The cost of oil country tubular goods (OCTG) in the U. S - could jump sharply if U.S. steelmakers' efforts to win antidumping duty taxes on OCTG imports are successful.
So warns the California Independent Petroleum Association (CIPA) in its association newsletter.
On June 30, seven U.S. steelmakers filed antidumping petitions with Washington alleging OCTG imports from Argentina, Austria, Italy, Japan, South Korea, Mexico, and Spain were being dumped into the U.S. market and injuring U.S. OCTG producers (OGJ, July 11, p. 31). The U.S. steelmakers also asked for countervailing duties for OCTG imports from Austria and Italy, which they claimed were subsidizing state owned OCTG producers.
On June 23, Quanex Corp.'s Gulf States Tubes division filed OCTG antidumping claims against Argentina, Brazil, Germany, and Italy and a subsidy claim against Italy (OGJ, July 4, p. 34).
The petitions were filed with the U.S. Commerce Department and U.S. International Trade Commission.
ANTIDUMPING PETITIONS
In the bigger claim, Bellville Tube Co., Ipsco Steel, Koppel Steel, Maverick Tube Corp., North State, USS-Kobe, and USX Corp.'s U.S. Steel Group asked Washington to take action to offset injury to the U.S. OCTG industry from unfairly traded imports.
"Oil country tubular imports are surging as the condition of U.S. (OCTG) producers erodes," said U.S. Steel Group Pres. Thomas J. Usher.
"These imports increased threefold in 1993, and they continue to skyrocket this year. During the first quarter of the year, OCTG imports totaled 74,000 tons, compared with 46,000 tons during the same quarter last year."
Usher claimed that OCTG imports from the seven nations listed in the bigger petition have captured 23% of the U.S. market. "This has resulted in declining prices, low operating rates at our Fairfield, Ala., pipe mill, and continued deterioration in financial performance."
The petitioners allege dumping and countervailing duty margins that often exceed 50% of the product's export price.
Quanex claimed OCTG imports from the four countries cited in its petition have claimed 40% of the market for carbon and alloy seamless standard, line, and pressure pipe up to 4/2 in. OD in first quarter 1994.
CIPA RESPONDS
CIPA members complained about the steelmakers' petitions, contending the resulting price hikes would be unwarranted.
"This is absolute lunacy," CIPA's newsletter quoted a service/supply member as saying.
"The domestic petroleum industry has experienced a severe production decline in the last decade, and the steelmakers stopped making products we needed. Now that there's a slight increase in drilling activity, the steel mills want to bump up their costs and have us subsidize their growth."
The proposed tariffs on imported steel are estimated at $300-400/ton, and a 7 ft, 23 lb casing costs about $8/linear ft, the newsletter noted. If the duty tax is approved, the same casing could cost as much as $11/linear ft, it claimed.
"Who among us can afford a 43% increase in materials costs?" the newsletter quoted a CIPA member as asking. "The steel mills didn't invest in the new technology to compete with the foreign companies 10 years ago, and now they want us to subsidize their mistakes."
CIPA said it is working with the International Association of Drilling Contractors to defeat steelmakers' efforts to get the U.S. Congress to amend the General Agreement on Tariffs and Trade to incorporate protectionist measures for U.S. produced OCTG.
Copyright 1994 Oil & Gas Journal. All Rights Reserved.
