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U.S. rules on steel dumping
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January 4, 1999: 1:28 p.m. ET
Commerce Dept. agency preliminarily finds that 8 countries are dumping steel
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NEW YORK (CNNfn) - Chalk one up for U.S. steel companies.
The Commerce Department's International Trade Administration issued a preliminary ruling on steel imports, in which it found that competitors in eight countries throughout Asia and Europe are, in fact, dumping stainless steel sheet and strip in coils into the U.S. market at unfair prices. The ruling does not mean that penalties will be imposed on steel imports ... at least not yet.
The preliminary determination was made several weeks ago, but appeared in the government's Federal Register on Monday.
If the Commerce Department makes the same determination in its final ruling, the International Trade Commission would follow up with its own review. The commission then decides whether U.S. companies have been harmed by dumping practices. If they have, Commerce can impose import duties.
The ITA said the final ruling vote is set for March 2, but other industry press releases put the date closer to May.
Legislation limiting overseas imports of stainless steel is by no means guaranteed, but domestic companies involved in the case view the preliminary ITA ruling as a major coup for the industry.
"This is a major step," said Dan Greenfield, a spokesman for Alleghany Teledyne, the Pittsburgh-based parent company of specialty steel maker Allegheny Ludlum. "We consider this to be the best news for the industry in a long, long time."
Greenfield added that demand for stainless steel in the U.S. market last year was strong, but because of illegal dumping by overseas competitors, he said, prices have fallen.
"What this [ITA ruling] does is demonstrate that a lot of this dumping has been done illegally according to domestic trade laws," he said. "We hope that the price of stainless steel sheet will establish a fair market price [once the ITC makes its ruling]."
Dumping occurs when goods are exported into the U.S. market at lower-than-domestic prices, or at prices below their international market value.
Because of market pressures, Greenfield said Alleghany Ludlum reduced its workforce of 5,500 by 20 percent through an early retirement program last year - part of its efforts to remain cost competitive.
Market pressures also have reduced the number of companies which produce stainless steel to two from four in the last year.
Alleghany Teledyne bought out the stainless-steel assets of Lukens last year, while J&L Specialty was bought by Usinor, their French parent company.
The mergers were precipitated by the dwindling price of stainless steel at home, and the need for companies to pair up to survive.
Alleghany Teledyne would not disclose the extent to which they have been financially harmed by dumping.
Greenfield said, however, that the company would not be so closely involved in the case if it weren't affected.
The unfair trade case was initiated June 10 when four U.S. producers, along with the United Steelworkers of America and two other unions charged the countries with "dumping."
In its report, the ITA said there is enough evidence to support allegations that Asian and European countries are, in fact, dumping stainless steel into the U.S.
"We preliminarily determine that stainless steel sheet and strip in coils from Japan is being, or is likely to be, sold in the United States at less than fair value…," the agency wrote in its report.
The same statement was made in the ITA's preliminary determination of steel exports from South Korea, Taiwan, Germany, Italy, France, Mexico and the United Kingdom.
As a result, the administration said it "is directing the Customs Service to suspend liquidation of all imports of subject merchandise..."
That means that bonds must be posted against such steel imports. The U.S. government would collect from the bonds if steel duties are imposed.
The Commerce Department initiated antidumping duty investigations of stainless steel sheet and strip in coils imports from those countries in July.
Bill Klinefelter, legislative and political director for Bethlehem Steel, said stainless-steel sheet dumping is merely a small part of a much bigger problem.
"The problem is much more widespread and pervasive than just stainless steel, but we certainly welcome this ruling," he said. "Right across the whole variety of steel mill products the U.S. markets are being penetrated by the dumping of steel from other countries."
So far, he said, more than 7,000 steelworkers nationwide have been laid off because "someone else is doing something illegal."
The ITA ruling, he added, is among the first signs that the government is beginning to recognize the "seriousness and depth of this problem and the need to do something concrete to mitigate this situation." 
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