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U.S. Steel Industry Under Threat by Overcapacity and Market-Distorting Practices

U.S. Steel Industry Under Threat by Overcapacity and Market-Distorting Practices

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Published on 5th October, 2019

SEATTLE (Scrap Monster): The U.S. steel industry continues to remain under threat by Chinese overcapacity and other market-distorting practices, said Thomas J. Gibson, President and CEO, American Iron and Steel Institute (AISI).

Despite creating huge economic impact and thousands of well-paid jobs, the American steel industry is at the risk of losing its global competitiveness, unless there are drastic changes to unfair trade practices, which have largely affected the industry. 

The much needed change has to begin in China, Gibson noted. Incidentally, China plans to commission five new steel mills in 2020, whose total capacity is likely to exceed the U.S, total steel production in 2018. The country is likely to report notable increase in its steelmaking capacity during this year. Moreover, the country is on track to surpass the record annual production reported last year. All promises by the Chinese administration, related to restructuring and reduction of steelmaking capacity has been in vain. 

The implementation of Section 232 tariffs, coupled with trade safeguard measures have helped in stemming the flood of dumped imports of steel from China into the U.S. The finished steel imports by the country have declined by 17% during the initial half of 2019. However, countries such as Vietnam and South Korea continue to flood the U.S. market. Surprisingly, most of these are transhipped Chinese steel.

Only meaningful reforms to global steel sector could save the U.S. market from its worries, Gibson added.

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