U.S. fails to prove unfair rebar trade

The US Department of Commerce is investigating cases of dumping and subsidies that allegedly harm the production of the domestic valve industry. US companies and workers expect the Department to be able to find and prove dumping and subsidies and to prosecute unfair trading practices to the fullest extent of the law.

The support of important legislators undoubtedly pleases domestic producers, but dumping from Turkey and Mexico has not yet been proven. To determine dumping, a domestic manufacturer must prove that the foreign manufacturer sold the product in the US for less than they sell it for domestically.

In this regard, US Senators Jeff Sessions and Richard Shelby joined 29 of their colleagues in signing a letter to Commerce Secretary Penny Pritzker asking her to take into account the interests of the US steel industry.

Steel demand and price, in particular for rebar, traditionally improve in the second quarter, when construction and manufacturing activities of firms are on the rise. However, a sluggish recovery in China and the absence of any major economic stimulus from Beijing will put pressure on commodity prices for the rest of this quarter and likely throughout the year.

The Chinese economy is a strong drag on steel prices, as China is the number one consumer of construction steel products and also trades rebar futures on the Shanghai Stock Exchange. US producers must show the difference between what was paid in the US and the commodity prices they trade overseas. It is hard to imagine that Turkish and Mexican producers would sell at lower prices without significant government subsidies.