News Column

American Iron and Steel Institute Lays Out Wish List

Feb 12, 2013

Len Boselovic

Development of domestic energy resources, getting more money for funding transportation, reduced taxes and tougher enforcement of trade rules top the U.S. steel industry's wish list as President Barack Obama prepares to deliver his State of the Union address this evening.

The head of the American Iron and Steel Institute said burdensome taxes, energy costs and inadequate infrastructure are some of the reasons why U.S. steel producers are at a disadvantage to foreign competitors.

AISI president and CEO Thomas J. Gibson said that while the industry expects to enjoy modest growth this year, it still faces unfair competition from subsidized foreign producers who are increasing their share of the U.S. market.

He noted that in 2012, imports of finished steel jumped 18 percent and U.S. steel consumption grew 8 percent. But shipments by U.S. steel producers only increased 4 percent.

"The growth last year in steel shipments didn't match the growth in consumption because of the increase in imports," Mr. Gibson said. "When you're running at 75 percent of capacity and 24 percent of the market is imports, that does tell you we're under some pressure."

The Washington, D.C., group represents U.S. steel producers such as U.S. Steel; the U.S. operations of foreign producers such as Luxembourg-based ArcelorMittal, the world's largest steel producer; as well as Canadian and Mexican producers. It has been critical of the Obama administration on several steel-related issues, including the administration's failure to label China a currency manipulator.

The institute's figures show imports of pipe and tube used by the energy industry rose 24 percent last year, tempering what has been one of the industry's best markets since the economic recovery began. Mr. Gibson said automotive demand remains strong and that there has been a pickup in construction.

But spending on transportation and other infrastructure, including aging river locks and dams steelmakers use to move raw materials and finished goods, remains constrained, he said.

He called on Mr. Obama to propose new ways to increase funding for transportation, since there's been a drop in gas tax revenues caused by more fuel-efficient vehicles and reduced driving.

"Transportation is really crying out for administration leadership," he said.

On energy, Mr. Gibson said one of the things the White House could accomplish without Congress is to approve the controversial Keystone XL pipeline, which would move tar sands 1,700 miles from western Canada to refineries in Houston.

He cautioned against the federal government taking a more active role in regulating production of the Marcellus Shale region, which lies under much of Pennsylvania, and other natural gas resources. "States like Pennsylvania have shown they are more than competent to regulate that activity," Mr. Gibson said.

He said the industry needs lower tax rates and urged Mr. Obama and other Democrats not to seek greater tax revenue from businesses.

"If they're looking at increasing revenue from corporate taxpayers, we're going to be less competitive, not more competitive," he said.

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Distributed by MCT Information Services



Source: (c) 2013 the Pittsburgh Post-Gazette


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