Yesterday, it was announced that the US and South Korea agreed to revise the US-Korea Free Trade Agreement (KORUS). As part of the changes, South Korea will decrease its steel exports to the US by 30 percent of the past three years’ average, in exchange for an indefinite exemption on the Section 232 steel tariffs.
Although the news is certainly positive, it does not exempt South Korean steelmakers from applicable duties from the antidumping/countervailing duty case. One trader source pointed out that, even including previous duties, Korean pipe pricing could once again competitive compared to other offshore sources.
“It’s possible, but it won’t necessarily pan out that way,” another source said. “The AD/CVD orders are still in place, and the last annual review kicked up those penalties substantially, with Nexteel dragging down the whole country as their rate hits 46 percent. Seah at 7 percent means all others are still in the mid-20’s. In the short term, yes, it makes Korea more attractive than say Taiwan, but the annual review is still there, and any new business will be subject to those penalties. And once pricing returns to market-based, rather than emotion-based, I’m not sure how competitive they can be long-term.”
A third source said he’ll have a better gauge of the market once he gets new pricing from Korean producers. “We’re still waiting on revised pricing, because everything out of Korea still has the 25 percent tariff built into it, which makes things really high,” he said. “Once I get the revised pricing, I wouldn’t be surprised to see an increased interest in Korean OCTG.”
Current import J55 ERW OCTG casing pricing from Taiwan in the US domestic market, which was trending at $40.00-$41.00 cwt. ($882-$904/mt or $800-$820/nt), DDP loaded truck in US Gulf coast ports prior to the Section 232 tariff announcement, is now being heard at $50.00-$51.25 ($1102-$1130/mt or $1000-$1025), DDP loaded truck in US Gulf coast ports.