Oil Country Tubular Goods Orders Are Much More Likely As Domestic Industry Gains From The Department of Commerce's Final Determinations

by King & Spalding
Contact

[author: Brian E. McGill]

The high-profile unfair trade cases on oil country tubular goods (OCTG) are nearing completion. The antidumping investigations cover imports from India, the Philippines, Saudi Arabia, Korea, Taiwan, Thailand, Turkey, Ukraine, and Vietnam, while the countervailing duty investigations cover India and Turkey. The Department of Commerce (Commerce) issued final determinations in these investigations on July 10. The International Trade Commission will vote on whether the domestic industry is materially injured by the unfair imports on August 14.

Commerce determined antidumping margins ranging from 2.05 to 9.91 percent for India, 9.89 to 15.75 percent for Korea, 9.88 percent for the Philippines, 2.69 percent for Saudi Arabia; zero to 2.52 percent for Taiwan; 118.32 percent for Thailand; zero to 35.86 percent for Turkey; 24.22 to 11.47 percent for Vietnam; and 6.73 percent for Ukraine. Commerce found countervailing duty rates ranging from 5.67 to 19.11 percent for Indian producers and 2.53 to 15.89 percent for Turkish producers. Despite opposition from the domestic industry, Commerce entered into the antidumping suspension agreement sought by Ukrainian producer Interpipe Group due to continuing unrest in that country.

The most significant gain for the domestic industry in the final Commerce determinations was the increase in antidumping margins applicable to imports from Korea, the source of the largest volume of OCTG imports into the U.S. market. On the other hand, antidumping margins declined for Indian producers to under 10 percent from preliminary margins of 55.37 percent. Moreover, producers in Taiwan and Turkey received final zero margins.

The OCTG cases have been viewed by many as highly politicized. For example, on June 17, the Commerce Assistant Secretary for Enforcement and Compliance met with Korean Deputy Minister for Economic Affairs of the Ministry of Foreign Affairs in Seoul, Korea. Although several topics were discussed, including overall United States-Korea bilateral trade relations, Commerce's antidumping investigation of OCTG imports from Korea was also on the agenda, with Minister Ahn urging Commerce to make an objective analysis notwithstanding the views expressed by many members of Congress. Likewise, Korea's Minister of Trade, Industry and Energy separately requested that Commerce make its final determination in a "fair and objective way." These comments from Korean officials were in reaction to a letter signed by over 150 members of Congress, including the Congressional Steel Caucus Chairman, Rep. Tim Murphy, and Vice-Chairman, Rep. Pete Visclosky, calling for action against unfair imports after Commerce's preliminary determination, which found no unfair pricing by the Korean producers.

Overall, the volume of OCTG imports did not decline following the preliminary Commerce determinations, led by shipments from Korea. But domestic OCTG prices did increase, leading to even greater price disparities between imported and domestic OCTG. Following Commerce's final determinations, there are strong indications that import prices are increasing and the gap in pricing is closing. U.S market prices reached their highest levels in a year and half in July. The benefits to the domestic industry are likely to be concentrated in the premium segment of the market until the high-inventories of commodity OCTG are absorbed. Whether the modest duties on imports from Korea significantly constrain the volume of imports from Korea remains to be seen. Because there is no internal market for OCTG in Korea and the United States is the primary export destination for Korean OCTG, in order to maintain production, the Korean producers likely will have to absorb some portion of the duties and slightly increased prices if orders are imposed.

The new cases are important to U.S. production. For example, U.S. Steel announced in early June that it would "indefinitely" idle its pipe plants in McKeesport, Pennsylvania and Bellville, Texas, due in part to unfairly traded tubular products. In addition, Alamo Tube Co. is planning to invest $62.5 million to build a 250,000-ton mill in Texas to produce welded OCTG. This mill is expected to employ more than 200 workers. The future of these facilities is likely to be affected by the outcome of the OCTG cases. The domestic industry had expected to obtain significant benefits from trade relief when it won unfair trade case against China several years ago. But the domestic industry has complained that unfair imports, particularly from Korea, have denied the domestic industry the benefits of the 2010 orders on imports from China. China was the largest import source of OCTG prior to those orders.

Canada recently initiated its own trade cases against OCTG imports from India, Indonesia, the Philippines, South Korea, Taiwan, Thailand, Turkey, Ukraine, and Vietnam based on petitions filed by Evraz, Inc. and Tenaris S.A. The Canadian preliminary injury determination is due September 19, and the preliminary antidumping and countervailing decisions are due October 20. To the extent that the Canadian cases are successful, they will further restrict the options for OCTG exporters because the Canadian cases involve many of the same countries whose imports are being investigated by the United States.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© King & Spalding | Attorney Advertising

Written by:

King & Spalding
Contact
more
less

King & Spalding on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
Feedback? Tell us what you think of the new jdsupra.com!