NLMK Indiana and NLMK Pennsylvania (NLMK USA), NLMK Group US Division companies, filed a complaint in the US Court of International Trade alleging that NLMK’s requests for slab exclusions from Section 232 of the Trade Expansion Act have been wrongfully denied.
NLMK USA's operations in the United States depend on reliable imports of steel slabs, because local capacity for processing steel into finished products is significantly in excess of the slab-making capacity.
To fill the overwhelming majority of its customers’ orders, NLMK USA requires 250mm-255mm thick slab (nominally “10-inch”), which it has not been able to source domestically because none of the objectors is capable of casting slabs with this thickness. With respect to thinner slabs, which account for only about 10% of NLMK USA’s overall requirements, NLMK USA has never been able to purchase in the domestic market more than 20% of its requirements in any given month.
Given the unavailability of steel slab in the domestic market, in 2018 NLMK USA applied for exclusions from the Section 232 steel tariffs for the steel slab products from Russia. Three US steelmakers – AK Steel, Nucor and US Steel – filed objections to the exemptions, despite the fact that they are unable to supply the required volumes and types of slabs.
According to a press statement issued by NLMK in Russia, by denying NLMK USA’s exclusion requests and sustaining the objections, "the Department of Commerce undertook no effort to verify the objectors’ claims, ignored the evidence that these companies are unable and/or unwilling to produce the subject products in the required quality or quantity, and failed even to offer any reasoned basis for its decisions".
NLMK claims that the total slab NLMK USA was able to source domestically amounted to only about 3% of its total requirements. "The company had to import the rest in order to maintain operations and to fill customers' orders. NLMK USA has paid nearly $170 million in tariffs from which it should have been exempted. The company requests the court to declare the US Department of Commerce’s denials of NLMK USA’s requests for slab exclusions from Section 232 unlawful and to recognise NLMK USA's right to refund the previously paid Section 232 tariffs.
NLMK Group owns and operates three steel mills in Indiana and Pennsylvania. Since acquiring these mills, NLMK has invested more than $800 million in these facilities, restoring much needed jobs to these communities. Among these mills, NLMK employs 1,200 workers and generates another 8,400 indirect jobs. NLMK claims that its reliable supplies are particularly important to its more than 90 manufacturing customers in Pennsylvania, Ohio, Michigan, Indiana, Illinois, and West Virginia.