Flange Economics (Part 4): The Effects of the Flange Anti-Dumping Determination

Unlike the pricing impact discussed in Parts 1-3 of this blog, the anti-dumping determination is new on the scene for carbon steel flanges, and it should not be taken lightly.  As we will discover, in many ways, it will likely have the greatest pricing impact of all.

First, let’s discuss what the anti-dumping determination for import carbon steel flanges really is.  On June 30, 2016, Weldbend and Boltex filed antidumping petitions with the U.S. Department of Commerce and the U.S. International Trade Commission, seeking the enforcement and compliance of Indian, Italian and Spanish manufacturers with U.S. and international trade laws.   Nearly one year later, on June 23, 2017, the Department of Commerce announced its final determination of the investigation, and the results are seen in Figure 6 below.


Manufacturer (India)

Weighted-average dumping margins (percent)

Cash Deposit Adjusted For Subsidy Offset (Percent)

R.N. Gupta & Co., Ltd.



All others




Manufacturer (Spain)

Weighted-average dumping margins (percent)

ULMA Forja, S.Coop


All Others



Manufacturer (Italy)

Weighted-average dumping margins (percent)



All others


Figure 6: Anti-Dumping Duties for India, Spain, and Italy

The anti-dumping values in Figure 6 act similar to a sales tax on purchasing flanges, with the effective rates from each country varying from roughly 20% (India and Spain) to 80% (Italy).   Some specific manufacturers, such as Metalfar, were impacted more severely. 

Now, let’s look at how much market volume is impacted by this ruling.  Figure 7 below shows the volumes produced, each year, by: India, Italy, and Spain.  If we assume that the combined volume of flanges imported from China, Germany, and all other countries is roughly 15,000 metric tons each year, this means that ~60% of import carbon steel flanges come from India, ~13% from Italy,  ~13% from Spain, and ~13% from China/Germany/Other. Furthermore, this also means that roughly $120 Million of carbon steel flanges are imported to the US every year!  Therefore, we can see that this duty will have a widespread impact on the US flange industry.





Volume (metric tons)




Value (USD)









Volume (metric tons)




Value (USD)









Volume (metric tons)




Value (USD)




Figure 7: Volume of Flanges imported each year


Indian/Spanish Flange Impact

Moving forward, when flanges are imported from India or Spain, only roughly $0.80 of every dollar spent by the US will actually be received by the foreign manufacturer, with the other $0.20 being paid to the US government.  This will cause a leftward shift in the supply curve, because the willingness of Indian/Spanish manufacturers to sell flanges at the previous prices will decrease.  Ultimately, Indian and Spanish flange prices will increase somewhere near but below 20%.  The timing of this increase will  take roughly 6 months (the lead time for import order fulfillment) to fully impact the US market, which will be near the end of 2017. 

carbon steel flanges

Italian Flange Impact

The long-term impact of Italian flanges is a slightly different story.  Prior to the enforcement of the anti-dumping duty, Italian flanges sold at approximately 25% below flanges manufactured in the US.  Given the 80%+ duty now being enforced, importing Italian flanges becomes economically unviable, since US flanges would be a cheaper substitute.  This leads to a complete loss of Italian flanges in the US market and an overall reduction in flange supply to the US. 

Before we simply assume the supply curve will shift left in this instance, as well, we must remember that Italian flanges are sold at a premium to Indian flanges (almost 2X on average).   Therefore, the supply curve will actually make a leftward pivot, like shown below.

carbon steel flanges

German Flange Impact

Aside from Italy and Spain, Germany is the only other foreign country to produce widely approved carbon steel flanges.  With the new anti-dumping duties in place, look for import volumes from Germany to increase. This will offset some (if not most) of the market supply reduction caused by the elimination of Italian flanges.  Since German flanges also sell at a premium, the effect will be a rightward pivot to the supply curve like the one shown below.  Therefore, in the long term, Germany should help reduce approved import carbon steel prices in the US market.

carbon steel flanges

China (and others) Impact

Prior to this anti-dumping duty, the standard US import carbon steel flange market was dominated by India.  However, this has now been thoroughly disrupted, and the market is ripe for entry from new foreign manufacturers.  China possesses the largest capacity and most efficient economics, but it has long struggled to shake a reputation for substandard quality.  In fact, US construction requirements often call for a strict ban on the use of any Chinese fittings or flanges.  So, while China may get another chance due to its low price points, it is unclear at this point.  In the long term, the US is also likely to see a rightward shift in the supply curve due to market entries from countries like: Malaysia, South Korea, and Taiwan.  These countries currently supply the US with butt weld fittings and would be a natural fit for flange manufacturing.  Still, it is difficult to imagine any of these countries achieving the pricing and scale that India could prior to the anti-dumping duty.   

Current Flange Pricing and a Speculated Forecast

Figure 8 below shows a weighted average of flange prices, by country of origin, over the past 18 months. Each country of origin will be analyzed below.


The pricing for domestic flanges has remained mostly constant, at price points that have been available in the market for years.  In the long term, expect to see an increase in US flange pricing, simply due to the leftward shift in the supply curve that the anti-dumping duties has caused in the overall carbon steel flange market.

Approved Import

Approved import carbon steel flange pricing has skyrocketed 10% in just two months since the June 2017 DOC determination, and a total of 20% since January 2017.  In the long-term, however, look for this to plateau or even retreat for a couple reasons.  First, we should see an increase in German flanges in the market at lower price points, and second, approved import flanges must maintain a substantial discount to domestic flanges to be a viable option.

Standard Import

Import carbon steel flanges have had the largest percentage increase since the announcement, rising nearly 20% in just two months.  Since January 2017, these (mostly) Indian flanges have climbed nearly 30%. The long-term impact for Indian flanges is much less certain than domestic or approved import pricing.  Between now and February 2018: currency fluctuations will cause up to a 10% price increase, rising costs of Fe and Mn could bring about an additional 5-10%, and anti-dumping duties could easily yield another 10-15% hike.  Meanwhile, demand volatility due to crude oil prices could drive the market in any direction (by shifting the demand curve left or right) for all flanges. 

My intuition, which is limited at best, tells me that crude oil will maintain a mostly flat or slightly upward trend over the next 6 months and that overall, import carbon steel flanges will rise another 20% above current levels.   Beyond the next 6 months, however, look for the import flange market to no longer being synonymous with the Indian flange market, as other countries begin supplying the US with flanges and bringing price points back down to a more appealing level.

carbon steel flanges

Figure 8: Flange Pricing for Import, Approved Import, and Domestic carbon steel flanges

Bonus: A Preview of What is to Come for Stainless Steel Flange Pricing њ

On August 16, 2017, Maass Flange and others filed a similar petition for an investigation of China and India with regards to stainless steel flanges.  Alleged dumping margins range from 70% to more than 200%.  If a determination similar to the one made here for carbon steel is reached, the pricing impact on the stainless steel market will also be significant.