Tenaris SA remains confident that domestic oil country tubular
goods (OCTG) producers will get a more-favorable anti-dumping
ruling on imports from South Korea when the Commerce
Departments International Trade Administration (ITA)
makes its final decision in early July.
"The department made
clear that they didnt take into full consideration some
relevant aspects and some data that they will take into
consideration for the final determination," Tenaris chairman
and chief executive officer Paolo Rocca said during a
conference call to discuss the Luxembourg-based pipe and tube
financial results. This has made Tenaris "very confident"
of a more-favorable final ruling, he added.
Based on its
preliminary briefing, Commerce does not believe it has "used
the complete data in terms of sales and cost on the Korean
exporting companies," said Tenaris North American area
manager, Germán Curá, putting this down to time
Also buoying the
companys hopes of a more-favorable ruling are "a lot of
cases in the past where the full consideration of data has led
to final determinations that are substantially higher than the
preliminary ruling," Rocca said.
In the meantime, the
preliminary ruling is expected to affect Tenaris revenue,
particularly in the welded OCTG segment, this year.
"In the first semester
of this year we can anticipate some continuing imports from
Korea ... of less-differentiated product," Rocca said, adding
that this "stock build-up will also have some impact in the
second half of the year."
Even the positive
impact of significant dumping margins assessed for the other
eight countries in the trade case, particularly those with
largely seamless OCTG production, likely will not be felt
immediately, he said. "There has been an inventory buildup in
the last few months and some of this will go on in the first
and second quarters of this year. We will not see a positive
effect until we get the final determination."
expects 2014 results will be largely in line with those in
2013, with a real pickup expected in 2015. "I really think that
the dynamics of demand and supply (in 2015) should drive the
margin of the industry in the United States to a slightly
higher (level)," Rocca said.
In the near term,
recent high natural gas prices are not expected to spur
drilling significantly, but continuing reshoring of
manufacturing is expected to lead to improved demand in the
longer term and move the price higher.
"Frankly, the view we
have is that the gas price is perhaps associated with one of
the worst winters weve had and continue to have. It is
the view of customers that when this is over well more
than likely go back to the (price) levels weve seen in
the past so many months," Curá said, adding that
"mid-term-wise the existing (price) level is not sustainable
and it has to increase" as "the reindustrialization process (in
the United States) continues to go on."