[Ferro-Alloys.com]U.S. Steel is trying to enlist suppliers in its fight against Chinese steel producers.

 

The Pittsburgh steel producer is asking suppliers to write letters to the U.S. International Trade Commission urging the agency to launch an investigation based on the trade complaint U.S. Steel filed last week against its Chinese competitors.

 

Domestic steelmakers blame Chinese steel imports for much of their woes, saying the imports are sold below market prices or benefit from massive subsidies from the Chinese government. U.S. Steel’s April 26 complaint seeks to exclude unfairly traded Chinese steel products from the U.S. market.

 

The complaint accuses China’s major steel producers of conspiring to fix prices, stealing proprietary information by hacking into U.S. Steel’s computer system, and falsely labeling steel in order to evade duties imposed on Chinese imports.

 

“Your support is important as these wanton illegal practices affect all of us — from the iron ore to our downstream customers,” John M. Foody Jr., the company’s general manager for global procurement, wrote in a May 5 letter to suppliers. “It is imperative that our government officials hear the views of American businesses whose success depends upon a strong, thriving domestic steel industry.”

 

A U.S. Steel spokeswoman said the letter was sent to approximately 300 suppliers.

 

In addition to the letter, U.S. Steel provided suppliers with draft language as a guide, telling suppliers the agency should receive their letters by May 20.

 

“The most effective letters are those that are personalized to include the specific views and individual circumstances of the author,” the company advised.

 

The ITC has 30 days from the filing of the complaint to decide whether to launch an investigation. Decisions not to open a case are rare, according to the agency’s website.

 

The United Steelworkers union is backing the complaint, saying, “America’s steel sector is under attack by China.”

 

“The case clearly lays out the array of actions China has taken to steal market share and jobs,” USW international president Leo Gerard said in a statement released by the union.

 

It would not be surprising for suppliers who depend on the steel industry for their livelihood to encourage the ITC to open a case.

 

But one supplier who asked not to be identified said some may do it grudgingly because of how U.S. Steel has treated suppliers as part of its Carnegie Way efficiency campaign. Some of the $1.4 billion in savings that the company generated over the last two years has come at their expense, the vendor said.

 

Suppliers and U.S. Steel employees familiar with the company’s purchasing practices say the steelmaker is now paying vendors 60 to 90 days after delivery. Prior to the Carnegie Way, payment terms were generally 45 days, giving suppliers their money sooner.

 

The sources, who asked not to be identified, also said U.S. Steel will order parts for repairs but tell vendors not to deliver the parts until the company is ready for them. The payment clock only starts once the part is delivered, making the vendor carry the expense longer.

 

The U.S. Steel spokeswoman declined to comment on the company’s relationship with vendors.

 

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