U.S. producers of steel pipe used in oil and gas drilling filed complaints Wednesday with U.S. trade officials over alleged unfair competition from Chinese imports they say have flooded the domestic market.

 

Steelmakers have faced sharply lower demand since late last year, when the global economic crisis undercut key customers in the construction, automotive and heavy-equipment industries. The decline comes just months after soaring prices and surging demand from China and other countries helped fuel record profits for many U.S. steel companies.

 

Stockpiles of the pipe products known as oil country tubular goods have grown in recent months as the recession has dampened demand for oil and gas drilling. Industry advocates say current inventories would last 14 to 16 months at today's consumption rates, which are lower than they were last year but not low historically.

 

Steel companies and the United Steelworkers union filed petitions with the Commerce Department and the U.S. International Trade Commission on Wednesday, according to their Washington, D.C.-based lawyer, Roger Schagrin. They are seeking punitive duties on Chinese imports of the pipe "as quickly as possible," he said.

 

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

 

Chinese steelmakers account for about 2.2 million tons - worth an estimated $2.7 billion - of the roughly five million-ton U.S. market for the pipe, Schagrin said.

 

"Just huge quantities of the Chinese imports over the last nine months have gone into inventories on the ground in the United States," he said.

 

But free-trade proponents say Chinese producers merely responded to market demand amid soaring prices for domestic steel pipe and a shortage among companies drilling for oil and natural gas.

 

"This isn't a case of unfair trade," said David Phelps, president of the American Institute for International Steel, a McLean, Va.-based group that opposes tariffs. "The market did this."

 

Imports of Chinese steel pipe also became a larger part of the domestic market because of a lag between orders and deliveries, he said. Pipe ordered when the market was strong last year may not have arrived until months later, when the market had declined, Phelps said.

 

Among the companies bringing the case are United States Steel Corp. of Pittsburgh (NYSE:X); 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.

 

About 6,000 workers are employed making oil country tubular goods, and about 2,000 of them have been laid off, United Steelworkers International President Leo W. Gerard said in a statement.

 

The U.S. steel industry has long used trade laws to fight alleged unfair trade in the domestic market, worth more than $100 million daily at current prices.

 

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.