NAS lauds denial of ATI’s second Section 232 exclusion request

North American Stainless Inc (NAS) has applauded a decision by the United States Commerce Department to deny a second Section 232 exclusion request from Allegheny Technologies Inc (ATI).

Commerce denied the request earlier this month. ATI had sought to remove the 25% Section 232 tariffs on its imports of semi-finished stainless slab from an Indonesian mill owned by China’s Tsingshan, the world’s largest stainless steel producer. The Chinese company and ATI are 50:50 joint-venture partners in Allegheny & Tsingshan Stainless, which operates in Midland, Pennsylvania.

“This decision sends a clear message that America will not allow China to gain a foothold in such a critical industry – even behind a US joint venture,” NAS chief executive officer Cristobal Fuentes said on Wednesday May 13.

“Moreover, it ensures that domestic producers like NAS will remain well-positioned to meet the stainless steel needs of the US market for all industries, including those of medical device and supply manufacturers [that] have been particularly urgent in recent months,” he said.

In October, ATI sought the tariff exclusion on 150,000 tonnes per year of Indonesian stainless slab, half the original volume requested. The original exclusion request in March 2018, which was denied by Commerce in April of last year, was for 300,000 tonnes in imported slab.

In denying the original and second requests, Commerce determined that there is sufficient domestic slab supply to meet ATI’s needs. Under the Section 232 statute, importers can be granted a tariff exclusion if they can demonstrate there is a lack of domestic supply to meet their needs. Ghent, Kentucky-based NAS has been a domestic supplier of stainless slab to ATI.

The denial also appears to close the door to any possibility that ATI will keep its Midland plant open past the end of June, according to ATI. The company said in March that it would be forced to shut the Midland plant if it failed to achieve the exclusion, noting that the Section 232 tariffs on imported slab made the operations unprofitable. 

“Denying ATI’s request for a tariff exclusion is really a lose-lose for US manufacturing,” ATI told Fastmarkets, adding that a continued supply of slab from Indonesia without tariffs “would have given nearly 100 hard-working Pennsylvanians the chance to keep working.”

The Commerce decision affects only two of the three types of slab that ATI imports from Indonesia: Type 304 slab and Type 316 slab. The agency has not yet made a determination on Type 201 slab imports.

Fastmarkets’ latest price assessment for stainless steel 304 cold-rolled sheet, fob mill US was at $112 per hundredweight on May 11, down by 4.3% from $117 per cwt the previous month. Similarly, the assessment for stainless 304L cold-rolled sheet has fallen by 4.2% to $114 per cwt from $119 per cwt, and that for Type 316L stainless sheet has declined by 5.2% to $146 per cwt from $154 per cwt in the same comparison.