South Korea escapes pipe-dumping duties
The Department of Commerce did not impose anti-dumping duties on oil and natural gas pipe products from South Korea, the largest exporter among nine nations targeted in a trade case filed by U.S. Steel Corp. and other producers.
Steel industry figures show that imports surged nearly 110 percent since 2008 from those countries, which the industry said caused “material injury” to domestic producers of so-called oil country tubular goods.
But the Commerce Department's preliminary decisions in the antidumping probe announced on Tuesday imposed high duties only on India, and small levies on other nations, who are mostly smaller producers.
“It affected a couple of countries, but had no affect on others,” said John Tumazos of Tumazos Very Independent Research of Holmdel, N.J. “It's better to spend time on cutting costs like (CEO) Mario Longhi at U.S. Steel is doing than pursue anti-dumping suits, which are not effective.”
Imports from those countries surged to 1.76 million tons in 2013 from 840,313 tons in 2010, according to the American Iron and Steel Institute, the industry's trade association, which claimed the nations dumped products in the United States at below cost.
South Korea shipped 894,300 tons to the United States, but Commerce did not levy anti-dumping duties on that country's producers because it ruled their prices weren't below what steel was being sold for in the American market.
India, which shipped 139,100 tons, received a dumping margin of 55.3 percent above prices the pipe was being sold for in the U.S. The margin will be collected by Customs and Border Protection officials.
Vietnam, which shipped 131,400 tons, received a 111.47 dumping margin on most of its producers, except the largest, SeAH Steel Vina Corp., which received a 9.57 dumping margin.
For five other nations, dumping margins ranged from 8.9 percent for the Philippines to 2.65 percent for Taiwan. Thailand refused to participate, and was issued a dumping margin of 118.3 percent, but it was the smallest producer, shipping 30,600 tons.
The anti-dumping action filed in July also included Saudi Arabia, Turkey and the Ukraine.
“We are disappointed by the preliminary determinations at the Department of Commerce and by its failure to deal with important issues at this stage of the investigations,” U.S. Steel said in a statement issued by spokeswoman Courtney Boone.
“Having said that, the determinations do confirm the existence of large-scale dumping in this market — something that has caused extensive injury to the domestic industry. When all of the facts come to light, we are confident that we will prevail with respect to all countries and exporters in the final determinations.”
In 2012, U.S. Steel shipped 1.34 million tons of oil country tubular products, the latest figures available, Boone said. The tubing market, including other types, was a $1.6 billion market for the company, she said. U.S. Steel has an oil country tubing plant in Lorain, Ohio.
Petitioners included TMK IPSCO, which has two plants in Beaver County; Vallourec Star, with a tubing plant in Youngstown, Ohio; Boomberang Tube; Energex Tube, a unit of JMC Steel; Maverick Tube Corp.; Northwest Pipe Co.; Tejas Products; and Welded Tube USA Inc.
Tumazos said, “In many ways, trade cases are a waste of time and expensive, costing several million dollars each. They distract management and send a bad message to the rank and file, who don't feel they have to reduce costs. They are as significant as the kicking game in football to the overall outcome.”
As a result of this case, U.S. Steel might ship 100,000 more tons of tubing and get $25-$50 more per ton sold, Tumazos said.
The overall market for oil and gas tubing is about 3 million to 4 million tons per year, Tumazos said, based on industry reports.
As much a problem as imports is new domestic manufacturing capacity. “Everybody except U.S. Steel is building a tube mill,” Tumazos said. They include the Vallourec plant in Youngstown, and others by Borusan Mannesmann in Baytown, Texas, Tenaris in Bay City, Texas, and Benteler in Caddo, La.
“There are competitive factors over and above the imports,” he said. “There was more demand anticipated than actually happened. There are three to five more tube mills in the U.S. than are needed. It's going to be competitive unless demand brings natural gas prices back to $7 (per mcf) on a sustained basis.”
Separately, the Commerce Department said last week it will maintain anti-dumping duties on oil and natural gas pipe products from China. That action was imposed by the International Trade Commission in 2009, but it was reviewed again because of issues over the use of loopholes to ship pipe to the United States by third-party countries.
About 2 million tons of the Chinese pipe, worth about $2.7 billion, were sold in the United States in 2008.
John D. Oravecz is a staff writer for Trib Total Media.