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Commerce granted Tenaris the exemption for rounds from Romania, Mexico and Italy that the company uses to make products such as seamless oil country tubular goods (OCTG), according to documents from the department dated Friday March 1.
The department found that the rounds for which Tenaris had sought exemptions were not made in sufficient quality or quantity in the US and that providing an exemption for them would not jeopardize national security.
Tenaris said it sought the exclusion because it needed the rounds to make seamless pipe – a key product for extracting oil and natural gas from wells – at its mill in Bay City, Texas.
The company began production at the $1.8-billion mill in 2017. The plant had been under construction since 2013.
The Trump administration in March 2018 imposed Section 232 tariffs of 25% on foreign steel, including imports of semi-finished goods such as rounds. Executives with Luxembourg-based Tenaris in November predicted that the company would be granted an exemption.
Tenaris requested exemptions for 430,000 tonnes of rounds: 180,000 tonnes from Tenaris Silcotub in Romania; 145,000 tonnes from Tenaris Tamsa in Mexico; 85,000 tonnes from Tenaris Dalmine in Italy; and 20,000 tonnes from Tenaris Siderca in Argentina. The exemption request for Argentinian material was not approved.
The Tenaris exemption is significant because it is believed to be the first instance of a Section 232 waiver being granted for semi-finished steel products. In an email to Fastmarkets AMM on March 7, a Commerce official said he could not immediately confirm whether this was the first exemption for a semi-finished steel product.
Commerce has rejected exemption requests from Evraz and California Steel Industries (CSI) for slab, another category of semi-finished steel. Slab is used to make flat-rolled material such as hot-rolled coil. By contrast, round billet is pierced to make items such as seamless OCTG. Fastmarkets AMM’s price assessment for domestic seamless P110 casing, a type of OCTG, stands at $1,420-1,470 per ton.
The approval of Tenaris’ exemption request bolsters the case for companies such as JSW Steel (USA) that need imported semi-finished goods and are investing in the United States, a source familiar with the matter said.
JSW Steel (USA) has restarted an idled sheet mill in Ohio and plans to add an electric-arc furnace to its plate and pipe mill in Texas.