Flood of cheap steel may prompt tariffs

Beth Steel chief laments injury `to our country'

April 03, 1999|By BLOOMBERG NEWS

WASHINGTON -- The U.S. International Trade Commission found yesterday that a surge in low-priced carbon steel plate from six countries might have injured U.S. steelmakers enough to warrant consideration of punitive tariffs.

ITC board members voted 6-0 to proceed with an investigation of whether companies such as Japan's Nippon Steel Corp. and South Korea's Pohang Iron & Steel Co. are selling cut-to-length steel plate, used to build ships, bridges and containers, in the United States at unfairly low prices. The ruling also targets producers in France, Italy, India and Indonesia.

"Very serious injury continues to be done to our country and industry," said Hank Barnette, chairman and chief executive officer of Bethlehem Steel Corp., one of the five companies that filed the trade complaint with the ITC in February. "It's evidenced by lower [mill] operating rates and significantly reduced prices."

The decision by the ITC, an agency that investigates the impact of trade on U.S. industries, is the latest step by the government, U.S. steelmakers and unions to drive down imports they blame for low prices and profits and thousands of layoffs. Bethlehem, the top U.S. plate producer, "substantially" cut output and limited work hours at its production and plate-finishing mills, Barnette said. He declined to be more specific.

U.S. companies have filed scores of complaints targeting other varieties of steel; the Commerce Department has imposed preliminary duties on hot-rolled sheet from Japan and Brazil and negotiated an agreement to scale back imports from Russia; and the House of Representatives passed a bill to slap quotas on steel imports.

In this latest case, if Commerce decides steel plate imports are being sold at cheaper prices in the United States than in their country of origin, it may move to impose duties on those imports. Steel plate makes up only about 5 percent of the total steel used in the United States.

The anti-dumping investigation is starting just as U.S. imports of the product, which surged last year, are plummeting. The United States imported 69,645 metric tons of the metal in February, according to preliminary government data. That's down 48 percent from January.

"That's because of the cases," said Alan Wolff, a partner with Dewey Ballantine LLP, a law firm representing Bethlehem Steel and USX-U.S. Steel Group. "It's vital that the trade laws be seen to work or we'll see a lot more injury and a lot more unemployment."

The companies are seeking duties of up to 119 percent for "dumping" -- or selling more cheaply here than at home -- cut-to-length steel plate. The U.S. companies also called for duties of up to 56 percent against six countries for allegedly offering government subsidies to steelmakers.

Joining USX and Bethlehem Steel -- the No. 1 and No. 3 steel producers in the United States -- were Ipsco Steel Inc., Tuscaloosa Steel Corp. and the United Steelworkers of America union, as well as Gulf States Steel Corp.

Ipsco Steel is a U.S. unit of Ipsco Inc. of Saskatchewan, Canada, and has a mill in Montpelier, Iowa, that makes steel plate.

While overall steel imports increased 33 percent from 1997, steel plate imports soared 50.5 percent, said the American Iron and Steel Institute, a trade group that represents Bethlehem and other large U.S. steelmakers and gets data from the Commerce Department.

Pub Date: 4/03/99

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