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4 NE Ohio steel pipe-makers ask feds to raise import duties



Published: Fri, August 9, 2013 @ 12:10 a.m.

4 local companies among those seeking action against 9 countries in dumping case

By Jamison Cocklin

jcocklin@vindy.com

YOUNGSTOWn

Major companies with operations in Youngstown and Northeast Ohio that manufacture steel pipe for oil and gas drilling are asking the federal government to raise import duties on nine countries they suspect of illegally dumping product at artificially low prices in the U.S.

A petition filed with the U.S. Department of Commerce early last month asked regulators to investigate South Korea, India, Vietnam, the Philippines, Saudi Arabia, Taiwan, Thailand, Turkey and Ukraine to determine if the countries are engaging in unfair and illegal trade practices.

Nine U.S. companies filed the petition, including Vallourec Star, U.S. Steel, TMK IPSCO and the JMC Steel Group, which operates Wheatland Tube in Warren.

The petition has set off one of the biggest anti-dumping cases of 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.

Dumping occurs when a foreign company sells a product in the U.S. at less than its fair market value. If the case is successful, it could raise the price of domestic steel pipe and give a lift to the profits of the companies petitioning the federal government and others with a stake in the industry.

“Mainly, it will affect employment — their bottom line,” said Mousa Kassis, an international trade adviser at Youngstown State University, speaking about the long-term consequences if the alleged dumping is left unchecked. “If they’re forced to shut down in a certain market because of foreign competition, it hurts sales and the local labor force.”

Under federal law, the companies can petition the government for relief from unfair imports. The U.S. Department of Commerce accepts the petitions and determines if illegal dumping is occurring, while the U.S. International Trade Commission determines whether the U.S. industry is materially injured or threatened by the presence of such imports.

The commission eventually will have to approve any duties, which are taxes raised against imports.

In 2010, the U.S. imposed anti-dumping duties that range from 30 percent to 99 percent on Chinese steel pipes. At the time, the commerce department said prices for those pipes, otherwise known as Oil Country Tubular Goods, were 29.94 percent to 99.14 percent lower than the U.S. fair value. Those restrictions do not apply to the countries currently under investigation.

Vallourec Star with operations in Youngstown, TMK IPSCO in Brookfield, U.S. Steel in Lorain and Wheatland Tube all gave a boost to the case against China by lobbying for those anti-dumping duties.

Kassis said foreign competitors often can sell their goods at a lower rate abroad because their governments provide subsidies, such as business financing, for example, that allow them to reduce prices.

“Domestic steel-pipe producers are being crippled by an onslaught of foreign competitors illegally dumping imports in the United States,” said U.S. Sen. Sherrod Brown of Ohio in a statement last month. “The International Trade Commission must commit to Ohio’s workers and businesses and crack down on countries that sell their products at unfair prices.”

According to Brown’s office, steel-pipe imports used for oil and gas drilling increased from 840,000 tons in 2010 to more than 1.7 million tons last year.

Metal Bulletin, an international publisher that provides analysis and news about the global metals market, estimated in a report released this year that the industry was worth $33 billion at the end of 2012. Metal Bulletin said the industry would grow at an annual rate of 4.5 percent between 2013 and 2020 on strong global demand for oil and gas pipe.

North America remains the largest consumer in the global market, accounting for 42 percent of tubular-pipe consumption.

The American Institute for International Steel, a group that represents both steel exporters and steel importers, has called the latest petition “overkill” and said it could disrupt the domestic marketplace and oil and gas drilling because exploration and production companies rely on dependable suppliers, which include foreign competitors.


Comments

1glbtactivist(261 comments)posted 1 year, 4 months ago

Most of the pipe being made in Youngstown is made by V&M steel, which is French owned.

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2iBuck(226 comments)posted 1 year, 4 months ago

Hmm, I seem to recall the Shrub admin levying anti-dumping tariffs against China in the early 2000s, running it all through our legal processes, and being threatened with multi-billion-dollar penalties by the WTO, at which point they rapidly backed down.

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3republicanRick(1250 comments)posted 1 year, 4 months ago

If Wheatland was a better run company with more emphasis paid to how they waste energy and the associated costs, they wouldn't need the feds to bail them out over and over.

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4paulydel(1332 comments)posted 1 year, 4 months ago

The problem is our govt sitting on their butts with no guts to to take action to raise the tariffs on imports coming into this country. I agree with Trump that they should be raised at least 25% that way maybe companies leaving the USA will think twice about leaving.

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