President Clinton has signed a law authorizing a $1.5 billion loan program for steel, oil and natural gas companies that have been hard-hit by depressed prices. The program is designed to help tide over U.S. firms in these industries until pricing recovers.
U.S. steel companies point to low-priced imported products as the cause of their recent struggle. Thousands of steel workers have lost their jobs, and several steel companies have filed for bankruptcy. The problems faced by the oil and gas industries are shared by their international counterparts.
Steel companies will be able to borrow up to $250 million each at market interest rates; American oil and gas producers and service companies are eligible for as much as $10 million each.
The announcement of the loan program came at the same time as U.S. steel producers planned a challenge to deals made by the Clinton administration allowing Brazil and Russia to avoid punitive tariffs on steel shipments to the United States. Five companies have filed suit to void those agreements; seven others plan to join the complaint against Russia later.
Meanwhile the American Iron and Steel Institute reported that steel imports in June reached 2.9 million net tons, the equivalent of 35 million tons per year. During the first six months of 1999, imports of steel products increased 2.8% over the same period of 1997, which held the record before last year's unprecedented surge in imports. Imports in the second quarter of this year rose 12.5% over the first quarter.
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