North American steel producers applaud governments call to address Steel excess capacity

CANADA April 18 2016 5:23 PM     

NEW YORK (Scrap Register): Steel groups in Canada, Mexico  and the United States today expressed strong support for the statement issued  this week by NAFTA-country governments calling for “strong and immediate  commitments by governments of all major steel-producing countries to address the  problem of global excess capacity.”

Representatives of the American Iron and Steel Institute (AISI), the Steel  Manufacturers Association (SMA), the Canadian Steel Producers Association  (CSPA), CANACERO (the Mexican steel association), the Committee on Pipe and Tube  Imports (CPTI) and the Specialty Steel Industry of North America (SSINA)  applauded the governments’ action as a key outcome of the North American Steel  Trade Committee meeting last week in Mexico City, where the groups and  governments discussed the steel overcapacity situation.

The groups said that the global steel industry continues to experience  significant levels of overcapacity, estimated by the Organization for Economic  Cooperation and Development (OECD) at 700 million metric tons, representing  almost one-third of world steel capacity. This overcapacity, which is a result  of foreign governments’ support of their steel industries, has distorted the  global market and resulted in high levels of steel imports into the NAFTA  region.

“One of the most serious consequences from the glut of global steelmaking  capacity has been very high levels of offshore imports into North America in  recent years. As demand has softened in other parts of the world, particularly  in China, our region remains one of the only regions where the steel trade  balance is negative and the deficit is increasing. Action must be taken to  address the injury being caused by these imports, many of which are dumped  and/or subsidized,” the groups stated.

They noted that last year, non-NAFTA finished imports captured 22 percent of  the North American market, up from 21 percent in 2014, while raw steel  production in the region declined by 9.3 percent. Imports are capturing market  share and costing thousands of jobs throughout the steelmaking supply chain in  the United States, Canada and Mexico.

The OECD will conduct a High-Level Symposium on Excess Capacity and  Structural Adjustment in the Steel Sector, which will take place in Brussels on  April 18. This meeting presents a critical opportunity to continue to address  the global steel overcapacity crisis.