NEW YORK Large volumes of
foreign wire rod have hit U.S. shores in recent months, but
those shipments might not have been classified correctly in the
Commerce Departments import statistics, market sources
said, skewing crucial data used by the steel industry and
perhaps making a possible trade case against such imports more
In late spring and early summer
2012, sources in the wire rod market said they expected
shipments as high as 100,000 tons to arrive from China in the
fourth quarter due to a widening price spread between domestic
and imported material (
amm.com, Sept. 20).
Multiple sources contacted by
AMM confirmed they had received Chinese wire rod
shipments in November, while a number of trading sources said
they facilitated large-tonnage deliveries in the fourth
"My steel hit the port in
November and I received it in early December," one buyer of
Chinese rod said.
However, steel import data
distributed by Commerces Import Administration division
shows no record of this material in the wire rod category.
According to the government data, only 16.3 tonnes of Chinese
rod arrived at U.S. ports in September, with no material
arriving in October and November and just 4,950 tonnes hitting
shores in December.
"What I can tell you is that
there has been more wire rod coming into this country than what
that government website says," one trader said.
Some market participants have
been puzzledand others, concernedby the small
volumes registered on the government website, they said,
contending that large quantities of material already received
havent been properly reflected in the data.
"There was definitely rod that
came in October, November and December in significant
quantities," one mill source said. "(The discrepancy) has to be
in the classification. Ive got plenty of customers who
told me close to 100,000 tons have come in. Were watching
Market sources speculated that
the "missing" wire rod might actually be in the import
statistics, but might have been classified as Chinese
hot-rolled bars instead because the product contains a fair
amount of boron.
Although neither Chinese wire
rod nor hot-rolled bars face import duties into the United
States, adding boron allows Chinese rod mills to avoid Chinese
export taxes, as well as gain a 9-percent tax rebate from the
Chinese government, thus making the value-added product a
slightly more attractive financial opportunity than traditional
A Commerce Department official
declined to comment on whether wire rod from China had perhaps
been classified as hot-rolled bar, noting that licensing data
is "always subject to revision."
But market players said it
appears that is exactly what happened. The volume of Chinese
hot-rolled bar licensed to arrive in November was 52,079
tonnes, according to data listed on Commerces website as
of midday Friday, marking the highest figure in more than a
year and a more than sixfold increase from the 8,204 tonnes
registered for import in October. Preliminary imports for
November ended up totaling just 26,866 tonnes, but thats
still about three times the volume brought in the previous
month and in the same month last year.
Meanwhile, December licenses for
hot-rolled bar from China totaled 37,920 tonnes compared with
just 8,026 tonnes imported in December 2011.
In addition, average unit values
for Chinese hot-rolled bar fell to $644 per tonne in November,
according to Commerce license data, down 47.1 percent from the
average value in October. Average unit values for the same
product fell even further to $610 per tonne in December, a far
cry from the $1,917-per-ton average value recorded in December
2011. That suggests lower-value materiallike wire
rodmight be bringing down the average price of material
classified as hot-rolled bar.
"The numbers of wire rod look so
small and there was a huge increase in hot-rolled bars.
Theres always a fair amount of hot-rolled bars coming in,
but Ive never seen it (volumes) that high in the market,"
a second trader said. "Its definitely more expensive on
the whole. This looks like some sort of misclassification
Market sources said they
couldnt say what, if any, legal implications a possible
misclassification would have. However, it could still have
ramifications for the industry as a whole, particularly if
domestic mills were to move forward with possible plans to file
a trade case against Chinese wire rod (
amm.com, Aug. 28).
"To be honest, I dont know
if classification makes that much of a difference. The steel is
already here, and there are no duties on either product, so
theres no difference. It only hurts the mills if they
want to file a dumping suit and they dont have the data
they need," the second trader said.