South Korea: Need to raise steel pipe exports to the USA amid soaring oil prices

South Korea's steel pipe export quotas to the USA was exhausted in CY'21 and there is an urgent need to expand export quotas for steel pipes. Measures are required to expand supply to the energy industry owing to high oil prices.

Pipe exports

Steel pipe exports to the USA consumed a major chuck the quota last year at 97,524 tonnes (t).

Thus, it is expected that exports will start to expand from the beginning of CY'22.

South Korea's steel pipe exports to the USA totalled 975,000 t last year, a 58.7% increase compared to the previous year, accounting for 59.3% of total steel pipe exports, according to imports and exports data compiled by the Korea Steel Association.

First of all, as the annual export quota of steel pipes to the USA is limited to 1 million tonnes (mn t) some volumes were transferred to the first quarter of this year, raising the possibility that steel pipe exports will expand from the beginning of CY'22.

However, active negotiations should be carried out in order to expand steel pipe exports in Korea, as it cannot exceed 300,000 t per quarter, and trade sanctions between Europe and the USA have been lifted while negotiations with Japan are still underway.

Surging oil prices

Oil prices are continuing to rise and the new and renewable energy industry in the USA is expanding. Therefore, it is estimated that it has secured considerable marketability for the time being with respect to pipe demand.

However, a flexible export strategy is expected to be prepared as dependence on the USA is too high. Also, if export quotas or trade restrictions are removed, excessive export expansion can lead to complaints from local companies.

In addition, the expansion of exports by European and Japanese companies to the USA may increase supply opportunities for the local market. The expansion of steel pipe exports to the USA is not the only way to expand stagnant pipe demand.

This insight has been published as part of an article exchange agreement between SteelMint and SteelDaily.