Comparisons of Export Pricing
Explanation of the Data Sources. Table 4.19 contains the
relative prices of steel exports in terms of domestic steel
prices. The nrelative export pricen of'ã steel commodity is
r;-,.
,-::
defined as its export price divided by its domestic price.
The data used for domestic prices are those in table 4.18.
The sources we employed for export prices were as follows:
For the United States unit values were used; they were
obtained from the U.S. Department of Commerce, Bureau of the
Census, publication FT 410 U.S. Exports: Commodity by Country. 73/
The bar product selected was concrete reinforcing bars, while
uncoated plates was the plate choice. In all cases for all
countries domestic and export, carbon steel products were
selected.
For the EC, the unit values used were for steel exports
published in the Statistical Office of the European Community's
(SOEC) biannual Yearbook of Iron and Steel. This was the same
source employed for domestic prices in the EC.
For Japanese export pr ices we used the data available in
the publication The Summary Report: Trade of Japan. This is
a Ministry of Finance document published by the Japa~ Tariff
Association.
Thus, virtually all the data are in unit values. l!/ The
selection of unit values was made for two fundamental reasons:
First, in general, unit values are the best approximation
ava ilable for steel pr ices. On the theOret ical level, products .~
~
such as concrete reinforcing bars or cold rolled carbon sheets
are standardized products compared with most finished products.
They should, therefore, be subject to fewer product mix
difficulties than other unit value indexes of finished products.
On the empir ical level, the index of steel expor t pr ices
of continental European producers published in Metal Bulletin
(and reprinted in a number of statistical publications) is
widely regarded as an excellent source of pr ice data. The
data are obtained confidentially by Metal Bulletin currespondents on the basis of actual prices and transactions. ~/ However, the Wage and Price Stability Council's A Study of Steel
Prices (5, pp. 44, 451 has shown that unit values taken from
74/ The exception is recent Japanese domestic prices, for
Which unit value data are unavailable.
75/ For example, see the assessment of these data in the
ãñnual statistical publication of the Organization for Economic
Cooperation and Develppment entitled The Iron and Steel
Industry, and in Krav1s and Lipsey (16, p. 2141.
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U. S. Customs data follow the Metal Bulletin price series with
a lag of several months. Thus the Council's comparison leads
to the conclusion that unit values of steel exports reflect
actual steel export pr ices fairly well, provided that one
adjusts for the several months' lag in unit value indexes.
A second reason for selecting unit values throughout was
to ma intain compar abil i ty. Generally speak ing, no better
source was available. However, the Met~l &ulletin index of
European export pr ices is a better source for actual pr ices
than the SOEC index of un it expor t pr ices. No source comparable to Metal Bulletin is available, however, for domestic
European prices. Therefore, had the Metal Bulletin data been
chosen, the relative export pr ices of the EC would have contained biased fluctuations because the export index is more
responsive to actual pr ices than the SOEC domest ic index.
Consequently, SOEC un i t value indexes were used for both EC
export prices and domestic prices. In the case of Japan,
this difficulty could not be avoided for recent years. The
unit value data are unavailable, so Metal Bulletin's assessment
of Japanese domestic prices for the 1970's were used.
Tests and Analysis of Export Pricing Data: Dumping.
Recently, a number of authors have alleged that foreign producers "dump" steel. It is argued that dur ing recessions, Japanese
and European producers export steel at low prices compared with
the ir home markets, bu t dur ing booms steel is exported at high
I
prices compared with their home markets. For the 1955-67 period,
i
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Lennart Friden (7) computed relative export prices for selected
steel products in a manner analogous to that used in table
4.19. He found that the United States was the only cOuntry
whose steel industry did not price its exports below its
domestic prices at any time. Friden concluded that other
countries have a dual pricing structure with exports priced
ø ~
both above and below domestic prices, depending on the time
period. Thus, the Friden data appear tò"support the contention
of the American Iron and Steel Institute:
The Japanese labor system, 1 ike that in
Europe, has the effect of making a large part
of labor costs fixed costs. In the past, this
has resulted in continu ing pressure on the
Japanese steel industry to maintain operations
by exporting at low prices during periods of
weakening domestic steel consumption (2, p. 19).
The view that import prices fluctuate in a cyclical
pattern is also stated in Paul Marshall's summary of the steel
pricing symposium held by the Council on Wage and Price