Steel Imports

Does there beat beneath the breast of William Jefferson Clinton the heart of a raving protectionist?The world was given good cause to ponder the question last week. President Clinton took the first major economic initiative of his new administration and what was it? A tariff -- ranging as high as 109 percent -- on flat rolled and plate steel from 19 of the nation's most intimate trading partners. This is a provocative act that amounts in many cases to a de facto embargo.This week he followed up by barring European companies from bidding on government contracts.

The celebration yesterday of Bethlehem Steel Corp.'s new $300 million cold mill at Sparrows Point was tempered a bit by the fact that imported steel is on the rise and driving down prices. Bethlehem spent more than $600 million renovating the Baltimore County plant, the largest piece of which was the cold mill. Had the steelmaker's board of directors declined to invest in the new mill, company officials said, it would have been the beginning of the end for the 113-year-old Sparrows Point facility.

The looming expiration of Voluntary Restraint Agreements -- the diplomatic term for steel import quotas -- on March 31 has sparked a debate among steel companies about how to protect their troubled industry.President George Bush has pledged that he will not extend the VRAs in favor of trying to conclude negotiations in Geneva on a much larger international accord on steel trading.Officials from more than 30 steelmaking nations have worked two years on a pact aimed at ending steel tariffs within 10 years, eliminating quotas and other trade barriers, and limiting subsidies.

Having achieved mixed results in its efforts to restrict steel imports through the regulatory process, the steel industry is now trying to change the trade laws themselves -- an action that is raising the hackles of steel importers.The object of the steel industry's attention is the legislation implementing the General Agreement on Tariffs and Trade (GATT) -- the multinational agreement aimed at lowering trade barriers. Steel importers and users charge that the steel industry is trying to include provisions in the bill that are contrary to its purpose.

Bethlehem Steel Corp. and other American steel companies received an early Christmas present yesterday as the U.S. Commerce Department slapped higher duties, ranging from 0.71 percent to 90.09 percent, on steel imports from 12 countriesThe ruling is expected to depress steel imports and to boost the prices of steel plate and sheet products, which are made at Bethlehem's Sparrows Point mill in Baltimore County.The amount of the conditional duties on various steel plate and sheet products varied depending on the company, country and the type of steel produced.

It has been a little more than three months since President Bush slapped tariffs on much of the foreign steel sold in the United States, and since then domestic spot prices have soared while imports have fallen. But the correlation between the two is not as strong as one might think, say domestic producers and analysts. Spot-market prices for hot-rolled sheet, the industry benchmark and the main product of Bethlehem Steel Corp.'s Sparrows Point plant, were at $340 a ton last month, up 42 percent from year-ago levels.

WASHINGTON - Legislation that pledges as much as $13 billion to pay health insurance for retired steelworkers is facing resistance, prompting concern that a cornerstone of industry plans to consolidate may be jeopardized. The measure's failure would mean companies such as U.S. Steel Corp. would be unable to acquire weaker rivals such as bankrupt Bethlehem Steel Corp. because commitments to retirees, obligations known as "legacy costs," are too high. "There won't be any restructuring without the legacy costs being dealt with," Gary Hubbard, a spokesman for the United Steelworkers of America labor union, said yesterday.

NEW YORK -- Even as it tries to fend off foreign competitors the U.S. steel industry is attempting to reclaim old markets and expand into new ones."Steel has successfully reclaimed numerous customers and applications from other materials, and has gained respect for its recyclability," said David H. Hoag, chairman and chief executive of the LTV Corp., the nation's third-largest steelmaker.At a news conference held at the annual meeting of the American Iron and Steel Institute, Mr. Hoag and the chief executives of four other major steel companies painted a picture of an industry struggling back to profitability but hampered by competitionand a lack of capital and threatened by new government taxes.

After three dark years of losses, Bethlehem Steel Corp. broke into the light of profits yesterday, announcing it earned $31.2 million in the third quarter."

Boosted by the decline of Asian currencies, steel imports are surging and worrying U.S. steelmakers such as Bethlehem Steel Corp.Steel imports hit record levels in April, rising to 3.26 million tons -- the highest monthly figure since the 1970s, according to the American Iron and Steel Institute. The April numbers are up 21.3 percent from March and 20.6 percent from a year ago."Imports are up substantially, to one of the highest months ever," said Curtis H. Barnette, chairman and chief executive officer of Pennsylvania-based Bethlehem Steel.