In a widely anticipated move, the Bush administration repealed the highly controversial Section 201 steel trade tariffs on December 4. In his decision, the administration cited changed economic circumstances and the progress the domestic steel industry has made since the tariffs were implemented as the reasons for their withdrawal. While domestic mills have made it clear they are disappointed with the outcome, they have been careful to de-emphasise their earlier negative arguments, which they feared would discourage potential investors, and are now focusing on the administration's pledge to improve import licensing and monitoring systems to prevent further trade crises in future. The blow to domestic mills has certainly been softened by rapidly improving steel market conditions. Mills are seeing both flat and long product prices rising, and while the bulk of the gains are attributed to rising costs, the economy is clearly strengthening, lending support to demand from end-users. Furthermore, inventories have been depleted both at suppliers and consumers, with the upturn in the economy prompting re-stocking by service centres and end-users and providing a further boost to steel demand. Of significance to ferro-alloy suppliers, mill operating rates are receding in December, falling back below 80 percent of capacity to just 77.7 percent of capacity at mid-month.
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