U.S. Steel Blames Chinese Military Hackers for Stealing Trade Secrets

The company, in a complaint filed on April 26 with the International Trade Commission, said a computer belonging to a Pittsburgh researcher was hacked in 2011 and plans for developing new steel technology were stolen.

The American steel firm alleges the Chinese government stole the proprietary information on behalf of Chinese steel producers seeking to gain market share in the U.S. automotive industry.

U.S. Steel says its forensic analysis into the 2011 hacking revealed that the alleged culprits were based in China, and that the methods were similar to those used by Chinese hackers indicted in 2014 by a grand jury in Western Pennsylvania. 

The hackers in the 2014 case allegedly worked for the Chinese military and stole price information and technological documents from U.S. Steel, Alcoa Inc., the United Steelworkers union and other entities to help companies win contract bids and trade disputes.

While U.S. Steel didn’t provide evidence of a Chinese government hack, it said the intrusion fit the pattern of previous cyberattacks involving the Chinese government. A program inserted in a U.S. Steel computer “contacted an Internet domain linked to a Chinese hacker group,” according to this week’s complaint. The hackers allegedly then turned over their discoveries to Chinese steelmakers.

Because governments are implementing tougher fuel efficiency standards, auto makers need lighter metals.

Steelmakers are upping their game to deliver, with so-called advanced high strength steel.

“The stakes are huge, with auto makers around the world buying tens of billions of dollars a year of steel and aluminum. To boot, this kind of high-tech steel also has military applications, such as armored vehicles,” the Wall Street Journal reports.

With demand sagging for other steel products, like construction materials and oil and gas pipes, U.S. Steel needs contracts from car makers to survive, analysts say.

U.S. Steel says hackers stole designs for making one of its most valuable products, a metal known as Dual-Phase 980.

Two years after the alleged hacking, Chinese state-owned steel giant Baosteel Group Corp. introduced a new line of products, including Dual-Phase 980, according to U.S. Steel.

According to the American company, “Since 2013, Baosteel has directly shipped ultra high-strength steel to the United States, causing and threatening to cause substantial injury to U.S. Steel’s domestic industry.”