Sunday, April 15, 2001

Iron ore company wants import curbs

Cleveland-Cliffs says industry is threatened

        CLEVELAND — The largest supplier of iron ore to the North American steel industry wants government support for a five-year freeze on imports of semifinished steel, or slabs.

        Cleveland-Cliffs Inc. argues the imports threaten the iron ore industry.

        In written comments to the U.S. Commerce Department, the company on Thursday said increased reliance on imports could lead to more shutdowns of steel-making furnaces that use iron ore pellets.

        The Commerce Department is investigating whether iron ore and semifinished steel imports are threatening national security, which could result in such remedies as quotas and tariffs on those goods.

        Members of Congress from Michigan and Minnesota, where most of the ore is mined, had asked for the probe.

        The company said imported steel slabs should be limited to current levels for the next five years so that the steel industry can become competitive and “survive the current surge of unfairly traded imports flooding into the United States.”

        Steel makers, including LTV Steel, Bethlehem Steel and U.S. Steel, normally cast their own slabs from molten steel and then roll them into coils of sheet steel in their mills.

        But in recent years, many steel mills have resorted to importing slabs to supplement their own production, avoiding the huge costs of building new blast furnaces and filling temporary production gaps when furnaces are down for repairs.

        AK Steel Holding Corp., of Middletown, Ohio, told the government it opposes any curb on slab imports. AK spokesman Alan McCoy said the company needs to import slabs to supplement its own production so that it has enough steel to keep its hot strip mill and finishing mills running full and to fill in production gaps when furnaces need repairs.

        “We've been doing it for years,” McCoy said. “We don't think it represents a threat to national security.”

        However, Cleveland-Cliffs, which has seen ore demand decline in recent months, said imports of slabs eventually could eliminate the need for domestically produced ore.

        Cleveland-Cliffs Chief Executive John Brinzo said that by relying on imports of “strategic materials like steel,” the United States could be vulnerable to external influences “experienced by our dependence on imported crude oil.”

        “The continued surge of unfairly traded semifinished steel imports could result in the premature closure of integrated steel-making facilities and iron ore mines,” the company warned in its Commerce Department letter.

        Subsidiaries of Cleveland-Cliffs manage and hold equity interests in iron ore mines in Michigan, Minnesota and Eastern Canada.

        The company was alarmed in the fourth quarter of last year when iron ore pellet sales of 2.6 million tons were 1.3 million tons below the same period in 1999, according to its annual report.


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