Price of Nails

I’ve driven a lot of nails in my lifetime, literally tons of them. I’d venture there are probably very few adults living in the United States today, who have not driven one or more nails.

But how much thought do we actually give to the nails we are driving?

10d NailsProbably not a whole lot – they are inanimate after all….so they are not going to think about being hit on the head, and won’t have near the controversy as Ray Rice and his then girlfriend.

There is a good chance the nails being sold in the stores are going to be more expensive and this article written by Tim Regan for explains why:

“The U.S. International Trade Commission voted July 11 to continue an antidumping case involving steel nails from five countries that collectively figured in more than one-third of all U.S. nail purchases last year. The case ultimately could lead to the imposition of antidumping duties on the nations’ products.

USITC’s preliminary findings concluded that nails made in Korea, Malaysia, Oman, Taiwan, and Vietnam could “materially injure” the U.S. nail industry by way of price dumping, which is the predatory practice of a foreign supplier artificially charging less than fair value for a product. The commission also investigated nail imports from India and Turkey, but determined that imports were so small they didn’t merit any action. 

If found to have engaged in price dumping, the next step could be tariffs on the implicated countries, which could drive up the cost of nails imported from the five countries if suppliers decide to pass along the cost increase. Imposing antidumping duties on the five countries also will affect the competitive landscape involving both nails made in the U.S. and nails imported from countries like China and Mexico that aren’t involved in this investigation.

U.S. consumers spent about $904.1 million on nails in 2013. Of that amount,  $334.3 million, more than one-third, was for nails originating in the five countries under investigation. About a quarter of all nails sold in the U.S. came from domestic suppliers that year, and the rest were imported from other nations.

Determinations on this stage of the investigation are due Aug. 22, and antidumping duty determinations are due on Nov. 5.

The investigation defines the steel nails to include products under 12 inches in length and made from round wire, nails cut from flat-rolled steel, nails of one piece construction or two or more pieces, and steel nails with any type of surface finish, head, shank, point, and shaft diameter. The nails may be in bulk or collated for use in nail guns. Some case-hardened nails, corrugated nails, and thumb tacks are excluded from the case.

The petition that began this investigation was filed by Mid Continent Nail Corporation located in Poplar Bluff, Mo. At a recent USITC hearing on the issue, tensions ran high between Mid Continent and suppliers of imported nails.

“Large importers seem addicted to unfairly traded imports,” said Mid Continent executive vice president of sales George Skarich. “As they themselves have testified in the past, once our government imposes duties on certain countries, they simply take their shopping lists to new countries.”

“This is the third time since 2007 that petitioner has asked this Commission for relief from imported nails,” said Mona Zinman, CEO of Prime Source Building Products, a company that imports nails from across the world. “Even New Zealand was accused of injury back in 1987,” remarked Zinman. “Must have been those unfairly traded kiwi nails.”

Zinman added that one of the reasons consumers buy so many imported nails isn’t because they’re cheaper, but because U.S. producers simply don’t make those kinds of nails.

“Are you looking for protection for what you produce,” said Zinman, “or are you punitively trying to damage another part of the market that you don’t even participate in for products that you don’t make for customer segments that you don’t serve?”

This isn’t the first time an allegation of steel nail price dumping has resulted in an investigation. In 2007, China was implicated in a price dumping investigation involving steel nails, and in 2011, steel nail imports from the UAE resulted in investigation. Both times, the USITC imposed anti-dumping duties.”

In my humble opinion – Zinman may have “hit the nail on the head”. For those who don’t drive nails for a living, and only need “enough” nails to construct one building….their own new pole building, this may not be of conern. But for those who drive tons of nails every year – this is not good news. In any case – if the price of nails does increase, you now have a better understanding of why!

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