Trade Cases
US senators urge reduction to S. Korean OCTG quota
Written by Ethan Bernard
September 3, 2024
Three US senators have called on the Commerce Department to reduce the quota for South Korean oil country tubular goods (OCTG).
“This quota was originally established in 2018 but is now outdated and ineffective due to lower demand for OCTG,” they wrote in a letter to Commerce Secretary Gina Raimondo on Aug. 30.
US Sens. Sherrod Brown (D-Ohio), Bob Casey (D-Pa.), and John Fetterman (D-Pa.) all signed on to the letter.
The senators wrote that a new quota should reflect the lower demand. Additionally, it should “level the playing field for the domestic OCTG industry and its workers.”
Recall that in 2018, Section 232 tariffs were announced at rates of 25% and 10% on certain steel and aluminum imports, including OCTG.
The US government made exceptions for certain trading partners, including South Korea. An annual absolute quota of 508,020 short tons was set for South Korean OCTG, the letter said. (This rate has held except for 2020. At that time the US government implemented a 40% quota reduction because of the Covid-19 pandemic.)
Lower demand, higher exports
The senators said OCTG consumption this year is expected to decline by about 22% from 2023.
“Simultaneously, South Korea no longer has a home market to purchase OCTG products, so their industry is solely reliant on exports,” according to the letter.
The senators noted the reduced demand and “out-of-date quota” have affected companies like Tenaris and Vallourec. Tenaris has operations in Ohio and Pennsylvania, and Vallourec has operations in Ohio.
AISI, SMA cheer letter
Steel trade groups came out in support of the letter.
Kevin Dempsey, president and CEO of the American Iron and Steel Institute (AISI), applauded the letter’s intent.
“Significant volumes of OCTG imports come from South Korea which has no real domestic market for OCTG and therefore produces this pipe almost exclusively for export,” Dempsey said in a statement. “These high levels of imports threaten good-paying jobs in the American steel industry.”
Dempsey noted that the “OCTG market remains a key focus” in the continuing attempt to level the playing field for the domestic steel industry.
Likewise, Philip K. Bell, president of Steel Manufacturers Association (SMA), praised the letter, calling the current quotas “outdated.”
“Reducing the import quotas is a commonsense way to defend American steel workers,” Bell said in a statement to SMU. “It also supports our efforts to decarbonize steel, as OCTG made in America is less carbon-intensive than steel made in South Korea or just about anywhere else in the world.”
Ethan Bernard
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