Slabs

Robie Smith, left, and Mick Lang, steelworkers at NLMK Pennsylvania’s Farrell steel plant, stand beside a stack of steel slabs from Russia in 2018, the year the federal government imposed a 25 percent tariff on the raw material the plant uses.

NLMK Pennsylvania’s president is seething over a request the United Steelworkers union’s top official has made to the U.S. Commerce Department.

USW International President Tom Conway appealed in a letter to keep Trump-era tariffs on imported steel slabs. Letters to the agency on tariff actions are public documents.

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“The U.S. national security depends on the domestic industry’s ability to manufacture steel from start to finish in America,’’ Conway said in the letter dated Oct. 12. “The domestic industry continues to have idled slab capacity that could be put to use in the commercial market.’’

Bob Miller, NLMK Pennsylvania’s president, said he was furious over Conway’s letter. NLMK Pennsylvania has fought to have the 25 percent tariffs lifted since they were imposed by President Donald Trump in 2018.

“The USW doesn’t have to go out into the market and buy slabs,’’ Miller said. “I can tell you we do, and there are no slabs available produced in America – zero, none.’’

Steel slabs produced by one steelmaker can be sold to another, which rolls them into steel coils. NLMK Pennsylvania’s Farrell steel plant imports slabs from its Russia-based parent company, known as NLMK Group.

Although Conway’s letter does not mention any American company by name, he acknowledged the union represents those employed at steelmakers importing steel slabs.

USW Local 1016-03 represents around 400 workers at the Farrell plant. Total employment at the Farrell plant and the company’s Sharon Coating plant in Sharon is around 600.

“While USW represents the workers at some of these foreign-owned producers of downstream finished steel products, we also represent laid-off American workers at U.S. Steel and other producers with the capacity to increase or restart slab production here in the U.S.,’’ Conway wrote in the letter.

He went on to add that foreign produces have “distortive cost structures based on unfairly traded slab imports.’’

Representatives of United Steelworkers Local 1016-03 in Farrell didn’t immediately return a phone call to The Herald Monday. An International USW spokesman said Monday afternoon the union couldn’t immediately respond to Conway’s letter.

The letter exacerbates an already strained relationship between NLMK and the union. USW Local 1016-03 went on strike in August 2020 in a stoppage that wasn’t settled until March.

NLMK Bob Miller

Miller

Due to the COVID-19 pandemic the steel plant is unable to fill 50 jobs at the Farrell steel plant, he said. He added American steelmakers with closed plants could reopen and get people back to work.

“I wish the USW would send me some of their good unemployed workers, because we need them,’’ Miller said.

NLMK officials have said the tariffs cost the company about $170 million through April 2019, but the company reached a settlement with the Commerce Department, which didn’t admit to any wrongdoing, that forced the federal government return $107 million.

Since then, NLMK has forked out around $200 million in tariffs, and Miller said the company has filed another legal claim against the agency to return those funds.

Tariff exemptions can be approved by the Commerce Department, but that hasn’t worked, Miller said.

“Since the tariffs began we’ve sought exemptions, and the Commerce Department has rejected every single one of them,’’ he said.

And steelmakers are cashing in on record steel prices. In August 2020, steel fetched $440 a ton but the prices has since skyrocketed to around $1,850 a ton. The COVID-19 pandemic is blamed because, as with other businesses, it threw supply chains into chaos.

Miller acknowledged NLMK is benefiting from high steel prices, while adding that the company is still getting thumped financially from the tariffs.

“The tariffs are hurting us through an unfair process,’’ he said.

Last month U.S. Steel said its third quarter profits totaled a little over $2 billion – the highest quarterly profit in the company’s 120-year history. NLMK Group reported its third-quarter profit was $1.62 billion, a five-fold jump from a year ago.

By far NLMK Group’s profits, Miller said, mostly comes from Russia where it has vast steel production resources. and because of that the Russian steelmaker produces the cheapest slabs in the world. The company shouldn’t be penalized for having good business practices, he added.

“Our company absolutely expects us to maximize our profits,’’ he said. “But we can’t do that because the tariffs put us at a competitive disadvantage.’’

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