Both American and foreign steel makers reacted cautiously to the Carter administration's long-waited announcement of its minimum price for steel imported into the United States.
The administration said Tuesday that its so-called trigger prices for imported steel average about 5.7 per cent below the price domestic steel makers charge on the East Coast. The prices are based on the cost of producting steel in Japan - supposedly the world's most efficient producer.
Because domestic steel users generally prefer American-made steel unless the price differential is 10 per cent or more, U.S. steel makers should be happy with the trigger prices, some of which are higher than U.S.prices and some of which are lower.
The closest thing to a substantive comment from a domestic producer came from Armco Steel Corp., which characterized the trigger prices as a "serious effort by the administration to achieve its stated objective of reducing imports to a level of 12 to 14 per cent of the domestic market."
Other steel makers did not even give a hesitant nod of approval to the trigger-rice list. U.S. Stell Corp. and Bethlehem Steel Corp. said they were studying the prices.
Inland Steel Co. of Chicago called the partial list of prices a "complex document" with "many gaps in information which preclude any simple or quic evaluation of its potential benefits to the domestic steel industry."
Even Armco chairman C. William Verity said there are a "number of questions that must be answered before we can offer a definitive opinion."
Japanese steel makers had mixed reactions, according to United Press International. Yoshihiro Inayama, chairman of Nippon Steel, Japan's biggest producer, said that the results of the trigger-rice system are hard to evaluate but that Nippon is willing to cooperate for " the good trade."
A spokesman for Kawasaki Steel said the company's export volume would drop, but an official of Nippon Kokan, Japan's second largest steel maker, said the U.S. trigger prices could "end unnecessary price competition among domestic (Japanese) makers."
In the last few months of 1977, steel imports accounted for close to 20 per cent of U.S. steel consumption but the administration is unwilling to predict what impact its trigger price mechanism will have on steel imports when the program is put in place about mid-February. Officials note that one of the key elements to the plan is the American steel industry's pricing behavior.
Most steel companies have annouced plans to boost prices by about 55 per cent Feb. 1, which would widen substantially the gap between the trigger prices the administration released Tuesday and domestic prices.
Under the trigger-price plan, if steel arrives at a U.S. port below the trigger price, an immediate investigation is launced by the Treasury to determine whether the steel is being sold below cost, or dumped, which is illegal.
If dumping is discovered, fines are levied against the improted product.
Although a producer can ship steel to the United States below the trigger price if he can prove his costs of production are less than those assumed for the price analysts expect that the trigger prices will serve as an effective floor on steel import prices.
The Treasury calculated 17 trigger prices for basic steel commodities such as plate and cold-rolled sheets. Ech commodity has four trigger prices - to reflect the costs of shipping it to the East, West or Gulf coasts or to Great Lakes Ports.
The agency still has to calculate trigger prices for several more steel commodities and determine what charges must be added to the bill to reflect the "extras" customers almost always demand on every order. These extras, such as dimensions or finishing, add between 10 and 40 per cent to most steel orders.