The U.S. steel industry continues to press its case that the federal government is allowing too much cheap foreign steel to be dumped on the American market, thereby jeopardizing the jobs of half a million U.S. steelworkers.
A report issued yesterday by the Economic Policy Institute supports the industry's case. The report states that global excess steel capacity is over half a billion metric tons—more that twice the volume of the surplus that followed the 1998 Asian financial crisis—and that state-backed foreign steelmakers have targeted America's large, open market to offload that excess supply.
The market sector feeling the biggest impact is oil-country tubular goods (OCTG)—the pipe and steel infrastructure used for energy exploration. The Economic Policy Institute report states that OCTG imports from nine countries, chief among them South Korea, more than doubled between 2010 and 2012, and, as a result, domestic steelmakers’ production, capacity utilization, shipments, and sales have all fallen.
The report states that domestic steel imports increased by 12.8% from 2011 to 2013, and surged even more sharply in the first two months of 2014, hitting 6.4 million net tons, an increase of 24.5% over the corresponding period of 2013.
The loss of market share has translated into depressed domestic steel production and revenues, leading to sharp declines in net income in the U.S. steel industry over the past two years, as well as layoffs for thousands of American workers, the EPI report states.
