TPT September 2013

Global Marketplace

horizontal drilling rigs tracked by Baker Hughes has risen 83 per cent since the start of 2010. Spurred by this activity, imports of OCTG from the nine countries cited in the petition have doubled in the past few years to almost 1.8 million metric tons. They accounted for about 63 per cent of the US market last year, according to the American Iron and Steel Institute. › For its part, the American Institute for International Steel (AIIS), the Washington, DC-based trade organisation representing steel importers and exporters alike, called the ITC filing “excessive and unwarranted” and warned that it could disrupt oil and gas drilling. According to David Phelps, the AIIS president, while the low end of the market is over-supplied, this is not the case for high-end seamless pipe sold by US Steel and others. He said, “We think this” – the ITC petition – “is an overreach.” › In 2010, the US Commerce Department applied anti- dumping duties ranging from about 30 to 99 per cent on OCTG from China. The parties to the latest ITC petition are, in addition to US Steel: Tenaris subsidiary Maverick Tube Corp; Boomerang Tube; Energex Tube, a division of JMC Steel Group; Northwest Pipe Co; Tejas Tubular Products; TMK IPSCO; Vallourec Star; and LP Steel. On the other hand . . . › “Buy America” rules require the federal government to source domestically melted steel for use in transportation infrastructure projects. But American Metal Market reported (5 July) that, according to numerous sources in themarketplace, “it appears that a handful of players may circumvent those rules in an effort to improve their margins”. “There are honest mills and there are dishonest mills, and there’s no one doing anything to check and certify the mills,” one industry source said of the alleged violations. This source told AMM that the steel wire mill where he was once employed was one such company: “[The mill] would say it was this made-in-America melt chemistry. They would submit made-in-America paperwork for foreign material.”

Steel US Steel is among the petitioners for a government investigation into OCTG imports from nine nations A group of US makers of speciality steel pipe for oil and gas drilling has launched one of the biggest trade cases in years, asking the US International Trade Commission (ITC) to curb what they claim is a flood of unfairly traded products from nine countries. If the effort is successful, the price of some high-margin steel products sold to the energy industry could rise, benefiting United States Steel Corp and other domestic producers. The petition, filed 2 July on behalf of US Steel and eight other companies, asked the commission to investigate imports of some oil country tubular goods (OCTG) from India, the Philippines, Saudi Arabia, South Korea, Taiwan, Thailand, Turkey, Ukraine and Vietnam. In the opinion of Nomura Securities analyst Curt Woodworth, the filing was a “modest positive” for US producers, but he noted that domestic capacity is already set to rise in 2014 and 2015. “These trade cases can be time-consuming,” he told Reuters (2 July). “With anti-dumping cases you need to prove financial injury. That will be difficult, given that most of the [petitioners] are still very profitable.” (“US Steel Pipe Makers Defend Energy Business with Trade Case.” India edition, 3 July) Cutting its profit estimates for US Steel on 3 July, the ratings agency Standard & Poor’s also saw the ITC complaint as a potential positive, although a final resolution would take some time. In the short term, Mr Woodworth said, some countries exporting to the US may dial back their aggressive pricing. Even as US steel manufacturing suffers weaker demand, steel pipe sales to the oil sector are a bright spot. In a sign of how quickly demand for pipe has grown – driven by shale rock exploitation facilitated by such horizontal drilling techniques as hydraulic fracturing (“fracking”) – the number of

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September 2013