AIST Steelmaker of the Year Mario Longhi Speaks on Trade

In his acceptance speech, Longhi stressed the importance of the steel industry as an economic segment that allows helps the economy to thrive.

Not surprisingly, his talk turned to the challenges of the American steel industry as it faces an onslaught of unfairly traded imports.

“When I decided that the rule of law has to prevail, many folks told me that would be an impossible mission,” said Longhi. “Filing cases against dumping is not a full solution for our industry because the moment you win one, the vacuum is fulfilled by another one. The true solution resides in changing the law in a way that the proper standards for the definition of injury get established.”

Longhi spoke of visiting US Steel facilities only to see projects going up right in front of them using imported material from regions that have demonstrated time and time again their defiance of the rule of law.

“How can it be those projects are receiving material, illegally dumped when we have the full capability of the steel workers in our companies right across the street?” he asked.

The current TPA legislation was seen as an opportunity to be seized by the steel industry. Longhi helped lead the development of an amendment to the TPA that will set standards for definition of injury.

“I guarantee if that amendment bill is passed and TPA is passed, that is the ultimate solution that will allow for a fair playing field to exist, said Longhi. “And in a fair playing field we will win every single time.

Executives comment on trade

Following the Awards Breakfast, a short question and answer period was held for the press in which more attention was devoted to imports and trade cases.

When asked what the US steel industry hopes to gain from a recent letter to China, Philip Bell, president of the Steel Manufacturers Association said it continues the dialogue with China.

Longhi added that it creates an environment that amplifies awareness and introduces a sense of urgency to the issue of steel capacity and trade.

When asked if what products might be under consideration for trade case action, Longhi commented that filings and cases are an ongoing process. “It is not a matter of if, but when.”

Dick Teets, executive vice president and COO of SDI, said that the number of WARN notices that have been issued show the damage imports have caused. He noted three galvanizing lines are out in Pittsburgh and it is hard to keep employees in jobs.

Lourenco Goncalves, CEO of Cliffs Natural Resources, commented that “Injury is not only when blood is on the ground, but when you can see blood is coming.”

There is a robust American economy and a sea of imports dumping in the U.S, said Andy Harshaw, president and CEO of ArcelorMittal USA. The TPA legislation is a good time to make others aware of the issue.

Philip Bell commented on the risk petitioners face when bringing trade cases. It is a long costly process, with numerous influences, including the market and politics. “Bringing a trade case is seen as a strategy of last resort.”

Another question put forth to the executives was, should we give China free market economy status?

Harshaw was quick to say that China is not a free market economy. “You can call a monkey a horse, but it will still be a monkey.”

Bell said not to assume it would happen. China has a long way to go and it could be devastating if it got status now.

Goncalves added, “Talk is cheap” and it is a big hurdle for China to become a market economy. “Truth tends to prevail, especially when people are committed to solving problems.”

Regarding the TPA legislation, Longhi said trade must be done under rules of law. They can’t dump stuff here, he said. If they have to prove it is not dumping, that will change things.

Bell warned that we need to be sure that TPA and TPP doesn’t erode Buy America policies.

Goncalves added that currency manipulation must be addressed.

The executives were not optimistic that there will be a quick solution for the problems in the iron and steel industry in China. It will take years to find a solution, said Longhi.

“It’s all about jobs for them and the rest is collateral,” said Harshaw. In order to take out excess capacity China will have to remove jobs.

A related question, in light of the difficulties in the OCTG market, was when will there be a turnaround in the oil and gas market?

Longhi said US Steel is sitting with minimal capex investment in the maker and inventory of 10 months. He does not expect a reversal until the end of the year. Dick Teets, agreed adding that inventory is everywhere including the docks.