Note: David N. Deinzer, President & CEO of Denman & Davis recently testified before the International Trade Commission. What follows is his testimony:

Oral Testimony
David Deinzer, President and CEO
Denman & Davis
Before the U.S. International Trade Commission
201 Hearing
September 20, 2001

Good afternoon Chairman Koplan and Members of the Commission. My name is David N. Deinzer. I am the President and CEO of Denman & Davis, a steel service center based in Clifton, New Jersey, with locations in New York and Rhode Island. I have over 30 years experience in the steel industry, and have been in my current position since 1981. I am a former Chairman of the Steel Service Center Institute - the trade association for steel service centers. Also, I am currently Chairman of the North American Steel Alliance, which is a buying coop of over 90 independent steel service centers, that have combined revenues of over $5billion.

The majority of my customers are large original equipment manufacturers of industrial equipment such as power generation equipment, plastics, petrochemical, food and pulp and paper manufacturing equipment. We also supply steel for maintenance and repair to a large and varying group of industries and utilities. About 75% of my business involves buying carbon and stainless plate from steel mills and further processing it through shearing or burning to meet my customers specifications. Thus, I dont compete with the steel mills, but take their product and add additional value to meet our customers specific needs.

I appreciate this opportunity to testify about the impact of the surge in low-priced imports that occurred in 1998 because my company was significantly affected by these developments. I first noticed that something very dramatic was occurring in May or June of that year, when I started receiving offers from overseas mills at unbelievably low prices - about $120 to $130 per ton below the U.S. market price. The volume of imports being offered at these incredibly low prices started out relatively small, but picked up dramatically in the third and fourth quarters of 1998.

The 1998 import surge quickly killed the market for plate in the United States. As the volume of very low-priced imports grew, domestic mills prices began to plummet. In my 30+ years in this industry, I had never seen prices drop so much and so quickly. The result was a financial bloodbath both for U.S. plate producers and for service centers like mine.

The sudden drop in prices in late 1998 quickly destroyed the value of my inventory and all other service centers with inventory. I was stuck with piles of plate that I had bought at prices substantially above what I could sell it for. In order to limit my losses, I was forced to buy a larger amount of cheap foreign product than I normally would, and to cut back on my orders from domestic mills.

Despite the imposition of dumping duties against plate from an additional six countries in early 2000, the plate market has never really recovered. The reason for this is two fold. First, at the same time that low-priced plate imports were receding from the market, lower priced coiled plate was surging into the United States. After the cheap imported coil was cut to length on cutting lines, it became cheap cut-to-length plate thus keeping pricing depressed for all coil plate and plate mill plate. Second, inventories of unfairly traded products usually remain in the market for six to nine months after duties are imposed. Unfortunately with declining demand, the inventories of the cheap imports stayed in the market much longer, continuing to depress pricing, thereby causing even more financial strain.

Our domestic steel industry like so many other U.S. manufacturing industries, has been targeted and dumped upon for my entire business career. It is time for fair trade to go hand-in-hand with free trade. In my mind, until we have a global steel agreement, there is no chance of recovery for the domestic steel industry unless comprehensive trade relief is granted.

Thank you.