Protectionist US policy hurting Turkish steel

There’s a dark side to cheap oil and gas. And it’s not just layoffs. It’s fear, and it’s not good for business or international relations.
In 2013, one of the largest steel manufacturers in Turkey invested $150 million to build a state-of-the-art plant in Baytown, just outside of Houston. It opened in April 2014 and created 250 jobs in Texas.

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The plant produces 300,000 tons of what are called oil country tubular goods. OCTG are generally 30-foot long, threaded pipes that carry oil from the wellbore. The quantity produced is expected to offset 85 percent of Turkey’s OCTG exports to the U.S. Put in context, in 2014, Turkey made up only a 5 percent quantity share and only 3.8 percent value share of U.S. steel imports.The threat from Capitol Hill is just as palpable, and a touch ironic. As part of the ballyhooed Trade Promotion Authority legislative package, Trade Adjustment Assistance (TAA) (HR 1295) also became law. TAA includes protectionist provisions championed by the American steel industry that alters the injury standard that the International Trade Commission uses to evaluate trade cases against importers, like Turkish steel producers.
What that means is that a broader injury standard gives U.S. producers the ability to file more cases, fast track trade cases against imports, and raise the price of steel in the U.S. with tariffs.
Despite the Turkish steel industry’s contributions and the fact that it is no real menace to the U.S. economy, the industry is constantly under threat of international sanctions as the U.S. steel industry prepares to launch yet another salvo of trade cases against Turkish steel companies.
Why? First a little background.
The global steel markets have some structural problems and have been adversely affected by macroeconomic conditions not of their own making. The chief culprit is plummeting global energy prices that have shrunken demand for the OCTG being produced in Baytown, Texas, and just about everywhere else.   
Coupled with the U.S. dollar rising 40 percent against the Euro and a slowing economy in China, which is responsible for over half the world’s steel production, and you can see why there is understandable anxiety in the steel industry.
Despite all these global macroeconomic challenges, if one was to listen to U.S. steel industry rhetoric, imported steel is 100 percent to blame for the American industry’s problems. That’s just flat out wrong.
We, as members of the Turkish Steel Exporters Association want a dialogue with our American counterparts and key members of Congress to clear up any misconceptions about Turkish trade practices, not legal wrangling or falling back on petty protectionist policies.
As the world’s eighth largest producer of steel, Turkey’s main objective is maintaining a globally sustainable steel market based on free and fair trade. Turkey is a free market economy and its producers adhere to the World Trade Organization’s trade laws and European Coal and Steel Community (ECSC) rules barring subsidies, embracing trade as the key to Turkey’s success. 
In 1996, Turkey agreed with the ECSC to abolish customs duties on bilateral steel trade. Turkey trades steel freely with all EU member states. Turkish Steel companies are private and do not receive government subsidies related to their energy, transportation or infrastructure costs.
Instead, Turkey’s modern vertically integrated production process with factories located on the Mediterranean coast and its world-leading use of electric arc furnace (EAF) technology make Turkish steel production more efficient and greener than any of its rivals around the world. Turkey produces 70 percent of its total crude steel using the EAF method, which is based on recycled scrap metal. As a result, the Turkish steel companies emit 1/6th of the CO2 compared to traditional methods.
We believe the U.S. steel industry’s legal actions are also out of step with American attitudes toward free and fair trade. In May, for the first time in 15 years the Wall Street Journal reported that a plurality of Americans who were polled last month said that, “free trade with foreign countries helped the United States.”
We agree with the American public’s views, and that the U.S. steel industry’s agitating for increased tariffs only ends up hurting American business, and the American economy. If Turkish steel producers are able to produce at a lower cost due to superior technology and business processes and sell at more competitive prices, should trade be stymied through tariffs and duties just because the U.S. steel industry has fallen behind?
Further, because the U.S. steel industry is less efficient, must it seek to disqualify its competitors from the American market by incessantly filing unsubstantiated trade cases? If the industry continues its fictitious saber-rattling, will the US give up its commitment to free and fair trade?
The continuing trend toward filing antidumping and countervailing duty cases against countries like Turkey will not solve the current structural and macroeconomic issues facing the U.S., and indeed world steel industries. Only by some form of constructive engagement among the stakeholders will we find a path out of this forest.
Ekinci is chairman of the Turkish Steel Exporters’ Association.
Source: http://thehill.com/blogs/congress-blog/foreign-policy/248696-protectionist-us-policy-hurting-turkish-steel

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Georgetown steel mill headed for Aug. 13 closure

The Arcelor Mittal steel mill in Georgetown is headed for an Aug. 13 permanent closure.
The rolling mill is shut down and the rest of the product should be sold by the end of this week, a company spokeswoman confirmed.
A Florida investor who said he wants to buy the mill had no comment Wednesday, but plant officials said they continue to be willing to “consider credible interest from potential buyers.”
On May 14, Arcelor Mittal announced it would close the wire rod mill, which opened in 1969, around Aug. 12. The company is required by its contract with the United Steelworkers to give 90 days notice.

The closure is forced by dumping of imported steel at prices lower than Arcelor Mittal can make it, company officials said. The company and several other steelmakers filed a complaint with the U.S. Commerce Department seeking action to slow the imports.
A May 22 followup letter to the union from mill manager Danie Devapiriam said layoffs would begin July 24 “or during the 14-day period thereafter.”

At the time of the announcement, 172 steelworkers were employed at the plant, along with 27 others who work for a sister company, and about 30 executive and administrative staffers.
The workers will receive preference for jobs at other Arcelor Mittal plants, the company spokeswoman said.

Efforts to reach Steelworkers Local 7898 president James Sanderson were unsuccessful Wednesday.
At one time, the mill had more than 1,000 employees but after a series of bankruptcies, steel company mergers and buyouts, it pared down but still made a high quality of wire rod and was Mittal's only wire rod plant in the United States.
Joseph G. Wortley, a Boca Raton, Fla., entrepreneur with holdings in a variety of businesses, said he wanted to buy the steel mill. Wortley tried to buy it during its 2002 bankruptcy sale but was unsuccessful.

He said his family had a history in the steel business in Pennsylvania and he had not lost his interest in buying the plant and making it profitable despite the flood of imports. Wortley said he thought he could promote and take advantage of the special quality of the wire rod as an independent factory in ways that a global company such as Arcelor Mittal could not do.
He said in May that the mill makes good steel and it deserves to continue to operate.
On Wednesday, Wortley was noncommittal about whether his purchase attempt is still on.
“Unfortunately, I can only say no comment,” he said. “I really can't say anything, I wish I could.”

Plant officials said they continue to be willing to “consider credible interest from potential buyers.”

Georgetown County's economic development director, Brian Tucker, said the steelworkers have the kind of skill sets that could be transferred to other positions available in the area. There is an unmet need for skilled workers and they could fit into it, Tucker said.
“Our first priority is to help find new positions for those employees as quickly as possible,” he said.

The second priority if the closure occurs is to “determine the best path forward for that property,” and be involved in decisions about it, Tucker said.
He said the company has indicated it is willing to work with the county and city on those issues.
The mill sprawls over more than 60 acres between the riverfront and South Fraser Street, which is also U.S. 17. Some of the property is scattered sites such as the company offices a block off South Fraser, and the old City Hall on Front Street.
During the previous bankruptcies and temporary shutdowns, many people hoped for a chance for the property to be transformed into a more tourist-friendly locale for the historic waterfront.
Georgetown Mayor Jack Scoville said residents are split about 50-50 on wanting the mill to continue to operate, or wanting it to be replaced with something like a marina and shops.

Read more here: http://www.myrtlebeachonline.com/news/business/article28345729.html#storylink=cpy

Read more here: http://www.myrtlebeachonline.com/news/business/article28345729.html#storylink=cpy

Read more here: http://www.myrtlebeachonline.com/news/business/article28345729.html#storylink=cpy

 

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