Of course buying organizations rarely – if ever – support anti-dumping cases filed by domestic steel producers, such as (in this case) AK Steel and ATI Allegheny Ludlum.
The mere filing of a petition sends a cold shudder throughout the overseas supply base and effectively causes prices to increase (we will see what our October Monthly MMI data tells us with regard to domestic prices).
And anti-dumping cases involving GOES (grain-oriented electrical steel) have a long history, both of U.S. producers filing them, as well as cases filed against them (China’s determination on GOES imports from the United States was successfully challenged by the U.S. government before the World Trade Organization).
So how shall we interpret the recent broad-swath accusations made by U.S. domestic producers against seven countries, including China, the Czech Republic, Germany, Japan, South Korea, Poland, and Russia?
We’re on DUMPWATCH
The knee-jerk reaction might include examining U.S. import (customs) data reporting average monthly dollar values of GOES materials coming into the United States. That data definitely does not support the U.S. producers’ case. In fact, one might dismiss outright the claims made by the U.S. industry, particularly against Japan, Korea, the Czech Republic and Germany. Heck, even Russia doesn’t look like it dumped material into the US market. (We compared our monthly MetalMiner IndX℠ data against reported U.S. average invoice dollar amounts).
But looking at U.S. customs data is not the way these cases are filed, according to John Hermann, partner with Kelley Drye, who currently represents the U.S. producers in this most recent petition.
“We obtained data from a foreign market researcher who examined home market prices in the subject countries that are market economies,” Herrmann said.
“We used that home market pricing information in preparing our dumping allegations concerning all of the countries against which dumping was alleged, other than China,” he said, “which is treated as a non-market economy for purposes of the U.S. antidumping laws by the Commerce Department.”
Herein Lies the Rub
To prove dumping has occurred, a domestic producer must show that a foreign producer has sold a product into the U.S. for less than what they sell it for in the home market, according to Herrmann.
“We did make appropriate comparisons for grades in the U.S. – and adjusted the best we could to make apples-to-apples comparisons – for corresponding sales in each producer’s home market,” he said. “The allegations we’ve made involve comparisons of sales for which we have information … the standard for coming forward with a petition is supplying information that is ‘reasonably available’ to the domestic industry.”
Of course, much of this information remains confidential.
Metal Buying Organizations See It a Bit Differently
Our sources suggest this petition really stems from the financial difficulties of the main U.S. producers – AK Steel and Allegheny Ludlum – as well as their lack of product innovation. (It remains widely known that both domestic producers do not even produce the higher-performing GOES grades; those come primarily from Japan.)
Moreover, the domestic industry has battled pricing issues for a couple of years because of a well-known contract dispute that has made it difficult for the domestic producers to recoup higher prices.
We shall see where this case GOES.