The president of U.S. Steel Corp. said yesterday that the government must set an average price of $360 a ton as a minimum for steel imports if its plan to assist the steel industry is to help domestic producers.
David M. Roderick told reporters that a $360 average - a very rough figure - would be a fair reflection of the Japanese costs of production.
Last Tuesday the government announced a major program to assist the ailin g steel industry. The key part of the plan is a special system of reference prices for imported steel to stop foreign steel makers from dumping their products (selling below cost) in the United States.
Since the first elements of the plan leaked out a month ago, steel makers have warned that the so-called reference prices must be set high enough or they will be of no use fighting unfair foreign competition.
If steel is imported below the reference price, an accelerated administration antidumping investigation would be automatically launched. If dumping is found, the Treasury expects to be able to levy duties within 60 to 90 days rather than the 13 months or more it now takes.
Roderick, speaking to a luncheon U.S. Steel hosts each year for reporters, said that he was not trying to pressure the government. He said, however, that he felt the $360 average price would be a fair and accurate reflection of the costs Japanese producers must incur to sell steel in the United States, including the cost of shipping the steel and insuring it. The reference price also must include a fair profit, according to the administration plan.
Japanese officials arrived here Wednesday to give U.S. economists the cost of production datat the government needs to calculate the reference prices.
Robert Crandall, deputy director of the Council on Wage and Price Stability, is directing the price calculation effort. Crandall said the government originally hoped to compute about 50 or 60 prices for different products, but said it apparent that several hundred such prices will be needed to cover adequately the range of imported steel products.
U.S. Steel officials estimate that 10,000 different grades of steel are sold in the United States.
The $360 average is developed from a wide range of products - some which sell at prices well below $36-a-ton and some, such as special-alloy steels, that sell at a price well above $360.
Roderick said, on the average, steel is being dumped by foreign producers in the U.S. at prices as much as $50 a ton below $360. Imported steel has captured as much as 20 per cent of the domestic market in recent months. Last year imports accounted for about 14 per cent of U.S. shipments.
Roderick also repeated statements he made earlier this week to securities analysts that the steel industry will have to raise prices this year to recover rising costs, especially for labor and energy.