UPDATE 2-Nucor CEO urges fair play in global steel industry

Thu Jul 18, 2013 5:39pm EDT

* Nucor CEO says U.S. trade laws reactive, not proactive

* Calls on China to stop funding inefficient steel producers

* Second-quarter earnings-per-share $0.27 vs est $0.30

* Average selling price per ton falls 7 pct

By Garima Goel

July 18 (Reuters) - The chief executive of U.S. steelmaker Nucor Corp urged policymakers to restrict cheap imports of Chinese steel after a slump in prices contributed to a fall in the company's quarterly profit.

John Ferriola said U.S. trade policy had been too slow to address the issue of imported steel sold at subsidized prices. He singled out imports from China, the world's largest steelmaker, as being particularly harmful to the U.S. economy.

"The current trade laws simply are not getting the job done," Ferriola said on a post-earnings conference call. "They are reactive, they are not proactive, and we need a more proactive approach to trade laws."

Sluggish economic growth and excess capacity in the global steel industry have weighed on prices and eaten into the margins of U.S. producers. Nucor said its average selling price per ton fell 7 percent in the second quarter from a year earlier.

The American Iron and Steel Institute, a trade association, said in February that steel imports to the United States were expected to grow for the fourth consecutive year in 2013 to the detriment of U.S. steel producers.

"If not for dumped steel and subsidized imports, we would have more production and more jobs in the United States," said Ferriola, who met senior trade officials in Washington this week to flag his concerns.

"Put simply, the key ingredients required for healthy and sustainable U.S. economic growth are jobs, jobs and more jobs."

Charlotte, North Carolina-based Nucor announced a 24 percent decline in second-quarter net earnings attributable to its stockholders.

LEVEL PLAYING FIELD

In 2010, the Commerce Department slapped anti-dumping duties on oil country tubular goods (OCTG) from China.

A group of U.S. companies that produce OCTG - specialty steel pipe used to drill for oil and gas - launched a separate trade case this month against what they say is a flood of unfairly traded products from nine countries.

Ferriola said, however, that it was "too little, too late".

He urged China to reduce its excess steel capacity, estimated at 200 million tons or more, and to halt subsidies to producers that are not cost-effective.

Recounting his visit to Washington, he said: "We stress each time we go that we are not asking for protection, we aren't asking for subsidies, we aren't asking for the government to invest in our companies.

"We're asking (for) nothing more than a level playing field on which our teams can compete."

Nucor, which makes steel from scrap metal, says it is the largest recycler in North America, as well as the biggest producer of cold finished bar products used in a wide range of industrial applications.

A weak construction market has dampened demand for bars and other products over the last year, although Nucor said the automotive and energy markets were relatively strong.

Nucor's shares closed up 1 percent on the New York Stock Exchange on Thursday after the company, which has a market value of more than $14 billion, said it expected a modest improvement in earnings for the third quarter.

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