U.S. Commerce Secretary Penny Pritzker came to Cleveland, Monday, with news of a new effort to help level the international steel market. For years, American companies have suffered from the import of steel from foreign competitors looking to dump their excess product at bargain basement prices. Pritzker made her announcement after taking a tour of an ArcelorMittal plant in Cleveland's industrial Flats
A series of long, shiny, six-foot bands of steel, rolled through an assortment of welding and cleaning machinery as the Secretary and her entourage walked the shop floor in hardhats and protective glasses. Company CEO John Brett says this advanced, high strength product will be wrapped into coils and shipped out to make cars and appliances. Brett calls his plant one of the most productive in the world. It's a welcome comeback from the crippling years of the Recession.
"We're off life support," he smiles. "Through some trade actions, we've seen an increase in pricing --- and that's much welcome. But, we really haven't seen the volume come back."
One reason for that is a multi-billion-dollar global market in cheap steel that makes it hard for him to compete. While trade sanctions can help stem the import of under-priced product into the US, some foreign producers sneak in by first selling steel to third-party countries who in turn dump it here. Commerce Secretary Pritzker says the newly created Global Steel Trade Monitor will track what amounts to a growing concern. steel price laundering operation.
"So, for example," she asks, "how much steel is going from China or Korea to another market in the rest of the world? Some of what we have to do is track excess capacity going through third markets, which then comes into the United States."
The Secretary said China, alone, is responsible for a "tsunami" of excess steel which is sold around the world at low prices. She noted that the Chinese produce 1.2 billion metric tons of steel a year, and use about 800,000 metric tons of it. By contrast, the United States produces 90 million metric tons --- which means the US has to compete with China's leftover 400,000 metric tons.
Pritzker paid a visit to Arcelor Mittal at the invitation of Ohio Senator Sherrod Brown, who co-chairs the Senate Steel Caucus.
You can get details on the Commerce Department's Global Steel Trade Monitor effort HERE.
