(Adds background on trade action, case)
By Krista Hughes
WASHINGTON, July 10 U.S. steel producers on
Thursday accused Russia of flooding the market with cheap
flat-rolled steel, challenging a 15-year trade deal and
potentially reigniting a decades-old dispute over imports amid
heightened tensions between Washington and Moscow.
In a submission to the Commerce Department, Nucor Corp
, U.S. Steel Corp, ArcelorMittal USA LLC
and others said the agreement had not stopped
Russian producers from undercutting local prices or flooding the
U.S. market with a 1,400 percent shipment increase in the first
half of 2014 compared with the year-ago period.
"The agreement has failed in achieving its statutory purpose
and thus should be promptly terminated," said the submission,
released by steel industry lawyers.
Scrapping the 1999 suspension agreement would be in line
with the U.S. administration's tougher stance toward Russia
following a flare-up in tensions over Ukraine, including
dropping the country from a trade benefits program.
The agreement has sheltered Russian steelmakers from steep
anti-dumping duties on hot-rolled coil (HRC), instead setting a
cap on imports and a minimum price. Reuters reported last month
that the industry was considering the move.
But the industry's submission noted that the reference price
had been below U.S. market prices since 2004, with the gap
widening to more than $180 in the second quarter. Russian prices
were also lower than any other imports sold in U.S. markets.
"This consistent disconnect between the price of imports
from Russia and those from other markets demonstrates that the
suspension agreement is not working," said Alan Price, an
attorney from Wiley Rein representing Nucor Corp.
"The failure of the suspension agreement to prevent
underselling is allowing Russian producers to sell significant
and injurious volumes of hot-rolled steel into the U.S. market,"
The call to scrap the deal follows travel bans and asset
freezes imposed on Russian officials after Russia's military
seized the Crimean Peninsula from Ukraine earlier this year.
Russia is a major HRC supplier and the move also reflects
concerns about weak global prices, oversupply and sluggish
demand for hot-rolled steel, used in appliances and autos.
A Commerce Department official said the department was
reviewing the request, which comes a day before a closely
watched decision over anti-dumping duties on imports of pipe
used in the oil and gas industries.
If the agreement is ditched, Russia's Severstal
would be hit with anti-dumping duties of 73.59 percent. Other
Russian producers, such as Novolipetsk Steel and
Magnitogorsk Iron and Steel Works, would face duties
of 184.56 percent.
The original deal was agreed as the United States moved to
stem a flood of Russian steel imports after the Cold War ended.
It can be terminated with 60 days notice and duties would apply
The submission was also signed by Gallatin Steel Company,
Steel Dynamics and SSAB.
(Reporting by Krista Hughes; Editing by G Crosse, James
Dalgleish and Richard Chang)