Local steel pipe makers suffer from custom duty regulations

ISTANBUL - Anadolu Agency

After beng hit by an anti-dumpring probe in the United States, Turkish steel pipe makers are facing customs-related challenges at home. AFP photo

Turkish steel pipe manufacturers which have competitive power in the markets are being hit by the customs policies, a prominent sector representative said.

“The duty exemption of steel pipes imported to be used in local markets is threatening our sector’s production,” the General Secretary of Association of Steel Piper Manufacturers (ÇEBİD), Mehmet Zeren, said in a written statement.

The first half of the year witnessed a huge hike in Turkey’s steel pipe imports.

The steel pipe imports soared 52 percent compared to last year’s same period, reaching 167 million, according to ÇEBİD figures.

After the remarkable rise, the share of imported steel reached 5 percent in the country’s overall steel pipe consumption.

In addition to the exemption of imported steel pipes from duties, steep duties imposed on flat steels that are going to be used for local steel pipe production places an enormous burden on local manufacturers’ shoulders, according to Zeren.

“Turkish steel pipe producers procure their crude materials [flat steel] at a higher price than any other world market. Therefore, the sector’s competitive power weakens both in domestic and foreign markets,” he said, calling on authorities to make necessary amendments in the regulations to re-fuel the strength of the sector.

Probe in US

Local producers still managed to increase both their production and exports in the first six-month period, despite all the negative factors affecting their business.

The sector’s output level rose to 2.14 million tons with a 3 percent rise from last year’s same period thanks to a better outlook in local automotive and construction sectors as well as continuing infrastructure investments, the ÇEBİD statement read.

Although Turkish manufacturers’ exports realized at 881,000 tons after a 3.3 percent rise during the same period, the fall in flat steel prices caused the exports’ value to drop 1.7 percent to $762 million.

Thanks to persisting steel pipe demand in Iraq, infrastructure investments in North Africa and drilling pipe necessity boosted by the shale gas exploration activities in the United States backed the strong export performance.

However, the Turkish steel pipe makers have received a recent blow to their exports to the United States, where they have been accused of selling at unfairly low prices.

The U.S. Commerce Department on July 23 launched one of its biggest trade investigations in years into charges that manufacturers in Turkey, South Korea, India and six other countries were selling steel pipes used by oil and natural gas producers.

For two countries, Turkey and India, U.S. producers are seeking additional countervailing duties to offset alleged government subsidies.