The domestic steel industry in the United States is seeing troubling signs of slower domestic production coupled with rising levels of imported steel.
The American Iron and Steel Institute (AISI), Washington, has reported a domestic steelmaking capability utilization rate of less than 90 percent in three of the four full weeks in May, falling below the 2004 annual average rate of 91.4 percent production.
In the week ending May 28, domestic mills produced slightly less than 2 million tons of steel, dropping nearly 5 percent below the previous week’s production level.
Meanwhile, the AISI is also reporting that imported steel is arriving in the United States at a rate some 9 percent higher than last year. Through April, more than 3 million tons of steel had been imported, including 2.3 million tons of finished steel.
Figures for the first four months of 2005 show Canada as the leading source of imported steel, followed by the European Union, China, South Korea and Mexico. But while imports from the EU and NAFTA partners Canada and Mexico are basically level with last year, China’s imports are up some 300 percent and South Korea’s are up about 63 percent over 2004 levels.
Although the rate of finished steel being imported has increased 5 percent over 2004, the total amount adds up to only slightly more than one full week of domestic production.
Nonetheless, the domestic steel industry is urging the federal government to beware of a potential flood of imports, and is calling for it to look beyond steel at the broader manufacturing sector.
“Our government needs to confront in a meaningful way the challenges facing this industry and the entire U.S. manufacturing base,” says John P. Surna, chairman of AISI and president and CEO of U.S. Steel Corp., Pittsburgh.
Adds AISI president and CEO Andrew Sharkey, “Our government should make sure that U.S. laws promote U.S. investment and penalize trade-distorting practices. To cite one example, subsidies granted in non-market economies should be subject to the countervailing duty law both before and after a country is declared to be a market economy.”