Increased global demand, trade measures constrain supply and boost pricesBy Peter A. Buxbaum, AJOTIs the United States importing too little steel? It depends on whom you ask. Steel imports in March of this year showed an up-tick compared to February, but steel imports are way down from their record highs in 2006. Advocates for steel consumer companies, such as automakers that incorporate steel in their end products, say the US needs more steel and urge the United States government to remove countervailing duties and anti-dumping sanctions currently in place on some steel product. Representatives of the domestic industry argue for fair trade and object to the importing of unfairly priced steel. The real issue goes beyond duties and sanctions. The continuing economic boom in some areas of the world is gobbling up an ever-greater chunk of the global steel supply and a weaker dollar is driving up prices of imported steel. Lifting import barriers could not of themselves counter these powerful market forces. March steel imports increased 1.2% over February, after having fallen during the two previous months, according to Department of Commerce figures. This came on the heals of a 2007 which saw steel imports drop dramatically in the second half of the year after record import levels were recorded in 2006 and the first half of 2007. Primary offshore suppliers for US steel customers include China, South Korea, Japan, India, and Germany. In 2007, steel imports totaled 33.2 million tons, down from 45.2 million tons in 2006, according to figures supplied by Nancy Gravatt, a spokesperson for the American Iron and Steel Institute (AISI). The AISI projects this year’s total to shrink again, to 32 million tons. The modest March increases were nonetheless disappointing to David Phelps, president of the American Institute for International Steel, who noted that the 1.2% increase month over month represented a 17.4% decrease compared to March 2007. Total Steel imports in March 2008 were 2.513 million tons compared to 2.483 million tons in February 2008, he noted, while year-to-date figures showed imports decreasing by 11.5%. “The US market needs more steel than the domestic industry can produce,” said Phelps. Demand for specific steel products varies, but at the moment, the import pictures leaves the domestic industry with shortages in steel plates, hot rolled steel, steel sheets, and steel wire, rods, and rebar products, according to Phelps, as well as pipes and tubes utilized by the oil and gas exploration industries. This is despite the fact that demand for steel in North America decreased by 9.1% in 2007, thanks to a slowing economy, according to the International Iron and Steel Institute. The ISSI projects growth in regional demand of a modest 1.9% in 2008 and 1.0% for 2009. “There continues to be strong demand in some pockets of the North American economy,” noted Gravatt. “Demand continues in the energy markets and in some aspects of non-residential construction.” Meanwhile, global demand for steel is booming. The IISI forecast that 2008 would show an increase of 6.7% in 2007 and 6.3% in 2009, with Brazil, Russia, India and China as a group leading the growth with expected increases of 11.1% in 2008 and 10.3% in 2009, according to the ISSI. Demand in the European Union is expected to grow at a more moderate rate, 1.6% in 2008 and 2.3% in 2009, say ISSI projections. Phelps points to what he calls protectionist measures by the US government against certain steel imports as exacerbating the situation for US steel importers. In recent months, the International Trade Commission has ruled that the domestic industry has been injured by pipe imports from China and by steel nails from China and the United Arab Emirates, placing antidumping sanctions on those products. “We see the pipe case as another example of trade protection against one product negatively affecting another,” said Phelps. “The large number of hot rolled sheet cases have severely limited US pipe prod