The Institute of Scrap Recycling Industries and the Steel Manufacturers Association filed a joint statement calling for trade measures against Russia and the Ukraine for imposing taxes and tariffs on the exports of scrap.
"The lack of a level playing field for steel scrap is harming U.S. steel producing and consuming industries," the two associations noted.
“Foreign steel producing countries are restraining their scrap exports in order to subsidize local steel production. At the same time, these export restraints distort the world market for scrap," they said.
The SMA and ISRI combined forces to lobby Washington to act against trade barriers overseas that they blame for more than doubling the price of scrap in a year.
"The combination of export duties or tariffs on exports amounts to trade distorting practices," said Thomas Danjczek, president of the SMA, which represents North American mini-mills that produce steel mostly from scrap.
"We are opposed to export controls. Our members benefit from free and fair trade and when you have tariffs, it interferes with the marketplace," said Robin Wiener, president of the ISRI, which represents scrap metal balers, shredders and other companies engaged in recycling steel.
With worldwide demand for steel soaring, especially from industrial growth in China, the steel price has soared in the past year. However, so too has the price of scrap, partly as a result of overseas export tariffs, the SMA and ISRI allege.
The Emergency Steel Scrap Coalition and the Institute of Scrap Recycling Industries, Inc. have agreed to work together in efforts to eliminate global trade barriers affecting steel scrap. ISRI supports the Coalition’s efforts in this area, and in particular the elimination of steel scrap export taxes and other barriers maintained by Russia and Ukraine, either through a Section 301 petition or other means. We believe that eliminating foreign government export restrictions may be the most productive path toward solving this problem. The Emergency Steel Scrap Coalition has decided not to pursue the imposition of restraints on the export of steel scrap from the United States.
The ESSC and ISRI call upon the U.S. Government to take rapid and immediate action to eliminate trade distorting measures affecting scrap steel.
Since October 2003, the composite scrap price has more than doubled from $120 per ton to just under $300, said Danjczek. The United States consumes 70 million short tons of scrap per year to produce around 108 million tons. It imports 3-4 million tons of scrap and exports 9-11 million, he said.
"If the scrap stays overseas, that's the equivalent of subsidizing their steel manufacturing -- they are getting scrap for less than the market price.