By Silvia Antonioli and Allison Martell
REUTERS - A group of U.S. companies that produce specialty steel pipe used to drill for oil and gas have launched a major trade case, 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, Philippines, Saudi Arabia, South Korea, Taiwan, Thailand, Turkey, Ukraine and Vietnam. (http://link.reuters.com/xud49t)
Shares of U.S. Steel jumped late on Tuesday but gave back some gains on Wednesday, dropping 4.6 percent to $18.37 on the New York Stock Exchange. Shares of pipe specialists Vallourec
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."
But in the short term, he said, some countries may dial back aggressive pricing.
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.
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 Maverick Tube Corporation
(Additional reporting by Bhaswati Mukhopadhyay and Robin Paxton in Bangalore; Editing by Louise Ireland,Jane Baird; and Marguerita Choy)
