At the end of December, the U.S. International Trade Commission (ITC) concluded that Chinese line pipe coming into the U.S. is being sold at less than fair market value, and that U.S. pipe manufacturers are, or will be, materially injured as a result. The Commerce Department will now set the tariff rate for the line pipe, which typically has diameters of less than 16 inches.
Demand for line pipe has increased dramatically over the past few years, from 872,606 short tons in 2005 to 1,403,335 short tons in 2006, before declining slightly to 1,375,726 short tons in 2007, for an overall increase of 57.7 percent during the period. Almost all of that increase was from the natural gas industry, as opposed to oil companies. The line pipe is typically used in natural gas gathering, and by distribution companies; but the ITC said their survey turned up considerable use of 14 and 16 inch diameter pipe by transmission companies as well.
Depending on the product category (e.g. grades such as B, X 42 or X 52), the Chinese pipe cost anywhere from 15.7 percent to 43.5 percent less than the U.S. made pipe, which is why American companies such as Maverick Tube Corp., Tex Tube Co. and U.S. Steel Corp. complained to the ITC and asked for an investigation. Look for considerable price increases on circular welded carbon quality steel line pipe from China in the very near future.