Massive OCTG Dumping Case Filed by Domestic Producers

Welded Tube USA Inc. – filed anti-dumping and countervailing duties complaint against nine foreign countries on July 2. A subsequent investigation was initiated by the Department of Commerce. The anti-dumping and countervailing duty case includes – Korea, Turkey, Saudi Arabia, The Philippines, Vietnam, India, Thailand, Ukraine and Taiwan, as well as countervailing duty cases against India and Turkey. 

The U.S. International Trade Commission (ITC) is scheduled to determine if the imports threaten or materially injure U.S. producers by August 16, 2013. If injury is found, the ITC will make its preliminary CVD determinations by September 2013 and preliminary AD determinations by December 2013.

The AIIS sent out a press release following the July 2nd filing by the domestic steel industry, stating that the trade case was “overkill.” (See www.aiis.org) The following contains excerpts from that release.

The domestic industry pointed to lower profits in the first quarter of 2013 as the proof of injury, although it was pointed out that there was softening demand for OCTG due to a lower drill-rig count. For those who have attended such hearings in the past, it was pretty much the same stuff, but of course, at the hearings in the past, the domestic industry had actual losses to point to. Not this time. There was a sense mentioned by more than a few at the hearing that it was somehow the responsibility of the government to guarantee their profit margins by eliminating imports from these nine countries. The domestic industry petitioners also stated that the $1.7 billion in investments in the industry in new and upgraded capacity were at risk due to unfair trade.

At the hearing importers said that the industry was very profitable and cited the large investment in new and upgraded capacity announced by the industry. “It is simply incomprehensible that companies would invest such a large sum in an industry that was vulnerable to unfair trade or suffering – as the petition states – market disruption and injury due to unfair trade. Put simply, this is a very healthy and profitable industry not in need of trade protection.”

Imports of OCTG products have been vital to the health of the oil and gas industry. It will be interesting to see how this case plays out over the second half of this year.