WASHINGTON: Commerce Department opened an investigation Wednesday into a complaint by American steel producers, asking the government to impose duties on low-cost corrosion-resistant steel products imported from six countries.
Six petitioners, including United States Steel Corp. X, -1.65% , complained that the low import prices of corrosion-resistant steel products imported from China, India, Italy, South Korea and Taiwan have exerted downward pricing pressure across the entire domestic market for corrosion-resistant steel products, which are typically used in the automotive, construction and equipment industries.
In recent months tons of imported steel products from China, India, South Korea and Taiwan accounted for a combined 30% of total steel imports, or 40% if imported tonnage from NAFTA trade partners Canada and Mexico are excluded, according to a recent research from Morningstar Inc., a Chicago-based investment research firm.
“For a publicly traded company, even just the filing of the trade case changes the competitive landscape,” said Andrew Lane, equity analyst with Morningstar Inc.
After the filing of the case on June 3, shares of Nucor Corporation NUE, -0.27% – one of the complainants — closed 0.7% higher and shares of another petitioner, ArcelorMittal MT, -1.61% , rose 1.7%.
”If indeed the trade case is determined in that there is illegal dumping going on, the sanctions are applied retroactively all the way back to the date that the trade case was filed,” Lane said in a phone interview. “Importers would become more wary about importing goods that may be subjected to a retroactive tariff. Therefore the publicly traded domestic steel makers will see an uptick in the shipment volumes. They take a little bit of the share from those companies, which helps their profitability.”