TPT March 2016

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114 MARCH 2016
G LOBA L MARKE T P L AC E
Asked whether this signalled stabilisation in domestic steel
prices after the sharp drop over the previous year, Andrew
Lane, an analyst with Morningstar Inc in Chicago, declined to
go that far. But, he told Mr Nixon, “the decline in [import] prices
has slowed, which does inspire some hope that prices have
bottomed.”
The benchmark price for hot-rolled steel was around $374 a
ton in the US in late December, down 38 per cent from a year
earlier – a fall widely attributed to cheap imports. But the steel
industry has begun to win trade cases, which may slow the
influx.
The Commerce Department on 23 December levied a 256 per
cent tax on imports of corrosion-resistant steel from China,
and a ruling is expected early this year on tariffs requested by
the industry on imports of Chinese-made hot- and cold-rolled
steel. Imports of finished steel products were down 15 per cent
in November, compared with October, according to preliminary
numbers from the American Iron and Steel Institute, a trade
group. Even as the major trade cases filed over the summer
move forward, however, continuing depressed prices for iron
ore and coal help to keep steel prices down. Over the course
of 2015 in the US, iron ore was down 39 per cent; coal, 22 per
cent.
› Another analyst – John Tumazos, of Tumazos Very
Independent Research in Holmdel, New Jersey – said the
market is not likely to support price hikes and speculated that
the AK Steel action might be a defensive move.
Sometimes, he told the Trib-Review, “the steel companies
announce hikes so their customers can reject the hike rather
than asking for a deeper cut.”
A lawsuit centring on steel purchased for
US highway programmes calls attention to
haphazard application of the Buy
American Act
A judge in the District of Columbia takes the US Federal
Highway Administration (FHWA) at its word, even if a purist
could object that the word in question – “predominately” –
does not exist. Focusing on the term as it was used in a 1997
FHWA memorandum citing the Buy American Act, Judge Amit
Mehta on 22 December ruled against the nation’s highway
maintenance and safety agency in a case that has brought the
domestic preference law back into the news.
The Buy American Act, passed in 1933 and overhauled in
1979, requires the government to favour US manufacturers
when it makes bulk purchases totalling more than $3,000. But
the FHWA in 2012 created an exemption allowing products
containing less than 90 per cent steel or iron to be obtained
from a foreign source. It also exempts goods available “off-
the-shelf” or that are “necessary to encase, assemble, and
construct” manufactured products.
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