Steel: Price and Policy Issues (CRS Report for Congress)
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| Release Date |
Revised Oct. 31, 2007 |
| Report Number |
RL32333 |
| Report Type |
Report |
| Authors |
Stephen Cooney, Resources, Science, and Industry Division |
| Source Agency |
Congressional Research Service |
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Summary:
Steel prices remain at historically elevated levels. The rapid growth of steel production and demand in China is widely considered as a major cause of the increases in both steel prices and the prices of steelmaking inputs. Steel companies have achieved much greater pricing power, in part through an ongoing consolidation of the industry. Most of the integrated side of the industry, nearly half of U.S. production, is controlled by just two companies: U.S. Steel, the traditional industry leader, and Mittal Steel, itself the result of multiple international mergers. Moreover, Mittal in 2006 merged with the global number-two producer, Arcelor. Nucor and Gerdau have been active major consolidators of U.S. minimill production. [â¦] Some policy developments in 2005-06 may affect domestic steel producers. The Organization for Economic Cooperation and Development abandoned the effort to achieve an international agreement to ban subsidies for steel mills. The federal deficit reduction law (P.L. 109-171) included a repeal of the Continued Dumping and Subsidy Offset Act ('Byrd Amendment'), under which domestic steel producers have received distributions of trade remedy duties. In December 2005 the U.S. International Trade Commission (ITC) terminated an antidumping case brought by domestic steel companies against steel wire rod imports, and President Bush decided in a safeguard case not to provide relief for domestic producers of steel pipe against imports from China. Later in 2006 the ITC will decide in a five-year review whether domestic producers are still injured by steel imports from a large number of countries. In April 2006 the World Trade Organization (WTO) Appellate Body ruled against the 'zeroing' methodology used by the U.S. Commerce Department in calculating dumping margins. In the 109th Congress, 2nd Session, H.R. 5043 and H.R. 5529 were introduced, which would establish some changes sought by the steel industry in U.S. trade law, as well as a commission to review WTO decisions adverse to U.S. interests. This report will be updated as warranted by developments.
