AK Steel Holding Corporation (AKS - Analyst Report) declared that is has submitted antidumping duty petitions with the U. S. Department of Commerce and the U. S. International Trade Commission (ITC) related to unfairly low-priced imports of non-oriented electrical steel (NOES) from six countries. The low-price imports from countries including China, Germany, Japan, Korea, Sweden and Taiwan are allegedly causing material injury to the company.
AK Steel has also filed countervailing duty petitions against NOES producers in China, Korea and Taiwan asserting that they are heavily subsidized by their respective governments.
The petitions assert that AK Steel’s NOES operations and its workforce had been negatively impacted owing to increased imports of NOES from the six targeted countries that accounted for 92% of U.S. imports of NOES from all countries in 2012.
AK Steel believes that foreign NOES producers in these countries, who have massive growing capacity to produce NOES, dump their surplus capacity in the oversupplied U.S. market. This has led to lower production and profits of NOES producing companies in the U.S. as domestic market prices for NOES were adversely impacted.
According to AK Steel, antidumping duties charged will cancel out the amount by which a product is sold at less than fair value, or dumped, in the U.S.; whereas countervailing duties charged will neutralize the unfair subsidies provided by foreign governments to the targeted countries.
In the process, ITC, an independent agency, will make a preliminary investigation on whether the U.S. industry producing NOES is materially injured, or threatened with material injury, by reason of the dumped and subsidized imports within 45 days. The Commerce Department will verify within 20 days whether to initiate the antidumping and countervailing duty investigations.
NOES is alloy steel built up of silicon, carbon and aluminum in different percentage proportions. The petition holds strong on all coils regardless of width and thickness. The representatives from the law firm King & Spalding LLP are assisting AK Steel in these actions.
AK Steel, which currently carries a Zacks Rank #3 (Hold), expects to release its third-quarter results on Oct 22 before the opening bell.
Other companies in the steel industry with favorable Zacks Rank are Companhia Siderurgica Nacional (SID - Analyst Report) , Shiloh Industries Inc. and Gerdau S.A. (GGB - Analyst Report) . While Companhia Siderurgica and Shiloh hold a Zacks Rank #1 (Strong Buy), Gerdau retains a Zacks Rank #2 (Buy).