Russia-based steelmaker NLMK's US subsidiary has reached a settlement with the United States government on a lawsuit regarding Section 232 tariffs on steel imports.
NLMK filed a suit in the US Court of International Trade on February 2020, challenging a decision from the Department of Commerce to deny the company's exclusion requests to the Section 232 tariff of 25% against steel imported from most countries.
In the settlement, the government agreed to refund to NLMK USA "a significant portion of the tariffs it had paid, with accrued interest," the company said without indicating the money involved.
In March of this year, NLMK USA claimed it had paid nearly $170 million in tariffs from which it should have been exempted.
NLMK USA sources slab from its parent company in Russia and from Brazilian suppliers. Brazilian slab is exempt from the Section 232 tariff but is limited to an annual quota of 3.51 million tonnes.
Fastmarkets' price assessment for
steel slab, export, fob Black Sea, CIS was $460-470 per tonne on Friday November 16, up from $455-460 per tonne a week earlier.
Fastmarkets' price assessment for
steel slab, export, fob main port Brazil reached $515-540 per tonne on Friday from $500-540 per tonne a week earlier.
NLMK USA applied for, and was denied, an exclusion from the Section 232 tariff for imports of slab from Russia in 2018. The company claimed that slab with a thickness of 250-255mm could not be purchased domestically in the volumes it needed.
The company was only able to source about 3% of its total slab requirement domestically and needed to import the rest to maintain its operations, it said in March of this year.
NLMK is still subject to the Section 232 tariff when importing Russian slab and to a quota when sourcing Brazilian material. But some market participants believe the settlement of the case sets a precedent that could threaten the future of the tariffs.
"Many US customers could allege the same problem when sourcing slabs," a source in the slab market said. "It could be the beginning of the end of Section 232 measures."