* Petitioners include U.S. Steel and Vallourec
* Traders says complaint will have impact on market
* Importers say group filing is excessive
By Silvia Antonioli and Allison Martell
July 3 (Reuters) - A group of U.S. companies that produce
specialty steel pipe used to drill for oil and gas has launched
one of the biggest steel trade cases in years, asking the U.S.
International Trade Commission to stem what they say is a flood
of unfairly traded products from nine countries.
If they succeed, the price of some high-margin steel
products sold to the energy industry could rise, benefiting
domestic producers like United States Steel Corp.
The petition, filed on Tuesday on behalf of U.S. Steel and
other companies, asked the commission to investigate imports of
some "oil country tubular goods" from India, the Philippines,
Saudi Arabia, South Korea, Taiwan, Thailand, Turkey, Ukraine and
Shares of U.S. Steel jumped late on Tuesday but gave back
some gains on Wednesday, dropping 5.6 percent to $18.18 on the
New York Stock Exchange. Shares of pipe specialists Vallourec
and Tenaris rose.
Nomura Securities analyst Curt Woodworth said the filing was
a "modest positive" for U.S. producers, but noted that domestic
capacity is set to rise in 2014 and 2015 in any case.
"These trade cases can be time consuming," he said. "With
the anti-dumping cases, you need to prove financial injury. That
will be difficult to prove, given that most of the companies are
still very profitable."
In the short term, he said, some countries may dial back
S&P, as it cut its profit estimates for U.S. Steel on
Wednesday, saw the ITC complaint as a potential positive, but
one that would take months to resolve.
U.S. steel manufacturing has been hit by weaker demand in
the past year, but steel pipe sales to the oil sector have been
a bright spot for the industry, and that has increased imports.
Many involved in the industry had been expecting an anti-dumping
case for months.
The dramatic growth in U.S. oilfield activity was driven by
drilling in shale rock, made possible in part by "horizontal"
drilling techniques. In a sign of how quickly demand for pipe
has grown, the number of horizontal drilling rigs tracked by
Baker Hughes has risen 83 percent since the start of 2010.
Meanwhile, imports of oil country tubular goods from the
nine countries cited in the petition have doubled in the past
few years to almost 1.8 million tonnes and accounted for about
63 percent of the U.S. market last year, according to steel
industry body American Iron and Steel Institute.
"This will benefit domestic producers of tubes and pipes and
domestic producers of steel hot rolled coil, which is used to
make them. We should see an increase in demand and prices in the
next few weeks already," a U.S.-based steel trader said.
FILING "EXCESSIVE", SAY IMPORTERS
The American Institute for International Steel, a group
representing steel importers and exporters, called the filing
"excessive and unwarranted" and warned that it could disrupt oil
and gas drilling.
The organization's president, David Phelps, said that while
the low end of the market is over supplied, that is not the case
for high-end seamless pipe sold by U.S. Steel and others: "We
think this is an overreach," he said.
The petitioners also included Tenaris subsidiary Maverick
Tube Corporation, Boomerang Tube, Energex Tube, a division of
JMC Steel Group, Northwest Pipe Company,
Tejas Tubular Products, TMK IPSCO, Vallourec Star, and L.P.
Most petitions are accepted by the Commerce Department, but
for import duties to actually be imposed, the U.S. International
Trade Commission must separately find that U.S. producers have
been materially injured or are threatened with injury by the
imports. As part of this quasi-judicial process, which takes
several months, importers can testify that duties are not
In 2010, the Commerce Department slapped on anti-dumping
duties ranging from about 30 to 99 percent on oil country
tubular goods from China.