Legal maneuvering continues in US wire rod market

Legal maneuvering continues in US wire rod market

Even after the International Trade Commission (ITC) terminated the antidumping suit against wire rod from China, Turkey and Germany late last year, legal maneuvering continues to keep wire rod trade action in the news. Earlier this week, the petitioners appealed the ITC's decision with the US Court of International Trade (CIT). Technically, the CIT could force the ITC to reconsider this case and start another investigation, however, this is a time-consuming process and will take at least a year. There is a precedent -- A few years ago during yet another dumping investigation of wire rods, the petitioners did not like the ITC's determination that Germany, Venezuela, and Egypt should be excluded. The CIT eventually agreed with the petitioners, ordering the ITC to re-launch the investigation. The ITC appealed this decision to the US Court of Appeals. In addition, Trinidad, Germany, and Venezuela submitted appeals. All of these appeals are being considered at various levels now. Four years after filing the original dumping suit, nothing has been resolved as of yet. (In case you have not noticed: Washington is run by lawyers!) One of the totally expected consequences of the present doomed wire rod case became apparent a few days ago. Wire companies and traders made all kinds of contingencies by ordering an enormous amount of wire rod. These rods have started to arrive in January. No less than 337'000 metric tons (371'475 net tons) were cleared through US Customs in January. Industry experts expect even more tons to come in during the month of February. Fortunately, the wire business continues to be strong, driven by a solid US economy and a very mild winter. Still, inventories will be high and new purchases might have to be curtailed in size. The outcome of the wire rod dumping case has been nothing short of catastrophic for the petitioners. After investing a good deal of money into a suit that did not even clear the first hurdle, they have now committed more funds into an appeal that will have no immediate relief. They are still financing appeals from the dumping suit four years ago and, to add insult to injury, record-breaking amounts of wire rod are now coming into the country, putting the rod price under pressure. Finally, there was a minor trade item on wire rod. Kryvorizhstal of the Ukraine have withdrawn their request for an administrative review by the International Trade Commission. Ukrainian rods have been under a substantial antidumping order for the last four years. They exported a minor amount of rods to the US last year and then requested a review. In the meantime, the mill was bought by Mittal Steel. The new management might have decided that the case was hopeless and not to spend any money on it or they might have a different strategy in mind for Kryvorizhstal. Mittal Steel not only own a rod mill in the US; they have a number of mills that depend on the US market. Ukrainian rods imported into the US may not be of any great interest for Mittal Steel.