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ITC rules OCTG imports hurting US industry

Keywords: Tags  ITC, OCTG, anti-dumping petition, AISI, AIIS, Thomas Gibson, David Phelps, John Foster Thorsten Schier

NEW YORK — The U.S. International Trade Commission (ITC) determined in a unanimous vote Aug. 16 that there is a reasonable indication that the U.S. oil country tubular goods (OCTG) industry is being materially injured by imports from India, the Philippines, Saudi Arabia, South Korea, Taiwan, Thailand, Turkey, Ukraine and Vietnam.

"We are very pleased with the results," said Alan Price, partner at Washington-based Wiley Rein LLP and counsel to domestic petitioner Maverick Tube Corp., Chesterfield, Mo., a subsidiary of Luxembourg-based Tenaris SA.

The preliminary vote applied to anti-dumping cases against all nine countries and countervailing cases against India and Turkey(, July 2).

The American Iron and Steel Institute (AISI) also applauded the decision.

"The U.S. laws against unfair trade exist to counter market-distorting practices, like dumping and subsidies, and to restore conditions of fair trade," president and chief executive officer Thomas Gibson said in a statement.

"U.S. companies and their workers deserve to have a fair shake, and we applaud today’s vote as an important move towards providing U.S. steel producers relief from unfairly traded OCTG imports," he added.

Others argued against the ITC decision saying it would unfairly affect relationships between US buyers and their suppliers.

"This decision by the ITC can be expected to disrupt longstanding supply relationships and reflects an abusive use of the trade laws. With a profitable and growing industry in the U.S., along with growing demand for OCTG from all sources, domestic and imported, this is not an industry that needs trade protection," David Phelps, president of the American Institute for International Steel (AIIS), said in a statement, although he acknowledged that "some overly aggressive suppliers had created an inventory overhang in the U.S. market."

AIIS chairman John Foster added that the ruling and the subsequent continuation of the case will "disrupt needed trade channels for over a year."

One trader told AMM he did not expect an immediate impact from the decision, which he said was largely expected.

"The ITC rarely throws anything out at this stage; if something gets thrown out it will get thrown out at the end stage," the trader said, adding that until preliminary decisions are made by the Commerce Department and importers have to post cash deposits or bonds, material would continue to flow in to the United States.

"There’s still cheap material arriving now and plenty of it," he said.

However, imports are likely to dwindle if the preliminary determinations finds that the domestic industry is being injured, and prices should begin to rise once inventories are reduced, as market participants relying on imported material will have limited supply options and will likely face higher prices, traders said.

The trader said initial discussions with some producers from countries not included in the case showed that "their prices are substantially higher, so eventually there will have to be an impact from this."

Commerce has until Sept. 25 to make its preliminary decisions in the countervailing cases and until Dec. 9 in the anti-dumping cases, unless extensions are granted.

Dumping margins against India allegedly range from 12.67 to 239.64 percent; Korea from 66.19 to 158.53 percent; the Philippines from 46.04 to 56.38 percent; Saudi Arabia at 53.34 percent; Taiwan from 68.44 to 70.98 percent; Thailand at 118.32 percent; Turkey from 44.52 to 47.20 percent; Ukraine from 25.75 to 30.76 percent; and Vietnam from 103.43 to 111.47 percent.

Subsidy rates for India and Turkey were not specified, but will be above 2 percent, the ITC said.

Petitioners in the case are Boomerang Tube LLC, Chesterfield, Mo.; Energex Tube, a division of Chicago-based JMC Steel Group Inc.; Maverick Tube Corp., a subsidiary of Luxembourg-based Tenaris SA; Northwest Pipe Co., Vancouver, Wash.; Tejas Tubular Products, Houston; TMK Ipsco, a subsidiary of Russia’s OAO TMK; U.S. Steel Corp., Pittsburgh; Vallourec Star LP, a subsidiary of France’s Vallourec SA; and Welded Tube USA Inc., the domestic subsidiary of Welded Tube of Canada Ltd., Concord, Ontario.

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