The Herald, Sharon, Pa.

Business

November 6, 2009

Pipe makers score another win over Chinese in trade case

By Michael Roknick

SHENANGO VALLEY —



Wheatland Tube Co., six other tube producers and United Steelworkers won another round in what is being billed as the largest U.S. trade case against China imports valued at $2.6 billion.

In a preliminary decision on Thursday the U.S. Department of Commerce called for proposed anti-dumping tariffs on China pipe imports known as oil country tubular goods. Such welded and seamless pipes are used to extract oil or gas from drilled wells. The decision became public on Friday.

Locally, such pipes are produced at Wheatland Tube’s Warren, Ohio, plant and are finished at the company’s Sharon mill where only a handful of employees are working due to Chinese imports that the company said were dumped on the market at a price below what they cost to produce.

Proposed tariffs on the China-wide goods is 99.14 percent. However one of China’s largest producers, Jiangsu Changbao Steel Tube Co., got off with no tariffs. That drew angry responses from the USW and American producers.

“We question why Changbao was singled out as if they were the only one among 75 other pipe exporters who were considered not in violation,’’ said Leo Gerard, USW International president. “We plan to challenge this finding as the case proceeds in our government’s investigation.”

Gerard complained that nearly half of the domestic industry’s 6,000 workers are now laid off.

“China’s dumped and subsidized OCTG (oil country tubular goods) pipe imports are a threat to working families and the future of a critical product used in our nation’s energy extraction industry.”

American producers are alleging Chinese companies are benefiting from massive government subsidies which are prohibited under international trade laws. Further, it alleges Chinese products are being dumped on American shores on margins ranging from 40 to 90 percent below their cost.

Dumped and subsidized oil country imports from China tripled from 750,000 tons in 2006 to 2.2 million tons in 2008.

“The battle isn’t over yet,’’ said Bill Kerins, Wheatland Tube’s president. “We still have to wait for the final ruling.’’

In September the Commerce Department found producers in China benefited from massive government subsidies and announced duties ranging from 11 to 31 percent. A final Commerce Department ruling is expected in March with the U.S. International Trade Commission to render its final decision in May.

In addition to Wheatland Tube, the six other American petitioners in the case are: U.S. Steel Corp., Pittsburgh; Maverick Tube Corp., Hickman, Ark.; Evraz Rocky Mountain Steel, Pueblo, Colo.; TMK IPSCO, Downers Grove, Ill.; and V&M; Star LLP and V&M; TCA, both Houston.

Last year the ITC ruled Chinese producers were illegally dumping and getting unfair government subsidies on standard pipe because of a petition filed by Wheatland Tube and other American producers. The ITC imposed hefty tariffs on Chinese imports ranging as high as 264 percent.

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