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232 outlook hazy as some see action near

Jul 19, 2017 | 03:17 PM | Michael Cowden

Tags  Section 232, Commerce Department, Wilbur Ross, Seth Rosenfeld, Jefferies, Mark Millett, SDI, AK Steel ArcelorMittal


CHICAGO — Top steel industry executives were said to have met with Commerce Department Secretary Wilbur Ross over the past week about the agency’s Section 232 investigation into steel imports, with one industry analyst predicting that a decision in the case could be imminent.

But other industry sources said they had left recent meetings with administration officials with little idea of when Commerce might conclude its probe or what remedies it might recommend to slow imports.

“While the recommendation from the (Commerce Department) to the administration has pushed past the June-end deadline initially targeted, we understand it could be provided this week,” Seth Rosenfeld, an equity analyst at New York-based Jefferies LLC, wrote in a July 19 research note.

Commerce is expected to provide a “menu” of options to the administration to select from. “But the administration’s decision may not be made public until next week, after previously scheduled meetings with Chinese government officials,” he added.

The US-China Comprehensive Economic Dialogue as well as North American Free Trade Agreement reform talks this week have taken up the bandwidth of trade officials also tasked with the 232, Washington sources said. Those discussions mean any big developments on the 232 could be pushed into next week, they agreed.

Nonetheless, Ross found time on Tuesday to meet with the top executives of six US steelmakers, according to two sources familiar with the matter. The group was said to include John Ferriola, chairman, president and chief executive officer of Charlotte, N.C.-based Nucor Corp.; David Burritt, president and CEO of Pittsburgh-based U.S. Steel Corp.; John Brett, CEO and president of Chicago-based ArcelorMittal USA LLC; Roger Newport, CEO of West Chester, Ohio-based AK Steel Corp.; Ward “Tim” Timken Jr., chairman, CEO and president of Canton, Ohio-based TimkenSteel Corp.; and Barbara Smith, who will become president and CEO of Irving, Texas-based Commercial Metals Co. (CMC) on Sept. 1.

Mark Millett, president and CEO of Fort Wayne, Ind.-based Steel Dynamics Inc. (SDI), had meetings with Ross and U.S. Trade Representative Robert Lighthizer last week.

“They understand the issues of trade and they are working to recommend to (President Donald Trump) restraints ... that will make the environment for steel healthy again,” he said during an interview with CNBC in which he confirmed the meetings.

An AK Steel spokeswoman, while declining to confirm the meeting with Ross, said the company continued to support a robust 232. “We urge the administration to implement a comprehensive, broad-based import remedy, covering the full range of steels, with only limited exceptions for products not currently available in the United States," she told AMM via e-mail on July 19.

Other steelmakers contacted by AMM either did not confirm whether the meeting had occurred or did not respond to requests for comment.

A Commerce spokesman did not respond to requests for comment about the 232 time line and the steelmakers' meetings with Ross.

Accounts of meetings with administration officials on 232 weren't uniformly positive. One industry executive said he left a meeting with Ross with the sense that the Commerce Secretary wanted to take action soon, but was unsure whether action might be days or weeks away.

In contrast, another industry source familiar with the meetings said he was left with the impression that action was probably not imminent. “The new narrative here is managing expectations and lowering expectations,” he said.

A Washington source said steel consumers who met with Vice President Mike Pence about the 232 last week came away equally short on specifics.
“It was, ‘Thank you for coming in. Appreciate your comments. A decision will be made,’” he said. “No time lines. No winks or nods or body language about whether that decision is in the pipeline or what the eventual outcome might be.”

Such mixed reactions come as the 232 faces stiff opposition from key steel-consuming industries, including the agricultural sector, which unlike the steel industry is highly dependent on exports. “If the Section 232 investigations into steel and aluminum result in new trade barriers, the aftermath could be disastrous for the global trading system and for (the) US agriculture sector in particular,” 18 agricultural industry associations—including the American Farm Bureau Federation and the National Cattlemen’s Beef Association—wrote in a July 11 letter to Ross.

They also come after the Commerce Department missed a self-imposed June deadline and amid continued speculation over whether and when a 232 decision might come.

While some sources insist Commerce will make a move this week, others contend that action might not come until as late as this fall. The latter scenario is more likely if the administration decides to use the threat of the 232 to position US trade negotiators to roll out policies aimed at combatting global steel overcapacity ahead of a November deadline, agreed at a Group of 20 (G20) meeting earlier this month.

Michael Cowden
mcowden@amm.com





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