To understand why foreign com- panies would dump steel pipe on the American market — apart from the fact that unfair practices are their stock-in-trade — one need only look at what is taking place with the oil and gas drilling boom. Over the past six years, more than 160,000 new energy jobs have been created, while spending on drilling and completing wells in the United States has topped $145 billion. In 2000, the total spent was $13 billion.
According to Well Servicing Magazine, U.S. Steel, the nation’s largest steel producer, has seen production for tubular goods used for pipes, tubes and joints in gas drilling double in the last couple of years; total tubular-good shipments reached 7.3 million tons in 2011, up from 3.9 million in 2009; a total of 1,974 drill rigs were operating in the U.S. as of August 2011, up by 19 percent from the previous year. About 45 percent of the rigs were working in the nation’s shale deposits.
Against that backdrop, it’s not surprising that countries are scrambling to take advantage of this new-found wealth. And, for the residents of the Mahoning Valley who have long suffered the consequences of unfair trade practices of foreign companies, especially in manufacturing, the dumping of steel pipe at artificially low prices is just one more reason to view the global marketplace with a jaundiced eye.
“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, D-Ohio, a leading voice in Congress for a level playing field. “The International Trade Commission must commit to Ohio’s workers and businesses and crack down on countries that sell their products at unfair prices.”
Brown’s comments last week were in reaction to a petition filed with the U.S. Department of Commerce asking regulators to determine whether South Korea, India, Vietnam, the Philippines, Saudi Arabia, Taiwan, Thailand, Turkey and Ukraine are engaging in unfair and illegal trade practices.
The petition was filed by nine U.S. companies, including those with operations in Youngstown and Northeast Ohio. Among them are Vallourec Star (formerly V&M Star of Youngstown), U.S. Steel, TML IPSCO and the JMC Steel Group, which operates Wheatland Tube in Warren.
The companies contend that steel pipe producers in the nine countries are selling products in the U.S. at less than their fair market value, thus placing them at a definite advantage over domestic producers.
Last year, more than 1.7 million tons of steel pipe for the oil and gas industry were imported, up from 840,000 tons in 2010. Metal Bulletin, an international publisher that provides analysis and news about the global metals market, has estimated that the oil and gas industry was worth $33 billion at the end of 2012 and that it would grow at an annual rate of 4.5 percent between this year and 2020.
Given that this part of the state of Ohio is in the epicenter of the boom because of the Utica Shale play, and considering that Vallouec Star has invested more than $1 billion in a state-of-the-art steel pipe producing complex along Route 422 on the Youngstown/Girard straddle, the battle against the nine foreign countries warrants the support of the public and private sectors in this region.