By Paul Ploumis
SEATTLE (Scrap Monster): The American Iron and Steel Institute (AISI) has issued its comments on global trade violations and abuses. The letter, in response to the Office of the US Trade Representative’s (USTR) call for public comments, states that the US steel industry still faces numerous trade-related challenges. The market-distorting trade policies by various governments including China has led to increased imports of foreign steel by the US, which in turn has led to thousands of job losses in domestic steel industry.
The US steel imports totaled over 30 million metric tons in 2016, significantly higher when compared with the average imports of 27 million metric tons during 2010-’13. The finished steel imports accounted for 25.4% market share in 2016. Alarmingly, the imports have continued to surge higher in 2017, with imports of finished steel accounting for 27.3% market share during the first half of the year. Meantime, US steel exports have declined steadily over the past four years. This had led to rising steel trade deficit by the country. Also, the US raw steel production has remained subdued.
The North American Free Trade Agreement (NAFTA) has been beneficial to steel producers in the US. North America is one of the few regions with which the US runs a steel trade surplus. Further, Canada and Mexico account for more than 90% of the US steel export. The steel trade between the US and NAFTA countries have more than doubled since 1994. The US steel exports to Canada and Mexico have surged higher by 180% during the same period.
According to AISI, nearly 50% of the estimated 700 million metric tons of steel overcapacity is in China. This excess capacity has led to the country flooding the global market with dumped and subsidized steel products. In 2016, Chinese steel industry produced a surplus of 127 million metric tons of steel, most of which was exported. The steel production in China continues to remain robust, with output recording 4.4% year-on-year jump during the first five months of 2017. The global steel market continues to be dominated by Chinese steel industry, noted Kevin Dempsey, AISI Senior Vice President for Public Policy.
The average steel export by US steel makers to India has dropped considerably from nearly 185,000 metric tons in 2011 to 81,000 metric tons during the past four years. This is mainly on account of trade protectionist measures by the Indian administration, which includes imposition of hefty duties on imported steel and allocation of incentives to domestic steel firms to boost domestic production.
Elsewhere, the US has continually reported steel trade deficit with Japan. The country’s steel trade deficits with Turkey and Vietnam too have widened during recent years.