Since 2009, US companies have shown increased support for fellow US manufacturers. The reasons for this are many, including patriotism, supporting the US economy (which should in turn grow their own business), shorter and more predictable supply chain, and known quality. We see this trend from E&P companies particularly on OCTG casing with many jobs specifying domestic casing.
However, the unfortunate market reality is that simply purchasing casing stenciled “Made in the USA” does not ensure that the casing was actually produced domestically.
US OCTG producers have been fighting a difficult battle against unfairly traded foreign produced products. In July of 2013, US OCTG producers filed a petition against nine countries for illegally dumping OCTG products into the US market. This petition has stirred discussion among distributors and producers regarding the impact of this trade case. We should have the answer by year’s end.
The pending trade case aside, I wonder if the E&P companies realize what can currently be found in the market stenciled “Made in the USA”?
Some companies are interpreting a US Customs ruling regarding country of origin of OCTG to mean that if pipe is heat treated, threaded and coupled in the USA then it can be stenciled “Made in the USA;” regardless of where the pipe itself originated. While the Custom’s ruling confers a change in country of origin upon heat treating, the Federal Trade Commission, which establishes the rules regarding consumer notification, makes it clear that a product that has more than 50% foreign content cannot be marked “Made in the USA” without identifying that it is produced from parts (tube) from a foreign country. Many companies are not following requirements set by the Federal Trade Commission and do not identify the foreign source of the green casing. The result is that if you simply rely on a “Made in the USA” stencil you may in fact be purchasing casing where the green casing came from Turkey or the Ukraine, as an example, that was heat treated and threaded in the US and stenciled “Made in the USA.”
Does this product satisfy the intent of specifying domestic only casing?
To make matters worse, it is my understanding that some companies are bringing in imports under a mechanical tube specification, then heat treating it and calling it OCTG, and stenciling it “Made in the USA.” The only plausible explanation for this is that the product is from a country subject to US duties, specifically China. This circumvention of the existing duties is illegal. Do you think a company that specifies domestic casing would be happy with a product that consists of illegally imported green casing that was processed in the US and stenciled “Made in the USA”?
Energex Tube and many other US OCTG producers make our green casing in the United States, process the product in the United States with United States workers and deliver it to companies drilling in the United States to help make America energy independent with domestic OCTG casing.