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Three US mills object to NLMK USA's steel slab exemption requests

Houston — Nucor, US Steel and AK Steel all are objecting to NLMK USA's request for slabs to be exempt from 25% import tariffs, according to filings made public on Tuesday.

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The three steelmakers all filed separate objections to NLMK USA's request continue importing tariff-exempt slabs from its Russia-based parent company to support its operations in the Pennsylvania and Indiana. The filings follow similar moves by Nucor and US Steel in objecting to Evraz NA exemption request for Russian slabs.

The producers argue that there is ample domestic slab supply in the US which NLMK has access to but continues to rely on imported slab maximize profits.

"Such a business model directly undermines US steel production and should not be rewarded with a product exclusion," according to Nucor in its filing.

US Steel also cited similar concerns while adding that slab imports' "threat to national security is even stronger when the source of the imports is a major US foreign policy adversary such as Russia."

Both steelmakers allege that NLMK USA is asking for exclusions that are in excess of its actual production needs. NLMK USA is requesting for approximately 3.5 million-3.6 million mt, according to Nucor and US Steel.

US Steel claims NLMK is requesting exclusions for 273.5% of its historic annual slab consumption in the US based off average annual consumption from 2015-2017 of 1.3 million mt. The steelmaker also alleges that of NLMK USA?s 84 exclusion requests, 41 are for products that it did not consume from 2015-2017.

"Thus, it is clear that NLMK's product exclusion requests are designed to eviscerate any benefit the 232 could have for the U.S. industry and are indicative of intentionally malicious actions by NLMK to damage American steel producers and their workers," according to the US Steel filing.

In an interview with S&P Global Platts at the end of March, NLMK USA CEO Bob miller said, "Re-rollers are part of the solution of a healthy domestic [steel] industry." He cited the substantial investment in its facilities which has helped create a significant number of jobs.

Over the next five years, NLMK USA had earmarked around $600 million of additional investments into its Indiana and Pennsylvania mills which have been put on hold as it waits to see how the tariff situation plays out, Miller added.

He could not immediately be reached for updated comments regarding the objections raised by the three steelmakers.

AK Steel's objection is based off the argument that it has the ability to produce products requested for tariff exclusion and is "currently utilizing its melt facilities at 89% capacity." It lists operations at Middletown, Ohio, and Dearborn, Michigan, in its filing but makes no mention of the 2.5 million st/year idled blast furnace in Ashland, Kentucky.

--Michael Fitzgerald,
--Edited by Richard Rubin,