A key gauge of U.S. manufacturing activity rose in June to reach its highest level in 16 months, according to the latest Manufacturing ISM Report On Business, issued July 1 by the Institute for Supply Management (ISM).

The ISM’s benchmark purchasing manager’s index (PMI) rose to 53.2 last month, from May’s reading of 51.3. An index level above 50 indicates expansion in the nation’s factories, and the index has been above that mark for four straight months, the ISM said.

The institute’s new-orders index rose to 57 in June from the May reading of 55.7. The production index hit 54.7 last month, 2.1 percentage points higher than the May level of 52.6.

Of the 18 manufacturing industries that the ISM tracks, 13 reported growth in June in the following order: printing & related support activities; textile mills; petroleum & coal products; food, beverage & tobacco products; fabricated metal products; apparel, leather & allied products; paper products; miscellaneous manufacturing; computer & electronic products; chemical products; primary metals; machinery; and nonmetallic mineral products.

The three industries reporting contraction in June were: electrical equipment, appliances & components; transportation equipment; and plastics & rubber products.

The survey’s employment index increased to 50.4 percent in June from 49.2 percent in May. The prices index registered 60.5, a decrease of 3 percentage points from the May reading of 63.5, indicating higher raw materials prices for the fourth consecutive month, the ISM report said.

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A North Carolina–based steel manufacturer, which operates two locations in Central New York, will benefit from a decision by the U.S. International Trade Commission’s (ITC) targeting certain steel imports.

The ITC has voted to place duties on foreign companies that were exporting “unfairly subsidized and artificially cheap” steel to the U.S., products that hurt domestic steelmakers, such as the Nucor Corporation (NYSE: NUE), according to a June 24 news release from the office of U.S. Senator Charles Schumer (D–N.Y.).

The duties are on companies that export corrosion-resistant and cold-rolled steel.

The Democrat’s office called it “unfair trade practices,” noting the ITC vote places New York steelmakers and their workers “on a level playing field.”

“These final determinations by the International Trade Commission confirm that the U.S. steel industry has suffered harmful effects from imports of dumped and subsidized corrosion-resistant steel,” John Ferriola, chairman, president and CEO of Nucor Corporation, said Schumer’s news release. “[The] decision and the [one in June] in two of the cold-rolled steel cases are important steps in returning fair trade to the U.S. flat-rolled steel market. Our government is sending a clear message that all countries must play by the rules of international trade and will be held accountable for failure to do so.”

Nucor Corporation is headquartered in Charlotte, North Carolina. The company employs a total of 579 workers in New York, according to Schumer’s office. The locations include Nucor Steel Auburn Inc. in Auburn and Vulcraft of New York Inc. in Chemung, according to the Nucor website.

Nucor’s Auburn facility produces a range of carbon steel products including reinforcing bars and employs more than 310 people, the Democrat’s office said.

The unanimous ruling is “great news” for Nucor and other steelmakers, Schumer said in the release.

“We could not afford to let our steel manufacturing base melt away because China refuses to play by the rules,” said Schumer. “That’s why I went to bat for our New 

York steel industry and pushed the ITC and the [U.S.] Department of Commerce to implement new duties to guard against this unfair foreign competition.”

Schumer’s argument
A “massive” volume of Chinese steel has entered global markets, including the U.S., “harming” American steel producers and the communities that rely on these manufacturers, like those in Central New York where Nucor has two locations.

Schumer’s office cited the Washington, D.C.–based American Iron and Steel Institute (AISI) as saying steel facilities averaged roughly 70 percent capacity utilization in 2015, which the AISI considers “well below” the levels necessary to generate a profit, invest in plant and equipment, or hire new workers.

Data from the U.S. Bureau of Labor Statistics indicates that employment in the steel industry has declined by more than 12,000 jobs over the last 12 months for which data are available.

In 2015, imports of corrosion-resistant steel from China, India, Italy, Korea, and Taiwan were valued at an estimated $500.3 million, $219.6 million, $110 million, $509.1 million, and $534.4 million, respectively, according to Schumer’s office.

The duties put in place on this steel are as high as 450 percent for China; 34 percent for India; 92 percent for Italy; 47 percent for Korea; and 3.7 percent for Taiwan, the senator added.

Schumer explained that China’s government, especially, is providing massive subsidies to its steel and aluminum sectors, which are primarily state-owned, in order to export high volumes of steel and aluminum.

These steel and aluminum products are sold at artificially low prices in the U.S. markets and foreign market where U.S. producers export, putting jobs at local companies at risk. In addition, Schumer urged the Office of the United States Trade Representative and the U.S. Department of Commerce to implement and enforce previous laws that he has already supported, like the “Level The Playing Field Act”, which strengthens Commerce’s ability to defend American workers and producers against predatory trade practices.

Contact Reinhardt at ereinhardt@cnybj.com