NEW YORK Questions should be asked whether anti-dumping and countervailing suits such as the one filed recently against producers of oil country tubular goods (OCTG) in nine countries actually present a net gain for the U.S. economy, according to counsel for a consumer advocacy group.
"If its like all the other (dumping) cases, and I have no reason to believe that it isnt, its going to do more harm than good," Lewis Leibowitz, partner at law firm Hogan Lovells US LLP and counsel for the Consuming Industries Trade Action Coalition (Citac), told AMM.
For example, jobs could be lost in shipping and other industries tied to the import of OCTG if the case is successful, he said. "The question is whether it will cost more jobs in those areas than it will save in the domestic industry."
The impact on the oil and gas industry is tougher to predict. "If its going to reduce the amount of wells being drilled, we dont know," Leibowitz said, as potentially higher prices due to tightening supply following a potential victory in the case by the domestic industry could be offset by positive market developments. "That (supply) reduction may be overwhelmed by other positive factors."
The cost of OCTG does not play a decisive role in considering the total price of a well since it typically is dwarfed by other expenses, according to Leibowitz.
The filing comes as companies such as Germanys Benteler Steel/Tube GmbH and Luxembourg-based Tenaris SA announced plans to build seamless OCTG mills in the United States for $900 million and $1.5 billion, respectively, while Frances Vallourec SA recently inaugurated a $650-million seamless OCTG mill in Youngstown, Ohio.
"They (OCTG producers) have a lot of money on the line, a lot of debt," Leibowitz said.
Both Tenaris and Vallourec are petitioners in the case through domestic subsidiaries.
The domestic industry is seeking anti-dumping duties on OCTG from India, the Philippines, Saudi Arabia, South Korea, Taiwan, Thailand, Turkey, Ukraine and Vietnam and countervailing duties on shipments from India and Turkey (amm.com, July 2).
It is one of the biggest multi-country trade cases to be filed so far this century, according to an industry source. "It could probably be viewed as a signal of things to come as the steel market deteriorates due to global overcapacity. Its getting worse rather than better," he said.