Wiley Rein: U.S. Line Pipe Producers Call on Administration to Address Loss of Sales and Hundreds of Jobs to Russian-Owned Company

WASHINGTON, June 12, 2017 /PRNewswire/ -- Russian-owned EVRAZ North America has taken a massive line pipe sale away from the U.S. industry and is aggressively seeking to capture other large sales, even as the Administration prepares to issue Section 232 recommendations on whether steel and steel product imports are a threat to national security.

Cheniere Energy informed U.S. producers that it has awarded its "Midship Pipeline" sale to EVRAZ, a Russian-owned company with pipe production in Canada. The job will require 221 miles, or 105,000 net tons, of 36-inch and 30-inch diameter line pipe. The total line pipe order is expected to be over $100 million dollars.

If the sale had stayed in the United States, domestic pipe mills would have added hundreds of manufacturing jobs. Moreover, domestic mills would have purchased all of their steel in the United States—more than 115,000 tons of hot-rolled coil and plate—resulting in a double loss for the U.S. steel industry.

"This is a serious loss, which directly affects hundreds of American manufacturing jobs," said Tim Brightbill, trade counsel to the American Line Pipe Producers Association. "We urge the Administration to address the loss of this and other major line pipe sales to Russian-owned EVRAZ in Canada."

EVRAZ, the only producer of large diameter line pipe in Canada, is aggressively bidding these U.S. pipeline projects even as the Commerce Department prepares to complete its Section 232 report on imports of steel and steel products. Cheniere had previously said it would purchase the line pipe domestically. However, EVRAZ has reportedly assured Cheniere and other customers that it will not face tariffs or quotas under Section 232, because Canadian producers will be excluded from any remedy.

Due to this lost sale, U.S. line pipe producers are being forced to investigate potential antidumping and countervailing duty cases against large diameter line pipe imports from Canada. Records indicate that large diameter pipe imported into the United States by EVRAZ in the first quarter of 2017 arrived at prices below domestic steel costs.

The Trump Administration has stated that the Section 232 report will be issued soon, likely within a matter of days. On Friday evening, President Trump tweeted: "Time to start building in our country, with American workers & with American iron, aluminum & steel. It is time to put #AmericaFirst."

Contact: Tim Brightbill
202.719.3138 | [email protected]

SOURCE Wiley Rein LLP