German and Spanish steel makers have called for new tariffs on Chinese steel pipes used in the energy sector, highlighting concerns China is benefiting more than European industry from the EU’s economic recovery.

Germany’s Salzgitter and Spanish steel tubes maker Tubacex said stainless steel tubes and pipes dumped into the EU market by Chinese exporters at illegally low prices have prompted a price war even as European demand grows, according to a complaint filed with the European Commission.

“The Community industry managed to keep its market share practically constant, but was forced for that to drastically lower its prices and profitability,” says the complaint, which was seen by Reuters.

The European Commission, the EU’s executive, is expected to respond by launching an investigation into the allegations this month, EU diplomats said.

This could lead to interim import duties as early as next June, followed by five-year duties from December 2011.

An EU investigation is likely to antagonise China, whose trade practices are the subject of a raft of fresh EU inspections and tariffs. In the past three months, the EU has moved to raise tariffs on Chinese products ranging from car wheels and modems to paper and fibreglass.

China Grows its EU Market Share
In 2009, China supplied about one sixth of the EU’s half-billion-euro demand for pipes and tubes. By the first quarter of 2010, with EU demand growing, China’s market share had risen to 18.3 percent, Salzgitter and Tubacex said in their complaint.

The complaint said Chinese illegal pricing was squeezing out other exporters, while the country’s “huge capacity and overcapacity” prompted by “heavy subsidies and export rebates” posed a long-term threat to the EU’s industry.

Other countries may also be using illegal trade practices, it warned: “Obviously the main injury (to EU industry) comes from China… However, the Complainants will continue to closely monitor the situation, especially with regard to India, South Korea and Ukraine.”

The pipes and tubes are used mainly in the energy sector for drilling for oil and piping oil and gas.

Salzgitter and Tubacex lodged their complaint through the Defence Committee of the seamless steel tubes industry of the European Union, and on behalf of their operations in Austria, Germany, Italy, France and Spain. (Reuters)