TPT September 2008

From the AmericaS

Steel pipe A new spiral-weld pipe plant is going up on the West Coast

is already seeing annual sales of about $12.3 billion in Europe. The European Commission has begun a formal antidumping investigation that could lead to the imposition of punitive tariffs on the US exports. Because the US and the 27-member, single-market European Union both subsidize their biodiesel industries, the dispute holds potential for a tit-for-tat exchange on the lines of Boeing vs Airbus, which seems set to go on endlessly. Here, however, there is an added dimension: many environmental and antipoverty groups bitterly oppose crop fuels that compete with food on grounds that they promote famine and do little to fight global warming. The process of chemical conversion of vegetable oils into renewable ‘biodiesel’ yields methyl or ethyl ester. After washing and filtering to meet prevailing standards, the product may be used in the pure form or in blends with diesel fuel to power compression ignition engines. Europe is a net importer of diesel, including biodiesel made from crops like soy in the US. The European producers charge their US counterparts with double-dipping: accepting subsidies from Washington to produce the biodiesel, and benefiting again – from subsidies granted earlier by European governments to their own producers – when the fuel is sold in Europe. According to the European Union, American biofuel producers have increased their exports to Europe from 7,000 tons in 2005 to about a million tons in 2007. The subsidies in question consist of federal excise and income tax credits, along with grants for increases in production awarded through a federal program. Raffaello Garofalo, the secretary general of the European Biodiesel Board, whose complaint to EC trade commissioner Mr Peter Mandelson in April led to the investigation, summarized the European view of these boons: “The result is that American producers are selling at a lower price than we can buy raw materials. It’s as if they are selling bread cheaper than we can buy flour.” There was no immediate response from the National Biodiesel Board, which represents the biodiesel industry in the United States. But, while initial findings are not expected until mid-March of next year, it should be a noisy interval. The European Commission “will leave no stone unturned in this investigation and will act in accordance with its findings,” said Peter Power, a spokesman for Mr Mandelson.

Work is under way in the California city of Pittsburg on the United Spiral Pipe plant, a joint venture between United States Steel Corp and two South Korean steel makers, Posco and SeAH Steel Corporation. The facility will produce spiral-weld pipe from hot rolled steel coils, to be delivered to the plant by rail and ship. As reported on 3 July by Paul Burgarino of the East County Times (San Jose, California), the factory will occupy 341,500ft 2 adjacent to a USS-Posco Industries plant that manufactures sheet metal products. The pipe plant is scheduled for commissioning in March 2009 at an estimated cost of nearly $137 million. Company officials said that North America is experiencing strong demand for spiral welded pipe for new natural gas and oil lines. They considered the Pittsburg site to be favourable for manufacture on the scale projected: 100,000 net tons of linepipe in 2009 and 300,000 in 2010, the plant’s first full year of operation. “We’re in a good position to be competitive in the North American market,” said MS Lee, president of United Spiral Pipe. The economic development director for the city of Pittsburg told Mr Burgarino that he had put two years of work into bringing the project to California, including several trips to Korea to help usher the Asian companies through the city’s permitting process. The expectation is that the plant will generate yearly tax revenue “in the high six figures” , this official said. If the name of the city evokes “the other” Pittsburgh, the home of US Steel, that is intentional. The East County Times noted that the original name of Pittsburg – Black Diamond – was changed when the Columbia Steel Co started up there in 1910. • American makers of steel pipe, who have complained about a surge in imports from China, won a major victory when the International Trade Commission on June 21 cleared the way for the imposition of stiff penalty tariffs for the next five years. The commission voted 5-0 that the domestic industry was being injured by the import of circular welded carbon-quality steel pipe that is subsidized by China and sold in the US at less than

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S eptember 2008

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