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Foreign steel pipe producers argue against U.S. import duties

U.S. producers of steel pipe used in the oil and gas industry helped drive down prices by flooding the market with new production, the U.S. International Trade Commission heard on Tuesday, as foreign producers argued against hefty new import duties.

The ITC has the final say in whether imports of oil country tubular goods (OCTG) from nine countries including South Korea will face hefty anti-dumping duties after a complaint by local producers about cheap imports undercutting prices.

United States Steel Corp, pipe specialist Tenaris subsidiary Maverick Tube Corporation; Boomerang Tube; Energex Tube, a division of JMC Steel Group ; Northwest Pipe Company ; Tejas Tubular Products; Russia’s TMK IPSCO and France’s Vallourec Star lodged the complaint last year after a surge in imports.

Maverick Tube director Brad Lowe said the company had been forced to cut prices, cut back on staff and keep factory capacity idle as a result of cheap imports.

“Without relief from unfair imports, Maverick will be forced to lay off more workers,” he told the ITC. “While the last few years should have been extremely strong for Maverick as demand recovered, the subject import surge, well in excess of demand, at extremely low prices, crippled market pricing and depressed profits.”

The ITC must decide whether imports materially injure the domestic industry, which welcomed strong demand for pipe by the oil sector as part of the shale boom. The Department of Commerce has already set the level of duties that will apply if the ITC finds injury.

Attorney Donald Cameron, from Morris Manning and Martin, representing the offshore producers, said the domestic industry had invested nearly $2 billion in new OCTG capacity, boosted hiring and increased its share of the U.S. market.

“Prices declined and profits declined during 2013 because domestic producers ramped up production at the time that raw material prices fell,” he said, noting that domestic producers had a monopoly on the key segment of high end proprietary connections.

Foreign producers and OCTG distributors told the hearing that the decline in prices was mainly due to competition among U.S.-based operators, not from imports.

“Huge additions to U.S. OCTG production capacity resulted in aggressive price-cutting by U.S. integrated mills and processors in an effort – ultimately successful – to fill that capacity with new orders,” South Korea’s Iljin Steel Corp said in a submission.

But several lawmakers urged the ITC to support the U.S. domestic industry.

Pennsylvania Representative Mike Doyle said U.S. Steel flagged the closure of two mills, one in his district, which would mean the loss of hundreds of jobs, and Indiana Representative Peter Visclosky, said he received more than 500 emails from constituents worried about steel jobs.

Source – Reuters


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