Steel Mills

NLMK Faces Objections to Slab Exclusion Request

June 7, 2018

NLMK USA has requested tariff exclusion on the import of slabs under Section 232, but has received blowback from several U.S. steel mills. Nucor, U.S. Steel and AK Steel have filed objections to the request, arguing that there is sufficient slab supply in the United States to supply NLMK yet the company continues to buy slabs from its Russian parent to maximize profits.

Wrote Nucor in its filing, “Such a business model directly undermines U.S. steel production and should not be rewarded with a product exclusion.” U.S. Steel and Nucor both object to the imports of slabs from a “major U.S. foreign policy adversary such as Russia.”

U.S. Steel also claims that NLMK is requesting exclusions in excess of its actual need, including for products that it did not use during 2015-2017. NLMK’s exclusion request is in the range of 3.5 million to 3.6 million metric tons of steel, said U.S. Steel and Nucor.

U.S. Steel wrote in its filing: “It is clear that NLMK’s product exclusion requests are designed to eviscerate any benefit the 232 could have for the U.S. industry and are indicative of intentionally malicious actions by NLMK to damage American steel producers and their workers.”

AK Steel says it has the ability to produce more steel to fulfill the need for products listed in the tariff exclusion requests. AK Steel is operating at 89 percent capacity at its Ohio and Michigan mills.

NLMK USA disputes rivals’ claims that its needs could be met within the U.S. NLMK USA requires over 200,000 tons of slabs per month, more than can be supplied domestically, said the company. AK Steel has no slabs currently available and U.S. Steel has insufficient quantity, said NLMK. Furthermore, Nucor admits it does not even sell slabs.

“Imported slabs support 30,000 to 35,000 direct and indirect steelmaking jobs,” said NLMK USA President and CEO Robert Miller. “We do not represent any national security threat and have been importing slabs for approximately 20 years.”

NLMK USA, a division of Russia’s NLMK Group, is a flat rolled steel producer with production sites at NLMK Indiana, NLMK Pennsylvania, and Sharon Coating (NLMK Pennsylvania’s galvanizing operations). The division has an annual steelmaking capacity of approximately 800,000 metric tons and rolling capacity of 2.9 million tons. NLMK USA has over 1,100 employees. Its products are used in construction, automotive, pipe and tube, and heavy equipment industries in the United States.

NOTE: This article was corrected to 1,100 employees at NLMK USA.