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China rod/bar import confusion fades

Keywords: Tags  steel, wire rod, China, trade, anti-dumping duties, countervailing, Commerce Department, Customs imports

NEW YORK — U.S. imports of Chinese hot-rolled bar have plummeted from year-ago levels, mirroring a decline in Chinese wire rod imports, and market sources said the issue of misclassified material has become less of a problem this year.

Imports of Chinese hot-rolled bar from May to July fell to an average of 5,688 tonnes per month vs. an average of 35,252 tonnes from August 2013 to April, according to data from the U.S. Commerce Department. That represents an 84-percent decline, the only recent notable decrease in steel import trends, according to an analysis by Commerce.

The fall has mirrored declines in Chinese wire rod imports, after U.S. steelmakers won initial victories in a trade case (, July 1).

Steel traders last year raised concerns that Chinese wire rod imports were mislabeled as hot-rolled bars, which could materially impact data for trade investigations even as a flood of Chinese wire rod hit U.S. shores (, Jan. 11, 2013).

But that problem has faded from view in recent months as traders have wised up to the misclassification, and as Chinese wire rod imports disappear, traders told AMM.

The category confusion "kind of muddies the clear view, but now it is a moot point because there’s no more Chinese wire rod coming in for the time being," said one wire rod trader, who estimated that any import tonnage of Chinese hot-rolled bar above 10,000 tonnes likely includes misclassified wire rod.

There’s little need for U.S. officials to fix or clarify the issue of the overlap between the two categories, whether the issue involves deliberate evasion or adherence to technically complex guidelines, the trader said.

"It doesn’t matter which HTS (import code) is being used, because there’s no more wire rod coming in. ... I don’t think there has been an intent to evade or circumvent any procedures or people," he said.

Traders have simply "evolved" their views to include some Chinese hot-rolled bars in their wire rod estimates, he added.

Alleged misclassification of Chinese wire rod has not been raised as an issue in ongoing anti-dumping and countervailing investigations of Chinese wire rod imports, a Commerce spokesman told AMM via e-mail.

"Commerce’s investigations are limited by law to the evidence and allegations placed on the record of the proceedings," he said.

"The misclassification of merchandise is more appropriately addressed by U.S. Customs and Border Protection. However, any efforts to undermine the integrity of the U.S. trade remedy regime would be of great concern to (Commerce) and we would seek to ensure that they are addressed appropriately," he said.

U.S. steelmakers won a critical circumstances determination in the Chinese wire rod case after documenting a surge of wire rod imports from February to April. (, June 5) Chinese hot-rolled bar imports stayed at elevated levels of 18,000 to almost 22,200 tonnes for that three month period, before falling to a recent low of 4,312 tonnes in June.

"With respect to (Commerce’s) critical circumstances analysis, the department will base its determination on the record evidence after considering the arguments of the parties," the Commerce spokesman said.

It will be interesting to see how Commerce addresses this issue, one U.S. wire rod distributor said.

"Nobody from Commerce can tell you the difference between wire rod in coil and hot-rolled bar in coil," he said. "Someone’s got to go down to the dock and prove it. Someone would have to go and see this steel coming in," but that’s not practicable for government officials, he said.

"It was actually rod, and the data just proves it. Now that rod has dropped, so has the bar," said the distributor.

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