The United States Department of Commerce has released the preliminary results of its administrative review of the antidumping duty order on Oil Country Tubular Goods imports from Mexico. The review, which covers the period from May 11, 2022, to October 31, 2023, has found that Tubos de Acero de México, a key player in the Mexican steel industry, sold these goods at prices below the normal value in the US market. As a result, the Department of Commerce has proposed a preliminary weighted average dumping margin of 30.38% for TAMSA’s OCTG exports.
OCTGs are vital components used in the extraction of oil and natural gas, including pipes and tubes essential for drilling operations. They are subject to antidumping duties when foreign producers are found to sell them at unfairly low prices, undercutting domestic manufacturers. The US government implements these duties to ensure a level playing field for its own producers and prevent market distortion caused by unfair pricing. The preliminary decision against TAMSA indicates that the company’s exports of OCTG to the US were priced lower than the cost of production or below the normal market price in Mexico.
TAMSA is a well-established Mexican producer, known for its high-quality steel tubes and pipes. The company is a subsidiary of Tenaris, a global steel manufacturing giant headquartered in Luxembourg. Tenaris is part of the Techint Group, an Italian-Argentine multinational conglomerate that also operates in the flat and long steel production sector across Latin America. As a key part of Tenaris’s operations, TAMSA plays a significant role in supplying steel tubes for the oil and gas industry, particularly in North America.
The US Department of Commerce’s preliminary ruling focuses on the company’s pricing practices during the review period. It calculated that TAMSA’s exports of OCTG to the US were sold at unfairly low prices, thus triggering the antidumping duty. This finding reflects a longstanding concern within the US steel industry about the competitive impact of low-priced imports. The department’s decision is based on detailed analysis of TAMSA’s export pricing, production costs, and market conditions in Mexico and the US.
In a related development, the Department of Commerce also announced the rescindment of its review of OCTG imports from Argentina, specifically from Siderca, a subsidiary of Tenaris. Siderca had been included in the review process but was ultimately removed from the scope of the inquiry. This decision to exclude Siderca may have broader implications for trade relations between the US and Argentina, as well as the steel industry in Latin America. Tenaris, which owns both TAMSA and Siderca, has significant interests in both markets and could be impacted by these regulatory changes.
The decision to impose an antidumping duty on TAMSA’s OCTG exports follows a similar trend of protectionist measures aimed at curbing unfair trade practices in the steel industry. In recent years, the US has increasingly relied on such tariffs to protect its domestic steel producers from cheap foreign imports, especially from countries where production costs are lower or where government subsidies may distort pricing. These measures have sparked tensions in international trade relations, especially with countries like Mexico, which depend on steel exports to the US market.
While the 30.38% preliminary dumping margin is significant, it is not the final decision. The US Department of Commerce will continue to monitor the situation and gather further data before issuing a final ruling. In the coming months, the US government will likely hold consultations and hearings where all interested parties, including TAMSA and its competitors in the US, can present additional evidence. These proceedings will ultimately determine the final antidumping duty rate, which could be higher or lower than the preliminary figure depending on the outcomes of these discussions.
In the meantime, TAMSA and Tenaris are expected to assess the impact of the preliminary ruling on their business strategy in the US market. The potential for higher duties could affect the price competitiveness of their OCTG products in the US, leading to possible shifts in production or pricing strategies. The company may also consider appealing the decision or seeking adjustments in the final ruling to mitigate the impact on their market share in North America.
