Steel wheel makers, importers differ markedly on U.S. market conditions

U.S. manufacturers of steel wheels for commercial vehicles and representatives of Chinese producers hold vastly different views as to why the domestic industry appears to be struggling financially.

Testifying before an International Trade Commission material injury hearing in Washington, U.S. producers claimed this week they are suffering "severe material injury" because of rising Chinese imports that are sold below market rates, while supporters of the Chinese steel wheel industry said the business practices of Accuride Corp. and Maxion Wheels Akron L.L.C. were to blame for any sales losses or financial difficulties they might be suffering.

A previous investigation against Chinese steel wheels in 2012 resulted in a negative determination, and little has changed in the market since then, they said.

At issue are Chinese-sourced steel wheels, rims and discs with 22.5- to 24.5-inch rim diameter, commonly used on commercial trucks, trailers and buses. Accuride and Maxion petitioned the ITC last year for antidumping and countervailing duties against Chinese importers.

In August 2018, the Commerce Department levied preliminary antidumping duties against the Chinese importers of up to 231.7 percent and countervailing duties of 48.75 to 172.51 percent.

At the hearing, Accuride and Maxion said Chinese steel wheel imports increased 14.64 percent from 2015 to 2017, the period of the ITC investigation.

From January-May 2018, imports rose 26.6 percent over the same period in 2017, according to the domestic companies. But in May-September 2018, after Commerce levied the preliminary duties, imports fell 47.1 percent, they said.

Accuride Wheels North America President Gregory Risch said at the hearing that Accuride had been forced to reduce capital expenditures by roughly half of what they normally would be and research and development spending by about two-thirds, because of unfair Chinese competition.

"Our Henderson (Ky.) facility is extraordinarily efficient and was recognized as a leading manufacturing facility in 2014 by the Association for Manufacturing Excellence," Mr. Risch said.

"Unfortunately, many projects at the plant that have been proposed have been rejected because of market conditions," he said. "Without relief, there is little doubt that the next move by Accuride would be to close Henderson and relocate to China."

Steel prices have increased significantly in 2018 because of the new tariffs against imported steel, according to Don Polk, president, The Americas for Maxion.

"As our financial information makes clear, Maxion's Akron facility has been able to pass on the large increase in raw-material costs," Mr. Polk said. "This inability is due in significant part to the depressed prices of Chinese product in the market."

Opponents of duties, however, said the steel wheel market is just as segmented in 2019 as it was in 2012, when steel wheels of 18.5 to 24.5 inches in rim diameter were investigated.

Domestic wheel manufacturers dominate the original equipment market, whereas China sells mainly into the replacement market, according to Amanda Walker, chief operations officer for Trans Texas Tire (TTT).

"We have always wanted to support American industry," Ms. Walker said, adding that since 1999 domestic steel wheel producers have refused to sell wheels to TTT.

Accuride offered to sell wheels to TTT just before the 2012 ITC hearing, according to Ms. Walker, "but those terms of sale were not suitable to us, and we declined the offer. They didn't want to sell us lightweight wheels, only the heavier ones."

U.S. wheel producers also are unwilling to provide smaller lots of specialized wheels, such as wheels in special colors, Ms. Walker said.

"My experience is that Chinese suppliers will add value for our customers," she said.

"To be sure, both Accuride and Maxion are both present in the aftermarket, and make sales to aftermarket customers," Ms. Walker said. "But in our view, their own business practices and commercial strategy has almost certainly prevented them from making even greater inroads into this market segment."

The hearing on Chinese steel wheels originally was scheduled for Jan. 8, but the partial government shutdown forced a postponement until March 14.

Post hearing briefs in the investigation are due March 26, and final comments April 19.