Steel-pipe makers file trade case against China

STAFF/WIRE REPORT

Two local producers of steel pipe used in oil and gas drilling are among those who filed complaints Wednesday against Chinese producers.

The complaints filed with U.S. trade officials allege unfair competition from Chinese producers that they say have flooded the domestic market.

Among the filers were Wheatland Tube Corp., which has several local plants, and V&M Star, which has a mill in Youngstown.

The case involves pipe products known as oil country tubular goods. It is separate from a case that Wheatland Tube and other producers won last year that involved standard pipe. The earlier case resulted in duties being placed on Chinese imports.

Steelmakers have faced sharply lower demand since late last year, when the global economic crisis undercut key customers in the construction, automotive and heavy-equipment industries.

The decline comes just months after soaring prices and surging demand from China and other countries helped fuel record profits for many U.S. steel companies.

Stockpiles of the pipe products known as oil country tubular goods have grown in recent months as the recession has dampened demand for oil and gas drilling. Industry advocates say current inventories would last 14 to 16 months at today’s consumption rates, which are lower than they were last year but not low historically.

Steel companies and the United Steelworkers union filed petitions with the Commerce Department and the U.S. International Trade Commission on Wednesday, according to their Washington, D.C.-based attorney, Roger Schagrin. They are seeking duties on Chinese imports of the pipe “as quickly as possible,” he said.

They allege Chinese producers have sold supplies of the pipe at prices below the cost of production — a practice known as “dumping” — and have benefited from massive government subsidies.

Chinese steel makers account for about 2.2 million tons — worth an estimated $2.7 billion — of the roughly 5 million-ton U.S. market for the pipe, Schagrin said.

“Just huge quantities of the Chinese imports over the last nine months have gone into inventories on the ground in the United States,” he said.

But free-trade proponents say Chinese producers merely responded to market demand amid soaring prices for domestic steel pipe and a shortage among companies drilling for oil and natural gas.

“This isn’t a case of unfair trade,” said David Phelps, president of the American Institute for International Steel, a McLean, Va.-based group that opposes tariffs. “The market did this.”

Imports of Chinese steel pipe also became a larger part of the domestic market because of a lag between orders and deliveries, he said. Pipe ordered when the market was strong last year may not have arrived until months later, when the market had declined, Phelps said.

Others involved in bringing case are United States Steel Corp. of Pittsburgh; Maverick Tube Corp. of Houston; Evraz Rocky Mountain Steel of Pueblo, Colo.; and TMK IPSCO of Downers Grove, Ill.

About 6,000 workers are employed making oil country tubular goods, and about 2,000 of them have been laid off, United Steelworkers International President Leo W. Gerard said in a statement.

V&M Star employs more than 400 in Youngstown and is considering an expansion, although it has delayed the decision until later this year.

Wheatland produces oil country tubular goods at its Warren plant and finishes them at a plant in Sharon. It also has plants in Wheatland, Pa., and Niles and employs about 1,300 in the region.