U.S. steel wire rod mills file unfair trade cases

Staff -- Purchasing, 12/8/2005

Five domestic producers of carbon and alloy steel wire rod are seeking punitive duties for alleged dumping wire rod products from mills in China, Germany and Turkey. The domestic mills say they have been injured financially by sales of imports as much as 330% below the cost of production by the Chinese mills.

The alleged dumping margins of the German mills range from 42% to 82% and from 31% to 78% from the Turkish steelmakers. These trade cases are similar to unfair sales petitions that resulted in the imposition of dumping duties on wire rod imports from Brazil, Canada, Indonesia, Mexico, Moldova, Trinidad and Tobago, and Ukraine in 2002.

The U.S. mills involved—Connecticut Steel, Gerdau Ameristeel, Keystone Consolidated Industries, Mittal Steel USA and Rocky Mountain Steel Mills-contend that unfair trade has allowed the foreign mills to increase their share of the U.S. wire rod market from 12% in 2002, to 23% in 2004, and reaching 28% of the domestic market in the first half of 2005.

Carbon steel wire rod is an intermediate product that is ultimately used for the manufacture of wire and wire products such as coat hangers, fasteners, wire mesh, tire cord, and chain link fencing. "Imports from the PRC, Germany and Turkey have surged dramatically over the last three years, taking an ever-greater market share and inflicting severe financial distress on the domestic industry," says Paul Rosenthal, lead trade counsel and a member of the Washington, D.C. law firm of Collier Shannon Scott.

"The increase in dumped imports from these countries and the disruptive low prices that are underselling the domestic industry have largely reversed the first brief period of reasonable profitability this industry has known in the last few years," he says. However, according to Purchasingdata.com, low-carbon wire rod prices averaged $517 in 2004 and have averaged $518/ton through October of this year as compared with $310 in 2003.