Steel firms see return of export orders from U.S.

Taipei, Dec. 23, 2003 (CENS)--With the U.S. expected to lift the Clause 201 restricting iron and steel imports in March next year, some domestic manufacturers of galvanized and coating steel products, including Yieh Phui Enterprise Co. and Sheng Yu Steel Co., are seeing return of export orders from the U.S.

Recently many U.S. firms have turned aggressive to ask domestic steel firms to quote export prices because of the expected elimination of the Clause 201.

Yieh Phui president Wu Mao-lin said his company has recently received advance orders scheduled to be delivered after March 20 next year in light of the U.S. Bush administration's announcement of call offing the Clause 201. Wu said many U.S. firms are lining up to negotiate with his company for placing orders in January next year.

The company anticipated it would resume the average monthly shipment of 10,000 metric tons of steel products to the U.S. in the second quarter of next year.

Since March 20 last year, the Bush administration has imposed a safeguarding measure to protect U.S. iron and steel manufacturers. Under the measure, 16 items of imported steel products are subject to 8% up to 30% import duties for a period of three years, which has stirred strong sentiment from the European Union, Japan and mainland China and forced them to threaten to retaliate. Thanks to the successful arbitration of the World Trade Organization, the Bush administration announced in early December the advanced elimination of the safeguarding measure and would allow free imports of iron and steel products beginning from March 20 next year.

Wu said the Clause 201 has made the steel prices quoted in the U.S. market higher than that of the international marketplace. After hearing the elimination of the measure, many U.S. importers have been rushing to ask foreign steel manufacturers to quote export prices.

During the period of the U.S.' imposition of the Clause 201, Yieh Phui saw exports to the U.S. market drop by two-thirds from the average of its heyday. The company estimated its exports to the U.S. would recover to 8,000 metric tons of steel per month after March next year.

Wu estimated the average quoting price of galvanized and coating steel exported to the U.S. market will surge US$50 per metric ton as the U.S. government has called off the Clause 201.

Yieh Phui had NT$2.79 billion (US$82.05 million) in cumulative pretax earnings for the first three quarters of this year. The company predicted it would garner pretax profits of NT$3.4 billion (US$100 million) for the entire year, up 10% from last year and hitting a historic high record.