The issue of Chinese oil and gas pipes (OCTG) import restrictions in the USA has been finished. The US Department for trade set the final antidumping duties for these products on April 9. Now this decision can be amended by the Commission on International trade only, which will make its decision on May 10.
The US Department for trade reports that the minimal antidumping duty (29.94%) was used to 38 Chinese companies. For other companies, including Jiangsu Changbao Steel Tube, the duty will amount 99.14 %. Besides, Chinese pipes are subject to 10.36 - 15.78% compensational duties. According to Roger Shagrin, the lawyer, representing 5 from 7 pipes manufacturers which complained for Chinese dumping, and United Steelworkers union the total tariff amounts at least 43%; this can cause the exile of Chinese pipes from the US oil and gas market.
The US pipes manufacturers are happy. Actually, in 2008 Chinese oil and gas pipes import to the USA amounted more than 1 mio tons for about $2.7 bn. Last year the supplies volume decreased two-fold due to the crisis and the cost reduced to $1.1 bn. In Jan.-Feb. 2010 Chinese companies exported to the USA totally 30.8 thousand tons of seamless pipes, which was down more than 80 % below Jan.-Feb. 2009.
The US oil and gas pipes market is increasing. In March the number of functioning oil wells was peak in recent 18 years. Last year the USA became the world largest manufacturer of natural gas and outrun Russia. It happened due to the development of the deposits of so-called shale gas, which is located in rock wholes and splits. To extract this gas thousands of wells are needed, that is why the demand for pipes boosted.
During the Q1 2010 the US companies increased the prices for pipes for many times. The prices of welded oil and gas pipes BPE A53 in Apr. reached more than $1300 Mt EXW. Korean companies offered pipes at $1180-1200 per ton CFR (excl. China Korea is the second-biggest pipes supplier to the USA after Canada).
At the same time Chinese pipe sector suffers the crisis. Seamless oil and gas pipes manufacturers are in the worst situation. Their products are exiled form the US and European markets; antidumping duties were introduced in Canada and the investigation is on in Mexico. About a half of Chinese pipes manufacturers have to reduce the output volumes. According to Chinese sources Chinese market can consume not more than 60-70 % of the total capacities of local mills.
In Apr. Chinese exporters of seamless pipes somewhat increased the prices under the influence of strip price growth. However, the price of ASTM A106B pipes of average diameter is $840-870 per ton FOB only, which is down $180-220 per ton below the prices of similar products of Russian and Ukrainian companies. At that Chinese specialists forecast the seamless pipes excessive supply and domestic and export prices fall in the second half-year. The decision of the US Department for trade on Chinese seamless pipes was made just before the visit of Hu Jintao to the USA. It is known that earlier the head of China tried to protect Chinese pipes manufacturers before the President Obama, but did not success. China accepted the antidumping duties as an insult and in three days the Ministry for trade of China set compensational duties on the US electric steel, which is the only product supplied from the USA to China more or less regularly.
For AK Steel and Allegheny Ludlum the antidumping duties were 7.8 % and 19.9%, and the compensational duties were 11.7 % и 12.0% correspondingly. For other companies the antidumping duty amounts 64.8% and the compensational duty amounts 4.6%. Russian manufacturers of electric steel suffered less losses. Compensational duty was not set for Russian products at all. The antidumping duty amounts 6.3% for the Novolipetsk Steel and its department VIZ-Steel and 25 % for others.
By all appearances these measures will not affect much Russian electric steel export to China, since China still do not fully provide itself with this kind of steel (till 2011). Russian companies are likely even to increase their share in Chinese market at the expense of the US suppliers. However Russian oil and gas pipes manufacturers, on the contrary, will face tough competition with the Chinese.