Any claim that US domestic line pipe producers cannot meet the demand of pipeline operators under a proposed buy America requirement is simply not credible, according to the American Line Pipe Producers Association.
In comments submitted to the Department of Commerce last week, the group, which represents a significant portion of US line pipe capacity, said the industry has "more than sufficient capacity to meet domestic demand and can supply a full range of line pipe products," adding that domestic supply of large diameter line pipe has consistently exceeded US demand and consumption since 2009.
Existing US capacity for large diameter pipe is 4.6 million st, according to the group. Even in the peak demand year of 2015 when US consumption reached 3 million st, the utilization rate of the domestic pipe mills way only 37% due to imports taking a large share of the market, the group said.
"Requiring the use of domestic line pipe will allow domestic producers to utilize existing unused capacity instead of continuing to lose market share to imports of large-diameter line pipe, which is often sold at dumped and subsidized prices," ALPPA said.
Commerce, which has been collecting information on the construction and maintenance of American pipelines, is looking into the feasibility of a memorandum signed by President Donald Trump in January requiring all new domestic pipeline construction and repair projects to use US-produced steel. The Secretary of Commerce, in consultation with relevant agencies, is required to deliver a plan to the President by July 23, 2017.
To the extent that there are any niche products that the domestic industry does not currently produce, "the very purpose of Buy America is to provide incentives for companies to innovate, and develop new products and improve manufacturing processes," the group said.
"ALPPA members are prepared to work with our customers and domestic steel suppliers to reach a mutual solution when niche product issues arise," adding that if necessary, Buy American requirements allow for waivers to be used in appropriate circumstances to overcome market limitations such as product unavailability.
