Manufacturing
8:25 am
Thu June 5, 2014

In Effort To Benefit From Shale Boom, U.S. Steel Producers Struggle With Foreign Competition

Steel tubes are shuttled around a Timken facility in eastern Ohio
Credit Brian Bull / WCPN

Shale drilling across much of the United States has increased demand for steel pipe, which has benefited U.S. steel producers, but that picture is starting to change as foreign steel makers increasingly enjoy the payoff.

An analysis by the Economic Policy Institute shows U.S. steel imports spiked 26 percent in the first three months of 2014. South Korea, China and India are flooding the U.S. market with steel tubes used in oil and gas production and selling them at below-market rates, a practice called “dumping.”

United States Steel Corporation blames this trend for its idling of two mills in Texas and Pennsylvania this summer, and for a slow-down at its Ohio plant.

“In the last three years, we’ve made upwards of $200 millionof investment to create a competitive advantage for Lorain,” says U.S. Steel spokeswoman Courtney Boone. “Unfortunately, because of the large quantity of unfairly traded tubular products and imports, the company’s not realizing the benefit.”

The pro-union Economic Policy Institute estimates 34,000 steel jobs in Ohio are at risk if “dumping” continues. Politicians and steel industry leaders alike are calling for greater enforcement of trade laws, but non-union steel companies also are calling for a more level playing field.

“You’re gonna have to put tariffs on the final products, and get them to understand that they can’t dump it here without penalty,” says Dan DiMicco, Chairman Emeritus at Nucor Corporation.

Meanwhile, U.S. Steel has filed suit against South Korea for alleged dumping.

Brian Bull is a reporter for Ohio Public Radio member station WCPN/ideastream.