Galvanised steel buyers in the United States are increasingly cautious about purchasing imports following a petition calling for trade defence measures against 10 countries.
In early September, Steel Dynamics petitioned the Department of Commerce (DOC) and the US International Trade Commission (ITC) to apply antidumping duties on corrosion resistant flat rolled steel (CORE) from Australia, Brazil, Canada, Mexico, the Netherlands, South Africa, Taiwan, Turkey, UAE and Vietnam. It also called for countervailing duties against imports of CORE from Brazil, Canada, Mexico and Vietnam.
The deadlines for the publication of preliminary countervailing and antidumping resulting from the investigation are November 29 and February 12, respectively.
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Shifting supply dynamics
The named countries accounted for 84% of all galvanised imports shipped into the United States during the first half of 2024. The trade case coincides with the onset of new domestic capacity for both galvanised and galvalume coated steel. SDI, who led the petition, has increased production at its Sinton facility, in Texas. Nucor and US Steel – two of the other petitioners – have declared similar intentions at their respective sites.
There is not a consensus view among US steelmakers on the need for antidumping and countervailing duties against all 10 countries listed in the petition, however. US Steel, Wheeling Nippon and United Steelworkers Union (USW) are not joining the cases against Canada. Nucor, meanwhile, did not file against Mexico.
The alleged dumping margins for each country are Australia (48.42%), Brazil (75.70%), Canada (35%), Mexico (34.16%), Netherlands (15.60%), South Africa (51.99%), Taiwan (67.90%), Turkey (16.39%), United Arab Emirates (77.68%) and Vietnam (158.83%).
During September research for MEPS’s International Steel Review, US market respondents reported that, since the filing of the petition, they have been increasingly reluctant to buy material from the countries listed in the petition.
Steel manufacturers in the US allege that some overseas producers benefit from government subsidies. This allegedly gives them a price advantage when they sell their surplus material into the country – at the expense of domestic producers.
US election effect
MEPS’s research partners have noted that increased protectionism has been a feature of the run-up to November 5’s presidential election. Campaigning from both the Democratic and Republican parties has emphasised an ‘America First’ agenda. Promises have been made to limit foreign influences on US industry, and steel supply is no exception.
According to International Trade Administration data, volumes of carbon and alloy galvanised hot dipped sheets and strip imported into the US rose by 41% year-on-year in the first seven months of 2024. Imports from Vietnam, Turkey, Taiwan and the Netherlands recorded three-digit percentage increases in the period.
US steelmakers will welcome the introduction of any additional protectionist measures. It would add to Section 232 legislation and the recently increased tariffs attached to Chinese imports under Section 301 rules. Domestic galvanised prices are likely to rise as tariffs and duties reduce the appeal of imports.
End-users – linked to automotive, appliance and construction segments – could argue that increased restrictions on steel imports only protect part of the supply chain, however. In the absence of low-cost competition, buying options will be more limited. Downstream manufacturers, facing higher input costs as a result of increased steel prices, may be exposed to increased competition from more cheaply produced foreign products.
MEPS analysis revealed a modest price rise for US coil products this month. The current spread between hot rolled and value-added material, such as cold rolled and galvanised coil, is wider than historical norms. That price gap is likely to widen further, depending on the extent of the trade action against galvanised steel imports.
Mepsinternational