As SteelOrbis reported yesterday, five US nail manufacturers filed an antidumping suit against nails from China and the United Arab Emirates. It is clear that China is the main target even though the United Arab Emirates have also significantly increased their nail exports to the US. This action has long been anticipated, and a lot of damage to the nail industry has already been done. Notice that three major US manufacturers, Paslode, Stanley Bostich and Senco, did not participate in the filing because they either have or share production facilities in China. Here are a few numbers to illustrate the problem:
According to the petitioners, imports of nails in the 12 months from April 2006 to March 2007 reached 590,391 metric tons (650,794 net tons). With annual US nail consumption at around one million metric tons (1.1 million net tons), imported nails have 59 percent of total US consumption. China's market share of US nail consumption during the period of investigation is 40 percent (68.44 percent of all imports), while the UAE's share is a mere 4.7 percent (22.8 percent of all imports).
Industry sources claim that this picture was even more lopsided in 2005 as far as imported nails are concerned. A total of 846,338 mt (940,376 net tons) were imported in '05, which was estimated to represent 85 percent (!) of the US nail market. China's share alone constituted 46.1 percent of the US market.
This problem has been going on for quite some time, and the avalanche of Chinese wire products is growing relentlessly. Threaded rod manufacturers cannot buy wire rods for the price of the finished product coming in from China. As a result, the whole US wire hanger manufacturing industry has shrunk to only one company.
After the recent market shifts in China and in the world and the introduction of the Chinese export tax, US wire rod prices have, at times, fallen below the latest offerings from China. A number of large wire drawers have shifted a large portion of their rod needs to the US mills, even the highly competitive low carbon grades for mesh manufacturing. Imports of Chinese rods are significantly below last year's number.
However, the US rod mills would be well-advised not to enjoy this seemingly advantageous situation for too long but to throw their full support behind the wire industry's trade action. As rod exports from China decrease, shipments of finished wire and wire products increase. It doesn't take a rocket scientist to figure out that the US rod mills will soon be left without a market.