NEW YORK — Line pipe mills in the United States have opened a new front in their war against foreign competition, this time threatening to file trade cases against imports from Canada and insisting that the northern neighbor not be exempt from Section 232 actions.
The American Line Pipe Producers Association, in a press release on June 12, accused Evraz North America Plc of dumping Canadian-made line pipe into the U.S.
"Records indicate that large-diameter pipe imported into the United States by Evraz in the first quarter of 2017 arrived at prices below domestic steel costs," the U.S. association said in its statement. Member mills "are forced to investigate potential anti-dumping and countervailing duty cases against large-diameter line pipe imports from Canada."
Further, imports from Canada "must be covered by any presidential Section 232 action," the press release's headline stated.
Chicago-based Evraz North America, a unit of London-based Evraz Plc, owns mills and other pipe manufacturing in Regina, Saskatchewan, and Calgary, Camrose and Red Deer in Alberta. However, the parent company's operational roots are in Russia, under the control of billionaire tycoon Roman Abramovich.
The American Line Pipe Producers Association singled out one recent Evraz supply contract as a basis for U.S. trade action. The association said Houston-based Cheniere Energy Inc. selected Evraz North America to provide 221 miles, or 105,000 tons, of 36-inch and 30-inch diameter line pipe for the Midship Pipeline. The interstate pipeline will transport natural gas from Oklahoma to Gulf Coast and Southeast markets.
Evraz "has reportedly assured Cheniere and other customers that it will not face tariffs or quotas under Section 232, because Canadian producers will be excluded from any remedy," the association said.
President Donald Trump's administration may issue a report on its Section 232 review, which considers the impact of steel imports on national security, as early as this week.
"We urge the administration to address the loss of this and other major line pipe sales to Russian-owned Evraz in Canada," Wiley Rein LLP attorney Tim Brightbill, trade counsel to the association, said in the statement.
An Evraz North America spokesman on June 12 said the company does not comment on "specific customers or transactions." Citing U.S. Commerce Department data, he noted that imports of Canadian line pipe are priced much higher than imports from other countries. In 2016, Canada was the fifth-largest source of large-diameter imports into the U.S., behind Turkey, South Korea, Germany and Greece. So far in 2017, Canada is the fourth-largest source, the spokesman said.
Evraz competed successfully for the Cheniere job at a time when the company is pursuing trade cases against rival imports coming into Canada. In a Canada Border Services Agency case initiated on June 8, Evraz North America was the complainant in an allegation of dumping against imports of carbon and alloy steel line pipe from South Korea.
The U.S. producers complained that Evraz took the estimated $100 million worth of Cheniere work away from them, resulting in a "double loss" for the U.S. steel industry because domestic pipe mills could have purchased as much as 115,000 tons of domestic coil and plate.
"The thing that I can see grinding their gears a little bit is Evraz just put in a trade case against South Korean pipe, and they already won cases against Japan and China," said Kimberly Leppold, senior analyst at Metal Bulletin Research. "They're securing the market for themselves at home in Canada, and here they are going after a U.S. project."
The American Line Pipe Producers Association's press release did not mention Commerce's pending report on how it will implement Trump's executive memorandum calling for fully U.S.-made line pipe, from the melt through coating stages, in all new pipeline construction and refurbishment. Commerce Secretary Wilbur Ross is due to deliver that policy by July 23.
Trade between the U.S. and Canada is also governed by the North American Free Trade Agreement, which Trump intends to renegotiate.