NEW YORK The battle for U.S. market share is heating up as anti-dumping and countervailing duties on corrosion-resistant steel from Germany and South Korea come up for review in Washington.
Domestic steelmakers will vie to maintain duties on their foreign competitors, while overseas mills and their advocates will urge the repeal of the measures when the U.S. International Trade Commission (ITC) holds a hearing on the issue Jan. 9.
Since 1993, corrosion-resistant steel plated with zinc-, aluminum-, nickel- or iron-based alloys from Germany has been subject to anti-dumping duties of 10.02 percent, while most South Korean corrosion-resistant steel has had anti-dumping duties of 17.7 percent and countervailing duties of 1.15 percent. The anti-dumping duty order on Posco Ltd. was revoked in 2010, while both Posco and Dongbu Steel Co. Ltd. received no countervailing duty orders during the original case or subsequent sunset reviews. Union Steel Manufacturing Co. Ltd. was also excluded from the original countervailing duty order.
The sunset review scheduled for January will be the third since 2000.
Domestic steelmakers represented at the reviewincluding U.S. Steel Corp., Nucor Corp., ArcelorMittal USA LLC, Steel Dynamics Inc. and AK Steel Corp.will argue to keep the margins in place to protect against allegedly unfair trade practices, sources familiar with the case said.
"The use of our trade laws is our finger in the dike," Steel Manufacturers Association (SMA) president Thomas Danjczek told AMM. "(Trade) has to be rule-based. It cant be a free-for-all where youre selling below costs or youre subsidizing to a point where its against the rules."
In the preliminary results of the third five-year sunset reviews release in July, the Commerce Departments International Trade Administration issued preliminary anti-dumping margins of at least 9.35 percent on Thyssen Stahl AG and all other German producers and exporters of corrosion-resistant steel, while South Korean producers and exporters, excluding Posco, were issued preliminary margins of at least 12.85 percent. In May, the Commerce Department also preliminarily issued countervailing duties of 1.26 percent on most South Korean material and of 0.57 percent and 0.75 percent for Posco and Dongbu, respectively.
"I think the facts are on our side," Danjczek said.
But others say the U.S. auto industry would benefit from cheaper steel if the dumping duties were revoked. For example, Ford Motor Co., which is participating in the review, is calling for the revocation of import duties in order to promote competition in the steel industry and reduce purchasing prices, according to its prehearing brief.
"The Koreans and Germans are still very export-oriented and the United States remains a very attractive market," a source familiar with the case told AMM. "And without the influence of duties, we think they would target the auto market."
Ford claimed in its prehearing brief that though it seeks the revocation of duties on South Korea and Germany, it intends to continue purchasing nearly all of its steel from North American producers as it has "a strong preference for North American sourcing."
"The thing that is important here is that corrosion-resistant steel is going to the automotive sectorwhich is a very healthy sector of our economy," David Phelps, president of the American Institute for International Steel, told AMM.
Under current trade laws, consumers who might be impacted by the outcome of the case are not given interested party statuswhich would give them access to court documents before the hearingbut they are allowed to testify.
Phelps said that consumers should be given more influence over decisions affecting their markets.
"The auto companies have no standing even though theyre the ones that pay the dumping duties," Phelps said. "That the company paying the tax has no say in whether there is a tax or how much the tax is is unfair."
The hearing scheduled for January was postponed more than two months after its original Nov. 1 date was pushed back due to the "severity and duration" of Hurricane Sandy, according to a notice from the court. The ITC will vote on the issue on Feb. 15.
Attorneys representing Steel Dynamics, AK Steel, ArcelorMittal and ThyssenKrupp Steel USA declined to comment, while counsel for Nucor, U.S. Steel, Ford, Posco, Posco America, Dongbu, Union and Hyundai did not respond to calls for comment.