Commerce Department finds China dumping stainless steel

The U.S. Department of Commerce has reached a preliminary determination that imports of stainless steel sheet and strip from China are being sold at less-than-fair value in the United States. As a result, the Commerce Department says it will instruct U.S. Customs and Border Protection (CBP) to require U.S. importers of stainless steel sheet and strip from China to deposit estimated anti-dumping duties at the time of importation.

Further, based on its previously announced preliminary affirmative critical circumstances determination, the Commerce Department will instruct CBP to require U.S. importers to post security equal to the preliminary anti-dumping rates on entries of stainless steel sheet and strip from China that were imported 90 days prior to the date of publication in the Federal Register of the affirmative preliminary anti-dumping duty determination.

The Commerce Department assigned a preliminary anti-dumping margin of 76.64 percent of the value of the imported stainless steel sheet and strip to Shanxi Taigang Stainless Steel Co., Ltd., the sole Chinese respondent that was subject to mandatory investigation. The Commerce Department established a preliminary anti-dumping margin of 63.86 percent for two Chinese entities with operations that the agency determined are not controlled by the government of China and, thus, were preliminarily determined to be eligible for a company-specific separate rate. In addition, the Commerce Department established a preliminary anti-dumping duty margin of 76.64 percent on imports of stainless steel sheet and strip from all other Chinese entities.

The Commerce Department's determinations follow the filing Feb. 12, 2016, of anti-dumping and countervailing (or subsidy) duty petitions by domestic stainless steel sheet and strip producers AK Steel Corp., Allegheny Ludlum, North American Stainless and Outokumpu USA, LLC.

July 12, 2016, the Commerce Department announced its preliminary determination that imports of stainless steel sheet and strip from China benefit from subsidies bestowed by the Chinese government, with subsidy margins ranging from 57.3 percent to 193.12 percent of the value of the imported product. The anti-dumping margins announced by the Commerce Department will generally be applied in combination with the previously announced subsidy margins calculated by the agency.

John Herrmann of the law firm Kelley, Drye & Warren LLP, counsel to the domestic stainless steel sheet and strip industry, says, "We are very pleased with the Commerce Department's affirmative preliminary determination that producers of stainless steel sheet and strip in China are selling their merchandise in the United States at significant dumping margins. The requirement that U.S. importers begin to post estimated anti-dumping duties on stainless steel sheet and strip from China – in combination with the existing requirement that importers post estimated countervailing duties on such shipments – will help to eliminate unfair trade and restore a level playing field in the U.S. market."

The next step in the trade action will be the Commerce Department's verification of factual information submitted by the Chinese producer participating in the investigations and the Government of China. Parties will have the opportunity to submit case and rebuttal briefs to the Commerce Department and to participate in a hearing. Following these events, the Commerce Department will issue its final anti-dumping and countervailing determinations. The current deadline for the announcement of these final determinations is in late November 2016, though the deadline could be extended until late January 2017.

One scrap metal dealer contacted about the decision applauded it, saying the move could improve the run time of domestic stainless steel producers, resulting in better movement of stainless steel scrap from U.S. sources.

The decision comes as the domestic stainless steel market has been struggling with softer order books and business has been slow.