U.S. Producers of Carbon and Alloy Steel Wire Rod File Trade Petitions Against Ten Countries

WASHINGTON, March 28, 2017 /PRNewswire/ -- Four major U.S. steel producers –Gerdau Ameristeel US Inc., Nucor Corporation Keystone Consolidated Industries, Inc., and Charter Steel – today filed petitions charging that unfairly-traded imports of carbon and alloy steel wire rod from Belarus, Italy, South Korea, Russia, South Africa, Spain, Turkey, Ukraine, United Arab Emirates, and the United Kingdom are causing material injury to the domestic industry. The petitions allege that producers in each of the ten countries are dumping wire rod in the U.S. market at sizeable margins:

The petitions also allege that the Governments of Italy and Turkey are providing countervailable subsidies to producers of wire rod. The petitions identify numerous subsidy programs related to export loans, credit, and insurance at preferential rates, preferential tax treatment, and government grants, among other programs.

The petitions were filed concurrently with the United States Department of Commerce ("Commerce Department") and the United States International Trade Commission ("USITC").  

The filing is in response to large and increasing volumes of low-priced imports of wire rod from the subject countries since 2014 that have injured U.S. producers.  From 2014 to 2016, subject imports surged into the market at increasingly low prices, with subject import volume growing by over 56 percent and their average price, or unit value, falling dramatically by 32 percent.       

The petitions allege that subject imports were able to penetrate the U.S. market by significantly undercutting U.S. prices. As a result of increasing volumes of low-priced imports, U.S. producers have suffered lost sales and significant declines in prices and profits. Foreign producers of wire rod also continue to threaten the domestic industry with additional injury due to their massive and growing production capacity and extensive unused capacity that will be used to export large volumes of unfairly low-priced and subsidized product to the United States. The price declines and financial deterioration that U.S. producers have suffered are likely to continue if duties are not imposed to offset these unfair trading practices.

"The substantial increase in low-priced and unfairly-traded carbon and alloy steel wire rod from the ten subject countries since 2014 has injured American manufacturers and their workers," according to Paul Rosenthal of Kelley Drye & Warren LLP, counsel for domestic producers Gerdau Ameristeel, Keystone Consolidated Industries, and Charter Steel.  "Trade relief is essential to ensuring that unfairly-traded imports do not continue to hammer the already-vulnerable domestic industry."

Alan Price of Wiley Rein LLP, counsel for domestic producer Nucor Corporation, highlighted the urgent need for a remedy: "Global steel overcapacity is wreaking havoc on U.S. steel producers, as demonstrated by the trade orders successfully obtained on numerous steel products in recent years. The U.S. long product producers, including the wire rod industry, have been similarly harmed by low-priced imports." 

FACT SHEET

Antidumping and countervailing duties:  Antidumping duties are intended to offset the amount by which a product is sold at less than fair value, or "dumped," in the United States. The margin of dumping is calculated by the Commerce Department. Estimated duties in the amount of the dumping are collected from importers at the time of importation. Countervailing duties are intended to offset unfair subsidies that are provided by foreign governments and benefit the production of a particular good. The USITC, an independent agency, will determine whether the domestic industry is materially injured or threatened with material injury by reason of the unfairly traded imports.

Next steps: The Commerce Department will determine whether to initiate the antidumping and countervailing duty investigations within 20 days of today's filing of the petitions and the USITC will reach a preliminary determination of material injury or threat of material injury within 45 days of today's filing. The entire investigative process will take approximately one year, with final determinations of dumping, subsidization, and injury likely occurring in the spring of 2018.

Product description: The product covered by these petitions is certain hot-rolled products of carbon steel and alloy steel, in coils, of approximately round cross section, less than 19.00 mm in actual solid cross-sectional diameter (carbon and alloy steel wire rod).  Carbon and alloy steel wire rod is primarily sold to wire drawers who manufacture wire for a wide variety of applications.  For example, industrial quality wire is used in the production of nails, reinforcing wire mesh, and chain link fence.  Other wire rod is drawn into wire for upholstery and mechanical springs, rope, screens, and pre-stressed concrete wire.  More demanding applications include automotive wheel bolds and tire reinforcing wire, cold-heading applications, certain welding applications (e.g., gas welding, electric arc welding), and music spring wire.     

Petitioning companies:  The petitioning companies and their law firms are Gerdau Ameristeel US Inc., Keystone Consolidated Industries, Inc., and Charter Steel (represented by Kelley Drye & Warren LLP), and Nucor Corporation (represented by Wiley Rein LLP).

SOURCE Kelley Drye & Warren LLP