This article was first published by Seeking Alpha on March
24, 2015
By Sarfaraz A. Khan
Last year, the U.S. witnessed phenomenal growth in steel
imports due to the excess global steel-making capacity and strengthening
dollar. The significantly higher steel prices in the U.S. as compared to rest
of the world also made this an attractive market for foreign producers. The
finished steel imports to U.S. rose 35% in 2014 and took an all-time record
level of 28% of the market share, despite tariffs on some of the steel
products. With continuing imports, that market share climbed to 32% in January.
While the U.S. steel producers have been accusing their
foreign competitors of "dumping" the steel in the U.S. -- the illegal
practice of selling a product below cost to gain market share -- they have not
yet filed a trade case. I believe this was mainly due to two reasons; firstly,
it is extremely hard to prove that a foreign competitor is actually selling the
product below cost. Secondly, most of the U.S. steel producers had a terrific
2014, with U.S. Steel (NYSE:X) reporting record annual net income since 2008,
which would have made it difficult for the industry to prove the negative
impact coming from growing steel imports.
