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OCTG mills file trade case vs. nine nations

Jul 02, 2013 | 04:56 PM |

Tags  OCTG, oil country tubular goods, anti-dumping, countervailing, American Iron and Steel Institute, AISI, Thomas Gibson, American Institute for International Steel AIIS

NEW YORK — U.S. producers of oil country tubular goods (OCTG) filed a long-anticipated trade case July 2 arguing for the imposition of anti-dumping duties on imports of OCTG from India, the Philippines, Saudi Arabia, South Korea, Taiwan, Thailand, Turkey, Ukraine and Vietnam and countervailing duties on shipments from India and Turkey.

"Petitioners ... allege that these unfairly traded imports have materially injured the United States domestic industry producing OCTG and threaten to cause further material injury if remedial action is not taken," attorneys with law firms Skadden, Arps, Slate, Meagher & Flom LLP; Wiley Rein LLP; and Schagrin Associates, all based in Washington, wrote in a filing on behalf of domestic producers.

Talk of a possible trade complaint against OCTG imports has been ongoing for years, although sources said recently that an early July filing was likely (, June 4).

The petition relates solely to casing and tubing, not drill pipe, but includes both seamless and welded OCTG. It also covers green tube, a subject at issue in a recent scope determination on anti-dumping duties on OCTG from China (, June 5).

Imports of OCTG from the nine countries totaled 1.77 million tons in 2012, a 37.7-percent jump from the previous year, according to the filing. "In short, enormous volumes of dumped and subsidized imports have poured into this market, and those unfairly traded imports have gained market share, significantly undersold the domestic like product, and caused prices in this market to fall."

The filing argues that duties should be imposed despite the fact that domestic producers largely showed positive financial results when drilling activity was booming between 2010 and 2012, as returns would have been even better had it not been for dumped and subsidized imports.

In making their subsidy claims, the petitioners pointed to the ability of Indian producers to import raw materials duty-free while Turkish OCTG producers benefit from export credits, preferential loans and export insurance from the government.

The petitioners also took aim at capacity additions in the countries accused of dumping, as well as additional production from Chinese OCTG makers, which while no longer able to ship directly to the U.S. market still represent a threat to the domestic industry. "As Chinese exports grow, they will put increased pressure on OCTG producers in the subject countries, thereby encouraging them to increase exports to the United States, a market where they avoid competition from Chinese imports," the filing said.

While the filing was supported by the American Iron and Steel Institute (AISI), whose president, Thomas Gibson, applauded the domestic industry for "taking a stand," the American Institute for International Steel (AIIS) called the filing "overkill."

"AIIS ... believes that the current law will quickly determine that the vast majority of the targets of this massive filing have been responsible suppliers to the U.S. market and allow the critical flow of OCTG to continue to support drilling, jobs and move our country toward American energy independence," AIIS president David Phelps said in a statement.

One trader said the way he saw it was that a host of countries are paying the price for the actions of some Korean producers in particular. "Because of the actions of one country, a major OCTG case has been filed that affects many jobs that are supported by the import industry," he said.

"Virtually all OCTG produced by Korean producers comes into this country. Korean mills have no home market for OCTG and virtually no other export markets. Thus, in the absence of trade relief those mills will continue to attack this market," lawyers wrote in the filing.

Korean shipments of OCTG to the United States totaled 870,580 tons in 2012, 58.6 percent higher than in 2010, according to the filing.

Korean producers have denied the claim that they are dumping and say they are well prepared for a case (, March 19).

"This might not be an easy case to win," the trader said.

Some sources expect the filing to have an immediate impact on OCTG prices. "I think you’re going to see a general firming, without question. It’s going to have an impact, given the volume of pipe this filing represents," a second trader said.

Others warned, however, that the impact could be delayed, considering the amount of material already in the domestic market and a slowing drilling rate.

Petitioners in the case are Boomerang Tube LLC, Chesterfield, Mo.; Energex Tube, a division of Chicago-based JMC Steel Group Inc.; Maverick Tube Corp., a subsidiary of Luxembourg-based Tenaris SA; Northwest Pipe Co., Vancouver, Wash.; Tejas Tubular Products, Houston; TMK Ipsco, a subsidiary of Russia’s OAO TMK; U.S. Steel Corp., Pittsburgh; Vallourec Star LP, a subsidiary of France’s Vallourec SA; and Welded Tube USA Inc., the domestic subsidiary of Welded Tube of Canada Ltd., Concord, Ontario.

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