Export quota almost depleted
South Korea's line pipe exports to the United States are likely to be virtually halted from next month as the export quota set by the U.S. Commerce Department will be retroactively applied from January 1 this year, not from May 1.
On a customs clearance basis, South Korean steel pipe suppliers exported approximately 200,000 tons of line pipes to the United States for the first four months of this year. This amount is about 70% of the quota. The ratio is estimated to reach 90% this month, given that South Korean steel pipe suppliers’ average monthly exports to the U.S. market are about 50,000 tons.
South Korean line pipe exports to the United States amounted to US$418 million in 2017 alone. For South Korean line pipe exporters, the U.S. market is important as it accounts for no less than 85% of their total exports.
Yet the US export quota is about to be depleted even before the end of the first half of this year because of the retroactive application.
Since the beginning of this year, South Korean line pipe manufacturers have increased their exports to the U.S. market based on a prediction that the Department of Commerce would calculate the export volume from May 1 in accordance with Section 232 of the Trade Expansion Act of 1962.