NY City bridge repairs can't span US-China steel divide

Updated: 2013-05-16 10:57

By Michael Barris (China Daily)

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NY City bridge repairs can't span US-China steel divide

Next to seeing the starting point of the New York City Marathon, the best reason to drive across the Verrazano-Narrows Bridge is the panoramic view of New York Harbor. The Statue of Liberty, the dense Manhattan skyline and the grandeur of one of the world's great ports are revealed from the heights of the double-deck suspension bridge linking the boroughs of Staten Island and Brooklyn.

But a half-century of wear and tear has necessitated its replacement.

Last year, the bridge operator, the Metropolitan Transportation Authority, awarded California-based Tutor Perini Corp a five-year, $235.7 million contract to replace the concrete upper roadway with a lighter steel deck.

As its steel fabricator, Perini chose Hebei province-based China Railway Shanhaiguan Bridge Group. China Railway subsequently hired China's Angang Steel Group, or Ansteel, to provide it with nearly 15,000 metric tons of steel plate for fabrication, according to Steel Orbis.com, a website that covers the global steel marketplace.

Amid allegations by the United States that China is dumping low-priced steel on the market to undercut American producers, Ansteel's participation in the revitalization of a New York City landmark comes at a time of bullish promise in the Chinese steel industry - and a challenging period for US producers.

China is the world's leading steel producer. Although its share of world production dipped from 50 percent to 49 percent between February and March, it still accounted for nearly half of the monthly total, according to the US Commerce Department.

In contrast, the US ranked fourth in production, at 5 percent. China's share of global output is bigger than the combined production of the US, the European Union, Russia and Japan, which historically were the top producers of steel.

"Last year the steel industry was difficult worldwide," analyst Jeffrey Friedland wrote on the investment website Seeking Alpha. "China wasn't spared, but even with 2012 being a challenging year for the steel industry in China, the demand for steel in China increased 3.1 percent over 2011.

"China will be the engine of the world's global economic growth for at least the rest of the decade," he wrote, adding his outlook for Chinese steelmakers is positive. US demand for steel is projected to be dampened by the "low economic growth rate", even though demand should grow faster than its economy, due to increased construction activity and auto production, Friedland added.

In March, US steel companies urged Congress and President Barack Obama's administration to take action against what they say has been a flood of unfairly traded steel from China. The request came shortly before the Commerce Department's International Trade Commission approved steep duties on stainless-steel sinks from China that officials had determined were unfairly priced and subsidized.

China's Ministry of Commerce, meanwhile, has launched anti-dumping probes into some alloy-steel seamless pipes imported from the US.

SteelOrbis.com reported that Ansteel has already delivered 10,000 tons of steel plate to China Railway for the Verrazano-Narrows Bridge renovation. Thomas Gibson, president and CEO of the American Iron and Steel Institute, a trade association representing North American producers, criticized the decision to allow Chinese steel's inclusion in the project.

"The taxpayers of New York, and the many American tourists who cross the Verrazano Bridge, should not be forced to have their toll dollars go toward improving the economy of China when American manufacturing needs their support," Gibson said.

"North American-made steel is better-quality, high-performance and continuously being improved to meet new market demand," he said. "State and local governments should only be using fees raised from its residents to purchase US materials in public infrastructure, and not to boost the Chinese steel industry, which is already subsidized by its own government."

A spokeswoman for the Metropolitan Transportation Authority said a Chinese company is allowed to work on the bridge renovation mainly because the MTA is funding the entire project, through bond sales, based on its ability to collect tolls on the New York bridges and tunnels it operates.

Projects that use any federal funding fall under the rules of the Buy American Act, which mandates the purchase of US-made iron, steel and manufactured goods whenever possible.

"There are no restrictions on this project," a spokesman for general contractor Tutor Perini told China Daily.

Contact the writer at michaelbarris@chinadailyusa.com