Lawsuit alleges steel collusion in US

U.S. subsidiary of India’s JSW Steel says Nucor, Cleveland-Cliffs and U.S. Steel conspired to prevent JSW from acquiring steel slabs.

JSW Steel (USA) Inc. and JSW USA Steel Ohio Inc., United States-based subsidiaries of an India-based steel producer, have announced the filing of a federal court lawsuit in the Southern District of Texas against three steelmakers: Nucor Corp., United States Steel Corp. and Cleveland-Cliffs, Inc.

The lawsuit alleges the defendant companies conspired to boycott and refused to supply plaintiffs with a critical feedstock (domestic semi-finished steel slab) beginning in 2018 and continuing until today. The plaintiffs allege the defendants’ cartel cost them hundreds of millions of dollars in lost profits, increased their expenses and caused them other damages, and led to higher prices and significant harm to U.S. steel buyers and significantly fewer jobs for U.S. steelworkers.

“We bought into the U.S. market a few years ago and made significant progress in improving our facilities and performance,” states Parth Jindal, a JSW Steel (USA) board member. “In 2018, we announced our intention to make substantial investments to further expand and upgrade our facilities. These companies derailed those plans, and so we file this suit today to respond assertively. As we allege, they stated repeatedly that they could make semi-finished steel slab in the quantities and quality to meet our needs and that they were willing to sell it to us, but when we tried to get them to move forward, they dragged things out and made excuses. We are now convinced that it was all for show and that, in reality, they never intended to make or sell steel slab to us.”

Adds JSW Steel (USA) board member John Hritz, “We would have had a state-of-the art facility in Baytown, Texas, up and running by now that would have literally set the standard for green steel production in this country and the world. The project would have resulted in hundreds of good, secure jobs for the next few decades. It would have resulted in billions of dollars in economic benefit in the state of Texas alone. Our costs of production would have plummeted and our production would have increased dramatically, meaning U.S. customers would have had more environmentally sound steel products at much better prices. These defendants, who account for more than two-thirds of all U.S. steel production, would have faced stiffer competition. That’s what they were afraid of, apparently, and we are convinced that is why they took the steps alleged in the complaint.”

Any collusion between the three steelmakers would be illegal, says Hritz, with JSW saying it “erodes competition, raises consumer prices, and disadvantages law-abiding businesses like JSW that seek to compete on a level playing field.”

“JSW, U.S. steel buyers and steelworkers all bore the brunt of the defendants’ actions,” says Hritz. “And who benefited? Defendants. They repeatedly announced record profits over the last few years. We will not sit by and let their conduct stand.”

JSW says its complaint is based upon federal antitrust laws and Texas state laws. It seeks “treble damages, which are automatic under the federal antitrust laws, compensatory and exemplary damages, and attorneys’ fees and costs,” adds JSW.

The plaintiffs are represented in the case by the Houston-based law firm of Baker Botts L.L.P.