U.S. International Trade Commission

Certain Circular Welded Carbon Quality 

Steel Line Pipe from China and Korea 

Investigation Nos. 701-TA-455 and 

731-TA-1149-1150 (Preliminary)

Publication 4003 May 2008

Washington, DC 20436
U.S. International Trade Commission

COMMISSIONERS 

 

Daniel R. Pearson, Chairman 

Shara L. Aranoff, Vice Chairman 

Deanna Tanner Okun 

Charlotte R. Lane 

Irving A. Williamson 

Dean A. Pinkert

Staff assigned

Address all communications to 

Secretary to the Commission 

United States International Trade Commission 

Washington, DC 20436

Robert A. Rogowsky

Elizabeth Haines, Investigator 

Norman VanToai, Industry Analyst 

Clark Workman, Economist 

Mary Klir, Accountant 

Steven Hudgens, Senior Statistician 

Michael Haldenstein, Attorney-Advisor 

Douglas Corkran, Supervisory Investigator

Director of Operations
U.S. International Trade Commission

Washington, DC 20436 

www.usitc.gov

Publication 4003 May 2008

Investigation Nos. 701-TA-455 and 

731-TA-1149-1150 (Preliminary)

Certain Circular Welded Carbon Quality 

Steel Line Pipe from China and Korea 

i

TABLE OF CONTENTS

Page

Determinations ................................................................. 1

Views of the Commission ......................................................... 3

Part I: Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1

Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1

Statutory criteria and organization of the report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1

Statutory criteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1

Organization of the report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-2

U.S. line pipe market summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-2

Summary data and data sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-3

Previous and related Title VII investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-3

Nature and extent of alleged subsidies and sales at LTFV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-6

Alleged subsidies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-6

Alleged sales at LTFV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-6

The subject merchandise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-6

Commerce’s scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-6

Tariff treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7

The domestic like product . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7

Description and applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7

Manufacturing processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-9

Domestic like product issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-10

Part II: Conditions of competition in the U.S. market ................................ II-1

U.S. market characteristics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1

Supply and demand considerations ................................................ II-1

U.S. supply ............................................................... II-1

Subject imports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-3

U.S. demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-3

Substitutability issues .......................................................... II-5

Comparison of domestic products, subject imports, and nonsubject imports ............. II-5

Part III: U.S. producers’ production, shipments, and employment ...................... III-1

U.S. producers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-1

U.S. capacity, production, and capacity utilization ................................... III-1

U.S. producers’ shipments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-3

U.S. producers’ inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-5

U.S. producers’ imports and purchases ............................................. III-6

U.S. employment, wages, and productivity ......................................... III-6
ii

TABLE OF CONTENTS

Page

Part IV: U.S. imports, apparent U.S. consumption, and market shares . . . . . . . . . . . . . . . . . . IV-1

U.S. importers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1

U.S. imports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-3

Negligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-3

Cumulation considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-6

Geographic markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-6

Presence in the market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-6

Apparent U.S. consumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-10

U.S. market shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-10

Ratio of imports to U.S. production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-13

Part V: Pricing and related information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1

Factors affecting prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1

Raw material costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1

Transportation costs to the U.S. market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-2

U.S. inland transportation costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-2

Exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-2

Pricing practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-4

Price data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-4

Price trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-5

Price comparisons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-5

Lost sales and lost revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-11

Part VI: Financial condition of U.S. producers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-1

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-1

Operations on line pipe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-1

Capital expenditures and research and development expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-4

Assets and return on investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-5

Capital and investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-5

Part VII: Threat considerations and Bratsk information .............................. VII-1

The industry in China .......................................................... VII-2

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-2

Line pipe operations and alternative products ..................................... VII-3

The industry in Korea .......................................................... VII-4

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-4

Line pipe operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-6

Alternative products ........................................................ VII-8

U.S. imports subsequent to December 31, 2007 ...................................... VII-9

U.S. importers’ inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-9

Antidumping and countervailing duty orders in third-country markets .................... VII-9
iii

TABLE OF CONTENTS

Page

Part VII: Threat considerations and Bratsk information, continued

Information on nonsubject sources ................................................ VII-10

“Bratsk” considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-10

Nonsubject source information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-10

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-10

Leading nonsubject sources of circular welded pipe ................................ VII-14

Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-18

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-19

Mexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-20

Taiwan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-21

Appendixes

A. Federal Register notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1

B. Conference witnesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1

C. Summary data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1

D. Price data for nonsubject countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D-1

E. Alleged effects of imports on U.S. producers’ existing development and production efforts, 

growth, investment, and ability to raise capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-1

Note.–Information that would reveal confidential operations of individual concerns may not be

published and therefore has been deleted from this report. Such deletions are indicated by

asterisks.

 1

 The record is defined in sec. 207.2(f) of the Commission’s Rules of Practice and Procedure (19 CFR § 207.2(f)).

 2

 Commissioner Charlotte R. Lane, Commissioner Irving A. Williamson, and Commissioner Dean A. Pinkert

determine that there is a reasonable indication that an industry in the United States is materially injured by reason of

imports of certain circular welded carbon quality steel line pipe from China and Korea.

 3

 Chairman Daniel R. Pearson, Vice Chairman Shara L. Aranoff, and Commissioner Deanna Tanner Okun

determine that there is a reasonable indication that an industry in the United States is threatened with material injury

by reason of imports of certain circular welded carbon quality steel line pipe from China and Korea. 

UNITED STATES INTERNATIONAL TRADE COMMISSION

Investigation Nos. 701-TA-455 and 731-TA-1149-1150 (Preliminary)

CERTAIN CIRCULAR WELDED CARBON QUALITY STEEL LINE PIPE

FROM CHINA AND KOREA

DETERMINATIONS

On the basis of the record1

 developed in the subject investigations, the United States International

Trade Commission (Commission) determines, pursuant to sections 703(a) and 733(a) of the Tariff Act of

1930 (19 U.S.C. § 1671b(a) and 19 U.S.C. § 1673b(a)) (the Act), that there is a reasonable indication that

an industry in the United States is materially injured,2

 or threatened with material injury3 by reason of

imports from China and Korea of circular welded carbon quality steel line pipe, provided for in

subheading 7306.19 of the Harmonized Tariff Schedule of the United States, that are alleged to be

subsidized by the Government of China and sold in the United States at less than fair value (LTFV). 

Pursuant to section 207.18 of the Commission’s rules, the Commission also gives notice of the

commencement of the final phase of its investigations. The Commission will issue a final phase notice of

scheduling, which will be published in the Federal Register as provided in section 207.21 of the

Commission’s rules, upon notice from the Department of Commerce (Commerce) of affirmative

preliminary determinations in these investigations under sections 703(b) and 733(b) of the Act, or, if the

preliminary determinations are negative, upon notice of affirmative final determinations in those

investigations under sections 705(a) and 735(a) of the Act. Parties that filed entries of appearance in the

preliminary phase of the investigations need not enter a separate appearance for the final phase of the

investigations. Industrial users, and, if the merchandise under investigation is sold at the retail level,

representative consumer organizations have the right to appear as parties in Commission antidumping and

countervailing duty investigations. The Secretary will prepare a public service list containing the names

and addresses of all persons, or their representatives, who are parties to the investigations.

BACKGROUND

On April 3, 2008, a petition was filed with the Commission and Commerce by Maverick Tube

Corp. (Houston, TX), Tex-Tube Co. (Houston, TX), U.S. Steel Corp. (Pittsburgh, PA), and the United

Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers

International Union, AFL-CIO-CLC (Pittsburgh, PA), alleging that an industry in the United States is

materially injured or threatened with material injury by reason of subsidized imports of certain circular

welded carbon quality steel line pipe from China and LTFV imports of circular welded carbon quality

steel line pipe from China and Korea. Accordingly, effective April 3, 2008, the Commission instituted

countervailing duty investigation No. 701-TA-455 (Preliminary) and antidumping duty investigation Nos.

731-TA-1149-1150 (Preliminary).
2

Notice of the institution of the Commission’s investigations and of a public conference to be held

in connection therewith was given by posting copies of the notice in the Office of the Secretary, U.S.

International Trade Commission, Washington, DC, and by publishing the notice in the Federal Register

of April 14, 2008 (73 FR 20064). The conference was held in Washington, DC, on April 24, 2008, and

all persons who requested the opportunity were permitted to appear in person or by counsel.
1

 Commissioner Charlotte R. Lane, Commissioner Irving A. Williamson, and Commissioner Dean A. Pinkert

determine that there is a reasonable indication that a domestic industry is materially injured by reason of subject

imports of certain circular welded carbon quality steel line pipe from China and Korea. See Views of

Commissioners Charlotte R. Lane, Irving A. Williamson, and Dean A. Pinkert Concerning Reasonable Indication of

Material Injury. 2

 Chairman Daniel R. Pearson, Vice Chairman Shara L. Aranoff, and Commissioner Deanna Tanner Okun

determine that there is a reasonable indication that a domestic industry is threatened with material injury by reason of

subject imports of certain circular welded carbon quality steel line pipe from China and Korea. See Views of

Chairman Daniel R. Pearson, Vice Chairman Shara L. Aranoff, and Commissioner Deanna Tanner Okun Concerning

Reasonable Indication of Threat of Material Injury. 3

 19 U.S.C. §§ 1671b(a) and 1673b(a); see also, e.g., Co-Steel Raritan, Inc. v. United States, 357 F.3d 1294

(Fed. Cir. 2004); American Lamb Co. v. United States, 785 F.2d 994, 1001-1004 (Fed. Cir. 1986); Aristech

Chemical Corp. v. United States, 20 CIT 353, 354 (1996). No party argued that the establishment of an industry is

materially retarded by reason of the allegedly unfairly traded imports. 4

 American Lamb, 785 F.2d at 1001 (Fed. Cir. 1986); see also Texas Crushed Stone Co. v. United States, 35

F.3d 1535, 1543 (Fed. Cir. 1994). 5

 Petition at 2.

3

VIEWS OF THE COMMISSION

Based on the record in the preliminary phase of these investigations, we find that there is a

reasonable indication that an industry in the United States is materially injured,1

 or threatened with

material injury,2

 by reason of imports of certain circular welded carbon quality steel line pipe (“line pipe”)

from China and Korea that are allegedly sold in the United States at less than fair value (“LTFV”) and by

reason of imports of such pipe from China that are allegedly subsidized.

I. THE LEGAL STANDARD FOR PRELIMINARY DETERMINATIONS

 The legal standard for preliminary antidumping and countervailing duty determinations requires

the Commission to determine, based upon the information available at the time of the preliminary

determination, whether there is a reasonable indication that a domestic industry is materially injured,

threatened with material injury, or whether the establishment of an industry is materially retarded, by

reason of the allegedly unfairly traded imports.3

 In applying this standard, the Commission weighs the

evidence before it and determines whether “(1) the record as a whole contains clear and convincing

evidence that there is no material injury or threat of such injury; and (2) no likelihood exists that contrary

evidence will arise in a final investigation.”4

II. BACKGROUND

The petition was filed on April 3, 2008, by three domestic producers (Maverick Tube Corp. and

Tex-Tube Company of Houston, Texas, and U.S. Steel Corp. of Pittsburgh, Pennsylvania) and the United

Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers

International Union, AFL-CIO-CLC.5

 Representatives of all four petitioners appeared at the staff

conference accompanied by counsel. Petitioners Maverick Tube Corp. and U.S. Steel Corp. filed a joint

postconference brief (“Petitioners’ Postconference Brief”), and petitioner Tex-Tube Company filed a

separate postconference brief (“Tex-Tube’s Postconference Brief”).

Three Korean producers are respondents: SeAH Steel Corporation, Husteel Co., Ltd and

Hyundai HYSCO (“Korean Respondents”). A representative of Hyundai Corporation USA (an importer)

appeared at the conference. The Korean Respondents also filed a postconference brief (“Korean
6

 19 U.S.C. § 1677(4)(A).

7

 19 U.S.C. § 1677(4)(A).

8

 19 U.S.C. § 1677(10).

9

 See, e.g., NEC Corp. v. Department of Commerce, 36 F. Supp. 2d 380, 383 (Ct. Int’l Trade 1998); Nippon

Steel Corp. v. United States, 19 CIT 450, 455 (1995); Torrington Co. v. United States, 747 F. Supp. 744, 749 n.3

(Ct. Int’l Trade 1990), aff’d, 938 F.2d 1278 (Fed. Cir. 1991) (“every like product determination ‘must be made on

the particular record at issue’ and the ‘unique facts of each case’”). The Commission generally considers a number

of factors including: (1) physical characteristics and uses; (2) interchangeability; (3) channels of distribution; (4)

customer and producer perceptions of the products; (5) common manufacturing facilities, production processes, and

production employees; and, where appropriate, (6) price. See Nippon, 19 CIT at 455 n.4; Timken Co. v. United

States, 913 F. Supp. 580, 584 (Ct. Int’l Trade 1996).

10 See, e.g., S. Rep. No. 96-249 at 90-91 (1979). 11 Nippon Steel, 19 CIT at 455; Torrington, 747 F. Supp. at 748-49. See also S. Rep. No. 96-249 at 90-91

(1979) (Congress has indicated that the like product standard should not be interpreted in “such a narrow fashion as

to permit minor differences in physical characteristics or uses to lead to the conclusion that the product and article

are not ‘like’ each other, nor should the definition of ‘like product’ be interpreted in such a fashion as to prevent

consideration of an industry adversely affected by the imports under consideration.”). 12 See, e.g., USEC, Inc. v. United States, Slip Op. 01-1421 (Fed. Cir. April 25, 2002) at 9 (“The ITC may not

modify the class or kind of imported merchandise examined by Commerce.”); Algoma Steel Corp. v. United States,

688 F. Supp. 639, 644 (Ct. Int'l Trade 1988), aff'd, 865 F.3d 240 (Fed. Cir.), cert. denied, 492 U.S. 919 (1989). 13 Hosiden Corp. v. Advanced Display Mfrs., 85 F.3d 1561, 1568 (Fed. Cir. 1996) (Commission may find a

single like product corresponding to several different classes or kinds defined by Commerce); Torrington, 747 F.

Supp. at 748-752 (affirming Commission determination of six like products in investigations where Commerce

found five classes or kinds).

4

Respondents’ Postconference Brief”). No producers or exporters of line pipe in China appeared at the

conference or submitted briefs.

III. DOMESTIC LIKE PRODUCT AND DOMESTIC INDUSTRY

A. In General

In determining whether there is a reasonable indication that an industry in the United States is

materially injured or threatened with material injury by reason of imports of the subject merchandise, the

Commission first defines the “domestic like product” and the “industry.”6

 Section 771(4)(A) of the Tariff

Act of 1930, as amended (“the Act”), defines the relevant domestic industry as the “producers as a

[w]hole of a domestic like product, or those producers whose collective output of a domestic like product

constitutes a major proportion of the total domestic production of the product.”7

 In turn, the Act defines

“domestic like product” as “a product which is like, or in the absence of like, most similar in

characteristics and uses with, the article subject to an investigation . . . .”8

The decision regarding the appropriate domestic like product(s) in an investigation is a factual

determination, and the Commission has applied the statutory standard of “like” or “most similar in

characteristics and uses” on a case-by-case basis.9

 No single factor is dispositive, and the Commission

may consider other factors it deems relevant based on the facts of a particular investigation.10 The

Commission looks for clear dividing lines among possible like products and disregards minor variations.11

Although the Commission must accept the determination of the U.S. Department of Commerce

(“Commerce”) as to the scope of the imported merchandise allegedly sold at LTFV,12 the Commission

determines what domestic product is like the imported articles Commerce has identified.13 The

Commission must base its domestic like product determination on the record in this investigation. 
14 Acciai Speciali Terni S.p.A. v. United States, 118 F. Supp. 2d 1298, 1304-05 (Ct. Int’l Trade 2000); Nippon

Steel Corp. v. United States, 19 CIT at 455; Asociacion Colombiana de Exportadores de Flores v. United States, 693

F. Supp. 1165, 1169 n.5 (Ct. Int’l Trade 1988) (particularly addressing like product determination); Citrosuco

Paulista, S.A. v. United States, 704 F. Supp. 1075, 1087-88 (Ct. Int’l Trade 1988). 15 Certain Circular Welded Carbon Quality Steel Line Pipe From the Republic of Korea and the People's

Republic of China: Initiation of Antidumping Duty Investigations, 73 Fed. Reg. 231888, 23189 (April 29, 2008);

Circular Welded Carbon Quality Steel Line Pipe From the People's Republic of China: Notice of Initiation of

Countervailing Duty Investigation, 73 Fed. Reg. 23184, 23185 (April 29, 2008). The subject merchandise is

provided for in statistical reporting numbers 7306.19.1010, 7306.19.1050, 7306.19.5110, and 7306.19.5150 of the

Harmonized Tariff Schedules of the United States (HTS). Id. 16 Commerce’s scope of investigation overlaps with that of another ongoing investigation, Circular Welded

Carbon Quality Steel Pipe from China, Inv. Nos. 701-TA-447 and 731-TA-1116 (Final). Line pipe from China

which meets the above scope definition, and typically meets certain American Petroleum Institute (API)

specifications, falls within the circular welded pipe scope definition when it has “one or more of the following

characteristics: is 32 feet in length or less; is less than 2.0 inches (50 mm) in outside diameter; has a galvanized

and/or painted surface finish; or has a threaded and/or coupled end finish.” 73 Fed. Reg. 2445, 2447 (Jan. 15, 2008). 

Commerce has indicated that it intends to ensure that there will be no overlap between the scope of the investigations

concerning circular welded pipe and these investigations. 73 Fed. Reg. 23189 (April 29, 2008). While the scope of

these investigations may change in the final phase of the investigations, for now we accept the definition that

Commerce has provided and base our determination as to the domestic like product on that definition. Therefore, the

existence of the overlap does not affect our determination as to domestic like product. See, e.g., USEC, Inc. v.

United States, Slip Op. 01-1421 (Fed. Cir. April 25, 2002) at 9 (“The ITC may not modify the class or kind of

imported merchandise examined by Commerce.”). 17 We use the term “line pipe” to refer to line pipe 16 inches or less in outside diameter, unless otherwise noted. 18 Confidential Staff Report INV-FF-056 (May 12, 2008), as revised by INV-FF-057 (May 14, 2008) (“CR”) at

I-9; Public Staff Report (“PR”) at I-8. 19 CR at I-10, PR at I-8.

20 CR at I-9, PR at I-8.

5

The Commission is not bound by prior determinations, even those pertaining to the same imported

products, but may draw upon previous determinations in addressing pertinent like product issues.14

B. Product Description

 Commerce defined the imported merchandise within the scope of these investigations as follows:

circular welded carbon quality steel pipe of a kind used for oil and gas

pipelines (‘‘welded line pipe’’), not more than 406.4 mm (16 inches) in

outside diameter, regardless of wall thickness, length, surface finish, end

finish or stenciling.15

The Commission follows the determination of Commerce as to the scope of the imported merchandise

alleged to be sold at less than fair value and subsidized in the preliminary phase of these investigations.16

Line pipe17 for use in oil and gas pipelines generally is produced to American Petroleum Institute

(API) specifications.18 The API specifications require higher hydrostatic test pressures and more

restrictive weight tolerances for line pipe than for pipe used in low pressure conveyances of water or

steam, known as standard pipe.19 Line pipe has either a black (lacquered) finish or bare surface finish. It

is typically marked or “stenciled” with paint on the outside surface by the manufacturer to indicate the

specification in conformance with which it has been manufactured.20 Because line pipe that complies

with API specifications is automatically in conformance with the less demanding standard pipe

specifications of the American Society for Testing and Materials (ASTM) and the American Society of
21 CR at I-10, PR at I-10.

22 CR at I-9, PR at I-8.

23 CR at I-7, PR at I-6. Commerce’s scope defines “carbon quality” to mean products in which (1) iron

predominates, by weight, over each of the other contained elements, (2) the carbon content is 2 percent or less, by

weight, and (3) none of the elements listed below exceeds the quantity, by weight, respectively indicated: (i) 2.00

percent of manganese, (ii) 2.25 percent of silicon, (iii) 1.00 percent of copper, (iv) 0.50 percent of aluminum, (v)

1.25 percent of chromium, (vi) 0.30 percent of cobalt, (vii) 0.40 percent of lead, (viii) 1.25 percent of nickel, (ix)

0.30 percent of tungsten, (x) 0.012 percent of boron, (xi) 0.50 percent of molybdenum, (xii) 0.15 percent of niobium,

(xiii) 0.41 percent of titanium, (xiv) 0.15 percent of vanadium, or (xv) 0.15 percent of zirconium. CR at I-7-8, PR at

I-6 (citing 73 Fed. Reg. 23189 (Apr. 29, 2008)). 24 CR at I-11, PR at I-9.

25 CR at I-11, PR at I-9.

26 CR at I-11 to I-12, PR at I-9.

27 CR at I-12, PR at I-12; CR/PR Table III-4. 

28 CR/PR at Table III-4. 

29 Petitioners’ Postconference Brief at 7.

30 CR at I-3, I-3 n.4, , PR at I-3, I-3 n.4.

31 Conference Transcript (Tr.) at 79. See Tr. at 76. Small diameter line pipe is occasionally used for

transmission as well. 

6

Manufacturing Engineers (ASME), it is often dual (or multiple) stenciled so that it can be used in both

line pipe and standard pipe applications.21 Most line pipe has a beveled end for welding in the field,

although it is sometimes square cut.22

Line pipe is made from “carbon quality” steel which includes both carbon steel and carbon steel

combined with small amounts of alloys.23 Line pipe is most commonly manufactured by the electricresistance-welded (ERW) process, but the continuous weld (CW) process can be used for pipe up to 4.5

inches in outer diameter.24 The manufacture of line pipe by the ERW process begins with coils of hotrolled steel sheet, which are cut by a slitting machine into strips of the precise width needed to produce a

desired diameter of pipe.25 The slit coils are fed into the tube mills, which cold-form the flat ribbon of

steel into a tubular cylinder by a series of tapered forming rolls. The formed pipe is then welded along

the joint axis, and inside and outside flash from the welding process is removed. After post-weld heat

treatment, sizing rolls shape the tube to specific diameter tolerances. The product is cooled and then cut

at the end of the tube mill by a flying shear or saw.26 Line pipe can be, and often is, produced on the same

equipment and with the same workers that produce other forms of welded pipe, in particular standard pipe

and oil country tubular goods (OCTG),27 as well as large diameter line pipe, i.e., line pipe over 16 inches

in diameter.28

C. Domestic Like Product

Petitioner proposes that the Commission define one domestic like product, line pipe, coextensive

with the scope of the investigation.29 The Korean Respondents do not disagree. For the reasons discussed

below, we define a single domestic like product consisting of line pipe 16 inches and under in diameter,

coextensive with the scope of the investigations.

The record in these investigations shows that all line pipe is used for the same general purpose – 

conveyance of oil and gas – although there is at least some overlap in the uses of line pipe of different

sizes.30 The size range under investigation is generally used for gathering oil or gas at the point of

extraction or distributing oil and gas to consumers, but it is also used occasionally for large pipeline

projects.31 
32 CR at II-1, PR at II-1; Tr. at 47, 91.

33 CR at II-1, PR at II-1.

34 See Certain Welded Large Diameter Line Pipe From Japan and Mexico, Inv. Nos. 731-TA-919 and 920

(Review), USITC Pub. 3593 (Oct. 2007). 35 19 U.S.C. § 1677(4)(A).

36 No domestic producer is related to an exporter or importer of the subject merchandise and none imported the

subject merchandise during the period. 19 U.S.C. § 1677(4)(B). 37 19 U.S.C. § 1677(7)(G)(i).

7

Large diameter line pipe, which exceeds 16 inches in diameter, is generally used for

transportation of gas and oil over long distances.32 As large diameter line pipe is generally used for

different applications than the size range under investigation, the two size ranges are not generally

interchangeable.33 The Commission has previously determined that large diameter line pipe is a distinct

domestic like product from line pipe 16 inches and under in diameter,34 and we do not find any evidence

on the record of these investigations that suggests that we should reconsider that determination. 

Consequently, we define the domestic like product to be coextensive with Commerce’s scope of

investigation, consisting of line pipe 16 inches and under in diameter.

D. Domestic Industry

1. Domestic Industry

The domestic industry is defined as the domestic “producers as a [w]hole of a domestic like

product, or those producers whose collective output of a domestic like product constitutes a major

proportion of the total domestic production of the product.”35 In defining the domestic industry, the

Commission’s general practice has been to include in the industry producers of all domestic production of

the like product, whether toll-produced, captively consumed, or sold in the domestic merchant market.

Based on our finding that the domestic like product is line pipe, for purposes of the preliminary phase of

these investigations we define a single domestic industry consisting of all domestic producers of line

pipe.36

IV. CUMULATION

A. In General

For purposes of evaluating the volume and price effects for a determination of material injury by

reason of the subject imports, section 771(7)(G)(i) of the Act requires the Commission to cumulate

subject imports from all countries as to which petitions were filed and/or investigations self-initiated by

Commerce on the same day, if such imports compete with each other and with domestic like products in

the U.S. market.37 In assessing whether subject imports compete with each other and with the domestic

like product, the Commission has generally considered four factors, including:

(1) the degree of fungibility between the subject imports from different countries and

between imports and the domestic like product, including consideration of specific

customer requirements and other quality related questions;

(2) the presence of sales or offers to sell in the same geographic markets of subject

imports from different countries and the domestic like product;

(3) the existence of common or similar channels of distribution for subject imports

from different countries and the domestic like product; and
38 See Certain Cast-Iron Pipe Fittings from Brazil, the Republic of Korea, and Taiwan, Inv. Nos. 731-TA-278-

280 (Final), USITC Pub. 1845 (May 1986), aff'd, Fundicao Tupy, S.A. v. United States, 678 F. Supp. 898 (Ct. Int'l

Trade), aff'd, 859 F.2d 915 (Fed. Cir. 1988). 39 See, e.g., Wieland Werke, AG v. United States, 718 F. Supp. 50 (Ct. Int'l Trade 1989). 40 Commissioner Lane notes that, with respect to fungibility, her analysis does not require such similarity of

products that a perfectly symmetrical fungibility is required and this factor would be better described as an analysis

of whether subject imports from each country and the domestic like product could be substituted for each other. See

Separate Views of Commissioner Charlotte R. Lane, Certain Lightweight Thermal Paper from China, Germany, and

Korea, Inv. Nos. 701-TA-451 (Preliminary) and 731-TA-1126-1128 (Preliminary), USITC Pub. 3964 (November

2007). 41 The SAA expressly states that “the new section will not affect current Commission practice under which the

statutory requirement is satisfied if there is a reasonable overlap of competition.” SAA at 848 (citing Fundicao

Tupy, S.A. v. United States, 678 F. Supp. 898, 902 (Ct. Int'l Trade 1988)), aff'd 859 F.2d 915 (Fed. Cir. 1988). See

Goss Graphic Sys., Inc. v. United States, 33 F. Supp. 2d 1082,1087 (Ct. Int’l Trade 1998) (“cumulation does not

require two products to be highly fungible”); Wieland Werke, AG, 718 F. Supp. at 52 (“Completely overlapping

markets are not required.”). 42 Petitioners’ Postconference Brief at 8-10.

43 Tr. at 115-116.

44 See 19 U.S.C. § 1677(7)(G) (ii). 45 See, e.g., Korean Respondents’ Postconference Brief, Exhibit 12 (declaration concerning unsuitability of

Chinese product).

8

(4) whether the subject imports are simultaneously present in the market.38

While no single factor is necessarily determinative, and the list of factors is not exclusive, these

factors are intended to provide the Commission with a framework for determining whether the subject

imports compete with each other and with the domestic like product.39 40 Only a “reasonable overlap” of

competition is required.41

B. Analysis

Petitioners argue that, under the facts in this record, the Commission is required to cumulate

imports from the two subject countries.42 Respondents do not argue that, for purposes of our present

injury analysis, imports from the two subject countries should not be cumulated.43

The threshold requirement for cumulation is satisfied because petitioners filed a petition with

respect to each of the subject countries on the same day. None of the statutory exceptions to cumulation

is applicable.44 We next examine the four factors that the Commission customarily considers in

determining whether there is a reasonable overlap of competition.

1. Fungibility

We find a reasonable degree of fungibility among the subject imports from China and Korea and

the domestic like product. While the Korean Respondents have questioned whether subject imports from

China are fungible with domestic or Korean product,45 the record indicates sufficient fungibility for

purposes of cumulation. All domestic producers and importers familiar with the products reported that

subject imports from China were “always,” “frequently,” or “sometimes” interchangeable with subject

imports from Korea, and all such responding domestic producers and 13 of the 14 reporting importers

reported that subject imports from China were “always,” “frequently,” or “sometimes” interchangeable
46 CR/PR at Table II-2. 

47 CR/PR at Table II-2. 

48 CR/PR at Table II-3. 

49 CR at II-8, PR at II-6.

50 CR/PR at Table IV-4, Table IV-5.

51 CR/PR at Table IV-4, Table IV-5.

52 CR at II-1, PR at II-1.

53 CR/PR at Table IV-7.

54 CR/PR at Table IV-6.

9

with domestic line pipe.46 All responding domestic producers and importers familiar with the products

reported that the domestic line pipe and subject imports from Korea were always or frequently

interchangeable.47 All domestic producers reported that non-price factors were sometimes or never

important in purchasing decisions with respect to the subject imports, as did a majority of responding

importers familiar with the products.48 Three importers also reported that imports from China are not

approved for some applications.49

While quality differences may limit the fungibility of subject imports from China to some extent,

the questionnaire responses indicate that the imports from China are at least moderately substitutable with

domestic line pipe and subject imports from Korea. Given these responses and the fact that line pipe is

generally made to API specifications, we find, for purposes of the preliminary phase of the these

investigations, that the record indicates that there is sufficient fungibility among subject imports from

China, subject imports from Korea, and domestic line pipe to support a finding of a reasonable overlap of

competition. 

2. Geographical Markets

We find a broad overlap in geographic markets among subject imports from China, subject

imports from Korea, and domestic line pipe. Subject imports from both countries entered the United

States at over 15 ports located on the East, West and Gulf Coasts, even without taking into account

subsequent shipments between regions.50 While the entries tended to be concentrated in ports such as

Houston and Los Angeles, there were also entries by subject imports at the ports of New York City,

Baltimore and Philadelphia, suggesting that competition is occurring across the United States.51 Domestic

line pipe also competes in a national market.52

3. Simultaneous Presence

The domestic like product and subject imports from China and Korea were simultaneously

present in the U.S. market during the period of investigation. Domestic producers shipped line pipe in the

U.S. market in 2005, 2006, and 2007 based on annual data.53 Based on monthly port entry data, imports

of subject line pipe from China and Korea entered the U.S. market in every month from January 2005

through December 2007, with the exception that no subject imports from China entered the U.S. market

in January 2005.54

4. Channels of Distribution 

Most U.S. shipments of line pipe by domestic producers went to distributors, although shipments

to end users increased over the period of investigation. In 2005, 71.2 percent of domestic producers’ U.S.

shipments went to distributors and 28.8 percent went to end users, whereas in 2007, 53.3 percent of
55 CR/PR at Table II-1. 

56 Negligibility is not an issue in these investigations under 19 U.S.C. § 1677(24). Official statistics from

Commerce indicate that from April 2007 through March 2008, the most recent 12-month period preceding the filing

of the petition for which data were available, subject imports from China accounted for 39.9 percent of total line pipe

imports and subject imports from Korea accounted for 31.2 percent of total line pipe imports. CR at IV-7, PR at IV6. 57 19 U.S.C. §§ 1671b(a) and 1673b(a).

58 19 U.S.C. § 1677(7)(B)( i). The Commission “may consider such other economic factors as are relevant to

the determination,” but shall “identify each [such] factor . . . [a]nd explain in full its relevance to the determination.” 

19 U.S.C. § 1677(7)(B). See also Angus Chemical Co. v. United States, 140 F.3d 1478 (Fed. Cir. 1998). 59 19 U.S.C. § 1677(7)(A).

60 19 U.S.C. § 1677(7)(C)(iii).

61 19 U.S.C. § 1677(7)(C)(iii).

10

domestic producers’ U.S. shipments went to distributors and 46.7 percent went to end users. All importer

shipments of subject imports, whether from China or Korea, went to distributors.55

5. Conclusion

Based on our consideration of the four criteria discussed above, we find that there is a reasonable

overlap of competition among the subject imports and the domestic like product, and we cumulate subject

imports from China and Korea for purposes of our present material injury analysis.

V. REASONABLE INDICATION OF MATERIAL INJURY OR THREAT OF MATERIAL

INJURY BY REASON OF SUBJECT IMPORTS56

In the preliminary phase of antidumping or countervailing duty investigations, the Commission

determines whether there is a reasonable indication that an industry in the United States is materially

injured by reason of the imports under investigation.57 In making this determination, the Commission

must consider the volume of subject imports, their effect on prices for the domestic like product, and their

impact on domestic producers of the domestic like product, but only in the context of their U.S.

production operations.58 The statute defines “material injury” as “harm which is not inconsequential,

immaterial, or unimportant.”59 In assessing whether there is a reasonable indication that the domestic

industry is materially injured by reason of subject imports, we consider all relevant economic factors that

bear on the state of the industry in the United States.60 No single factor is dispositive, and all relevant

factors are considered “within the context of the business cycle and conditions of competition that are

distinctive to the affected industry.”61

For the reasons stated below, we determine that there is a reasonable indication that the domestic

industry producing line pipe is materially injured or threatened with material injury by reason of subject

imports from China and Korea.

A. Conditions of Competition and the Business Cycle

The following conditions of competition inform our analysis of whether there is a reasonable

indication of material injury or threat of material injury by reason of subject imports.
62 CR at I-9, PR at I-8.

63 CR at I-10, PR at I-8.

64 See CR at II-7, PR at II-5. 65 Korean Respondents claim that end users often find the subject imports from China unacceptable for line pipe

applications, and moreover, Chinese line pipe is frequently dual stenciled so that it does not face high preliminary

antidumping duties resulting from Commerce’s preliminary determination in the ongoing investigation concerning

standard pipe from China. They assert that a significant portion of subject imports from China is actually being

utilized in standard pipe applications. See Korean Respondents’ Brief at 26. We will examine this issue more

thoroughly in any final phase investigations. 66 CR at II-5, PR at II-3, II-5.

67 CR/PR at Table IV-8.

68 CR at II-5, PR at II-5.

69 Tr. at 54, 67.

70 Tr. at 56; Korean Respondents’ Postconference Brief at Exhibit 2. The “rig count” is the number of rigs

actively drilling and exploring for crude oil or natural gas in the United States. See CR at Fig. II-2. 71 CR at II-5, PR at II-5.

72 See Tr. at 76. 73 Petitioners’ Postconference Brief at 15-16; Korean Respondents’ Postconference Brief at Exhibit 16 (listing

pipeline projects). While the Overland Pass Pipeline is due to be completed this year, the schedule for the other

projects is unclear. CR at III-4, PR at III-2 to III-3.

11

1. Product Considerations

As noted above, line pipe is produced to API specification 5L. Line pipe bears that stencil as

well as grades such as B, X-42 or X-52.62 Pipe that is in conformance with API Specification 5L Grade B

is automatically also in conformance with the less restrictive standard pipe specification of the American

Society for Testing and Materials, ASTM A-53 Grade B. As a consequence, manufacturers often mark

such product with both specifications so that it may be used as standard pipe or line pipe (“dual

stenciling”).63 While line pipe can be used for less demanding standard pipe applications, most producers

and importers agreed in their questionnaire responses that there are no substitute products for line pipe

when it is used for oil and gas applications.64 65

2. Demand Conditions

Demand for line pipe, which is principally used in the gathering and distribution of oil and gas, is

tied to oil and gas exploration (and ultimately to demand for oil and gas).66 When measured by apparent

U.S. consumption, U.S. line pipe demand increased sharply from 872,606 short tons in 2005 to 1,403,335

short tons in 2006, before declining slightly to 1,375,726 short tons in 2007, for an overall increase of

57.7 percent during the period.67 Most producers and importers reported in their questionnaire responses

that the increase in demand was due to the high level of activity in the oil and gas industries.68

A domestic industry representative at the Staff Conference explained that the expansion of

drilling for natural gas, rather than oil exploration, was responsible for much of the increase in demand 

during the period.69 Domestic industry representatives also suggested that demand, as evidenced by the

rig count, is likely to stabilize at the higher levels seen at the end of the period, with further slight

increases.70 There are reports that demand for line pipe outside of the United States has also increased.71

While line pipe 16 inches and under in outside diameter is generally used for gathering oil or gas

at the point of extraction or distributing oil or gas to consumers,72 a number of large transmission projects

during the period also boosted demand for line pipe. Such projects typically call for large diameter pipe,

but at least two projects used line pipe 14 to 16 inches in diameter.73
74 CR at III-1, III-1n.1 PR at III-1, III-1 n.1.

75 CR at VI-1, PR at VI-1.

76 Subject imports increased from 115,596 short tons in 2005 to 410,642 short tons in 2006, and to 458,997

short tons in 2007. CR/PR at Table IV-2. U.S. shipments of domestic line pipe also increased, from 522,966 short

tons in 2005 to 694,012 short tons in 2006, and to 727,185 short tons in 2007. CR/PR at Table III-5. 77 CR/PR at Table IV-8.

78 CR/PR at Table III-2.

79 CR at I-12, II-3, PR at I-9, II-3; CR/PR at Table III-4.

80 CR at Table III-4. 

81 See CR/PR at Table III-4. 82 See CR/PR at Table III-4. 83 CR/PR at Table IV-2.

84 CR/PR at Table IV-2.

85 CR/PR at Table IV-8.

86 See CR/PR at Table IV-3. 87 CR/PR at Table VI-1.

88 CR at V-1, PR at V-1.

89 CR at V-1, PR at V-1.

90 CR/PR at Table II-1.

91 American Cast Iron Pipe Company (“ACIPCO”) reported ***. Petitioners’ Postconference Brief at 15-16;

CR/PR at Table II-1 n.1. See also CR at III-4, PR at III-1, III-3 (noting three large projects).

12

3. Supply Conditions

Nine producers accounted for almost all U.S. commercial shipments of line pipe during the

period.74 During the period examined, the line pipe industry underwent extensive restructuring, including

Tenaris’ purchase of Maverick in October 2006, IPSCO’s purchase of NS Group in December 2006, and

U.S. Steel’s purchase of Lone Star in June 2007.75 Despite the restructuring and some associated

production curtailments, U.S. producers’ shipments increased over the period, though the volume of

subject imports increased more than did the volume of U.S. producers’ shipments.76 The result was a

decline in the domestic industry’s market share, from 59.9 percent in 2005 to 52.9 percent in 2007.77 The

domestic industry’s capacity, production, and capacity utilization all rose from 2005 to 2007.78

Line pipe is often produced on the same equipment and with the same workers that produce other

forms of welded pipe, in particular standard pipe, oil country tubular goods (OCTG),79 and large diameter

line pipe.80 Line pipe of 16 inches and under in diameter typically accounted for less than a quarter of the

industry’s production of pipe products.81 Both subject line pipe and large diameter line pipe experienced

extensive growth in production during the period.82

Domestic supply of line pipe is also supplemented by nonsubject imports.83 Nonsubject imports

increased from 2005 to 2006 before declining in 2007.84 In terms of market share, nonsubject imports fell

from 26.8 percent of the market to 13.8 percent in 2007.85 Major nonsubject sources of line pipe included

Mexico, Taiwan, Japan, and Brazil.86

The cost of goods sold on a per ton basis increased from $780 per short ton in 2005 to $897 per

short ton in 2007.87 Raw material costs were responsible for much of the increase and accounted for

approximately 75 percent of the cost of goods sold.88 Moreover, during the first few months of 2008,

prices for hot-rolled steel, the primary input for production of line pipe, increased sharply.89

 Line pipe, particularly the commodity grades, is primarily sold through distributors.90 Sales for

large projects were made directly to end users, and much of the increase in domestic sales to end users

during 2007 resulted from domestic shipments by producers supplying a few large pipeline projects.91

Spot sales were the predominant basis by which the subject imports and the domestic like product were
92 CR at V-6, PR at V-4.

93 Tr. at 47.

94 See CR at I-9, PR at I-8; Tr. at 41-42, 64. 95 Tr. at 41.

96 CR/PR at Table II-2.

97 CR/PR at Table II-2. The Korean Respondents argued that Chinese line pipe was often poor quality and

deemed unacceptable by purchasers, many of whom maintain “Approved Manufacturer Lists.” Korean

Respondents’ Postconference Brief at 35, Exhibit 12 (declaration of ***). 98 According to ***. Postconference Brief of Tex-Tube, at Exhibit 1. 99 Petitioners’ Postconference Brief at 15-16.

100 Chairman Daniel R. Pearson, Vice Chairman Shara L. Aranoff, and Commissioner Deanna Tanner Okun

determine that there is a reasonable indication that a domestic industry is threatened with material injury by reason

of subject imports of line pipe from China and Korea. See Views of Chairman Daniel R. Pearson, Vice Chairman

Shara L. Aranoff, and Commissioner Deanna Tanner Okun Concerning Reasonable Indication of Threat of Material

Injury. 101 CR/PR at Table IV-2. The increase in subject imports from China was particularly notable, rising over 900

percent from 2005 to 2007. Subject imports from Korea more than doubled over the same period. Id. As noted,

some of the subject imports from China during the period are subject to another ongoing investigation, Circular

Welded Carbon Quality Steel Pipe from China, Inv. Nos. 701-TA-447 and 731-TA-1116 (Final). These imports of

line pipe from China are dual-stenciled (produced to both ASTM and API specifications) and have one or more of

the following physical characteristics typically associated with standard and structural pipe and tube: 32 feet in

(continued...)

13

sold, and prices were typically negotiated for each transaction.92 For pipeline projects, the end users may

solicit bids directly from a manufacturer for the contract.93

4. Substitutability and Other Conditions

The information on the record indicates that line pipe produced to the same specifications is

generally interchangeable.94 The subject imports from China and Korea are typically produced to the

same specifications as domestic line pipe, resulting in at least moderate substitutability between the

subject imports and domestic line pipe.95

All responding domestic producers and importers familiar with the products reported that

domestic line pipe and subject imports from Korea are always or frequently interchangeable.96 All

responding producers reported that subject imports from China are always interchangeable with domestic

line pipe, whereas a majority of reporting importers familiar with the products indicated that the Chinese

product is only sometimes interchangeable.97

Line pipe for use in large projects is sold in longer lengths, of up to 80 feet, a size which the

importers did not supply.98 In contrast, subject imports tend to be concentrated in the commodity grades

of line pipe, which is line pipe 8 inches and under in diameter and 40 to 42 feet in length.99

B. Views of Commissioners Charlotte R. Lane, Irving A. Williamson, and Dean A.

Pinkert Concerning Reasonable Indication of Material Injury100

1. Volume of the Subject Imports

Section 771(7)(C) of the Act provides that the “Commission shall consider whether the volume of

imports of the merchandise, or any increase in that volume, either in absolute terms or relative to

production or consumption in the United States, is significant.”

The volume of subject imports surged during the period of investigation from 115,596 short tons

in 2005 to 410,642 short tons in 2006 and to 458,997 short tons in 2007.101 As apparent consumption
101 (...continued)

length or less; less than 2.0 inches (50 mm) in outside diameter; galvanized and/or painted surface finish; or a

threaded and/or coupled end finish. Imports of such dual-stenciled circular welded pipe from China reportedly

increased from 9,920 short tons in 2005 to 67,870 short tons in 2007. CR at IV-5 n.6, PR at IV-3 n.6; CR/PR at

Table IV-2. This is an issue we will reexamine any final phase of the investigations. 102 CR/PR at Table IV-8. 103 CR/PR at Table IV-8. 104 CR/PR at Table IV-9. 105 Petitioners argue that the subject imports’ effects were felt primarily by those domestic producers who focus

on the commodity grades of line pipe while those domestic producers selling directly to end users were insulated

from import competition to some extent. See Petitioners’ Postconference Brief at 13-17. While we do not have

information concerning the grades of the subject imports, the data indicate that the subject imports increased most

dramatically in the over 4.5 inches in diameter segment. See CR at IV-5 n.5, PR at IV-3 n.5. The quantity of line

pipe from China exceeding 4.5 inches in diameter increased from 21,181 short tons to 233,296 short tons from 2005

to 2007; the quantity from Korea increased from 63,818 short tons to 139,279 short tons. Id. In any final phase

investigations, we will seek more detailed information concerning the market segments in which the subject imports

compete. 106 19 U.S.C. § 1677(7)(C)(ii). 107 CR/PR at Table II-3.

14

increased sharply, the increasing subject imports captured substantial market share from both the

domestic industry and nonsubject imports. The market share of subject imports measured by quantity

rose from 13.2 percent in 2005 to 29.3 percent in 2006 and to 33.4 percent in 2007, while the domestic

industry’s market share declined from 59.9 percent in 2005 to 52.9 percent in 2007.102 Nonsubject

imports lost even more market share, declining from 26.8 percent in 2005 to 13.8 percent in 2007.103 The

ratio of the quantity of subject imports to U.S. production rose from 20.3 percent in 2005 to 54.8 percent

in 2006 and to 59.6 percent in 2007.104

Based on the foregoing, for purposes of the preliminary phase of these investigations, we find that

the volume of subject imports and the increase in that volume are significant, both in absolute terms and

relative to consumption and production in the United States.105

2. Price Effects of the Subject Imports

Section 771(7)(C)(ii) of the Act provides that, in evaluating the price effects of the subject

imports, the Commission shall consider whether –

 (I) there has been significant price underselling by the imported merchandise as

compared with the price of domestic like products of the United States, and

 (II) the effect of imports of such merchandise otherwise depresses prices to a significant

degree or prevents price increases, which otherwise would have occurred, to a significant

degree.106

The majority of domestic producers and even a slight majority of importers familiar with the

products reported that differences other than price are only sometimes or never a significant factor in sales

of line pipe.107 This suggests that price is an important consideration in purchasing decisions. The record

also shows that subject imports from Korea and domestic line pipe are highly substitutable,
108 CR/PR at Tables II-1 and II-2; CR at V-6, PR at V-4. 109 The specification of the products were the following: API 5L Grades B/X-42 welded pipe, 4-inch nominal

size (4.5 inch outside diameter), plain end, with a wall thickness of 0.237 inch (Product 1); API 5L Grades B/X-42

welded pipe, 6-inch nominal size (6.625 inch outside diameter), plain end, with a wall thickness of 0.280 inch

(Product 2); API 5L Grades B/X-42 welded pipe, 8-inch nominal size (8 5/8 inch outside diameter), plain end, with a

wall thickness of 0.322 inch (Product 3); API 5L Grades B/X-42 welded pipe, 12-inch nominal size (12.75 inch

outside diameter), plain end, with a wall thickness of 0.375 inch (Product 4). CR at V-6. 110 CR at V-7, PR at V-5. 111 CR/PR at Table V-6. 112 CR at V-15, PR at V-5. 113 CR at Tables V-1, V-2, V-3, and V-4; CR/PR at Figure V-3. 114 See CR/PR at Figure V-3. 115 The unit value of average COGS was $780 per short ton in 2005, $770 per short ton in 2006, and $897 per

short ton in 2007. CR/PR at Table VI-1. The unit value cost of raw materials was $585 per short ton in 2005, $573

per short ton in 2006, and $664 per short ton in 2007. Id. 116 The unit value of net sales was $977 per short ton in 2005, $1,007 per short ton in 2006, and $1,042 per

short ton in 2007. CR/PR at Table VI-1. 117 The COGS-to-net-sales ratio was 79.8 percent in 2005, 76.5 percent in 2006, and 86.1 percent in 2007. 

CR/PR at Table VI-1. During any final phase of these investigations, we intend to more closely examine the causes

of the domestic industry’s increasing costs.

15

subject imports from China and domestic line pipe are moderately substitutable, and most sales of both

the domestic like product and subject imports are sold on the spot market to distributors.108

The Commission collected quarterly pricing data for 4-inch, 6-inch, 8-inch and 12-inch API 5L

Grades B/X-42 line pipe.109 Nine U.S. producers, seven importers of line pipe from China, and seven

importers of line pipe from Korea reported data for the four product categories. The data accounted for

10 percent of U.S. producers’ shipments, 10 percent of subject imports from China, and 27 percent of

subject imports from Korea in 2007.110

The Commission’s pricing data indicate that prices of imports from China and Korea were lower

than domestic prices in all quarters for all four products. Specifically, subject imports undersold the

domestic like product in all 96 quarterly pricing comparisons.111 For subject imports from China, margins

of underselling ranged from 15.7 percent to 43.5 percent, and for subject imports from Korea, margins

ranged from 9.2 percent to 37.9 percent.112 Given the consistency and size of the underselling margins

and the substitutability of the domestic and imported products, we find underselling by the subject

imports to be significant.

Prices for domestically produced line pipe generally fluctuated during 2005 and 2006, peaking in

2006, and then generally declining at the end of 2007 to levels below those of early 2005,

notwithstanding the large growth in apparent consumption.113 Prices for all four pricing products

followed relatively similar trends.114 Given the large increase in the supply of lower-priced subject

imports during the period, we find that the modest price declines experienced by domestic line pipe

during 2006 to 2007 provide some evidence of price depression attributable to the subject imports.

We also find that the subject imports have prevented domestic price increases that otherwise

would have occurred in the absence of the subject imports. On a per unit basis, the domestic industry’s

cost of goods sold (“COGS”) increased from 2006 to 2007, primarily as a result of an increase in per unit

raw material costs.115 While the industry increased the unit value of its net sales, the increases were not

nearly sufficient to compensate the industry for its rising costs.116 As a result, the domestic industry’s

COGS as a ratio to net sales increased over the period, resulting in a cost-price squeeze.117 Given the

strong increase in demand during this period, we find that it was competition from the subject imports that

prevented the domestic industry from raising its prices to cover its increasing costs. We therefore
118 The petitioners reported that because most producer sales are made to distributors, they are unable to identify

specific instances of lost sales or lost revenues. They reported that much of the competition is between distributors

selling domestic and imported line pipe. Accordingly, the Commission has no lost sales or lost revenue revenues

allegations to evaluate. See CR at V–15, PR at V-11. 119 In its notice of initiation, Commerce estimated that the dumping margin for subject line pipe from China

ranges from 57.45 to 58.96 percent and that the dumping margin for subject line pipe from Korea ranges from 41.69

percent to 42.75 percent. 73 Fed. Reg. 23188, 23192 (April 29, 2008). 120 19 U.S.C. § 1677(7)(C)(iii); see also SAA at 851 and 885 (“In material injury determinations, the

Commission considers, in addition to imports, other factors that may be contributing to overall injury. While these

factors, in some cases, may account for the injury to the domestic industry, they also may demonstrate that an

industry is facing difficulties from a variety of sources and is vulnerable to dumped or subsidized imports.”). SAA

at 885. 121 19 U.S.C. § 1677(7)(C)(iii); see also SAA at 851, 885; Live Cattle from Canada and Mexico, Inv. Nos. 701-

TA-386, 731-TA-812-813 (Preliminary), USITC Pub. 3155 (Feb. 1999) at 25 n.148. 122 Production increased from 570,077 short tons in 2005 to 749,202 short tons in 2006 and to 769,607 short

tons in 2007. CR/PR at Table III-2. 123 CR/PR at Table III-2. 124 U.S. shipments were 522,966 short tons in 2005, 694,012 short tons in 2006, and 727,185 short tons in 2007. 

CR/PR at Table III-5. 125 The ratio of inventories to total shipments was 7.6 percent in 2005, 6.7 percent in 2006, and 10.6 percent in

2007. CR/PR at Table III-6. 126 CR/PR at Table VI-2.

16

conclude that subject imports prevented price increases, which otherwise would have occurred, to a

significant degree.

For the foregoing reasons, we find for purposes of these preliminary determinations that there has

been significant underselling by the subject imports and that such imports have suppressed prices to a

significant degree.118

3. Impact of the Subject Imports on the Domestic Industry119

Section 771(7)(C)(iii) of the Act provides that the Commission, in examining the impact of the

subject imports on the domestic industry, “shall evaluate all relevant economic factors which have a

bearing on the state of the industry.”120 These factors include output, sales, inventories, ability to raise

capital, research and development, and factors affecting domestic prices. No single factor is dispositive

and all relevant factors are considered “within the context of the business cycle and conditions of

competition that are distinctive to the affected industry.”121

With demand growing strongly, the domestic industry’s production, capacity utilization,

shipments, and net sales quantity and value all increased over the period. Domestic production increased

by 35.0 percent from 2005 to 2007.122 Capacity utilization increased from 62.7 percent in 2005 to 79.1

percent in 2006, before declining to 74.8 percent in 2007.123 The domestic producers’ U.S. shipments

increased by 39.1 percent from 2005 to 2007,124 although their inventories as a ratio to shipments also

increased.125 The domestic industry’s quantity of net sales was 591,129 short tons in 2005, 748,071 short

tons in 2006, and 745,656 short tons in 2007; the total value of the industry’s net sales was $577.8 million

in 2005, $753.1 million in 2006, and $777.1 million in 2007.126

With the increase in production and shipment levels, most of the domestic industry’s employment

indicators also improved over the period of investigation. The number of production and
127 The number of production and related workers increased from 780 in 2005 to 929 in 2006 and 1,037 in 2007. 

Aggregate hours worked increased from 1.5 million in 2005 to 1.9 million in 2006 and to 2.1 million in 2007. 

Aggregate wages paid were $33.9 million in 2005, $43.2 million in 2006, and $48.9 million in 2007. Hourly wages

rose from $22.71 in 2005 to $22.86 in 2006 and to $23.46 in 2007. CR/PR at Table III-7. 128 Productivity (measured in short tons per 1,000 hour) rose from 381.9 in 2005 to 396.7 in 2006, before

falling to 368.9 in 2007. CR/PR at Table III-7. The industry’s capital expenditures were $7.5 million in 2005, $13.7

million in 2006, and $10.4 million in 2007. CR/PR at Table VI-4. 129 The industry’s operating income increased from $93.4 million in 2005 to $142.2 million in 2006, before

falling to $71.4 million in 2007. CR/PR at Table VI-2. Operating income as a ratio to net sales increased from 16.2

percent to 18.9 percent in 2006 and then fell to 9.2 percent in 2007. Id. 130 Commissioner Pinkert, in any final phase investigations, invites the parties to supply information concerning

the historical profitability levels of this industry. 131 See CR/PR at Table IV-8. 132 The Korean Respondents attribute the declining profitability of the domestic industry to restructuring by

three petitioning companies, U.S. Steel, Maverick Tube, and Tex-Tube. Korean Respondents’ Postconference Brief

at 17-24. With respect to U.S. Steel we find that the record evidence does not show that its acquisition of Lone Star

accounts for its financial performance. See CR at VI-7 to VI-8 n.11, PR at VI-3 n.11.

Furthermore, while we examine the domestic industry as a whole, even with Maverick Tube and Tex-Tube

excluded from the financial data of the domestic industry, the industry’ operating income as a ratio to net sales fell

from *** percent in 2006 to *** percent in 2007. Staff Worksheet Table C-1A. Accordingly, any shutdowns and

disruptions associated with the restructuring of these two companies do not fully account for the industry’s declining

profitability. In any final phase investigations, we will more closely examine the industry’s cost structure and

accounting treatment of extraordinary expenses. 133 See CR at III-4, PR at III-1, III-3; Petitioners’ Postconference Brief at 15-16. Domestic producers

American, Stupp, and CSI focused their efforts on these sales and ***. See CR at III-4, PR at III-3; CR/PR at Table

VI-2; CR/PR at Table II-1 n.1.

17

related workers, aggregate hours worked, aggregate wages paid, and hourly wages all increased.127 There

was a decline in productivity, but the industry’s capital expenditures increased.128

Despite the increase in the output of the domestic industry during a period of strong demand, the

industry’s profitability suffered. While the industry remained profitable, it experienced a 23.6 percent

decline in operating income from 2005 to 2007, and a 49.8 percent decline from 2006 to 2007 alone.129 130

The industry lost 7 percentage points of market share as well, despite its unused capacity for production

of line pipe.131 As described above, we attribute this decline in profitability to the presence of low-priced

subject imports and their price-suppressing effects. We note the Korean Respondents’ argument that

disruptive restructuring experienced by several domestic producers is responsible for any lost profitability

during the period, but we find significant evidence to the contrary in the record of the preliminary phase

of these investigations.132 While some producers experienced increased costs due to their restructuring,

other domestic producers benefitted from sales of line pipe directly to end users for a few large projects,

which tended to mask the effects of the subject imports because there is little import competition for this

business.133 The tremendous growth in demand also enabled the industry to remain profitable, despite the

surge in subject imports.

We conclude that subject imports had a significant adverse impact on the condition of the

domestic industry during the period of investigation. As discussed above, subject imports gained

significant market share from the domestic industry, undersold the domestic product, and suppressed

domestic prices for line pipe to a significant degree. As the domestic industry’s costs increased and

significant volumes of lower-priced subject imports entered the U.S. market, the domestic industry was

caught in a cost-price squeeze. The increase in subject imports and their adverse effects on U.S. prices
134 While nonsubject imports of line pipe were a declining presence in the U.S. market during the period

examined, we note that there is limited information on the record regarding such imports. In any final phase

investigations, we will seek information on the role of non-subject imports of line pipe in the U.S. market. We invite

parties to comment in any final phase investigations on whether Bratsk Aluminium Smelter v. United States, 444

F.3d 1369 (Fed. Cir. 2006), is applicable to the facts of these investigations. We also invite parties to comment on

what additional information the Commission should collect to address the issues raised by the Court, how that

information should be collected, and which of the various non-subject sources should be the focus of additional

information gathering by the Commission in any final phase investigations. 135 19 U.S.C. § 1677(7)(G)(I). There are four exceptions to the cumulation provision, none of which applies to

these investigations. See id. at 1677(7)(G)(ii). 136 The Uruguay Round Agreements Act, Statement of Administrative Action ("SAA"), H.R. Doc. No. 103-316,

103rd Cong., 2d Sess. (1994) (at 848) expressly states that “the new section will not affect current Commission

practice under which the statutory requirement is satisfied if there is a reasonable overlap of competition.” (citing

Fundicao Tupy, S.A. v. United States, 678 F. Supp. 898, 902 (Ct. Int’l Trade), aff’d 859 F.2d 915 (Fed. Cir. 1988)). 137 See Certain Cast-Iron Pipe Fittings from Brazil, the Republic of Korea, and Taiwan, Invs. Nos. 731-TA-278-

280 (Final), USITC Pub. 1845 (May 1986), aff’d, Fundicao Tupy, S.A. v. United States, 678 F. Supp. 898 (Ct. Int’l

Trade), aff’d, 859 F.2d 915 (Fed. Cir. 1988).

18

caused declines in the domestic industry’s profitability and market share over the period of

investigation.134

C. Views of Chairman Daniel R. Pearson, Vice Chairman Shara L. Aranoff, and

Commissioner Deanna Tanner Okun Concerning Reasonable Indication of Threat

of Material Injury

Based on the record in these investigations, we determine that there is a reasonable indication that

an industry in the United States is threatened with material injury by reason of subject imports of circular

welded carbon quality steel line pipe from China and Korea.

1. Cumulation for Threat

a. In General

For purposes of evaluating the volume and price effects for a present material injury

determination, Section 771(7)(G)(I) of the Act requires the Commission to cumulate subject imports from

all countries as to which petitions were filed and/or investigations self-initiated by Commerce on the same

day, if such imports compete with each other and with domestic like products in the United States

market.135 In assessing whether subject imports compete with each other and with the domestic like

product,136 the Commission has generally considered four factors, including:

(1) the degree of fungibility between the subject imports from different countries and

between imports and the domestic like product, including consideration of specific

customer requirements and other quality related questions;

(2) the presence of sales or offers to sell in the same geographical markets of subject

imports from different countries and the domestic like product;

(3) the existence of common or similar channels of distribution for subject imports

from different countries and the domestic like product; and

(4) whether the subject imports are simultaneously present in the market.137
138 See, e.g., Wieland Werke, AG v. United States, 718 F. Supp. 50 (Ct. Int’l Trade 1989). 139 See, e,g., Wieland Werke, AG, 718 F. Supp. at 52 (“Completely overlapping markets are not required”). 140 19 U.S.C. § 1677(7)(H). 141 See Torrington Co. v. United States, 790 F. Supp. at 1172 (affirming Commission’s determination not to

cumulate for purposes of threat analysis when pricing and volume trends among subject countries were not uniform

and import penetration was extremely low for most of the subject countries); Metallverken Nederland B.V. v. United

States, 728 F. Supp. 730, 741-42 (Ct. Int’l Trade 1989); Asociacion Colombiana de Exportadores de Flores v. United

States, 704 F. Supp. 1068, 1072 (Ct. Int’l Trade 1988).

142 Petitioners’ Postconference Brief at 33-40. 143 Korean Respondents’ Postconference Brief at 31-39. 144 See 19 U.S.C. § 1677(7)(G)(ii). 145 CR/PR at Table IV-2. 

19

While no single factor is necessarily determinative, and the list of factors is not exclusive, these factors

are intended to provide the Commission with a framework for determining whether the subject imports

compete with each other and with the domestic like product.138 Only a “reasonable overlap” of

competition is required, but if these four factors are met, cumulation of subject imports is mandatory.139

By contrast, for purposes of determining if a threat of material injury exists, cumulation is

discretionary. Under section 771(7)(H) of the Act, the Commission may “to the extent practicable”

cumulatively assess the volume and price effects of subject imports from all countries as to which

petitions were filed on the same day if the requirements for cumulation for material injury analysis are

satisfied.140 In addition to considering the four cumulation factors described above, the Commission has

considered other factors such as the similarity of the volume trends and pricing data of subject imports

from the countries under investigation.141

Petitioners argue that the Commission should cumulate subject imports for purposes of its threat

analysis.142 Korean respondents contend that imports from Korea should not be cumulated with imports

from China for purposes of threat as, among other factors, the record indicates that the volume and

pricing trends for imports from Korea are distinct from those for imports from China.143

b. Analysis

In these investigations, the threshold criterion is satisfied because Petitioners filed petitions with

respect to both China and Korea on the same day, April 3, 2008, and none of the cumulation exceptions

applies.144 Further, as noted above, we conclude that there is a reasonable overlap of competition between

subject imports from China and Korea as well as among subject imports and the domestic like product. 

Given our finding that there is a reasonable overlap of competition between subject imports, we

proceed to examine whether, for purposes of a determination of threat of injury, subject imports exhibited

similar volume and price trends during the period examined so as to justify a decision to cumulate such

imports. We determine that, viewed broadly, the overall trends in subject import volumes from China and

Korea, and the price trends of those imports, are sufficiently similar to warrant the use of our discretion in

cumulating subject imports.

First, during the period of investigation, the volume of subject imports from both countries

increased markedly.145 From 2005 to 2007, imports from China increased from 27,673 short tons in 2005

to 280,820 short tons in 2007, while imports from Korea increased from 87,923 short tons in 2005 to

178,177 short tons in 2007. While the percentage increase of imports from China far exceeded that of

imports from Korea during the period examined, this is accounted for by the fact that imports from China

started the period at relatively low levels. Also, we acknowledge that in 2007, imports from Korea
146 CR/PR at Table V-6, as revised by Memorandum INV-FF-057. 147 CR/PR at Table V-6, as revised by Memorandum INV-FF-057. 148 For example, for product 1, the highest underselling margin for subject imports from China (***) occurred in

July-September 2006, the same period in which the highest underselling margin for subject imports from Korea

(36.9 percent) occurred. CR/PR at Table V-1. 149 CR at VII-3 and VII-5, PR at VII-2 and VII-4. 150 Petitioners’ Postconference Brief at 53-56. 151 Korean Respondents’ Postconference Brief at 34. 152 CR/PR at Table II-1. 153 Korean Respondents’ Postconference Brief at 36-37. 154 CR/PR at Table VII-7. 155 Korean Respondents’ Postconference Brief at 34-35. 156 CR/PR at Table II-2.

20

declined slightly, in contrast to those from China, which continued to increase. Nevertheless, the overall

trend for both subject imports sources was strongly positive over the three-year period.

Second, pricing data indicated strikingly similar margins of underselling between the subject

countries.146 The average margin of underselling during the period for imports from China was 28.9

percent, and was 24.1 percent for imports from Korea.147 Underselling margins for imports from China

ranged from 15.7 to 43.5 percent, while for Korean imports such margins ranged from 9.2 to 37.9 percent. 

Moreover, we find it significant that imports from neither country oversold the domestic like product in

any quarter during the period examined. In fact, even the trends in underselling margins by subject

imports from China and Korea were also roughly similar, with underselling margins from both countries

peaking in mid-2006.148

Finally, we note that the line pipe industries in both China and Korea are large and export

oriented. In recent years, both China and Korea have ranked in the top three worldwide in welded tube

production, and in 2007 the two countries far outpaced all others in line pipe exports.149 In addition, there

is evidence on the record that line pipe has been identified by the Chinese government as a “key product”

that would provide export opportunities for Chinese firms.150

Korean respondents argue that Korean products are sold through an established distribution

network, in contrast to Chinese producers, who have no such network and must sell on a more “ad hoc”

basis.151 Even so, the record indicates that both sets of subject producers sell exclusively through the

distributor channel.152 Korean respondents also contend that, in the absence of antidumping orders,

Korean companies would have far less incentive to shift from exports of standard pipe to exports of line

pipe because, unlike Chinese firms, which face potentially significant antidumping duties from the

ongoing investigation into imports of standard pipe, Korean producers face only minimal antidumping

duties under an existing antidumping duty order.153 However, the current investigation into exports of

standard pipe from China is not final, and thus the premise of the argument is speculative. Further,

between 2005 and 2006, a period in which demand was increasing in the United States, Korean producers

did in fact shift from other pipe production to line pipe production without increasing overall pipe

production, effectively demonstrating an ability and willingness to product-shift.154 Finally, Korean

respondents allege that there are significant quality differences between Chinese and Korean pipe that

would make cumulation for threat purposes inappropriate.155 While the record at this preliminary stage is

unclear on this point, we note that a majority of both producers and importers familiar with the products

indicated that Chinese and Korean pipe was either “always” or “frequently” interchangeable.156 Thus, we

do not believe that this factor argues against cumulation of subject imports for purposes of assessing

threat of injury.

In sum, although there are some factors that may distinguish subject imports from one another,

we determine that the similar overall trends in the volumes and prices of subject imports, coupled with
157 19 U.S.C. § 1677(7)(F)(ii). 158 Id. 159 19 U.S.C. § 1677(7)(F)(i) and (iii). These factors include the following: any existing unused production

capacity or imminent, substantial increase in production capacity in the exporting country; a significant rate of

increase of the volume or market penetration of imports of the subject merchandise indicating the likelihood of

substantially increased imports; whether imports of the subject merchandise are entering at prices that are likely to

have a significant depressing or suppressing effect on the domestic prices and are likely to increase demand for

further imports; inventories of the subject merchandise; the potential for product shifting; the actual and potential

negative effects on the existing development and production effects of the domestic industry; and whether dumping

in the markets of foreign countries suggests a threat of material injury to the domestic industry. Id. Although the

statutory factors also require the Commission to consider any information presented by the administering authority

as to the nature of any countervailable subsidy, such information is unavailable in this preliminary phase. Finally, an

additional statutory factor addressing raw and processed agricultural products is inapplicable in these investigations. 160 We observe that in its notice of initiation, Commerce estimated that the alleged dumping margins for subject

imports ranged from 57.45 percent to 58.96 percent for China, and from 41.69 percent to 42.75 percent for Korea. 

Certain Circular Welded Carbon-Quality Steel Line Pipe from the Republic of Korea and the People’s Republic of

China: Initiation of Antidumping Duty Investigations, 73 Fed. Reg. 23188 (Apr. 29, 2008).

Moreover, in its notice of initiation, Commerce initiated investigations into 31 potentially countervailable

subsidy programs in China, including two related to preferential lending, two related to equity infusions and debtfor-equity swaps, ten related to tax benefit programs, two related to value-added tax (“VAT”) programs, one related

to land grants and discounts, three related to allegedly subsidized provision of goods and services, six related to

various grant programs, and five related to various provincial programs. Circular Welded Carbon-Quality Steel Line

Pipe from the People’s Republic of China: Notice of Initiation of Countervailing Duty Investigation, 73 Fed. Reg.

23184 (Apr. 29, 2008). 

21

the similar export-orientation and behavior of the subject foreign industries, warrant the exercise of our

discretion to assess cumulatively the volume and price effects of the subject imports from China and

Korea for purposes of the preliminary phase of these investigations.

2. Reasonable Indication of Threat of Material Injury by Reason of Cumulated

Subject Imports from China and Korea

a. Legal Standard

Section 771(7)(F) of the Act directs the Commission to determine whether the U.S. industry is

threatened with material injury by reason of the subject imports by analyzing whether “further dumped or

subsidized imports are imminent and whether material injury by reason of imports would occur unless an

order is issued or a suspension agreement is accepted.”157 The Commission may not make such a

determination “on the basis of mere conjecture or supposition” and considers the threat factors “as a

whole” in making its determination whether dumped or subsidized imports are imminent and whether

material injury by reason of imports would occur unless an order is issued.158 In making our

determinations, we considered all statutory factors that are relevant to these investigations.159 160

b. Trends During Period of Investigation

In determining whether there is a reasonable indication that the domestic industry is threatened

with material injury by reason of subject imports, we consider evidence relating to the volume of subject

imports, the extent to which subject imports undersold and had effects on prices for the domestic product,

and the impact of subject imports on the domestic industry. This record evidence informs our analysis of

the individual statutory threat factors and our ultimate determination as to those factors as a whole. 
161 CR/PR at Table C-1. 162 CR/PR at Table C-1. 163 CR/PR at Table C-1. 164 CR/PR at Table C-1. 165 CR/PR at Table C-1. 166 CR/PR at Table C-1. 167 From 2005 to 2006, subject imports gained in market share, while both the domestic product and nonsubject

imports lost market share. From 2006 to 2007, subject imports gained additional market share, the domestic industry

regained a small portion of its loss during the previous year, and nonsubject imports again lost market share. CR/PR

at Table C-1. 168 For the reasons explained infra, we also find a significant rate of increase of the volume and market

penetration of imports of subject merchandise indicating the likelihood of substantially increased imports in the

imminent future. 169 CR at V-6 to V-7, PR at V-4 to V-5. 170 Prices for Product 4 produced in the United States fluctuated in a wider range, but generally followed the

same trend seen in Products 1-3. CR/PR at Tables V-1 to V-4 and Fig. V-3. 

22

i. Volume

The volume of subject imports increased very substantially over the period of investigation. 

From 2005 to 2007, subject imports more than tripled in quantity, from 115,596 short tons to 458,997

short tons.161 In terms of market share, subject imports increased from 13.2 percent to 33.4 percent over

the same period.162 

Subject import volumes increased while demand in the U.S. market rose, and they continued to

increase even after demand stabilized and began to decline. From 2005 to 2006, apparent U.S.

consumption of line pipe rose by 60.8 percent, and then fell by 2.0 percent from 2006 to 2007.163 From

2005 to 2006, subject imports increased from 115,596 short tons to 410,642 short tons, captured over half

the increase in apparent U.S. consumption, and also captured 10.4 percentage points of market share from

the domestic industry.164 From 2006 to 2007, in contrast to apparent consumption, subject imports

continued to rise, from 410,642 short tons to 458,997 short tons in terms of quantity, and from 29.3

percent to 33.4 percent in terms of market share.165 

In contrast, the volume of nonsubject imports fell from 234,044 short tons in 2005 to 189,544

short tons in 2007, and nonsubject imports’ market share declined from 26.8 percent to 13.8 percent.166 

Because nonsubject import volumes fell over the period, we attribute the domestic industry’s overall loss

of market share to subject imports.167 We view the volume and increase in subject imports as significant

both in absolute terms and relative to domestic consumption.168

ii. Underselling and Price Effects

In evaluating underselling and price effects, we consider the conditions of competition in the U.S.

market, discussed above. In particular, we note that subject imports and the domestic product are 

generally substitutable, that price is an important factor in purchasing decisions, and that demand for line

pipe increased by over 60 percent from 2005 to 2006, before stabilizing from 2006 to 2007.

The Commission collected pricing data for four line pipe products produced in the United States

and imported from China and Korea.169 Prices for the four products produced in the United States

fluctuated within a relatively limited range for most of 2005 and 2006, before declining somewhat during

2007.170 Subject merchandise undersold the domestic product in each of the 96 quarterly price

comparisons, by margins of 15.7 percent to 43.5 percent for subject imports from China and 9.2 percent
171 CR at V-15, PR at V-5. 172 CR/PR at Table VI-2. 173 CR/PR at Tables V-1 to V-4 and VI-2. 174 CR/PR at Table VI-1. 175 As discussed infra, we also find that imports of the subject merchandise are entering at prices that are likely

to have a significant depressing or suppressing effect on domestic prices, and are likely to increase demand for

further imports. 176 CR/PR at Tables III-3, III-5, and VI-1. 177 CR/PR at Table C-1. 178 CR/PR at Tables III-7, VI-1, and C-1. 179 CR/PR at Table VI-1. 180 CR/PR at Table C-1. 181 CR/PR at Table C-1.

23

to 37.9 percent for subject imports from Korea.171 Given the degree of substitutability between the

subject imports and domestic product, and that price is an important factor in purchasing decisions, we

find that subject imports price undersold the domestic product to a significant degree. 

In addition, subject imports have prevented price increases for the domestic product that

otherwise would have occurred. From 2005 to 2007, the domestic industry experienced rising costs, as

unit COGS increased by $117 per short ton (from $780 per short ton to $897 per short ton) and unit

SG&A expenses increased by $10 per short ton (from $40 per short ton to $50 per short ton).172 During

the period in which the domestic industry experienced rising costs, demand for the product jumped by

over 50 percent and the volume of nonsubject imports declined substantially. These circumstances

demonstrate that the domestic industry had both a need and an apparent opportunity to increase prices. 

Nevertheless, prices for the four pricing products produced in the United States were generally lower at

the end of the period of investigation than at the beginning.173 While the domestic industry experienced

an increase in unit sales values of $65 per short ton from 2005 to 2007, the size of the change was much

smaller than the change in the industry’s COGS and SG&A expenses, which, taken together, increased by

$127 per short ton over the period. As a result, the domestic industry experienced a cost/price squeeze in

2007, as the ratio of its COGS to net sales value jumped from 76.5 percent in 2006 to 86.1 percent in

2007.174 Based on the record evidence, we conclude that subject imports prevented price increases for the

domestic product that otherwise would have occurred.175

iii. Impact and Vulnerability

By various measures relating to production and sales, the domestic industry experienced positive

changes over the period of investigation as it participated in a market characterized by sharply rising

demand. From 2005 to 2007, the domestic industry registered increases of 13.2 percent in capacity, 35.0

percent in production, 12.1 percentage points in capacity utilization, 39.1 percent in U.S. shipments, and

34.5 percent in net sales values.176 Most of these gains were achieved by 2006, with much smaller gains

or losses from 2006 to 2007.177 

While the domestic industry achieved these gains, it experienced important adverse changes by

most financial measures. From 2005 to 2007, the domestic industry experienced a 6.9 percent rise in unit

labor costs, a 3.4 percent reduction in productivity, a 15.0 percent rise in unit COGS, a 6.3 percentage

point rise in its COGS/net sales ratio,178 a 23.6 percent drop in operating income,179 and an operating

income margin that fell from 16.2 percent to 9.2 percent.180 Most of these adverse changes occurred from

2006 to 2007, as the domestic industry’s performance, as measured by these indicators, improved from

2005 to 2006.181
182 We join our colleagues in expressing interest in issues raised by both the petitioners and the Korean

respondents relating to individual companies’ reported financial performance in the preliminary phase of these

investigations. See petitioners’ Postconference Brief at 15-16 and Korean respondents’ Postconference Brief at 17-

24. In any final phase investigations, we intend to explore further whether certain U.S. producers of line pipe may

be less affected by subject imports because they sell directly to project oriented end users, and whether certain U.S.

producers’ restructuring, strategy, and capital investment decisions might have adversely affected their financial

performance in 2007. We also intend to examine whether sales to project-oriented end users are likely to decline in

volume. 183 Tr. at 56; Korean Respondents’ Postconference Brief at Exhibit 2; CR/PR at Fig. II-2. 184 Even after subject import volumes increased from 115,596 short tons in 2005 to 410,642 short tons in 2006,

they sustained a further increase to 458,997 short tons in 2007. CR/PR at Table C-1. 

24

We attribute the industry’s declining financial fortunes at the end of the period in significant part

to the effect of competition from low-priced subject imports. Given the sharp increase in demand and the

reduction in nonsubject imports over the period of investigation, the domestic industry should have been

poised for substantial financial gains. Instead, the domestic industry experienced a financial reversal as

subject imports captured most of the increase in apparent U.S. consumption, displaced the domestic

industry in market share, consistently undersold the domestic product, and prevented the domestic

industry from increasing prices in order to offset rising production costs.182 

Considered as a whole, the various indicators of the condition of the domestic industry were

mixed, with positive changes in most factors relating to production and sales, and adverse changes in

most financial measures. From 2005 to 2006, rapidly rising demand mitigated the impact of subject

imports on the domestic industry. From 2006 to 2007, the industry’s financial condition deteriorated, yet

it remained profitable, regained a portion of the market share it had lost the previous year, and registered

increases in production, U.S. shipments, employment, hours worked, and wages paid. 

Based on our consideration of the record, we find the domestic industry vulnerable to future

injury if underselling by large and increasing volumes of subject imports continues unabated. 

c. Analysis of Statutory Threat Factors

While the domestic industry has not yet experienced material injury by reason of subject imports,

the conditions that allowed the domestic industry to avoid such injury have changed or are in the process

of changing. While a very large increase in demand from 2005 to 2006 mitigated the impact of subject

imports, demand was essentially steady from 2006 to 2007, and it is not projected to rise substantially in

the imminent future.183 Additionally, because the domestic industry was so profitable in 2005 and 2006,

it was able to sustain a relative decline in 2007 and yet remain profitable by any objective measure. On

the other hand, the decline in profitability was large enough that it would be unsustainable if projected

into the imminent future. As these favorable demand conditions have ended or near their end, they are no

longer able to moderate the impact of subject imports, which are likely to increase substantially in volume

and continue to undersell the domestic like product. As explained in more detail below, we find a

reasonable indication that the domestic industry is threatened with material injury by reason of subject

imports.

There has been a significant rate of increase in the volume and market penetration of subject

imports indicating a likelihood of substantially increased imports. As indicated above, subject imports

exhibited a rapid rate of increase in both volume and market penetration during the period of

investigation. Other record evidence supports the conclusion that subject import volumes will increase

substantially. First, the increase occurred not only when demand in the U.S. market was increasing from

2005 to 2006, but also after it stabilized from 2006 to 2007.184 That subject import volumes increased

during both periods indicates that the increases were not a function of increases in demand in the U.S.
185 CR/PR at Table C-1. While U.S. imports from Korea declined slightly between 2006-07 according to

official Commerce statistics, U.S. importers' questionnaire responses indicate an increase in terms of importers' U.S.

shipments of U.S. imports of Korean-origin line pipe between 2006-07. Korean Respondents’ Postconference Brief

at Exhibit 4. 186 CR at VII-3 and VII-5, PR at VII-2 and VII-4. 187 Petitioners’ Postconference Brief at 40-42; Korean Respondents’ Postconference Brief at 37. 188 Petitioners’ Postconference Brief at 40-42; Korean Respondents’ Postconference Brief at 37. 189 CR/PR at Table VII-1. 190 CR/PR at Tables VII-6 and VII-7. 191 Inventories of subject merchandise held in the United States declined from 2006 to relatively low levels in

2007. CR/PR at Table C-1. 192 CR at VII-7, PR at VII-5; CR/PR at Tables VII-4 & VII-5. 193 CR at VII-3, PR at VII-3. The foreign producers in China reported the production of “small/medium line

pipe,” which was defined as “welded line pipe 16 inches or less in outside diameter (excluding dual-stenciled pipe

used in standard/structural applications).” CR/PR at Table VII-2. While that product is not identical in scope to the

line pipe subject to investigation here, it provides a reasonable proxy for subject line pipe production by these

producers for purposes of discerning trends during the period of investigation. 194 CR at VII-4 and VII-10, PR at VII-3 and VII-8.

25

market. Consequently, subject import volumes are likely to increase regardless of any changes in demand

in the imminent future. Second, the increase was fueled by subject imports both from China and from

Korea. From 2005 to 2007, subject imports from China increased from 27,673 short tons to 280,820

short tons and in market share from 3.2 percent to 20.4 percent. Over the same period, subject imports

from Korea increased from 87,923 short tons to 178,177 short tons, and in market share from 10.1

percent to 13.0 percent.185 That subject imports volumes increased independent of demand changes in the

U.S. market, and regardless of whether produced in China or Korea, supports our conclusion that

increases will occur in the imminent future.

We also find an imminent, substantial increase in production capacity in China and Korea

indicating the likelihood of substantially increased exports to the United States, taking into account the

availability of other export markets to absorb additional exports from those countries. Even without

increases in production capacity and exports, China and Korea ranked in the top three worldwide in

welded tube production during the period of investigation, and each exported over 300,000 short tons of

line pipe in 2007, while no other country exported more than 100,000 short tons.186 Nevertheless, welded

tube production capacity in China will continue to increase substantially, as an estimated five new welded

pipe production facilities are projected to come on line by 2009.187 Much of the new production will be

devoted to export markets,188 with a substantial share of exports likely directed to the U.S. market, as

Chinese producers directed a rapidly increasing percentage of their line pipe exports to the U.S. market

from 2005 to 2007.189 While there are no similar reports of new mills in Korea, Korea is one of the

world’s leading line pipe exporters, and during the period examined Korean producers added total plant

capacity, devoted an greater share of total capacity to the production of subject line pipe, and directed an

increasing share of their line pipe production to the U.S. market.190 191

There is also a potential that production facilities in China and Korea currently being used to

produce other products would shift to the production of subject line pipe. In this preliminary phase, the

Commission received questionnaire responses from three of the four known producers of subject line pipe

in Korea, which accounted for all or nearly all subject line pipe exported to the United States from Korea,

and the majority of Korean production of subject line pipe.192 The record also contains questionnaire

responses submitted by five producers of subject line pipe in China in a recent investigation.193 The

foreign producers in both countries report that they produce line pipe and other products on the same

equipment and machinery.194
195 CR/PR at Tables VII-2 and VII-7. In order to increase their production of subject line pipe, the foreign

producers in Korea shifted away from the production of other products. CR/PR at Table VII-7. The foreign

producers in China were able to increase their production of subject line pipe, as well as their production of other

products, by increasing capacity utilization. CR/PR at Table VII-2. While the Chinese producers did not curtail the

production of other products in order to increase subject line pipe production, they *** the production capacity

devoted to the production of subject line pipe. 196 Circular Welded Carbon-Quality Steel Pipe from China, Inv. No. 701-TA-447 and 731-TA-1116

(Preliminary), USITC Pub. 3983 (July 2007) at 21 n.132; Petition at 43. 197 Petition at 43 and Exhibit 24. 198 Because the Chinese government may remove these incentives at any time without warning, we consider

them to be only one factor supporting our analysis. 

26

While total production capacity for the reporting foreign producers in both China and Korea

remained essentially unchanged during the period of investigation, the producers in each country

substantially increased production of line pipe. From 2005 to 2007, the responding Chinese producers

*** their production of subject line pipe, while the responding Korean producers increased production of

subject line pipe by over 50 percent.195 These changes indicate that producers in each country perceived

an economic incentive to devote an increasing share of their capacity to the production of subject line

pipe, and that they were willing and able to do so. 

Moreover, producers in China have new incentives to shift to the production of line pipe over

standard pipe and other products. In June of 2007, the government of China discontinued a 13 percent

commodity export rebate of its domestic value-added tax on standard pipe, while leaving in place the

rebate applicable to exports of line pipe.196 Additionally, in January of 2008, the government of China

excluded line pipe from an export tax instituted on a variety of other steel products, including standard

pipe.197 The preferential treatment afforded line pipe vis-a-vis other steel products provides additional

incentives for Chinese producers to shift to the production of line pipe.198 

We find that subject imports are entering at prices that are likely to have a significant depressing

or suppressing effect on domestic prices, and are likely to increase demand for further imports. As noted

above, subject imports from China and Korea consistently undersold the domestic product during the

period of investigation, and by substantial margins. The underselling occurred not only while demand

increased from 2005 to 2006, but continued as demand stabilized from 2006 to 2007. Given that 

underselling was consistent and that it persisted despite changes in demand in the U.S. market,

underselling appears likely to continue in the imminent future. As discussed previously, subject imports 

have suppressed prices for the domestic product, as the domestic industry experienced increased

production costs and yet was unable to raise prices, even while demand was increasing and the volume of

nonsubject imports was falling. 

Further, we note that substantial new line pipe capacity will be brought into production in China,

that Chinese producers have new incentives to shift to the production of line pipe, and that both Chinese

and Korean producers of the subject merchandise have directed increasing shares of their production to

line pipe and a greater portion of their line pipe exports to the United States. These trends indicate that

both countries will be motivated to find markets for increased volumes of subject line pipe, and thus will

need to price line pipe aggressively in order to gain sales volumes in the U.S. market. For these

additional reasons, subject imports are likely to enter at prices that will be likely to have a significant

depressing or suppressing effect on domestic prices, and that will likely increase demand for further

imports. 

We also find that subject imports will have negative effects on the development and production

efforts of the domestic industry. From 2005 to 2006, the sharp increase in demand mitigated the impact

of subject imports, and allowed the domestic industry to increase its profits even as it lost market share. 

This trend did not continue in the following year, however, as demand stabilized, subject imports
199 There are no known dumping findings or antidumping remedies in other WTO member markets against the

same class or kind of merchandise manufactured or exported by the same party as under investigation. CR at VII12, PR at VII-9. 200 Chairman Pearson and Commissioner Okun note that petitioners concede that line pipe is a commodity

product. See, e.g., Petitioners’ Postconference Brief, Exhibit 1 at 3. The Korean respondents had no opinion on this

issue. See, e.g., Korean Respondents Postconference Brief, Exhibit A at 1. Given our determination that subject

imports and the domestic like product are fungible, for purposes of the preliminary phase of these investigations we

find that line pipe is a commodity product, and, therefore, the first predicate of the test provided for in Bratsk

Aluminium Smelter v. United States, 444 F.3d 1369 (Fed. Cir. 2006) is satisfied.

The second predicate of the Bratsk test requires that nonsubject imports are price competitive and a significant

factor in the U.S. market. With respect to whether nonsubject imports are price competitive, we note that data

gathered in the preliminary phase of these investigations indicate that nonsubject imports undersold the domestic like

product in 44 out of 45 price comparisons. In addition, for some products, nonsubject imports undersold subject

imports. See, e.g., CR/PR at tables V-1 through V-4 and appendix D. On balance, it appears that nonsubject

imports are price-competitive with the domestic like product and, to a lesser extent, with subject imports. 

On the other hand, the record does not support a conclusion that price-competitive nonsubject imports are a

significant factor in the U.S. market. Collectively, nonsubject imports’ market share by quantity declined markedly

over the period examined from 26.8 percent in 2005 to 13.8 percent in 2007. See, e.g., CR/PR at Table IV-8. 

Nonsubject imports are comprised of imports from numerous sources with no single source having a predominant

share. See, e.g., CR/PR at Table IV-3. The largest nonsubject source, Mexico, accounted for approximately 10

percent of all U.S. imports in 2007, and less than 5 percent of apparent U.S. consumption in that year. See, e.g.,

CR/PR at Tables IV-2, IV-3, and IV-8. Hence, we conclude, for purposes of the preliminary phase of these

investigations, that the second predicate of the Bratsk test is not satisfied. Consequently, we need not evaluate

whether, if orders were imposed on subject imports, nonsubject imports would negate any benefit of the orders to the

domestic industry.

For a complete statement of Chairman Pearson’s and Commissioner Okun’s interpretation of Bratsk in a

preliminary phase investigation, see Separate and Additional Views of Chairman Daniel R. Pearson and

Commissioner Deanna Tanner Okun Concerning Bratsk Aluminum v. United States in Sodium Hexametaphosphate

from China, Inv. No. 731-TA-1110 (Preliminary), USITC Pub. 3912 at 19-25 (Apr. 2007).

27

continued to increase, and the domestic industry experienced a declining financial performance. As

subject imports continue to increase in the imminent future, the domestic industry will lose not only

market share, but sales volumes as well. As the increased competition continues to prevent the industry

from raising prices to cover rising production costs, the domestic industry will experience declining

operating income margins, and have negative effects on employment, returns on assets, and the ability to

maintain and upgrade production facilities.199 

Considering the statutory threat factors as a whole, we determine that further dumped or

subsidized imports of line pipe from subject sources are imminent and that material injury by reason of

subject imports would occur unless orders are issued. Accordingly, we determine that the domestic

industry producing line pipe is threatened with material injury by reason of subject imports from China

and Korea.200

CONCLUSION

For the reasons stated above, we find that there is a reasonable indication that an industry in the

United States is materially injured, or threatened with material injury, by reason of imports line pipe from

China and Korea that allegedly are sold in the United States at less than fair value and imports from China

that are allegedly subsidized.

 1

 See the section entitled “The Subject Merchandise” in Part I of this report for a complete description of the

merchandise subject to these investigations.

 2 Federal Register notices cited in the tabulation are presented in appendix A.

I-1

PART I: INTRODUCTION

BACKGROUND

These investigations result from a petition filed on April 3, 2008, with the U.S. Department of

Commerce (“Commerce”) and the U.S. International Trade Commission (“USITC” or “Commission”) by

Maverick Tube Corp. (Houston, TX), Tex-Tube Co. (Houston, TX), U.S. Steel Corp. (Pittsburgh, PA),

and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service

Workers International Union, AFL-CIO-CLC (Pittsburgh, PA). The petition alleges that an industry in

the United States is materially injured and threatened with material injury by reason of subsidized and

less-than-fair-value (“LTFV”) imports of circular welded carbon quality steel line pipe (“line pipe”)1

 from

China and Korea. Information relating to the background of the investigations is provided below.2

Date Action

April 3, 2008

Petition filed with Commerce and the Commission; institution of Commission

investigations (73 FR 20064, April 14, 2008)

April 24, 2008

Commission’s conference (a list of witnesses appearing at the conference is

presented in appendix B)

April 29, 2008

Commerce’s notice of initiation of countervailing investigation (73 FR 23184);

Commerce’s notice of initiation of antidumping duty investigations (73 FR 23188)

May 16, 2008 Commission’s vote

May 19, 2008 Commission determinations transmitted to Commerce

May 27, 2008 Commission views transmitted to Commerce

STATUTORY CRITERIA AND ORGANIZATION OF THE REPORT

Statutory Criteria

Section 771(7)(B) of the Tariff Act of 1930 (the “Act”) (19 U.S.C. § 1677(7)(B)) provides that in

making its determinations of injury to an industry in the United States, the Commission--

shall consider (I) the volume of imports of the subject merchandise, (II)

the effect of imports of that merchandise on prices in the United States

for domestic like products, and (III) the impact of imports of such

merchandise on domestic producers of domestic like products, but only

in the context of production operations within the United States; and. . .

may consider such other economic factors as are relevant to the

determination regarding whether there is material injury by reason of

imports.

Section 771(7)(C) of the Act (19 U.S.C. § 1677(7)(C)) further provides that--
I-2

In evaluating the volume of imports of merchandise, the Commission

shall consider whether the volume of imports of the merchandise, or any

increase in that volume, either in absolute terms or relative to production

or consumption in the United States is significant.

. . .

In evaluating the effect of imports of such merchandise on prices, the

Commission shall consider whether . . . (I) there has been significant

price underselling by the imported merchandise as compared with the

price of domestic like products of the United States, and (II) the effect of

imports of such merchandise otherwise depresses prices to a significant

degree or prevents price increases, which otherwise would have

occurred, to a significant degree.

. . .

In examining the impact required to be considered under subparagraph

(B)(i)(III), the Commission shall evaluate (within the context of the

business cycle and conditions of competition that are distinctive to the

affected industry) all relevant economic factors which have a bearing on

the state of the industry in the United States, including, but not limited to

. . . 

(I) actual and potential declines in output, sales, market share, profits,

productivity, return on investments, and utilization of capacity, (II)

factors affecting domestic prices, (III) actual and potential negative

effects on cash flow, inventories, employment, wages, growth, ability to

raise capital, and investment, (IV) actual and potential negative effects

on the existing development and production efforts of the domestic

industry, including efforts to develop a derivative or more advanced

version of the domestic like product, and (V) in {an antidumping

investigation}, the magnitude of the margin of dumping.

Organization of the Report

Part I of this report presents information on the subject merchandise, alleged subsidies and

dumping margins, and domestic like product. Part II of this report presents information on conditions of

competition and other relevant economic factors. Part III presents information on the condition of the

U.S. industry, including data on capacity, production, shipments, inventories, and employment. Parts IV

and V present the volume and pricing of imports of the subject merchandise, respectively. Part VI

presents information on the financial experience of U.S. producers. Part VII presents the statutory

requirements and information obtained for use in the Commission’s consideration of the question of threat

of material injury, and the judicial requirements and information obtained for use in the Commission’s

consideration of Bratsk issues.

U.S. LINE PIPE MARKET SUMMARY

Trade for line pipe totaled approximately $1.2 billion (nearly 1.4 million short tons) in the U.S.

market in 2007. Currently, at least ten firms produce line pipe in the United States. Nine of the producers

– American, California Steel, IPSCO, Maverick, Northwest, Stupp, Tex-Tube, U.S. Steel, and Wheatland

– accounted for more than *** percent of estimated U.S. production in 2007. At least ten firms have

imported line pipe from China since 2005. The three largest importers – ***, ***, and *** – accounted

for almost *** percent of reported U.S. imports from China in 2007. At least seven firms have imported

line pipe from Korea since 2005. The three largest importers – ***, ***, and *** – accounted for almost
 3

 The Commission sent foreign producer questionnaires to 50 firms in China and received no completed

questionnaires. Under the Commission’s currently active investigation Certain Circular Welded Carbon Quality

Steel Pipe from China (Inv. Nos. 701-TA-447 and 731-TA-1116 (Final)), five Chinese producers reported that they

also produce line pipe. Those firms are Benxi Northern Steel Pipe Co., Ltd., Liaoning Northern Steel Pipe Co., Ltd.,

Shanghai Alison Steel Pipe Co., Ltd., Tai Feng Qiao Metal Products Co. Ltd., and Tianjin Lifengyuanda Steel Group

Co., Ltd.

 4

 In most instances, however, transmission requires line pipe in diameters greater than 16 inches.

I-3

*** percent of reported U.S. imports from Korea in 2007. The petition estimates there are 65 producers

of subject line pipe in China.3

 There are three confirmed producers of subject line pipe in Korea,

Hyundai, HYSCO, and SeAH.

Line pipe is generally used for gathering oil and gas from the point of production, as well as

distributing oil and gas to the consumer, and in some instances transmission of oil and gas in extensive

pipelines.4

 The quantity of apparent U.S. consumption of line pipe increased by 57.7 percent between

2005 and 2007, reflecting the growth in natural gas drilling. The value of apparent U.S. consumption

increased by 57.3 percent from 2005 to 2007. U.S. producers’ U.S. shipments of line pipe totaled

727,185 short tons in 2007, and accounted for 52.9 percent of apparent U.S. consumption by quantity. 

U.S. imports from China totaled 280,820 short tons in 2007, and accounted for 20.4 percent of apparent

U.S. consumption by quantity; U.S. imports from Korea totaled 178,177 short tons in 2007, and

accounted for 13.0 percent of apparent U.S. consumption by quantity. U.S. imports from all other sources

combined totaled 189,544 short tons in 2007, and accounted for 13.8 percent of apparent U.S.

consumption by quantity. The largest sources of imported line pipe are China and Korea, followed by

Mexico.

SUMMARY DATA AND DATA SOURCES

A summary of data collected in the investigations is presented in appendix C, table C-1. Except

as noted, U.S. industry data are based on questionnaire responses of nine firms that accounted for more

than *** percent of U.S. production of line pipe during 2007. U.S. imports are based on official import

statistics of Commerce. Data regarding the Chinese industry are based on public sources and five foreign

producer questionnaires from the Commission’s currently active investigation Certain Circular Welded

Carbon Quality Steel Pipe from China (Inv. Nos. 701-TA-447 and 731-TA-1116 (Final)). Data regarding

the Korean industry are based on three foreign producer questionnaire responses, while information with

respect to other foreign industries is drawn from published sources.

PREVIOUS AND RELATED TITLE VII INVESTIGATIONS

The Commission has conducted several previous import relief investigations on line pipe. Table

I-1 presents data on previous and related title VII and safeguard investigations. In addition, several

related Commission investigations have included imports of welded line pipe, in whole or in part. Details

on these related investigations are provided in table I-2.
I-4

Table I-1

Line pipe: Previous Title VII and safeguard investigations

Investigations Dates

Number Product / Country Begin End Outcome

701-TA-165, 168

Welded Carbon Steel

Pipes and Tubes from

Brazil and Korea 05/07/1982

12/27/1982

02/08/1983

Brazil - terminated after

Commission preliminary affirmative

determination; Korea - Commission

final affirmative determination1

731-TA-212

Welded Carbon Steel

Pipes and Tubes from

Venezuela 12/18/1984 02/01/1985

Commission preliminary negative

determination2

701-TA-242 &

731-TA-253

Welded Carbon Steel

Pipes and Tubes from

Venezuela

02/28/1985 12/05/1985 Terminated by Commerce following

Commission preliminary affirmative

determination2

701-TA-252-253

& 

731-TA-272-274

Welded Carbon Steel

Pipes and Tubes from

Taiwan, Turkey, and

Yugoslavia 07/16/1985

01/08/1986

02/21/1986

Taiwan and Yugoslavia -

terminated by Commerce following

Commission preliminary affirmative

determinations; 

Turkey - Commission final

affirmative determination2

731-TA-375

Certain Line Pipes and

Tubes from Canada 02/11/1987 03/30/1987

Commission preliminary negative

determination3

TA-201-70

Circular Welded Carbon

Quality Line Pipe 06/30/1999 12/22/1999

Commission affirmative

determination4

731-TA-1073-

1075 

Circular Welded Carbon

Quality Line Pipe from

China, Korea, Mexico 10/06/2004

12/14/2004

02/17/2005

China - terminated by Commerce

following Commission preliminary

affirmative determination; Korea

and Mexico terminated after

petition withdrawn5

 1 The Commission found small (16 inches or less) diameter welded carbon steel standard, line, and structural pipes and tubes

to constitute a single like product.

 2

 The Commission found separate like products consisting of welded standard pipe and welded line pipe.

 3

 The Commission found that the product “like” welded line pipe from Canada was welded line pipe. Commissioner Brunsdale

concurred with reservations, writing that “...while I do not do so here, it appears appropriate to find that the like product consists

of both standard and line pipe.”

 4

 The Commission found that the domestic product “like or directly competitive” with line pipe (including multiple-stenciled line

pipe) was line pipe. Commissioner Crawford concluded that the record would justify defining the like or directly competitive

product as both line pipe and standard pipe, although she declined to do so.

 5

 The Commission found small (16 inches or less) diameter welded line pipe to constitute a single like product but in the final

phase sought data on both welded standard pipe and welded line pipe. 

Source: Various Commission publications.
I-5

Table I-2

Line pipe: Related Commission investigations

Investigations Dates

Number Product / Country Begin End Outcome

TA-201-51

Carbon and Certain Alloy

Tool Steel Products 01/24/1984 07/24/1984

Commission negative

determination1

731-TA-732-733

Circular Welded Nonalloy

Steel Pipe from Romania

and South Africa 04/26/1995 06/27/1996

Commission final negative

determination2

731-TA-943-947

Circular Welded

Non-Alloy Steel Pipe from

China, Indonesia,

Malaysia, Romania, and

South Africa 05/24/2001

07/16/2001

07/02/2002

Indonesia, Malaysia, Romania, and

South Africa - Commission

preliminary negative determination;

China - Commission final negative

determination3

TA-421-06

Circular Welded NonAlloy Steel Pipe from

China 08/02/205 10/21/2005

Commission affirmative4

President–Import relief not in the

national interest

701-TA-447 &

731-TA-1116

Circular Welded Carbon

Quality Steel Pipe from

China 06/07/2007 07/02/08

Affirmative preliminary5

Ongoing final6

 1 The Commission found that the like or directly competitive product was all welded and seamless pipe.

 2

 In the final phase of the investigations, the Commission found that the domestic product “like” subject imports of standard

pipe (including multiple-stenciled pipe used in standard pipe applications) included all multiple-stenciled pipe. Commissioners

Crawford and Watson concluded that the record would justify defining the domestic like product to include all (welded) line pipe,

although they declined to do so.

 3

 In the final phase of the investigation, the Commission found that the domestic product “like” subject imports of standard

pipe (including multiple-stenciled pipe used in standard pipe applications) was standard pipe (including multiple-stenciled pipe

used in standard pipe applications), “absent argument and information to the contrary.”

 4

 The Commission found that the domestic product “like or directly competitive” subject imports of standard pipe (including

multiple-stenciled pipe used in standard pipe applications) was standard pipe (including multiple-stenciled pipe used in standard

pipe applications

 5

 In the preliminary phase of the investigations, the Commission defined the like product as coterminous with Commerce’s

scope. Dual stenciled pipe, which satisfies both ASTM specifications for standard pipe and API specifications for line pipe

applications, was included within the scope to the extent it is used or intended for use in standard pipe applications.

 6 Commerce's revised scope includes multiple-stenciled line pipe when it meets the physical description (in the scope) and

also has one or more of the following characteristics: is 32 feet in length or less; is less than 2.0 inches (50 mm) in outside

diameter; has a galvanized and/or painted surface finish; or has a threaded and/or coupled end finish.

Source: Various Commission publications.
 5 Circular Welded Carbon Quality Steel Line Pipe From the People’s Republic of China: Notice of Initiation of

Countervailing Duty Investigation, 73 FR 23186, April 29, 2008.

I-6

NATURE AND EXTENT OF ALLEGED SUBSIDIES AND SALES AT LTFV

Alleged Subsidies

Commerce initiated on the following types of subsidies: preferential loans, equity infusions and

debt-to-equity swaps; tax benefit programs; value-added tax programs; land grants discounts; provision of

inputs for less than adequate remuneration; grant programs; and provincial programs.5

 

Alleges Sales at LTFV

The LTFV margins alleged in the petition upon which Commerce based its decision to initiate its

investigations, as adjusted by Commerce, are presented in table I-3. 

Table I-3

Line pipe: Allegations of LTFV imports

Country Basis of comparison

Estimated dumping margin

(in percent)

China

Export price based on adjusted U.S. price quote and

home market normal value (India surrogate) 57.45 - 58.96

Korea

Constructed export price based on adjusted U.S. price

quote and home market normal value 41.69 - 42.75

Source: 73 FR 23192, April 29, 2008.

THE SUBJECT MERCHANDISE

Commerce’s Scope

Commerce has defined the imported merchandise subject to these investigations as:

circular welded carbon quality steel pipe of a kind used for oil and gas pipelines

(‘‘welded line pipe’’), not more that 406.4 mm (16 inches) in outside diameter,

regardless of wall thickness, length, surface finish, end finish or stenciling. The term

‘‘carbon quality steel’’ includes both carbon steel and carbon steel mixed with small

amounts of alloying elements that may exceed the individual weight limits for nonalloy

steels imposed in the Harmonized Tariff Schedule of the United States (‘‘HTSUS’’). 

Specifically, the term ‘‘carbon quality’’ includes products in which (1) Iron

predominates by weight over each of the other contained elements, (2) the carbon

content is 2 percent or less by weight and (3) none of the elements listed below exceeds

the quantity by weight respectively indicated: (i) 2.00 percent of manganese, (ii) 2.25

percent of silicon, (iii) 1.00 percent of copper, (iv) 0.50 percent of aluminum, (v) 1.25

percent of chromium, (vi) 0.30 percent of cobalt, (vii) 0.40 percent of lead, (viii) 1.25

percent of nickel, (ix) 0.30 percent of tungsten, (x) 0.012 percent of boron, (xi) 0.50

percent of molybdenum, (xii) 0.15 percent of niobium, (xiii) 0.41 percent of titanium,

(xiv) 0.15 percent of vanadium, or (xv) 0.15 percent of zirconium. Welded line pipe is
 6

 Commerce further notes that the scope of these investigations covers line pipe which may include certain

merchandise potentially subject to the on-going antidumping and countervailing duty investigations of circular

welded pipe. Given that the scope issue has not been finally resolved in the circular welded pipe investigations, for

purposes of the line pipe initiations, Commerce defined the scope to include the potential overlap. However,

Commerce intends to resolve the issue to ensure that there will be no overlap between the scopes in the circular

welded pipe and welded line pipe cases. Circular Welded Carbon Quality Steel Line Pipe From the Republic of

Korea and the People’s Republic of China: Initiation of Antidumping Duty Investigations, 73 FR 23189, April 29,

2008.

 7

 Questionnaire responses in these investigations indicate that the amount of subject line pipe imported under the

statistical reporting numbers for alloy line pipe, (7306.19.5110 and 7306.19.5150 (after February 3, 2007), and

7306.10.5010 and 7306.10.5050 (prior to February 3, 2007)), is minimal.

 8

 73 FR 32189, April 29, 2008.

 9

 Nominal 40-45 foot lengths are referred to by the industry as “double random lengths” or “DRL.”

I-7

normally produced to specifications published by the American Petroleum Institute

(‘‘API’’) (or comparable foreign specifications) including API A–25, 5LA, 5LB, and X

grades from 42 and above, and/or any other proprietary grades or non-graded material. 

Nevertheless, all pipe meeting the physical description set forth above that is of a kind

used in oil and gas pipelines, including all multiplestenciled pipe with an API line pipe

stencil is covered by the scope of these investigations.6

 

Tariff Treatment

Subject welded line pipe is currently classifiable in the Harmonized Tariff Schedule of the United

States (“HTS”) under statistical reporting numbers 7306.19.1010, 7306.19.1050, 7306.19.5110, and

7306.19.5150 (after February 3, 2007) and 7306.10.1010, 7306.10.1050, 7306.10.5010, and

7306.10.5050 (prior to February 3, 2007).7

 Welded line pipe imported from China and Korea enters the

U.S. market at a column 1-general duty rate of “free.” 

THE DOMESTIC LIKE PRODUCT

Description and Applications

 Circular welded carbon quality steel pipe subject to these investigations is made from ‘‘carbon

quality steel’’ which includes both carbon steel and carbon steel mixed with small amounts of alloying

elements that may exceed the individual weight limits for nonalloy steels imposed in the HTS. 

Specifically, the term ‘‘carbon quality’’ includes products in which (1) iron predominates by weight over

each of the other contained elements, (2) the carbon content is 2 percent or less by weight and (3) none of

the elements listed below exceeds the quantity by weight respectively indicated: 2.00 percent of

manganese, 2.25 percent of silicon, 1.00 percent of copper, 0.50 percent of aluminum, 1.25 percent of

chromium, 0.30 percent of cobalt, 0.40 percent of lead, 1.25 percent of nickel, 0.30 percent of tungsten,

0.012 percent of boron, 0.50 percent of molybdenum, 0.15 percent of niobium, 0.41 percent of titanium,

0.15 percent of vanadium, or 0.15 percent of zirconium.8

The welded line pipe subject to these investigations is a circular pipe product not more that 406.4

mm (16 inches) in outside diameter, regardless of wall thickness, length, surface finish, end finish or

stenciling. Line pipe generally is produced in the United States in lengths of 40 feet or greater,9

 and with

either a bare finish or a black (lacquered) finish to protect the pipe from rust, which is especially

important for ocean transport or for storage in humid climates. End finishes typically include square cut

or beveled for welding in the field.
 10 The purchaser and manufacturer can agree to put all or part of the markings on the inside surface of the pipe. 

Pipe that is 1-1/2 inches and smaller has the identification markings die-stamped on a metal tag fixed to the bundle

or printed on the straps or binding clips used to tie the bundle.

 11 In thousands of psi (pounds per square inch). Grades A and B require tensile strength of 30,000 and 35,000 psi,

respectively.

 12 API, Specification for Line Pipe: API Specification 5L, March 2004, p. 52.

 13 Standard pipe is intended for the low-pressure conveyance of liquid or gas in plumbing and heating systems, air

conditioning units, automatic sprinkler systems, and other related uses. It may also be used for light load-bearing

and mechanical applications, such as for fence tubing, and for protection of electrical wiring, such as conduit shells,

and for structural applications in general construction. 

 14 ASTM A-53 covers seamless and welded black and hot-dipped galvanized steel pipe intended for mechanical

and pressure applications and that is also acceptable for ordinary uses in steam, water, gas, and air lines. 

 15 API, Specifications for Line Pipe: API Specification 5L, March 2004, pp. 9, 40-44, and 68-69, and 2000

Annual Book of ASTM Standards, vol. 01.01 (Philadelphia, PA: 2000), pp. 2-3 and 6-7.

I-8

The subject product includes pipe of a kind used in oil and gas pipelines, whether or not stenciled. 

Such line pipe normally is produced in conformance with the American Petroleum Institute’s 

specification API 5L, and bears an API line pipe stencil. A “stencil” is information marked by the

manufacturer with paint stenciled on the outside surface of the pipe indicating the specification in

conformance with which it has been manufactured.10 The API 5L specification for line pipe indicates that

the markings should identify the manufacturer’s name, specification (“Spec 5L”), size and weight

designation, grade and class (e.g., A-25, A, B, and X-42 through X-80), process of manufacture (seamless

pipe, electric resistance welded pipe, or continuous welded pipe), heat treatment, and test pressure. 

The API 5L grades define the strength level of the pipe and of the steel that is used to make the

pipe. For grade A-25 and X-42 to X-80, the last two digits reflect the tensile strength of the steel.11

Lower strength grades of line pipe, namely, A-25, grade A, and grade B, have lower strength but have

other desirable properties. For example, grade A line pipe is more bendable and more readily weldable

than pipes of higher grades.

The API 5L specification also suggests that “products in compliance with multiple compatible

standards may be marked with the name of each standard.”12 The API stencil identifies the product as that

which can be used in line pipe applications. Produced to API specifications, welded line pipe for use in

oil and gas pipelines requires higher hydrostatic test pressures and more restrictive weight tolerances than

standard pipe.13 Pipe that is in conformance with API Specification 5L Grade B is automatically also in

conformance with the less restrictive standard pipe specification of the American Society for Testing and

Materials, ASTM A-53 Grade B.14 As a consequence, manufacturers often mark such product with both

specifications (so-called “dual stencil”) so that it may be applied for either use.15 Product may also be

simultaneously in conformance with both Grade B and Grade X-42 of the API 5L specification; indeed,

much of the line pipe used in the United States meets the specifications of both Grades B and X-42. Such

product may be marked with API 5L Grade B, API 5L Grade X-42, and ASTM A-53 Grade B (the “triple

stencil”). Finally, some standard pipe customers require product marked as being in compliance with the

American Society of Manufacturing Engineers (ASME) AS-53, which is identical to ASTM A-53;

including this information can result in a “quad stencil.”
 16 ERW is a process where the strip edges are mechanically pressed together and welded. The heat for welding is

generated by resistance of the steel to the flow an of electric current. In one process, a low frequency current

(typically 60 to 360 hertz) is conducted to the strip edges by a pair of copper alloy discs which rotate as the pipe is

propelled under them. A second variation uses high frequency current (in the range of 400 to 500 kilohertz) which

enters the tubing through shoes which act as sliding contacts. An induction coil can also be used with the high

frequency current to induce current in the edges of the steel. No direct contact between the induction coil and the

tubing is required. American Iron and Steel Institute, Steel Products Manual, Steel Specialty Tubular Products,

October 1980, pp. 20-21.

 17 CW is a process of forming a seam by heating the steel in a furnace and mechanically pressing the formed

edges together as it passes through a series of round welding rolls. Successive coils are joined together to provide a

continuous flow of steel to the welding mill. This process is also known as continuous butt welding. See, API,

Specification for Line Pipe: API Specification 5L, March 2004, p. 35. According to the API line pipe specification,

only grade A-25 can be manufactured using the CW process. Wheatland is the only known U.S. producer of CW

line pipe.

 18 Flat-rolled steel that is more than 0.1875 inch in thickness if more than 48 inches in width, or more than 0.230

inch in thickness if 48 inches or less in width, may be called “plate in coils.”

 19 The required diameter and wall thickness of a pipe are a function of the intended volume and pressure of

material that is to flow through the pipe.

 20 United States Steel, “Manufacture of Steel Tubular Products,” in The Making, Shaping, and Treating of Steel,

10th ed. (Pittsburgh, PA: Herbick & Held, 1985), p. 1,029.

 21 Welded OCTG includes casing (the structural retainer for the walls of oil and gas wells) and tubing (used with

casing to convey hydrocarbons to ground level).

I-9

Manufacturing Processes

Welded line pipe is most commonly manufactured by the electric resistance weld (ERW)16

process; however, the continuous weld (CW)17 process can be used for pipe up to 4.5 inches (114.3 mm)

in diameter. The manufacture of welded line pipe by the ERW process begins with coils of hot-rolled

sheet steel,18 which are cut by a slitting machine into strips of the precise width needed to produce a

desired diameter of pipe.19 The slit coils are fed into the tube mills, which cold-form the flat ribbon of

steel into a tubular cylinder by a series of tapered forming rolls. The product is then welded along the

joint axis. The welded tube then passes under a tool that removes the outside flash resulting from the

pressure during welding. Inside flash is likewise removed by cutting tools. The tube is then subjected to

such post-weld heat treatment as is required. Such treatment may involve heat treatment of the welded

seam only or treatment of the full cross-section of the pipe. After heat treatment, sizing rolls shape the

tube to specific diameter tolerances. The product is cooled and then cut at the end of the tube mill by a

flying shear or saw.20 The same equipment and workers can be used to produce standard pipe as well as

other tubular products, most commonly standard pipe and oil country tubular goods (“OCTG”).21
 22 U.S. Steel and Maverick’s postconference brief, p. 7.

 23 Conference transcript, p. 113 (Cameron).

 24 73 FR 23189, April 29, 2008.

I-10

DOMESTIC LIKE PRODUCT ISSUES

The petitioners contend that the Commission should find one domestic like product that is coextensive with the scope of merchandise subject to the investigations as identified by Commerce.22

Respondents do not dispute this characterization.23 Staff notes that the scope of the investigations with

respect to China overlaps with that of Circular Welded Carbon Quality Steel Pipe from China, Inv. Nos.

701-TA-447 and 731-TA-1116 (Final). Commerce already has announced its intention “to resolve the

issue to ensure that there will be no overlap between the scopes in the CWP and welded line pipe cases”

and is soliciting comments on the issue.24
 1

 The increases in end user sales during the period are largely attributable to shipments by ***.

II- 1

PART II: CONDITIONS OF COMPETITION IN THE U.S. MARKET

U.S. MARKET CHARACTERISTICS

Line pipe is used for gathering, transporting, and distributing oil and gas via pipelines. Because

of the size range of the tubular products at issue (line pipe with an outside diameter of 16 inches or less),

the most common use is in gathering oil or gas from the point of extraction to the transmission line or

distributing it to the consumer. Transportation of oil and natural gas typically takes place through large

diameter line pipe, although there can be notable exceptions. Regardless of application, line pipe

normally is produced in conformance with the American Petroleum Institute’s specification API 5L, and

bears an API line pipe stencil.

Sales of line pipe by U.S. producers and importers to distributors and end users are shown in table

II-1. While the majority of sales by producers went to distributors in all three years, the increase in U.S.

producers’ shipment quantities resulted from increasing levels of sales directly to end users.1

 For

importers from China and Korea, all sales went to distributors during all three years.

Some firms sell line pipe nationally while others sell to specific regions. Five of the nine

responding U.S. producers reported that they sell nationally, while four reported that they sell in various

regions including the Southwest, the Rocky Mountain area, the West Coast, the Northwest, the Midwest,

the Northeast and the Southeast. Among all importers, eight firms reported that they sell nationally while

the other 17 importers reported that they sell in one or more of the same areas cited by U.S. producers.

Among importers, the Southwest was the most frequently cited region. Among the nine importers of

product from China, two reported that they sell nationally and seven reported that they sell in the

Southwest and other regions cited above. Among the seven importers of product from Korea, three

reported that they sell nationally and four reported that they sell in other regions cited above. One firm

that imports from both China and Korea sells on the West Coast.

When asked to estimate the average lead time for sales of line pipe, the responses by producers

and importers depended upon whether the product was sold from inventories or produced to order. When

sold from inventories, producer lead times ranged from 3 to 7 days, and for importers lead times ranged

from 7 to 10 days. For both producers and importers, the vast majority of all line pipe sales are produced

to order. For producers lead times for items produced to order ranged from 30 to 90 days for most firms,

and for importers they ranged from 60 to 180 days. 

SUPPLY AND DEMAND CONSIDERATIONS

U.S. Supply

Domestic supply responsiveness depends upon such factors as the level of industry capacity

utilization, the level of inventories, the existent of alternate markets, and the flexibility of shifting

production equipment to other products.
II- 2

Table II-1

Line pipe: Channels of distribution for domestic product and imports sold in the U.S. market, by

source, 2005-07

Item

Calendar year

2005 2006 2007

Quantity (short tons)

U.S. producers’ U.S. shipments of line pipe:

Distributors 372,440 429,088 387,626

End users1 150,526 264,924 339,559

U.S. shipments of line pipe from China:

Distributors 28,638 145,698 168,394

End users 0 0 0

U.S. shipments of line pipe from Korea:

Distributors 80,835 178,972 200,915

End users 0 0 0

U.S. shipments of line pipe from all other import sources:

Distributors *** *** ***

End users *** *** ***

Share of total quantity (percent)

U.S. producers’ U.S. shipments of line pipe:

Distributors 71.2 61.8 53.3

End users1 28.8 38.2 46.7

U.S. shipments of line pipe from China:

Distributors 100.0 100.0 100.0

End users 0.0 0.0 0.0

U.S. shipments of line pipe from Korea:

Distributors 100.0 100.0 100.0

End users 0.0 0.0 0.0

U.S. shipments of line pipe from all other import sources:

Distributors *** *** ***

End users *** *** ***

 1 The increase in shipments to end users between 2005 and 2007 (189,033 short tons) is largely attributable to

***.

Source: Compiled from data submitted in response to Commission questionnaires.
II- 3

 The available data suggest that U.S. line pipe producers have some flexibility in expanding

output and U.S. shipments in response to an increase in price. The main factors contributing to this

degree of supply responsiveness are moderately low industry capacity utilization rates and moderately

high ratios of inventories to shipments. U.S. producers’ capacity utilization rates ranged from a low of 

62.7 percent in 2005 to a high of 79.1 percent in 2006. The ratio of U.S. producers’ end-of-period

inventories to their total shipments ranged from a low of 6.7 percent in 2006 to a high of 10.6 percent in

2007. U.S. producers’ export shipments, as a percentage of total shipments, decreased from 10.4 percent

in 2005 to 6.8 percent in 2006 and to 2.2 percent in 2007. 

When asked whether they produce other products using the machinery and equipment used to

produce line pipe, all nine of the U.S. producers listed other products. Those most commonly mentioned

included standard pipe, large diameter pipe, and oil country tubular goods. This indicates that U.S.

producers may have some flexibility in shifting between products in response to changing economic

conditions.

Subject Imports

The ability of line pipe producers in China and Korea to increase or decrease shipments to the

U.S. market depends upon such factors as capacity utilization rates, planned expansions in capacity,

current inventory levels, and current levels of both home market sales and exports to markets other than

the United States. In the case of China, detailed information relating to these variables is not available. 

Available data does indicate that the total capacity for the limited number of identified line pipe/standard

pipe producers in China has remained constant during 2005-07 and that production and capacity

utilization increased during this period. In addition to producing line pipe, the Chinese industry produces

circular welded pipe, large diameter line pipe, OCTG, and other pipe on the equipment and machinery

used to produce line pipe. 

Korea

During 2005-07, Korean producers capacity utilization rates for line pipe increased from a low of

70.9 percent in 2005 to a high of 97.6 percent in 2007. Capacity utilization is projected to be 99.7 percent

in both 2008 and 2009. Inventories, as a share of total shipments, ranged from a low of 5.3 percent in

2007 to a high of 7.3 percent in 2006. The majority of Korean shipments have gone to export markets

during 2005-07. The combined exports to the United States and other export markets consistently

accounted for more than 90 percent of their shipments during these years, while home market shipments

ranged from *** percent to *** percent of the annual total during these years. Exports to the United

States ranged from a low of 45.9 percent of total shipments in 2005 to a high of 57.5 percent in 2007. 

These data suggest that Korean suppliers may have the ability to shift sales from other export markets to

the United States.

U.S. Demand

The demand for line pipe is a derived demand that depends upon such factors as the level of

prices of oil and natural gas and the extent of drilling activity. Figure II-1 shows that monthly prices of

oil increased sharply from January 2005 through April 2008, while prices of natural gas spiked in 2005

and then fluctuated during the rest of the period through January 2008. As shown in figure II-2, drilling 

activity as measured by the number of rigs increased overall during January 2005 through April 2008. 

The demand for line pipe as measured by apparent U.S. consumption in quantity terms increased from

872,606 short tons in 2005 to 1,403,335 short tons in 2006, and then decreased to 1,375,726 short tons in

2007.
II- 4

Figure II-1

Indexed prices for crude oil and natural gas, by month, January 2005-April 2008

Source: Energy Information Administration.

Figure II-2

Number of drilling rigs actively exploring for or developing oil and natural gas in the United States,

by month, January 2005- April 2008

Source: Compiled from Baker Hughes data, U.S. monthly averages, 2005-07 and January-April 2008.
 2

 *** producer questionnaire, p. 24.

II- 5

When asked how the demand for line pipe had changed since January 1, 2005, all nine U.S.

producers and the majority of importers reported that demand had increased. Among the 21 responding

importers, 16 reported that demand had increased, one reported that demand had increased with

fluctuations, three reported demand had fluctuated, and one reported that demand was unchanged. Firms

that reported an increase in demand often attributed the increase to high levels of activity in the oil and

gas industries.

Questionnaire respondents were also asked how demand for line pipe outside the United States

had changed since January 1, 2005. The four U.S. producers that were able to comment on this question

reported that demand had increased. Another producer that was not familiar with demand outside of

North America, reported that demand in Canada had increased during this period. Among importers that

responded, 13 reported that demand had increased, 3 reported that it had fluctuated, and 1 reported that it

was unchanged. Again, firms that reported an increase in demand attributed the increase to increased oil

and gas activity.

Substitute Products

When asked to list substitute products for line pipe, many of the questionnaire respondents were

not aware of any substitutes. One U.S. producer stated in its questionnaire response that unless a pipe

product is certified to API line pipe standards (or other designer specified standards), it cannot be used in

a line pipe application.2

 Therefore, standard pipe cannot be used in line pipe applications. Products listed

by other producers and importers as potential substitutes for line pipe included seamless pipe, copper

pipe, and plastic pipe. 

Cost Share

 When asked to estimate the share of the total cost of end use products accounted for by line pipe,

most questionnaire respondents did not provide such estimates. Two producers provided estimates

ranging from 25 to 30 percent, and one importer estimated a share of 20 percent. 

SUBSTITUTABILITY ISSUES

The degree of substitution between domestic and imported line pipe depends upon such factors as

relative prices, quality (e.g., grade standards, reliability of supply, defect rates, etc.), and conditions of

sale (e.g., price discounts/rebates, lead times between order and delivery dates, payment terms, product

services, etc.). 

Comparisons of Domestic Products, Subject Imports, and Nonsubject Imports

In order to determine whether U.S.-produced line pipe can generally be used in the same

applications as imports from China, Korea and nonsubject sources, producers and importers were asked

whether the products can “always,” “frequently,”“sometimes,” or “never” be used interchangeably. As

shown in table II-2, all producers reported that U.S. products are always interchangeable with imports

from China and Korea. Responses by importers were more varied, with a majority indicating that the

domestic and Korean products are always or frequently interchangeable. However, a majority of

importers reported that products from China are sometimes or never interchangeable with the U.S.

product. Some importers also commented on the extent of interchangeability between the U.S. product

and subject and nonsubject imports and between subject imports from China and Korea. One importer

reported that imports from Korea and Mexico are sometimes considered to be of lower quality by some 
 3

 Two of these firms also reported that imports from Taiwan are not approved for some uses. 

 4

 At the preliminary conference, the Korean respondents argued that the quality of the Chinese product is inferior

to the Korean product. Conference transcript, pp. 108-109 (Byun). 

II- 6

Table II-2

Line pipe: Interchangeability of product from the United States and subject and nonsubject

sources1

Country comparison

U.S. producers U.S. importers

AFSN0AFSN 0

U.S. vs. China 9 0 0 0 0 4 1 8 1 11

U.S. vs. Korea 9 0 0 0 0 9 7 0 0 9

U.S. vs. Mexico 9 0 0 0 0 5 5 3 0 12

U.S. vs. Japan 9 0 0 0 0 10 1 1 1 12

U.S. vs. Taiwan 8 0 0 0 1 4 3 6 0 12

U.S. vs. other countries 6 0 0 0 3 1 4 6 0 14

China vs. Korea 6 0 0 0 3 6 3 5 0 11

China vs. Mexico 6 0 0 0 3 3 4 2 1 14

China vs. Japan 6 0 0 0 3 4 3 3 0 14

China vs. Taiwan 6 0 0 0 3 4 4 3 0 14

China vs. other countries 6 0 0 0 3 3 2 2 0 18

Korea vs. Mexico 6 0 0 0 3 3 3 4 0 15

Korea vs. Japan 6 0 0 0 3 4 4 2 0 15

Korea vs. Taiwan 6 0 0 0 3 4 4 3 0 14

Korea vs. other countries 6 0 0 0 3 3 3 1 0 18

 1

 Producers and importers, were asked if line pipe produced in the United States and in other countries is used

interchangeably.

Note: “A” = Always, “F” = Frequently, “S” = Sometimes, “N” = Never, and “0” = No familiarity.

Source: Compiled from data submitted in response to Commission questionnaires.

customers. Another importer reported that imports from Korea are sometimes not considered fully

interchangeable with U.S. products because of long lead times for delivery. Three importers reported that

imports from China are not approved for some applications, and one reported that it is not interchangeable

with U.S.-produced line pipe.3

 Five importers reported that imports from Korea are superior to imports

from China with regard to quality and/or reliability.4

In addition to questions concerning interchangeability, producers and importers were also asked

to compare U.S.-produced products with imports from China, Korea and nonsubject imports in terms of

product differences other than price such as quality, availability, product range, and other characteristics,

as a factor in their sales of line pipe. All U.S. producers reported that product differences are never or

sometimes significant, while importer responses were widely varied as shown in table II-3. Two firms

reported that imports from Korea have longer lead times in delivery than the U.S.-produced products.
II- 7

Table II-3

Line pipe: U.S. producers’ and importers’ perceived importance of factors other than price in

sales of products produced in the United States and in other countries1

Country comparison

U.S. producers U.S. importers

AFSN0AFSN 0

U.S. vs. China 0 0 3 6 0 3 3 3 4 12

U.S. vs. Korea 0 0 3 6 0 5 2 5 3 10

U.S. vs. Mexico 0 0 3 6 0 1 3 6 3 12

U.S. vs. Japan 0 0 3 6 0 3 2 4 2 14

U.S. vs. Taiwan 0 0 3 5 1 2 4 3 1 15

U.S. vs. other countries 0 0 2 5 2 2 4 3 1 15

China vs. Korea 6 0 0 0 3 2 4 4 4 11

China vs. Mexico 6 0 0 0 3 1 2 3 4 15

China vs. Japan 6 0 0 0 3 2 2 3 3 15

China vs. Taiwan 6 0 0 0 3 2 2 2 4 15

China vs. other countries 6 0 0 0 3 0 3 0 3 19

Korea vs. Mexico 6 0 0 0 3 0 2 6 3 14

Korea vs. Japan 6 0 0 0 3 1 2 4 3 15

Korea vs. Taiwan 6 0 0 0 3 1 2 3 4 15

Korea vs. other countries 6 0 0 0 3 1 3 3 1 17

 1

 Producers and importers, were asked if differences other than price between line pipe produced in the United

States and in other countries are a significant factor in their firms’ sales of line pipe.

Note: “A” = Always, “F” = Frequently, “S” = Sometimes, “N” = Never, and “0” = No familiarity.

Source: Compiled from data submitted in response to Commission questionnaires.

 1

 Since 2005, the line pipe industry has experienced several mergers and acquisitions. In October 2006,

Maverick was acquired by Tenaris S.A. (Luxembourg). In December 2006, IPSCO completed the purchase of the

NS Group. In June 2007, Lone Star was acquired by U.S. Steel. In March 2008, IPSCO was sold by its Swedish

parent, SSAB Svenskt Stal AB, to Evraz Group S.A. (Russia) for $4 billion. In a back-to-back agreement, Evraz

will sell IPSCO’s U.S. pipe operations to another Russian producer, TMK, for $1.7 billion. 

 2 ***.

 3 IPSCO acquired NS Group in 2006.

 4 Wheatland shut down its Sharon, PA pipe plant in May 2006. 

 5 ***. 

 6 Conference transcript, p. 35 (Davila). Tex-Tube’s production of line pipe decreased *** percent from 2006 to

2007.

III-1

PART III: U.S. PRODUCERS’ PRODUCTION, SHIPMENTS, AND

EMPLOYMENT

The Commission analyzes a number of factors in making injury determinations (see 19 U.S.C. §§

1677(7)(B) and 1677(7)(C)). Information on the alleged margin of dumping and the alleged subsidies

was presented earlier in this report and information on the volume and pricing of imports of the subject

merchandise is presented in Parts IV and V. Information on the other factors specified is presented in this

section and/or Part VI.

 

U.S. PRODUCERS

The Commission sent producer questionnaires to all firms identified in the petition as domestic

producers of line pipe. Nine firms that are estimated to account for more than *** percent of U.S.

production of line pipe during 2007 provided responses to the Commission’s producer questionnaire,

while one known producer, ***, did not.1

Presented in table III-1 is a list of current domestic line pipe producers, each company’s position

on the petition, production locations, related and/or affiliated firms, and their shares of 2007 reported

domestic production of line pipe. Three firms, ***, ***, and ***, account for *** percent of reported

2007 domestic production of line pipe.

U.S. CAPACITY, PRODUCTION, AND CAPACITY UTILIZATION

Producers’ capacity, production, and capacity utilization data for line pipe are presented in table

III-2. These data show an increase in the capacity to produce line pipe of 13.2 percent from 2005 to 2007. 

*** accounted for a majority of the increase in capacity.2

 ***3 and *** also reported an increase in

capacity. ***, ***, and ***4

 reported a decrease in capacity from 2005 to 2007. Production of line pipe

increased by 35.0 percent from 2005 to 2007. ***,5

 ***, and *** accounted for the majority of increased

production of line pipe. Tex-Tube shut down its production of line pipe from December 2006 until May

2007 in order to upgrade its facility.6

 Capacity utilization increased by 12.1 percentage points from 2005

to 2007. Two firms reported capacity utilization at greater than or equal to 90 percent in 2005 (*** and

***), three in 2006 (***, ***, and ***), and three in 2007 (***, *** and ***). 

A few large projects that involve highly specialized line pipe built to unique specifications in

larger diameters and lengths beyond the 40-42 feet standard have occurred during 2005 to 2007. It was

announced in May 2006 that a 750-mile natural gas liquids pipeline known as the Overland Pass Pipeline

would be built from Opal, Wyoming, to Conway, Kansas. Construction of this project was 
III-2

Table III-1

Line pipe: U.S. producers, positions on the petition, U.S. production locations, related and/or affiliated

firms, and shares of 2007 reported U.S. production of line pipe

Firm name

Position on

petition

U.S. production

location(s) Related and/or affiliated firms

Share of

production

(percent)

American *** Birmingham, AL None ***

California

Steel *** Fontana, CA

JFE (USA)

Rio Doce, Ltd. (USA) ***

IPSCO ***

Camanche, IA

Blytheville, AR

Wilder, KY

IPSCO (Canada)

SSAB (Sweden) ***

Maverick Support

Hickman, AR

Blytheville, AR

Counce, TN

Tenaris S.A. (Luxembourg)

Siderca SAIC (Argentina)

Tamsa S.A. (Mexico)

Hylsa (Mexico)

SIAT (Argentina)

Tubocaribe (Columbia)

Prudential (Canada)

Confab (Brazil)

Ternium (USA) ***

Northwest *** Atchison, KS None. ***

Paragon (1

) Sapulpa, OK (1) (1)

Stupp *** Baton Rouge, LA Stupp Brothers (USA) ***

Tex-Tube Support Houston, TX

Visteel (USA)

Vi Capital (USA)

Tuberia Nacional (Mexico) ***

U.S. Steel Support

McKeesport, PA

Dallas, TX

U.S. Steel Tubular Products 

Apolo Tubulars (Brazil) ***

Wheatland ***

Sharon, PA

Wheatland, PA

Warren, OH

Chicago, IL

Little Rock, AR

John Maneely Co. 

DBO Holdings (USA) ***

 1

 Not available. 

Note.–Because of rounding, shares may not total 100.0 percent.

Source: Compiled from data submitted in response to Commission questionnaires.
 7

 U.S. Steel and Maverick’s postconference brief, p. 15.

 8 Tex-Tube’s postconference brief, p. 4.

 9 Conference transcript, p. 38 (Avera).

III-3

Table III-2

Line pipe: U.S. capacity, production, and capacity utilization, 2005-07

Item

Calendar year

2005 2006 2007

Capacity1

 (short tons) 909,237 947,056 1,028,983

Production (short tons) 570,077 749,202 769,607

Capacity utilization (percent) 62.7 79.1 74.8

 1 ***. 

Source: Compiled from data submitted in response to Commission questionnaires.

scheduled to begin in the summer of 2007 and would be completed in early 2008.7 In 2007, Oneok (a

diversified energy company based in Tulsa, OK) purchased large amounts of specialized line pipe to build

two pipelines for natural gas liquids such a propane and butane.8

 A third project, the “Arbuckle” pipeline,

will run from Oklahoma to the Texas Gulf Coast. Domestic producers like American, Stupp and CSI

focus their sales in this market.9

In the Commission’s questionnaire, U.S. producers were asked if they had experienced any plant

openings, relocations, expansions, acquisitions, consolidations, closures, or prolonged shutdowns because

of strikes or equipment failure; curtailment of production because of shortages of materials; or any other

change in the character of their operations or organization relating to the production of line pipe since

January 1, 2005. Six firms reported such changes; their responses to this question are presented in table

III-3.

*** U.S. producers of line pipe that responded to the Commission’s questionnaire reported the

production of other products on the same equipment and machinery and using the same production and

related workers employed in the production of line pipe. Their responses are presented in table III-4. 

Capacity to produce all welded pipe grew, largely due to ***. In aggregate, the producers reported the

following products that were produced using the same production and related workers employed to

produce line pipe and those products’ shares of total plant production in 2007: subject line pipe (23.8

percent); standard/structural pipe (17.8 percent); large diameter line pipe (*** percent); OCTG (36.6

percent); and other products (*** percent).

U.S. PRODUCERS’ SHIPMENTS

Data on domestic producers’ shipments of line pipe are presented in table III-5. U.S. shipments

accounted for 97.8 percent of U.S. producers’ total shipments of line pipe in 2007. There was no reported

internal consumption or transfers to related firms. U.S. shipments increased by 39.1 percent from 2005 to

2007. *** accounted for the majority of increased shipments of line pipe. The unit value of U.S.

shipments increased by 7.3 percent from 2005 to 2007. Exports of line pipe were reported by ***. These

exports decreased by 73.1 percent from 2005 to 2007 and accounted for 2.2 percent of U.S. producers’

total shipments during 2007. *** accounted for the majority of decreased exports of line pipe. The

export markets listed included ***. *** reported a toll agreement with ***. *** firm reported production

of line pipe in a Foreign Trade Zone.
III-4

Table III-3

Line pipe: U.S. producers’ comments concerning plant openings, relocations, expansions,

acquisitions, consolidations, closures, or prolonged shutdowns

Firm Changes in the character of operations

IPSCO ***

Maverick ***

Northwest ***

Tex-Tube ***

U.S. Steel ***

Wheatland ***

Source: Compiled from data submitted in response to Commission questionnaires.

Table III-4

Line pipe: U.S. producers’ total plant capacity and production, by products, 2005-07

Item

Calendar year

2005 2006 2007

Quantity (short tons)

Total plant capacity1 4,315,577 4,183,156 4,643,442

Production:

Subject line pipe2 570,076 749,201 738,243

Standard/structural pipe3

 612,346 578,969 552,207

Large diameter line pipe4 *** *** ***

OCTG 1,138,211 1,150,337 1,133,849

Other5 *** *** ***

Total production 2,822,855 3,025,004 3,096,328

Total plant capacity utilization (percent) 65.4 72.3 66.7

 1 ***.

 2

 ***.

 3

 Welded standard/structural pipe 16 inches or less in outside diameter.

 4

 Welded line pipe greater than 16 inches in outside diameter.

 5

 Other products include: ***.

Source: Compiled from data submitted in response to Commission questionnaires.
III-5

Table III-5

Line pipe: U.S. producers’ shipments, by types, 2005-07

Item

Calendar year

2005 2006 2007

Quantity (short tons)

Commercial shipments 522,966 694,012 727,185

Export shipments 60,968 50,293 16,401

Total shipments 583,934 744,305 743,586

Value (1,000 dollars)

Commercial shipments 507,703 694,165 757,701

Export shipments 61,653 53,030 16,634

Total shipments 569,356 747,195 774,335

Unit value (per short ton)

Commercial shipments $971 $1,000 $1,042

Export shipments 1,011 1,054 1,014

Total shipments 975 1,004 1,041

Share of quantity (percent)

Commercial shipments 89.6 93.2 97.8

Export shipments 10.4 6.8 2.2

Total shipments 100.0 100.0 100.0

Share of value (percent)

Commercial shipments 89.2 92.9 97.9

Export shipments 10.8 7.1 2.1

Total shipments 100.0 100.0 100.0

Note.–Because of rounding, figures may not add to the totals shown.

Source: Compiled from data submitted in response to Commission questionnaires.

U.S. PRODUCERS’ INVENTORIES

Data collected in these investigations on domestic producers’ end-of-period inventories of line

pipe are presented in table III-6. Domestic producers’ inventories increased 78.3 percent over the period

for which data were collected. U.S. producers’ inventories were equivalent to between 6.7

and 10.6 percent of U.S. producers’ total shipments during 2005-07. *** and *** accounted for ***

percent of the inventories held at the end of 2007. 
 10 In particular, ***.

III-6

Table III-6

Line pipe: U.S. producers’ end-of-period inventories, 2005-07

Item

Calendar year

2005 2006 2007

Inventories (short tons) 44,254 49,637 78,920

Ratio of inventories to production (percent) 7.8 6.6 10.3

Ratio of inventories to U.S. shipments (percent) 8.5 7.2 10.9

Ratio of inventories to total shipments (percent) 7.6 6.7 10.6

Source: Compiled from data submitted in response to Commission questionnaires.

U.S. PRODUCERS’ IMPORTS AND PURCHASES

*** U.S. producer, ***, reported direct imports of line pipe during the period for which data were

collected. *** imported *** short tons in 2005, *** short tons in 2006, and *** short tons in 2007, from

***. ***. *** purchased *** short tons in 2005, *** short tons in 2006, and *** short tons in 2007,

from nonsubject countries. *** also purchased line pipe from ***.

U.S. EMPLOYMENT, WAGES, AND PRODUCTIVITY

The U.S. producers’ aggregate employment data for line pipe are presented in table III-7. In the

aggregate, U.S. line pipe producers reported an increase in the number of production and related workers

employed in the manufacture of line pipe from 2005 to 2007. *** accounted for the majority of the

increase in number of employees. Productivity rose in 2006 then fell in 2007, for an overall decrease of

3.4 percent. Falling productivity, combined with a modest increase in wage rate, resulted in higher unit

labor costs in 2007.10

Table III-7

Line pipe: U.S. producers’ employment-related indicators, 2005-07

Item

Calendar year

2005 2006 2007

Production and related workers (PRWs) 780 929 1,037

Hours worked by PRWs (1,000 hours) 1,493 1,889 2,086

Wages paid to PRWs (1,000 dollars) 33,906 43,183 48,945

Hourly wages $22.71 $22.86 $23.46

Productivity (short tons produced per 1,000 hours) 381.9 396.7 368.9

Unit labor costs (per short ton) $59.48 $57.64 $63.60

Source: Compiled from data submitted in response to Commission questionnaires.
 1

 Eight firms reported that they did not import the subject merchandise during 2005-07.

 2

 The Commission received three incomplete questionnaire responses from ***, ***, and ***. Two firms, ***

and ***, reported no imports during 2005-07, but reported they had placed orders for line pipe from Korea and other

sources for delivery into the United States after December 31, 2007. *** returned an importer questionnaire,

however, because the company was identified as a purchaser, its questionnaire was not used.

IV-1

PART IV: U.S. IMPORTS, APPARENT U.S. CONSUMPTION, 

AND MARKET SHARES

U.S. IMPORTERS

The Commission sent importer questionnaires to 66 firms believed to be importers of line pipe, as

well as to all U.S. producers of line pipe.1

 Usable questionnaire responses were received from 25

companies that are believed to account for *** percent of the quantity of U.S. imports from China, all or

virtually all U.S. imports from Korea, and *** percent of U.S. imports from other countries during the

period for which data were collected.2

 In 2007, the largest importer of line pipe from China was ***, the

largest importer of line pipe from Korea was ***, and the largest importer of line pipe from other sources

(***) was ***. Presented in table IV-1 are the responding U.S. importers and 2007 coverage based on

responses to Commission questionnaires. 

Table IV-1

Line pipe: U.S. importers, locations, related and/or affiliated firms, and shares of reported U.S.

imports in 2007

Firm name Location

Related and/or affiliated

firms

Share of 2007 reported U.S. imports from-- 

China

(percent)

Korea

(percent)

other

sources

(percent)

all sources 

(percent)

Ameripipe Dallas, TX None *** *** *** ***

Commercial

Metals Irving, TX CMC (Croatia) *** *** *** ***

Conestoga Houston, TX None *** *** *** ***

Corpac Aventura, FL None *** *** *** ***

Corus 

America Schaumburg, IL

Corus Group (UK) 

Corus International (USA)

Corus Tubes (UK) *** *** *** ***

Corus

International Schaumburg, IL

Tata Steel (India) 

Corus Tubes (UK) *** *** *** ***

Coutinho Houston, TX

Man Ferrostall (Germany)

Villacero (Mexico)

HPC (Germany) *** *** *** ***

CPW Houston, TX

Corinth Pipeworks

 (Greece) *** *** *** ***

Fortis Alliance Houston, TX

J.D. Fields (USA)

Tex-Isle Supply (USA)

D.V. Kimball (USA) *** *** *** ***

Fremak New York, NY None *** *** *** ***

Husteel Anaheim, CA Husteel (Korea) *** *** *** ***

Table continued on next page.
IV-2

Table IV-1--Continued

Line pipe: U.S. importers, locations, related and/or affiliated firms, and shares of reported U.S. imports in 2007

Firm name Location

Related and/or affiliated

firms

Share of 2007 reported U.S. imports from-- 

China

(percent)

Korea

(percent)

other

sources

(percent)

all sources 

(percent)

HYSCO Houston, TX HYSCO (Korea) *** *** *** ***

Hyundai 

Englewod Cliffs,

NJ

Hyundai Corp. (Korea)

Hyundai (LA Branch) *** *** *** ***

Hyundai 

(LA Branch) Gardena, CA

Hyundai Corp. (Korea)

Hyundai *** *** *** ***

Kurt Orban Burlingame, CA None *** *** *** ***

Macsteel

Newport Beach,

CA MacSteel (Netherlands) *** *** *** ***

Maurice

Pincoffs Houston, TX None *** *** *** ***

MC Tubular Houston, TX Metal One (USA) *** *** *** ***

Metallia Fort Lee, NJ None *** *** *** ***

Nippon Los Angeles, CA Nippon (Japan) *** *** *** ***

Okaya Houston, TX Okaya (Japan) *** *** *** ***

Oxbow

Pleasant Hill,

CA None *** *** *** ***

Pusan

Santa Fe

Springs, CA SeAH (Korea) *** *** *** ***

Salzgitter Houston, TX

Salzgitter Mannesmann

 (Germany)

Salzgitter Mannesmann 

 (Canada)

Salzgitter Mannesmann 

 Line Pipe (Germany) *** *** *** ***

SNT Houston, TX None *** *** *** ***

Stemcor New York, NY

Stemcor Holdings (UK)

Stemcor (China) *** *** *** ***

Ternium Houston, TX

Ternium (Uruguay)

Hylsa (Mexico)

Tenaris Siat (Argentina)

Tenaris Confab (Brazil)

Tenaris Tubo Caribe

 (Colombia)

Prudential (Canada)

Maverick (USA) *** *** *** ***

U.S. Steel Pittsburgh, PA Apolo Tubulars (Brazil) *** *** *** ***

 

 Total 100.0 100.0 100.0 100.0

Note.–Because of rounding, figures may not add to the totals shown.

Source: Compiled from data submitted in response to Commission questionnaires.
 3

 Imports of line pipe are from official statistics under the HTS statistical reporting numbers 7306.19.1010 and

7306.19.1050 (prior to 2007, 7306.10.1010 and 7306.10.1050). Questionnaire responses in these investigations

indicate that the amount of subject line pipe imported under the statistical reporting numbers for alloy line pipe,

7306.19.5110 and 7306.19.5150 (prior to 2007, 7306.10.5010 and 7306.10.5050), is minimal. 

 4

 A majority of the remainder comes from Brazil, Japan, Mexico, and Taiwan. 

 5

 From 2005 to 2007, the quantity of imports from China of line pipe < 4.5 inches increased from 6,493 short tons

to 47,524 short tons, and the quantity from China of line pipe > 4.5 inches increased from 21,181 short tons to

233,296 short tons. From 2005 to 2007, the quantity of imports from Korea of line pipe < 4.5 inches increased from

24,105 short tons to 38,888 short tons, and the quantity from Korea of line pipe > 4.5 inches increased from 63,818

short tons to 139,279 short tons. 

 6

 A portion of the U.S. imports of line pipe from China are dual-stenciled (produced to both ASTM and API

specifications) and have one or more of the following physical characteristics typically associated with standard and

structural pipe and tube: 32 feet in length or less; less than 2.0 inches (50 mm) in outside diameter; galvanized

and/or painted surface finish; or a threaded and/or coupled end finish. Such imports of dual-stenciled circular

welded pipe from China reportedly increased from 9,920 short tons in 2005 to 67,870 short tons in 2007. See

Circular Welded Carbon-Quality Steel Pipe from China, Inv. Nos. 701-TA-447 and 731-TA-1116 (Final), public

version of the prehearing report to the Commission, calculated from tables IV-2 and IV-4. Staff notes that this

calculation may include a portion of micro-alloy steel pipe that is not dual-stenciled, but that any such inclusion is

believed to be very small. Ibid., p. I-15, n.29.

 7

 Section 733(a)(1) of the Act. 

IV-3

U.S. IMPORTS

U.S. imports are based on official import statistics of Commerce.3

 U.S. imports of line pipe are

presented in table IV-2. China is the largest foreign supplier of line pipe to the United States, accounting

for 43.3 percent of the quantity of total imports in 2007, and 38.6 percent of the value. Korea is the

second largest foreign supplier of line pipe to the United States, accounting for 27.5 percent of the

quantity of total imports in 2007, and 28.3 percent of the value.4

From 2005 to 2007, the quantity and value of imports of line pipe from China increased by 914.8

percent and 845.0 percent, respectively.5

 At the same time, the unit value of imports of line pipe from

China decreased by 6.9 percent.6

 From 2005 to 2007, the quantity and value of imports of line pipe from

Korea increased by 102.7 percent and 96.8 percent, respectively. At the same time, the unit value of 

imports of line pipe from Korea decreased by 2.9 percent. The quantity and value of imports from other

countries decreased by 19.0 percent and by 16.5 percent, respectively, from 2005 to 2007. At the same

time, the unit value of imports of line pipe from other sources increased by 3.2 percent. 

Nonsubject imports of line pipe are presented in table IV-3. Brazil, Japan, Mexico, and Taiwan 

consistently accounted for a substantial share of imports of line pipe from nonsubject sources during

2005-07.

NEGLIGIBILITY

The statute requires that an investigation be terminated without an injury determination if imports

of the subject merchandise are found to be negligible.7

 Negligible imports are generally defined in the

Tariff Act of 1930, as amended, as imports from a country of merchandise corresponding to a domestic

like product where such imports account for less than 3 percent of the volume of all such merchandise

imported into the United States in the most recent 12-month period for which data are available that

precedes the filing of the petition or the initiation of the investigation. However, if there are imports of

such merchandise from a number of countries subject to investigations initiated on the same day that

individually account for less than 3 percent of the total volume of the subject merchandise, and if the
IV-4

Table IV-2

Line pipe: U.S. imports, by sources, 2005-07

Source

Calendar year

2005 2006 2007

Quantity (short tons)

China 27,673 224,357 280,820

Korea 87,923 186,285 178,177

 Subtotal 115,596 410,642 458,997

Nonsubject sources 234,044 298,681 189,544

 Total 349,640 709,323 648,541

Value (1,000 dollars)

1

China 19,191 137,547 181,357

Korea 67,417 126,705 132,660

 Subtotal 86,608 264,252 314,017

Nonsubject sources 185,863 253,886 155,275

 Total 272,471 518,138 469,292

Unit value (per short ton)

1

China $693 $613 $646

Korea 767 680 745

 Subtotal 749 644 684

Nonsubject sources 794 850 819

 Average 779 730 724

Share of quantity (percent)

China 7.9 31.6 43.3

Korea 25.1 26.3 27.5

 Subtotal 33.1 57.9 70.8

Nonsubject sources 66.9 42.1 29.2

 Total 100.0 100.0 100.0

Share of value (percent)

China 7.0 26.5 38.6

Korea 24.7 24.5 28.3

 Subtotal 31.8 51.0 66.9

Nonsubject sources 68.2 49.0 33.1

 Total 100.0 100.0 100.0

1

 Landed, duty-paid.

Note.–Because of rounding, figures may not add to the totals shown.

Source: Compiled from official Commerce statistics.
IV-5

Table IV-3

Line pipe: U.S. imports from nonsubject countries, by sources, 2005-07

Source

Calendar year

2005 2006 2007

Quantity (short tons)

Brazil 43,788 21,694 18,641

Japan 16,523 36,598 25,244

Mexico 73,148 89,850 66,055

Taiwan 16,059 40,510 31,072

All other 84,526 110,029 48,532

 Total 234,044 298,681 189,544

Value (1,000 dollars)

1

Brazil 33,515 15,442 13,805

Japan 14,131 29,218 21,663

Mexico 65,789 80,340 57,591

Taiwan 11,102 24,972 20,318

All other 61,325 103,913 41,897

 Total 185,863 253,886 155,275

Unit value (per short ton)

1

Brazil $765 $712 $741

Japan 855 798 858

Mexico 899 894 872

Taiwan 691 616 654

All other 726 944 863

 Total 794 850 819

 1 Landed, duty-paid.

Note.–Because of rounding, figures may not add to the totals shown.

Source: Compiled from official Commerce statistics.
 8

 Section 771(24) of the Act. 

IV-6

imports from those countries collectively account for more than 7 percent of the volume of all such

merchandise imported into the United States during the applicable 12-month period, then imports from

such countries are deemed not to be negligible.8

 Subject imports from China accounted for 39.9 

percent and subject imports from Korea accounted for 31.2 percent, of total imports of line pipe by

quantity during April 2007 to March 2008, the most recent 12-month period for which data are available

that precedes the filing of the petition. 

CUMULATION CONSIDERATIONS

In assessing whether subject imports are likely to compete with each other and with the domestic 

like product with respect to cumulation, the Commission generally has considered the following four

factors: (1) the degree of fungibility, including specific customer requirements and other quality-related

questions; (2) presence of sales or offers to sell in the same geographic markets; (3) common channels of

distribution; and (4) simultaneous presence in the market. Channels of distribution and fungibility

(interchangeability) are discussed in Part II of this report. Additional information concerning geographic

markets and simultaneous presence in the market is presented below.

Geographic Markets

Information summarizing the shipments of line pipe is presented in Part II of this report. Table

IV-4 presents imports from China by Customs districts from 2005 to 2007, while table IV-5 presents

imports from Korea by Customs districts for the same period. Houston-Galveston, TX, was the largest

district of entry for imports from China, accounting for 52.9 percent of total subject imports during 2005-

07. New Orleans, LA, was the second largest port, with 19.6 percent of imports from China. HoustonGalveston, TX, was the largest district of entry for imports from Korea, accounting for 61.8 percent of

total subject imports during 2005-07. Los Angeles, CA, was the second largest port with 15.4 percent of

subject imports. 

Presence in the Market

Line pipe produced in China and Korea was present throughout the period for which data 

were collected. Table IV-6 presents monthly import entries into the United States by sources. 
IV-7

Table IV-4

Line pipe: U.S. imports from China, by Customs district, 2005-07

Customs district

Calendar year

2005 2006 2007 Total

Quantity (short tons)

Baltimore, MD 0 6,222 8,952 15,174

Chicago, IL 0347

Columbia-Snake, OR 741 3,007 5,477 9,225

Detroit, MI 0 3 1 4

Houston-Galveston, TX 18,263 112,978 150,743 281,985

Los Angeles, CA 4,537 26,384 37,824 68,745

Miami, FL 0 0 110 110

Mobile, AL 0 0 1,454 1,454

New Orleans, LA 0 59,954 44,572 104,525

New York, NY 408 388 1,134 1,930

Norfolk, VA 0 0 1,291 1,291

Pembina, ND 17 0 0 17

Philadelphia, PA 0 5,470 3,844 9,313

San Francisco, CA 1,618 1,694 5,368 8,680

Savannah, GA 0 3,111 4,375 7,485

Seattle, WA 881 1,422 823 3,125

Tampa, FL 1,208 3,722 14,849 19,780

Total 27,673 224,357 280,820 532,850

Source: Compiled from official Commerce statistics.
IV-8

Table IV-5

Line pipe: U.S. imports from Korea, by Customs district, 2005-07

Customs district

Calendar year

2005 2006 2007 Total

Quantity (short tons)

Charlotte, NC 40 0 0 40

Columbia-Snake, OR 10,582 11,010 9,199 30,791

Great Falls, MT 0 0 30 30

Houston-Galveston, TX 38,258 120,561 120,595 279,414

Laredo, TX 0707

Los Angeles, CA 24,058 26,214 19,296 69,568

Mobile, AL 392 1,232 127 1,751

New Orleans, LA 0 1,555 1,809 3,364

Pembina, ND 5 1 0 6

Philadelphia, PA 2,357 8,392 9,261 20,010

San Francisco, CA 2,184 5,045 4,519 11,748

San Juan, PR 436 80 754 1,270

Savannah, GA 99 44 2,491 2,634

Seattle, WA 762 1,947 1,459 4,168

Tampa, FL 8,748 10,199 8,638 27,585

Total 87,923 186,285 178,177 452,385

Source: Compiled from official Commerce statistics.
IV-9

Table IV-6Line pipe: U.S. imports, monthly entries into the United States, by sources, 2005-07, and January-March 2008

Source Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. 

2005: (Short tons)

China 0 1,856 44 409 3,245 393 863 7,394 4,941 2,780 Korea 9,429 7,194 2,326 14,161 7,682 9,938 4,404 6,462 7,862 4,858 7,5 Subtotal 9,429 9,050 2,370 14,570 10,927 10,331 5,267 13,856 12,803 7,639 7,6All other 17,301 19,675 14,455 36,498 24,513 23,856 20,963 14,410 21,114 17,686 14,3 Total 26,730 28,725 16,825 51,068 35,440 34,187 26,231 28,266 33,917 25,325 21,92006:China 4,200 6,916 2,144 17,103 15,377 11,640 21,152 19,969 21,529 40,544 37,3Korea 18,143 10,222 19,892 12,281 10,766 1,883 19,392 12,394 11,109 21,568 23,2 Subtotal 22,343 17,138 22,036 29,383 26,143 13,523 40,544 32,362 32,637 62,112 60,5All other 22,919 17,865 17,465 12,430 33,062 22,295 29,845 43,433 16,893 32,535 31,0 Total 45,262 35,004 39,502 41,813 59,205 35,818 70,389 75,795 49,530 94,647 91,52007:China 24,216 18,069 35,857 13,324 26,631 27,304 23,849 20,037 27,023 17,287 35,7Korea 12,271 10,867 16,070 17,706 12,209 20,872 21,381 8,832 16,570 17,605 9,9 Subtotal 36,487 28,936 51,927 31,030 38,840 48,176 45,230 28,869 43,593 34,891 45,6All other 27,634 6,562 25,661 21,582 15,084 14,537 14,656 12,924 11,237 15,210 15,7 Total 64,121 35,498 77,588 52,612 53,924 62,713 59,886 41,793 54,830 50,101 61,42008:China 18,781 23,839 6,870 (1) (1) (1) (1) (1) (1) (1) (1) 

Korea 30,827 12,534 14,946 (1) (1) (1) (1) (1) (1) (1) (1)  Subtotal 49,609 36,373 21,816 (1) (1) (1) (1) (1) (1) (1) (1) All other 19,147 12,129 21,609 (1) (1) (1) (1) (1) (1) (1) (1)  Total 68,756 48,502 43,425 (1) (1) (1) (1) (1) (1) (1) (1) 

1 Not available.

Source: Compiled from official statistics of Commerce. 
 9

 Conference transcript, p. 54 (Tinne).

 10 U.S. Steel and Maverick’s postconference brief, p. 15.

 11 Tex-Tube’s postconference brief, p. 4.

IV-10

APPARENT U.S. CONSUMPTION

Data on apparent U.S. consumption of line pipe presented in table IV-7 are based on U.S.

producers’ U.S. shipments of line pipe provided in response to Commission questionnaires and U.S.

imports from official statistics. Apparent U.S. consumption increased by quantity 57.7 percent from 2005

to 2007. A substantial portion of the increase in demand reflected the need for gathering lines to support

the expansion of natural gas drilling in the United States.9

 In addition, three large pipeline projects have

been undertaken during 2005 to 2007. It was announced in May 2006, that a 750-mile natural gas liquids

pipeline known as the Overland Pass Pipeline would be built from Opal, Wyoming, to Conway, Kansas. 

Construction of this project was scheduled to begin in the summer of 2007 and would be completed in

early 2008.10 In 2007, Oneok (a diversified energy company based in Tulsa, OK) purchased large

amounts of specialized line pipe to build two pipelines for natural gas liquids such a propane and

butane.11 A third project, the “Arbuckle” pipeline, will run from Oklahoma to the Texas Gulf Coast. 

U.S. MARKET SHARES

U.S. market share data are presented in table IV-8. The quantity of the U.S. producers’ market

share decreased 7.1 percentage points from 2005 to 2007. In contrast, the share of subject imports from

China increased from 3.2 percent in 2005 to 20.4 percent in 2007, on the basis of quantity, and the share

of subject imports from Korea increased from 10.1 percent in 2005 to 13.0 percent in 2007. Nonsubject

imports’ market share decreased from 26.8 percent in 2005 to 13.8 percent in 2007.
IV-11

Table IV-7

Line pipe: U.S. shipments of domestic product, U.S. imports, by sources, and apparent U.S.

consumption, 2005-07

Item

Calendar year

2005 2006 2007

Quantity (short tons)

U.S. producers’ U.S. shipments 522,966 694,012 727,185

U.S. imports from--

China 27,673 224,357 280,820

 Korea 87,923 186,285 178,177

 Subtotal 115,596 410,642 458,997

Nonsubject 234,044 298,681 189,544

 Total imports 349,640 709,323 648,541

Apparent U.S. consumption 872,606 1,403,335 1,375,726

Value (1,000 dollars)

U.S. producers’ U.S. shipments1 507,703 694,165 757,701

U.S. imports from--

China2 19,191 137,547 181,357

 Korea2 67,417 126,705 132,660

 Subtotal 86,608 264,252 314,017

Nonsubject2 185,863 253,886 155,275

 Total imports 272,471 518,138 469,292

Apparent U.S. consumption 780,174 1,212,303 1,226,993

1

 F.o.b. U.S. mill.

2

 Landed, duty-paid.

Source: Compiled from data submitted in response to Commission questionnaires and from official Commerce

statistics.
IV-12

Table IV-8

Line pipe: Apparent U.S. consumption and market shares, 2005-07

Item

Calendar year

2005 2006 2007

Quantity (short tons)

Apparent U.S. consumption 872,606 1,403,335 1,375,726

Value (1,000 dollars)

Apparent U.S. consumption 780,174 1,212,303 1,226,993

Share of quantity (percent)

U.S. producers’ U.S. shipments 59.9 49.5 52.9

U.S. imports from--

China 3.2 16.0 20.4

 Korea 10.1 13.3 13.0

 Subtotal 13.2 29.3 33.4

Nonsubject 26.8 21.3 13.8

 Total imports 40.1 50.5 47.1

Share of value (percent)

U.S. producers’ U.S. shipments1 65.1 57.3 61.8

U.S. imports from--

China2 2.5 11.3 14.8

 Korea2 8.6 10.5 10.8

 Subtotal 11.1 21.8 25.6

Nonsubject2 23.8 20.9 12.7

 Total imports 34.9 42.7 38.2

1

 F.o.b. U.S. mill.

2

 Landed, duty-paid.

Source: Compiled from data submitted in response to Commission questionnaires and from official Commerce

statistics.
IV-13

RATIO OF IMPORTS TO U.S. PRODUCTION

Information concerning the ratio of subject imports to U.S. production of line pipe is presented in

table IV-9. Imports from China were equivalent to 4.9 percent of U.S. production during 2005, increased

to 29.9 percent during 2006, and further increased to 36.5 percent in 2007. Imports from Korea were

equivalent to 15.4 percent of U.S. production during 2005, increased to 24.9 percent during 2006, and

decreased to 23.2 percent in 2007.

Table IV-9

Line pipe: Ratio of U.S. imports to U.S. production, by sources, 2005-07 

Item

Calendar year

2005 2006 2007

Quantity (short tons)

U.S. production 570,077 749,202 769,607

Ratio of U.S. imports to production (percent)

China 4.9 29.9 36.5

Korea 15.4 24.9 23.2

 Subtotal 20.3 54.8 59.6

Nonsubject sources 41.1 39.9 24.6

 All countries 61.3 94.7 84.3

Source: Compiled from data submitted in response to Commission questionnaires and from official Commerce

statistics.

V-1

PART V: PRICING AND RELATED INFORMATION

FACTORS AFFECTING PRICES

Raw Material Costs

U.S. producers’ costs of raw materials were fairly stable relative to the overall cost of goods sold

during 2005-07. Raw material costs accounted for approximately three-quarters of the cost of goods sold

in 2005, 2006, and 2007.

Hot-rolled steel is the primary input used in the production of line pipe. As shown in figure V-1,

the monthly price of this material fluctuated with no clear trend during 2005-07. However, prices

increased sharply from January through April of 2008. 

Figure V-1

Hot-rolled sheet prices, by month, January 2005-April 2008

Source: American Metal Market
 1

 The estimated cost was obtained by subtracting the customs value from the c.i.f. value of the imports for 

2007 and then dividing by the customs value. 

 2

 Real exchange rates are calculated by adjusting the nominal rates for movements in producer prices in the

United States and other countries. 

V-2

Transportation Costs to the U.S. Market

Transportation costs of line pipe shipped to the United States from China and Korea averaged

10.3 percent and 14.1 percent of the respective customs values of these imports during 2007, as derived

from official import data.1

 Line pipe is classified under HTS subheading 7306.19, statistical reporting

numbers 7306.19.1010, 7306.19.1050, 7306.19.5110, and 7306.19.5150.

U.S. Inland Transportation Costs

Transportation costs on U.S. inland shipments of line generally account for a moderate share of

the delivered price of these products. For the majority of U.S. producers, these costs ranged from 5 to 10

percent of the delivered price. For those importers that provided estimates the costs ranged from 1 to 12

percent of the delivered price. 

Producers and importers were asked to estimate the shares of their sales that occurred within 100

miles of their storage or production facility, between 101 and 1,000 miles, and over 1,000 miles. Seven of

eight producers reported that the majority of their sales are for distances of less than 1,000 miles. Among

those seven firms, the shares of shipments for distances of 1,000 miles or less by producers ranged from

60 to 100 percent. One producer reported that 78 percent of its sales are for distances of over 1,000 miles. 

Of the 14 importers that provided estimates, 10 reported that between 90 and 100 percent of their sales

were for distances of 1,000 miles or less, and 5 reported that the majority of their sales were for distances

of more than 1,000 miles.

Exchange Rates

Nominal exchange rates for the Chinese yuan and nominal and real exchange rates for the Korean

won in relation to the U.S. dollar are shown on a quarterly basis in figure V-2 for the period 2005-07.2

The data show that the yuan has appreciated relative to the dollar in nominal terms since 2005 and the

won has appreciated in both nominal and real terms. Real exchange rates for the yuan could not be

computed because of the lack of producer price indices for China.
V-3

Figure V-2

Exchange rates: Indexes of the nominal and real exchange rates of the Chinese yuan and the

Korean won relative to the U.S. dollar, by quarters, 2005-07

Source: IMF International Financial Statistics, March 2008 and various earlier issues.
 3

 *** sells only on a contract basis, and *** sells principally on a contract basis.

V-4

PRICING PRACTICES

Producers and importers were asked whether prices are determined by transaction-by-transaction

negotiations, by contracts, by set price lists, by a combination of these methods, or by other methods. 

Among the nine U.S. producers, seven reported that their prices are determined solely by transaction-bytransaction negotiations, and two reported that they are based upon both transaction-by-transaction

negotiations and contracts. Among importers of line pipe from the subject countries, 14 reported that

their prices are determined solely by transaction-by-transaction negotiations and 1 reported that its prices

are based on both transaction-by-transaction negotiations and contracts. 

Producers and importers were also asked to describe their discount policies indicating whether

they offer quantity discounts, offer annual volume discounts, do not offer discounts, or do not have a

discount policy. Among U.S. producers, five reported that they do not have a discount policy, one

reported that it has an annual volume discount, one reported that it takes volume into account in its

transaction-by-transaction negotiations, one reported that its quarterly pricing is based upon tonnages

purchased and another reported that it provides a two percent discount for the early payment of accounts. 

In the case of importers of product from the subject countries, 13 of the 15 responding firms either

reported that they do not offer discounts or do not have a discount policy. One reported that it offers

quantity discounts and another reported that it provides a 0.5 percent discount for the early payment of

accounts. 

The majority of U.S. producers and importers from the subject countries quote prices on an f.o.b.

basis, although some firms quote prices on a delivered basis. Among producers, four firms quote on an

f.o.b mill basis, three quote f.o.b. from a particular city, and two others quote delivered prices. Among

importers of product from the subject countries, 14 reported quoting prices on an f.o.b. basis, and 1

reported quoting on a delivered basis. The importers’ f.o.b quotes are from a port of entry, from a

warehouse, or in some cases from a particular city. All 9 of the responding U.S. producers and 9 of the

15 responding importers of product from the subject countries reported that they arrange transportation

for their customers. None of the producers or importers sell line pipe on the internet. 

 Line pipe is sold on either a spot or contract basis although spot sales are more common. Among

the nine U.S. producers, five firms sell exclusively on a spot basis and two others sell principally on a

spot basis but also make use of contracts. Of the other two firms, one sells only on a contract basis, and

the other sells principally on a contract basis.3

 Among importers from the subject countries, 10 sell

exclusively on a spot basis, and 1 sells exclusively on a short-term contract basis. Producers and

importers that make use of contracts reported that they range from 2 months to 1 year. In the majority of

cases, both prices and quantities are fixed during the contract period. The majority of the contracts do not

contain meet-or-release provisions. 

PRICE DATA

The Commission asked U.S. producers and importers of line pipe from China and Korea to

provide quarterly data for the total quantity and f.o.b value of line pipe that was shipped to unrelated

purchasers in the U.S. market during 2005-07. The products for which pricing data were requested are as

follows:
 4

 Additional price data relating to imports from nonsubject countries, primarily Mexico, Taiwan, and Japan, are

provided in appendix D (other includes South Africa and Venezuela).

 5

 Available data show that average market prices of line pipe, including both domestic and imported product,

have increased during January and February of 2008 over levels in December of 2007 (Preston Pipe and Tube

Report, p. 15 and p. 24). 

V-5

Product 1.–API 5L Grades B/X-42 welded pipe, 4-inch nominal size (4.5 inch outside diameter), 

plain end, with a wall thickness of 0.237 inch. 

Product 2.--–API 5L Grades B/X-42 welded pipe, 6-inch nominal size (6.625 inch outside

diameter), plain end, with a wall thickness of 0.280 inch.

Product 3.--–API 5L Grades B/X-42 welded pipe, 8-inch nominal size (8 5/8 inch outside

diameter), plain end, with a wall thickness of 0.322 inch.

Product 4.--–API 5L Grades B/X-42 welded pipe, 12-inch nominal size (12.75 inch outside

diameter), plain end, with a wall thickness of 0.375 inch.

Nine U.S. producers, seven importers of line pipe from China, and seven importers of line pipe

from Korea reported varying amounts of price data for the four product categories. The data received

accounted for 10 percent of U.S. producers’ shipments, 10 percent of imports from China, and 27 percent

of imports from Korea in 2007. 

Price Trends

U.S. producer and importer prices are presented in tables V-1 through V-4 and in figure V-3 for

the period 2005-07.4

 U.S. producer prices for all products peaked during 2006, then generally declined

over 2007.5

 Prices for Chinese line pipe generally decreased from 2005 levels in 2006, but then increased

in 2007. For Korea prices were at their highest level in 2005, and then declined during 2006 before

partially recovering in 2007. Price trends are summarized in table V-5. 

Price Comparisons

 As shown in table V-6, prices of imports from China and Korea were consistently lower than

domestic prices in all quarters for all four products. For China, margins of underselling ranged from 15.7

percent to 43.5 percent, and for Korea they ranged from 9.2 percent to 37.9 percent. 
V-6

Table V-1

Line pipe: Weighted-average f.o.b. selling prices and quantities for product 1, and margins of

underselling/(overselling), 2005-07

Period

United States China Korea Nonsubject

Price Quantity Price Quantity Margin Price Quantity Margin Price Quantity

per

short

ton

short

tons

per

short

ton

short

tons percent

per

short

ton

short

tons percent

per 

short 

ton

short

tons

2005:

 January-March $1,033 1,592 *** *** *** $788 403 23.8 *** ***

 April-June 1,010 2,479 *** *** *** 834 2,556 17.4 *** ***

 July-September *** *** *** *** *** 850 424 *** *** ***

 October-December 959 2,481 *** *** *** 750 1,521 21.8 *** ***

2006: 

 January-March *** *** *** *** *** *** *** *** *** ***

 April-June 1,030 3,593 *** *** *** 705 2,014 31.5 *** ***

 July-September 1,065 3,329 *** *** *** 672 1,279 36.9 *** ***

 October-December 1,049 3,133 *** *** *** 728 3,588 30.6 *** ***

2007: 

 January-March 979 5,960 *** *** *** 774 3,665 20.9 *** ***

 April-June 968 4,656 *** *** *** 763 3,715 21.2 *** ***

 July-September 963 3,213 *** *** *** 757 2,543 21.5 *** ***

 October-December 980 1,533 *** *** *** 756 2,240 22.8 *** ***

Product 1.-- API 5L Grades B/X-42 welded pipe, 4-inch nominal size (4.5 inch outside diameter), plain end, with a

wall thickness of 0.237 inch.

Note.--Margins are calculated from unrounded data. 

Source: Compiled from data submitted in response to Commission questionnaires.
V-7

Table V-2

Line pipe: Weighted-average f.o.b. selling prices and quantities for product 2, and margins of

underselling/(overselling), 2005-07

Period

United States China Korea Nonsubject

Price Quantity Price Quantity Margin Price Quantity Margin Price Quantity

per

short

ton

short

tons

per

short

ton

short

tons percent

per

short

ton

short

tons percent

per 

short 

ton

short

tons

2005:

 January-March $1,003 3,995 *** *** *** $794 825 20.8 *** ***

 April-June 988 3,948 *** *** *** 848 2,566 14.2 *** ***

 July-September 982 6,173 *** *** *** 821 484 16.3 *** ***

 October-December 982 3,044 *** *** *** 725 1,146 26.2 *** ***

2006: 

 January-March 919 5,044 *** *** *** 705 2,440 23.3 *** ***

 April-June 974 5,535 *** *** *** 730 1,642 25.0 *** ***

 July-September 1,050 4,650 *** *** *** 696 2,189 33.7 *** ***

 October-December 1,031 3,759 *** *** *** 728 3,494 29.4 *** ***

2007: 

 January-March 982 6,375 *** *** *** 793 2,662 19.2 *** ***

 April-June 1,017 4,459 *** *** *** 768 4,593 24.5 *** ***

 July-September 1,008 8,552 *** *** *** 748 2,734 25.8 *** ***

 October-December 935 4,691 *** *** *** 747 2,438 20.2 *** ***

Product 2.-- API 5L Grades B/X-42 welded pipe, 6-inch nominal size (6.625 inch outside diameter), plain end, with a

wall thickness of 0.280 inch.

Note.--Margins are calculated from unrounded data. 

Source: Compiled from data submitted in response to Commission questionnaires.
V-8

Table V-3

Line pipe: Weighted-average f.o.b. selling prices and quantities for product 3, and margins of

underselling/(overselling), 2005-07

Period

United States China Korea Nonsubject

Price Quantity Price Quantity Margin Price Quantity Margin Price Quantity

per

short

ton

short

tons

per

short

ton

short

tons percent

per

short

ton

short

tons percent

per 

short 

ton

short

tons

2005:

 January-March $1,052 1,228 *** *** *** $797 1,103 24.3 *** ***

 April-June 997 2,595 *** *** *** 824 852 17.4 *** ***

 July-September 964 3,573 *** *** *** *** *** *** *** ***

 October-December 947 4,196 *** *** *** 728 1,132 23.2 *** ***

2006: 

 January-March 926 3,883 *** *** *** 733 1,622 20.9 *** ***

 April-June 974 4,657 *** *** *** 703 1,392 27.9 *** ***

 July-September 1,069 4,542 *** *** *** 695 1,192 34.9 *** ***

 October-December 1,050 3,395 *** *** *** 716 3,635 31.8 *** ***

2007: 

 January-March 1,035 3,226 *** *** *** 788 3,551 23.8 *** ***

 April-June 1,035 3,644 *** *** *** 785 4,024 24.2 *** ***

 July-September 985 2,569 *** *** *** 736 2,079 25.3 - -

 October-December 972 6,353 *** *** *** 744 2,036 23.5 - -

Product 3.-- API 5L Grades B/X-42 welded pipe, 8-inch nominal size (8 5/8 inch outside diameter), plain end, with a

wall thickness of 0.322 inch.

Note.--Margins are calculated from unrounded data. 

Source: Compiled from data submitted in response to Commission questionnaires.
V-9

Table V-4

Line pipe: Weighted-average f.o.b. selling prices and quantities for product 4, and margins of

underselling/(overselling), 2005-07

Period

United States China Korea Nonsubject

Price Quantity Price Quantity Margin Price Quantity Margin Price Quantity

per

short

ton

short

tons

per

short

ton

short

tons percent

per

short

ton

short

tons percent

per 

short 

ton

short

tons

2005:

 January-March *** *** *** *** *** $810 515 *** *** ***

 April-June 1,098 1,613 *** *** *** 844 912 23.1 *** ***

 July-September *** *** *** *** *** 864 964 *** *** ***

 October-December 940 1,273 *** *** *** *** *** *** *** ***

2006: 

 January-March *** *** *** *** *** 731 1,225 *** *** ***

 April-June 988 2,829 *** *** *** 696 869 29.5 *** ***

 July-September 1,074 4,860 *** *** *** 697 1,503 35.1 *** ***

 October-December 1,093 2,390 *** *** *** 759 2,784 30.6 *** ***

2007: 

 January-March 1,022 4,828 738 4,080 27.8 807 2,823 21.1 *** ***

 April-June 995 3,535 720 2,610 27.6 740 3,043 25.6 *** ***

 July-September 978 4,982 694 1,571 29.0 771 2,484 21.1 - -

 October-December *** *** *** *** *** *** *** *** *** ***

Product 4.-- API 5L Grades B/X-42 welded pipe, 12-inch nominal size (12.75 inch outside diameter), plain end, with

a wall thickness of 0.375 inch.

Note.--Margins are calculated from unrounded data. 

Source: Compiled from data submitted in response to Commission questionnaires.

Figure V-3

Line pipe: Weighted-average f.o.b. prices of products 1-4, 2005-07

* * * * * * *
V-10

Table V-5

Line pipe: Summary of weighted-average f.o.b. prices for products 1-4, by country, 2005-07

Product/Country Number of

quarters

Lowest price

(per short ton)

Highest price

(per short ton)

Change in price:1

(percent)

Product 1

 U.S. 12 $*** $1,065 ***

 China 12 *** *** ***

 Korea 12 672 850 -4.0

 Nonsubject 12 *** *** ***

Product 2

 U.S. 12 919 1,050 -6.7

 China 12 *** *** ***

 Korea 12 696 848 -6.0

 Nonsubject 12 *** *** ***

Product 3

 U.S. 12 926 1,069 -7.6

 China 12 *** *** ***

 Korea 12 695 *** ***

 Nonsubject 10 *** *** ***

Product 4

 U.S. 12 940 *** ***

 China 12 *** *** ***

 Korea 12 696 864 -5.7

 Nonsubject 11 *** *** ***

 1

 Percentage change from the first quarter in which price data were available to the last quarter in which price

data were available, based on unrounded data. 

Source: Compiled from data submitted in response to Commission questionnaires.

Table V-6

Line pipe: Instances of underselling and the range and average of margins for products 1-4, 

2005-07

Country Number of instances Range (percent)

Average margin

(percent)

 China 48 15.7 to 43.5 28.9

 Korea 48 9.2 to 37.9 24.1

 Total 96 9.2 to 43.5 26.5

Source: Compiled from data submitted in response to Commission questionnaires.
 6

 Petition, p. 31 and conference transcript, p. 73 (Schragin). 

V-11

LOST SALES AND LOST REVENUES

While the petitioners and other domestic firms reported in their producer questionnaires that they

have lost sales and revenue to competition from imports from China and Korea, none of the firms

provided detailed information and purchaser contacts needed to investigate the allegations directly. The

petitioners reported that since most producer sales are made to distributors, they are not well positioned to

identify specific instances of lost sales or lost revenues. They reported that much of the competition is

between distributors selling domestic and imported line pipe.6

 

 1

 The firms (and their fiscal year ends if other than December 31) are: American, CSI, IPSCO, Maverick,

Northwest, Stupp, Tex-Tube (September 30), U.S. Steel, and Wheatland (September 29). ***. All firms reported

GAAP as their accounting basis. 

 2

 Aggregate operating income increased by 52.3 percent from 2005 to 2006, then declined by 49.8 percent from

2006 to 2007.

 3

 Per short ton COGS actually declined by $10 from 2005 to 2006, but increased by $127 from 2006 to 2007

primarily due to increased raw material costs.

VI-1

PART VI: FINANCIAL CONDITION OF U.S. PRODUCERS

INTRODUCTION

Nine U.S. producers of line pipe provided usable financial data on their operations on this

product.1

 These data are believed to account for the vast majority of U.S. production of line pipe in 2007. 

No firms reported internal consumption or transfers to related firms; however, ***. The line pipe

industry experienced considerable restructuring during the period for which data were collected, including

Tenaris’ purchase of Maverick in October 2006, IPSCO’s purchase of NS Group in December 2006, and

U.S. Steel’s purchase of Lone Star in June 2007.

OPERATIONS ON LINE PIPE

Aggregate income-and-loss data for U.S. producers on their operations producing line pipe are

presented in table VI-1, and selected company-specific financial data are presented in table VI-2. The

overall financial performance of the reporting U.S. producers improved from 2005 to 2006, then declined

sharply in 2007. While reported aggregate net sales quantities and values increased by 26.1 and 34.5

percent, respectively, from 2005 to 2007, aggregate cost of goods sold (“COGS”) and selling, general,

and administrative (“SG&A”) expenses combined increased by 45.7 percent during this timeframe. As a

result of the larger increase in operating costs and expenses as compared to revenues, aggregate operating

income declined during the period for which data were collected by 23.6 percent, with all of the decline in

operating income occurring from 2006 to 2007.2

 Of the nine firms that reported financial data, six

reported decreased operating profits in 2007 as compared to 2005, while five reported decreased

operating profits in 2007 as compared to 2006.

For U.S. producers of line pipe, per short ton net sales values increased by $65 from 2005 to

2007, while combined COGS and SG&A expenses increased by $127 per short ton during the same

period, which led to a decline in per short ton operating income in 2007 as compared to 2005. Increases

in per short ton raw material costs, which rose 13.6 percent from 2005 to 2007 and accounted for 74.1 to

75.0 percent of total per short ton COGS during the reporting period, had the greatest impact on the

overall increase in COGS from 2005 to 2007.3
VI-2

Table VI-1

Line pipe: Results of operations of U.S. producers, fiscal years 2005-07

Item

Fiscal year

2005 2006 2007

Quantity (short tons)

Total net sales 591,129 748,071 745,656

Value ($1,000)

Total net sales 577,774 753,061 777,099

Cost of goods sold 460,995 576,253 668,704

Gross profit 116,779 176,808 108,395

SG&A expense 23,372 34,561 37,032

Operating income 93,407 142,247 71,363

Other income or (expense), net (1,196) (2,236) (5,164)

Net income 92,211 140,011 66,199

Depreciation 8,568 10,433 13,035

Cash flow 100,779 150,444 79,234

Ratio to net sales (percent)

Cost of goods sold:

 Raw materials 59.8 56.9 63.7

 Direct labor 6.2 6.4 6.6

 Other factory costs 13.7 13.2 15.7

 Average COGS 79.8 76.5 86.1

Gross profit 20.2 23.5 13.9

SG&A expenses 4.0 4.6 4.8

Operating income 16.2 18.9 9.2

Net income 16.0 18.6 8.5

Unit value (per short ton)

Total net sales $977 $1,007 $1,042

Cost of goods sold:

 Raw materials 585 573 664

 Direct labor 61 64 69

 Other factory costs 134 133 164

 Average COGS 780 770 897

Gross profit 198 236 145

SG&A expenses 40 46 50

Operating income 158 190 96

Net income 156 187 89

Number of companies reporting

Operating losses 1 2 2

Data 9 9 9

Source: Compiled from data submitted in response to Commission questionnaires.
 4

 Respondents’ postconference brief, pp. 9-10.

 5

 ***.

 6

 Ibid., pp. 21-23.

 7

 Ibid., pp. 23-24. ***.

 8

 Ibid., pp. 18-21.

 9

 U.S. Steel and Maverick’s postconference brief, pp. 29-30, and exh. 1, pp. 1-5. Petitioners argue that ***. See

also CSI’s Form 10-K, March 25, 2008, p. 1. 

 10 Ibid., pp. 30-31.

 11 Ibid., exh. 1, pp. 6-9. At the request of Commission staff, ***. 

VI-3

Table VI-2

Line pipe: Selected results of operations of U.S. producers, by firm, fiscal years 2005-07

* * * * * * *

Company-specific data reveal that the vast majority of the industry’s reported decline in operating

income from 2006 to 2007 is due to ***. Respondents argue that short-term operational costs and

inefficiencies resulting from consolidations and investments in the line pipe industry are the primary

factors behind the decline in profitability for ***, and that such acquisitions and upgrades will ultimately

make the industry more competitive and efficient.4

 ***.5 ***.6 ***.7 ***.8

In contrast, petitioners argue that the decline in profitability was experienced by non-petitioning

firms as well as petitioning firms, and that ***.9

 ***.10 ***.11 

A variance analysis for the operations of U.S. producers of line pipe is presented in table VI-3. 

The information for this variance analysis is derived from table VI-1. The analysis shows that the decline

in operating income from 2005 to 2007 was attributable to the unfavorable net cost/expense variance

despite favorable price and volume variances (e.g., costs increased more than prices and volume).
 12 Conference transcript, pp. 34-35 (Davila)

 13 ***.

 14 ***.

VI-4

Table VI-3

Line pipe: Variance analysis on the operations of U.S. producers, fiscal years 2005-07

Item

Fiscal year

2005-07 2005-06 2006-07

Value ($1,000)

Total net sales:

 Price variance 48,289 21,891 26,469

 Volume variance 151,036 153,396 (2,431)

 Total net sales variance 199,325 175,287 24,038

Cost of sales:

 Cost variance (87,200) 7,134 (94,311)

 Volume variance (120,509) (122,392) 1,860

 Total cost variance (207,709) (115,258) (92,451)

Gross profit variance (8,384) 60,029 (68,413)

SG&A expenses:

 Expense variance (7,550) (4,984) (2,583)

 Volume variance (6,110) (6,205) 112

 Total SG&A variance (13,660) (11,189) (2,471)

Operating income variance (22,044) 48,840 (70,884)

Summarized as:

 Price variance 48,289 21,891 26,469

 Net cost/expense variance (94,751) 2,150 (96,894)

 Net volume variance 24,418 24,799 (459)

Note.--Unfavorable variances are shown in parenthesis; all others are favorable. 

Source: Compiled from data submitted in response to Commission questionnaires.

CAPITAL EXPENDITURES AND RESEARCH AND DEVELOPMENT EXPENSES

Capital expenditures and research and development (“R&D”) expenses are shown in table VI-4. 

All nine firms reported capital expenditures, and two firms reported R&D expenses. *** accounted for

the majority of reported capital expenditures in each period. *** reported that it made a major investment

in upgrading its plant by installing new cut-off, hydrostatic testing, and ultrasonic testing equipment in

2007,12 while *** reported that its capital expenditures reflect ***.13 According to ***, its reported

capital expenditures include ***.14 In two of the three periods for which data were requested, total

reported capital expenditures were less than total reported depreciation expense, which may indicate that

the industry did not replace its productive assets in those periods. 
 15 ***.

VI-5

Table VI-4

Line pipe: Capital expenditures and research and development expenses of U.S. producers, fiscal

years 2005-07

Item

Fiscal year

2005 2006 2007

Value (1,000 dollars)

Capital expenditures 7,500 13,729 10,384

R&D expenses *** *** ***

Source: Compiled from data submitted in response to Commission questionnaires.

ASSETS AND RETURN ON INVESTMENT

Data on the U.S. producers’ total assets and their return on investment (“ROI”) are presented in

table VI-5. For U.S. producers of line pipe, the total assets utilized in the production, warehousing, and

sale of such products increased from $230.8 million in 2005 to $*** in 2007. The increase in current

assets from 2005 to 2007 largely reflects the increases in the prices and costs for line pipe, while ***.15

The ROI increased 3.7 percentage points from 2005 to 2006, then declined *** percentage points from

2006 to 2007. The trend in the ROI was similar to the trend in the operating income margin.

CAPITAL AND INVESTMENT

The Commission requested U.S. producers of line pipe to describe any actual or potential

negative effects of imports of line pipe from China and Korea on their firms’ growth, investment, ability

to raise capital, development and production efforts, or the scale of capital investments. Their responses

are shown in appendix E.
VI-6

Table VI-5

Line pipe: U.S. producers’ total assets and return on investment, fiscal years 2005-07

Item

Fiscal year

2005 2006 2007

Value of assets: Value ($1,000)

Current assets:

 Cash and equivalents 10,785 400 1,390

 Accounts receivable, net 56,205 71,018 72,083

 Inventories 75,338 130,460 148,980

 Other 12,439 6,824 16,500

 Total current assets 154,767 208,702 238,953

Property, plant and equipment:

Original cost 177,020 178,880 189,831

Less: accumulated depreciation 106,848 82,626 63,414

Equals: book value 70,172 96,254 126,417

Other non-current assets1 5,827 16,597 ***

 Total assets 230,766 321,553 ***

Operating income or (loss) 93,407 142,247 71,363

Share (percent)

Return on investment1 40.5 44.2 ***

 1 ***.

Source: Compiled from data submitted in response to Commission questionnaires.
 1

 Section 771(7)(F)(ii) of the Act (19 U.S.C. § 1677(7)(F)(ii)) provides that “The Commission shall consider

{these factors} . . . as a whole in making a determination of whether further dumped or subsidized imports are

imminent and whether material injury by reason of imports would occur unless an order is issued or a suspension

agreement is accepted under this title. The presence or absence of any factor which the Commission is required to

consider . . . shall not necessarily give decisive guidance with respect to the determination. Such a determination

may not be made on the basis of mere conjecture or supposition.”

VII-1

PART VII: THREAT CONSIDERATIONS AND BRATSK INFORMATION

Section 771(7)(F)(i) of the Act (19 U.S.C. § 1677(7)(F)(i)) provides that--

In determining whether an industry in the United States is threatened

with material injury by reason of imports (or sales for importation) of the

subject merchandise, the Commission shall consider, among other

relevant economic factors1

--

(I) if a countervailable subsidy is involved, such information as may be

presented to it by the administering authority as to the nature of the

subsidy (particularly as to whether the countervailable subsidy is a

subsidy described in Article 3 or 6.1 of the Subsidies Agreement), and

whether imports of the subject merchandise are likely to increase,

(II) any existing unused production capacity or imminent, substantial

increase in production capacity in the exporting country indicating the

likelihood of substantially increased imports of the subject merchandise

into the United States, taking into account the availability of other export

markets to absorb any additional exports,

(III) a significant rate of increase of the volume or market penetration of

imports of the subject merchandise indicating the likelihood of

substantially increased imports,

(IV) whether imports of the subject merchandise are entering at prices

that are likely to have a significant depressing or suppressing effect on

domestic prices, and are likely to increase demand for further imports,

(V) inventories of the subject merchandise,

(VI) the potential for product-shifting if production facilities in the

foreign country, which can be used to produce the subject merchandise,

are currently being used to produce other products,

(VII) in any investigation under this title which involves imports of both

a raw agricultural product (within the meaning of paragraph (4)(E)(iv))

and any product processed from such raw agricultural product, the

likelihood that there will be increased imports, by reason of product

shifting, if there is an affirmative determination by the Commission

under section 705(b)(1) or 735(b)(1) with respect to either the raw

agricultural product or the processed agricultural product (but not both),
 2

 Section 771(7)(F)(iii) of the Act (19 U.S.C. § 1677(7)(F)(iii)) further provides that, in antidumping

investigations, “. . . the Commission shall consider whether dumping in the markets of foreign countries (as

evidenced by dumping findings or antidumping remedies in other WTO member markets against the same class or

kind of merchandise manufactured or exported by the same party as under investigation) suggests a threat of material

injury to the domestic industry.”

 3 See Table VII-10.

 4

 As reported by Global Trade Atlas in HS 7306.19 and 7306.10 (prior to 2007) which includes all line pipe

products. At the international level, the HTS system is consistent across countries at the 6-digit level and lower.

VII-2

(VIII) the actual and potential negative effects on the existing

development and production efforts of the domestic industry, including

efforts to develop a derivative or more advanced version of the domestic

like product, and

(IX) any other demonstrable adverse trends that indicate the probability

that there is likely to be material injury by reason of imports (or sale for

importation) of the subject merchandise (whether or not it is actually

being imported at the time).2

Information on the nature of the alleged subsidies and sales at less than fair value was presented

earlier in this report; information on the volume and pricing of imports of the subject merchandise is

presented in Parts IV and V; and information on the effects of imports of the subject merchandise on U.S.

producers’ existing development and production efforts is presented in Part VI. Information on

inventories of the subject merchandise; foreign producers’ operations, including the potential for

“product-shifting;” and dumping in third-country markets, follows. Also presented in this section of the

report is information obtained for consideration by the Commission in relation to Bratsk rulings.

THE INDUSTRY IN CHINA

Overview

According to the International Iron and Steel Institute (“IISI”), China is currently the world’s

leading producer of welded tubes, with total production of 22.1 million short tons in 2006, an increase of

54 percent over the level recorded in 2004.3

According to Global Trade Atlas, since 2005, China has been among the world’s leading

exporters of welded line pipe.4

 During 2005-07, Chinese exports of welded line pipe increased from

80,691 to 343,716 short tons. These data are presented in table VII-1. In 2007, China and Korea both

exported more than 300,000 short tons of line pipe, with no other country exporting more than 100,000

short tons.
 5

 Petition, exh. 6a.

 6

 U.S. importers identified the following Chinese producers as sources for their imports: ***. 

VII-3

Table VII-1

Line pipe: China's exports, by quantity and average unit value, 2005-07

Destination

2005 2006 2007 2005 2006 2007

Exports (short tons) Unit value (U.S. $ per short ton)

United States1 9,140 53,546 149,364 653 576 524

Chile 0 4,887 29,623 - 869 758

Canada 6,840 5,309 28,666 690 872 559

Myanmar 11,029 24,029 25,917 579 624 526

Brazil 4,565 726 12,915 998 796 694

Spain 0 0 12,526 - - 648

Sudan 12,782 9,282 9,265 739 822 747

Belgium 0 0 7,425 - - 521

Pakistan 74 130 6,448 794 590 615

Nigeria 0 0 5,136 - - 736

Gabon 0 231 4,685 - 1,133 672

Australia 830 0 4,444 504 - 640

United Arab Emirates 0 0 4,149 - - 567

Philippines 809 0 3,503 522 - 549

Kazakhstan 60 151 3,471 1,436 692 667

All other 34,564 35,778 36,178 612 610 594

Total 80,691 134,070 343,716 659 635 582

 1 China’s exports of line pipe to the United States are substantially lower than U.S. imports of line pipe from China from official

Commerce statistics.

Note.– The data presented in this table are for HS 7306.19 and HS 7306.10 (prior to 2007) which covers all welded line pipe

excluding stainless steel. The data thus include welded line pipe of outside diameter larger than 16 inches which is not subject to

these investigations.

Source: Compiled from Global Trade Atlas.

The petition in these investigations identified 65 producers and/or exporters of line pipe in

China.5

 The Commission sent foreign producer questionnaires to 50 firms, received no completed

questionnaires, and received no responses indicating that the firms do not produce the subject product.6

 

Under the Commission’s currently active investigation Certain Circular Welded Carbon Quality Steel

Pipe from China (Inv. Nos. 701-TA-447 and 731-TA-1116 (Final)), five Chinese producers confirmed

that they also produce line pipe. Those firms are Benxi Northern Steel Pipe Co., Ltd., Liaoning Northern

Steel Pipe Co., Ltd., Shanghai Alison Steel Pipe Co., Ltd., Tai Feng Qiao Metal Products Co. Ltd., and

Tianjin Lifengyuanda Steel Group Co., Ltd.

Line Pipe Operations and Alternative Products

Information on the Chinese producers’ total operations is presented in table VII-2. In addition to

line pipe, Chinese producers produce circular welded pipe, large diameter line pipe, OCTG, and other

pipe on the same equipment and machinery used to produce line pipe. Total capacity remained

unchanged during the period, while total production and capacity utilization increased from 2005 to 2007. 

The largest product category was of circular welded pipe.
 7

 International Iron and Steel Institute, Steel Statistical Yearbook 2007, Table 29.

 8

 Conference transcript, p. 7 (Byun).

VII-4

Table VII-2

Line pipe: Chinese producers’ total plant capacity and production, by products, 2005-07

Item

Calendar year

2005 2006 2007

Quantity (short tons)

Total plant capacity 1,208,000 1,208,000 1,208,000

Production:

Small/medium line pipe1 *** 76,976 131,076

Circular welded pipe 745,191 926,575 865,844

Large diameter line pipe2 *** *** ***

OCTG *** *** ***

Other *** *** ***

Total, all products 862,617 1,118,234 1,139,810

Total plant capacity utilization (percent) 71.4 92.6 94.4

 1 Welded line pipe 16 inches or less in outside diameter (excluding dual-stenciled pipe used in

standard/structural applications).

 2

 Welded line pipe greater than 16 inches in outside diameter.

Source: Compiled from data submitted in response to Commission questionnaires for Certain Circular Welded

Carbon Quality Steel Pipe from China (Inv. Nos. 701-TA-447 and 731-TA-1116 (Final)). 

THE INDUSTRY IN KOREA

Overview

According to the IISI, overall Korean production of welded tubes decreased from nearly 4.8

million short tons in 2004 to over 4.5 million short tons in 2006, when Korea was the third largest

producer of welded tube in the world, behind China and Japan (table VII-10).7

 Global Trade Atlas data

show that Korea was the world’s leading exporter of welded line pipe during the last three years. 

Although the United States is the leading market for Korean exports of welded line pipe, accounting for

almost 63 percent of the total, Global Trade Atlas indicates that during the last three years, Korea has also

increased exports other markets, particularly in the Middle East (table VII-3).

According to testimony provided by one U.S. importer of line pipe from Korea, Korea’s line pipe

is well known for its quality, which is regarded as higher than that of Chinese products. Korea’s market

strategy in the United States is to establish a niche market based on Korean high quality brand names and

to sell them through a well-controlled system of distributors. The witness described the United States as a

mature, well-established market for Korean products.8
 9

 Petition, exh. 6b.

 10 The Commission received a response from *** reporting it does not produce line pipe.

VII-5

Table VII-3

Line pipe: Korea's exports, by quantity and average unit value, 2005-07

Destination

2005 2006 2007 2005 2006 2007

Exports (short tons) Unit value (U.S. $ per short ton)

United States 118,850 195,136 240,466 683 636 689

United Arab

Emirates 10,190 20,933 23,208 679 596 717

Singapore 19,518 20,733 21,443 639 580 650

Australia 15,167 8,292 17,156 723 619 717

Thailand 12,868 11,426 14,642 736 634 729

Saudi Arabia 824 851 11,126 565 639 945

Canada 4,942 8,535 8,564 696 588 675

Indonesia 8,426 2,742 6,846 695 550 680

Iran 19,216 14,415 5,962 747 561 956

South Africa 2,686 2,436 5,437 703 631 756

Turkey 0 429 5,264 - 1,203 810

Oman 2,164 7,116 4,172 767 743 1,063

Mexico 0 1,136 3,649 - 530 594

United Kingdom 0 0 2,452 (1

) - 736

Vietnam 13 174 2,100 (1

) 894 842

All other 13,061 15,405 12,023 660 724 976

Total 227,927 309,758 384,511 691 631 718

 1 2005 unit values for the United Kingdom and Vietnam are $4,488 and $21,233, respectively.

Note.– The data presented in this table are for HS 7306.19 which covers all welded line pipe excluding stainless

steel. The data thus include welded line pipe of outside diameter larger than 16 inches which is not subject to these

investigations.

Source: Compiled from Global Trade Atlas.

The petition in these investigations identified four producers and/or exporters of line pipe in

Korea.9

 The Commission sent foreign producer questionnaires to four firms, received three completed

questionnaires, and received one response indicating that the firm does not produce the subject product.10

The responding firms are Hyundai Steel Co., Ltd. (“HYSCO”), SeAH Steel Corp. (“SeAH”), and

HuSteel. Table VII-4 presents data on the shares of 2007 reported capacity and production in Korea of

each of the Korean respondents, and their estimated shares of total 2007 production in Korea. The largest

producer is *** followed by ***.

Table VII-5 presents data on the shares of 2007 reported exports to the United States for each

respondent and their estimated shares of total exports to the United States from Korea in 2007. Reported

exports in 2007 exceeded U.S. imports of line pipe from Korea in 2007 according to official statistics. 

*** is the largest exporter of line pipe to the United States, followed by ***. 

The estimated share of each respondent firm’s total sales represented by sales of line pipe varied

widely by firm. *** devoted a minor amount of their sales (***), to the subject product in 2007, whereas

*** devoted *** percent. 
 11 ***.

 12 ***.

VII-6

Table VII-4

Line pipe: Korean producers’ reported capacity, production, shares of reported capacity and

production, and estimated shares of total production in Korea, 2007

* * * * * * *

Table VII-5

Line pipe: Korean producers’ reported exports to the United States, share of total reported

exports to the United States, and share of estimated total exports to the United States from Korea,

2007

* * * * * * *

Line Pipe Operations

Information on the Korean industry’s line pipe operations is presented in VII-6. Capacity,

production, and capacity utilization increased overall from 2005 to 2007. Projections for 2008-09 reflect

stable capacity and increases in production and capacity utilization.11 ***.

Internal consumption and home market sales combined were consistently less than *** percent of

shipments during 2005 to 2007, and are projected to remain less than *** percent in 2008 and 2009. As a

share of total shipments, exports to the United States increased steadily from 2005 to 2007, but are

projected to decrease slightly in 2008 and 2009. Exports to all other markets decreased steadily as a share

of total shipments during 2005 to 2007, but are projected to increase slightly in 2008 and 2009. Other

major export markets are ***. Inventories held by Korean producers increased overall from December

2005 to December 2007, but are projected to decrease in 2008 and 2009. No firm reported maintaining

inventories of line pipe in the United States. No firm reported plans to add, expand, curtail, or shut down

production capacity and/or production of line pipe in Korea.12 
VII-7

Table VII-6

Line pipe: Korean producers’ reported production capacity, production, shipments, and

inventories, 2005-07, and projected 2008-09

Item

Actual experience Projections

2005 2006 2007 2008 2009

Quantity (short tons)

Capacity 303,359 356,441 343,476 343,476 343,476

Production 215,125 315,808 335,063 342,476 342,476

End of period inventories 13,347 22,516 17,959 14,875 11,670

Shipments:

 Internal consumption *** *** *** *** ***

 Home market *** *** *** *** ***

 Exports to--

 The United States 96,322 151,423 195,155 186,650 181,138

 All other markets 102,714 125,201 119,941 131,092 136,604

 Total exports 199,036 276,624 315,096 317,742 317,742

 Total shipments 209,657 306,639 339,620 345,560 347,765

Ratios and shares (percent)

Capacity utilization 70.9 88.6 97.6 99.7 99.7

Inventories to production 6.2 7.1 5.4 4.3 3.4

Inventories to total

 shipments 6.4 7.3 5.3 4.3 3.4

Share of total quantity of

 shipments:

 Internal consumption *** *** *** *** ***

 Home market *** *** *** *** ***

 Exports to--

 The United States 45.9 49.4 57.5 54.0 52.1

 All other markets 49.0 40.8 35.3 37.9 39.3

 All export markets 94.9 90.2 92.8 91.9 91.4

Note.–Because of rounding, figures may not add to the totals shown.

Source: Compiled from data submitted in response to Commission questionnaires.
 13 Korean producers reported other pipe includes ***.

VII-8

Alternative Products

In addition to line pipe, Korean producers produce standard/structural pipe, large diameter line

pipe, OCTG, and other pipe on the same equipment and machinery used to produce line pipe. As

presented in table VII-7, the largest nonsubject product category was other pipe.13 

Table VII-7

Line pipe: Korean producers’ total plant capacity and production, by products, 2005-07

Item

Calendar year

2005 2006 2007

Quantity (short tons)

Total plant capacity1 2,411,537 2,429,725 2,451,656

Production:

Subject line pipe 215,125 315,808 335,063

Standard/structural pipe *** *** ***

Large diameter line pipe2 *** *** ***

OCTG 207,744 211,374 217,816

Other3 942,074 807,485 874,800

Total production 2,115,266 2,110,816 2,212,285

Total plant capacity utilization (percent) 87.7 86.9 90.2

 1 ***.

 2

 Welded line pipe greater than 16 inches in outside diameter.

 3

 Other products consist primarily of boiler tube, conduit, large diameter standard/structural pipe, electric pole,

and mechanical pipe.

Source: Compiled from data submitted in response to Commission questionnaires. 
 14 Those firms were ***. 

 15 Those firms were ***. 

 16 Those firms were ***. 

 17 *** reported inventories from China. ***.

VII-9

U.S. IMPORTS SUBSEQUENT TO DECEMBER 31, 2007

Seven U.S. importers reported that they had placed orders for line pipe from China for delivery

into the United States after December 31, 2007,14 eight U.S. importers reported orders from Korea,15 and

seven U.S. importers reported orders from other countries.16 This information is presented in table VII-8.

Table VII-8

Line pipe: U.S. importers’ orders after December 31, 2007

* * * * * * *

U.S. IMPORTERS’ INVENTORIES

Two U.S. importers reported inventories of imports of line pipe from China during the period for

which data were collected, no firms reported inventories from Korea, and two firms reported inventories

from other countries.17 Data collected in these investigations on U.S. importers’ end-of-period inventories

of line pipe are presented in table VII-9. Inventory from China increased markedly from 2005 to 2006

then decreased by *** percent in 2007. *** accounted for the vast majority of inventory of Chinese line

pipe. ***.

Table VII-9

Line pipe: U.S. importers’ end-of-period inventories of imports, 2005-07

* * * * * * *

ANTIDUMPING AND COUNTERVAILING DUTY ORDERS 

IN THIRD-COUNTRY MARKETS

Based on available information, no known antidumping or countervailing duties on subject line

pipe exist in third-country markets. 
 18 Silicon Metal from Russia, Inv. No. 731-TA-991 (Second Remand), USITC Publication 3910, March 2007, 

p. 2; citing Bratsk Aluminum Smelter v. United States, 444 F.3d at 1375.

VII-10

INFORMATION ON NONSUBJECT SOURCES

“Bratsk” Considerations

As a result of the Court of Appeals for the Federal Circuit (“CAFC”) decision in Bratsk

Aluminum Smelter v. United States (“Bratsk”), the Commission is directed to:

undertake an “additional causation inquiry” whenever certain triggering factors are

met: “whenever the antidumping investigation is centered on a commodity product, and

price competitive non-subject imports are a significant factor in the market.” The

additional inquiry required by the Court, which we refer to as the Bratsk replacement /

benefit test, is “whether non-subject imports would have replaced the subject imports

without any beneficial effect on domestic producers.”18

Nonsubject Source Information

During the preliminary phase of these investigations, the Commission sought pricing data from

U.S. importers of line pipe from China, Korea, Japan, Mexico, Taiwan, and all other countries. Those

data are presented in appendix D of this report. With respect to foreign nonsubject sources of supply, the

Commission sought publicly available information regarding international suppliers of line pipe since

2005 from national import and export statistics, from conference testimony, and from interviews with

industry sources. 

Overview

As discussed in Part IV of this report, the leading nonsubject source of line pipe is Mexico; other

major nonsubject source countries include Taiwan, Japan, and as recently as 2005, Brazil. Imports from

all nonsubject sources combined accounted for 66.9 percent of total imports in 2005 but, by 2007, had

decreased as a share of total imports to 29.2 percent. Figure VII-1 shows the volume of subject and

leading nonsubject imports for the period for which data were collected, while figure VII-2 shows the

respective average unit values of such imports during the same period.

In general, most published data on welded steel pipes and tubes distinguish between OCTG and 

line pipe, on the one hand, and all other forms of welded pipe (including standard pipe and various forms

of structural and mechanical pipe, pressure pipe, and piling). That is, in terms of demand factors, most

analysis focuses on energy applications and structural applications, very broadly defined. In addition,

published analysis of supply factors are often grouped at an even more aggregate level, combining all

forms of welded pipe, reflecting in part a commonality among raw materials (i.e., hot-rolled sheet and 

strip and, for thicker pipe and tubes, steel plate) and some overlap of production facilities and methods.

Accordingly, for the purpose of this market review, information and data are provided according to their

availability, and include both subject and nonsubject welded line pipe. 
VII-11

Figure VII-1

Line pipe: Quantity of U.S. imports, by sources, 2005-07

Source: Tables IV-2 and IV-3.
VII-12

Figure VII-2

Line pipe: Average unit values of U.S. imports, by sources, 2005-07

Source: Tables IV-2 and IV-3.
 19 IISI, Steel Statistical Yearbook 2007. Global and regional production data as published by IISI refer to all

welded pipe and tube (including, e.g., mechanical tubing, structural tubing, OCTG, and line pipe), and are therefore

substantially broader than the subject merchandise. As such, global and regional production data represent general

trends and are for illustrative purposes only.

 20 Data for 2007 are not yet available.

VII-13

Line pipe is produced in substantial quantities by welded pipe and tube producers throughout the

world. Although figures specifically for global welded line pipe production are not generally available,

the IISI publishes data on the global production of the larger product grouping of all welded pipe and 

tube.19 As shown in table VII-10, welded pipe and tube production, especially in China, increased

between 2004 and 2006.20

Table VII-10

Welded steel pipe: Global production, by region, 2004-06

Region

2004 2005 2006

Quantity (1,000 short tons)1

North America 4,892 6,662 7,019

 United States 1,285 2,897 3,117

 Canada 2,995 3,127 3,250

 Mexico 612 639 651

European Union (15)2 10,049 9,984 10,639

Turkey — — —

Asia 29,544 33,901 38,061

 China 14,344 19,255 22,144

 India — — —

 Japan 7,435 7,081 7,924

 Korea 4,701 4,467 4,527

 Taiwan 1,204 1,096 1,230

 Thailand — — —

 Other Asia 15,200 14,646 15,917

Commonwealth of Independent States — — —

South America — — —

Total 46,570 50,693 57,285

 1 The data presented in this table are for all welded pipe and tube, and so are substantially overstated with respect to the

welded line pipe subject to these investigations. Data were not published for the Commonwealth of Independent States, India,

South America, Thailand, and Turkey in 2004-06. The original data were published in metric tons, which were converted to short

tons by multiplying by 1.1023. Because of rounding, figures may not add to the totals shown. 2 The EU15 includes Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the

Netherlands, Portugal, Spain, Sweden, and the United Kingdom.

Source: International Iron and Steel Institute, Steel Statistical Yearbook, 2007.
 21 HS 7306.10 and HS 7306.19 do not include stainless steel line pipe.

VII-14

Leading Nonsubject Sources of Circular Welded Pipe

The following is an analysis of the world’s leading exporters of welded line pipe which are also

important suppliers to the United States. Global trade data provide a measure of the trade flows in subject

merchandise, although for international comparisons, only data at the 6-digit level of the Harmonized

System (HS) are available. Table VII-11 presents data for HS 7306.19 (7306.10 prior to 2007), which

covers all welded carbon steel line pipe.21 The data thus also include welded line pipes of outside

diameter larger than 16 inches, which are not subject products of these investigations.

With respect to individual nonsubject countries, table VII-12 provides available information

regarding the production capabilities of the countries providing the largest volumes of U.S. imports of

line pipe other than China and Korea.

Table VII-11

Line pipe: Global exports, by country, 2005-07

Source

2005 2006 2007 2005 2006 2007

Exports (short tons)1 Unit value (U.S. $ per short ton)1

South Korea 227,927 309,758 384,511 691 631 718

China 80,691 134,070 343,716 659 635 582

Japan 84,823 86,783 91,031 1,179 1,013 1,412

EU27 (External Trade)2 109,882 268,845 85,777 1,051 1,085 1,761

Turkey 138,185 215,424 83,652 852 747 895

Mexico 94,244 117,913 77,639 885 890 869

Malaysia 2,127 928 70,056 576 1,251 457

United States 112,876 107,670 64,032 1,017 1,031 949

Taiwan 20,104 60,878 36,125 686 665 649

Brazil 49,326 39,566 24,367 696 909 990

Russia 63,597 19,025 24,259 622 680 809

Indonesia 16,691 8,697 24,098 793 659 861

Ukraine 62,424 62,382 17,682 591 675 713

Kazakhstan 10,728 6,327 12,711 109 150 178

Singapore 6,479 11,015 11,590 1,615 2,003 1,871

All other 159,478 159,736 18,306 816 949 1,500

Total 1,239,581 1,609,017 1,369,549 825 839 834

 1 The data presented in this table are for HS 7306.19 and 7306.10 (prior to 2007) which covers all welded line pipe excluding

stainless steel. The data thus includes welded line pipe of outside diameter larger than 16 inches which are not subject to these

investigations. 

 2 The EU27 includes Austria, Belgium, Bulgaria, Czech Republic, Cyprus, Denmark, Estonia, Finland, France, Germany,

Greece, Hungary, Italy, Ireland, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Romania, Poland, Portugal, Slovakia,

Slovenia, Spain, Sweden, and the United Kingdom.

Source: Compiled from Global Trade Atlas.
VII-15

Table VII-12 

Line pipe: Locations, capacity,1

 and parent companies of production facilities in nonsubject

countries 

Firm

Production

location(s)

Capacity1

(short

tons)

Product

standard(s)

Parent company/related foreign

producer

Brazil

Apolo Pipe and

Equipments

Mondesir 99,000 API 5L, 

ASTM A-53 (2 Pavuna 84,000 )

Apolo Tubulars São Paulo 150,000 API 5L

A joint venture between Grupo Peixoto de

Castro Group (brazil) and Lone Star, each

owns 50 percent in 2007.

Brastubo

Cutabao 331,000 API 5L, 

ASTM A- 53 (2 Guarulhos 331,000 )

Empresa

Brasileira de

Solda Eletrica3 Rio de Janeiro 5,000

API 5L, 

ASTM A- 53 (2)

M.F. Persisco

Pizzamiglio Guarulhos 265,000

API 5L, 

ASTM A- 500 (2

)

Metalurgica de

Tubos de Precisao Guarulhos 79,000 (2

) (2)

Tenaris Confab

Moreira Cesar 

551,000

API 5L, 

ASTM A- 53 An affiliate of Tenaris Group (Luxembourg)

Pinda

São Caetano

do Sul 

Tubonal

Unidale de

Belo Horizonte

(

2

)

API 5L,

ASTM A- 53 (2)

Unidale de

Volta Redonda

V&M do Brasil Barreiro 661,000

API 5L,

ASTM A-53

An affiliate of V&M Tubes, a FrancoGerman company.

Japan

Araya Industrial Osaka (2)

Oil, gas,

chemicals

linepipe (2

)

JFE Steel Corp.

Chita Works

(

2

)

API 5L,

ASTM A- 53 (2)

East Japan

Work (Chiba)

East Japan

Works (Keilin)

West Japan

Work

(Fukuyama)

Table continued on next page
VII-16

Table VII-12–Continued

Line pipe: Locations, capacity,1

 and parent companies of production facilities in nonsubject countries

Firm

Production

location(s)

Capacity 1

(short

tons)

Product

standards

Parent company/related foreign

producer

Maruichi Steel

Tube

Ichibana 1,323,000 API 5L, 

ASTM A- 53 (2 Kashima pole ( ) 2

)

Kyushu (2

)

API 5L, 

ASTM A- 53 (2

)

Nagoya 225,000

Osaka 198,000

Sakai 529,000

Shikoku (2

)

Takuma 397,000

Mory Industries

Kawachinagano

55,000

Line pipe,

standard pipe,

Japanese

standards (2 Mitsukaido )

Nippon Steel

Hikari

4,300,000

API 5L, 

ASTM A- 53 (2

)

Kimitsu

Nagoya

Tokyo

Yawata

Nishimura Koki

Amagasaki

40,000 API 5L (2

)

Kizugawa

(Osaka)

Osaka Tokushu

Kokan (OTK)

Osaka

41,000 API 5L (2

)

Shiga

Tokushima

Sumimoto Metals

Amagasaki

3,307,000

API 5L, 

ASTM A- 53 (2

)

Kainan

Kashima

Wakayama

Sumimoto Pipe &

Tube

Tokyo

(

2

)

API 5L, 

ASTM A- 53 (2 Kashima )

Toa Gaigyo Toban (2

) API 5L (2)

Usui Kokusai

Sangyo Kaisha Shizuoka (2

) Line pipe (2)

Table continued on next page.
VII-17

Table VII-12–Continued

Line pipe: Locations, capacity,1

 and parent companies of production facilities in nonsubject countries

Firm

Production

location(s)

Capacity 1

(short

tons)

Product

standards

Parent company/related foreign

producer

Mexico

Procarsa Frontera (2) API 5L (2)

Pytco S.A. de C.V. Coahuila (2

)

API 5L, 

ASTM A-53 (2)

Talleres Acero

Rey S.A. de C.V. Nuevo Leon (2

) API 5L (2)

Tenaris Veracruz (2

)

API 5L, 

ASTM A- 53 An affiliate of Tenaris Group.

Ternium Hylsa Nuevo Leon (2

)

API 5L, 

ASTM A- 53 (2) 

Tubacero

Apocada

386,000 API 5L (2

)

Monterey 

Villa de Garcia

Tuberia Laguna Gomez Palacio 138,000

API 5L, 

ASTM A- 53 Tylsa Group

Tuberia Nacional

Villacero

San Nicolas de

los Garza (2

)

API 5L, 

ASTM A- 53 Villacero Group

Swecomex S.A.

de C.V. Veracruz (2

) API 5L (2)

Taiwan

Femco

Chiyi

159,000

API 5L, 

ASTM A- 53 (2 Tou - Chau )

Kao Hsing Chang Kaohsiung 100,0004

API 5L, 

ASTM A- 53 (2

)

Yieh Loong Kaohsiung 110,000

API 5L, 

ASTM A- 53 (2

)

 1 Capacity may be overstated because line pipe is only one among the many products manufactured by the companies’

production lines.

 2

 Not available.

 3

 http://www.ebse.com.br/en/prod_tubos_indust.html

 4 Found at http://www.trade-taiwan.org/WebSiteTemp/en/e4.asp?page=3&v_id=75466009, retrieved May 9, 2008.

http://www.sahathai.com/prod01.htm

 

Sources: Companies’ websites and The Simdex Steel Tube Manufacturers Worldwide Guide, 2008.
 22 Tenaris group is the world’s largest tube producer in terms of annual production.

VII-18

Brazil

Table VII-13 indicates that there are nine producers of welded line pipe and related tubular

products in Brazil that collectively offer a wide range of products, with a total reported Brazilian capacity

approaching 3 million short tons per year. Brastubo is the leading Brazilian tube producer with total

capacity of 662,000 short tons. V&M do Brasil is the country’s second leading producer with a capacity

of more than 661,000 short tons per year (including line pipe together with related tubular products).

V&M is an affiliate of V&M Tubes, a French tube producer with production facilities in several countries

including the United States and Canada. The third largest producer is Tenaris Confab with annual

capacity of 551,000 short tons. Tenaris is an affiliate of Tenaris Group with headquarters in Luxembourg

and with production facilities located in many countries.22

According to Global Trade Atlas, the United States was Brazil’s leading foreign market during the

past three years, accounting for almost 70 percent of Brazil’s exports in 2007. However, during 2005-07,

Brazil’s total export volume steadily decreased by one-half to a total of 24,367 short tons in 2007 while

Brazil’s exports to the United States declined to 16,707 short tons (table VII-13). 

Production facilities at Brazil’s leading companies can typically produce a wide variety of tubular

products to several international standards. Many plants are also equipped with coating and processing

facilities and thus are able to adjust to market conditions. 

Table VII-13

Line pipe: Brazil's exports, by quantity and average unit value, 2005-07

Destination

2005 2006 2007 2005 2006 2007

Exports (short tons) Unit value (U.S. $ per short ton)

United States 47,242 29,878 16,707 689 694 714

Congo 0 9,131 4,839 0 1,568 1,810

Bolivia 0 0 962 0 0 1,362

Venezuela 258 378 860 695 690 852

Colombia 0 0 731 0 19,083 1,002

Angola 5 69 120 1,688 1,922 2,845

Norway 1,422 0 100 891 0 2,321

Belgium 0 0 48 74,410 0 1,475

Netherlands 0 0 0 0 0 810

Peru 0 0 0 0 0 47,792

All other 400 109 0 798 4,541 1,815

Total 49,326 39,566 24,367 696 909 990

Note.– The data presented in this table are for HS 7306.19 and 7306.10 (prior to 2007) which covers all welded line pipe

excluding stainless steel. The data thus include welded line pipe with an outside diameter larger than 16 inches which is not

subject to these investigations.

Source: Compiled from Global Trade Atlas.
 23 Japan was second only to China (table VII-10) in production of welded steel pipe.

 24 These companies are also among the world’s leading integrated steel producers. 

 25 In 1998, four Japanese line pipe producers accounting for 64 percent of welded line pipe production in Japan

reported an aggregate capacity of 112,801 short tons. Circular Welded Carbon Quality Line Pipe, Investigation No.

TA-201–70, USITC Publication 3261, December 1999, p. II-33. Although dated, staff believes that the larger

portion of Japanese capacity dedicated to welded line pipe remains directed to large diameter line pipe. 

VII-19

Japan

According to the IISI (table VII-10), Japan was the world’s second largest producer of welded

steel pipe and related tubular products, with a production of over 7.9 million short tons in 2006 (the most

recent year for which data are available).23 There are 12 identified producers of welded line pipe in 

Japan (table VII-14). The largest producers are Nippon Steel, with a total capacity for tube and pipe of

4.3 million short tons, and Sumitomo Metals with a capacity of over 3.3 million short tons per year.24

These quantities, however, are likely to be substantially overstated with respect to welded line pipe in the

size ranges that are the subject of these investigations.25 Most of Japan’s plants can manufacture a wide

variety of tubular products to several international specifications and are equipped with processing

facilities including external and internal coating (polyurethane and epoxy lining). 

According to Global Trade Atlas, Malaysia was the leading market for Japan’s exports in 2007,

accounting for approximately 57 percent of the total (table VII-14). During 2006-07, Japan’s line pipe

exports to Malaysia increased four-fold, enabling Malaysia to replace the United States as the leading 

market for Japan’s welded line pipe exports. Global Trade Atlas also indicates that during the last three

years, Japan has diversified its export markets to China, the EU27, and areas that are active in energy

production including Nigeria and the Middle East. 

Table VII-14

Line pipe: Japan's exports, by quantity and average unit value, 2005-07

Destination

2005 2006 2007 2005 2006 2007

Exports (short tons) Unit value (U.S. $ per short ton)

Malaysia 17,743 10,047 51,582 1,839 1,097 1,516

United States 15,839 36,543 24,574 786 738 829

Norway 2,311 3,494 3,860 4,479 4,842 5,352

Vietnam 1,734 2,165 3,445 416 355 356

China 3,194 909 2,449 987 822 883

Nigeria 14,896 4,177 2,200 768 790 900

Saudi Arabia 0 61 992 0 1,909 1,129

Singapore 1,593 2,801 529 789 874 1,505

Indonesia 6,303 7,143 384 1,009 924 1,000

Belgium 0 0 306 0 0 915

All other 21,211 19,443 711 1,020 979 1,916

Total 84,823 86,783 91,031 1,179 1,013 1,412

Note.– The data presented in this table are for HS 7306.19 and 7306.10 (prior to 2007) which covers all welded line pipe excluding

stainless steel. The data thus include welded line pipe with an outside diameter larger than 16 inches which is not subject to these

investigations.

Source: Compiled from Global Trade Atlas.
 26 2006 is the most recent year for which data are available.

 27 In 1998, five Mexican line pipe producers reported an aggregate capacity of 245,900 short tons. Circular

Welded Carbon Quality Line Pipe, Investigation No. TA-201–70, USITC Publication 3261, December 1999, p. II-36

and table 16. Although dated, staff believes that a portion of Mexican capacity dedicated to welded line pipe

remains directed to large diameter line pipe. 

VII-20

Mexico

According to the IISI, during the period of 2004-06, Mexico increased production of welded line

pipe from 612,000 short tons to 651,000 short tons, an increase of 6.5 percent (table VII-10).26 Global

Trade Atlas indicates that, in 2007, Mexico was the world’s sixth largest exporter of welded line pipe in

terms of volume (table VII-11).

According to Global Trade Atlas, approximately 90 percent of Mexico’s exports in 2007 went to

the United States, which was the dominant export destination for Mexico’s line pipe during 2005-07. 

Nearly all the rest of Mexico’s exports go to Latin American countries. During 2005-07, Mexico’s total 

export volume decreased by almost 20 percent while Mexico’s exports to the United States declined by

nearly 10 percent (table VII-15). 

Table VII-12 shows that there are nine producers of welded line pipe in Mexico with a reported

combined capacity of over 525,000 short tons in 2007. Tubacero is among the largest Mexican producers

with capacity of approximately 386,000 short tons. These quantities, however, are likely to be overstated

with respect to welded line pipe in the size ranges that are the subject of these investigations.27

Table VII-15

Line pipe: Mexico's exports, by quantity and average unit value, 2005-07

Destination

2005 2006 2007 2005 2006 2007

Exports (short tons) Unit value (U.S. $ per short ton)

United States 75,625 95,640 69,972 882 866 861

Venezuela 6,110 10,939 3,835 949 913 891

Colombia 5,748 976 2,462 809 890 987

Guatemala 2,045 700 393 866 1,164 964

Liechtenstein 0 0 364 0 0 808

Peru 0 0 319 0 0 1,369

Ecuador 0 0 169 0 0 833

Uruguay 239 0 99 1,092 0 892

Costa Rica 0 8,323 18 0 1,112 1,820

El Salvador 224 275 9 893 939 899

All other 4,252 1,061 0 959 895 0

Total 94,244 117,913 77,639 885 890 869

Note.–The data presented in this table are for HS 7306.19 and 7306.10 (prior to 2007) which covers all welded line pipe

excluding stainless steel. The data thus include welded line pipe with an outside diameter larger than 16 inches which is not

subject to these investigations.

Source: Compiled from Global Trade Atlas.
 28 Certain Circular Welded Quality Line Pipe from China, Korea, and Mexico; Invs. Nos. 731-TA-1073-1075

(Preliminary), USITC Publication 3687, April 2004, p. IV-4.

 29 A large line pipe has outside diameter larger than 16 inches and is not subject to these investigations. 

 30 API X70 is a mid-level API specification in terms of quality .

 31 Villacero acquired Houston-based Tex-Tube in 1994.

 32 Maria Guzzo, “Tex-Tube, Tubular Synergy Sign Marketing Agreement,” American Metal Market, February 20,

2008, found at http://amm.com/2008-02-20__17-46-29.html retrieved May 8, 2008.

 33 IISI, Steel Statistical Yearbook-2007, table 29, p. 70.

VII-21

According to the Commission’s 2004 report on Certain Circular Welded Carbon Quality Line

Pipe from China, Korea, and Mexico, most Mexican pipe mills were located in the Monterey area and

their exports to the United States tended to be routed through Laredo, TX.28 

Mexican plants are capable of producing a variety of tubular products including large line pipe,29

OCTG, ASTM standard pipe, rectangular pipe and tubing, and conduits. Mexican producers can produce

line pipe to API X70 specifications.30 A U.S. affiliate of Mexican-based Villacero Group of companies,

Tex-Tube,31 has recently signed an agreement with Dallas-based Tubular Synergy Group (TSG) wherein

TSG will market Tex-Tube’s API products in the United Startes and Canada.32

Taiwan 

According to the IISI, Taiwan’s production level of welded tube surpassed 1.2 million short tons

in 2006 (the most recent year for which data are available). In Asia, Taiwan ranked behind China, Japan,

and Korea (table VII-10) in total production of welded tube in 2006.33

According to the Global Trade Atlas (table VII-16), the United States accounted for almost 80

percent of total Taiwan’s exports in 2007 and, during 2005-07, was consistently the primary destination

for Taiwan’s exports. Australia, Taiwan’s second largest export destination, accounted for 17 percent of

the total in 2007. Other important export markets were largely in Asia. Taiwan’s exports to the United

States reached 36,237 short tons in 2006, but fell by 23 percent in 2007 relative to the previous year. 

Femco is the largest line pipe producer in Taiwan, with a reported capacity of 159,000 short tons. Simdex

identifies three welded line pipe producers from Taiwan with a reported collective reported capacity of

approximately 370,000 short tons (for all tubular products). 
VII-22

Table VII-16

Line pipe: Taiwan's exports, by quantity and average unit value, 2005-07

Destination

2005 2006 2007 2005 2006 2007

Exports (short tons) Unit value (U.S. $ per short ton)

United States 11,051 36,237 27,904 641 562 600

Australia 3,776 3,466 5,957 692 592 614

Thailand 2,374 992 858 683 733 696

Japan 303 685 720 1,904 1,989 2,003

New Zealand 67 23 290 912 587 618

Bangladesh 110 141 186 641 598 610

Singapore 1,539 94 62 677 549 669

United Arab Emirates 83 0 60 606 0 483

Hong Kong 33 44 41 2,580 2,186 2,273

China 82 54 39 919 1,324 13,203

All other 686 19,143 10 738 820 3,315

Total 20,104 60,878 36,125 686 665 649

Note.– The data presented in this table are for HS 7306.19 and 7306.10 (prior to 2007) which covers all welded line pipe

excluding stainless steel. The data thus include welded line pipe of outside diameter larger than 16 inches which is not subject to

these investigations.

Source: Compiled from Global Trade Atlas.
A-1

APPENDIX A

FEDERAL REGISTER NOTICES

20064 Federal Register / Vol. 73, No. 72 / Monday, April 14, 2008 / Notices 

1Prior to February 2, 2007, the subject 

merchandise was provided for in subheadings 

7306.10.10 and 7306.10.50. 

This application will be processed in 

accordance with the regulations set 

forth in 43 CFR 2300. 

Rights-of-way, leases, permits, 

cooperative agreements and other 

discretionary land use authorizations of 

a temporary nature would continue 

under the BLM during the 2-year 

segregation period. 

No water rights would be needed to 

fulfill the purpose of this withdrawal. 

Effective on the date of publication of 

this notice, the lands will be segregated 

from location and entry under the 

United States mining laws. The 

segregative effect of this application will 

terminate April 14, 2010, unless final 

withdrawal action is taken or the 

application is denied or cancelled prior 

to that date (43 CFR 2310.2). Notice of 

any action will be published in the 

Federal Register. 

Notice is hereby given that an 

opportunity for a public meeting is 

afforded in connection with the 

proposed withdrawal and transfer of 

jurisdiction. All interested persons who 

desire a public meeting for the purpose 

of being heard on the proposed 

withdrawal and transfer of jurisdiction 

must submit a written request to the 

BLM Wyoming State Director at the 

address indicated above within 90 days 

from the date of publication of this 

notice. If the authorized officer 

determines that a public meeting will be 

held, a notice of the time and place will 

be published in the Federal Register at 

least 30 days before the scheduled date 

of the meeting. 

(Authority: 43 CFR 2310.3–1) 

Dated: March 24, 2008. 

Michael Madrid, 

Chief, Branch of Fluid Mineral Operations, 

Lands and Appraisal. 

[FR Doc. E8–7840 Filed 4–11–08; 8:45 am] 

BILLING CODE 6450–01–P 

INTERNATIONAL TRADE 

COMMISSION 

[Investigation Nos. 701–TA–455 and 731–

TA–1149–1150 (Preliminary)] 

Certain Circular Welded Carbon 

Quality Steel Line Pipe From China and 

Korea 

AGENCY: United States International 

Trade Commission. 

ACTION: Institution of countervailing 

duty and antidumping duty 

investigations and scheduling of 

preliminary phase investigations. 

SUMMARY: The Commission hereby gives 

notice of the institution of investigations 

and commencement of preliminary 

phase countervailing duty investigation 

No. 701–TA–455 (Preliminary) and 

antidumping duty investigation Nos. 

731-TA–1149–1150 (Preliminary) under 

sections 703(a) and 733(a) of the Tariff 

Act of 1930 (19 U.S.C. 1671b(a) and 

1673b(a)) (the Act) to determine 

whether there is a reasonable indication 

that an industry in the United States is 

materially injured or threatened with 

material injury, or the establishment of 

an industry in the United States is 

materially retarded, by reason of 

imports from China and Korea of certain 

circular welded carbon quality steel line 

pipe, provided for in subheadings 

7306.19.10 and 7306.19.511 of the 

Harmonized Tariff Schedule of the 

United States, that are alleged to be 

subsidized by the Government of China, 

and sold in the United States at less 

than fair value. Unless the Department 

of Commerce extends the time for 

initiation pursuant to sections 

702(c)(1)(B) or 732(c)(1)(B)of the Act (19 

U.S.C. 1671a(c)(1)(B) or 1673a (c)(1)(B)), 

the Commission must reach a 

preliminary determination in these 

investigations in 45 days, or in this case 

by May 19, 2008. The Commission’s 

views are due at Commerce within five 

business days thereafter, or by May 27, 

2008. 

For further information concerning 

the conduct of these investigations and 

rules of general application, consult the 

Commission’s Rules of Practice and 

Procedure, part 201, subparts A through 

E (19 CFR part 201), and part 207, 

subparts A and B (19 CFR part 207). 

EFFECTIVE DATE: April 3, 2008. 

FOR FURTHER INFORMATION CONTACT: 

Elizabeth Haines (202–205–3200), Office 

of Investigations, U.S. International 

Trade Commission, 500 E Street, SW., 

Washington, DC 20436. Hearingimpaired persons can obtain 

information on this matter by contacting 

the Commission’s TDD terminal on 202–

205–1810. Persons with mobility 

impairments who will need special 

assistance in gaining access to the 

Commission should contact the Office 

of the Secretary at 202–205–2000. 

General information concerning the 

Commission may also be obtained by 

accessing its Internet server (http:// 

www.usitc.gov). The public record for 

these investigations may be viewed on 

the Commission’s electronic docket 

(EDIS) at http://edis.usitc.gov. 

SUPPLEMENTARY INFORMATION: 

Background.—These investigations 

are being instituted in response to a 

petition filed on April 3, 2008, by 

Maverick Tube Corp. (Houston, TX), 

Tex-Tube Co. (Houston, TX), U.S. Steel 

Corp. (Pittsburgh, PA), and the United 

Steel, Paper and Forestry, Rubber, 

Manufacturing, Energy, Allied 

Industrial and Service Workers 

International Union, AFL–CIO–CLC 

(Pittsburgh, PA). 

Participation in the investigations and 

public service list.—Persons (other than 

petitioners) wishing to participate in the 

investigations as parties must file an 

entry of appearance with the Secretary 

to the Commission, as provided in 

sections 201.11 and 207.10 of the 

Commission’s rules, not later than seven 

days after publication of this notice in 

the Federal Register. Industrial users 

and (if the merchandise under 

investigation is sold at the retail level) 

representative consumer organizations 

have the right to appear as parties in 

Commission countervailing duty and 

antidumping duty investigations. The 

Secretary will prepare a public service 

list containing the names and addresses 

of all persons, or their representatives, 

who are parties to this investigation 

upon the expiration of the period for 

filing entries of appearance. 

Limited disclosure of business 

proprietary information (BPI) under an 

administrative protective order (APO) 

and BPI service list.—Pursuant to 

section 207.7(a) of the Commission’s 

rules, the Secretary will make BPI 

gathered in these investigations 

available to authorized applicants 

representing interested parties (as 

defined in 19 U.S.C. 1677(9)) who are 

parties to the investigations under the 

APO issued in the investigation, 

provided that the application is made 

not later than seven days after the 

publication of this notice in the Federal 

Register. A separate service list will be 

maintained by the Secretary for those 

parties authorized to receive BPI under 

the APO. 

Conference.—The Commission’s 

Director of Operations has scheduled a 

conference in connection with these 

investigations for 9:30 a.m. on April 24, 

2008, at the U.S. International Trade 

Commission Building, 500 E Street SW., 

Washington, DC. Parties wishing to 

participate in the conference should 

contact Elizabeth Haines (202–205–

3200) not later than April 21, 2008, to 

arrange for their appearance. Parties in 

support of the imposition of 

countervailing and antidumping duties 

in these investigations and parties in 

opposition to the imposition of such 

duties will each be collectively 

allocated one hour within which to 

make an oral presentation at the 

conference. A nonparty who has 

testimony that may aid the 


jlentini on PROD1PC65 with NOTICES
Federal Register / Vol. 73, No. 72 / Monday, April 14, 2008 / Notices 20065 

Commission’s deliberations may request 

permission to present a short statement 

at the conference. 

Written submissions.—As provided in 

sections 201.8 and 207.15 of the 

Commission’s rules, any person may 

submit to the Commission on or before 

April 29, 2008, a written brief 

containing information and arguments 

pertinent to the subject matter of the 

investigations. Parties may file written 

testimony in connection with their 

presentation at the conference no later 

than three days before the conference. If 

briefs or written testimony contain BPI, 

they must conform with the 

requirements of sections 201.6, 207.3, 

and 207.7 of the Commission’s rules. 

The Commission’s rules do not 

authorize filing of submissions with the 

Secretary by facsimile or electronic 

means, except to the extent permitted by 

section 201.8 of the Commission’s rules, 

as amended, 67 Fed. Reg. 68036 

(November 8, 2002). Even where 

electronic filing of a document is 

permitted, certain documents must also 

be filed in paper form, as specified in II 

(C) of the Commission’s Handbook on 

Electronic Filing Procedures, 67 Fed. 

Reg. 68168, 68173 (November 8, 2002). 

In accordance with sections 201.16(c) 

and 207.3 of the rules, each document 

filed by a party to the investigation must 

be served on all other parties to the 

investigations (as identified by either 

the public or BPI service list), and a 

certificate of service must be timely 

filed. The Secretary will not accept a 

document for filing without a certificate 

of service. 

Authority: These investigations are being 

conducted under authority of title VII of the 

Tariff Act of 1930; this notice is published 

pursuant to section 207.12 of the 

Commission’s rules. 

By order of the Commission. 

Issued: April 4, 2008. 

Marilyn R. Abbott, 

Secretary to the Commission. 

[FR Doc. E8–7830 Filed 4–11–08; 8:45 am] 

BILLING CODE 7020–02–P 

DEPARTMENT OF JUSTICE 

Notice of Lodging of Consent Decree 

Under the Park System Resource 

Protection Act 

Notice is hereby given that on April 

7, 2008, a proposed Consent Decree 

(‘‘Decree’’ ) in United States v. Kristin R. 

Blake, Civil Action No. 07–5001 MMM 

(FMOx), was lodged with the United 

States District Court for the Central 

District of California, Western Division. 

In this action the United States sought 

to recover response costs and damages 

pursuant to the Park System Resource 

Protection Act (‘‘PSRPA), 16 U.S.C. 19jj 

to 19jj–4, and treble damages pursuant 

to California trespass law for injury to 

and destruction of vegetation resulting 

from the defendant’s alleged cutting of 

a horse trail on a parcel owned by the 

United States and located within the 

Santa Monica Mountains National 

Recreation Area. The Decree would 

settle these claims in return for a 

payment of $56,500, to be deposited in 

the Department of the Interior’s Natural 

Resource Damage Assessment and 

Restoration Fund, and applied toward 

response and damage assessment costs 

incurred as a result of the defendant’s 

alleged incursion onto property of the 

United States and/or natural resource 

restoration projects related to this 

incident. 

The Department of Justice will receive 

for a period of thirty (30) days from the 

date of this publication comments 

relating to the Decree. Comments should 

be addressed to the Assistant Attorney 

General, Environment and Natural 

Resources Division, and either e-mailed 

to pubcomment-ees.enrd@usdoj.gov or 

mailed to P.O. Box 7611, U.S. 

Department of Justice, Washington, DC 

20044–7611, and should reference 

United States v. Kristin R. Blake., Civil 

Action No. 07–5001 MMM (FMOx), D.J. 

Ref. No. 90–5–1–1–08909. 

The Decree may be examined at the 

Office of the United States Attorney, 300 

North Los Angeles Street, room 7516, 

Los Angeles, CA 90012. During the 

public comment period, the Decree may 

also be examined on the following 

Department of Justice Web site: http:// 

www.usdoj.gov/enrd/ 

Consent_Decrees.html. A copy of the 

Decree may also be obtained by mail 

from the Consent Decree Library, P.O. 

Box 7611, U.S. Department of Justice, 

Washington, DC 20044–7611 or by 

faxing or e-mailing a request to Tonia 

Fleetwood (tonia.fleetwood@usdoj.gov), 

fax no. (202) 514–0097, phone 

confirmation number (202) 514–1547. In 

requesting a copy from the Consent 

Decree Library, please enclose a check 

in the amount of $2.75 (25 cents per 

page reproduction cost) payable to the 

U.S. Treasury or, if by email or fax, 

forward a check in that amount to the 

Consent Decree Library at the stated 

address. 

Henry Friedman, 

Assistant Chief, Environmental Enforcement 

Section, Environment and Natural Resources 

Division. 

[FR Doc. E8–7779 Filed 4–11–08; 8:45 am] 

BILLING CODE 4410–15–P 

DEPARTMENT OF LABOR 

Mine Safety and Health Administration 

Petitions for Modification 

AGENCY: Mine Safety and Health 

Administration, Labor. 

ACTION: Notice of petitions for 

modification of existing mandatory 

safety standards. 

SUMMARY: Section 101(c) of the Federal 

Mine Safety and Health Act of 1977 and 

30 CFR part 44 govern the application, 

processing, and disposition of petitions 

for modification. This notice is a 

summary of petitions for modification 

filed by the parties listed below to 

modify the application of existing 

mandatory safety standards published 

in Title 30 of the Code of Federal 

Regulations. 

DATES: All comments on the petitions 

must be received by the Office of 

Standards, Regulations, and Variances 

on or before May 14, 2008. 

ADDRESSES: You may submit your 

comments, identified by ‘‘docket 

number’’ on the subject line, by any of 

the following methods: 

1. Electronic mail: StandardsPetitions@dol.gov. 

2. Facsimile: 1–202–693–9441. 

3. Regular Mail: MSHA, Office of 

Standards, Regulations, and Variances, 

1100 Wilson Boulevard, Room 2349, 

Arlington, Virginia 22209, Attention: 

Patricia W. Silvey, Director, Office of 

Standards, Regulations, and Variances. 

4. Hand-Delivery or Courier: MSHA, 

Office of Standards, Regulations, and 

Variances, 1100 Wilson Boulevard, 

Room 2349, Arlington, Virginia 22209, 

Attention: Patricia W. Silvey, Director, 

Office of Standards, Regulations, and 

Variances. 

We will consider only comments 

postmarked by the U.S. Postal Service or 

proof of delivery from another delivery 

service such as UPS or Federal Express 

on or before the deadline for comments. 

Individuals who submit comments by 

hand-delivery are required to check in 

at the receptionist desk on the 21st 

floor. 

Individuals may inspect copies of the 

petitions and comments during normal 

business hours at the address listed 

above. 

FOR FURTHER INFORMATION CONTACT: 

Lawrence D. Reynolds, Office of 

Standards, Regulations, and Variances 

at 202–693–9449 (Voice), 

reynolds.lawrence@dol.gov (E-mail), or 

202–693–9441 (Telefax), or contact 

Barbara Barron at 202–693–9447 

(Voice), barron.barbara@dol.gov (EVerDate Aug<31>2005 18:09 Apr 11, 2008 Jkt 214001 PO 00000 Frm 00048 Fmt 4703 Sfmt 4703 E:\FR\FM\14APN1.SGM 14APN1

jlentini on PROD1PC65 with NOTICES
23184 Federal Register / Vol. 73, No. 83 / Tuesday, April 29, 2008 / Notices 

Administration, Department of 

Commerce. 

ACTION: Notice of Consent Motion to 

Terminate Panel Review of the final 

results of the second antidumping 

administrative review respecting Carbon 

and Certain Alloy Steel Wire Rod from 

Canada (Secretariat File No. USA–CDA–

2006–1904–04). 

SUMMARY: Pursuant to the Notice of 

Consent Motion to Terminate the Panel 

Review by the case participants, the 

panel review is terminated as of April 

18, 2008. A panel was appointed to this 

panel review and has been dismissed 

pursuant to Rule 71(2) of the Rules of 

Procedure for Article 1904 Binational 

Panel Review, effective April 18, 2008. 

FOR FURTHER INFORMATION CONTACT: 

Valerie Dees, United States Secretary, 

NAFTA Secretariat, Suite 2061, 14th 

and Constitution Avenue, Washington, 

DC 20230, (202) 482–5438. 

SUPPLEMENTARY INFORMATION: Chapter 

19 of the North American Free Trade 

Agreement (‘‘Agreement’’) establishes a 

mechanism to replace domestic judicial 

review of final determinations in 

antidumping and countervailing duty 

cases involving imports from a NAFTA 

country with review by independent 

binational panels. When a Request for 

Panel Review is filed, a panel is 

established to act in place of national 

courts to review expeditiously the final 

determination to determine whether it 

conforms with the antidumping or 

countervailing duty law of the country 

that made the determination. 

Under Article 1904 of the Agreement, 

which came into force on January 1, 

1994, the Government of the United 

States, the Government of Canada and 

the Government of Mexico established 

Rules of Procedure for Article 1904 

Binational Panel Reviews (‘‘Rules’’). 

These Rules were published in the 

Federal Register on February 23, 1994 

(59 FR 8686). The panel review in this 

matter was requested and terminated 

pursuant to these Rules. 

Dated: April 22, 2008. 

Valerie Dees, 

United States Secretary, NAFTA Secretariat. 

[FR Doc. E8–9296 Filed 4–28–08; 8:45 am] 

BILLING CODE 3510–GT–P 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[C–570–936] 

Circular Welded Carbon Quality Steel 

Line Pipe From the People’s Republic 

of China: Notice of Initiation of 

Countervailing Duty Investigation 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

DATES: Effective Date: April 29, 2008. 

FOR FURTHER INFORMATION CONTACT: 

Kristen Johnson or Eric Greynolds, AD/ 

CVD Operations, Office 3, Import 

Administration, International Trade 

Administration, U.S. Department of 

Commerce, 14th Street and Constitution 

Avenue, NW., Washington, DC 20230; 

telephone: (202) 482–4793 and (202) 

482–6071, respectively. 

SUPPLEMENTARY INFORMATION: 

The Petition 

On April 3, 2008, the Department of 

Commerce (‘‘Department’’) received the 

Petition concerning imports of certain 

circular welded carbon quality steel line 

pipe (‘‘welded line pipe’’) from the 

People’s Republic of China (‘‘PRC’’) 

filed in proper form by United States 

Steel Corporation, Maverick Tube 

Corporation, Tex-Tube Company, and 

the United Steel, Paper and Forestry, 

Rubber, Manufacturing, Energy, Allied 

Industrial and Service Workers 

International Union, and AFL–CIO–CLC 

(collectively, ‘‘Petitioners’’). See 

Imposition of Antidumping and 

Countervailing Duties: Certain Circular 

Welded Carbon Quality Steel Line Pipe 

from the People’s Republic of China and 

the Republic of Korea, dated April 3, 

2008 (‘‘Petition’’). 

On April 9 and 10, 2008, the 

Department issued requests for 

additional information and clarification 

of certain areas of the Petition. Based on 

the Department’s requests, Petitioners 

filed additional information 

supplementing the Petition on April 14, 

2008, including one submission on 

general issues (Response to the 

Department Questionnaire Concerning 

Volume I of the Petition, dated April 14, 

2008 (‘‘Supp. Response’’)) and one 

submission on the imposition of 

countervailing duties (‘‘CVD’’) 

(Response to the Department 

Questionnaires Concerning Volume III 

of the Petition, dated April 14, 2008 

(‘‘Supp. CVD Response’’)). On April 16, 

2008, the Department called Petitioners 

to request certain information relating to 

the Petition. See Memorandum to the 

File from Meredith A.W. Rutherford, 

Import Policy Analyst, regarding 

Petitions for the Imposition of 

Antidumping and Countervailing 

Duties—Certain Circular Welded Carbon 

Quality Steel Line Pipe from the 

People’s Republic of China and the 

Republic of Korea: Phone Call with 

Petitioner Regarding Industry Support, 

dated April 16, 2008. On April 17, 2008, 

the Department issued a request for 

additional information and clarification 

of certain areas of the Petition 

concerning the imposition of 

countervailing duties. On April 18, 

2008, Wheatland Tube Company, a U.S. 

manufacturer of welded line pipe, filed 

a letter in support of the Petition. On 

April 21, 2008, Petitioners filed 

additional information in response to 

the April 16, 2008, memorandum to the 

file. See Response to the Department’s 

Second Request for Additional 

Information Concerning the People’s 

Republic of China and the Republic of 

Korea, dated April 21, 2008 (‘‘Second 

Supp. Response’’). Petitioners also filed 

a response to the Department’s April 17, 

2008, request for additional information 

on the imposition of countervailing 

duties. See Response to the 

Department’s Request for Additional 

Information Concerning Volume III of 

the Petition filed on April 3, 2008 

(‘‘Second CVD Supp. Response’’). 

On April 21, 2008, the Department 

called Petitioners regarding the scope 

language. See Memorandum to the File 

from Norbert Gannon, Supervisory 

Import Policy Analyst, regarding 

Petitions for the Imposition of 

Antidumping and Countervailing 

Duties—Certain Circular Welded Carbon 

Quality Steel Line Pipe from the 

People’s Republic of China and the 

Republic of Korea: Phone Call with 

Petitioners Regarding Industry Support, 

dated April 21, 2008. Additionally, on 

April 21, 2008, Stupp Corporation, a 

domestic producer of subject 

merchandise, filed a letter in support of 

the Petition. 

In accordance with section 702(b)(1) 

of the Tariff Act of 1930, as amended 

(‘‘the Act’’), Petitioners allege that 

manufacturers, producers, or exporters 

of welded line pipe in the PRC receive 

countervailable subsidies within the 

meaning of section 701 of the Act and 

that such imports are materially 

injuring, or threatening material injury 

to, an industry in the United States. 

The Department finds that Petitioners 

filed the Petition on behalf of the 

domestic industry because they are 

interested parties as defined in section 

771(9)(C) of the Act and Petitioners have 

demonstrated sufficient industry 

support with respect to the CVD 

investigation (see ‘‘Determination of 


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Industry Support for the Petition’’

section below). 

Period of Investigation 

The period of investigation (‘‘POI’’) is 

January 1, 2007, through December 31, 

2007. 

Scope of Investigation 

The merchandise covered by this 

investigation is circular welded carbon 

quality steel pipe of a kind used for oil 

and gas pipelines (‘‘welded line pipe’’), 

not more that 406.4 mm (16 inches) in 

outside diameter, regardless of wall 

thickness, length, surface finish, end 

finish or stenciling. 

The term ‘‘carbon quality steel’’

includes both carbon steel and carbon 

steel mixed with small amounts of 

alloying elements that may exceed the 

individual weight limits for nonalloy 

steels imposed in the Harmonized Tariff 

Schedule of the United States 

(‘‘HTSUS’’). Specifically, the term 

‘‘carbon quality’’ includes products in 

which (1) iron predominates by weight 

over each of the other contained 

elements, (2) the carbon content is 2 

percent or less by weight and (3) none 

of the elements listed below exceeds the 

quantity by weight respectively 

indicated: 

(i) 2.00 percent of manganese, 

(ii) 2.25 percent of silicon, 

(iii) 1.00 percent of copper, 

(iv) 0.50 percent of aluminum, 

(v) 1.25 percent of chromium, 

(vi) 0.30 percent of cobalt, 

(vii) 0.40 percent of lead, 

(viii) 1.25 percent of nickel, 

(ix) 0.30 percent of tungsten, 

(x) 0.012 percent of boron, 

(xi) 0.50 percent of molybdenum, 

(xii) 0.15 percent of niobium, 

(xiii) 0.41 percent of titanium, 

(xiv) 0.15 percent of vanadium, or 

(xv) 0.15 percent of zirconium. 

Welded line pipe is normally 

produced to specifications published by 

the American Petroleum Institute 

(‘‘API’’) (or comparable foreign 

specifications) including API A–25, 

5LA, 5LB, and X grades from 42 and 

above, and/or any other proprietary 

grades or non-graded material. 

Nevertheless, all pipe meeting the 

physical description set forth above that 

is of a kind used in oil and gas 

pipelines, including all multiplestenciled pipe with an API line pipe 

stencil is covered by the scope of this 

investigation. 

The line pipe products that are the 

subject of this investigation are 

currently classifiable in the HTSUS 

under subheadings 7306.19.10.10, 

7306.19.10.50, 7306.19.51.10, and 

7306.19.51.50. While HTSUS 

subheadings are provided for 

convenience and customs purposes, the 

written description of the scope of this 

investigation is dispositive. 

Comments on Scope of Investigation 

During our review of the Petition, we 

discussed the scope with Petitioners to 

ensure that it is an accurate reflection of 

the products for which the domestic 

industry is seeking relief. The scope of 

this investigation covers line pipe 

which, we recognize, may include 

certain merchandise potentially subject 

to the on-going antidumping (AD) and 

CVD investigations of circular welded 

pipe (CWP investigations). See Circular 

Welded Carbon Quality Steel Pipe from 

the People’s Republic of China: Notice 

of Preliminary Determination of Sales at 

Less than Fair Value and Postponement 

of Final Determination, 73 FR 2445, 

January 15, 2008; see also Circular 

Welded Carbon Quality Steel Pipe from 

the People’s Republic of China: 

Preliminary Affirmative Countervailing 

Duty Determination; Preliminary 

Affirmative Determination of Critical 

Circumstances; and Alignment of Final 

Countervailing Duty Determination with 

Final Antidumping Duty Determination, 

72 FR 63875, November 13, 2007. Given 

that the scope issue has not been finally 

resolved in the CWP investigations, for 

purposes of this initiation, we have 

defined the scope to include the 

potential overlap. However, we intend 

to resolve the issue to ensure that there 

will be no overlap between the scopes 

in the CWP and welded line pipe cases. 

Moreover, as discussed in the preamble 

to the regulations (Antidumping Duties; 

Countervailing Duties; Final Rule, 62 FR 

27296, 27323 (May 19, 1997)), we are 

setting aside a period for interested 

parties to raise issues regarding product 

coverage. The Department encourages 

all interested parties to submit such 

comments by May 13, 2008, which is 20 

calendar days from the date of signature 

of this notice. Comments should be 

addressed to Import Administration’s 

APO/Dockets Unit, Room 1870, U.S. 

Department of Commerce, 14th Street 

and Constitution Avenue, NW., 

Washington, DC 20230. The period of 

scope consultations is intended to 

provide the Department with ample 

opportunity to consider all comments 

and to consult with parties prior to the 

issuance of the preliminary 

determinations. 

Consultations 

Pursuant to section 702(b)(4)(A)(ii) of 

the Act, the Department invited 

representatives of the Government of the 

PRC for consultations with respect to 

the CVD petition. The Department held 

these consultations in Beijing, China, 

with representatives of the Government 

of the PRC on April 18, 2008. See the 

April 18, 2008, Memorandum to the 

File, entitled, ‘‘Consultations with 

Officials from the Government of the 

People’s Republic of China on the 

Countervailing Duty Petition regarding 

Circular Welded Carbon Quality Steel 

Line Pipe,’’ on file in the Central 

Records Unit (‘‘CRU’’) of the 

Department of Commerce, Room 1117. 

Determination of Industry Support for 

the Petition 

Section 702(b)(1) of the Act requires 

that a petition be filed on behalf of the 

domestic industry. Section 702(c)(4)(A) 

of the Act provides that a petition meets 

this requirement if the domestic 

producers or workers who support the 

petition account for: (i) At least 25 

percent of the total production of the 

domestic like product; and (ii) more 

than 50 percent of the production of the 

domestic like product produced by that 

portion of the industry expressing 

support for, or opposition to, the 

petition. Moreover, section 702(c)(4)(D) 

of the Act provides that, if the petition 

does not establish support of domestic 

producers or workers accounting for 

more than 50 percent of the total 

production of the domestic like product, 

the Department shall: (i) Poll the 

industry or rely on other information in 

order to determine if there is support for 

the petition, as required by 

subparagraph (A), or (ii) determine 

industry support using a statistically 

valid sampling method. 

Section 771(4)(A) of the Act defines 

the ‘‘industry’’ as the producers as a 

whole of a domestic like product. Thus, 

to determine whether a petition has the 

requisite industry support, the statute 

directs the Department to look to 

producers and workers who produce the 

domestic like product. The International 

Trade Commission (‘‘ITC’’), which is 

responsible for determining whether 

‘‘the domestic industry’’ has been 

injured, must also determine what 

constitutes a domestic like product in 

order to define the industry. While both 

the Department and the ITC must apply 

the same statutory definition regarding 

the domestic like product (section 

771(10) of the Act), they do so for 

different purposes and pursuant to a 

separate and distinct authority. In 

addition, the Department’s 

determination is subject to limitations of 

time and information. Although this 

may result in different definitions of the 

like product, such differences do not 

render the decision of either agency 

contrary to law. See USEC, Inc. v. 

United States, 132 F. Supp. 2d 1, 8 (CIT 


sroberts on PROD1PC70 with NOTICES
23186 Federal Register / Vol. 73, No. 83 / Tuesday, April 29, 2008 / Notices 

2001), citing Algoma Steel Corp. Ltd. v. 

United States, 688 F. Supp. 639, 644 

(CIT 1988), aff’d 865 F.2d 240 (Fed. Cir. 

1989), cert. denied 492 U.S. 919 (1989). 

Section 771(10) of the Act defines the 

domestic like product as ‘‘a product 

which is like, or in the absence of like, 

most similar in characteristics and uses 

with, the article subject to an 

investigation under this title.’’ Thus, the 

reference point from which the 

domestic like product analysis begins is 

‘‘the article subject to an investigation,’’

(i.e., the class or kind of merchandise to 

be investigated, which normally will be 

the scope as defined in the petition). 

With regard to the domestic like 

product, Petitioners do not offer a 

definition of domestic like product 

distinct from the scope of the 

investigation. Based on our analysis of 

the information submitted on the 

record, we have determined that welded 

line pipe constitutes a single domestic 

like product and we have analyzed 

industry support in terms of that 

domestic like product. For a discussion 

of the domestic like product analysis in 

this case, see ‘‘Countervailing Duty 

Investigation Initiation Checklist: 

Circular Carbon Quality Steel Line Pipe 

from the People’s Republic of China,’’

(‘‘Initiation Checklist’’) Industry 

Support at Attachment II, on file in the 

CRU. 

In determining whether Petitioners 

have standing (i.e., those domestic 

workers and producers supporting the 

petition account for (1) at least 25 

percent of the total production of the 

domestic like product and (2) more than 

50 percent of the production of the 

domestic like product produced by that 

portion of the industry expressing 

support for, or opposition to, the 

petition), we considered the industry 

support data contained in the Petition 

with reference to the domestic like 

product as defined in the ‘‘Scope of 

Investigation’’ section above. To 

establish industry support, Petitioners 

provided their shipments for the 

domestic like product for the year 2007, 

and compared them to shipments of the 

domestic like product for the industry. 

In the Petition, Petitioners demonstrated 

the correlation between shipments and 

production. See Petition, Volume I, at 3, 

and Exhibit 3b. Based on the fact that 

total industry production data for the 

domestic like product for 2007 is not 

reasonably available, and that 

Petitioners have established that 

shipments are a reasonable proxy for 

production data, we have relied upon 

shipment data for purposes of 

measuring industry support. For further 

discussion see Initiation Checklist, at 

Attachment II (Industry Support). 

The Department’s review of the data 

provided in the Petition, supplemental 

submissions, and other information 

readily available to the Department 

indicates that Petitioners have 

established industry support. First, the 

Petition establishes support from 

domestic producers (or workers) 

accounting for more than 50 percent of 

the total production of the domestic like 

product and, as such, the Department is 

not required to take further action in 

order to evaluate industry support (e.g., 

polling). See Section 702(c)(4)(D) of the 

Act. Second, the domestic producers (or 

workers) have met the statutory criteria 

for industry support under section 

702(c)(4)(A)(I) of the Act because the 

domestic producers (or workers) who 

support the Petition account for at least 

25 percent of the total production of the 

domestic like product. Finally, the 

domestic producers (or workers) have 

met the statutory criteria for industry 

support under section 702(c)(4)(A)(ii) of 

the Act because the domestic producers 

(or workers) who support the Petition 

account for more than 50 percent of the 

production of the domestic like product 

produced by that portion of the industry 

expressing support for, or opposition to, 

the Petition. Accordingly, the 

Department determines that the Petition 

was filed on behalf of the domestic 

industry within the meaning of section 

702(b)(1) of the Act. See Initiation 

Checklist at Attachment II (Industry 

Support). The Department finds that 

Petitioners filed the Petition on behalf of 

the domestic industry because they are 

an interested party as defined in section 

771(9)(C) and (D) of the Act and they 

have demonstrated sufficient industry 

support with respect to the CVD 

investigation that they are requesting 

the Department initiate. See Initiation 

Checklist at Attachment II (Industry 

Support). 

Injury Test 

Because the PRC is a ‘‘Subsidies 

Agreement Country’’ within the 

meaning of section 701(b) of the Act, 

section 701(a)(2) of the Act applies to 

these investigations. Accordingly, the 

ITC must determine whether imports of 

the subject merchandise from the PRC 

materially injure, or threaten material 

injury to, a U.S. industry. 

Allegations and Evidence of Material 

Injury and Causation 

Petitioners allege that imports of 

welded line pipe from the PRC are 

benefitting from countervailable 

subsidies and that such imports are 

causing or threaten to cause, material 

injury to the domestic industry 

producing welded line pipe. In 

addition, Petitioners allege that 

subsidized imports exceed the 

negligibility threshold provided for 

under section 771(24)(A) of the Act. 

Petitioners contend that the industry’s 

injured condition is illustrated by 

reduced market share, underselling and 

price depressing and suppressing 

effects, lost sales and revenue, a decline 

in financial performance, and an 

increase in import penetration. We have 

assessed the allegations and supporting 

evidence regarding material injury, 

threat of material injury, and causation, 

and we have determined that these 

allegations are properly supported by 

adequate evidence and meet the 

statutory requirements for initiation. See 

Initiation Checklist at Attachment III 

(Injury). 

Initiation of Countervailing Duty 

Investigation 

Section 702(b) of the Act requires the 

Department to initiate a CVD proceeding 

whenever an interested party files a 

petition on behalf of an industry that (1) 

alleges the elements necessary for an 

imposition of a duty under section 

701(a) of the Act; and (2) is 

accompanied by information reasonably 

available to the petitioner(s) supporting 

the allegations. The Department has 

examined the CVD petition on welded 

line pipe from the PRC and finds that it 

complies with the requirements of 

section 702(b) of the Act. Therefore, in 

accordance with section 702(b) of the 

Act, we are initiating a CVD 

investigation to determine whether 

manufacturers, producers, or exporters 

of welded line pipe in the PRC receive 

countervailable subsidies. For a 

discussion of evidence supporting our 

initiation determination, see Initiation 

Checklist. 

We are including in our investigation 

the following programs alleged in the 

Petition to have provided 

countervailable subsidies to producers 

and exporters of the subject 

merchandise in the PRC: 

A. Preferential Loans 

1. Preferential Lending of Policy Loans to 

State-Owned Enterprises (‘‘SOEs’’) and the 

Steel Industry by State-Owned and 

Controlled Banks. 

2. Preferential Loans for Key Projects and 

Technologies. 

B. Equity Infusions and Debt-to-Equity Swaps 

1. Equity Infusions into Baosteel. 

2. Debt-to-Equity Swaps for SOEs. 

C. Tax Benefit Programs 

1. The ‘‘Two Free, Three Half’’ Program. 

2. Income Tax Reduction for ExportOriented Foreign Invested Enterprises 

(‘‘FIEs’’). 


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3. Income Tax Reductions for FIEs Based 

on Location. 

4. Preferential Tax Programs for FIEs that 

Quality as Technology-Intensive or 

Knowledge-Intensive. 

5. Preferential Tax Programs for FIEs 

Recognized as High or New Technology 

Enterprises. 

6. Preferential Tax Programs for FIEs that 

are Engaged in Research and Development. 

7. Income Tax Reduction for FIEs that 

Reinvest Profits into Export-Oriented 

Enterprises. 

8. Local Income Tax Exemption and 

Reduction Programs for ‘‘Productive’’ FIEs. 

9. Income Tax Credits on Purchases of 

Domestically-produced Equipment by FIEs. 

10. Income Tax Credits on Purchases of 

Domestically-produced Equipment by 

Domestically-Owned Companies. 

D. Value-Added Tax (‘‘VAT’’) Programs 

1. VAT Exemptions for Use of Imported 

Equipment. 

2. VAT Export Rebates. 

E. Land Grants and Discounts 

F. Provision of Inputs for Less Than 

Adequate Remuneration 

1. Hot-Rolled Steel. 

2. Electricity. 

3. Water. 

G. Grant Programs 

1. Interest Subsidies for Key Projects and 

Technologies. 

2. State Key Technologies Renovation 

Project Fund. 

3. Central Government’s Famous Brands 

Program. 

4. Government of Guandong Province 

Provision of Grants to Companies for 

Outward Expansion and Export Performance. 

5. Export Interest Subsidy Program. 

6. Grants to State Owned Enterprises 

Operating at Loss. 

H. Provincial Programs 

1. Northeast Revitalization Program. 

2. Liaoning Province Framework. 

3. The ‘‘Five Points One Line’’ Program. 

4. Liaoning Province Grants. 

5. Sub-Central Government Programs to 

Promote Famous Brands. 

For further information explaining 

why the Department is investigating 

these programs, see Initiation Checklist. 

We are not including in our 

investigation the following programs 

alleged to benefit producers and 

exporters of the subject merchandise in 

the PRC: 

1. VAT Refunds Available to Companies 

Operating in Specific Locations 

Petitioners allege that VAT refunds 

are available to companies that are 

located in the Economic Development 

Zone of Hainan. Specifically, under the 

‘‘Preferential Policies Regarding 

Investment by Manufacturer,’’ high-tech 

or labor intensive enterprises with an 

investment of more than RMB 3 billion 

and more than 1,000 local employees 

are refunded 25 percent of the VAT paid 

on domestic sales, the percentage of the 

tax received by the local government. 

The subsidy starts the first year the 

company has production and sales and 

continues for five years. Petitioners, 

however, did not demonstrate that 

producers/exporters of welded line pipe 

are located in the Hainan Province or 

explain why such information is 

unavailable. Therefore, we are not 

investigating this program. 

2. Preferential Tax Programs for 

Enterprises Making Little Profit 

Petitioners assert that China’s 

subsidies notification to the World 

Trade Organization (‘‘WTO’’) indicates 

that the Chinese government (‘‘GOC’’) 

provides preferential tax treatment to 

enterprises making little profit. This 

program, which is authorized by the 

Ministry of Finance, provides an 18 

percent income tax reduction for 

enterprises which have annual taxable 

income of less than RMB 30,000 and a 

27 percent income tax reduction to 

enterprises which have annual taxable 

income between RMB 30,000 and RMB 

100,000. Petitioners, however, have not 

established with reasonably available 

information that ‘‘enterprises making 

little profit’’ are a de jure or de facto 

specific group. Petitioners failed to 

provide an explanation of why 

companies with access to this program 

comprise an enterprise or industry, or 

group of enterprises or industries, as 

those terms are normally interpreted by 

the Department. Therefore, we are not 

investigating this program. 

3. Preferential Tax Programs for 

Enterprises Engaged in Research and 

Development 

Petitioners allege that the GOC 

provides preferential tax policies for 

domestic-invested enterprises engaged 

in research and development. 

Specifically, Petitioners claim that 

under this program, authorized by the 

Ministry of Finance, the costs associated 

with research and development of new 

products, new technologies, and new 

crafts which have increased 10 percent 

or more from the previous year, are 

offset by 150 percent from the taxable 

income of that year. Petitioners, 

however, have not established with 

reasonably available information that 

‘‘domestic enterprises’’ are a de jure or 

de facto specific group. Petitioners 

failed to provide an explanation of why 

companies with access to this program 

comprise an enterprise or industry, or 

group of enterprises or industries, as 

those terms are normally interpreted by 

the Department. Therefore, we are not 

investigating this program. 

4. Central Government Grants and 

Loans 

Petitioners allege that the government 

provides grants and loans for technology 

and research. Petitioners claim that one 

such program is administered by the 

Ministry of Finance pursuant to State 

Council Circular No. 99 of 1987, which 

is referenced in China’s WTO accession. 

Petitioners assert that this grant program 

is intended to benefit preferred 

industries such as the steel industry, 

including welded line pipe producers. 

Petitioners, however, have not provided 

adequate documentation to support the 

allegation that this program is specific. 

For example, the evidence provided by 

Petitioners does not support the claim 

that this program is specific to stateowned enterprises or to the steel 

industry. We, therefore, are not 

investigating this program. 

5. Hunan Province Grants and Loans 

Petitioners allege that in 1999, the 

Hunan Province provided 

approximately RMB 300 million, in the 

form of grants and reduced-interest 

loans, for technological upgrades and 

for hi-tech companies located in the 

province. Petitioners claim that welded 

line pipe producers located in Hunan 

Province likely benefited from the 

program. Petitioners, however, have 

failed to demonstrate that welded line 

pipe producers are located in Hunan 

Province. We, therefore, are not 

investigating this program. 

6. Government-Mandated Mergers and 

Transfers of Ownership on Terms 

Inconsistent With Commercial 

Considerations 

Petitioners allege that the GOC 

provides benefits to welded line pipe 

producers through governmentmandated mergers and transfers of 

ownership on terms inconsistent with 

commercial considerations. Petitioners 

maintain that the mergers are driven by 

the GOC’s Eleventh FYP and China’s 

Steel Policy. Petitioners allege that 

because many Chinese steel companies 

are controlled by the government, the 

GOC can essentially order companies to 

merge. Petitioners allege that such 

mergers commonly involve offering 

ownership stakes in state-owned steel 

companies to other, larger steel 

producers at prices below market value, 

or even for free. Petitioners, however, 

fail to explain how mergers and 

restructuring of state-owned enterprises 

provide a financial contribution in light 

of the Department’s past practice in 

addressing restructuring of governmentowned steel companies. See, e.g., Final 

Affirmative Countervailing Duty 


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Determination: Certain Steel Products 

from Italy, 58 FR 37327 (July 9, 1993). 

Therefore, we are not investigating the 

provision of ‘‘other companies’’ for less 

than adequate remuneration. 

7. Other Grant Programs 

Petitioners assert that a review of 

available financial reports of Chinese 

welded line pipe producers indicates 

that many of the producers have 

benefitted from direct cash grants 

provided under other grant programs 

and policies administered by the GOC. 

Petitioners, however, have not 

adequately established with reasonably 

available evidence how these programs 

are specific. Petitioners also have not 

established whether these grants are a 

result of programs separate from those 

which Petitioners have already alleged. 

We, therefore, are not investigating this 

program. 

Application of the Countervailing Duty 

Law to the PRC 

The Department has treated the PRC 

as a non-market economy (‘‘NME’’) 

country in all past AD investigations 

and administrative reviews. In 

accordance with section 771(18)(C)(i) of 

the Act, any determination that a 

country is an NME country shall remain 

in effect until revoked by the 

administering authority. See, e.g., 

Tapered Roller Bearings and Parts 

Thereof, Finished and 10 Unfinished, 

(‘‘TRBs’’) From the People’s Republic of 

China: Preliminary Results of 2001–

2002 Administrative Review and Partial 

Rescission of Review, 68 FR 7500, 7500–

1 (February 14, 2003), unchanged in 

TRBs from the People’s Republic of 

China: Final Results of 2001–2002 

Administrative Review, 68 FR 70488, 

70488–89 (December 18, 2003). 

In the final affirmative CVD 

determination on coated free sheet 

paper from the PRC, the Department 

determined that the current nature of 

the PRC economy does not create 

obstacles to applying the necessary 

criteria in the CVD law. See Coated Free 

Sheet Paper from the People’s Republic 

of China: Final Affirmative 

Countervailing Duty Determination, 72 

FR 60645 (October 25, 2007), and the 

accompanying Issues and Decision 

Memorandum at Comment 1. Therefore, 

because Petitioners have provided 

sufficient allegations and support of 

their allegations to meet the statutory 

criteria for initiating a CVD 

investigation of welded line pipe from 

the PRC, initiation of a CVD 

investigation is warranted in this case. 

Respondent Selection 

For this investigation, the Department 

expects to select respondents based on 

U.S. Customs and Border Protection 

(‘‘CBP’’) data for U.S. imports during the 

POI. We intend to make our decision 

regarding respondent selection within 

20 days of publication of this Federal 

Register notice. The Department invites 

comments regarding the CBP data and 

respondent selection within seven 

calendar days of publication of this 

Federal Register notice. 

Distribution of Copies of the Petition 

In accordance with section 

702(b)(4)(A)(i) of the Act, a copy of the 

public version of the Petition has been 

provided to the GOC. As soon as 

possible and to the extent practicable, 

we will attempt to provide a copy of the 

public version of the Petition to each 

exporter named in the Petition, 

consistent with 19 CFR 351.203(c)(2). 

ITC Notification 

We have notified the ITC of our 

initiation, as required by section 702(d) 

of the Act. 

Preliminary Determination by the ITC 

The ITC will preliminarily determine, 

within 25 days after the date on which 

it receives notice of the initiation, 

whether there is a reasonable indication 

that imports of subsidized welded line 

pipe from the PRC are causing material 

injury, or threatening to cause material 

injury, to a U.S. industry. See Section 

703(a)(2) of the Act. A negative ITC 

determination will result in the 

investigation being terminated; 

otherwise, the investigation will 

proceed according to statutory and 

regulatory time limits. 

This notice is issued and published 

pursuant to section 777(i) of the Act. 

Dated: April 23, 2008. 

David M. Spooner, 

Assistant Secretary for Import 

Administration. 

[FR Doc. E8–9345 Filed 4–28–08; 8:45 am] 

BILLING CODE 3510–DS–P 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[A–580–861, A–570–935] 

Certain Circular Welded Carbon 

Quality Steel Line Pipe From the 

Republic of Korea and the People’s 

Republic of China: Initiation of 

Antidumping Duty Investigations 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

DATES: Effective Date: April 29, 2008. 

FOR FURTHER INFORMATION CONTACT: 

Dena Crossland (Republic of Korea), 

Jeffrey Pederson, or Rebecca Pandolph 

(People’s Republic of China), AD/CVD 

Operations, Office 7 and Office 4, 

Import Administration, International 

Trade Administration, U.S. Department 

of Commerce, 14th Street and 

Constitution Avenue, NW., Washington, 

DC 20230; telephone: 202–482–3362, 

202–482–2769, or 202–482–3627, 

respectively. 

SUPPLEMENTARY INFORMATION: 

The Petition 

On April 3, 2008, the Department of 

Commerce (‘‘Department’’) received the 

petition concerning imports of certain 

circular welded carbon quality steel line 

pipe (‘‘welded line pipe’’) from the 

Republic of Korea (‘‘Korea’’) and the 

People’s Republic of China (‘‘PRC’’) 

filed in proper form by United States 

Steel Corporation (‘‘U.S. Steel’’), 

Maverick Tube Corporation 

(‘‘Maverick’’), Tex-Tube Company 

(‘‘Tex-Tube’’), and the United Steel, 

Paper and Forestry, Rubber, 

Manufacturing, Energy, Allied 

Industrial and Service Workers 

International Union, and AFL–CIO–CLC 

(‘‘United Steelworkers’’) (collectively, 

‘‘Petitioners’’). See Imposition of 

Antidumping and Countervailing 

Duties: Certain Circular Welded Carbon 

Quality Steel Line Pipe from the 

People’s Republic of China and the 

Republic of Korea, dated April 3, 2008 

(in four volumes) (‘‘Petition’’). 

On April 9, 2008, the Department 

issued requests for additional 

information and clarification of certain 

areas of the Petition. Based on the 

Department’s requests, Petitioners filed 

additional information supplementing 

the Petition on April 14, 2008, including 

one submission on general issues 

(Response to the Department 

Questionnaire Concerning Volume I of 

the Petition, dated April 14, 2008 

(‘‘Supp. Response’’)), one distinct 

submission on Korea-only material 

(Response to the Department 

Questionnaire Concerning the Republic 

of Korea, dated April 14, 2008 (‘‘Supp. 

Korea Response’’)), and one distinct 

submission on PRC-only material 

(Response to the Department 

Questionnaire Concerning the People’s 

Republic of China, dated April 14, 2008 

(‘‘Supp. PRC AD Response’’)). On April 

16 and April 17, 2008, the Department 

called Petitioners to request certain 

information relating to the Petition, the 

Supp. Korea Response, and the Supp. 

PRC AD Response. See Memorandum to 

the File from Meredith A.W. Rutherford, 


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Import Policy Analyst, regarding 

Petitions for the Imposition of 

Antidumping and Countervailing 

Duties—Certain Circular Welded Carbon 

Quality Steel Line Pipe from the 

People’s Republic of China and the 

Republic of Korea: Phone Call with 

Petitioner Regarding Industry Support, 

dated April 16, 2008; Memorandum to 

the File from Juanita H. Chen, Special 

Assistant to the SEC Office, through 

Edward C. Yang, Director, SEC Office, 

AD/CVD Operations, China/NME 

Group, regarding Circular Welded 

Carbon Quality Steel Line Pipe from the 

People’s Republic of China: Request for 

Information, dated April 17, 2008; and 

Memorandum to the File from Dena 

Crossland, Analyst, through Patrick 

Edwards, Acting Program Manager, AD/ 

CVD Operations, Office 7, regarding 

Circular Welded Carbon Quality Steel 

Line Pipe from the Republic of Korea: 

Request for Information, dated April 17, 

2008. On April 18, 2008, Wheatland 

Tube Company, a U.S. manufacturer of 

welded line pipe, filed a letter in 

support of the Petition. On April 21, 

2008, Petitioners filed additional 

information in response to the 

Department’s April 16, 2008, and April 

17, 2008, request for information. See 

Response to the Department’s Second 

Request for Additional Information 

Concerning the People’s Republic of 

China and the Republic of Korea, dated 

April 21, 2008 (‘‘Second Supp. 

Response’’); Response to the 

Department’s Second Request for 

Additional Information Concerning the 

People’s Republic of China, dated April 

21, 2008 (‘‘Second Supp. PRC AD 

Response’’); and Response to the 

Department’s Second Request for 

Additional Information Concerning the 

Republic of Korea, dated April 21, 2008 

(‘‘Second Supp. Korea Response’’). On 

April 21, 2008, The Department called 

Petitioners regarding the scope 

language. See Memorandum to the File 

from Norbert Gannon, Supervisory 

Import Policy Analyst, regarding 

Petitions for the Imposition of 

Antidumping and Countervailing 

Duties—Certain Circular Welded Carbon 

Quality Steel Line Pipe from the 

People’s Republic of China and the 

Republic of Korea: Phone Call with 

Petitioner Regarding Scope, dated April 

21, 2008. Additionally, on April 21, 

2008, Stupp Corporation, a domestic 

producer of subject merchandise, filed a 

letter in support of the Petition. 

In accordance with section 732(b) of 

the Tariff Act of 1930, as amended 

(‘‘Act’’), Petitioners allege that imports 

of welded line pipe from Korea and the 

PRC are being, or are likely to be, sold 

in the United States at less than fair 

value, within the meaning of section 

731 of the Act, and that such imports 

are materially injuring, or threatening 

material injury to, an industry in the 

United States. 

The Department finds that Petitioners 

filed the Petition on behalf of the 

domestic industry because Petitioners 

are interested parties as defined in 

sections 771(9)(C) and 771(9)(D) of the 

Act, and have demonstrated sufficient 

industry support with respect to the 

antidumping duty investigations that 

Petitioners are requesting that the 

Department initiate. See ‘‘Determination 

of Industry Support for the Petition’’

section below. 

Periods of Investigation 

The period of investigation (‘‘POI’’) 

for Korea is April 1, 2007, through 

March 31, 2008. The POI for the PRC is 

October 1, 2007, through March 31, 

2008. See 19 CFR 351.204(b)(1). 

Scope of Investigations 

The merchandise covered by each of 

these investigations is circular welded 

carbon quality steel pipe of a kind used 

for oil and gas pipelines (‘‘welded line 

pipe’’), not more that 406.4 mm (16 

inches) in outside diameter, regardless 

of wall thickness, length, surface finish, 

end finish or stenciling. 

The term ‘‘carbon quality steel’’

includes both carbon steel and carbon 

steel mixed with small amounts of 

alloying elements that may exceed the 

individual weight limits for nonalloy 

steels imposed in the Harmonized Tariff 

Schedule of the United States 

(‘‘HTSUS’’). Specifically, the term 

‘‘carbon quality’’ includes products in 

which (1) Iron predominates by weight 

over each of the other contained 

elements, (2) the carbon content is 2 

percent or less by weight and (3) none 

of the elements listed below exceeds the 

quantity by weight respectively 

indicated: 

(i) 2.00 percent of manganese, 

(ii) 2.25 percent of silicon, 

(iii) 1.00 percent of copper, 

(iv) 0.50 percent of aluminum, 

(v) 1.25 percent of chromium, 

(vi) 0.30 percent of cobalt, 

(vii) 0.40 percent of lead, 

(viii) 1.25 percent of nickel, 

(ix) 0.30 percent of tungsten, 

(x) 0.012 percent of boron, 

(xi) 0.50 percent of molybdenum, 

(xii) 0.15 percent of niobium, 

(xiii) 0.41 percent of titanium, 

(xiv) 0.15 percent of vanadium, or 

(xv) 0.15 percent of zirconium. 

Welded line pipe is normally 

produced to specifications published by 

the American Petroleum Institute 

(‘‘API’’) (or comparable foreign 

specifications) including API A–25, 

5LA, 5LB, and X grades from 42 and 

above, and/or any other proprietary 

grades or non-graded material. 

Nevertheless, all pipe meeting the 

physical description set forth above that 

is of a kind used in oil and gas 

pipelines, including all multiplestenciled pipe with an API line pipe 

stencil is covered by the scope of these 

investigations. 

The line pipe products that are the 

subject of these investigations are 

currently classifiable in the HTSUS 

under subheadings 7306.19.10.10, 

7306.19.10.50, 7306.19.51.10, and 

7306.19.51.50. While HTSUS 

subheadings are provided for 

convenience and customs purposes, the 

written description of the scope of these 

investigations is dispositive. 

Comments on Scope of Investigations 

During our review of the Petition, we 

discussed the scope with Petitioners to 

ensure that it is an accurate reflection of 

the products for which the domestic 

industry is seeking relief. The scope of 

these investigations covers line pipe 

which, we recognize, may include 

certain merchandise potentially subject 

to the on-going antidumping (‘‘AD’’) and 

countervailing duty (‘‘CVD’’) 

investigations of circular welded pipe 

(‘‘CWP’’). See Circular Welded Carbon 

Quality Steel Pipe from the People’s 

Republic of China: Notice of Preliminary 

Determination of Sales at Less than Fair 

Value and Postponement of Final 

Determination, 73 FR 2445 (January 15, 

2008); see also Circular Welded Carbon 

Quality Steel Pipe from the People’s 

Republic of China: Preliminary 

Affirmative Countervailing Duty 

Determination; Preliminary Affirmative 

Determination of Critical 

Circumstances; and Alignment of Final 

Countervailing Duty Determination with 

Final Antidumping Duty Determination, 

72 FR 63875 ( November 13, 2007). 

Given that the scope issue has not been 

finally resolved in the CWP 

investigations, for purposes of these 

initiations, we have defined the scope to 

include the potential overlap. However, 

we intend to resolve the issue to ensure 

that there will be no overlap between 

the scopes in the CWP and welded line 

pipe cases. Moreover, as discussed in 

the preamble to the regulations 

(Antidumping Duties; Countervailing 

Duties; Final Rule, 62 FR 27296, 27323 

(May 19, 1997)), we are setting aside a 

period for interested parties to raise 

issues regarding product coverage. The 

Department encourages all interested 

parties to submit such comments by 

May 13, 2008, which is 20 calendar days 


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from the date of signature of this notice. 

Comments should be addressed to 

Import Administration’s APO/Dockets 

Unit, Room 1117, U.S. Department of 

Commerce, 14th Street and Constitution 

Avenue, NW., Washington, DC 20230. 

The period of scope consultations is to 

provide the Department with ample 

opportunity to consider all comments 

and to consult with parties prior to the 

issuance of the preliminary 

determinations. 

Comments on Product Characteristics 

for Antidumping Duty Questionnaires 

We are requesting comments from 

interested parties regarding the 

appropriate physical characteristics of 

welded line pipe to be reported in 

response to the Department’s 

antidumping duty questionnaires. This 

information will be used to identify the 

key physical characteristics of the 

subject merchandise in order to more 

accurately report the relevant factors 

and costs of production, as well as to 

develop appropriate product 

comparison criteria. 

Interested parties may provide any 

information or comments that they feel 

are relevant to the development of an 

accurate listing of physical 

characteristics. Specifically, they may 

provide comments as to which 

characteristics are appropriate to use as 

(1) general product characteristics and 

(2) the product comparison criteria. We 

note that it is not always appropriate to 

use all product characteristics as 

product comparison criteria. We base 

product comparison criteria on 

meaningful commercial differences 

among products. In other words, while 

there may be some physical product 

characteristics utilized by 

manufacturers to describe welded line 

pipe, it may be that only a select few 

product characteristics take into account 

commercially meaningful physical 

characteristics. In addition, interested 

parties may comment on the order in 

which the physical characteristics 

should be used in product matching. 

Generally, the Department attempts to 

list the most important physical 

characteristics first and the least 

important characteristics last. 

In order to consider the suggestions of 

interested parties in developing and 

issuing the antidumping duty 

questionnaires, we must receive 

comments at the above-referenced 

address by May 13, 2008. Additionally, 

rebuttal comments addressing only 

those issues raised in the comments 

must be received by May 20, 2008. 

Determination of Industry Support for 

the Petition 

Section 732(b)(1) of the Act requires 

that a petition be filed on behalf of the 

domestic industry. Section 732(c)(4)(A) 

of the Act provides that a petition meets 

this requirement if the domestic 

producers or workers who support the 

petition account for: (i) at least 25 

percent of the total production of the 

domestic like product; and (ii) more 

than 50 percent of the production of the 

domestic like product produced by that 

portion of the industry expressing 

support for, or opposition to, the 

petition. Moreover, section 732(c)(4)(D) 

of the Act provides that, if the petition 

does not establish support of domestic 

producers or workers accounting for 

more than 50 percent of the total 

production of the domestic like product, 

the Department shall: (i) Poll the 

industry or rely on other information in 

order to determine if there is support for 

the petition, as required by 

subparagraph (A), or (ii) determine 

industry support using a statistically 

valid sampling method. 

Section 771(4)(A) of the Act defines 

the ‘‘industry’’ as the producers as a 

whole of a domestic like product. Thus, 

to determine whether a petition has the 

requisite industry support, the statute 

directs the Department to look to 

producers and workers who produce the 

domestic like product. The U.S. 

International Trade Commission 

(‘‘ITC’’), which is responsible for 

determining whether ‘‘the domestic 

industry’’ has been injured, must also 

determine what constitutes a domestic 

like product in order to define the 

industry. While both the Department 

and the ITC must apply the same 

statutory definition regarding the 

domestic like product (section 771(10) 

of the Act), they do so for different 

purposes and pursuant to a separate and 

distinct authority. In addition, the 

Department’s determination is subject to 

limitations of time and information. 

Although this may result in different 

definitions of the like product, such 

differences do not render the decision of 

either agency contrary to law. See 

USEC, Inc. v. United States, 132 F. 

Supp. 2d 1, 8 (CIT 2001), citing Algoma 

Steel Corp. Ltd. v. United States, 688 F. 

Supp. 639, 644 (CIT 1988), aff’d 865 

F.2d 240 (Fed. Cir. 1989), cert. denied 

492 U.S. 919 (1989). 

Section 771(10) of the Act defines the 

domestic like product as ‘‘a product 

which is like, or in the absence of like, 

most similar in characteristics and uses 

with, the article subject to an 

investigation under this subtitle.’’ Thus, 

the reference point from which the 

domestic like product analysis begins is 

‘‘the article subject to an investigation’’

(i.e., the class or kind of merchandise to 

be investigated, which normally will be 

the scope as defined in the petition). 

With regard to the domestic like 

product, Petitioners do not offer a 

definition of domestic like product 

distinct from the scope of these 

investigations. Based on our analysis of 

the information submitted on the 

record, we have determined that welded 

line pipe constitutes a single domestic 

like product and we have analyzed 

industry support in terms of that 

domestic like product. For a discussion 

of the domestic like product analysis in 

this case, see ‘‘Antidumping Duty 

Investigation Initiation Checklist: 

Certain Circular Welded Carbon Quality 

Steel Line Pipe from the Republic of 

Korea (Korea)’’ (‘‘Korea Initiation 

Checklist’’), Industry Support at 

Attachment II, and ‘‘Antidumping Duty 

Investigation Initiation Checklist: 

Certain Circular Welded Carbon Quality 

Steel Line Pipe from the People’s 

Republic of China’’ (‘‘PRC Initiation 

Checklist’’), Industry Support at 

Attachment II, on file in the Central 

Records Unit (‘‘CRU’’), Room 1117 of 

the main Department of Commerce 

building. 

With regard to section 732(c)(4)(A) of 

the Act, in determining whether 

Petitioners have standing (i.e., those 

domestic workers and producers 

supporting the Petition account for (1) at 

least 25 percent of the total production 

of the domestic like product and (2) 

more than 50 percent of the production 

of the domestic like product produced 

by that portion of the industry 

expressing support for, or opposition to, 

the Petition), we considered the 

industry support data contained in the 

Petition with reference to the domestic 

like product as defined in the ‘‘Scope of 

Investigations’’ section, above. To 

establish industry support, Petitioners 

provided their shipments for the 

domestic like product for the year 2007, 

and compared them to shipments of the 

domestic like product for the industry. 

In the Petition, Petitioners demonstrated 

the correlation between shipments and 

production and argued that shipments 

are a good proxy for production. See 

Petition, Volume I, at 3, and Exhibit 3b. 

Based on the fact that total industry 

production data for the domestic like 

product for 2007 is not reasonably 

available, and that Petitioners have 

established that shipments are a 

reasonable proxy for production data, 

we have relied upon shipment data for 

purposes of measuring industry support. 

For further discussion, see Korea 

Initiation Checklist and PRC Initiation 


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Checklist at Attachment II (Industry 

Support). 

The Department’s review of the data 

provided in the Petition, supplemental 

submissions, and other information 

readily available to the Department 

indicates that Petitioners have 

established industry support. First, the 

Petition establishes support from 

domestic producers (or workers) 

accounting for more than 50 percent of 

the total production of the domestic like 

product and, as such, the Department is 

not required to take further action in 

order to evaluate industry support (e.g., 

polling). See section 732(c)(4)(D) of the 

Act and Korea Initiation Checklist and 

PRC Initiation Checklist at Attachment 

II (Industry Support). Second, the 

domestic producers (or workers) have 

met the statutory criteria for industry 

support under section 732(c)(4)(A)(i) of 

the Act because the domestic producers 

(or workers) who support the Petition 

account for at least 25 percent of the 

total production of the domestic like 

product. See Korea Initiation Checklist 

and PRC Initiation Checklist at 

Attachment II (Industry Support). 

Finally, the domestic producers (or 

workers) have met the statutory criteria 

for industry support under section 

732(c)(4)(A)(ii) of the Act because the 

domestic producers (or workers) who 

support the Petition account for more 

than 50 percent of the production of the 

domestic like product produced by that 

portion of the industry expressing 

support for, or opposition to, the 

Petition. Accordingly, the Department 

determines that the Petition was filed on 

behalf of the domestic industry within 

the meaning of section 732(b)(1) of the 

Act. See Korea Initiation Checklist and 

PRC Initiation Checklist at Attachment 

II (Industry Support). 

The Department finds that Petitioners 

filed the Petition on behalf of the 

domestic industry because they are 

interested parties as defined in sections 

771(9)(C) and 771(9)(D) of the Act and 

have demonstrated sufficient industry 

support with respect to the antidumping 

investigation that they are requesting 

the Department initiate. See Korea 

Initiation Checklist and PRC Initiation 

Checklist at Attachment II (Industry 

Support). 

Allegations and Evidence of Material 

Injury and Causation 

Petitioners allege that the U.S. 

industry producing the domestic like 

product is being materially injured, or is 

threatened with material injury, by 

reason of the imports of the subject 

merchandise sold at less than normal 

value (‘‘NV’’). Petitioners contend that 

the industry’s injured condition is 

illustrated by reduced market share, 

underselling and price depressing and 

suppressing effects, lost sales and 

revenues, a decline in financial 

performance, and an increase in import 

penetration. We have assessed the 

allegations and supporting evidence 

regarding material injury, threat of 

material injury, and causation, and we 

have determined that these allegations 

are properly supported by adequate 

evidence and meet the statutory 

requirements for initiation. See Korea 

Initiation Checklist and PRC Initiation 

Checklist at Attachment III. 

Allegations of Sales at Less Than Fair 

Value 

The following is a description of the 

allegations of sales at less than fair value 

(‘‘LTFV’’) upon which the Department 

based its decision to initiate these 

investigations of imports of welded line 

pipe from Korea and the PRC. The 

sources of data for the deductions and 

adjustments relating to the U.S. price, 

NV (for Korea), and the factors of 

production (for the PRC) are also 

discussed in the country-specific 

initiation checklists. See Korea 

Initiation Checklist and PRC Initiation 

Checklist. Should the need arise to use 

any of this information as facts available 

under section 776 of the Act in our 

preliminary or final determinations, we 

will reexamine the information and 

revise the margin calculations, if 

appropriate. 

Korea 

Constructed Export Price (‘‘CEP’’) 

Petitioners calculated two CEPs based 

on price quotes for Korean-produced 

welded line pipe that was sold or 

offered for sale in the United States 

during the POI. Petitioners claimed that 

CEP was appropriate for Korea because 

the major Korean producers of welded 

line pipe typically sell through affiliated 

offices in the United States which, in 

turn, resell the welded line pipe to 

distributors in the United States. See 

Petition, Volume IV, at Exhibit IV–1. 

Petitioners made adjustments to the 

starting price for foreign inland freight, 

ocean freight, marine insurance 

expenses, foreign and U.S. port 

expenses, and estimated expenses that 

the affiliated distributor would incur in 

selling merchandise on behalf of the 

Korean producer in the United States. 

Foreign inland freight, ocean freight and 

insurance were calculated as the 

difference between the value of welded 

line pipe imports from Korea on a ‘‘costinsurance-freight’’ (‘‘CIF’’) basis, and the 

value of welded line pipe imports from 

Korea on a custom’s value basis as 

reported on the ITC’s ‘‘DataWeb’’ at 

http://usitc.gov/tata/hts/other/dataweb. 

Petitioners calculated foreign and U.S. 

port expenses based on U.S. and Korean 

tariff schedule data. See Petition, 

Volume IV, at Exhibits 7, 7a, and 7b. See 

Korea Initiation Checklist for further 

discussion. 

NV 

Petitioners calculated NV based on 

home market prices for welded line pipe 

produced in Korea and sold or offered 

for sale to customers in Korea. 

Petitioners calculated the ex-factory NV 

for the home market sales by converting 

the reported offer prices to a per-ton 

basis. See Petition, Volume IV, at 9–12, 

and Korea Initiation Checklist for 

further discussion. 

PRC 

EP 

Petitioners calculated two EPs based 

on two price quotes for welded line pipe 

from the PRC, offered for sale during the 

POI. Petitioners made adjustments to 

the starting prices by deducting the 

costs associated with exporting and 

delivering the product, including 

foreign inland freight and ocean freight, 

insurance expenses, foreign and U.S. 

port expenses and wharfage fees, and 

brokerage and handling expenses. See 

PRC Initiation Checklist for further 

discussion. 

NV 

Petitioners note that the PRC is a nonmarket economy country (‘‘NME’’) and, 

as the Department has not revoked this 

determination, such status remains in 

effect today. See Petition, Volume II, at 

11. The Department has previously 

examined the PRC’s market status and 

determined that NME status should 

continue for the PRC. See Memorandum 

from the Office of Policy to David M. 

Spooner, Assistant Secretary for Import 

Administration, regarding The People’s 

Republic of China Status as a NonMarket Economy, dated May 15, 2006 

(available online at http://ia.ita.doc.gov/ 

download/prc-nme-status/prc-nmestatus-memo.pdf). In addition, in recent 

investigations, the Department has 

continued to determine that the PRC is 

an NME country. See Final 

Determination of Sales at Less Than 

Fair Value: Sodium 

Hexametaphosphate from The People’s 

Republic of China, 73 FR 6479 

(February 4, 2008); Final Determination 

of Sales at Less Than Fair Value and 

Partial Affirmative Determination of 

Critical Circumstances: Certain 

Polyester Staple Fiber from the People’s 

Republic of China, 72 FR 19690 (April 


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1The identity of Company A is proprietary 

information; further discussion of Company A is 

available in the initiation checklist. See PRC 

Initiation Checklist. 

19, 2007); Final Determination of Sales 

at Less Than Fair Value: Certain 

Activated Carbon from the People’s 

Republic of China, 72 FR 9508 (March 

2, 2007). 

In accordance with section 

771(18)(C)(i) of the Act, the 

presumption of NME status remains in 

effect until revoked by the Department. 

The presumption of NME status for the 

PRC has not been revoked by the 

Department and, therefore, remains in 

effect for purposes of the initiation of 

this investigation. Accordingly, the NV 

of the product is appropriately based on 

factors of production valued in a 

surrogate market economy country, in 

accordance with section 773(c) of the 

Act. In the course of the PRC 

investigation, all parties will have the 

opportunity to provide relevant 

information related to the issues of the 

PRC’s NME status and the granting of 

separate rates to individual exporters. 

Petitioners argue that India is the 

appropriate surrogate country for the 

PRC because it is at a comparable level 

of economic development and it is a 

significant producer of welded line 

pipe. See Petition, Volume II, at 12. 

Based on the information provided by 

Petitioners, the Department believes that 

the use of India as a surrogate country 

is appropriate for purposes of initiation. 

However, after initiation of the 

investigation, interested parties will 

have the opportunity to submit 

comments regarding surrogate country 

selection and, pursuant to 19 CFR 

351.301(c)(3)(i), will be provided an 

opportunity to submit publicly available 

information to value factors of 

production within 40 days after the date 

of publication of the preliminary 

determination. 

Petitioners calculated NV and 

dumping margins for the two U.S. 

prices, discussed above, using the 

Department’s NME methodology as 

required by 19 CFR 351.202(b)(7)(i)(C) 

and 19 CFR 351.408. Petitioners 

calculated NV based on Company A’s 

consumption rates for producing 

welded line pipe, arguing that it is the 

best information reasonably available to 

Petitioners.1 See PRC Initiation 

Checklist. 

Petitioners valued the factors of 

production to produce welded line pipe 

based on reasonably available, public 

surrogate country data, including India 

import data from the Monthly Statistics 

of the Foreign Trade of India, and prices 

from Energy Prices & Taxes: Second 

Quarter 2003, published by the 

International Energy Agency. Petitioners 

calculated labor cost using rates posted 

on the Department’s Web site. Where 

Petitioners were unable to find input 

prices from a period contemporaneous 

with the POI, Petitioners adjusted for 

inflation using the wholesale price 

index for India, as published in the 

International Monetary Fund 

Publication ‘‘International Financial 

Statistics.’’ See Petition, Volume II, at 19 

and Exhibit II–8. Petitioners made 

currency conversions, where necessary, 

using a simple average of the rupee/U.S. 

dollar exchange rate for the POI, as 

reported on the Department’s Web site. 

See Petition, Volume II, at 19; Supp. 

PRC AD Response, at Exhibit Supp-9. 

While Petitioners calculated movement 

expenses using information from the 

Department of Commerce and the ITC, 

Petitioners did not include freight 

expenses in their calculation of 

surrogate values for the PRC because 

they could not determine the correct 

distance necessary for the calculations. 

See Petition, Volume II, at 19–20; Supp. 

PRC AD Response, at Exhibit Supp-9. 

For purposes of initiation, the 

Department determines that the 

surrogate values used by Petitioners are 

reasonably available and, thus, 

acceptable. However, the Department 

modified the surrogate value that 

Petitioners calculated for hot-rolled 

steel coil. See PRC Initiation Checklist. 

Petitioners based factory overhead 

expenses, selling, general and 

administrative (‘‘SG&A’’) expenses, and 

profit, on financial data from the 2006–

2007 annual reports of Tata Steel 

Limited, Jindal SAW Ltd. (‘‘Jindal’’), 

and Ratnamani Metals & Tubes Ltd., 

Indian producers of welded steel pipe 

using steel sheet in coils. See Petition, 

Volume II, at 22–25; Supp. PRC AD 

Response at Exhibit Supp-9. We 

recalculated factory overhead expenses, 

SG&A expenses, and profit using only 

Jindal’s data because of the three 

potential surrogate companies, only 

Jindal’s financial data were from a 

period that overlapped with the POI. In 

addition, we revised the financial ratios 

that Petitioners calculated from Jindal’s 

data to account for expenses that were 

omitted from Petitioner’s calculation. 

See PRC Initiation Checklist. 

Fair Value Comparisons 

Based on the data provided by 

Petitioners, with adjustments as 

requested by the Department, there is 

reason to believe that imports of welded 

line pipe from Korea and the PRC are 

being, or are likely to be, sold in the 

United States at less than fair value. 

Based on a comparison of CEP and NV, 

calculated in accordance with sections 

772(b) and 773(a)(1) of the Act, 

respectively, estimated dumping 

margins for welded line pipe from Korea 

range from 41.69 percent to 42.75 

percent. See Korea Initiation Checklist. 

Based on a comparison of EP and NV, 

calculated in accordance with sections 

772(a) and 773(c) of the Act, 

respectively, the revised estimated 

dumping margins for welded line pipe 

from the PRC range from 57.45 percent 

to 58.96 percent. See PRC Initiation 

Checklist. 

Initiation of Antidumping 

Investigations 

Based upon the examination of the 

Petition on welded line pipe from Korea 

and the PRC, the Department finds that 

the Petition meets the requirements of 

section 732 of the Act. Therefore, we are 

initiating antidumping duty 

investigations to determine whether 

imports of welded line pipe from Korea 

and the PRC are being, or are likely to 

be, sold in the United States at less than 

fair value. In accordance with section 

733(b)(1)(A) of the Act, unless 

postponed, we intend to make our 

preliminary determinations no later 

than 140 days after the date of this 

initiation. 

Respondent Selection for Korea 

For the Korean investigation, the 

Department intends to select 

respondents based on U.S. Customs and 

Border Protection (‘‘CBP’’) data for U.S. 

imports during the POI. We intend to 

release the CBP data under 

Administrative Protective Order 

(‘‘APO’’) to all parties with access to 

information protected by APO within 

five days of publication of this Federal 

Register notice, and make our decision 

regarding respondent selection within 

20 days of publication of this notice. 

The Department invites comments 

regarding the CBP data and respondent 

selection within 10 days of publication 

of this Federal Register notice. 

Interested parties must submit 

applications for disclosure under APO 

in accordance with 19 CFR 351.305. 

Instructions for filing such applications 

may be found on the Department’s Web 

site at http://ia.ita.doc.gov/apo. 

Respondent Selection for the PRC 

In the PRC investigation, the 

Department will request quantity and 

value information from all known 

exporters and producers identified, with 

complete contact information, in the 

Petition. The quantity and value data 

received from these exporters/producers 

will be used as the basis to select the 

mandatory respondents. The 


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Department requires that the 

respondents submit a response to both 

the quantity and value questionnaire 

and the separate-rate application by the 

respective deadlines in order to receive 

consideration for separate-rate status. 

See Circular Welded Austenitic 

Stainless Pressure Pipe from the 

People’s Republic of China: Initiation of 

Antidumping Duty Investigation, 73 FR 

10221, 10225 (February 26, 2008); and 

Initiation of Antidumping Duty 

Investigation: Certain Artist Canvas 

From the People’s Republic of China, 70 

FR 21996, 21999 (April 28, 2005). 

Attachment I of this notice contains the 

quantity and value questionnaire that 

must be submitted by all NME 

exporters/producers no later than May 

14, 2008. In addition, the Department 

will post the quantity and value 

questionnaire along with the filing 

instructions on the Import 

Administration Web site, at http:// 

ia.ita.doc.gov/ia-highlights-andnews.html. The Department will send 

the quantity and value questionnaire to 

those PRC companies identified, with 

complete contact information, in the 

Petition, Volume I, at Exhibit 6a, and in 

the Supp. PRC AD Response, at Supp1. 

Separate Rates 

In order to obtain separate-rate status 

in NME investigations, exporters and 

producers must submit a separate-rate 

status application. See Policy Bulletin 

05.1: Separate-Rates Practice and 

Application of Combination Rates in 

Antidumping Investigations involving 

Non-Market Economy Countries (April 

5, 2005) (‘‘Separate Rates/Combination 

Rates Bulletin’’), available on the 

Department’s Web site at http:// 

ia.ita.doc.gov/policy/bull05-1.pdf. The 

specific requirements for submitting the 

separate-rate application in this 

investigation are outlined in detail in 

the application itself, available on the 

Department’s Web site at http:// 

ia.ita.doc.gov/ia-highlights-andnews.html on the date of publication of 

this initiation notice in the Federal 

Register. The separate-rate application 

will be due 60 days from publication of 

this notice. 

Use of Combination Rates in an NME 

Investigation 

The Department will calculate 

combination rates for certain 

respondents that are eligible for a 

separate rate in this investigation. The 

Separate Rates/Combination Rates 

Bulletin states: 

{w}hile continuing the practice of 

assigning separate rates only to exporters, all 

separate rates that the Department will now 

assign in its NME investigations will be 

specific to those producers that supplied the 

exporter during the period of investigation. 

Note, however, that one rate is calculated for 

the exporter and all of the producers which 

supplied subject merchandise to it during the 

period of investigation. This practice applies 

both to mandatory respondents receiving an 

individually calculated separate rate as well 

as the pool of non-investigated firms 

receiving the weighted-average of the 

individually calculated rates. This practice is 

referred to as the application of ‘‘combination 

rates’’ because such rates apply to specific 

combinations of exporters and one or more 

producers. The cash-deposit rate assigned to 

an exporter will apply only to merchandise 

both exported by the firm in question and 

produced by a firm that supplied the exporter 

during the period of investigation. 

See Separate Rates/Combination Rates 

Bulletin, at 6. 

Distribution of Copies of the Petition 

In accordance with section 

732(b)(3)(A) of the Act and 19 CFR 

351.202(f), copies of the public version 

of the Petition have been provided to 

the representatives of the Governments 

of Korea and the PRC. Because of the 

particularly large number of producers/ 

exporters identified in the Petition, the 

Department considers the service of the 

public version of the Petition to the 

foreign producers/exporters satisfied by 

the delivery of the public version to the 

Governments of Korea and the PRC, 

consistent with 19 CFR 351.203(c)(2). 

International Trade Commission 

Notification 

We have notified the ITC of our 

initiations, as required by section 732(d) 

of the Act. 

Preliminary Determinations by the 

International Trade Commission 

The ITC will preliminarily determine, 

no later than May 19, 2008, whether 

there is a reasonable indication that 

imports of welded line pipe from Korea 

and the PRC are materially injuring, or 

threatening material injury to, a U.S. 

industry. A negative ITC determination 

with respect to either of the 

investigations will result in that 

investigation being terminated; 

otherwise, these investigations will 

proceed according to statutory and 

regulatory time limits. 

This notice is issued and published 

pursuant to section 777(i) of the Act. 

Dated: April 23, 2008. 

David M. Spooner, 

Assistant Secretary for Import 

Administration. 

Attachment I 

Where it is not practicable to examine 

all known producers/exporters of 

subject merchandise, section 777A(c)(2) 

of the Tariff Act of 1930 (as amended) 

permits us to investigate 1) a sample of 

exporters, producers, or types of 

products that is statistically valid based 

on the information available at the time 

of selection, or 2) exporters and 

producers accounting for the largest 

volume and value of the subject 

merchandise that can reasonably be 

examined. 

In the chart below, please provide the 

total quantity and total value of all of 

your sales of merchandise covered by 

the scope of this investigation (see 

attachment II of this document), 

produced in the PRC, and exported/ 

shipped to the United States during the 

period October 1, 2007 through March 

31, 2008. 

Market Total 

quantity 

Terms of 

sale Total value 

United States 

1. Export Price Sales.

2. 

a. Exporter name.

b. Address.

c. Contact.

d. Phone No.

e. Fax No.

3. Constructed Export Price Sales.


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Market Total 

quantity 

Terms of 

sale Total value 

4. Further Manufactured Sales.

Total Sales.

Because the scope of this 

investigation may include certain 

merchandise potentially subject to the 

on-going antidumping and 

countervailing duty investigations of 

circular welded pipe, we also request 

that you identify, in the chart below, the 

total quantity and total value that was 

reported in the above chart for sales of 

the following merchandise: 

Pipe multiple-stenciled to a standard 

and/or structural specification and to 

any other specification, such as the 

American Petroleum Institute (‘‘API’’) 

API–5L specification, when it meets the 

physical description set forth in the 

scope description in the circular welded 

pipe cases (see Circular Welded Carbon 

Quality Steel Pipe from the People’s 

Republic of China: Notice of Preliminary 

Determination of Sales at Less than Fair 

Value and Postponement of Final 

Determination, 73 FR 2445 (January 15, 

2008)) and also has one or more of the 

following characteristics: is 32 feet in 

length or less; is less than 2.0 inches (50 

mm) in outside diameter; has a 

galvanized and/or painted surface 

finish; or has a threaded and/or coupled 

end finish. 

Market Total 

quantity 

Terms of 

sale Total value 

United States 

1. Export Price Sales.

2. 

a. Exporter name.

b. Address.

c. Contact.

d. Phone No.

e. Fax No.

3. Constructed Export Price Sales.

4. Further Manufactured Sales.

Total Sales.

Total Quantity: 

• Please report quantity on a metric 

ton basis. If any conversions were used, 

please provide the conversion formula 

and source. 

Terms of Sales: 

• Please report all sales on the same 

terms (e.g., free on board—port of 

export). 

Total Value: 

• All sales values should be reported 

in U.S. dollars. Please indicate any 

exchange rates used and their respective 

dates and sources. 

Export Price Sales: 

• Generally, a U.S. sale is classified as 

an export price sale when the first sale 

to an unaffiliated person occurs before 

importation into the United States. 

• Please include any sales exported 

by your company directly to the United 

States. 

• Please include any sales exported 

by your company to a third-country 

market economy reseller where you had 

knowledge that the merchandise was 

destined to be resold to the United 

States. 

• If you are a producer of subject 

merchandise, please include any sales 

manufactured by your company that 

were subsequently exported by an 

affiliated exporter to the United States. 

• Please do not include any sales of 

merchandise manufactured in Hong 

Kong in your figures. 

Constructed Export Price Sales: 

• Generally, a U.S. sale is classified as 

a constructed export price sale when the 

first sale to an unaffiliated person 

occurs after importation. However, if the 

first sale to the unaffiliated person is 

made by a person in the United States 

affiliated with the foreign exporter, 

constructed export price applies even if 

the sale occurs prior to importation. 

• Please include any sales exported 

by your company directly to the United 

States. 

• Please include any sales exported 

by your company to a third-country 

market economy reseller where you had 

knowledge that the merchandise was 

destined to be resold to the United 

States. 

• If you are a producer of subject 

merchandise, please include any sales 

manufactured by your company that 

were subsequently exported by an 

affiliated exporter to the United States. 

• Please do not include any sales of 

merchandise manufactured in Hong 

Kong in your figures. 

Further Manufactured Sales: 

• Sales of further manufactured or 

assembled (including re-packaged) 

merchandise are sales of merchandise 

that undergoes further manufacture or 

assembly in the United States before 

being sold to the first unaffiliated 

customer. 

• Further manufacture or assembly 

costs include amounts incurred for 

direct materials, labor and overhead, 

plus amounts for general and 

administrative expense, interest 

expense, and additional packing 

expense incurred in the country of 

further manufacture, as well as all costs 

involved in moving the product from 

the U.S. port of entry to the further 

manufacturer. 

[FR Doc. E8–9361 Filed 4–28–08; 8:45 am] 

BILLING CODE 3510–DS–P 


sroberts on PROD1PC70 with NOTICES

APPENDIX B

CONFERENCE WITNESSES

B-3

CALENDAR OF PUBLIC CONFERENCE

Those listed below appeared as witnesses at the United States International Trade

Commission’s conference:

Subject: Certain Circular Welded Carbon Quality Steel Line Pipe From China and Korea

Inv. Nos.: 701-TA-455 and 731-TA-1149-1150 (Preliminary)

Date and Time: April 24, 2008 - 9:30 a.m.

The conference in connection with these investigations was held in the Main Hearing Room

(room 101), 500 E Street, SW, Washington, DC

OPENING REMARKS:

Petitioners (Alan H. Price, Wiley Rein LLP)

Respondents (Donald B. Cameron, Troutman Sanders LLP)

In Support of the Imposition of Countervailing and Antidumping Duties

Skadden, Arps, Slate, Meagher & Flom LLP 

Washington, DC

on behalf of

United States Steel Corporation 

George H. Thompson, General Manager–Commercial, Tubular Products, 

U.S. Steel Tubular Products, Inc.

Mark Tinne, Regional Sales Manager–Gulf Coast, 

U.S. Steel Tubular Products, Inc.

William D. Bartos, Manager–Standard and Line Pipe Marketing, 

U.S. Steel Tubular Products, Inc.

James R. Massimino, General Manager–Metallurgy and Quality Assurance, 

U.S. Steel Tubular Products, Inc.

Linda Andros, Legislative Representative on Trade, United Steel Paper and

Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service

Workers International Union, AFL-CIO-CLC

Seth T. Kaplan, The Brattle Group 

Robert E. Lighthizer )

John J. Mangan )

 – OF COUNSEL James C. Hecht )

Stephen P. Vaughn )
B-4

In Support of the Imposition of Countervailing and Antidumping Duties – Continued

Wiley Rein LLP 

Washington, DC

on behalf of

Maverick Tube Corporation 

Roland Balkenende, President, Tenaris Global Services USA (sales office of

Maverick Tube Corporation)

Robert Avera, Sales Director for Line Pipe Distribution, Tenaris Global Service

USA (sales office of Maverick Tube Corporation) 

Alan H. Price )

 – OF COUNSEL Robert E. DeFrancesco )

Schagrin Associates 

Washington, DC

on behalf of

Tex-Tube Company 

Rusty Fisher, Vice President of Line Pipe Sales, Tubular Synergy Group

Raymond Davila, Vice President, Tex-Tube Company 

Roger B. Schagrin ) – OF COUNSEL

In Opposition to the Imposition of Countervailing and Antidumping Duties

Troutman Sanders LLP

Washington, DC

on behalf of

SeAH Steel Corporation

Husteel Co., Ltd.

Hundai HYSCO

Sung Heum Byun, General Manager, Hyundai Corporation USA

Donald B. Cameron )

 – OF COUNSEL Julie C. Mendoza )
B-5

Closing Remarks

Petitioners (Stephen P. Vaughn, Skadden, Arps, Slate, Meagher & Flom LLP

 Roger B. Schagrin, Schagrin Associates)

Respondents (Donald B. Cameron, Troutman Sanders LLP)

APPENDIX C

SUMMARY DATA

Table C-1

Line pipe: Summary data concerning the U.S. market, 2005-07

(Quantity=short tons, value=1,000 dollars, unit values, unit labor costs, and unit expenses are per short ton; 

period changes=percent, except where noted)

Reported data Period changes

Item 2005 2006 2007 2005-07 2005-06 2006-07

U.S. consumption quantity:

 Amount . . . . . . . . . . . . . . . . . . . . 872,606 1,403,335 1,375,726 57.7 60.8 -2.0

 Producers' share (1) . . . . . . . . . 59.9 49.5 52.9 -7.1 -10.5 3.4

 Importers' share (1):

 China . . . . . . . . . . . . . . . . . . . . 3.2 16.0 20.4 17.2 12.8 4.4

 Korea . . . . . . . . . . . . . . . . . . . . 10.1 13.3 13.0 2.9 3.2 -0.3

 Subtotal . . . . . . . . . . . . . . . . . 13.2 29.3 33.4 20.1 16.0 4.1

 All other sources . . . . . . . . . . . 26.8 21.3 13.8 -13.0 -5.5 -7.5

 Total imports . . . . . . . . . . . . . 40.1 50.5 47.1 7.1 10.5 -3.4

U.S. consumption value:

 Amount . . . . . . . . . . . . . . . . . . . . 780,174 1,212,303 1,226,993 57.3 55.4 1.2

 Producers' share (1) . . . . . . . . . 65.1 57.3 61.8 -3.3 -7.8 4.5

 Importers' share (1):

 China . . . . . . . . . . . . . . . . . . . . 2.5 11.3 14.8 12.3 8.9 3.4

 Korea . . . . . . . . . . . . . . . . . . . . 8.6 10.5 10.8 2.2 1.8 0.4

 Subtotal . . . . . . . . . . . . . . . . . 11.1 21.8 25.6 14.5 10.7 3.8

 All other sources . . . . . . . . . . . 23.8 20.9 12.7 -11.2 -2.9 -8.3

 Total imports . . . . . . . . . . . . . 34.9 42.7 38.2 3.3 7.8 -4.5

U.S. imports from:

 China:

 Quantity . . . . . . . . . . . . . . . . . . 27,673 224,357 280,820 914.8 710.7 25.2

 Value . . . . . . . . . . . . . . . . . . . . 19,191 137,547 181,357 845.0 616.7 31.9

 Unit value . . . . . . . . . . . . . . . . . $693 $613 $646 -6.9 -11.6 5.3

 Ending inventory quantity . . . . ***** ***** ***** ***** ***** *****

 Korea:

 Quantity . . . . . . . . . . . . . . . . . . 87,923 186,285 178,177 102.7 111.9 -4.4

 Value . . . . . . . . . . . . . . . . . . . . 67,417 126,705 132,660 96.8 87.9 4.7

 Unit value . . . . . . . . . . . . . . . . . $767 $680 $745 -2.9 -11.3 9.5

 Ending inventory quantity . . . . ***** ***** ***** ***** ***** *****

 Subtotal:

 Quantity . . . . . . . . . . . . . . . . . . 115,596 410,642 458,997 297.1 255.2 11.8

 Value . . . . . . . . . . . . . . . . . . . . 86,608 264,252 314,017 262.6 205.1 18.8

 Unit value . . . . . . . . . . . . . . . . . $749 $644 $684 -8.7 -14.1 6.3

 Ending inventory quantity . . . . ***** ***** ***** ***** ***** *****

 All other sources:

 Quantity . . . . . . . . . . . . . . . . . . 234,044 298,681 189,544 -19.0 27.6 -36.5

 Value . . . . . . . . . . . . . . . . . . . . 185,863 253,886 155,275 -16.5 36.6 -38.8

 Unit value . . . . . . . . . . . . . . . . . $794 $850 $819 3.2 7.0 -3.6

 Ending inventory quantity . . . . ***** ***** ***** ***** ***** *****

 All sources:

 Quantity . . . . . . . . . . . . . . . . . . 349,640 709,323 648,541 85.5 102.9 -8.6

 Value . . . . . . . . . . . . . . . . . . . . 272,471 518,138 469,292 72.2 90.2 -9.4

 Unit value . . . . . . . . . . . . . . . . . $779 $730 $724 -7.1 -6.3 -0.9

 Ending inventory quantity . . . . ***** ***** ***** ***** ***** *****

Table continued on next page.

C-3
Table C-1--Continued

Line pipe: Summary data concerning the U.S. market, 2005-07

(Quantity=short tons, value=1,000 dollars, unit values, unit labor costs, and unit expenses are per short ton; 

period changes=percent, except where noted)

Reported data Period changes

Item 2005 2006 2007 2005-07 2005-06 2006-07

U.S. producers':

 Average capacity quantity . . . . . 909,237 947,056 1,028,983 13.2 4.2 8.7

 Production quantity . . . . . . . . . . 570,077 749,202 769,607 35.0 31.4 2.7

 Capacity utilization (1) . . . . . . . . 62.7 79.1 74.8 12.1 16.4 -4.3

 U.S. shipments:

 Quantity . . . . . . . . . . . . . . . . . . 522,966 694,012 727,185 39.1 32.7 4.8

 Value . . . . . . . . . . . . . . . . . . . . 507,703 694,165 757,701 49.2 36.7 9.2

 Unit value . . . . . . . . . . . . . . . . . $971 $1,000 $1,042 7.3 3.0 4.2

 Export shipments:

 Quantity . . . . . . . . . . . . . . . . . . 60,968 50,293 16,401 -73.1 -17.5 -67.4

 Value . . . . . . . . . . . . . . . . . . . . 61,653 53,030 16,634 -73.0 -14.0 -68.6

 Unit value . . . . . . . . . . . . . . . . . $1,011 $1,054 $1,014 0.3 4.3 -3.8

 Ending inventory quantity . . . . . 44,254 49,637 78,920 78.3 12.2 59.0

 Inventories/total shipments (1) . 7.6 6.7 10.6 3.0 -0.9 3.9

 Production workers . . . . . . . . . . 780 929 1,037 32.9 19.1 11.6

 Hours worked (1,000s) . . . . . . . 1,493 1,889 2,086 39.8 26.5 10.5

 Wages paid ($1,000s) . . . . . . . . 33,906 43,183 48,945 44.4 27.4 13.3

 Hourly wages . . . . . . . . . . . . . . . $22.71 $22.86 $23.46 3.3 0.7 2.6

 Productivity (tons/1,000 hours) . 381.9 396.7 368.9 -3.4 3.9 -7.0

 Unit labor costs . . . . . . . . . . . . . $59.48 $57.64 $63.60 6.9 -3.1 10.3

 Net sales:

 Quantity . . . . . . . . . . . . . . . . . . 591,129 748,071 745,656 26.1 26.5 -0.3

 Value . . . . . . . . . . . . . . . . . . . . 577,774 753,061 777,099 34.5 30.3 3.2

 Unit value . . . . . . . . . . . . . . . . . $977 $1,007 $1,042 6.6 3.0 3.5

 Cost of goods sold (COGS) . . . . 460,995 576,253 668,704 45.1 25.0 16.0

 Gross profit or (loss) . . . . . . . . . 116,779 176,808 108,395 -7.2 51.4 -38.7

 SG&A expenses . . . . . . . . . . . . . 23,372 34,561 37,032 58.4 47.9 7.1

 Operating income or (loss) . . . . 93,407 142,247 71,363 -23.6 52.3 -49.8

 Capital expenditures . . . . . . . . . 7,500 13,729 10,384 38.5 83.1 -24.4

 Unit COGS . . . . . . . . . . . . . . . . . $780 $770 $897 15.0 -1.2 16.4

 Unit SG&A expenses . . . . . . . . . $40 $46 $50 25.6 16.9 7.5

 Unit operating income or (loss) . $158 $190 $96 -39.4 20.3 -49.7

 COGS/sales (1) . . . . . . . . . . . . . 79.8 76.5 86.1 6.3 -3.3 9.5

 Operating income or (loss)/

 sales (1) . . . . . . . . . . . . . . . . . . 16.2 18.9 9.2 -7.0 2.7 -9.7

 (1) "Reported data" are in percent and "period changes" are in percentage points.

 (2) Not applicable.

Note.--Financial data are reported on a fiscal year basis and may not necessarily be comparable to data reported on a calendar year basis.

Because of rounding, figures may not add to the totals shown. Unit values and shares are calculated from the unrounded figures.

Source: Compiled from data submitted in response to Commission questionnaires and from official Commerce statistics.

C-4
D-1

APPENDIX D

PRICE DATA FOR NONSUBJECT COUNTRIES

D-3

Table D-1

Line pipe: Weighted-average f.o.b. selling prices and quantities for product 1, imported from

nonsubject countries, 2005-07

* * * * * * *

Table D-2

Line pipe: Weighted-average f.o.b. selling prices and quantities for product 2, imported from

nonsubject countries, 2005-07

* * * * * * *

Table D-3

Line pipe: Weighted-average f.o.b. selling prices and quantities for product 3, imported from

nonsubject countries, 2005-07

* * * * * * *

Table D-4

Line pipe: Weighted-average f.o.b. selling prices and quantities for product 4, imported from

nonsubject countries, 2005-07

* * * * * * *

E-1

APPENDIX E

ALLEGED EFFECTS OF SUBJECT IMPORTS ON U.S. PRODUCERS’ 

EXISTING DEVELOPMENT AND PRODUCTION EFFORTS,

GROWTH, INVESTMENT, AND ABILITY TO RAISE CAPITAL

E-3

The Commission requested U.S. producers to describe any actual or potential negative effects since

January 1, 2005, on their return on investment, growth, investment, ability to raise capital, existing

development and production efforts, or the scale of capital investments as a result of imports of line

pipe from China and Korea. Their responses are as follows:

Actual Negative Effects

* * * * * * *

Anticipated Negative Effects

* * * * * * *