Domestic steelmakers are cheering the recent finding by the International Trade Commission that they’ve been harmed by cheap imports of steel used in oil and gas exploration.
The ruling allows the Department of Commerce to impose tariffs on imports of steel goods from India, South Korea, Taiwan, Turkey, Ukraine and Vietnam – potentially leveling the playing field for domestic steelmakers.
The steel pipe is used mainly in drilling oil and gas wells and has figured heavily in the recent U.S. energy exploration boom. The shale oil fields in eastern Ohio, for example, are providing growing opportunity for hydraulic fracturing – “fracking” – and other means of domestic energy production.
Imports accounted for nearly 40 percent of the 7 million tons of oil country tubular goods consumed in 2013. Last year, the U.S. market was worth about $10.1 billion and 8,910 workers’ employment was tied to the U.S. production of oil country tubular goods.
“They have sent a clear message that we are open to trade from all, as long as it is fair,” said Dave Mitch, president and chief executive of Houston-based TMK IPSCO, which employs 350 at a plant in Wilder, Kentucky.
“It is unfortunate that we had to scale back operations due to the unfairly traded imports. On a level playing field, we can compete with anyone.”
He expects to see relief in price competition by year’s end.
TMK was among nine companies that petitioned last year for trade relief, citing concerns that imports were sold at less-than-fair value in the United States or benefited from a foreign government subsidy.
In Wilder, TMK has invested $77.5 million in equipment and technology upgrades and new buildings since the second half of 2007 – an investment that was at risk from the unfair trade, the company says.
The plant turns steel bought from producers such as Gallatin Steel near Ghent, Kentucky, into steel pipe up to 16 inches in diameter. Steel production in Wilder ended in in 2001, but recent growth in domestic energy production is helping boost the mill’s viability.
The International Trade Comission ruling, issued Aug. 22, confirms an earlier finding by the Department of Commerce. It found that companies from some countries sold their products in the United States at less-than-fair market value or that the products themselves benefited from trade distorting-government subsidies.
“Unfairly traded-imports ... from these countries have been very damaging to American steel producers,” said Thomas Gibson, president and chief executive of the trade group American Iron and Steel Institute.
The unfair trade has been “taking away significant sales in the energy sector, which should be a bright spot for the industry given increased oil and gas development in the U.S.”
Source: http://www.cincinnati.com/