The amount of steel China exported into U.S. markets more than doubled in 2006 from 2005, raising the ire and concern of steelmakers from Northwest Indiana to Europe to Korea.

At stake in the Region, supporters of domestic steel companies argue, are company profits plus jobs of an industry that already has lost tens of thousands of local workers the past few decades.

The United States is one of 11 nations that have launched 27 anti-dumping investigations into steel products from China, according to Chinese news reports. China's steel companies exported 4.8 million metric tons of steel into the U.S. market in 2006, up from 2.2 million tons the previous year, according to U.S. trade data.

The jump in U.S. steel imports from China occurred during a year when domestic steelmakers cut capacity to keep prices and profits from dropping. Both U.S. Steel Corp. and Mittal Steel USA shuttered blast furnaces in their local mills in Gary and East Chicago, respectively, during the fourth quarter to keep expenses and inventory in line with demand.

Some steel industry experts say the imports from China filled a need that domestic companies couldn't supply, and they point to huge profits made by domestic companies in 2006 as proof that imports aren't detrimental.

But others say China's exports are subsidized and in violation of World Trade Organization rules, therefore profits made by domestic companies shouldn't affect how the law is upheld.

U.S. Rep. Pete Visclosky, D-Ind. and the Congressional Steel Caucus chairman from Merrillville, supports trade action. He contends too many good-paying jobs have been shipped overseas because of misguided trade policies and an unfair playing field.

"For our economic stability and to strengthen our manufacturing base, the time is past due to address the critical problem posed by China," Visclosky said.

Imports needed

Domestic steelmakers produced 98.5 million metric tons of steel in 2006, but the U.S. economy used about 120 million metric tons, according to the International Institute for International Steel.

David Phelps, president of the American Institute of International Steel, said "the facts are what they are."

"The U.S. needs more steel, and imports filled the gap," he said. "There may be people that take the view that in a particular niche, there's too much Chinese steel. That could be true. Those things happen all the time."

In mid-2006, the price of hot-rolled band steel hit $700 a ton and prices fell as inventory levels began to build in the fourth quarter, but that didn't affect steelmakers' profitability, Phelps said.

He points out that U.S. Steel Corp., which employs 5,000 workers at its Gary Works and about 950 at its Midwest plant in Portage, had its best fourth quarter ever, even though steel prices were at their lowest level since the fall of 2005. U.S. Steel earned $287 million for the quarter compared to $109 million in the same quarter 2005.

"The mills are very healthy," Phelps said. "Customers are demanding lots of steel and all's right with the world. Predictions of doom and gloom are highly exaggerated."

Steelmakers say subsidized imports unfair

But Andrew G. Sharkey, president and CEO of the American Iron and Steel Institute, said U.S. steelmakers are facing unfair, state-subsidized competition from China, where steelmaking has no comparable advantage.

"China is not a low-cost place to make steel," Sharkey said. "It has to import most of its raw materials, its labor costs are 16-to-20-manhours per ton, plus it cost $40 per ton in shipping.

"We're not dealing with comparable advantage, we're dealing with mercantilism designed to move excess steel capacity into world markets," he said. "It's a very real and immediate concern."

U.S. steelmakers contend it is not OK for a nation to bend the rules, even if its competitors aren't adversely affected, and they've taken their case to the Capitol. The domestic steelmakers want U.S. trade remedies that impose countervailing duties on Chinese imports to offset the huge subsidies they contend China offers is industry.

Thursday, the Committee on Pipe and Tube Imports (CPTI), representing 38 producers of steel pipe, tube and fittings products, provided testimony before members of the Congressional Steel Caucus on the impact of China trade on the industry.

Imports of standard pipe from China have soared to nearly 700,000 tons in 2006 from 269,000 tons in 2004. The surge has led to reductions in production, layoffs and plant closures, according to the organization.

Armand Lauzon, CEO of welded standard pipe and welded structural tubing manufacturer John Maneely Co., said there has never been a more appropriate time for Congress to take the first step to develop a sound and effective trade policy to ensure fair competition.

"This industry is world class, and we have made the investments and also taken the steps to consolidate to ensure our future, but we need to be able to use the trade laws to challenge unfair trade and trade distorting practices," he said..

Frank DiFalco, vice president and general manager of CaluMetals, said that although his business hasn't been affected by imports from China, they are putting small U.S. producers of steel and stainless guide castings out of business at a rate of five or more a week. Many of the castings businesses are "ma and pa" operations employing fewer than 30 workers, DiFalco said.

"They're killing all our guide-casting outfits," he said Friday. "They sell the finished castings for less than what our (U.S.) suppliers pay for their materials. ... They can do it because we have to abide by all the rules. They abide by nothing."