The investigation will look at the flood of imports of high fatigue performance rebar, which is coming into the UK at below market prices.
Imports now account for half of the total steel used in construction and are undermining domestic steel manufacturing.
European trade body EUROFER triggered the Commission investigation warning the situation was “no longer sustainable”.
UK Steel, the body representing manufacturers, said it hoped the move would see a step-change for European procurement practices, reintroducing a level playing field for suppliers across the UK and Europe.
Gareth Stace, Director of UK Steel, said: “UK steel members are encouraged by the Commission’s action to investigate our complaint that rebar from China is being dumped on the EU market, at below fair market prices.”
“Over the last three years we have seen import penetration rise from near zero to around 50% of the UK market.
“I very much hope that this investigation can be concluded as quickly as possible, to ensure that UK rebar producers can once again operate in a free and fair global marketplace.”
The organisation, which represents every steel producing company in the UK and many steel processing companies, launched the Charter for Sustainable British Steel last year to combat the excess of what they see as sub-standard Chinese rebar imports.
Balfour Beatty and Morgan Sindall and a range of local authorities have already signed-up to the Charter, which promotes the use of sustainable, BES 6001 accredited rebar. The Charter has also been formally welcomed by the UK Government and the Welsh Government.
Softening Chinese steel demand has exposed vast over-capacities, estimated by the OECD at around 400 million tonnes, fuelled by state control and financial assistance.
In particular, the recent lifting of the boron-alloy VAT export rebate has created a trade loophole by replacing boron with other alloys such as chrome.
According to EUROFER the Chinese government cut electricity prices recently to support Chinese steel producers facing an over-supplied, depressed domestic market.
The steel producer body claimas that because China does not effectively address its excess steel capacities and allows producers to operate under market conditions, its excess production is destabilising the global steel industry.
“Like most of its steel trade partners, the EU is acting against the unfair Chinese imports” said Axel Eggert, director of EUROFER.
“When trade remedies are justified, they should be imposed in as timely and effective a manner as possible – just like other trade partners do”.