This article first appeared in the St. Louis Beacon, Feb. 10, 2011 - WASHINGTON - Die-casting companies in Missouri had mixed views on whether a decision by the U.S. International Trade Commission to end one antidumping tariff but continue another on imported magnesium would help their businesses.
In a vote Thursday in Washington, the commission retained the antidumping duties on magnesium imports from China after determining that revoking the tariffs would likely "lead to continuation or recurrence of material injury" to the sole U.S. magnesium producer.
On the other hand, the commission found that dropping the duties on imported Russian magnesium would not likely damage the American producer, Utah-based U.S. Magnesium LLC. That finding means that the antidumping duties imposed on Russian imports of the metal will be revoked, according to an ITC statement.
The ITC's vote appears likely to have a mixed impact on the competitiveness of die-casting companies in Missouri and Illinois that use magnesium -- and the more than 2,000 workers they employ. Those firms, including St. Louis-based Spartan Light Metal Products Inc., contend that the U.S. Commerce Department's decision in 2005 to impose the duties on imports of magnesium from Russia and magnesium alloy imports from China and Russia drove up the domestic price of magnesium and left them at disadvantage against foreign competitors.
"I'm glad the ITC took a hard look at the duties on magnesium, and I hope that the decision to drop duties on magnesium imports from Russia will provide some relief for Missouri companies," said U.S. Sen. Claire McCaskill, D-Mo. "I think it was important that the voices of those Missouri companies were heard. I did all I could to support them in this process."
McCaskill had testified at an ITC hearing in December in favor of dropping the antidumping tariffs against China and Russia and was among the members of Congress from Missouri and Illinois who urged the ITC this month to do so.
Michael L. Sparks, executive vice president for operations for Spartan Light Metal Products, told the Beacon that the ITC decision was "a step in the right direction and we appreciated the change." He said he hoped that Spartan -- which employs 684 workers at its plants in Sparta, Ill., Mexico, Mo., and Hannibal, Mo. -- might get some benefit from dropping the tariff on Russian magnesium imports.
"Given the [tariff] revocation, they may be less fearful to play in our market," Sparks said. But he also noted that Russian magnesium producers "have limited capacity" compared to the Chinese. "If magnesium alloy becomes competitive with alternative materials, particularly aluminum and composite, and there is stability in price and supply availability, then the design engineers will begin to use it again."
But Don Hays, general manager of Continental Casting LLC -- a die-cast manufacturer that employs 170 workers at three plants, including about 65 workers at its main magnesium die-casting plant in Palmyra, Mo., near Hannibal -- was less optimistic about the potential impact of the ITC decision.
"While we appreciate the commission taking on this issue, we are disappointed in their decision -- as we do not expect this to favorably affect our concerns about being at a price disadvantage on quoting new products to our customer base," Hays said in an email to the Beacon.
"In the past, the Russian prices were very close to the U.S. producer's prices," he wrote. "If this remains, all of our competitors outside the U.S. can still purchase China magnesium at a lower price than we are able to with the tariff" still imposed on imports of Chinese magnesium. He said that tariff covers "all magnesium alloys and some forms of magnesium scrap."
Thursday's action by the ITC resulted from the Uruguay Trade Round's requirement that antidumping tariffs be dropped after five years unless a review finds them to be essential to affected domestic industries. The full ITC report on the case won't be available for a month or so, a spokeswoman said.
In Thursday's vote, ITC Chairman Deanna Tanner Okun, Vice Chairman Irving A. Williamson, and Commissioners Daniel R. Pearson and Shara L. Aranoff voted to maintain the China antidumping tariff and against keeping the Russia tariff. Commissioner Charlotte R. Lane voted to maintain both; Commissioner Dean A. Pinkert did not vote.
At an ITC hearing on the case on Dec. 7, U.S Magnesium President Mike Legge testified that "we have survived because these orders were imposed and have been enforced." He added that "over the past 20 years, low-priced import competition has put out of business every other producer of primary magnesium in North America, western Europe and India."