Report on 2001-2007 U.S. Indirect Steel Trade Now Available

AISI analysis shows indirect steel trade deficits continue at high levels
Deficit with China hits new record

To obtain the full report, please contact Robert MacDonald at 202.452.7203, or visit  www.steel.org.

WASHINGTON, D.C., January 6, 2009 – The American Iron and Steel Institute (AISI) has updated its analysis of U.S. “indirect” steel trade to include 2007 (see attached summary sheets). This expands the earlier analysis for years 1999-2006.  This report identifies the volume and value of steel incorporated in finished products in eight major consumer markets imported and exported between the United States and 11 major countries and four regions.   The full report is now available to the public in hard copy for $200. 

The AISI report shows that U.S. indirect steel imports hit 38.7 million net tons (NT) in 2007 -- down 2.9 percent from the record high of 39.8 million NT in 2006.   U.S. indirect exports of steel reached a new high of 22.6 million NT in 2007, a 10 percent gain from an estimated level of 20.6 million NT in 2006.   The total indirect steel trade deficit declined to 16.1 million NT in 2007, down from 19.3 million NT in 2006.  On a value basis, America’s indirect steel trade deficit in 2007 was $205 billion, down slightly from the record $218 billion deficit in 2006.

America’s large deficit in indirect steel trade serves as an ongoing warning about the increasing long-term challenges facing domestic manufacturing.  For the automotive sector, the indirect steel trade deficit was 8.2 million NT in 2007.  While this was the lowest such deficit in the last seven years, automotive remained the largest contributor to the total indirect steel trade deficit on a market basis.

The significant overall deficit in America’s indirect steel trade highlights continuing structural problems for U.S. manufacturing.  Of particular concern to domestic steelmakers is the fact that U.S. indirect steel imports from China in 2007 grew to an estimated 5.8 million NT -- a new record level.   The U.S. indirect steel trade deficit with China was 3.3 million NT higher in 2007 than it was in 2001.

 “China’s mercantilist model of economic development includes massive government subsidies (over $50 billion just to steel), currency misalignment and export-led growth, and this model extends well beyond steel to include automotive and other downstream producers throughout the Chinese manufacturing base.
“Because no U.S. manufacturer, regardless of how efficient it is, can compete against the government of China, this model of economic development represents a growing threat to the U.S. steel industry, to the American manufacturing base (our domestic customers) and to U.S. national security.

“Moreover, this threat is now substantially exacerbated by the 2008 global economic crisis, which has seen domestic steel consumption and industrial production growth in China decline for the first time in many years.  The concern now is that, given the deterioration in Chinese domestic market conditions and China’s significant excess capacity in both steel and many steel-intensive goods, the U.S. and North America could see major surges of both direct and indirect steel imports in 2009.  

“To combat this threat, AISI and other industries are urging the adoption of a pro-manufacturing U.S. policy that has -- at its core -- stronger laws and enforcement against unfair trade, including fundamental currency misalignment, which has devastated U.S. manufacturing.  The place to start, in asserting a new and more effective U.S. trade and manufacturing policy, is to get tough on unfair trade from China,” said Thomas J. Gibson, president and CEO of AISI.

AISI has been publishing data on U.S. indirect steel trade by world areas and steel-consuming markets expressed in tons of steel since 1984.  These reports provide data on the total amount of indirect steel trade each year in the U.S. economy, and show the main sources of foreign competition faced by major steel-using industries in the United States.   This latest report includes detailed data for the last seven years (2001-2007).    

To obtain the full report, please contact Robert MacDonald at 202.452.7203, or visit www.steel.org.

AISI serves as the voice of the North American steel industry in the public policy arena and advances the case for steel in the marketplace as the material of choice.  AISI plays a lead role in the development and application of new steels and steelmaking technology.  AISI is comprised of 27 member companies, including integrated and electric furnace steelmakers, and 138 associate and affiliate members who are suppliers to or customers of the steel industry.  AISI's member companies represent over 75 percent of both U.S. and North American steel capacity.  For more news about steel and its applications, view AISI’s Web site at www.steel.org.

Contact:
Nancy Gravatt
Vice President, Communications
American Iron and Steel Institute
Tel: 202.452.7115