Millions of tons of cheap, imported steel could threaten the nation's iron and steel companies, particularly on Minnesota's Iron Range, where there are several mines and factories making taconite.
Economists from the Economic Policy Institute say that below-cost steel is a looming crisis that could close domestic plants and shed jobs in an already vulnerable industry. A coalition of businesses, trade and labor groups is calling for the U.S. Department of Commerce to quickly impose sanctions on several nations that are dumping underpriced steel into the United States.
The issue came to a head this week when U.S. Steel Corp., the United Steelworkers union and the Alliance for American Manufacturing (AAM) banded together for the last of six "SOSJobs" rallies that have been held around the country. On Monday, 2,000 iron and steel workers, Gov. Mark Dayton, state legislators and local politicians protested in Virginia, Minn., and chanted "Gotta do something. Stop that dumping!" Speakers complained about potential job losses if South Korea, China, India and six other nations continue to flood the U.S. with cheap steel.
"Today's enemies are … the countries who depress your prices and steal your jobs," said Dayton, who spoke at the rally on the Iron Range. He bemoaned the low-priced tube and pipe exports from South Korea that have risen 45 percent as a result of unfair pricing. "That's $800 million out of the pockets of Americans and we should not allow that to happen. It is essential that the U.S. government stand up for American jobs and American workers," he said.
Dayton, along with other governors and U.S. senators, has called for quick government action, saying that tariffs should be imposed on the imported steel to level the playing field with U.S. companies. Some union officials and members of Congress even took to the airwaves to educate the public about the issue and to demand that the Commerce Department impose sanctions immediately.
"Why is it that South Korea can penetrate our market below the cost of production? It's because they cheat. And we are tired of fighting the cheaters. It's time our government stood up," said Leo Gerard, president of the United Steel Workers International, on MSNBC Monday.
The scourge of cheap steel has already caused job cuts in steel plants in Ohio, layoff warnings in Pennsylvania and Texas and has roused fears among workers and politicians in Minnesota, the largest supplier of iron ore to steel mills nationwide.
Last year alone, more than 1.8 million tons of below-cost steel was dumped into the U.S., with South Korea being seen as the biggest offender, rally organizers said.
The entire Iron Range has weathered bankruptcies and plant closures over three decades due to episodic bouts of cheap steel imports, erratic demand and other problems. While the Iron Range has enjoyed a resurgence in the last eight years, cheap imports are putting its future and thousands of jobs at risk, said rally organizers who waved signs, texted regulators and got the word out to Washington that something must be done.
The imports in question are usually "Oil Country Tubular Goods (OCTG)," which are high-strength pipes and tubes in high demand in North Dakota's oil drilling and fracking fields and in Minnesota's resurging construction and manufacturing industries, said John Rebrovich, assistant to the director of the United Steelworkers' nine-state District 11. South Korea and other nations that illegally dump the pipes typically sell them "30 to 40 percent below the fair market value," Rebrovich said Tuesday.
Scott Paul, president of the Alliance for American Manufacturing (AAM) told Monday's crowd that they must lobby Congress and the Department of Commerce for tariffs on illegal steel. Sanctions will keep steel import prices honest and protect jobs on the vulnerable Iron Range, he said.
The Iron Range contains the largest iron ore deposit in the country. The iron ore is mined and converted into taconite pellets. The pellets are then shipped to steel plants nationwide, where special furnaces convert the pellets into steel that is formed into a multitude of steel products.
According to the Economic Policy Institute, the U.S. steel industry supports about 583,000 American jobs, but cheap imports threaten that stability. Imports have doubled since 2010 and jumped 12 percent just last year. That contributed to U.S. steelmakers losing $1.2 billion.
A steel plant in Lorain, Ohio, recently laid off 108 workers. And steel plants in Pennsylvania and Texas recently warned that they may also be forced to cut staff. United States Steel Corp., which mines and processes taconite in Keewatin and Mountain Iron on the Mesabi Range, is so concerned about unfair imports that it partnered with its labor unions and U.S. manufacturers to lobby in Washington and hold protests nationwide.
The rallies have drawn attention. Last month, Minnesota Sens. Amy Klobuchar and Al Franken and 55 other senators sent a letter to the Department of Commerce asking for punitive sanctions against South Korea, which they described as one of the world's largest OCTG makers with no domestic market for the pipes. As a result, nearly half of U.S. petroleum drillers are snatching up Korea's cheap stock, the senators said.
Dayton said he is acutely concerned about the situation. He took to the podium Monday and told the revved-up crowd at the Miners Memorial Building in Virginia that he remembers years ago when Minnesota's Butler Iron Ore mine shut in Nashwauk, when Eveleth Taconite filed for bankruptcy and when LTV Steel in Hoyt Lakes closed for good, taking hundreds of jobs with it.
So fighting to preserve today's iron ore industry means "I stand with you" in the fight against illegal dumping, Dayton shouted.