The cascading impact of foreign steel's play on the international markets has reached the Great Lakes shipping industry.
Imported steel is largely to blame for declining iron ore shipments, the Lake Carriers' Association reported this week.
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After moving 6.6 million tons in July, iron ore shipments dipped to just 4.3 million tons in August — a decrease of 22 percent compared to the same month a year ago.
The Lake Carriers' Association said the decline reflects steel imports that continue to command more than 30 percent of the U.S. market.
"We haven't seen the latest numbers but through June foreign steel had 32 percent of the market," said Glen Nekvasil, vice president of the Lake Carriers' Association, based in Cleveland, that represents 16 American companies operating 56 U.S.-flag vessels.
Because it takes about 1.5 tons of iron ore and about 400 pounds of fluxstone — shipped on the lakes as limestone — to make a ton of U.S. steel, "every ton of foreign steel takes two tons of cargo off the Great Lakes," Nekvasil said.
Nekvasil cited the lengthy summer closure of the MacArthur Lock at Sault Ste. Marie, Mich., and the loss of three 1,000-foot vessels to repairs as other mitigating factors.
But the Soo Locks are fully operational again and the vessels were back online by mid-September.
It's the slowdown in the market for American-made steel that gives the the association reason for deeper concern.
"I've been in this industry since 1976," Nekvasil said. "It's not the first time I've written a news release about what foreign steel can do to this industry."
Foreign steel "virtually decimated this industry" in the early 1980s, he said, recalling seasons of 90 million tons of raw materials shipped that were suddenly cut in half.
"We started scrapping boats," he said.
An avalanche of foreign steel in the late 1990s cost the Iron Range its LTV Steel Mining Co. (formerly Erie Mining Co.) in 2001. The closure amounted to the loss of 1,400 jobs.
The spectre of foreign steel looms over both shipping and mining.
Rep. Rick Nolan, D-Crosby, addressed the issue in a column earlier this month, titled "Revive the American Dream."
"Iron Rangers want a stop to bad trade agreements like the Trans-Pacific Partnership and NAFTA that allow foreign governments to dump their subsidized steel and other low-grade knock-offs of U.S. manufactured goods into our marketplace, sending good-paying jobs overseas," Nolan wrote.
To date through August, total shipments of dry bulk cargo — iron ore, coal, limestone, cement, salt, grain and sand — on the Great Lakes are at 52.4 million tons. That number already is better than 2014's total of 49.4 million tons and closing in on the five-year average of 53.2 million tons.
Iron ore shipments make up almost half of the total. At 24.84 million tons through August, iron ore was on its way to a banner year until a slowdown that began in July. The 4.3 million tons shipped in August were the lowest figure for the month since 2010.
Source: Duluth News Tribune
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