NEWS RELEASES - 1999

(Washington, D.C.) - The Congressional Steel Caucus today heard a specialty steel industry executive denounce a recent World Bank loan of almost $100 million dollars to a joint venture that will build a $1.4 billion stainless steel plant in China. The world's largest stainless steel producer, Germany's Krupp Thyssen, benefits from the loan.

Bill Pendleton, Director of Corporate Affairs for Carpenter Technology Corporation in Reading, Pennsylvania, testified before the Caucus on behalf of the Specialty Steel Industry of North America (SSINA), and presented "a graphic illustration of why the Congress and the Administration must not give one inch on the issue of opening up U.S. antidumping and countervailing duty laws for negotiation during the upcoming WTO Seattle Round in November." Employing strong language, Pendleton two stated, "Apparently, the World Bank's International Finance Corporation in its wisdom determined that there was just not enough stainless steel available in the world today, so it has extended a $98.8 million loan to a joint venture between Krupp Thyssen - the world's largest stainless producer - and China's Shanghai Pudong Steel to build the initial stage of what ultimately will be a $1.4 billion fully integrated stainless steel plant in Shanghai with an estimated output of 72,000 tons. It gets worse. The German development agency KfW is co-financing the venture with an additional $78.8 million loan. I hope I'm not the only person who is outraged that, on one hand, since mid-1997 my industry has filed and litigated more than 30 dumping and countervailing duty cases against 45 producers in 14 countries, and now we see the World Bank and the German government loaning nearly $200 million to finance a new stainless steel plant in China?"

Pendleton urged Caucus members to ask the same question of the U.S. representatives at the World Bank because " . . . in my opinion, this is outrageous and completely unjustified. Krupp Thyssen hardly needs a government loan. Furthermore, this is precisely the type of deal President Clinton promised to oppose in his Steel Action Plan."

He said that overall the industry is encouraged by President Clinton's Steel Action Plan and Administration assurances to vigorously enforce U.S. trade laws, eliminate unfair trade practices that support excess production capacity, and improve the 'early warning' system that will help identify developing trade problems. Pendleton also not participate in any trade negotiation that has antidumping and countervailing duty rules on the agenda.

The Specialty Steel Industry of North America is a Washington, D.C.-based trade association representing 15 companies employing over 25,000 workers across North America. Specialty steels are high technology, high-value stainless and other special alloy products sold by the pound rather than by the ton. They differ from carbon steel in their alloy content and uses. Stainless steel, the largest specialty steel product line, has a high tensile strength and resists abrasion and corrosion because of its high chromium content. Stainless steel is used extensively in the automotive, food processing and petrochemical industries, and in medical and dental equipment and consumer products.

While shipments of specialty steel account for only 2% of all steel produced in North America, annual revenues of approximately $8 billion account for over 14% of the total value of all steel shipped.

Editor's Note: Complete testimony available: Pendleton Testimony