INDIANAPOLIS | Steel dumping poses a real threat to jobs in Northwest Indiana, and policy-makers in Washington need to take heed, industry officials said.
Industry leaders said the domestic steel industry was "under assault" from a surge of subsidized imports that are being sold below market rates. They called for stronger enforcement of international trade rules during a town hall forum Wednesday at the Association for Iron and Steel Technology AISTech 2014 conference in Indianapolis.
High-ranking steel industry executives, including ArcelorMittal USA president and CEO Michael Rippey and U.S. Steel senior vice president for North American Flat-Rolled Operations Douglas Matthews, called upon those in the industry, including steelworkers, to be more vocal about the economic harm done by dumped steel.
"We need a full-court press to educate policy-makers and the customers who write the purchase orders," Matthews said. "They need to comprehend this affects the whole supply chain, from our manufacturing operations in Indiana and Ohio to our pipe and tube mills in Texas. It's critically important to the jobs in those regions."
Global overcapacity in the steel industry has risen to about 550 million tons, largely as the result of a lot of underutilized steel mills in China, said Dieter Hoeppli, managing director and head of Metals & Mining, Americas for Deutsche Bank Securities.
"Publicly traded steelmakers are facing the harshest operating environment in years," he said. "Some less competitive mills may find it hard to continue in this environment. Overcapacity is a real issue for the global steel industry."
Steel is a globally traded product. If foreign steelmakers cannot sell steel sheet, slab or other products in their home counties, they try to find new markets abroad.
But the problem is, they often dump the steel at a loss in the United States, undercutting U.S. steelmakers that do not get the same government subsidies, said Tracy Porter, president of CMC Americas.
His commercial metals company is currently involved in a trade case on the dumping of steel rebar, while U.S. Steel and other steelmakers are also asking for tariffs against oil and gas tubular imports.
"In my 25-year stint with the company, I have never seen a more vicious attack on our economy," Porter said. "There's a difference between free trade and fair trade. The U.S. industry is equal to or better than on cost than any producers in the world, but when you see these imports coming in at the numbers they are, it's mind-blowing."
Steel imports have risen 17 percent this year, and now account for 25 percent of the domestic market, according to the American Iron and Steel Institute.
"It's disturbing when steelmakers in this country operated at 77 percent capacity last year," Rippey said. "It's a full-out assault."
U.S. steelmakers need a fair and level playing field, Rippey said. They would win every time on cost and quality if the market were not distorted by foreign subsidies and currency manipulation, he said.
The steel industry needs to be louder and more actively engaged on political issues, particularly steel dumping, said John Farris, vice president and general manager of Nucor Steel-Texas. Politicians, outside of those in the Congressional Steel Caucus, do not seem to understand that foreign steelmakers cannot buy scrap metal from the United States, ship it overseas, make it into steel and ship it back more cost-effectively, without unfair advantages, he said.
It seems like it would take a steelmaker to go out of business before they would start taking the issue more seriously, Farris said.
"They might think we're crying wolf," he said. "We're absolutely not crying wolf."