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Granite City workers rally for curbs on below-cost steel imports

Granite City workers rally for curbs on below-cost steel imports

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Granite City Works

Workers leave at the end of a shift Wednesday afternoon at the U.S. Steel 's Granite City Works steel mill in Granite City. (2010 file photo by Erik M. Lunsford

Hundreds of steelworkers and supporters rallied Friday in Granite City, shouting for their jobs and for a change of heart at the U.S. Department of Commerce.

“Jobs!” and “American steel” they chanted as speakers called on the government to protect their jobs in the face of a surge in South Korean steel imports.

At issue is the Commerce Department’s decision holding that South Korean steelmakers are not “dumping” tube steel on the U.S. market.

At stake could be many of the 2,000 jobs at U.S. Steel’s Granite City Works. About 60 percent of the plant’s production becomes pipe for the oil and gas industry — the same market the Koreans serve.

“We have not been hit quite yet. We’re trying to stop it before we get hit,” said Dan Simmons, president of Local 1899 of the United Steelworkers.

U.S. Steel, owner of the Granite City Works, complains that Korean pipes sell at 30 to 50 percent below the market price, which it defines as the price charged by other companies including U.S. Steel. The company contends that Korean labor costs are roughly equal to its own.

But the Commerce Department in February, in a preliminary ruling, rejected the notion that the Koreans are dumping, meaning selling at a price below production cost. The department did recommend duties on similar products from India, the Philippines, Saudi Arabia, Taiwan, Thailand, Ukraine and Vietnam.

Among these countries, however, Korea is by far the largest pipe importer to the United States, accounting for more than half of imports, according to Commerce Department figures.

A final decision from the Commerce Department is expected July 8. The industry and unions are campaigning for a change of mind, and enlisting Congressional support. A letter of concern over the issue has the signatures of 57 members of the U.S. Senate, the steel industry lobby announced.

To impose anti-dumping duties, both the Commerce Department and the U.S. International Trade Commission must agree.

Steelworkers at the rally said they were worried. They struggled to get by during a several-month shutdown in 2009, which was brought on by the Great Recession and a surge in imports.

“These are good jobs. A lot of kids went to college because of that steel mill,” said John Reed, a mill worker for 25 years. “All these little bitty businesses around here — some of them have not quite recouped from those layoffs,” he said, pointing at storefronts around Civic Park.

Rising steel demand, much of it from the oil and gas business, now has the plant humming. It is also picking up work from northern steel plants, where production slowed as ice stalled Great Lakes shipping.

“We are definitely running full out,” said Simmons, the union president.

Speakers at the rally hailed the importance of the mill, founded in 1878, to the town.

“Our schools are only as strong as the economy around them,” said Granite City school superintendent Jim Greenwald, who brought the high school band to serenade the crowd. Each steel job helps support seven others in the region, he said.

The Granite City Works is an integrated mill, turning iron into steel coil, and occasionally into slabs. Most of its production is later turned into tubes for the oil business, mainly at U.S. Steel’s Lone Star plant in East Texas.

U.S. Steel has had a small number layoffs at its Loraine, Ohio, plant, which makes tubes for the gas fracking industry in Ohio and Pennsylvania.

Spokespeople could not be reached for comment at the South Korean Embassy or at the American Institute for International Steel, a pro-import trade group.

The trade group argues that import restrictions raise costs for American companies that use steel, making them less competitive in world markets.

“A dumping law should only punish truly predatory behavior, not normal commercial behavior stemming from market conditions that require all sellers to offer their products at less than full cost of production,” the group says on its website.

In a report this week, the liberal think tank Economic Policy Institute says steel imports rose from 28 million tons in 2011 to 32 million tons in 2013. Imports were up 24 percent in the first two months of 2014, compared to a year earlier.

Imported steel prices seem to be dropping, said the institute, which favors import restrictions. The average unit value of imports dropped 23 percent between 2011 and early this year.

The U.S. steel industry lost $1.2 billion last year in the face of declining domestic production, the institute says.

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