RWR 2019: Section 232 remains top concern in the long product market

Tuesday, 22 January 2019 23:17:43 (GMT+3)   |   San Diego
       

Section 232 remains a defining factor and top concern within the US long product market according to panelists at SteelOrbis’ 10th Annual Rebar & Wire Rod Conference in Las Vegas on Monday, Jan. 21.

Tom Gibson, President and CEO of the American Iron and Steel Institute (AISI), said the 25 percent tariffs on steel imports were necessary to “fix the underlying problem” of protecting the US steel industry from surges of subsidized and dumped steel. He noted that before Section 232 tariffs went into effect, the steel import market share had risen to 29 percent, while it is now down closer to 20 percent.

John Foster, President of Kurt Orban Partners and Chairman of the American Institute for International Steel (AIIS), offered a contrary view, stating that tariffs “always come back to bite us.” Instead of penalizing lower-priced steel in the global market, Foster suggested that continued modernization of US steel mills can lower costs and produce globally competitive products.

Chris Casey, President of the Independent Steel Alliance—a coalition of rebar fabricators and buyers—added that tariffs are also punitive toward consumers. While tariffs are intended to give steel producers “breathing room” in their margins, US mills sharply raised their own prices after the Section 232 tariffs were implemented, pushing higher costs down the supply chain to steel buyers and end-users, which can have a damaging effect on demand.

Foster also pointed out that import levels gradually increased near the end of 2018, as a direct result of US steel producers raising their prices. Renewed interest in imports was a “self-inflicted wound” for US steel producers, Foster said.

When asked about the national security justification for the Section 232 tariffs, Gibson said a strong, viable steel industry is critical to national security, and pointed to World War II as an example of the steel and manufacturing industries quickly mobilizing for defense. However, Foster said US steel producers are successful enough, reaching record-high profits in the last couple years, and the threat from imports is not as critical as they claim.


Most Recent Related Articles

US and Canadian rig counts decline again week-on-week

US import wire rod offers remain flexible

US OCTG exports down 3.1 percent in July

US tool steel imports up 5.2 percent in July

Domestic rebar prices in China