Steel imports drop with demand

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

30 Mar 2009

Imports of steel, one of the commodities contributing to passage of the TARP's Buy American provision, dropped in February yet are taking a larger share of a smaller market. "We're watching it very carefully," said Mike Rippey, president and CEO of ArcelorMittal USA.


U.S. and global steel demand has "dropped off a cliff," which has plunged domestic steel production to a level not seen since the Great Depression, he said. Since October, companies have shuttered steel plants and laid off thousands of steelworkers. Steelmakers are operating at less than 45 percent of capacity,
Steel imports totaled about 1.6 million net tons of steel in February 2009, a drop of 34 percent compared to January data. On an annualized basis, total steel imports for 2009 dropped 26 percent.
"Imports plummeted in February both from January 2009 and February 2008 levels, reflecting the sharp decline in import orders after steel demand dried up last fall," said David Phelps, president of the American Institute for International Steel. The organization's mission is to support free trade.
But United Steelworkers District 7 Director Jim Robinson said at any level, imports are a concern, especially when U.S. steelmakers are making or selling steel.
"The conditions that have created surges of imported steel in the past can always return, and we have to be concerned in times like we're in," Robinson said. "We have to be on guard that some country can decide to develop its own stimulus package by exporting its steel to the U.S. We've seen it before and need to make sure it won't happen again."
Domestic steel organizations and the United Steelworkers asked U.S. Trade Ambassador Ron Kirk Thursday to "consult with other governments and to request immediate consultations" regarding China's actions to boost steel exports by reintroducing or enlarging its value added tax rebates.
The VAT rebates would give Chinese steelmakers a 17 percent export tax credit on steel shipments, said Thomas Danjczek, president of the Steel Manufacturer's Association.
"That encourages exports, and we're very concerned about it," said Danjczek, adding that China produces about 40 percent of the world's steel.

Source: The Times