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Trade commission believes domestic steel pipe threatened by foreign imports
youngstown
The U.S. International Trade Commission on Friday moved one step closer to raising duties against nine countries accused of dumping oil and gas pipe in the U.S. at artificially low prices.
All six of the commission’s members unanimously determined in a vote that there is a “reasonable indication” that U.S. industry could be materially injured or threatened by foreign-made Oil Country Tubular Goods, otherwise known as carbon and steel pipe used in oil and gas drilling.
The move comes after nine U.S. companies filed a petition with the U.S. Department of Commerce early last month that asked regulators to investigate South Korea, India, Vietnam, the Philippines, Saudia Arabia, Thailand, Turkey and Ukraine to determine if the countries are engaging in unfair and illegal trade practices.
Among those companies are Vallourec Star, U.S. Steel, TMK IPSCO and the JMC Steel Group, which operates Wheatland Tube in Warren. Each company has operations in Youngstown or Northeast Ohio.
The trade commission’s vote lends momentum to one of the biggest anti-dumping cases in recent years for a segment of the U.S. steel industry that has seen a historic rise in demand as a result of the shale-gas drilling boom. The industry was worth about $33 billion last year, according to the Metal Bulletin, an international publisher that provides analysis and news about the global metals market.
But according to documents filed with the trade commission as a part of the case, steel-pipe imports used for oil and gas drilling have increased from 840,312 tons in 2010 to more than 1.7 million last year.
Dumping occurs when a foreign company sells a product in the U.S. at less than fair market value, undermining domestic competition and threatening local workforces. If the case is successful, it could give a boost to the profits of those companies petitioning the government and other domestic producers.
The commerce department accepts such petitions and determines if illegal dumping is occurring, while the trade commission determines if it is hurting U.S. industry.
Typically, foreign competitors are able to dump products below fair value price because their governments subsidize operations by providing things such as business financing, for example. In this case, U.S. companies allege that the government’s of India and Turkey are subsidizing OCTG producers there.
Both agencies work in tandem, and as a result of the commission’s ruling, the commerce department will continue its investigation of the imports. It will have preliminary rulings Sept. 25 and Dec. 9 to determine the margin of subsidies and the level of dumping that is occurring.
Those hearings will clear the way for the commission to conclude the final phase of its investigation, and if the case continues, the commerce department then could raise duties based upon all the findings.
The commission’s full report is expected to be made public Sept. 13.