The effect of illegally subsidized foreign steel, particularly from China, continued to be debated in Washington, D.C. today with domestic steel producers and scrap recyclers both testifying that more anti-dumping measures are needed to protect industries.
Steel Executives Detail Dumping Pains
Chief executives from five of the leading steel companies in the U.S. told members of the Congressional Steel Caucus today that unfair foreign trade practices have caused an increase in steel imports resulting in the loss of more than 13,000 jobs in the industry this year, and the government needs to dramatically improve policies on trade. The Steel Caucus is chaired by Tim Murphy (R-PA) and vice-chaired by Rep. Pete Visclosky (D-IN).
As members of the American Iron and Steel Institute, Mario Longhi, President and CEO of U.S. Steel Corporation; Chad Utermark, Executive Vice President of Nucor Corporation; Jim Baske, CEO of ArcelorMittal North America; Chuck Schmitt, President, of SSAB Americas and Chairman of AISI; and, Roger Newport, CEO of AK Steel Corporation, testified before the more than two dozen members of Congress. The target of much of their discussion was China, its steel overproduction and its attempt to have market economy status granted to it by the World Trade Organization.
“From outright government ownership to a vast array of illegal subsidies, many foreign steel companies are shielded from the realities of the market,” Utermark said. “China is the prime example. Basically, the Chinese government is a company disguised as a country engaged in economic warfare. It is the major contributor to the capacity glut. China’s economic slowdown, coupled with its estimated 425 million tons of excess capacity, has resulted in China flooding the global market with steel exports. This market-distorting behavior is creating real harm for American steelworkers.”
Scrap Recyclers Want Protection, Too
Institute of Scrap Recycling Industries Chief Economist Joe Pickard also testified recently at a U.S. Trade Representative/U.S. Department of Commerce hearing.
“Recycled iron and steel products, also known as ferrous scrap, is by far the largest recycled commodity group processed by our industry, with scrap recyclers — who are located in every congressional district – typically processing between 70-75 million tons of ferrous scrap annually,” Pickard said.
“According to U.S. Geological Survey estimates, the total value of ferrous scrap processed in the U.S. in 2014 was $26.1 billion, but for 2015 USGS reports that figure declined to $18.3 billion as scrap prices and volumes declined due to a range of domestic and global market factors,” Pickard testified. “Many factors, including the surge in Chinese steel production to more than 800 million tons annually has resulted in some of the most difficult market conditions faced by scrap recyclers and the steel industry in a decade.”