U.S. to scrap trade deal on Russian steel duties
Resource from: Reuters Likes:177
Oct 28,2014
WASHINGTON, Oct 21 (Reuters) - The U.S. Department of Commerce will terminate a 15-year-old deal sheltering Russian flat-rolled steel producers from high import duties, it said in a letter to Russian authorities.
In the letter published on Monday, the United States gave Russia 60 days notice of the termination and said anti-dumping duties would then apply.
The so-called suspension agreement has sheltered Russian steelmakers from anti-dumping duties as high as 184.56 percent on hot-rolled, flat-rolled, carbon quality steel, instead setting a cap on imports and a minimum price.
Duties will apply beginning Dec. 16, according to the letter from Ronald K. Lorentzen, the Commerce Department's deputy assistant secretary for enforcement and compliance, to Russia's economic development ministry.
Severstal, one of Russia's top steel producers, blasted the proposed move. It claimed there was "no objective reason" for it because the price of hot-rolled coil in the U.S. market has actually risen this year and it indicated it might appeal the decision to "defend our interests."
A spokesman for the Russian ministry told Reuters his office had received the formal notice and was studying the issue.
The United States has intensified sanctions against Russia over its intervention in Ukraine in recent months, moving from travel bans and asset freezes for officials to targeting Russia's largest bank and oil companies.
U.S. steel producers complained to Commerce in July that the 1999 agreement had not stopped Russian producers from undercutting local prices or flooding the U.S. market.
Nucor Corp, U.S. Steel Corp, ArcelorMittal USA LLC and other companies said the reference price set in the agreement, which also set a cap on imports, had been below U.S. market prices since 2004.
"The deal did not comply with the legal requirements and obviously the policy parameters have changed so there was no reason to give Russia any special treatment," said Alan Price, an attorney from Wiley Rein representing Nucor Corp.
Spokeswomen at Nucor and US Steel did not immediately respond to requests for comment on the ruling.
Severstal now faces anti-dumping duties of 73.59 percent. Other Russian producers, such as Novolipetsk Steel and Magnitogorsk Iron and Steel Works, face duties of 184.56 percent.
Cowen and Company analysts said the move might help to stabilize hot-rolled coil prices, which had been falling in recent weeks.
The American Iron and Steel Institute (AISI) welcomed the decision and said the agreement was no longer working.
"Our industry should not have to endure injury from surging imports of Russian hot-rolled steel that are coming into this country under a deal that no longer serves its intended purpose," AISI President Thomas J. Gibson said.
Flat-rolled steel comes in rolls or sheets and is commonly used for purposes such as car bodies, roofing, construction and consumer appliances.
(Reuters)
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