NEW YORK Imports of oil country tubular goods (OCTG) remain high on the agendas of producers in the United States, with several top executives drawing attention to the issue during first-quarter conference calls in the past week.
Comments from Tenaris SA North American area manager Germán Curá and U.S. Steel Corp. chairman and chief executive officer John P. Surma about the damaging effects of imports on prices reignited speculation that a much-discussed potential trade case against South Korea and other significant exporters of OCTG to the U.S. market could be filed in the next few months, market sources told AMM
Were expecting a trade case to be filed sometime around July. Korean prices have been deteriorating week after weekits crazy, one trader said.
Curá said that Tenaris and other domestic producers are looking at imports from Korea and other countries that they believe are crimping domestic prices. We believe we might come to a final conclusion in the coming months, he said. (amm.com, May 2
Imports, which have taken a significant market share of both OCTG and line pipe, remained at historically high levels during the first two months of the year, with Korean product in particular running well ahead of last year, U.S. Steels Surma said during the companys first-quarter earnings call (amm.com, May 1).
However, some market sources said a trade case was unlikely, pointing to tube makers first-quarter profits.
Pittsburgh-based U.S. Steels tubulars segment reported first-quarter earnings of $62 million, while Tenarispredominantly a pipe and tube makerposted net income of $422.7 million during the period (amm.com, May 2
When you are making a profit, its hard to make the case that you are injured, a second trader said.
However, both companies results were lower than those achieved in the same period a year ago, when U.S. Steels tubular segment made $129 million and Tenaris net income was 5.7 percent higher at $448.2 million. Tenaris North American sales fell 9.9 percent to $1.14 billion during the first quarter as prices for commodity products declined.
You have to take a look at where they were last year, a third trader said. My gut is, it (the trade case) is coming.