Sources: Kelley Drye & Warren LLP, Washington, D.C.; CP staff
Gerdau Ameristeel US Inc., Nucor Corp., Keystone Consolidated Industries Inc., and Charter Steel have filed petitions concurrently with the U.S. Department of Commerce and International Trade Commission charging that unfairly-traded imports of carbon and alloy steel wire rod are causing material injury to the domestic industry.
The petitions address product under 19 mm in cross section, shipped in coils to drawers or fabricators of reinforcing wire mesh, prestressed concrete strand, chain link fence, screens and nails. They allege that producers in each of the following countries are dumping wire rod in the U.S. market at sizeable margins: Belarus, 179.07–304.94 percent; Italy, 26.36 percent; South Korea, 41.72–53.09 percent; Russia, 216.50–821.40 percent; South Africa, 159.35–164.08 percent; Spain, 32.64 percent; Turkey, 45.10 percent; Ukraine, 21.64–61.64 percent; United Arab Emirates, 69.57 percent; and, the United Kingdom, 88.25 percent. Another allegation in the petitions is that the governments of Italy and Turkey are providing countervailable subsidies to producers through export loans, credit and insurance at preferential rates, preferential tax treatment, and government grants.
"Global overcapacity is wreaking havoc on U.S. steel producers, as demonstrated by the trade orders successfully obtained on numerous steel products in recent years. The U.S. long product producers, including the wire rod industry, have been similarly harmed by low-priced imports," affirms Alan Price of Wiley Rein LLP, counsel for domestic producer Nucor Corp.
The filing is in response to large and increasing volumes of low-priced imports of wire rod from the subject countries since 2014 that have injured U.S. producers. From 2014 to 2016, subject imports surged into the market at increasingly low prices, with subject import volume growing by over 56 percent and their average price, or unit value, falling dramatically by 32 percent.
The petitions allege that subject imports were able to penetrate the domestic market by significantly undercutting U.S. prices. As a result of increasing volumes of low-priced imports, petitioners contend, U.S. producers have suffered lost sales and significant declines in prices and profits. Foreign producers of wire rod also continue to threaten the domestic industry with additional injury due to their massive and growing production capacity and extensive unused capacity that will be used to export large volumes of unfairly low-priced and subsidized product to the United States, petitioners add. The price declines and financial deterioration that U.S. producers have suffered are likely to continue if duties are not imposed to offset these unfair trading practices.
"The substantial increase in low-priced and unfairly-traded carbon and alloy steel wire rod from the ten subject countries since 2014 has injured American manufacturers and their workers," says Paul Rosenthal of Kelley Drye & Warren LLP, counsel for domestic producers Gerdau Ameristeel, Keystone Consolidated Industries and Charter Steel. "Trade relief is essential to ensuring that unfairly traded imports do not continue to hammer the already-vulnerable domestic industry."