U.S. Steel links demand to Granite City plant's future
Updated 12:30 p.m., April 27, with CEO comments — There is still no firm timeline for production to resume at the U.S. Steel plant in Granite City. The company continues to describe the shutdown as temporary and operations will not start again until demand picks up.
The idling is affecting about 2,000 workers in the Metro East. U.S. Steel Chief Executive Officer Mario Longhi says more sustainable demand is needed for Granite City to come back online.
"But we would do it, if that was the case. No question," he told analysts Wednesday during a conference call.
Longhi also touched on the company's effort to battle what it says is unfairly-priced, foreign steel in the U.S. market. It has filed a complaint with the U.S. International Trade Commission, accusing Chinese companies of conspiring to fix prices, using false labeling to avoid import fees and stealing trade secrets.
Longhi said the ultimate penalty in this case goes beyond tariffs.
"It is an exclusion of the products from the U.S. market," he said.
Original article, March 16, 2016 — The United Steelworkers union says two key trade rulings are the first steps in slowing down unfairly priced imports. They are among several cases officials in the Metro East have been closely monitoring as they wait for U.S. Steel to decide when it might resume operations at its Granite City plant.
A preliminary determination from the U.S. Department of Commerce issued Tuesday indicated hot-rolled flat steel from seven countries (Australia, Brazil, Japan, Korea, the Netherlands, Turkey and the United Kingdom) has been sold in the U.S. at unfairly low prices. This type of steel is used for items like railroad tracks and I-beams in the construction industry.
Two weeks ago, the Commerce Department gave a preliminary finding that cold-rolled flat steel was also being dumped in the U.S. market, especially by China. The report also said Brazil, India, Korea, Russia, Japan and the United Kingdom unfairly priced their products, which are used in appliances, automotive items, containers, and industrial and transportation equipment.
The decisions place tariffs on the imports, including a duty of more than 260 percent on Chinese cold-rolled products and 49 percent on hot-rolled products from the United Kingdom.
U.S. Customs and Border Protection will now collect the imposed fees on hot-rolled steel following this week's determination; it began collecting duties on cold-rolled steel as of last week. Final rulings by the International Trade Commission on dumping of both types of steel are expected later this year.
Another case involves corrosion-resistant steel from five countries. A final determination from the U.S. Department of Commerce is expected in late May.
Favorable decisions in these cases could help get U.S. Steel's Granite City plant back on track.
Madison County Chairman Alan Dunstan told St. Louis Public Radio last week that those investigations could prevent any additional dumping. He also pointed out that unfairly priced foreign steel already in the U.S. is causing a glut in the market and still has to work its way through the system.
"Once you get rid of that surplus, I think you'll steel plants like Granite City that have been idled coming back in full force."
Some of the roughly 2,000 Metro East workers who have been laid off because of the idling are cautiously optimistic.
"I have a lot of hope that it will, I mean, I really hope, you know, but you gotta cover your bases," said Jason Anderson, who had been a steelworker for 23 years before being laid off. "You still gotta be looking."
But there aren't many jobs "like what we had," said Bill Hunsche of Collinsville. He lost his job just before Christmas, and while he's went through plant idling back in 2008, he said this time is harder.
"It's been up and down, it's pretty tough," he said. "This one's a little different because of all the dumping of the steel and this or that, and you don't know if you're going to go back or if it's really temporary. It's difficult, but you just gotta go day by day."
Here are the countries and some of the companies affected by the preliminary rulings:
- Companhia Siderurgica Nacional - 38.93% (cold-rolled) and 33.91% (hot-rolled)
- Usiminas Siderugicas de Minas Gerais - 38.93% (cold-rolled) and 34.28% (hot-rolled)
- Countywide Rate - 265.79% (cold-rolled)
- JSW Steel Limited/JSW Coated Products Limited - 6.78 % (cold-rolled)
- JFE Steel Corporation - 71.35% (cold-rolled) and 6.79% (hot-rolled)
- Nippon Steel & Sumitomo Metal Corporation - 71.35% (cold-rolled) and 11.29% (hot-rolled)
- POSCO/Daewoo International Corporation - 6.85% (cold-rolled) and 7.33% (hot-rolled)
- Hyundai Steel Corporation - 2.17% (cold-rolled) and 3.97% (hot-rolled)
- Russia Joint Stock Company Severstal - 12.62% (cold-rolled)
- Novolipetsk Steel OJSC - 16.89% (cold-rolled)
- Caparo Precision Strip, Ltd. - 5.79% (cold-rolled)
- Tata Steel UK Ltd. - 31.39% (cold-rolled) and 49.05% (hot-rolled)
- BlueScope Steel Ltd. - 23.25% (hot-rolled)
- Tata Steel IJmuiden B.V - 5.07% (hot-rolled)
- Colakoglu Metalurji A.S./Colakoglu Dis Ticaret A.S - 7.07% (hot-rolled)
- Ereğli Demir ve Çelik Fabrikaları T.A.Ş./Iskendrun Demir ve Çelik T.A.Ş - 5.24% (hot-rolled)