US to decide on plywood trade case against China next week

WASHINGTON Oct 10 (Reuters) - The U.S. Commerce Department will decide by next week whether to launch an investigation that could lead to steep duties on roughly $600 million dollars of hardwood plywood imports from China, a spokesman said on Wednesday.

The case was filed in late September by U.S. plywood manufacturers in New York, North Carolina and Oregon. The department, which rarely receives petitions that fail to meet the minimum legal requirements for a probe to begin, is expected to announce its decision on October 18.

The group, calling itself the Coalition for Fair Trade of Hardwood Plywood, alleges Chinese producers benefit from illegal subsidies and sell their products in the United States at prices more than 300 percent below fair value.

Because of significant underselling by unfairly traded imports from China, "U.S. producers have lost a substantial volume of sales, resulting in extremely low rates of capacity utilization and a razor-thin profit margin," the group said.

"Domestic producers have curtailed production lines, or eliminated production lines altogether, leading to plant closures, and significant reductions in employment," they added.

Total U.S. imports of hardwood plywood from China reached 1.44 million cubic meters in 2011, compared to 1.29 million in 2010 and 1.01 million in 2009.

"Indeed, in 2011, the volume of hardwood plywood imports from China was more than double the next nine leading foreign suppliers combined," the group said.

The value of the imports, reflecting a drop in prices that more than offset the rise in volume, fell to $597.17 million in 2011, from $613.28 million in 2010.

Hardwood plywood is used in wall panels, kitchen cabinet components, furniture components, trailer components and as the raw material for certain engineered wood flooring.