Steelmakers say imports threaten national security

Longshoremen unload coils of steel from the Iryda at the Port of Indiana in 2010. Domestic steelmakers warned imports imperil national security at a Section 232 hearing in Washington D.C.

Domestic steelmakers say the record tide of imports threatens the very existence of American steelmaking, putting national security at risk.

More than 35 business officials, including from ArcelorMittal and the American Iron and Steel Institute, testified last week on a Section 232 investigation into steel imports. The U.S. Department of Commerce's probe could result in a further clampdown on imports, on which the United States already has imposed more than 190 tariffs.

ArcelorMittal USA President and Chief Executive Officer John Brett said his company has a history of supporting military capabilities dating back to predecessor companies like Bethlehem Steel Corp. and Lukens Steel Co.

"We are currently the largest supplier of armor steel plate for the United States Armed Forces," Brett said. "Our armor products find application in many fighting vehicles used by the Army and Marine Corps, including the Abrams M1 main battle tank, the Bradley fighting vehicle, M88 recovery vehicles, the Stryker family of fighting vehicles, various MRAP (Mine Resistant Ambush Protected) vehicles and the up-armored Humvee."

Brett said U.S. mills were needed to bulk the Navy fleet up to 350 to 360 vessels, but military contracts only represented about 1 percent of total production and weren't enough alone to sustain a steel mill.

"In other words, defense-related sales of steel alone are not the determining factor in whether a steel mill is successful and sustainable," he said. "Instead, the commercial viability of a steel operation is imperative for retention of that operation’s ability to serve the defense needs of the nation, both in times of peace and war."

ArcelorMittal's plate industry operating income has dropped 75 percent over the last few years, a time when ArcelorMittal USA filed a slew of trade cases. The company's steel plate sales dropped by a third in a single year as a result of the surge of imports.

"By 2015, our plate operations were running at only 55 percent of their capacity," Brett said. "Our plate prices fell to the lowest levels we had seen in more than 10 years. When we are forced to price at levels that do not cover our costs, then we also are not generating the capital required to reinvest in our operations. And if we cannot reinvest, we cannot remain on the cutting edge of new technology for the future, for our commercial business or for our military business. In other words, the impact of the imports is felt throughout our business, commercial and military."

U.S.-made steel is used in aircraft carriers, nuclear submarines, Patriot and Stinger missiles, tank armor, field artillery pieces and in every major military aircraft currently in production, American Iron and Steel Institute President and CEO Thomas Gibson said. He said the United States needed to apply pressure to China and other foreign countries to reduce excess steelmaking capacity, so that unsold steel wouldn't end up dumped in U.S. ports.

"Steel’s importance to national security must also be looked at in a broader context to include both direct and indirect steel shipments to the military infrastructure that are needed to support our defense efforts, both at home and overseas — e.g., all of the steel that goes into the rails, rail cars, ground vehicles, support ships, military barracks, fences and bases," Gibson said. "On a broader scale, steel is also essential to our nation’s critical infrastructure, in terms of transportation, public health and safety and energy, to name a few key areas. Our military and our broader economy depend on transportation infrastructure like roads, bridges, railroads, transit systems and airports, all of which are built with steel products such as rebar, plate, sheet and fabricated structural members."


Business Reporter

Joseph S. Pete is a Lisagor Award-winning business reporter who covers steel, industry, unions, the ports, retail, banking and more. The Indiana University grad has been with The Times since 2013 and blogs about craft beer, culture and the military.