TORONTO, March 9: Canada’s top steel makers and the union representing most of their workers united in a coalition on Friday to push Ottawa to follow the United States with safeguard action on steel imports.
Jim Alfano, president and chief executive of Canada’s biggest steel maker, Stelco Inc., said Canada also needs relief from the flood of cheap foreign steel products that pushed prices to 20-year lows.
Washington this week imposed tariffs of up to 30 per cent on imports to bring relief to its steel industry, a move that prompted protests and threats of retaliation from the European Union and other countries. Canada and Mexico were both exempted from the US action under the North American Free Trade Agreement (NAFTA).
Canadian producers and the United Steelworkers union say the federal government should apply similar remedies to protect them, especially with the increased threat of steel imports destined for the United States being diverted to Canada and its large auto manufacturing sector.
This already untenable situation threatens to worsen as the United States and Mexico have announced import tariffs, which will cause diversion of export steel shipments to Canada. It is important that we take a consistent approach within North America, Alfano said.
The coalition said it would request safeguard action for a broad range of steel products including plate, hot-rolled, cold-rolled and coated sheet, pipe, rebar, hot-rolled and hot-formed bars, shapes and structurals.
Steel imports reached a record share of apparent Canadian consumption, 44 per cent, in 2000, but that has since declined slightly to 37 per cent. But they are still up from 26 per cent share they had in the early 1990s.
This complete coalition is something we have been seeking for over a year, said United Steelworkers’ national director Lawrence McBrearty.
Anna Sorbo, an analyst from CIBC World Markets, said Canadian producers are justified in calling for safeguards.
I think it is pretty much necessary to provide some sort of protection in Canada because Canada is a very attractive market, maybe the currency situation is not the same as the US but we have a got a very strong automotive industry in Ontario, which is very attractive from the product-mix point of view for those who produce steel, she told Reuters.
If somebody was exporting to the US, they would be willing to switch to Canada to whatever extent is possible. I think it’s justified that they request some protection and it has to be similar to what we have in the US, otherwise it will not be as effective, she said.
She said Canadian companies that do not have US operations, including Stelco, Dofasco and Algoma Steel would feel the most impact.
Sorbo said Canadian companies on average were in better financial shape than their US counterparts and had survived the crisis through major cost-cutting programs.
They have been better at managing costs and they have been faster at adopting modern steelmaking technology, she said.
She said that only recently had they been able to increase their prices as orders rose.—Reuters