The US Commerce Department said on Tuesday it will issue duties on welded pipes with diameters greater than 16 inches (41 centimetres). The penalty will range from 3.5% to 132.6% on pipes from Canada, China, Greece, India, South Korea and Turkey, the department said in an e-mailed statement.
The decision comes as pipeline companies are already trying to navigate a separate 25% tariff on foreign steel. Plains All American Pipeline LP has said the tariffs will lift costs for its Cactus II crude pipeline by $40mn. And Kinder Morgan Inc could be forced to pay as much as twice as that for its Gulf Coast Express gas conduit if Trump moves forwards with a plan to hike tariffs on Turkish steel to 50%.
Though preliminary, Tuesday’s measure will impact most oil and gas pipelines in the US that depend on material from those countries, according to Tudor Pickering Holt & Co analyst Colton Bean. Only smaller gathering lines, which are typically 14 inches in diameter or smaller, will likely be spared.
In a statement immediately following the announcement, the Interstate Natural Gas Association of America urged the independent agency undertaking the investigation to “consider that domestic capacity differs for different types of line pipe.” The trade group cited an industry-funded study from last year that found that there is limited US availability of the type of pipe used in cross-state gas projects.
For the US steel industry, the anti-dumping duties will provide a boost but won’t change the game, Philip Gibbs, a steel analyst at Keybanc Capital Markets in Cleveland, said in a telephone interview. “It will be nice for the guys in that market, but is it going to be a huge victory for them?” he said. “It’s not that big of a product.”
The Commerce Department is scheduled to announce final determinations on or around November 6 for the China and India probe and on or around January 3 for the Canada, Greece, Korea and Turkey investigations.
