NEW YORK While the United States and Russia have largely agreed on a tentative deal concerning the existing suspension agreement on hot-rolled steel, domestic producers argue that it still stands to favor Russian producers.
Under the new draft agreement reached earlier this month, minimum prices for Russian steel sold into the United States would be increased to "bring them into alignment with current U.S. prices," which would effectively raise prices by some 47 percent (amm.com, Nov. 16).
Domestic interests, however, argue that while the revised agreement is an improvement, they have issues with the pact.
"The modified agreement would continue to allow Russian producers to sell under a reference price mechanism, an alternative generally available only to non-market-economy countries, even though the (Commerce) department has treated Russia as a market-economy country since 2002," petitioners ArcelorMittal USA LLC, Gallatin Steel Co., Nucor Corp., SSAB Americas, Steel Dynamics Inc. and U.S. Steel Corp. said in comments submitted to Commerce. "In light of these benefits, the department should treat with caution any future claims by the Russian government that the modified agreement is keeping Russian exports out of the U.S. market." The petitioners added that there is "no requirement" that a suspension agreement guarantee foreign producers a share of the U.S. market.
A number of market participants told AMM last week that as a result of the revised prices, imports of the Russian product likely would drop off (amm.com, Nov. 19).
Meanwhile, OAO Severstal, Novolipetsk Steel, Magnitogorsk Iron & Steel Works and OJSC OMK-Steel complained that the steel benchmark used in the agreement is still inadequate as a basis for pricesan argument first introduced during the preliminary comment period (amm.com, Aug. 13).
"Russian producers continue to question the use of SteelBenchmarker either for purposes of determining whether the current agreement is allowing price suppression or as a basis for resetting the agreement," the foreign interests said in their comments. "While accepting it for purposes of resetting the reference price in the revised agreement ... the Russian producers are hopeful that a benchmark that actually corresponds to the level of trade and selling conditions of the Russian producers is used."
Final revisions are set to be signed by both governments Friday.