ITC Antidumping Conference: Manufacturers & Importers Differ on Tariffs for Fastener Imports

10/20/2009
HEADLINES
ITC Antidumping Conference: Manufacturers & Importers Differ on Tariffs for Fastener Imports
Manufacturers Say Industry

“A devastating onslaught on the market.”

That’s how Nucor Fastener general manager Tom Miller described the effect of standard fastener imports from China and Taiwan on U.S. producers.

In a conference at the Washington DC headquarters of the International Trade Commission, Miller and other domestic producers painted a grim picture of the fastener industry during the recession.

According to Miller, Chinese and Taiwanese exporters were able to offer Grade 2, Grade 5 and Grade 8 nuts and bolts at prices lower than what the raw materials cost U.S. producers. The effect of these low prices was heightened as the U.S. economy worsened and more people needed to make their purchasing decisions based on the bottom line, Miller said at the ITC session covered by FIN.

Nucor Fastener lead attorney Alan Price told the ITC panel that the domestic fastener industry is at risk because Chinese and Taiwanese fastener companies are able to offer significantly cheaper standard nuts, bolts and capscrews.

“This case is filed…when the (domestic) industry is on the brink of extinction,” Price stated.

The U.S. Department of Commerce has initiated antidumping (AD) and countervailing (CVD) investigations on imports of certain standard steel fasteners from China and Taiwan.

The petitions, filed by Nucor Fastener on September 23, allege average dumping margins of 145% for Chinese imports, and 74% for imports from Taiwan.
“From 2006 to 2008, imports of certain standard steel fasteners from China increased by 4.48% and were valued at an estimated $291 million in 2008. Imports from Taiwan over the same time period decreased by 19.09% and were valued at an estimated $395 million in 2008,” the Commerce Department’s International Trade Administration stated.

Nucor entered the steel fastener business in 1986 when it opened a $25 million plant in St. Joe, IN. Nucor opened a second plant in Conway, AR, in 1995, but closed the Arkansas plant in 2002 because of low-cost foreign competition, Miller told investigators.

Workers at Nucor Fastener’s Indiana facility have been reduced to 16-hour weeks as the U.S. recession deepened, driving consumers to place price above other considerations.

Part of the reason Chinese fastener producers are able to sell the same quality fasteners at unrealistically low prices is access to subsidized steel, he claimed.

In the face of such competition, Nucor has reduced prices twice in 2009, and has now reached the point where they can’t lower prices any more, according to Miller.

He said competition with Chinese and Taiwanese importers is pushing down prices and keeping them down, with the price for some imported fasteners not even covering raw materials for Nucor. This was already a problem when the economy is good, but with the economy pretty bad, “The industry we started out in will be gone,” Miller stated.

David Aman, national sales manager of Sems and Specials, told the ITC panel that the ability to provide low-cost fasteners is crucial to surviving the current economic environment. “The single most important factor is price,” Aman stated.

He added that he believes the Chinese are trying to run Americans out of the business altogether.

“Our industry has been under attack for 20 years.”

Importers: Tariffs Are “Needless”

“We … don’t believe there is any evidence that Nucor or any member of the U.S. industry has been injured by reason of imports from China or Taiwan, particularly by imports of products Nucor has shown no interest in making and imports for markets Nucor has shown no interest in serving,” Porteous Fastener Co. CEO Barry Porteous said in prepared remarks.

Porteous said commercial steel fastener manufacturing moved offshore to Japan in the 1960s, with U.S. manufacturers shifting to produce value-added “specials.”

In the 1980s, the commercial fastener industry shifted from Japan to Taiwan, then to China in the 1990s.
Porteous is working collectively on the issue with fellow importers Heads and Threads International, Indent Metals LLC, Stelfast Inc., XL Screw, Bossard North America, the Hillman Group and Earnest Machine Products Co.

The group, based on the American Association of Fastener Importers formed during the U.S. Fastener Quality Act legislative process, retained attorney Matthew McGrath of the Washington D.C. law firm of Barnes Richardson & Colburn to represent them. McGrath represented importers during the FQA years.
Hillman Group CEO Max Hillman testified that tariffs on standard fasteners make no sense.

“Remedial tariffs on imports of all Grade 2s, and most imports of retail market Grade 5s and 8s, will create no new opportunity for Nucor or any other U.S. producer … unless they decide to completely re-establish themselves as manufacturers of low end commercial products which have not been produced in this country for decades,” emphasized Hillman.

The Industrial Fasteners Institute has “no current or planned” involvement in the tariff dispute.

“This is simply a member company using existing U.S. law to protect their own legitimate interests,” IFI managing director Rob Harris told FIN.

Antidumping Scope Finalized

The U.S. Commerce Department finalized the scope of Nucor Fastener’s antidumping petition to include standard nuts, bolts and cap screws.

Suppliers won concessions from Nucor Fastener, which agreed to exclude “work truck” and “medium-duty passenger vehicle” OEMs, in addition to exemptions for automotive and aerospace OEMs listed in the original scope.

Track bolts, carriage bolts and socket screws are also excluded from the scope.
The U.S. International Trade Commission is scheduled to make its preliminary injury determination by November 9, 2009.

EU Tariffs Unmentioned

U.S. fastener suppliers trying to source products outside China and Taiwan are likely to find lengthy lead times.

European suppliers have already booked fastener plants in other Asian countries, including Thailand and Malaysia, after the European Union adopted antidumping duties on certain fasteners from China. The EU concluded that Chinese producers were selling at 30% to 50% below European prices.

The general EU tariff for a range of imported fasteners is 85%. Products involved are covered by 10 CN tariff codes, including woodscrews, drywall screws, self tapping screws, machine screws, various other small screws, mild steel and high tensile hex bolts and screws, socket screws, bolts with other heads, spring and flat washers.

China responded by filing an official complaint with the World Trade Organization, claiming the EU tariffs were “neither impartial nor transparent,” and that they hurt over 1,700 Chinese fastener manufacturers. The Chinese government has requested the WTO establish a panel to investigate the EU tariffs.

In addition, China has responded to the EU tariffs with its own antidumping investigation into EU carbon steel fasteners imports.

In the wake of the tariffs, China exports of steel and copper fasteners have plunged, with export numbers showing a 45% decline in fastener exports to 850,000 tons during the first seven months of 2009, with the value declining 45.4% to US$1.31 billion. ©2009 GlobalFastenerNews.com

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Related Links:

• Nucor Fastener

• Porteous Fastener Co.