Steel industry says Carney is moving in the right direction, but needs to pick up the pace

SEATTLE (Scrap Monster): Prime Minister Mark Carney is not moving as fast or as far on changing steel policies as industry players want, but they generally concede he is slowly taking major steps to transform the sector.

His latest proposals will slash steel imports from free-trade-partner countries for the first time, further reduce steel imports from non-free-trade countries, cut imports of steel derivative products — essentially raw steel that has been minimally transformed — subsidize the cost of shipping steel across the country and step up border enforcement to ensure compliance.

Taken together, the steps are what steel producers want, but haven’t come as quickly or reached as far as they’d like.

“He is plodding along, as opposed to giving much faster relief,” Butch Mandel, chief executive and founder of Concord, Ont.-based Welded Tube of Canada Corp., said. “I suspect he’s going to get close, if not all the way, to what we’re asking, so why wait?”

He said he found the pace of change highly “frustrating,” but he doesn’t fault Carney, given the challenges he faces, which include an unpredictable trade war that has left Canada’s steel sector highly exposed to downturn.

The Canadian Steel Producers Association (CSPA) has been open about wanting a federal policy that slashes steel imports to 20 per cent of 2024 levels.

“The ask of the industry was straightforward and it has not relented,” Mandel said. “We just said take everyone down to 20 per cent.”

Carney on Wednesday tightened steel import quotas to restrict non-free-trade countries to importing no more than 20 per cent of the volumes they imported in 2024. Above that volume, they will encounter a 50 per cent tariff.

For the first time, he also placed significant restrictions on steel imports from free-trade partners, which includes countries such as South Korea and Vietnam, reducing their shipments to 75 per cent of their import volume in 2024 before hitting a 50 per cent tariff. The policy excludes the U.S. and Mexico.

The moves come after months of lobbying and still don’t reach the 20 per cent line on all countries, but it’s a policy that tightens controls on imports.

“I’ve always looked at this stuff stepwise … and I consider this a very big step,” Catherine Cobden, chief executive of the CSPA, said. “We’ll take stock of things and come back to ask for adjustments if it’s not working.”

For now, she said she was very happy to see policies that will open up new domestic demand.

Carney also announced a global 25 per cent tariff on steel-derivative products from all countries, which won praise from Rita Rahmati, a spokesperson for the Canadian Institute of Steel Construction, a lobby group for steel fabricators and other companies that add value to raw steel.

She said her organization had asked for such a policy months ago. Previously, by adding a screw or doing minor work to steel, foreign companies could avoid Canadian tariff quotas on steel. The new policy should plug “the loopholes,” she said.

But it’s only a 25 per cent tariff and the industry might want a higher duty rate.

Courtesy: www.ca.finance.yahoo.com