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Steelmakers clash on coated steel duty

Keywords: Tags  corrosion-resistant steel, U.S. Steel, Nucor, ArcelorMittal, Steel Dynamics, AK Steel, ThyssenKrupp, Salzgitter Flach anti-dumping

WASHINGTON — Foreign and domestic steelmakers clashed Wednesday on the role of German and South Korean corrosion-resistant steel in the U.S. automotive and construction markets.

Steelmakers argued whether anti-dumping duty orders on the product from both countries and a countervailing duty order on material from Korea should be revoked at a U.S. International Trade Commission (ITC) sunset review hearing Wednesday.

Existing dumping duties range from 10.02 percent for Germany to 17.7 percent for Korea, while the subsidy duty on Korean product has been set at 1.15 percent.

The Commerce Department’s International Trade Administration ruled previously that revocation of the duties—first imposed in 1993—likely would lead to a continuation or recurrence of dumping at margins of at least 9.35 percent by German producers and at least 12.85 percent by Korean producers (, Dec. 5) and subsidy margins of at least 0.57 percent for Korean producers (, May 9).

Domestic interests said Wednesday that ThyssenKrupp AG’s impending sale of its Calvert, Ala., plant will mean that it will no longer supply material domestically and it will increase imports from its German plants, especially with the European economic crisis.

They also argued that with China’s growth in exports of corrosion-resistant product, Korean mills will need to move excess supply to stronger markets such as the United States.

"Korean mills are now more dependent on exports ... (but) they (also) face severe competition from mills in China," James C. Hecht, an attorney at Skadden, Arps, Slate, Meagher & Flom LLP, counsel for petitioner Pittsburgh-based U.S. Steel Corp., said during the hearing. "U.S. mills cannot afford price competition with unfairly traded imports. Further, raw material costs have risen dramatically ... (and U.S. producers) have struggled to make a profit, with an operating income margin at a paltry 2.3 percent from 2006 to 2011."

Foreign interests, however, argued that the U.S. steel industry has strengthened since the original imposition of the duties almost two decades ago, and have benefited from a strong automotive sector due to geographic advantages.

"Things have changed since 1993. That was before we had internet, cell phones and before this (U.S.) industry became world-class competitive," Donald B. Cameron, an attorney at Morris, Manning & Martin LLP, counsel for Korean steelmakers Dongbu Steel, Hyundai Hysco, Posco, Posco C&C and Union Steel, said in opening remarks. "Many of the U.S. producers have become or are in the process of becoming vertically integrated. Even with the declines in demand during the cycle as a result of the recession, the U.S. industry has gained almost 8 percentage points of market share and doubled operating income from the beginning to the end of the period of review."

Other domestic petitioners include AK Steel Corp., ArcelorMittal USA LLC, Nucor Corp. and Steel Dynamics Inc. Other foreign respondents include ThyssenKrupp AG and its North American and European subsidiaries, as well as Salzgitter Flachstahl GmbH.

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