AD suits against wire rods - let the games commence

AD suits against wire rods - let the games commence

This last week saw a lot of activity about wire rod imports into the US or rather, attempts to restrict the inflow of wire rod. The US Department of Commerce (DOC) announced Thursday (December 1) that they will initiate a formal antidumping investigation about carbon and alloy wire rods from Turkey, China, and Germany – a routine, unsurprising announcement. On Friday, the DOC announced that it will review wire rod imports from Hylsa in Mexico, Mittal Point Lisas in Trinidad, Ivaco in Canada, and Krivorozstal in Ukraine. The period of review is October 1, 2004 to September 30, 2005. One should remember that this refers to the other antidumping and countervailing duty suit filed four years ago. It is somewhat surprising that Ukrainian rods will be reviewed. They had an extraordinarily high dumping margin of 116 percent and it will be interesting to see how they will fare in this review. Now, this past Thursday there was a public hearing at the International Trade Commission (ITC) in Washington DC dealing with the antidumping suit of carbon and alloy rods just filed last month. The petitioning mills gave their arguments and the opposing side, consisting of trade lawyers for the Chinese and Turkish mills, representatives of the American Wire Producers Association and tire companies, plead their case. Their arguments really did not uncover any new ground. The petitioners pointed out their declining business volume and shrinking margins causing injury – the crux of their case. They have to prove injury or the case will be dismissed. In turn, the Turkish and Chinese mills pointed to the global steel markets where volume was declining and margins shrinking on a broader front. They also pointed out that during the huge price increases earlier in 2004 the imports were leading the way – again following the global market trends. There was an awkward moment when one of the petitioning rod mills had to admit that they had imported wire rod from Turkey as well to be used in their mesh plant. One wire drawer presented an e-mail from another petitioning mills indicating that only a fraction of the requested tonnage could be supplied. Unreliable deliveries and concern that some mills were struggling financially or had poor labor relations were two important points given by the rod consuming industry. Regardless, the process is under way and the investigations by DOC and ITC will proceed. The next step will be the "preliminary" injury determination by the ITC. Experience tells us that there will be a preliminary injury ruling. It has happened previously that in the end no injury was found and the dumping case was terminated. The odds are against such fortunate outcome but hope springs eternal, does it not?