NEW YORK The recent surge in steel
imports that has been weighing down the domestic long products
segment is starting to trickle over to flat-rolled products as
well, further highlighting the need for a "proactive"
government response, said Nucor Corp. chairman and chief
executive officer Daniel DiMicco.
"We have a global economy that
is sputtering. We have a domestic economy that is growing at a
snails pace. And theres massive oversupply in some
products here in the United States and around the world,
created in this country by both domestic overcapacity based on
the demand levels were seeingnot based on peak
demandand the influx of imports," DiMicco told investors
during an earnings call Thursday. "In particular, weve
seen a significant, serious flood of imports from Turkey,
(including) reinforcing bar and a little bit on merchant. And
were starting to see it on sheet and were concerned
The pickup in long product
imports has been evident for months, with 161,666 tonnes of
rebar licensed to arrive in March, nearly triple the 56,490
tonnes imported in the same month last year, U.S. Commerce
Department import data show.
"Clearly, this flood of imports
is not being driven by demand. Its an excess supply push
on the part of the global steel industry and the trading
environment, and as such it usually leads to distortions in
pricing and cost," DiMicco said.
But the influx of imports is no
longer limited to long products, he said. According to Commerce
data, license applications for hot-rolled sheet totaled 191,525
tonnes in the first 17 days of April, up from 177,087 tonnes
for all of March. Cut-to-length plate import licenses do not
appear to have spiked in Aprilwith only 47,105 tonnes
licensed to date vs. 97,593 tonnes licensed for all of
Marchbut domestic plate sources have suggested they may
look more closely at foreign material if domestic plate price
increases prove successful (AMM, April 13).
"Its a serious issue. It
affects all the products eventually," DiMicco said of the
import surge. "Its been more so in the long products,
rebar business and in the sheet business, (but) were
starting to see some of that in plate.
"Theres no wayif
competing on a level playing field, all things being
equalthat an industry running at 78 percent or less needs
a 36-percent increase in (finished steel) imports to satisfy
demand. And it doesnt come in here unless it is
underpriced, and many times priced below the cost to produce.
So those issues are with us," he added.
Nucor and other domestic
steelmakers have been successful in past cycles in their
attempts to thwart many low-priced imports with the imposition
of countervailing and anti-dumping duties, but that reactive
approach may not be the best option, DiMicco said.
"We continue to win, (but)
its unfortunate that we cannot have something thats
more proactive in dealing with these surges on the part of our
government," he said, adding that the government is "working on
that as we speak."
Asked to elaborate on what that
might entail, DiMicco declined to provide specifics. "We are
working on coming up with tools that allow our government to be
more proactivei.e., to respond much quicker to floods of
imports. Other than that, I wont go any further."
Meanwhile, as imports rise,
Nucors exports have inched down slightly in recent
months. According to president and chief operating officer John
Ferriola, Nucor exported about 7 to 8 percent of its output in
the first quarter, down from an average quarterly shipment rate
of around 10 percent and almost half the 13-percent export rate
logged in the third quarter of last year.