California Steel urges president to exclude slab from Section 232 tariffs

California Steel Industries Inc. (CSI), Fontana, Calif., is calling for President Trump to exclude semifinished steel (slabs) from the 25 percent tariffs he is expected to impose on steel imports as part of the administration's investigation under Section 232 of the Trade Expansion Act.

CSI is a slab converter mill, relying almost entirely on imported slab as feedstock to produce coil steel sheet and electrical resistance welded pipe.

Because steel slabs are not commercially available in the U.S. on a consistent basis, nor are they produced anywhere in the western U.S., CSI says it buys its slabs primarily from Mexico, Brazil, and Japan. The company imports more than 1.5 million tons of slabs annually and supplies its finished steel products to hundreds of manufacturers and distributors.

According to CSI President/CEO Marcelo Botelho Rodrigues, the president’s goal of protecting American steel jobs may be harmed by placing tariffs on slabs, when imports of slabs have been a key source of industry health, both for slab converters such as CSI and for integrated steel mills, which supplement their production needs with imported slabs.

Rodrigues emphasized that historically, imported slabs represent 6.3 percent of total steel demand in the U.S., and there was no surge of imported slabs in 2017. "So, imported slabs are not part of the problem, but part of the solution, particularly in the western U.S.," he said.

Rodrigues noted that there have never been unfair trading cases filed against slab imports. "We are for fair trade, and the international slab market in which CSI participates has no problems in that area," he said. "Furthermore, we do not buy slabs from China." On the other hand, he said, CSI was a key participant along with industry peers as a plaintiff in numerous antidumping and countervailing duty cases against unfairly traded finished sheet and pipe products.

The company produces flat-rolled steel products, including hot-rolled, cold-rolled, and galvanized sheet and electric resistance welded pipe up to 24 in. dia.