We track metal category anti dumping cases closely because of the ramifications to industrial manufacturers here in the US and the supply markets for those products. Let’s face it, when domestic industries win anti dumping cases, prices tend to increase for those whom rely on those products. That’s not necessarily a bad thing of course. In fact, we have seen a couple of cases where industries have come back to the US. Let’s talk about a few of those cases, as we’ll leave our opinions about other cases off the table for now.
This recent story about a wire hanger company that has re-started operations in the States after the domestic industry shriveled up to one supplier demonstrates how leveling the playing field, if you will, encourages domestic production. Let’s hope the new wire hanger supply market will encourage others to open up shop to generate domestic competition and keep prices in check. This story also highlights another benefit – it helps reduce the trade deficit.
We have written several pieces on the oil and gas industry. In particular, we have covered a recent line pipe anti dumping ruling and an OCTG case where we took a stand in support of the overseas suppliers. The domestic line pipe industry has consolidated which can create sourcing problems for buyers, particularly if little competition exists. However, this article from the Wall Street Journal last week bodes well for energy company buyers as Indian firm Welspun-Gujarat Stahl Rohren Ltd opened a plant in Little Rock Arkansas to serve the industry. The Journal cites DOE estimates of 25,000 miles of new oil and gas pipe required in the US market over the next four years. Several thousand miles of natural gas pipe will also get developed this year. That plant will hire local workers and pay local taxes. It will also obviously positively impact the trade deficit.
And yet the controversy rages on. We can look at the result of the wire hanger case and feel good that US manufacturing has moved back. More than one domestic company has opened its doors. If the industry grows to three or more producers, competition may help consumers and we will all benefit. But anti dumping cases also have a dark side. Many don’t like the idea of foreign firms taking majority control of steel firms in the US. And yet one of the most controversial posts ever published on MetalMiner generated 17 comments about just the opposite ” US firms idling Canadian plants to favor domestic workers over Canadian workers during tough economic times.
How do you think we can best balance sufficient supply market competition, openness (remember when we close our borders, our exports also suffer) and the trade deficit?