U.S. panel approves China steel import probe

WASHINGTON (Reuters) - A U.S. trade panel gave its unanimous approval on Friday to a government anti-dumping probe that could lead to steep U.S. duties on an estimated $2.6 billion worth of Chinese steel pipe used in oil production.

The U.S. International Trade Commission (ITC) voted 6-0 in favor of the investigation on the basis that there was a reasonable indication that the U.S. industry is threatened with material injury by the Chinese imports.

The case is one of several prickly trade issues between the United States and China. Tensions have been exacerbated by the growth in the U.S. trade deficit.

The United Steelworkers union and U.S. tire manufacturers also want the Obama administration to curb tire imports.

The vote means the Commerce Department can continue an investigation that could pave the way for anti-dumping and countervailing duties on the steel pipe imports.

It is slated to make a preliminary ruling on countervailing duties in early July, and anti-dumping duties in September. Final decisions by the department and ITC won't come until early next year.

United States Steel Corp (X.N), Tenaris SA (TS.N) (TENR.MI) unit Maverick Tube Corp and other U.S. producers of "certain oil country tubular goods" filed the case after imports of the product from China jumped to $2.6 billion in 2008 from $749 million in 2007.

The firms say China is engaged in dumping and they want the United States to impose duties of between 37 to 99 percent.

Steel prices have slumped as the recession dried up demand, and most steelmakers have cut production sharply.

The Steelworkers union, also a petitioner in the case, said the vote was an important step, noting more than a third of the 6,000 American workers who make the steel pipes have been laid off.

"The ... producers and jobless pipe workers are paying the price of China's massive government subsidies and unfair dumping of imports in our market," Leo Gerard, the union's president, said in a statement.

The decision is bullish for steelmakers in the United States and abroad, Michelle Applebaum, an analyst with Steel Market Intelligence in Chicago, said in a note to investors.

"Too many global governments are pointing fingers at the high-cost Chinese for Beijing to continue to allow its high- cost steelmakers access to export markets via subsidies and tax incentives," Applebaum said.

"We suspect the 'end game' in this path will be a negotiated settlement where China keeps its high-cost steel home," she said, noting China has been a net importer of steel during the past two months for the first time in years.

(Additional reporting by Steve James in New York and Jasmin Melvin and Doug Palmer in Washington; Editing by Paul Simao)