Saying "American steel jobs are in jeopardy" - including those at Mahoning Valley pipe manufacturers - the Alliance for American Manufacturing, or AAM, and bipartisan U.S. Senators from Ohio and other states are asking the U.S. Department of Commerce to revisit a preliminary ruling that found no illegal steel dumping from South Korea.
The U.S. Department of Commerce is expected to rule in early July on a trade case that could have lasting implications for local steel pipe manufacturers TMK IPSCO in Brookfield, Vallourec Star in Youngstown and several other U.S. producers. The pipes, known as "Oil Country Tubular Goods" or OCTG are used in the domestic oil and gas drilling industry.
A letter signed Thursday by 57 U.S. Senators, including Democrat Sherrod Brown and Republican Rob Portman, both of Ohio, urged the Department of Commerce to rethink its preliminary ruling released in February that had found no evidence of illegal dumping from South Korea, one of nine countries listed on a complaint filed by domestic steel pipe producers. That preliminary decision also had ruled in favor of anti-dumping duties on gas- and oil-drilling pipes imported from eight other countries that compete with locally produced products.
The anti-dumping investigation was triggered by a Dec. 18 complaint filed by local pipe manufacturers TMK IPSCO of Brookfield, Vallourec Star of Youngstown, U.S. Steel in Pennsylvania and six other domestic manufacturers. The complaints outlined "critical circumstances," according to information released by the Department of Commerce.
Statistics show that steel produced for the U.S. energy market, such as OCTG, accounts for about 10 percent of domestic steel production, and U.S. OCTG producers employ about 8,000 workers nationwide.
"We're exploring natural gas and oil in this country on the promise of energy independence. But if our government doesn't act, we'll head down a path of swapping our dependence on foreign oil with a dependence on foreign energy infrastructure," said Scott Paul, president of AAM, a non-profit, non-partisan partnership by America's leading manufacturers and United Steelworkers.
"U.S. demand for OCTG products has been rising, but our U.S. producers are increasingly losing sales to foreign competitors," the letter said. "Imports of OCTG have doubled since 2008 and increased by 61 percent thus far in 2014 compared to the previous year. By some measures imported OCTG products account for more than 50 percent of the pipes being used by companies drilling for gas and oil in the U.S. One steel company has already reduced hours at three American facilities and idled another as a result of growing OCTG imports. We have been told that more reductions and layoffs could occur."
The letter was referring to an April announcement that TMK IPSCO would reduce operating hours by about 30 percent at its welded steel pipe plants in Blytheville, Ark., Camanche, Iowa, and Wilder, Ky. At the time, the company also had said Wilder's 8-inch welded pipe mill was being idled. No cuts were expected at the company's Brookfield plant.
The senators' letter asked the Commerce Department to further analyze information submitted by the Korean producers to ensure its accuracy.
"We are concerned that certain information used for the preliminary determination did not fully reflect the costs of production and sales for the Korean producers, such as profit information based on lower valued pipe products and certain affiliation issues that may impact which sales are used as the basis for the dumping calculation. As this case proceeds, we urge you to ensure that the Department's investigation is objective and accurate," the letter said.
The anti-dumping law was established to provide U.S. business a way to seek relief from illegal dumping of imports, a term used when a foreign company sells a product in the U.S. at less than its fair value. The law forces fair competition among domestic and foreign businesses.
After its preliminary ruling in February, the Commerce Department made this statement: "In each instance where we found that affirmative critical circumstances exist, we will instruct CBP (U.S. Customs and Boarder Patrol) to impose provisional measures retroactively on entries of subject OCTG up to 90 days prior to these determinations."
Under the preliminary ruling, anti-dumping duties could be placed on oil country tubular goods, or OCTG, from India, the Philippines, Saudi Arabia, Taiwan, Thailand, Turkey, Ukraine and Vietnam. In 2013, imports of OCTG from India, Korea, the Philippines, Saudi Arabia, Taiwan, Thailand, Turkey, Ukraine and Vietnam were valued at an estimated $1.54 billion, ranging from $174.4 million in imports from India to $37 million from Thailand, the report indicates.
The Commerce Department is scheduled to announce a final determination around July 8. If the U.S. International Trade Commission maintains the preliminary ruling, and determines the imports have caused material injury to domestic industry, the Department of Commerce will issue anti-dumping orders and could set duties on the products by August.