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.