Steel workers, management and top elected officials rallied in Pittsburgh last week to stop what they say is foreign dumping of seamless tubes, or oil country tubular goods (OCTG), used in the gas and oil industry. A U.S. Steel spokesman said the practice is similar to one used by China in 2008.
“We actually won that fight [with China], but by the time it was over we already lost the jobs at home,” said Chris Masciantonio, general manager for government affairs at U.S. Steel and co-chair of the Pennsylvania Steel Alliance. “If we lose this one, it could become the model for cheating in the future.”
In July 2013, U.S. Steel and other American steel producers petitioned the Commerce Department to investigate dumping by nine countries. In February, the department imposed high duties on India, and small levies on other nations, which are mostly smaller producers.
But the industry said the biggest offender, South Korea, skirted any penalties, with the department saying that it lacked the evidence to take action. The investigation continues and a decision is expected in early July.
The Alliance for American Manufacturing said that overall imports from the nine countries in question more than doubled from 850,000 tons in 2010 to 1.8 million tons in 2012, a 113 percent increase, with South Korea accounting for half that amount. In that time period, domestic industry operating margins dropped from 13.6 percent to 9.8 percent, with foreign imports often sold at hundreds of dollars per ton less than domestic OCTG products.
A spokesman for the United Steelworkers said that one positive to take from the latest trade fight is that it has put the workers and management on common ground.
“Dumping weakens our position in contract negotiations because it weakens the industry,” said United Steelworkers spokesman Tony Montana. “We are fully behind management on this.”
The market for OCTG has expanded rapidly with the onset of drilling in the Marcellus Shale and other newly accessible gas and oil plays.