Note: On December 14, 1999, Mr. David N. Deinzer, President and CEO of Denman & Davis testified before the U.S. International Trade Commission, speaking on the impact of the unfair trade on steel service centers. What follows is his testimony:

Good morning, my name is Dave Deinzer. I am the President and CEO of Denman & Davis, a steel service center based in Clifton, N.J. I have over 30 years experience in the steel industry, and have been in my current position since 1981. I am also a past Chairman of the Steel Service Center Institute - the trade association for steel service centers.

My customers are largely original equipment manufacturers of industrial equipment such as power generation equipment, plastics, petrochemical, food and pulp and paper manufacturing equipment. About 75 percent of my business involves buying plate from steel mills and further processing it through shearing or burning to meet my customers' specifications. Thus, I don't compete with the steel mills, but take their product and add additional value to meet customers' specific needs.

In a typical year, at least half the plate I purchase is higher value-added grade product, while the remaining 40 to 50 percent is commodity grade plate. I purchase about 80 percent of my inventory from domestic mills and the rest from foreign mills. My preference is to buy from domestic sources, and I have never had a problem getting whatever grade plate I need from the domestic mills. But price considerations sometimes cause me to buy foreign to protect the overall cost structure of my inventory.

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.

This import surge quickly killed the market for plate in the U.S. As the volume of very low-priced imports grew, domestic mills' prices began to plummet. In my 30 years in this business, I have never seen prices drop so much and so quickly. The result was a bloodbath both for U.S. plate producers and for serve centers like mine. As a matter of fact, my company lost an account, valued at approximately $4 million, due to imports of heavy plate from Italy. We serviced this account for more than 10 years, until our competition sourced this unfairly traded plate.

The sudden drop in prices in late 1998 quickly destroyed the value of my inventory. I was stuck with piles of plate that I had bought a 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.

Furthermore, the negative impact of the surge in low-priced imports has affected the market and my business ell into 1999. The Steel Service Center Institute measures number of months of inventory n hand by product. Carbon pate months supply on hand has exceeded 3.5 months for 15 months beginning gin July of 1998. I would consider anything in excess of 3 months a glut. In my experience, an additional month of inventory will take six to nine months to self-correct. Excess inventory still sitting on the docks was available in to the third and fourth quarters of this year at prices even lower than what importers were offering last year. I have documentation on this point which I would be happy to provide to the Commission in the domestic industry's post-hearing brief. Only since September of this year has the market begun to improve as the inventory on the docks began to dry up.

In my mind, then, there can be no doubt of the cause of the collapse in the plate market in 1998 and 1999: It was the surge in imports at extremely low prices. Thank you. When appropriate, I would be happy to answer any questions.