US industry gets ongoing protection from Chinese and Indian HR coil imports

Implications: US steel industry gains direct benefit from market protection against the major sources of potential over-supply over the next five years. This won't insulate the industry entirely due to a spillover effect. ArcelorMittal illustrates its phenomenal lobbying power and this has to be a success for this company.

Analysis: The International Trade Commission (ITC) voted to keep for a further five years high anti-dumping (AD) tariffs on direct imports of Chinese and Indian (and Indonesia, Thai, Taiwanese, Ukrainain and Indonesian) HR coil. This means that steel from these countries cannot be sold directly to the USA (although Thai steel has only a low tariff). Given that the Chinese and Indian steel sectors are likely to be the most likely to cause global over-supply over the next five years, this has to be a positive for US steel pricing.
This is not to say that US steel prices may not be impacted by over-supply from these nations at some point in the future. They will export to other markets and displace material which will then be sent to the US market, but it does provide some protection to the industry due to the additional time lag and complexity.

The big winner in this is ArcelorMittal. It managed to persuade the ITC to lift duties against HR coil from Kazakhstan, Romania and South Africa. These are countries where it is the sole (or dominant in the case of South Africa) HR coil producer. The ITC appeared to buy its argument that the company would not therefore deliberately dump into the US market where ArcelorMittal is the dominant player. That may be true, but it does give ArcelorMittal the opportunity to bring in product duty-free and supply to the US market if required.

More importantly, it will be able to point to the ITC decision in other anti-dumping cases and argue that the ITC is a precedent and this may help them gain access to markets that they were not in before. ArcelorMittal is the world's biggest steel maker and is beginning to show its clout in its lobbying power. It, for example, is probably a significant driver in pushing Eurofer and the EU into complaints on China as well.