) has cheered the final verdict of the U.S. Department of Commerce
("DOC") which found that intense dumping of unfairly priced Oil
Country Tubular Goods (OCTG) products by South Korea and other 8
countries has caused significant harm to the U.S. market.
OCTG products, which play a pivotal role in building and
maintaining the nation's energy infrastructure, are being illegally
dumped at unfairly low prices in the domestic market which happens
to be the most open and attractive market in the world.
The DOC found significant unfair trade margins against most of
OCTG imports from South Korea and other countries. It has levied
duties on OCTG imports from these nations. South Korea exported
OCTG worth $818 million to the U.S. last year, according to the
The positive decision of the DOC has allowed the OCTG trade case
to move ahead to the International Trade Commission hearing on Jul
15 where U.S. Steel and others have to prove that subsidized
imports from 9 countries has significantly hurt the American OCTG
U.S. Steel's shares gained 3.2% to close at $27.64 last Friday.
The stock is down around 6% so far this year versus a roughly 8%
gain for the S&P 500.
U.S. Steel and United Steelworkers union have been actively
pressing Congress to stop unfair trade practices and enforce
America's trade laws so as to maintain the country's economic and
The prime concern against which U.S. Steel raised its voice is
that an alarming inflow of imported OCTG products into the American
market is hurting the company's domestic position in the tubular
market. The company has suffered heavily due to a flood of cheap
steel imports, reflected by declined orders, idling of mills and
U.S. Steel, which has been removed from the S&P 500
effective Jul 1, remains beset by weak steel market fundamentals.
The U.S. steel industry continues to contend with surging steel
imports. This, in addition to the oversupply in the industry, is
pressurizing prices and prospects of steel producers including
While healthy automotive demand, aggressive cost management and
increased cokemaking capabilities are expected to benefit U.S.
Steel, it is exposed to certain near-term operational
U.S. Steel is expected to face raw material cost pressure and
delivery issues as well as maintenance outages in the near term.
Moreover, bad weather-related logistic bottlenecks are expected to
affect production and shipments in second-quarter 2014, leading to
a loss in the company's flat-rolled segment. U.S. Steel's European
division is also expected to see weaker results in the quarter.
U.S. Steel is a Zacks Rank #3 (Hold) stock.
Universal Stainless & Alloy Products Inc.
), which also belongs to the steel industry, is worth a look with a
Zacks Rank #1 (Strong Buy).
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