Leading Domestic Steel Producers Are Feeling Effects of Global Competition
Even the top domestic steel makers are not immune from a hurting industry. The second largest producer of domestic steel, U.S. Steel, is feeling the effects from global competition. Despite cost-cutting efforts, the Pittsburgh based producer has last a significant amount of money in this year’s previous two quarters.
The cause of the decline can be attributed to the strength of the U.S. dollar, reduced commodity prices and a decrease in global economic growth. Despite the current conditions of the U.S. steel market, it remains to be in much better shape than any of the other major steel industries throughout the world – the problem is cheap imports.
These imports come mostly from China and flood the American market – making it much harder for U.S. producers to sell their products. However recently China’s steel economy has been slowing down – leaving steel mills with massive overcapacity. This has led to the government funneling subsidiaries into China’s declining steel industry to prevent manufacturers from having to close doors and lay off employees.
Meanwhile, producers of steel in America have accused China of dumping low-cost steel in to the domestic market. The U.S. Trade Commission is set to rule of these accusations in the coming months and the imposition of punitive duties on steel from China will provide some relief to the U.S. market.