Chinese Steel Drill-Pipe Exporters to Face U.S. Dumping Duties

Chinese makers of steel pipe used to drill for oil will face dumping and subsidy duties averaging 86 percent, after the U.S. International Trade Commission ruled that domestic competitors may be hurt by the low-cost imports.

The independent panel yesterday voted 3-to-3, a tie that affirmed the complaint by U.S. companies and makes the action final. Duties will take effect this month.

“We invented these products a hundred years ago,” said Roger Schagrin, a lawyer for U.S. producers who filed the case more than a year ago. Without duties “we would be dependent on imports from China for this critical industry.”

Companies such as closely held VAM Drilling USA Inc. in Houston and a U.S. subsidiary of Moscow-based OAO TMK sought the duties on imports of the pipe, valued at $109 million for 2009. After the complaint, imports from China fell by more than two- thirds to $24 million in the first half of 2010, according to U.S. Commerce Department data.

U.S. Steel Corp., the nation’s largest producer of the metal by volume, and the United Steelworkers union supported the complaint.

Oil-service companies that use the pipe sought to fend off the duties, arguing that U.S. makers are enjoying steady profits and the tariffs will raise their costs.

“There was no case for injury or threat,” said Lewis Leibowitz, a lawyer at Hogan Lovells LLP in Washington who representing U.S. drilling companies.

Wang Baodong, a spokesman for the Chinese Embassy in Washington, didn’t return a telephone message seeking comment.

Three Cases

The U.S. has completed three cases targeting China pipes used by the oil and natural-gas industry. The complaints said Chinese makers are dumping their products at a discount in the U.S. and benefiting from unfair government subsidies.

Under a Commerce Department ruling last month, DP Master Manufacturing Co. received a dumping rate of 69.32 percent, while Baoshan Iron & Steel Co. Ltd. had no dumping duty applied. That rate was applied to three other companies, while all other Chinese producers must pay 429.95 percent. The so-called countervailing duty rate for all companies was set at 18.18 percent.

To contact the reporter on this story: Mark Drajem in Washington at mdrajem@bloomberg.net.

To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.net.

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