Fresh markets sought amid dumping issues

Additional tariffs are compelling China suppliers of pipes and pipe fittings to seek new marketing strategies to stay afloat. This is a result of the US and the EU having tacked anti-dumping duties on China-made imports of steel pipes for use in the oil and gas industries.

Already, formal protests have been lodged in several international trade bodies but the majority of enterprises plan to sustain production while waiting for the restrictions to be lifted.

The measures are expected to constrain shipments further and reduce China’s steel pipe delivery to the EU and the US by more than 40 percent in the months ahead. In 3Q09, steel pipe exports to both destinations fell 85 and 79 percent, respectively, year on year.

The US, meanwhile, is continuing investigations on unfair trade practices, particularly on producers of seamless copper pipes with more than 152.4mm length and less than 308.102mm diameter. More countries are expected to follow the US and the EU’s lead. Argentina, for instance, intends to pursue similar proceedings for carbon steel alloy pipes with a diameter of less than 273.1mm.

So far, tariffs imposed against China seamless metal pipe manufacturers have forced about 70 percent of their rank to stall or limit production. On the other hand, a few enterprises still see the US and the EU as profitable outlets, and are prepared to strengthen their foothold in the markets and pay the extra levies.

To minimize revenue losses, most makers are planning to reroute shipments to the domestic market and to their customary big buyers in Algeria, India and Singapore. Other possible overseas destinations are South America and Africa.

With burgeoning demand from the homefront, steel industry associations in China are likewise lobbying for 13 to 17 percent tax rebates on certain metal products. The government is still considering this appeal.

Steel pipes, which account for 50 percent of the country’s total output, remain in great demand for a range of applications such as those for gas conduits and boiler tubes. From January to September 2009, production reached 15.4 million tons of seamless designs worth $3.3 billion. During this period, crude steel output grew 8 percent year on year to reach 420 million tons.