US dumping action against wire rod?

US dumping action against wire rod?

Washington is rife with rumors about possible trade action against wire rod. Specifically, with China, Turkey, Germany and Italy bring cited as the targets. There is no question that China and Turkey have gone beyond all prior limits for rod imports. The current numbers for the period of March 2004 to February 2005 show China in excess of 800'000 net tons and Turkey slightly less than this number. The import share of all US rod deliveries in 2004 exceeded 50%. Now, there were good reasons for the dramatic increase of rod imports last year but that is not stopping the domestic industry from filing a dumping suit now that the market has turned considerably softer. No proof of injury? Well, there is threat of injury and that is a valid reason for trade action. Considering that the overwhelming majority of the US rod industry is in foreign hands is not a detriment either. At last count, there were seven countries above the "magical" threshold of 3% percent import share. Three of those, Brazil, Trinidad and Canada, have already a dumping suit or dumping and countervailing duty (Brazil) charged against them. China, Turkey, Germany and Italy complete the list of the major importers. In fact, it would help Gerdau/Brazil with their US owned rod mills to have some relief from the import juggernaut coming out of China and Turkey. The new owners of Georgetown Steel, Mittal Steel, would be helped as well especially since the ad margin for their Trinidadian mill has just been reduced to 3%. Their German mills could be affected even though Mittal might expect no or low dumping margins against its individual German mills. Business is tough and even if a possible dumping suit might ultimately fail, it will help to keep the market from further deteriorating in the short to medium term.