Zekelman to close California steel pipe plant

Zekelman Industries will close a steel pipe plant in Long Beach, California, the company said Oct. 5, citing rising U.S. pipe imports from Mexico as a contributing factor to the closure.

“According to the US Census Bureau, the expected volume of steel pipe imports from Mexico will increase from 11,960 tons in 2017 to 69,641 tons in 2022, a 480% increase,” Zekelman said in a statement.

Zekelman said imports of steel pipes from Mexico have skyrocketed despite an agreement stemming from the U.S.-Mexico-Canada Agreement that Mexico would be exempt from the 25 percent U.S. tariff on steel imposed under Section 232 until as long as imports of steel products from Mexico as a whole remain at historical levels.

“It was clearly understood that if the volumes imported into the US from Mexico significantly exceed (increase) historical norms, the US would have the right to reintroduce the 25 percent tariff or take any other measures to reduce the surge,” the Chicago-based company said. said.

To cope with the initial surge in steel pipe imports, US and Mexican trade representatives implemented a temporary permit control system from August 2020 to May 2021 to reduce shipments from Mexico.

“The desired outcome was self-regulation after May 2021,” Zekelman said. “This obviously hasn’t happened as Mexico’s pipeline imports continue to rise steadily and are up six times their pre-USMCA levels.”

Zekelman said Mexican steel pipe makers also misclassified products under alternative trade codes.

The Long Beach plant operates under the brand names Zekelman's Western Tube and Wheatland Tube. Plant customers will now be served by the company's plant in Rochelle, Illinois, and additional distribution centers on the west coast.

Zekelman manufactures steel tubes and pipes, structural hollow sections and other steel products through several operating divisions. According to the company, it is the largest independent manufacturer of structural hollow sections and steel pipes, and the leading manufacturer of electrical conduit and elbows, couplings and nipples in North America.