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OCTG trade case having little impact on prices

Keywords: Tags  OCTG, trade case, anti-dumping, countervailing, Thorsten Schier

NEW YORK — Market sources have seen little impact on oil country tubular goods (OCTG) prices as a result of the recent filing of an anti-dumping and countervailing petition by domestic producers against nine countries, but effects could be seen once preliminary decisions in the case are made.

"If the Department of Commerce comes out and says this petition is worth assessment, then you might see things change," Kurt Minnich, manager of Tulsa, Okla.-based Pipe Logix Inc., told AMM. He said an impact could be felt "if not by the end of this quarter, then the next one."

The Commerce Department is scheduled to decide by July 22 whether or not to initiate an investigation into OCTG imports from India, the Philippines, Saudi Arabia, South Korea, Taiwan, Thailand, Turkey, Ukraine and Vietnam.

However, Minnich cautioned that potentially removing the volumes imported from the nine countries, which totaled 747,115 tonnes in the first half of 2013 (, July 11), is not a cure-all for the OCTG market.

"There’s oversupply and it’s not just those suppliers (in the dumping case). There are other things in the pricing equation," he said, such as increasing domestic supply, with a number of foreign producers slated to build new mills in the United States.

One southern OCTG distributor said he had seen little change in the marketplace as a result of the filing. "Pricing right now is as competitive as it’s ever been. Any company in my position is doing whatever they have to do to sell inventory," he said.

Analysts at New York-based Jefferies Group LLC do not expect a significant long-term benefit for domestic OCTG producers’ profitability from the case as the industry might struggle to get significant duties on some of the more-established Korean producers and also due to increasing domestic capacity, according to a research note. The analysts said the current market environment is not as bad as it was in 2009, when domestic producers succeeded in getting anti-dumping duties on Chinese OCTG, making the latest case more challenging.

Jefferies sees the strongest possibility of significant duties against alleged Chinese transplants in Vietnam, Thailand and the Philippines (, July 3).

In the meantime, Evraz North America Inc.’s OCTG-producing subsidiary, Pueblo, Colo.-based Rocky Mountain Steel, has thrown its weight behind the trade petition, according to a letter sent to the Commerce Department. Parent company Evraz Plc said recently that its second-quarter tubular production in North America was impacted by growing imports.

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