NEW YORK — US producers of steel flanges need more federal actions to thwart unfairly traded imports, even in the wake of their recent victory against dumped goods from India, Italy and Spain, according to Boltex Manufacturing president and chairman Frank Bernobich.
Domestic producers plan to pursue more anti-dumping cases against other countries, and circumvention investigations are warranted, too, Bernobich said. Still, he believes Section 232 tariffs will be vital to ensuring that all unfairly traded flanges stay out of the United States.
Bernobich's company had employed about 230 workers, before Indian, Italian and Spanish goods came pouring in two years ago.
Cheap imports damaged the Houston-based flange-maker so severely that Boltex's work force was down to 130 last autumn, and the company's very existence was threatened. Market conditions for energy-related piping have improved since the low point in 2016, and Boltex is back up to around 200 workers now, but the company is still hobbled by the imports.
"Basically, it is a fight for survival," Bernobich said in an interview with AMM on July 13. "We made tremendous sacrifices on our pricing. We had to do what it takes to preserve market share. ... We dropped our prices almost 50%, and those are untenable numbers."
Boltex, which previously made large investments in modern manufacturing equipment, needs to maintain certain flange volume levels. "It has not been a level playing field," as the company has been forced to compete against imports from countries that do not have the same wage, health care, safety and regulatory standards—or their associated costs.
Now, domestic flange producers must rely on the Section 232 investigation into steel imports to offset some of those unequal cost differentials.
"The 232 is important," Bernobich said. "When we do an anti-dumping case, we have target countries. What happens? As soon as those countries start getting anti-dumping tariffs, some other country pops up. The 232 would ... put a tariff on all flanges coming in from everywhere, so that would help."
President Donald Trump confirmed on July 13 that his administration is considering remedies in the form of tariffs, quotas or possibly both. Bernobich called tariffs "the cleanest and most effective" measure against the unfairly traded flanges. "The simplest thing would be tariffs. Quotas are much more difficult to administer."
Even if no official remedies are forthcoming, already speculation has caused various bad actors to modify their behavior. "The emphasis on the 232 has had some effect," Bernobich said. "Just the talk of it has had some effect."
In a July 12 press release, Bernobich said that the US Commerce Department's ruling against India, Italy and Spain confirmed that the three nations indeed had been dumping flanges at "significant margins," and that India's government illegally subsidized the goods.
In a final determination in June, Commerce slapped imports of finished carbon steel flanges from Italy with dumping margins of 79.17% to 204.53%. Indian producers' dumping margins ranged from 11.32% to 12.58%. Subsidization rates for India producers were 5.66% to 9.11%. In a related decision, imported goods from Spain were hit with dumping margins of 18.81% to 24.43%.
Flange volumes from those countries rose 27% between 2014 and 2015, during a period when demand for the product declined. Finished carbon steel flanges are forged rings that join two sections of pipe or join pipe to a pressure vessel, valve or other assembly.
Boltex's partner in petitioning the anti-dumping and countervailing cases was fellow domestic producer Weldbend, based in Argo, Ill.
"We welcome the final outcome of the Commerce Department's lengthy investigation into allegations of unfair trading by Indian, Italian and Spanish producers," Weldbend president and owner James Coulas Jr. said in a statement July 12. "We thank the US government for taking decisive action against those who choose to violate those laws."
Boltex was "hoping to get a more significant victory against India, (but) overall we were pleased," Bernobich told AMM.
Boltex and Weldbend already have spent millions of dollars on Washington trade lawyers to protect their American businesses, Bernobich said. Still, he vowed to pursue even more trade cases—with an eye toward circumvention as well.
Steel flanges being imported into the United States may have arrived via intermediary countries, in order to avoid their rightful duties. And, to make matters worse, "some manufacturers are misrepresenting the quality of the flanges," he alleged.
"We are going to defend ourselves. This is not the end," Bernobich said. "The battle rages on."