On March 26, ATI Metals filed an exemption to the Section 232 tariffs on behalf of its joint venture (JV) with Tsingshan Stainless called Allegheny & Tsingshan Stainless.
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In November 2017, the JV sought to produce and market 60” wide sheet in the North American market, a width ATI can no longer melt and cast due to the idling of its Midland, Pennsylvania, melt shop. Chinese company Tsingshan, the largest stainless steel producer in the world, has supplied the slab since Q4 2017 from its vertically integrated mining, refining and casting assets in Indonesia.
ATI has been converting slab using its state-of- the-art Hot Rolling and Processing Facility (HRPF) in Brackenridge, Pennsylvania, and the JV’s Direct Rolled Anneal and Pickle (DRAP) facility in Midland.
Although ATI has long supported anti-dumping and countervailing lawsuits in the United States to combat unfairly traded imports, the JV presents a unique situation.
Although the final hot and cold rolled stainless steel is produced in western Pennsylvania, the slab is currently subject to the 25% Section 232 tariff because it is of Indonesian origin. To claim an exemption from the tariff, ATI must prove that there are no viable alternatives available in the United States.
In last week’s earnings call, Outokumpu’s CEO Roeland Baan stated that they could supply slab from its Calvert, Alabama, facility, and, thus, ATI should not receive an exemption. Others have proposed that ATI could restart its 60” wide melt shop in Midland, Pennsylvania, idled three years ago.
Are these options feasible?