(Adds comment by U.S. producers' and Deacero company, background)
NEW YORK, Sept 9 (Reuters) - The U.S. Commerce Department on Tuesday dropped a preliminary decision to impose anti-dumping duties on steel rebar imports from Turkey in a ruling U.S. rebar producers described as "shocking" because they believed they had a strong case.
At the same time, the Commerce Department confirmed duties on Mexican material of up to 66.7 percent, a move at least one Mexican producer said would severely hurt that country's rebar industry.
The ruling on Turkey reverses a preliminary decision in April that would have imposed duties of up to 2.6 percent on the country's imports of rebar, which is used to reinforce concrete.
"We are shocked that the Commerce Department failed to find dumping against Turkish rebar companies," the Rebar Trade Action Coalition, a group comprised of five U.S.-based producers, said in an emailed statement.
The group is made up of Nucor Corp, Byer Steel, Cascade Steel, Commercial Metals Co and Gerdau Long Products North America.
The group sued last year accusing the two countries of selling rebar at unfairly low prices, essentially undercutting U.S. prices to grab sales and market share.
"We also were surprised that the subsidy findings on Turkish producers were not found to be at higher levels," the group said.
The ruling was only a partial victory for Turkish producers though as the department set anti-subsidy duties of 1.25 percent.
For Mexican companies, it slapped duties of 66.7 percent on Grupo Acerero SA de CV and Grupo Simec. For Simec, that is an increase from 10.66 percent in the preliminary ruling.
It set a duty on Deacero SAPI de CV of 20.58 percent and confirmed a duty of 20.58 percent for all other producers and exporters.
Deacero Chief Executive Raul Gutierrez said the duties will have a "big impact" on Mexican manufacturers and U.S. consumers, who will no longer have a high-quality alternative to U.S.-produced rebar.
"We will not be able to sell our product there. None at all. It's impossible with a 20-percent tax," Gutierrez said in an interview.
The Commerce Department said in 2013 that imports of steel rebar from Mexico were valued at an estimated $182.1 million and from Turkey at $381.3 million. (Reporting by Josephine Mason in New York, David Alire Garcia in Mexico City and Nicole Mordant in Vancouver; Editing by Gunna Dickson and Grant McCool)