Steel firms rip foreign 'dumping' Bethlehem Steel leads push for tariffs or quotas

Union joins effort

Producers accused in Japan, Russia and Brazil

Basic materials

October 01, 1998|By William Patalon III | William Patalon III,SUN STAFF Bloomberg News contributed to this article.

WASHINGTON -- Big U.S. steelmakers, with Bethlehem Steel Corp. taking the point position, alleged yesterday that steel producers in Japan, Russia and Brazil have been illegally "dumping" commodity steel on the U.S. market and called on the government to clap quotas or punitive tariffs on the low-priced imports.

The dumped steel has resulted in cutbacks in shifts and overtime at Bethlehem Steel's Sparrows Point plant, and could result in lost jobs if the flood continues, company management and union local officials said yesterday.

In filing the anti-dumping petitions with the Commerce Department and International Trade Commission, the steel companies were joined by the industry's biggest union, the United Steelworkers of America. Both the companies and the union said they have been lobbying the Clinton administration for months to stop what they say is a tidal wave of hot-rolled carbon steel being sent into the U.S. market at prices below what it costs the most up-to-date factory to make it. The announcement was made during a morning news conference at the National Press Club.

"There's an unprecedented level of unfairly priced imports" coming into the United States, said Curtis H. Barnette, chairman and chief executive officer of Bethlehem Steel, which employs 4,900 at Sparrows Point.

Barnette was joined by the leaders of such U.S. steelmakers as USX Corp., LTV Steel Co. Inc., Weirton Steel Corp., National Steel Corp. and Geneva Steel Co., a Utah firm that laid off 335 workers last week after losing orders to overseas rivals.

The simmering trade spat could be viewed as yet more evidence of worsening economic conditions in Russia, parts of Latin America, and much of Asia, including Japan.

The U.S. steel companies allege that their foreign competitors, with their domestic economies in effect shut down by deepening financial crises, are turning to the one healthy -- and open -- market left in the world: the United States. In doing so, these foreign firms are "exporting" their economic problems into this country, leaders of the steel companies said.

In July alone, imports of steel mill products into the United States hit an all-time record of more than 4 million tons, with the totals of many countries for the year's first seven months exceeding their totals for all of 1997, the American Iron and Steel Institute reported Sept. 17. The AISI figures came from Commerce Department data.

Hot-rolled steel is important not only as a product itself -- it is used for such things as the sturdy frames in sport-utility vehicles -- but also because it is a key ingredient in making other steel products: cold-rolled steel and tin, for instance.

At the current rate, imports of hot-rolled steel from the three countries in question will reach 5.5 million tons, an increase of 500 percent since 1995.

Nippon Steel Corp. of Tokyo, the world's biggest steel company, said its exports to the United States for the October-December period will likely fall 10 percent from year-ago totals, stating that lower demand -- and not the threat of a trade action -- was the reason. However, Bethlehem's Barnette said the damage has been done and said the consortium of U.S. companies will pursue punitive tariffs even if foreign imports fall.

It is not just the volume of steel that is a cause for concern -- it is the low prices at which this steel is being sold, union and company officials said.

Acme Metals Inc., the smallest integrated U.S. steelmaker, filed for Chapter 11 bankruptcy protection Tuesday, attributing at least part of its ills to cheap foreign steel.

"Dumping" generally involves at least one of three activities: selling a product in a foreign market for less than it takes to make it; selling it in the foreign market for less than it is being sold for at home; or using government subsidies to undercut the price of the same product being made by a foreign rival.

Japanese and Russian companies meet at least one of the first two criteria, while Brazil's steel is being subsidized by its government, according to the trade filings. "We see impossible pricing," said Joseph J. Rosel Jr., president of Local 4727 of the United Steelworkers of America, which represents some of the hourly workers at Sparrows Point.

For instance, Rosel said, Russian steel that had been fetching $350 a metric ton a year ago is now selling in Houston for $220 per ton -- including shipping. And Russian steelmakers are among the least efficient and modern in the world, he said.

Some Japanese steel, which is of much higher quality, that sold for $340 to $350 per ton in this year's first quarter, was sent into New Orleans on consignment -- meaning that there was no customer waiting -- with an asking price of $280 per ton, he said.

Other purchasers say they have seen even lower sticker prices.

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