WARREN - The resurgence in U.S. oil and gas exploration is being threatened by unfairly dumped imports of steel pipes, three pipe mills with local ties and six other domestic mills argued before the International Trade Commission.
The companies, including Youngstown's Vallourec Star, Brookfield's TMK IPSCO and a division of JMC Steel Group, the company that operates local Wheatland Tube plants, are awaiting a report expected today from trade commission investigators.
The companies filed a formal complaint with the trade commission last month, seeking tariffs on "oil country tubular goods" or OCTG products, imported from India, Korea, Philippines, Saudi Arabia, Taiwan, Thailand, Turkey, Ukraine and Vietnam.
This is a view inside the Vallourec Seamless Pipe Mill in Youngstown. Vallourec is one of three area pipe mills represented in arguments before the International Trade Commission on claims that unfairly dumped imports are threatening domestic business in the resurgence in U.S. oil and gas exploration. File photo / R. Michael Semple
In response, the trade commission has launched a preliminary investigation to determine whether a full investigation is necessary on the allegations. The preliminary report is due today, and a commission decision on the preliminary outcome is expected by Aug. 16.
"The United States has been experiencing a resurgence in oil an gas exploration and production in recent years. ... The benefits of supplying the oil and gas industry during this period were cut short, however, as imports from the subject countries rushed in at an extraordinary rate. Import levels from these countries more than doubled in just two years," attorneys representing the nine domestic pipe and steel producers argued in the complaint.
"The producers in these countries did not grab market share by competing fairly, but increased their sales by offering OCTG at dumped and subsidized prices," the complaint states.
By the numbers: Pipe imports
9: Number of foreign countries accused of illegally dumping steel pipes.
173,303: Tons of oil and gas steel pipe products imported in 2009.
840,312: Tons of oil and gas steel pipe products imported in 2010.
1,771,320: Tons of oil and gas steel pipe products imported in 2012.
11: Percentage of 2009 imports from the nine countries in question.
37: Percentage of 2010 imports from the nine countries.
52: Percentage of 2012 imports from the nine countries.
59: Percentage of first quarter 2013 imports from the nine countries.
Source: International Trade Commission filings
The complaint, filed by attorneys Roger B. Shagrin, John W. Bohn and Paul W. Jameson, said as a result, low-priced imports forced the domestic producers to lower their prices to avoid losing more market share.
"The robust profits that the industry had been beginning to enjoy dwindled to unsustainable levels," the complaint states.
Imports from the nine countries more than doubled in volume from 840,312 tons in 2010 to 1,771,320 tons in 2012.
A congressional letter sent July 31 to the chairman of the International Trade Commission encourages the commission to take action to ensure competition on a level playing field. The letter was signed by local officials U.S. Reps. Timothy J. Ryan, D-Niles, and Bill Johnson, R-Marietta.
"We cannot allow tubular goods to be imported into this country that have been subsidized or unfairly traded by another country," Ryan said Thursday. "Our manufacturing sector is making a comeback and creating more employment, but we cannot remain competitive if we allow foreign nations to flood our markets with cheap imports."
In recent months JMC Steel Group CEO Barry Zekelman compared fighting foreign steel dumping to a game of "Whac-A-Mole."
Zekelman said the International Trade Commission imposes anti-dumping duties, but foreign countries will simply rename the products and resend them, surpassing border inspectors that lack the time or knowledge to distinguish the proper names of the products.
Vallourec Star officials declined to comment on the complaint Thursday, and a message left seeking comment from TMK IPSKO spokesmen was not immediately returned.
Attorneys representing the foreign producers from Korea, Taiwan and Turkey, argued in response that there is "no reasonable indication of material injury," and instead said the domestic industry leads the world in OCTG technology, offering premiums that are not available from imports.