Russian producers have been able to weather substantial downturn in domestic market and turn increasingly to exports. This was due in large part to Russian steel mills that bartered their products, did not pay their bills and produced steel regardless of market demand, much of which was sold for export at prices that did not reflect a true market cost of production. The major structural problem is Japan's noncompetitive steel market. Apparent coordination among major integrated steel producers allows Japanese producers to charge high prices for their products at home. Higher profits on domestic sales can be used to export at low prices and weather downturns in the economy.
Brazilian producers enjoy the advantage of a domestic market insulated from full market competition.
The Brazilian producers are able to leverage the advantage of an insulated home market to sell at low prices abroad. During this time, the workforce was reduced by 60 percent. The U.S. became a world leader in low- cost production. Extent of the Steel Crisis Steel imports in 1998 rose 33 percent above 1997, which at the time had set a record for steel imports. Average prices for finished steel products in the United States declined dramatically due to a 20 percent reduction in the price of these imports.