The U.S. Department of Commerce (DOC) in December announced and published its preliminary affirmative determinations in the antidumping duty investigations of certain types of steel nail imports from Korea, Malaysia, Oman and Vietnam. DOC also found that none of the major importers from Taiwan were selling at less than fair market value.
Federal authorities will take a closer look at the financials of targeted companies before releasing its final determination in May 2015. The preliminary duties started to be collected at the end of last year.
The antidumping duties are applied when a U.S. company can demonstrate that a foreign importer is selling nails below fair market value. The preliminary duties are detailed in Chart 1.
“We greatly appreciate the Commerce Department’s dedicated efforts to investigate dumped imports from these countries,” said David Libla, co-president and CEO of Mid Continent Steel & Wire. “As this third set of cases in seven years should show, Mid Continent is committed to defending itself and our industry against the persistent dumping that has driven many U.S. producers out of business over the past decade. The margins announced today will bring badly-needed discipline to the market and encourage foreign producers and exporters in these countries to sell their products at fair prices, especially given the potential for increased duties in the future if they do not.”
Nail importers have cautioned that duties will drive up the cost of nails and will damage the U.S. industry at a time when lumber costs have skyrocketed. Todd Mazur, president of Viper Industrial Products Inc., commented, “If history repeats itself, the overall market price for nails will increase over the next 2-3 months potentially 5-10%, somewhat proportional to the duties assessed.”
While escalating nail prices do drive up total costs, it is nothing compared to the impact of lumber on the final price of the pallet.
Most of the duties are somewhat small compared to the significant finding in 2007 against Chinese manufacturers. The only country with major preliminary duties is Vietnam, which pretty much knocks it out of the picture for the U.S. market.
While there likely will be upward pressure on both domestic and imported nails due to this assessment, the market will likely reach an equilibrium as countries with minimal to no assessments reach maximum capacity and volume moves to other markets.
The actual assessments could fluctuate based on the final finding after the U.S. government does a more thorough investigation over the next 3-6 months.
Chart 1.
Korea
Daejin Steel Company 12.38%
Jinheung Steel Corporation, Jinsco International Corporation, and Duo-Fast Korea Co., Ltd. 2.13%
All Others7.26%
Malaysia
Inmax Sdn. Bhd. 2.14%
Region International Co. Ltd./Region Systems 2.56%
Tag Fasteners Sdn. Bhd. 39.35%
All Others 2.20%
Oman
Oman Fasteners LLC 9.07%
All Others 9.07%
Taiwan
PT Enterprise, Inc. 0.00%
Quick Advance Inc. 0.00%
All Others 0.00%
Vietnam
Region Industries Co., Ltd. 103.88%
United Nail Products Co., Ltd. 93.42%
Kosteel Vina Limited Company 98.65%
All Others 323.99%
