CITAC STEEL TASK FORCE CHALLENGES CLAIMS THAT U.S. HAS "LOWEST STEEL PRICES IN THE WORLD"
New Price Chart Is A "More Complete Picture of Steel Prices"
Washington, DC: The United States is still at the high end of the world's steel prices, according to a steel price chart released today by the Consuming Industries Trade Action Coalition Steel Task Force (CITAC STF). The CITAC STF chart shows a more complete picture of U.S. versus international steel prices than information previously published by steel producers.
"We believe that policymakers and the media should have all the facts when comparing U.S. and international steel prices, particularly after a chart published by the American Iron and Steel Institute in January provided an incomplete snapshot of the situation being faced by steel consumers in the United States," stated CITAC STF Chairman William Gaskin.
CITAC STF Counsel Lewis Leibowitz explained, "Our price chart includes fuller information on the price disparities facing steel consumers as a result of the Section 201 steel tariffs and over 200 countervailing and antidumping duties in place. Let's get the facts straight: steel consumers are in trouble because of price hikes in the U.S. that have resulted in a severe competitive disadvantage for these companies versus their overseas competitors."
"The steel producers' claim that steel prices have retreated to levels on the 'low end' of world steel prices is incomplete and inaccurate. AISI's chart makes several errors that present a false picture of relative steel prices. When these errors are corrected, it is clear that prices in the U.S. are still at the high end of world steel markets," said Leibowitz.
AISI only posted prices for hot-rolled steel, according to Leibowitz, and excluded cold-rolled and galvanized steel — more important products used by steel consumers. When all three flat-rolled products are included in the calculations, and countries such as Russia and Japan are added, (Russia, for example, is the world's largest steel exporter, although trade restrictions keep much Russian steel from the U.S. market), the U.S. is shown to have higher prices than in most markets.
Leibowitz also notes that AISI failed to include prices on the West Coast of the U.S., where a large proportion of steel users manufacture products, and where prices are far higher than in the Midwest or Gulf Coast.
Finally, AISI failed to note that prices in most world markets are stated in "C&F" terms, while U.S. prices are listed in "FOB mill" terms. This means that world market prices are based on the steel cost plus its freight charges, while the U.S. prices are only based on the price of steel at the factory gate, with no freight charges added in. AISI, in making a comparison using the FOB mill prices for the U.S., therefore understates U.S. prices. U.S. freight charges add an estimated $40 per metric ton to the price of steel delivered to the end user. When these charges are incorporated (see attached chart), U.S. prices are higher than in Europe and most of Asia.
"A truly fair comparison of steel prices worldwide using reliable sources shows that, while the price gap has narrowed, U.S. prices are at or near the highest prices worldwide," says Leibowitz. "The U.S. manufacturers that use steel are therefore operating under a competitive disadvantage compared with their foreign counterparts. Additionally, as U.S. producers are now exporting at low prices to destinations such as Asia, and with recently-announced price increases for the second quarter, U.S. steel users are facing a real crisis."
"Our goal," said Gaskin, "is to lay the facts on the table so that policymakers can make an informed decision when assessing the impact of the steel tariffs. We urge President Bush to direct the International Trade Commission (ITC) to review the affect of the tariffs on both steel consumers and steel producers."
CITAC is a coalition of companies and organizations committed to promoting a trade arena where U.S. consuming industries have access to global markets for imports that enhance the international competitiveness of American firms. T he CITAC Steel Task Force is comprised of steel consumers working to achieve the termination of the 201 steel tariffs by mid-point review and reform U.S. trade laws and policies to benefit U.S. steel consumers.