China Probes U.S., Russian Steel Pricing

BEIJING (AP) -- China is investigating imports of U.S. and Russian steel under anti-dumping rules amid a rise in Chinese imports of the metal.

China is looking into a special type of steel used in power transformers to determine whether U.S. and Russian mills sold below market value, the Ministry of Commerce said in a statement dated Monday.

The case was opened after a complaint in April by the only two Chinese companies that produce such electrical steel, Wuhan Iron and Steel Co. and Baoshan Iron & Steel Ltd.

Chinese steel companies have accused U.S. and Russian suppliers of dumping since last year, according to industry analysts.

Russian companies, benefiting from a weak ruble, have been squeezing Chinese rivals with lower prices, said Cui Jingyi, a steel analyst for Guotai Junan Securities in Shanghai.

Wuhan Iron and Steel's price for electrical steel has fallen by half since last year to 20,000 yuan ($3,000) per ton before rebounding to about 25,000 yuan ($3,700), according to Cui.

"But the probe won't have much impact on the price of electrical steel in the near future," Cui said.

China's total consumption of electrical steel in 2008 was 680,000 tons, about 59,000 tons of which came from the United States and 79,900 tons from Russia, according to Chinese news reports that cited unidentified sources in the China Iron and Steel Association, the state-sanctioned industry group.

Imports from those two countries rose 64.7 percent last year from 2007, according to the association.

In April, U.S. producers of steel pipe used in oil and gas drilling filed complaints with trade officials complaining of unfair competition from Chinese imports that they say have flooded the U.S. market.

They allege Chinese producers have sold supplies of the pipe at prices below the cost of production -- known as dumping -- and have benefited from massive government subsidies.

Among the companies bringing the cases are United States Steel Corp. of Pittsburgh; Maverick Tube Corp. of Houston; Evraz Rocky Mountain Steel of Pueblo, Colo.; TMK IPSCO of Downers Grove, Ill.; V&M Star and V&M TCA, both of Houston, and Wheatland Tube Corp. of Beachwood, Ohio.

In May, the U.S. International Trade Commission voted in favor of the steel companies in a preliminary determination of the likelihood of injury from Chinese steel imports. A final determination is not expected until early 2010.

Last year, U.S. steel pipe manufacturers won a major victory when the ITC found the U.S. industry was being harmed by imported circular steel pipe, used in everything from home plumbing to sprinkler systems. It was the first time a U.S. industry had won a decision to impose tariffs on a Chinese product based on the argument that the Chinese government was unfairly subsidizing a Chinese industry.

Associated Press researcher Bonnie Cao in Beijing and AP Manufacturing Writer Daniel Lovering in Pittsburgh contributed to this report.

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