As a result of the ITC’s affirmative determinations, the existing orders on imports of this product from Belarus, Italy, Russia, South Africa, South Korea, Spain, Turkey, Ukraine, United Arab Emirates, and the United Kingdom will remain in place.

The DOC found that revocation of the antidumping duty orders on the given product from the given countries would be likely to lead to continuation or recurrence of dumping.

The DOC has determined weighted-average dumping margins of up to 280.02 percent for Belarus, 18.89 percent for Italy, 41.10 percent for South Korea, 756.93 percent for Russia, 142.26 percent for South Africa, 32.64 percent for Spain, 4.44 percent for Turkey, 44.03 percent for Ukraine, 84.10 percent for the UAE, and 147.63 percent for the UK.

The products in question are currently classifiable in the Harmonized Tariff Schedule of the United States (HTSUS) under subheading 7213.91.3011, 7213.91.3015, 7213.91.3020, 7213.91.3093; 7213.91.4500, 7213.91.6000, 7213.99.0030, 7227.20.0030, 7227.20.0080, 7227.90.6010, 7227.90.6020, 7227.90.6030, and 7227.90.6035.

At the opening of the conference Murat Cebecioglu, chairman of IREPAS, said that IREPAS firmly believes in, has supported and will always continue to support free and fair trade in steel but is very concerned by the recent developments triggered by the unilateral US tariffs, which are unjustified and against the World Trade Organisation rules and principles.

The IREPAS chairman stated that, in spite of all such protectionist measures, the global long steel products market is currently in a positive mood amid good demand worldwide. He added that, had there not been protectionist actions like the additional tariffs, quotas or safeguard measures, the global business scenario would certainly be much better. Mr.Cebecioglu said that protectionism is like a virus, expanding and hurting the international trade environment.

On the last day of the conference, producers of long steel products, as well as traders and raw material suppliers, shared the conclusions reached at their special committee meetings regarding the current situation in the markets with the general participants at the event.

Raw material suppliers at IREPAS : Two major events have impacted the market

Jens Björkman, chairman of the raw material suppliers committee, said that, since the previous IREPAS meeting held in September 2018 in Istanbul, two major events have impacted the raw materials market. The first of these events was the significant reduction in production by Turkish steel producers – the leading buyers of scrap in the world – and the corresponding reduction in their demand for scrap. Turkish mills’ scrap demand has stabilized somewhat since then but it still remains at low levels, a fact which scrap suppliers will have to get used to. Mr. Björkman said that most of the raw materials committee members believe that they will continue to see reductions in Turkish demand for scrap due to poor domestic market conditions in Turkey.

According to the committee chairman, the second major event that influenced the raw materials market was the iron ore waste dam collapse in Brazil, which has had a strong influence on iron ore prices. He added that iron ore prices increased by 20 percent within a short time and that prices have continued to move upwards. Mr. Björkman also touched upon some other factors affecting the raw materials market, namely, the low water levels on the Rhine which had made logistics extremely difficult and costly, leading to a slowdown in the accumulation of scrap at ports for export. He stated that the slowing down of the EU automotive sector in the last six months led to the lower availability of prime scrap for export.

The committee chairman said that there has been some buildup of scrap demand in areas such as Southeast Asia, South America and North Africa, which is balancing the reduced demand from Turkey though not entirely. Answering a question about the influence of the Section 232 tariffs on US scrap exports, Mr. Björkman said that in the past few months there have been some reductions in US scrap exports, partly because of lower import needs from Turkey and partly due to stronger demand in the US domestic market, adding that US domestic scrap demand is driving down the availability of scrap for exports.

Regarding steel production in the EU, he pointed out that it has declined somewhat in the first few months of the current year, while both demand for scrap in the EU and intra-EU trade have been active and strong.

Commenting on the financing of the scrap trade, Mr. Björkman said that, right after the currency crisis in Turkey, availability of letters of credit was tight in the country and financing costs for Turkish mills increased substantially, with the currency fluctuations making these issues much more challenging.

Traders at IREPAS: Safeguard measures have a major impact on trade

Representing the IREPAS traders committee, F.D. Baysal said that safeguard measures are having a major impact on steel trade. Referring to a question by his fellow traders, Mr Baysal commented on Turkey’s alternative markets and said that Africa will by no means replace the US and the EU as a destination for Turkish exports. Mr. Baysal said there are not a lot of places the extra supply in Turkey could go to and the only solution is reducing capacity utilization.

Answering a question regarding the potential for Iran’s billet exports, Mr. Baysal said that Iran is not likely to produce steel any cheaper than Turkey, Saudi Arabia or Algeria, while sanctions make it almost impossible to buy Iranian steel.

Mr. Baysal also stated that, while the Chinese government is taking serious measures and reducing production, Chinese suppliers will definitely not be absent from the global market but, as they are more contented in their domestic market, they will be less destructive in terms of pricing in the export markets. He added that the cut in VAT in China will help stimulate the economy.

Producers at IREPAS:  Importers have become exporters and vice versa

Mr Murat Cebecioglu, chairman of IREPAS and also of the IREPAS producers committee, said that GDP is growing in most countries worldwide although growth is slower than expected in some markets. Nevertheless, he added that things are getting better, which signals good demand. The IREPAS chairman said that protectionist measures are spreading like a virus throughout the world, changing trade flows.

He pointed out that importers have become exporters and vice versa. Mr. Cebecioglu stated that US President Trump totally destroyed the markets with tariffs and that others are following suit, starting a chain effect, increasing customers’ costs and ultimately causing economies to slow down.

Answering a question about the troubled Turkish exports, Mr. Cebecioglu said that the main export markets for Turkey have become Yemen and Israel, with the US and Canada being out of reach. However, the committee chairman reiterated that the Turkish steel industry has gone through difficult times before and will get through this one as well.

1. A global 24 percent tariff on all steel imports from all countries.
2. A tariff of at least 53 percent on steel imports from Brazil, China, Costa Rica, Egypt, India, Malaysia, Korea, Russia, South Africa, Thailand, Turkey and Vietnam.
3. A quota on all steel products from the aforementioned countries equal to 63 percent of their exports to the US in 2017. All other countries could export 100 percent of their 2017 export levels to the US, but would still be subject to tariffs.

Additionally, if implemented, the tariff or quota options would be in addition to any duties already in place.

The US DOC also recommends a process be put in place to allow US companies to request exclusions from specific steel products if the US steel industry lacks sufficient domestic capacity to replace the imports, or for national security reasons. Any exclusions granted result in changed tariffs or quotas for the remaining products to maintain the overall effect.

President Trump has until April 11 to make a decision.

The US DOC expects each of these remedies to increase US domestic steel production from its current capacity utilization rate of 73 percent to 80 percent.

Chairman Rhonda K. Schmidtlein, Vice Chairman David S. Johanson, and Commissioners Irving A. Williamson and Meredith M. Broadbent voted in the affirmative. As a result of the US ITC’s affirmative determinations, the US DOC will issue antidumping duty orders on imports of this product from South Africa and Ukraine.

The Commission also made a negative finding concerning critical circumstances with regard to imports of this product from South Africa.  As a result, imports of carbon and alloy steel wire rod from South Africa will not be subject to retroactive antidumping duties.

Accordingly, the US DOC has calculated the following dumping rates:

South Africa

ArcelorMittal South Africa Limited                                                       : 142.26 percent

Scaw South Africa (Pty) Ltd. (also known as Scaw Metals Group) : 142.26 percent

Consolidated Wire Industries                                                                 : 142.26 percent

Davsteel Division of Cape Gate (Pty) Ltd. was found to have no shipments of subject merchandise during the period of investigation.

All other producers/exporters in South Africa                                     : 135.46 percent.

Ukraine

ArcelorMittal Steel Kryvyi Rih OJSC                                                      :   44.03 percent

Public Joint Stock Company (PJSC) Yenakiieve Steel                        :   44.03 percent

Duferco S.A. was found to have no sales of the subject merchandise during the period of investigation and the US DOC determined not to further examine Duferco as a part of this investigation.

All other producers/exports in Ukraine                                                 :    34.98 percent.
The US International Trade Commission (USITC) is scheduled to make its final determinations on or about February 22, 2018.

The products subject to final antidumping duty currently fall under the Harmonized Tariff Schedule of the United States (HTSUS) 7213.91.3011, 7213.91.3015, 7213.91.3020, 7213.91.3093, 7213.91.4500, 7213.91.6000, 7213.99.0030, 7227.20.0030, 7227.20.0080, 7227.90.6010, 7227.90.6020, 7227.90.6030 and 7227.90.6035. Products entered under subheadings 7213.99.0090 and 7227.90.6090 of the HTSUS also may be included in this scope if they meet the physical description of the subject merchandise.

According to the amended decision, the US DOC recalculated a preliminary antidumping duty rate of 40.80 percent for South Korean steelmaker POSCO and all other exporters from South Korea, compared to the previous preliminary antidumping duty rate of 10.09 percent for POSCO and all other exporters from the country as announced in October this year.

The products in question currently fall under the Harmonized Tariff Schedule of the United States (HTSUS) 7213.91.3011, 7213.91.3015, 7213.91.3020, 7213.91.3093, 7213.91.4500, 7213.91.6000, 7213.99.0030, 7227.20.0030, 7227.20.0080, 7227.90.6010, 7227.90.6020, 7227.90.6030 and 7227.90.6035.

The products in question currently fall under the Harmonized Tariff Schedule of the United States (HTSUS) 7213.91.3011, 7213.91.3015, 7213.91.3020, 7213.91.3093, 7213.91.4500, 7213.91.6000, 7213.99.0030, 7227.20.0030, 7227.20.0080, 7227.90.6010, 7227.90.6020, 7227.90.6030 and 7227.90.6035.

The preliminary antidumping duty rates per exporter/producer are as follows:

Italy

• Ferriere Nord S.p.A.                                                                                                     :  22.06%
• Ferriera Valsider S.p.A.                                                                                               :  22.06%
• Others                                                                                                                              :  22.06%

South Korea

• POSCO                                                                                                                              :   10.09%
• Others                                                                                                                               :   10.09%

South Africa

• ArcelorMittal South Africa Limited, Scaw South Africa (Pty) Ltd. (also known as Scaw Metals Group), and Consolidated Wire Industries                                                                                         : 142.26%
• Others                                                                                                                                : 135.46%

Spain

• Global Steel Wire/ CELSA Atlantic SA/ Compania Espanola de Laminacion    : 20.25%
• ArcelorMittal Espana S.A                                                                                               : 32.64%
• Others                                                                                                                                 : 20.25%

Turkey

• Habas Sinai ve Tibbi Gazlar Istihsal Endustrisi A.S.                                                :   2.80%
• Icdas Celik Enerji Tersane ve Ulasim Sanayi A.S                                                      :   8.01%
• Others                                                                                                                                 :   5.41%

Ukraine

• ArcelorMittal Steel Kryvyi Rih OJSC                                                                           : 44.03%
• Public Joint Stock Company (PJSC) Yenakiieve Steel                                             : 44.03%
• Others                                                                                                                                :  34.98%

UK

• British Steel Limited                                                                                                       :  41.96%
• Longs Steel UK Limited                                                                                                 : 147.63%
• Others                                                                                                                                :   41.96%

Demand in the global long steel products market is good and has even been increasing slightly in almost all markets as there is no pressure from China on the international market.

Strong domestic steel consumption in China reduces prospects for Chinese exports

Some months ago, the consensus of steel sector analysts was that steel demand in China would decrease during the remainder of the year but this is not happening. With strong domestic consumption of steel in China, the prospects for Chinese steel exports continue to decrease. Ongoing increases in demand raise productivity and utilization rates for steel mills elsewhere. In addition, some major reinforcing bar markets, like Turkey and the EU, are growing, while the regionalization of the steel trade has been strengthening pricing levels. Latin America, on the other hand, is probably the only exception, with prices there remaining weak.

Low inventories, low interest rates and weaker dollar also help boost global market

In addition to declining exports from China, overall low inventories, low interest rates and the cheaper US dollar are also helping to boost the global market. Better economic conditions for GDP growth around the globe likewise help a lot, as does the delay in possible protectionist measures by the Trump administration under Section 232.

Low US preliminary CVD rates for Italian and Turkish wire rod surprise the market

The US DOC recently issued affirmative preliminary countervailing duty rates for wire rod imports from Italy and Turkey. However, the initial low countervailing margins announced  must have surprised the market and the petitioners. At present, the market is awaiting the antidumping decision affecting Belarus, S. Africa, S. Korea, Spain, Turkey, the UAE and the UK, which may also turn out to be a surprise.

Mills in EU finally able to raise prices amid limited imports and higher costs

Due to limited import possibilities, mills in the EU have finally been able to increase their sales prices. Their prices are also driven by higher costs for scrap and electrodes. Demand in the EU is very good compared to previous years. That said, cut and bend prices are still very much under pressure due to competition from domestic fabricators, most of which expected to see declines in prices and thus accepted long-term orders. Now the fabricators are in a really difficult situation, which local mills are taking advantage of. The uncertainty in the market resulting from the Section 232 investigation has contributed to the further upward movement of scrap and steel prices.

Rising raw material costs push producers to raise their long steel sales prices

The upward trend in raw material prices is pushing producers to increase their sales prices for long products. It is noteworthy that in July Turkish crude steel output rose to 3.3 million metric tons, up 30 percent from 2.6 million metric tons in the same month last year. Accordingly, ferrous scrap demand from Turkey – the world’s leading scrap importer – is significantly stronger this year, pushing import scrap prices in Turkey to reach their highest levels of the past three years.

Chinese suppliers highly unlikely to re-enter billet export market

The shortage of billets, or the lack of extra billets in other words, is preventing several rolling mills from producing more long products. The price of billet today is considered to be uneconomical, unless scrap and other inputs increase further in price. The curtailment of electricity in China means that electrically-produced billets will be produced less and that BOF mills will be chased for more billets and will thereby also increase prices or keep prices at the present high levels. Prices would have to go down by around 7-10 percent in order for Chinese suppliers to re-enter the billet export market. But that seems highly unlikely at this point.

Competition is decreasing and more balanced in the absence of China

Competition in the market is decreasing and is much more balanced due to the absence of China, and may be described as being fair and modest.

Very good outlook for next quarter provided there is no surprise from China

The current status of the market is stable and the outlook for the next quarter is very good as long as there is no surprise from China. Increasing prices and a solid supply-demand balance combined with low inventories have given everyone reason to believe that the strength of price levels will be sustained up to Christmas. The market is in outstanding shape but protective measures still pose a real threat for the future.

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Chairman Rhonda K. Schmidtlein, Vice Chairman David S. Johanson, and Commissioners Irving A. Williamson, and Meredith M. Broadbent voted in the affirmative.  Commissioner F. Scott Kieff did not participate in these investigations.

As a result of the ITC’s affirmative determinations, the US Department of Commerce will continue to conduct its antidumping and countervailing duty investigations. Preliminary countervailing duty determinations are due on or about June 21, 2017, and preliminary antidumping duty determinations are due on or about September 5, 2017.