Berlin Metals President Roy Berlin has been in the steel business for 30 years, but he’s never seen anything like the amount of imports that have been flooding into the United States.
"It's a very tough time in the steel industry overall in the U.S.," he said at the Times Board of Economists meeting last month at Ciao Bella Ristorante, in Schererville. "The strong dollar is hurting the mills here terribly and incentivizing imports from overseas."
Imports tied a record market share of 28 percent last year, according to the American Institute of Iron and Steel. So far this year, finished steel imports have captured 31 percent of the U.S. market, depressing prices and spurring thousands of steel industry layoffs nationwide.
A glut of imports have caused steel prices to fall by 50 percent since 2008, ArcelorMittal USA Manager of Government Affairs Susan Zlajic said. The Luxembourg-based steelmaker has been trying in labor negotiations to cut its North American labor costs of $2.1 billion a year.
"On a more positive note, automotive has been a bright spot in the United States," she said. "Auto production was 16.1 million in 2014, and we expect to see at least that many units over the next few years. ArcelorMittal is the largest supplier of steel to the automotive industry with 17 percent of the worldwide market."
With regard to Northwest Indiana, the company has made no secret of its wish to "optimize its assets," or take underutilized finishing lines offline so that others may be used more efficiently, Zlajic said. ArcelorMittal already idled Indiana Harbor Long Carbon’s electric arc furnace and rolling mill earlier this year and is rumored to be looking at idling more operations at Indiana Harbor West in East Chicago.
"We are constantly reevaluating our footprint, while finding ways to increase our capacity utilization with sacrificing production or market share," she said. "With that said no final decisions have been made with regard to an asset optimization plan. I can assure you ArcelorMittal has no plans to reduce blast furnace capacity in the United States."
Anti-dumping lawsuits have been filed in the United States, and all over the world, Berlin said. The Chinese government has indicated it will disincentive steel exports, but they’ve said that before.
Berlin's Hammond-based steel service center buys metal from steel mills, processes it, and sells it to end users. The automotive and construction markets have been strong lately, but energy, agriculture and heavy equipment have been weak.
Demand has slackened in China, where there's massive overcapacity that's led to a ripple effect of steel dumping across the globe, Berlin said. China is dumping steel in countries that in turn are dumping their surplus steel in the United States.
"The wave of imports in this country here has been huge," he said. "I've been in this business for 30 years. I’ve never a percent of market share this high. The percent of market penetration is huge. It's a problem."