US-Russia Steel Trade Dispute Increases Political Tensions

US steel producers have reignited a long-standing trade dispute with Russia as they accused Moscow of flooding the market with cheap flat-rolled steel.

A host of American producers said a 15-year trade agreement had not stopped Russian producers from undercutting the US firms.

In a submission to the Commerce Department, the US companies accused the Russians of flooding the American market in the first half of 2014 by upping steel shipments 1400% compared with the same period in the previous year.

"The agreement has failed to achieve its statutory purpose and thus should be promptly terminated," the US companies said in the submission.

Political tensions between Washington and Moscow are already stretched after the US imposed economic sanctions on individuals with ties to the Kremlin in the wake of Russia's annexation of Crimea from Ukraine.

Disposing of the 1999 suspension agreement would be consistent with White House attempts to punish Russia for fuelling the crisis in eastern Ukraine.

The agreement protects Russian producers from anti-dumping duties on hot-rolled coil (HRC) setting a cap and minimum price on imports instead.

The US steelmakers said the reference price of steel in the agreement was out-of-sync with the market, with Russian prices significantly lower than that charged by other markets and US producers.

"This consistent disconnect between the price of imports from Russia and those from other markets demonstrates that the suspension agreement is not working," Nucor Corp attorney Alan Price told Reuters.

"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 US market," Price said.

The agreement was reached in the wake of the Cold War when the US acted to slow a flood of cheap Russian steel imports.