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Your 3-Minute Update on the Trade Cases

What’s happened in the last couple of weeks? 

Nearly two weeks ago, six U.S. steelmakers (U.S. Steel, ArcelorMittal, AK Steel, Nucor, California Steel and Steel Dynamics), the U.S. Department of Commerce (DOC) and the International Trade Commission (ITC) filed both anti-dumping and countervailing trade cases against five nations, including China, India, South Korea, Italy and Taiwan.

The material under review was defined as sheet that “has been coated or plated with a corrosion- or heat-resistant metal to prevent corrosion and thereby extended the service life of the products made from steel.”

Steel coated with zinc, aluminum or any of several zinc-aluminum alloys comprises most of the product at issue. Galvanized, electrogalvanized, aluminized, Galvalume and painted all fall into this category.

What’s up with Italy? Seems as though they’re an outlier that’s been absent from the conversation until now.

Starting in 2013 to now, Italy jumped from the seventh largest importer of coated products (roughly 3,600 tons a month in 2013) to the fifth largest (roughly 13,297 tons a month in 2015). Many feel that this surge in imports from a non-traditional importer is due to unfair pricing.

Most notably, this jump drew attention from the domestic mill Nucor because Italian product imported to Florida greatly impacted their business in the region.

What does this mean for imported goods?

If fully accepted by the ITC and DOC, all imports of coated sheet material from the named countries above will be slapped with an additional duty ranging from 70.09% on Indian material to as high as 120.20% on Chinese imports.

What can we expect to see happen domestically? 

These impacted imports made up nearly 70% of all imports of these targeted products in Q1 2015, which equates to roughly 1.75 million tons.

These 1.75 million tons of corrosion resistant imports will have to be filled by domestic suppliers, which would tighten availability and push domestic prices higher.

What’s the next step in the proceedings? 

The ITC must have a preliminary ruling within 45 days and the DOC will issue preliminary rulings by the end of 2015.

The trade case investigations will likely conclude in the summer of 2016, but preliminary duties can be put in place this year, requiring cash deposits in the amount of the provisional duties.

What’s the general feeling in the industry? 

Currently, the general feeling in the industry is that some form of duties will be finalized on these products, though they could take almost a year to be determined.

In the meantime, people who were mostly or even solely dependent on material from these countries are currently looking for new sources, whether that be domestically or from other foreign countries such as Brazil.

Why do people think hot rolled and cold rolled cases are next to come?

Many feel these products are being equally subsidized and dumped into the domestic market much like the corrosion resistant products.

The countries may vary slightly with a CR trade case but the bones of the case would be similar.

In a best case scenario, what are the domestic mills hoping will happen? 

Best case scenario for the domestic producers would be that these duties are finalized at their current level and the domestic producers are able to accomplish a few things:

– Regain market share lost to “unfair” imports
– Boost utilization rates
– Push out lead-times
– Improve profitability

We’ll continue to update readers as the cases develop. Read more about why the cases were filed. 

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