OCTG trade case mulled: Tenaris

CHICAGO — U.S. oil country tubular goods (OCTG) producers are looking closely at a potential trade case against imports from South Korea, Tenaris SA said Thursday.

Low-priced imports from Korea and other countries are pressuring prices in the lower-end segment of the OCTG market in particular, according to executives of the Luxembourg-based steel tube and pipe maker.

In the United States, "the continued high level of imports is putting pressure on the prices of less-differentiated product," Tenaris chief executive officer Paolo Rocca said in a conference call with analysts Thursday following the release of the company’s financial results Wednesday.

Imports account for about 50 percent of the U.S. OCTG market, Tenaris North American area manager Germán Curá said, and Korean material now accounts for about 45 percent of overall U.S. welded imports.

Such volumes have made Korean material a "major market-share participant" in the United States, he said. "And when we look at the prices of imports and we compare it to the ... price of hot-rolled coil, frankly we believe that these are unfairly traded imports."

One analyst asked Tenaris executives whether the company was considering a trade petition similar to the one against imports of energy tubular products from China in 2009.

"As an industry, we are ... evaluating the specifics as to understand a potential trade case," Curá said. "This is an industry effort. We are all working on this. And we are convinced that there are unfairly traded tons in the market."

The comments by Curá and other Tenaris executives echoed remarks by top executives at Pittsburgh-based U.S. Steel Corp. last month (, Oct. 31).

OCTG imports appear on course to rise to around 267,180 tonnes in October (, Nov. 6).

Tenaris executives largely brushed off questions and concerns about increased domestic capacity. "Going forward, we believe that there is a clear opportunity to substitute big components of ... imports by domestic production," Curá said.

Rocca acknowledged that there were a host of new projects that are expected to add new capacity to the U.S. energy tubular market, but those haven’t "changed the overall picture. We are ... going on with our project."

Tenaris has said it is close to choosing a site in either Texas or Louisiana for a planned $1.5-billion, 650,000-ton-per-year seamless pipe mill (, Oct. 26).

Other companies also have announced or are working on big seamless projects. Benteler Steel/Tube GmbH plans to build a seamless OCTG mill in Caddo, La. (, Nov. 7); TPCO America Corp. continues work on its $1-billion, 550,000-ton-per-year seamless pipe mill near Corpus Christi, Texas (, Oct. 23); and Vallourec SA has started production of seamless tubulars at its mill in Youngstown, Ohio (, Nov. 5).

"I wouldn’t focus so much on the question of pure production capability," Rocca said. "The point is how strong and how intense is the competition in our space? ... You need much more than a plant to support a strong competing position here."

Tenaris executives said that the company is in a good position to compete in the United States because it offers premium grades of OCTG and connections needed for demanding shale and deepwater wells and because of its ability to offer a full line of welded and seamless products in addition to services.

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