Certain Steel Nails From China and

the United Arab Emirates

Investigation Nos. 731-TA-1114 and 1115 (Preliminary)

Publication 3939 August 2007

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

Robert A. Rogowsky

Director of Operations

Staff assigned:

Fred Ruggles, Investigator

Gabriel Ellenberger, Research Assistant

Gerald Houck, Industry Analyst

Steve Trost, Economist

Charles Yost, Accountant

Robin Turner, Attorney

Lita David-Harris, Statistician

George Deyman, Supervisor Investigator

Address all communications to

Secretary to the Commission

United States International Trade Commission

Washington, DC 20436
U.S. International Trade Commission

Washington, DC 20436

www.usitc.gov

Certain Steel Nails From China and

the United Arab Emirates

Investigation Nos. 731-TA-1114 and 1115 (Preliminary)

Publication 3939 August 2007
 
i

CONTENTS

Page

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

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

Separate and additional views of Chairman Daniel R. Pearson and 

Commissioner Deanna Tanner Okun concerning Bratsk Aluminum v. United States . . . . . 27

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

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

Organization of the report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1

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

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

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

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

The subject product . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-6

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

U.S. tariff treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7

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

Physical characteristics and uses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-9

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

Interchangeability and customer and producer perceptions . . . . . . . . . . . . . . . . . . . . . . . . . . I-11

Channels of distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-12

Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-13

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

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

Channels of distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1

Supply and demand considerations ................................................ II-2

U.S. supply ............................................................... II-2

U.S. demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-5

Substitutability issues .......................................................... II-6

Factors affecting purchasing decisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-6

Comparisons of domestic products, subject imports, and nonsubject imports ............ II-7

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-4

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

U.S. producers’ inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-8

U.S. producers’ employment, wages, and productivity ................................ III-8

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

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

U.S. imports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1

U.S. imports by type . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-4

Negligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-5

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

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

Presence in the market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-8

Apparent U.S. consumption, U.S. market shares, and ratios of imports to U.S. production . . . . IV-8
ii

CONTENTS

Page

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-3

Pricing methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-3

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

Price trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-10

Price comparisons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-11

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

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

Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-1

Operations on steel nails . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-1

Capital expenditures, research and development expenses, and investment in productive 

facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-6

Assets and return on investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-7

Capital and investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-7

Part VII: Threat considerations .................................................. VII-1

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

The industry in the United Arab Emirates .......................................... VII-4

U.S. importers’ inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-4

U.S. importers’ current orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-6

Antidumping and countervailing duty orders in third-country markets .................... VII-6

Information on nonsubject sources ................................................ VII-6

“Bratsk” considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-6

Nonsubject source information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-6

Appendixes

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

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

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

D. Alleged effects of subject imports on producers’ existing development and production 

 efforts, growth, investment, and ability to raise capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D-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)).

1

UNITED STATES INTERNATIONAL TRADE COMMISSION

Investigation Nos. 731-TA-1114 and 1115 (Preliminary)

CERTAIN STEEL NAILS FROM CHINA AND THE UNITED ARAB EMIRATES

DETERMINATIONS

On the basis of the record1

 developed in the subject investigations, the United States International

Trade Commission (Commission) determines, pursuant to section 733(a) of the Tariff Act of 1930 (19

U.S.C. § 1673b(a)) (the Act), that there is a reasonable indication that an industry in the United States is

materially injured by reason of imports from China and the United Arab Emirates of certain steel nails,

provided for in subheadings 7317.00.55, 7317.00.65, and 7317.00.75 of the Harmonized Tariff Schedule

of the United States, that are alleged to be sold in the United States at less than fair value (LTFV).

COMMENCEMENT OF FINAL PHASE INVESTIGATIONS

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 the investigations under section 733(b) of the Act, or, if the preliminary

determinations are negative, upon notice of affirmative final determinations in the investigations under

section 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 May 29, 2007, a petition was filed with the Commission and Commerce by Davis Wire Corp.

(Irwindale, CA), Gerdau Ameristeel Corp. (Tampa, FL), Maze Nails (Peru, IL), Mid-Continent Nail Corp.

(Poplar Bluff, MO), and Treasure Coast Fasteners, Inc. (Fort Pierce, FL), alleging that an industry in the

United States is materially injured or threatened with material injury by reason of LTFV imports of

certain steel nails from China and the United Arab Emirates. Accordingly, effective May 29, 2007, the

Commission instituted antidumping duty investigation Nos. 731-TA-1114 and 1115 (Preliminary).

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 June 4, 2007 (72 FR 30831). The conference was held in Washington, DC, on June 19, 2007, and all

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

 19 U.S.C. § 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.

 2

 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). 

 3

 These producers account for *** of U.S. production of steel nails. Confidential Staff Report (“CR”) and Public

Staff Report (“PR”) at Table III-1. The Commission received questionnaire responses from 15 U.S. producers,

accounting for *** of U.S. production of steel nails in 2006. CR/PR at III-1. The Commission also received

questionnaire responses from 38 importers, of which 33 firms reported imports from China, accounting for (***) of

total U.S. imports from China during 2004 to 2006, and *** reported imports from the UAE, accounting for (***) of

total U.S. imports from the UAE during 2004 to 2006. CR/PR at IV-1 and Table IV-1. Finally, the Commission

received questionnaire responses from 43 Chinese producers of steel nails, accounting for about 71 percent of U.S.

imports from China in 2006, and one UAE producer, Dubai Wire, *** of steel nails to the United States. CR at

VII-2 and VII-6/ PR at VII-2 and VII-4.

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 by reason of imports of

certain steel nails (“nails” or “steel nails”) from China and the United Arab Emirates (“UAE”) that

allegedly are sold in the United States at less than fair value (“LTFV”).

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 the establishment of an industry is materially retarded by reason of the

allegedly unfairly traded imports.1

 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.”2

II. BACKGROUND

The antidumping petition in these investigations was filed on May 29, 2007. The petitioners,

Davis Wire Corporation, Gerdau Ameristeel Corporation, Maze Nails, Mid Continent Nail Corporation,

Treasure Coast Fasteners, Inc., and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy,

Allied Industrial and Service Workers International Union (“Petitioners”), are domestic producers and a

union representing workers engaged in the production of certain steel nails. Petitioners participated at the

June 19, 2007 conference conducted in these investigations and filed a postconference brief.3

 Five

respondent parties participated in the conference and filed postconference briefs: (1) Dubai Wire FZE

(“Dubai Wire”), *** UAE exporter and an UAE producer of subject nails; (2) a group of 24 Chinese

producers and exporters (“Chinese Producers”); (3) Illinois Tool Works Inc. (“ITW”), a domestic

producer that also is an importer from *** and has a subsidiary that is a Chinese producer of subject

merchandise; (4) Hitachi Koki USA, Ltd. (“HKU”), an importer of subject merchandise from the UAE

***; and (5) a group of eight U.S. importers of subject nails from China (“U.S. Importers”). Four other

respondents or groups of respondents participated at the conference but did not file briefs, including: 
 4

 19 U.S.C. § 1677(4)(A).

 5

 19 U.S.C. § 1677(4)(A).

 6

 19 U.S.C. § 1677(10).

 7

 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).

 8

 See, e.g., S. Rep. No. 96-249 at 90-91 (1979).

 9

 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.”).

 10 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).

4

(1) Continental Materials, Inc., an importer of subject merchandise; (2) ITOCHU Building Products Co.,

Inc., an importer of subject merchandise from ***; (3) Black & Decker (U.S.), Inc. (“Black & Decker”),

an importer of subject merchandise from ***; and (4) a second group of Chinese producers and a U.S.

importer, XM International, Inc. (collectively, “XM”). Finally, one other respondent party, Stanley

Fastening Systems, LP (“Stanley”), a domestic producer and an importer of subject nails from ***, filed

a brief.

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.”4

 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.”5

 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 . . . .”6

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.7

 No single factor is dispositive, and the Commission

may consider other factors it deems relevant based on the facts of a particular investigation.8

 The

Commission looks for clear dividing lines among possible like products and disregards minor variations.9

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,10 the Commission
 11 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).

 12 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).

 13 Certain Steel Nails from the People’s Republic of China and the United Arab Emirates: Initiation of

Antidumping Duty Investigations, 72 Fed. Reg. 38816 (July 16, 2007).

5

determines what domestic product is like the imported articles Commerce has identified.11 The

Commission must base its domestic like product determination on the record in these investigations. 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.12

B. Product Description

In its notice of initiation, Commerce defined the imported merchandise subject to these

investigations as:

certain steel nails having a shaft length up to 12 inches. Certain steel nails include, but

are not limited to, nails made of round wire and nails that are cut. Certain steel nails may

be of one piece construction or constructed of two or more pieces. Certain steel nails

may be produced from any type of steel, and have a variety of finishes, heads, shanks,

point types, shaft lengths and shaft diameters. Finishes include, but are not limited to,

coating in vinyl, zinc (galvanized, whether by electroplating or hot-dipping one or more

times), phosphate cement, and paint. Head styles include, but are not limited to, flat,

projection, cupped, oval, brad, headless, double, countersunk, and sinker. Shank styles

include, but are not limited to, smooth, barbed, screw threaded, ring shank and fluted

shank styles. Screw-threaded nails subject to these proceedings are driven using direct

force and not by turning the fastener using a tool that engages with the head. Point styles

include, but are not limited to, diamond, blunt, needle, chisel and no point. Finished nails

may be sold in bulk, or they may be collated into strips or coils using materials such as

plastic, paper, or wire.

Certain steel nails subject to these proceedings are currently classified under the

Harmonized Tariff Schedule of the United States (HTSUS) subheadings 7317.00.55, 7317.00.65

and 7317.00.75.

Excluded from the scope of these proceedings are roofing nails of all lengths and

diameter, whether collated or in bulk, and whether or not galvanized. Steel roofing nails are

specifically enumerated and identified in ASTM Standard F 1667 (2005 revision) as Type I, Style

20 nails. Also excluded from the scope of these proceedings are corrugated nails. A corrugated

nail is made of a small strip of corrugated steel with sharp points on one side. Also excluded

from the scope of these proceedings are fasteners suitable for use in powder-actuated hand tools,

not threaded and threaded, which are currently classified under HTSUS 7317.00.20 and

7317.00.30. Also excluded from the scope of these proceedings are thumb tacks, which are

currently classified under HTSUS 7317.00.1000.13
 14 Petitioners’ Postconference Brief at 2-6; Conference Tr. at 41-44 and 166; Chinese Producers’ Postconference

Brief at 3; Dubai Wire’s Postconference Brief at 1. Petitioners, moreover, contend that the domestic like product

should not be subdivided into two separate like products, one for construction nails and one for woodworking nails,

as proposed by importer Black & Decker. Petitioners’ Postconference Brief at 2.

 15 Conference Tr. at 156. According to Black & Decker, “[w]oodworking nails and construction nails are not

interchangeable and have different physical characteristics, uses, channels of distribution, production processes,

customer perceptions and price.” Conference Tr. at 156-162 and Attachment (Black & Decker – Nail Anti-dumping

Investigation). Black & Decker’s proposal does not include a distinction between collated and bulk nails. Id. at 168. 

Black & Decker also alleges that “imports are not causing material injury or the threat of material injury to the

domestic industry producing woodworking nails.” Id. at 156 and 161-162. Black & Decker estimated that the steel

nail market is about 84 percent construction nails and 16 percent woodworking nails. Id. at 156-157.

 16 See CR at I-10-I-18; PR at I-10-I-13.

 17 Accord Softwood Lumber from Canada, Inv. Nos. 701-TA-404 and 731-TA-928 (Final), USITC Pub. 3509 at

6-15 (May 2002); Professional Electric Cutting and Sanding/Grinding Tools from Japan, Inv. No. 731-TA- 571

(Final), USITC Pub. 2658 at 8-10, and 49-51 (July 1993); Polyethylene Terephthalate Film, Sheet, and Strip from

Japan and the Republic of Korea ("PET Film"), USITC Pub. 2383 at 8 and 10 (May 1991).

 18 CR at I-11; PR at I-9; Petitioners’ Postconference Brief at 4.

 19 CR at I-11; PR at I-9.

 20 For example, some types of steel nails (and specific characteristics for each) include: common nail (flat head,

diamond point); finishing nail (cupped brad head, diamond point); flooring nail (casing head, blunt point); pallet nail

(flat head, screw shank, diamond point); and drywall nail (sinker head, ring shank, needle point). See e.g., Certain

Steel Wire Nails from the People’s Republic of China, Inv. No. 731-TA-266, USITC Pub. 1842 at A-5 (Figure 1)

and A-49-53 (Appendix C) (May 1986). Nails also are produced in a variety of finishes, including bright

(unfinished), galvanized (i.e., zinc coated to impart corrosion-resistance), vinyl coated (facilitates driving), cement

coated (facilitates grip once driven), and painted. Petition at 8. About 75 percent by quantity and 60 percent by

value of U.S. producers’ reported U.S. shipments of steel nails in 2006 had a bright finish, whereas about 20 percent

by quantity and 34 percent by value had a galvanized finish. Calculated from CR/PR at Table III-5.

6

The subject merchandise includes certain steel nails, having a shaft length of up to 12 inches, produced

from various grades of steel, and having a variety of finishes, heads, shanks, points and sizes. 

Specifically excluded from the subject merchandise are roofing nails of any length or diameter, either

collated or in bulk, and whether or not galvanized.

C. Domestic Like Product

Petitioners propose, and all respondents, except one, agree for purposes of the preliminary phase

investigations that a single domestic like product should be found: certain steel nails, coextensive with

the scope of investigation.14 At the Commission conference, importer Black & Decker proposed that the

scope of investigation cover “two distinct like products . . . [and] domestic industries – construction-based

nails and woodworking-based nails,” also commonly known as finish nails.15

Based on the evidence, as discussed below,16 we find that certain steel nails are all part of a

continuum with no clear dividing line between different types of nails.17 Thus, we define a single

domestic like product consisting of certain steel nails, coextensive with the scope of investigation.

Physical Characteristics and End Uses. All steel nails share the same basic characteristics,

consisting of a head, shaft, and point, and are produced to the same industry-wide standards.18 Steel nails

may be produced of low-carbon steel, stainless steel (to resist corrosion), or hardenable medium- to highcarbon steel.19 Steel nails are made in a wide variety of types, sizes and finishes.20 They have a common
 21 CR at I-8; PR at I-6; Petitioners’ Postconference Brief at 4-5; USITC Pub. 1842 at A-4.

 22 CR/PR at II-1.

 23 CR at I-11; PR at I-9. About 77 percent by quantity and 85 percent by value of U.S. producers’ reported U.S.

shipments of steel nails in 2006 were collated nails. CR/PR at Table III-5.

 24 Black & Decker specifically contends that the woodworking nails generally are shorter in length and smaller in

diameter than construction nails and are used for molding installation, indoor use, and in cabinet and woodworking

shops, whereas construction nails are used for stick framing, new construction, and deck and fence building. 

Conference Tr. at 156-162 and Attachment (Black & Decker – Nail Anti-dumping Investigation).

 25 CR/PR at II-1.

 26 Petitioners’ Postconference Brief at 5; Conference Tr. at 158 and Attachment.

 27 CR/PR at Table II-1. In 2006, sales to distributors accounted for 84.1 percent of U.S. producers’ U.S.

shipments, 88.0 percent of U.S. importers’ U.S. shipments of imports from China, and *** of U.S. importers’ U.S.

shipments of imports from the UAE. Id.

 28 According to Black & Decker, construction nails primarily are sold at independent specialty shops (82 percent),

and woodworking nails “primarily” are sold by large retailers (58 percent), but with 42 percent sold to independent

specialty shops. Conference Tr. at 159.

 29 CR at I-12; PR at I-9. Although cut nails may be made for carpentry use, the main uses are for joining masonry

or concrete and for flooring in applications where an antique appearance is required. CR at I-15; PR at I-11.

 30 CR at I-12; PR at I-9.

 31 CR at I-12 and I-13; PR at I-9 and I-10; Petitioners’ Postconference Brief at 5.

7

end use of fastening two pieces of material, generally wood, together.21 Specific uses for nails include the

building of houses and other structures – both for structural framing and interior applications, decks and

fences, cabinets and furniture, and crates and pallets for shipping.22 Nails are either packaged in bulk, i.e.,

loose in a container, or collated, i.e., joined with wire, paper strips, plastic strips, or glue, into coils or

straight strips for use in pneumatic nailing tools.23 While woodworking nails generally may be of shorter

length and smaller diameter than construction-type nails,24 there is no clear delineation regarding the

types and/or sizes of nails that would be included in each of these categories or such other possible

categories of nails as industrial-type nails used to make crates or pallets.25

Interchangeability. There are some limitations on the interchangeability of steel nails resulting

from differences in types, sizes and finishes, as well as the compatibility of even the same type of nail

with different nailing tools.26 However, limitations on interchangeability among a wide variety of types

of products comprising a continuum is not unexpected.

Channels of Distribution. Both U.S. producers and U.S. importers of subject merchandise

primarily sold their steel nails to distributors.27 While the evidence provided by Black & Decker shows

some differences in channels of distribution for construction-based nails and woodworking-based nails,

there still is significant overlap in the channels of distribution for both product types.28

Manufacturing Facilities, Production Processes, and Employees. Most steel nails are produced

from steel wire, with a small share of nails produced from steel plate and referred to as “cut nails.”29 Wire

nails are produced by one of two general methods: single wire and multiple wire.30 Using the more

common single-wire method, a wire is fed into a nail machine that automatically straightens the wire,

forms the head and cuts the nail from the wire. Depending on the type of machinery used, either rotary

heading or cold heading, the head of the nail can be formed either first or last in the process.31 Both types

of nail machines are used to produce all styles of nails, including finish nails, and some manufacturers
 32 CR at I-14; PR at I-11. Both type of machines are capable of producing a range of nail sizes and head and

point styles by changing tooling and adjustments. Id. While Respondents have alleged that many types of nails

imported from China and the UAE are not made by domestic producers, such producers indicate that they

collectively are capable of producing the full range of nail products. Compare Chinese Producers’ Postconference

Brief at 21 and Conference Tr. at 80. 

 33 CR at I-14; PR at I-11; Conference Tr. at 159-160.

 34 See, e.g., Petitioners’ Postconference Brief at 6. According to Black & Decker, customers of construction nails

typically shop based on price and have the option of many generic brands, whereas customers of woodworking nails

typically shop based on compatibility, quality, and convenience, along with a strong brand name. Conference Tr. at

160 and Attachment.

 35 According to Black & Decker, the average retail price of woodworking nails was $2.74 per pound compared to

$0.81 per pound for construction nails. Conference Tr. at 161 and Attachment.

 36 CR at I-17; PR at I-13.

 37 See, e.g., Carbon and Certain Alloy Steel Wire Rod from China, Germany, and Turkey, Inv. Nos. 731-TA1099-1101 (Preliminary), USITC Pub. 3832 at 10 (January 2006) (“a lack of interchangeability among products

comprising a continuum is not unexpected and not inconsistent with finding a single like product”); Outboard

Engines from Japan, Inv. No. 731-TA-1069 (Preliminary), USITC Pub. 3673 at 7-8 (March 2004) (“A lack of

interchangeability between products at either end of a continuum is not inconsistent with a finding of a single

domestic like product when the products are all part of a continuum.”).

 38 19 U.S.C. § 1677(4)(A).

8

have both types in their facilities.32 On the other hand, the multiple wire method is limited to the

production of small-diameter nails with no head or a countersinkable head, often called “brads” or “finish

nails.”33

Producer and Customer Perceptions. Overall, producers and customers perceive certain steel

nails to be a single product comprised of a broad mix of nail types.34 Nevertheless, depending on the

application, a purchaser may use one specific type and/or finish of steel nail and not another type of nail.

Price. The evidence suggests that prices for woodworking-based nails are substantially higher

than those for construction-based nails.35 However, it is not clear whether there are similar price

variations across the continuum of other types of steel nails.36

Conclusion. Certain steel nails, whether used by the construction industry, woodworkers, or

other sectors, including industrial applications, share certain general physical characteristics and uses, are

sold primarily to distributors, are produced in similar production processes, and generally are perceived to

be similar products. Limitations in interchangeability among types of steel nails comprising a continuum

product are not unexpected.37 Thus, we define a single domestic like product consisting of certain steel

nails, coextensive with the scope of investigation.

D. Domestic Industry and Related Parties

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.”38 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.
 39 19 U.S.C. § 1677(4)(B). 

 40 The primary factors the Commission has examined in deciding whether appropriate circumstances exist to

exclude a related party include: (1) the percentage of domestic production attributable to the importing producer;

(2) the reason the U.S. producer has decided to import the product subject to investigation, i.e., whether the firm

benefits from the LTFV sales or subsidies or whether the firm must import in order to enable it to continue

production and compete in the U.S. market, and (3) the position of the related producer vis-a-vis the rest of the

industry, i.e., whether inclusion or exclusion of the related party will skew the data for the rest of the industry. See,

e.g., Torrington Co. v. United States, 790 F. Supp. 1161 (Ct. Int’l Trade 1992), aff’d without opinion, 991 F.2d 809

(Fed. Cir. 1993). The Commission has also considered the ratio of import shipments to U.S. production for related

producers and whether the primary interest of the related producer lies in domestic production or importation. These

latter two considerations were cited as appropriate factors in Allied Mineral Products, Inc. v. United States, —F.

Supp. 2d—, Slip Op. 04-139 (Ct. Int’l Trade November 12, 2004) at 5-6 (“The most significant factor considered by

the Commission in making the ‘appropriate circumstances’ determination is whether the domestic producer accrued

a substantial benefit from its importation of the subject merchandise.”); USEC, Inc. v. United States, 132 F. Supp. 2d

1, 12 (Ct. Int’l Trade 2001) (“the provision’s purpose is to exclude from the industry headcount domestic producers

substantially benefitting from their relationships with foreign exporters.”), aff’d, Slip Op. 01-1421 (Fed. Cir. April

22, 2002); S. Rep. No. 249, 96th Cong. 1st Sess. at 83 (1979) (“where a U.S. producer is related to a foreign exporter

and the foreign exporter directs his exports to the United States so as not to compete with his related U.S. producer,

this should be a case where the ITC would not consider the related U.S. producer to be a part of the domestic

industry”).

 41 Petitioners’ Postconference Brief at 8. Petitioners also maintain that *** other U.S. producers, *** that are

related parties because they imported subject merchandise should not be excluded. Id. at 15.

 42 Petitioners’ Postconference Brief at 8. They contend that it is necessary to exclude these companies to avoid

skewing the industry database. Id. at 7-15.

 43 See Chinese Producers’ Postconference Brief at 3-10; Stanley’s Postconference Brief at 2-10; ITW’s

Postconference Brief at 3-11; Dubai Wire’s Postconference Brief at 17.

9

Based on our finding that the domestic like product is certain steel nails, for purposes of these preliminary

determinations we define a single domestic industry corresponding to the merchandise subject to

investigation.

2. Related Parties

We must determine whether any producer of the domestic like product should be excluded from

the domestic industry pursuant to section 19 U.S.C. § 1677(4)(B). Subsection 1677(4)(B) allows the

Commission, if appropriate circumstances exist, to exclude from the domestic industry producers that are

related to an exporter or importer of subject merchandise or which are themselves importers.39 Exclusion

of such a producer is within the Commission’s discretion based upon the facts presented in each

investigation.40

a. Parties’ Arguments

Petitioners. Petitioners contend that “appropriate circumstances exist to exclude *** – from the

U.S. industry as related parties.”41 According to Petitioners, “[e]ach of these companies ***.”42

Respondents. Chinese Producers, Dubai Wire, ITW, and Stanley urge the Commission not to

exclude any U.S. producers as related parties.43 They contend that the primary interests of these related

parties lie in increasing U.S. production and that excluding the related party U.S. producers would skew
 44 Stanley’s Postconference Brief at 9; see also ITW’s Postconference Brief at 11; Chinese Producers’

Postconference Brief at 3-10.

 45 CR/PR at Table III-6. While another U.S. producer, ***, also reported importing from China in 2006 and

2007, ***. Id. at Tables III-1 and III-6. According to ***. Id. at Table III-6, n.3.

 46 In addition, two other U.S. producers, *** reported purchases of subject merchandise that if deemed to

constitute control of a large volume of subject imports would also qualify them as related parties. CR/PR at Table

III-6. ***. Id. at III-9, n.7. ***. Based on the limited information regarding these purchases and *** as well as the

relatively small volumes involved, we do not find either of these U.S. producers to be a related party for purposes of

these preliminary phase investigations. However, we plan to seek information regarding these purchases and any

relationship with importers of subject merchandise, and thus will reconsider this issue in any final phase

investigations.

 47 Commissioner Lane determines that appropriate circumstances exist to exclude three U.S. producers, ITW,

Senco, and Stanley, from the domestic industry. She notes that the fourth U.S. producer, Specialty Fasteners,

excluded by the Commission majority accounted for *** of domestic production in 2006. CR/PR at Table III-1. 

Thus, for the most part, the data for the domestic industry defined by Commissioner Lane varies *** from the data

for the domestic industry defined by the Commission majority.

 48 Consistent with her practice in past investigations and reviews, Vice Chairman Aranoff does not rely on

individual-company operating income margins in assessing whether a related party has benefitted from importation

of subject merchandise. Rather, she determines whether to exclude a related party based principally on its ratio of

subject imports to domestic shipments and whether its primary interests lie in domestic production or importation.

In these preliminary investigations, she has determined that the primary interests of the four excluded

producers lie principally in importation rather than domestic production based on ***.

10

the pertinent industry data and “inaccurately portray the U.S. industry as less healthy than it is by

focusing the Commission’s analysis on producers accounting for the *** of the U.S. industry.”44

b. Analysis

Seven U.S. producers, *** reported that they imported the subject merchandise during the period

of investigation.45 Thus, they qualify as “related parties” under 19 U.S.C. § 1677(4)(B) and, therefore, we

must consider whether “appropriate circumstances” exist to exclude any of these U.S. producers from the

domestic industry on the basis of those importations.46

For purposes of the preliminary phase of these investigations, we determine that appropriate

circumstances exist to exclude four U.S. producers (ITW, Senco, Specialty Fasteners, and Stanley) from

the domestic industry.47 As discussed below, each of these four domestic producers has imported *** and

increasing volumes of subject merchandise over the period of investigation as their domestic production

of steel nails has declined, indicating that their primary interest is shifting from domestic production to

importation. Moreover, the evidence suggests, at least for some of those excluded, that they may have

benefitted from the importation of subject merchandise.48 We recognize that, in determining that

appropriate circumstances exist to exclude these producers, we have excluded producers accounting for

*** of total U.S. production in 2006. Thus, in any final phase of these investigations, we intend to

reexamine the appropriate application of the related parties provision, as well as the factual allegations. 

In doing so, we will explore more fully the extent to which the significant importation by a number of

firms indicates a primary interest in importation as opposed to domestic production. For example,

importation may be due to a need to provide customers with a full product line by supplementing

domestic production with imports, or it may indicate a shift away from domestic production. The

evidence in the preliminary phase of these investigations also shows significant disparities in the
 49 For purposes of these preliminary investigations, Commissioner Pinkert does not rely upon related parties’

financial performance as a factor in determining whether there are appropriate circumstances to exclude them from

the domestic industry and relies instead on other information relevant to this issue. The present record is not

sufficient to infer from the related parties’ profitability on U.S. operations that they have derived a specific benefit

from importing or from their relationships to foreign producers. See Allied Mineral Products, Slip Op. 04-139, at 8. 

For the final investigations, Commissioner Pinkert invites the parties to provide any information they may have with

respect to whether related parties are benefiting financially from their status as related parties.

 50 ITW consists of three divisions that produce subject nails: Industrial Fastening, Paslode, and Ramset. ***. 

CR at III-9, n.7; PR at III-6, n.7.

 51 ITW imported ***. CR/PR at Table III-6.

 52 Calculated from CR/PR at Table III-1.

 53 CR/PR at Table III-6. Its ratio of imports from *** in 2006. Id.

 54 CR/PR at Table III-6, n.6; ITW’s Postconference Brief at 6. According to ITW, “its paramount interests lie in

domestic production, it is not shielded from injury based on its importing activities, and its inclusion in the domestic

industry does not skew the industry results.” ITW’s Postconference Brief at 4. ITW contends that it “is first and

foremost a U.S. producer of nails, despite its ownership of a plant in China and its importing activities.” Id. ITW

maintains that it began production in June 2005 at a wholly owned production facility in Shanghai, China “because

of the lack of ready and consistent availability of wire rod in the U.S. market starting in 2004” and that its “imports

from its plant in China consist of specialized, premium priced products, comparable to the other premium products

that it makes in its U.S. facilities.” Id. at 6.

 55 CR/PR at Table III-6.

 56 CR/PR at Table III-6.

 57 CR/PR at Table III-6, n.6; ITW’s Postconference Brief at 7 (ITW indicated that it “*** to expand ITW’s range

of customer offerings.”).

 58 CR/PR at Table VI-2. ITW reported an operating income margin of *** in interim period 2007. Id.

 59 CR/PR at Table III-1. The Commission may consider whether a producer supports or opposes the petition as

one factor in deciding whether appropriate circumstances exist to exclude that producer as a related party, but

support or opposition to the petition is not dispositive of the question. See e.g., Allied Mineral Products, Inc. v.

(continued...)

11

performance indicators, particularly regarding profitability, among the domestic producers.49 We intend

to seek information in any final phase of these investigations regarding the extent to which any related

parties are benefitting from the subject imports and whether they conduct their operations, including the

types of products they import and the types of products they produce domestically, so as to be shielded

from any injurious effects of the subject imports.

ITW. ITW50 imported increasing volumes of subject merchandise from *** in 2005 and 2006.51

ITW accounted for *** of reported U.S. steel nail production in 2006.52 Its ratio of combined subject

imports to production was *** in 2006; its ratio for combined subject imports to U.S. production was

***.53 According to ITW, *** resulted in its establishment of a facility in China – “***.”54 As ITW

started importing subject merchandise in *** and as such imports increased in 2006, its domestic

production of steel nails declined *** from *** in 2006.55 ITW’s total volume of domestic production

and subject imports in 2006 of *** is similar to its total volume in 2005 of ***, although the share of the

total consisting of domestic production is ***.56 While it appears that ITW may have imported from

***,57 its *** to its wholly owned facility in China suggests that its primary interest is shifting to

importation rather than domestic production, although it still remains a significant U.S. producer. 

Moreover, as it has shifted to importation, its operating income as a ratio of net sales has *** in 2006.58

This suggests that ITW’s domestic operations may be *** from importing subject merchandise. 

Furthermore, ITW opposes the petition in these investigations.59 We find that appropriate circumstances
 59 (...continued)

United States, Slip Op. 04-139 (Ct. Int’l Trade Nov. 12, 2004) at 9-10 & n. 5.

 60 ***. CR at III-9, n.7; PR at III-6, n.7. Senco imported. Id. at Table III-6.

 61 Senco’s domestic production of steel nails declined from *** in 2006. CR/PR at Table III-6.

 62 CR/PR at Table III-1.

 63 CR/PR at Table III-6. Senco’s ratio of subject imports to U.S. production was *** in interim period 2007. Id.

 64 CR/PR at Table III-6, n.7.

 65 CR/PR at Table VI-2. Senco’s operating income as a ratio of net sales *** in 2006; it reported an operating

income margin of *** in interim period 2007. Id.

 66 CR/PR at Table III-1.

 67 Specialty Fasteners imported *** in January-March 2007. CR/PR at Table III-6. *** in 2005, 2006, and

interim period 2007. Id.

 68 CR/PR at Table III-1.

 69 CR/PR at Table III-6. Specialty Fasteners’ ratio of *** to its U.S. production ***. Id.

 70 CR/PR at Table III-6, n.10.

 71 CR/PR at Table VI-2. For example, Specialty Fasteners’ operating income as a ratio of net sales *** in 2006; it

reported an *** in interim period 2007. Id.

 72 CR/PR at Table III-1.

 73 Commissioner Lane does not join this conclusion.

 74 *** CR at III-9, n.7; PR at III-6, n.7. Stanley imported ***. CR/PR at Table III-6. *** in 2005, 2006 and

interim period 2007. Id. at Table III-6. Stanley’s domestic production of steel nails fluctuated between years and

(continued...)

12

exist to exclude ITW from the domestic industry for purposes of the preliminary phase of these

investigations. However, we plan to reconsider this exclusion in any final phase of these investigations.

Senco. Senco imported steadily increasing volumes of subject merchandise from ***60 and

produced steadily decreasing volumes at its domestic production facility over the period of

investigation.61 Senco accounted for *** of reported U.S. steel nail production in 2006.62 Its ratio of

imports from *** in 2006.63 According to Senco, it imports steel nails because of a “***.”64 Its

decreasing domestic production and *** increases in subject imports, both in volume and as a share of its

U.S. production, indicate that its primary interest is ***. Moreover, Senco may be ***.65 Furthermore,

Senco *** the petition in these investigations.66 We find that appropriate circumstances exist to exclude

Senco from the domestic industry for purposes of the preliminary phase of these investigations. 

However, we plan to reconsider this exclusion in any final phase of these investigations.

Specialty Fasteners. Specialty Fasteners imported subject merchandise from *** in steadily

increasing amounts from 2005 to 2006.67 In 2006, it accounted for *** of domestic production.68 As

Specialty Fasteners’ domestic production *** over the period of investigation, its importation increased. 

Its ratio of imports from *** in 2006.69 According to Specialty Fasteners, “***.”70 It is not clear whether

Specialty Fasteners has ***.71 Moreover, *** Specialty Fasteners *** the petition,72 its primary interests

seem to be ***. We find that appropriate circumstances exist to exclude Specialty Fasteners from the

domestic industry for purposes of the preliminary phase of these investigations.73 However, we plan to

reconsider this issue in any final phase of the investigations.

Stanley. Stanley imported subject merchandise from *** in ever-increasing amounts during the

period of investigation, while its domestic production declined over the same period.74 Stanley accounted
 74 (...continued)

declined overall from *** in 2006. CR/PR at Table III-6.

 75 CR/PR at Table III-1.

 76 Calculated from CR/PR at Table III-6. Stanley’s ratio of imports from *** in 2006. Id.

 77 Calculated from CR/PR at Table III-6.

 78 CR/PR at Table III-6, n.9. According to Stanley, it “imports nails from China as an element of a coordinated

marketing strategy that supports and increases production of nails *** in the United States. This marketing strategy

enables Stanley to continue manufacturing nails in Rhode Island and to compete effectively in the U.S. market.” 

Stanley’s Postconference Brief at 5. According to Stanley, its “primary interest is as a U.S. manufacturer of nails

***. The output of Stanley’s affiliated factory in China supports Stanley’s production of nails in Rhode Island by

contributing to Stanley’s ***.” Id. at 10.

 79 CR/PR at Table VI-2. For example, Stanley’s operating income as a ratio of net sales *** in 2006; it reported

an operating income margin of *** in interim period 2007. Id.

 80 CR/PR at Table III-1.

 81 CR/PR at Table III-6.

 82 CR/PR at Table III-6.

 83 CR/PR at Table III-1.

 84 According to ***, it has imported in an effort to ***. CR/PR at Table III-6 at n. 2.

 85 CR/PR at Table III-1.

 86 For example, ***’s operating income as a ratio of net sales *** in 2006; its operating income margin of *** in

interim period 2007. CR/PR at Table VI-2.

 87 CR/PR at Table III-6. According to ***, “***.” Id. at n. 8.

13

for *** of reported U.S. steel nail production in 2006.75 Its ratio of combined subject imports to U.S.

production increased from *** in 2006.76 Its ratio of combined subject imports to U.S. production was

*** in interim period 2007.77 While Stanley indicates that it imports to ***, it adds that “***.”78

Stanley’s increasing importation through its affiliation with Chinese producers as its domestic production

declined *** indicates that its primary interest is shifting to importation rather than domestic production. 

The record indicates that Stanley’s financial performance ***.79 Furthermore, Stanley *** the petition.80

We find that appropriate circumstances exist to exclude Stanley from the domestic industry for purposes

of the preliminary phase of these investigations. However, we plan to reconsider this exclusion in any

final phase of the investigations.

***. *** imported *** quantities of subject merchandise from *** in 2005.81 These imports as a

share of ***’s U.S. production in 2004 and 2005 were only about ***.82 *** accounted for *** of

domestic production in 2006.83 Its domestic production continued to *** the volume of its subject import

shipments over the period of investigation and, therefore, its interests appear to be primarily those of a

domestic producer.84 *** is a petitioner and supports the petition.85 Moreover, its financial performance

***86 which suggests that *** does not appear to have ***. We find that appropriate circumstances do

not exist to exclude *** from the domestic industry.

***. *** has imported *** volumes of subject merchandise from *** in each year of the period

of investigation.87 While the subject import volume has remained constant, it has *** ***’s declining
 88 Its subject imports as a ratio of U.S. production *** in 2006, and were *** in interim period 2007. CR/PR at

Table III-6.

 89 CR/PR at Table III-1. ***. CR/PR at VI-1, n.1.

 90 CR/PR at Table III-1.

 91 CR/PR at Table III-6.

 92 CR/PR at Tables III-1.

 93 CR/PR at Table III-6.

 94 CR/PR at Table III-6, n.12.

 95 CR/PR at Table VI-2. For example, ***’s operating income margin as a ratio of net sales *** in 2006; it

reported an operating income margin of *** in interim period 2007. Id.

 96 CR/PR at Table III-1.

 97 19 U.S.C. § 1677(7)(G)(i).

 98 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).

14

U.S. production.88 *** accounted for *** of domestic production in 2006,89 and even though its domestic

production has ***, its interests appear to be primarily those of a domestic producer, as its ratio of

imports to U.S. production is ***. Furthermore, *** supports the petition in these investigations.90 We

find that appropriate circumstances do not exist to exclude *** from the domestic industry.

***. *** imported subject merchandise from ***, respectively.91 *** accounted for *** of

domestic production in 2006,92 and even though its domestic production has ***, its interests appear to be

primarily those of a domestic producer. Its ratio of imports from *** in 2006 and *** in interim period

2007.93 According to ***, “***.”94 While the record indicates that ***’s financial performance ***.95

*** the petition.96 We find that appropriate circumstances do not exist to exclude Tree Island from the

domestic industry.

IV. CUMULATION

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.97 In assessing whether subject imports compete with each other and with the domestic

like product, the Commission has generally considered the following factors:

(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

(4) whether the subject imports are simultaneously present in the market.98

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
 99 See, e.g., Wieland Werke, AG v. United States, 718 F. Supp. 50 (Ct. Int'l Trade 1989).

 100 The SAA (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.” 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.”).

 101 Petitioners’ Postconference Brief at 20-22; Conference Tr. at 45-47.

 102 Dubai Wire’s Postconference Brief at 2-16. According to Dubai Wire, “nails from the UAE are not fungible

with nails from United States and China” because: 1) only Dubai Wire nails meet all quality standards, whereas

other steel nail suppliers only satisfy one or two of these criteria; 2) Dubai Wire sells the full range of steel nail

products and tailors shipments to reflect customer needs, “which largely distinguishes it from domestic producers

(especially petitioners) and Chinese suppliers”; 3) only Dubai Wire’s nails are essentially 100 percent “on spec

quality-wise,” have superior packaging, and have a strong reputation for timely supply on a consistent basis; and

4) the UAE only supplies collated steel nails and thus is not present in the bulk steel nail market. Id.

 103 See 19 U.S.C. § 1677(7)(G)(ii).

 104 CR at I-15 and II-11-13; PR at I-11 and II-6-8.

 105 Conference Tr. at 46; Petitioners’ Postconference Brief at 21.

 106 See, e.g., Chinese Producers’ Postconference Brief at 20-26; HKU’s Postconference Brief at 1-8; U.S.

Importers’ Postconference Brief at 2-4; Dubai Wire’s Postconference Brief at 21-22; Conference Tr. at 117, 119, and

145.

 107 Dubai Wire’s Postconference Brief at 3-4.

 108 See, e.g., Conference Tr. at 80.

15

imports compete with each other and with the domestic like product.99 Only a “reasonable overlap” of

competition is required.100

Petitioners contend that subject imports from China and the UAE should be cumulated on the

basis that they are fungible with the domestic product and each other, are sold in the same geographic

markets through common or similar channels of distribution, and were both present in the U.S. market

during the three-year period of investigation.101 Respondents generally do not contest cumulation and

present arguments that are based on the assumption that subject imports will be cumulated for purposes of

assessing the volume and effects of subject imports for determining material injury. However, one

respondent, Dubai Wire, contends that “there is no reasonable overlap in competition between the UAE

and others (i.e., the domestic industry or China) with respect to sales of steel nails in the United States.”102

In these investigations, the threshold criterion is met since the antidumping petitions with respect

to subject imports from China and the UAE were both filed on the same day, May 29, 2007. None of the

statutory exceptions to cumulation is applicable.103 Subject imports from China and the UAE are thus

eligible for cumulation. We next examine the four factors that the Commission customarily considers in

determining whether there is a reasonable overlap of competition.

Fungibility. The evidence indicates that there generally is interchangeability between

domestically produced steel nails and steel nails from China and the UAE.104 Steel nails, whether

domestically produced or subject imports, are produced to certain industry specifications, including ICC

and ASTM.105 There are allegations that domestically produced steel nails are not available in the

complete range of types of steel nails provided by subject imports106 and that subject imports from the

UAE in collated form may not be fully fungible with the domestic product and subject imports from

China in bulk.107 The evidence, however, shows that the domestic producers are capable of producing the

full range of steel nail products offered by subject imports, if they are not already doing so,108 and that
 109 See, e.g., Conference Tr. at 145-147, 151 and 153. 

 110 Dubai Wire indicated that it only supplied collated nails. Dubai Wire’s Postconference Brief at 3 and 4;

CR/PR at Table C-4. However, Dubai Wire could not explain why official import statistics reported that collated

steel nails accounted for only about 61 percent by quantity and 62 percent by value of total subject imports from the

UAE in 2006. Calculated from CR/PR at Tables IV-3 and IV-4; Dubai Wire’s Postconference Brief at n.15.

 111 About 46 percent by quantity and 52 percent by value of U.S. imports of steel nails from China in 2006 were

collated nails. Calculated from CR/PR at Tables IV-3 and IV-4. Similarly, about 77 percent by quantity and

85 percent by value of U.S. shipments of steel nails in 2006 were collated nails. CR/PR at Table III-5.

 112 CR/PR at Table II-2.

 113 CR/PR at Table II-2.

 114 CR/PR at II-1. Specifically, nine of 16 responding U.S. producers reported nationwide sales, and another five

reported sales to at least three regions. Id.

 115 CR/PR at Table IV-5. Specifically, 19 of 37 responding importers indicated that they sold nationwide, and

another seven reported sales to at least three regions. Id. at II-1.

 116 CR/PR at Table II-1. Dubai Wire asserts that UAE steel nails have different marketing channels, given that

“the vast majority of sales of Dubai Wire steel nails in the United States were conducted through a single purchaser

***,” whereas U.S. product and imports from China are distributed through a variety of U.S. customers. Dubai

Wire’s Postconference Brief at 16.

 117 CR/PR at Table IV-6.

 118 CR/PR at Table IV-6.

16

there is simply a degree of customization or tailoring of the product mix for customer orders.109 Although

there is conflicting evidence regarding whether subject imports from the UAE are in both collated and

bulk form,110 the collated nails represent a substantial share of both subject imports from China and U.S.-

produced steel nails.111

Finally, the majority of U.S. producers and importers found domestically produced steel nails are

always or frequently interchangeable with steel nails from China and the UAE.112 A majority of market

participants who compared subject imports from different sources also found them to be always or

frequently interchangeable.113

Geographic Overlap. The market for steel nails is not limited by geography and tends to be

nationwide. U.S. producers reported nationwide sales of steel nails.114 While subject imports may enter

specific customs districts, they are sold throughout the United States.115

Channels of Distribution. During the period of investigation, the majority of shipments of

domestically produced steel nails and the subject imports from China and the UAE were sold to

distributors.116

Simultaneous Presence. Between 2004 and March 2007, subject imports of steel nails from

China and the UAE have simultaneously been present in the U.S. market.117 Specifically, subject imports

from China and the UAE have entered the U.S. market in each of the 39 months from January 2004 to

March 2007.118

Conclusion. The record indicates that both U.S.-produced steel nails and subject imports from

China and the UAE are sufficiently fungible to support a finding of a reasonable overlap of competition,

are primarily sold to distributors, have geographic overlaps in sales, and have been simultaneously

present in the U.S. market during the entire period of investigation. We consequently conclude that the

subject imports from China and the UAE compete with each other and with the domestic like product, and
 119 Negligibility is not an issue in this investigation under 19 U.S.C. § 1677(24). The petition was filed on May

29, 2007. Subject imports from China accounted for 69.8 percent, and subject imports from the UAE accounted for

8.0 percent, of total imports of nails for the most recent 12-month period (May 2006-April 2007) for which data were

available that preceded the filing of the petition. CR at IV-9; PR at IV-5 and IV-6.

 120 19 U.S.C. §§ 1671b(a) and 1673b(a).

 121 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).

 122 19 U.S.C. § 1677(7)(A).

 123 19 U.S.C. § 1677(7)(C)(iii).

 124 19 U.S.C. § 1677(7)(C)(iii).

 125 CR at I-8; PR at I-6.

 126 Nails are produced uncoated (bright) or with any of several different coatings such as zinc (to retard

corrosion), cement (to provide better adherence in wood or other material into which the nail is to be driven), and

paint (for improved appearance). CR at I-8; PR at I-6.

17

we cumulatively assess the volume and effects of subject imports in determining a reasonable indication

of material injury by reason of subject imports.

V. REASONABLE INDICATION OF MATERIAL INJURY BY REASON OF SUBJECT

IMPORTS119

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.120 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 U.S. production

operations.121 The statute defines “material injury” as “harm which is not inconsequential, immaterial, or

unimportant.”122 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.123 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.”124

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

industry producing certain steel nails is materially injured by reason of subject imports from China and

the UAE.

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 by reason of subject imports.

1. Demand Conditions

Steel nails are primarily used to fasten or hold separate pieces of wood together.125 They are

produced in many different lengths, with a wide variety of heads, shanks, points, and finishes,126
 127 CR/PR at II-1.

 128 CR at I-11; PR at I-9.

 129 CR/PR at II-1 and Tables III-5, IV-3, and IV-4. About 77 percent by quantity and 85 percent by value of U.S.

producers’ reported U.S. shipments of steel nails in 2006 were collated nails. CR/PR at Table III-5. About

46 percent by quantity and 52 percent by value of U.S. imports of steel nails from China in 2006 were collated nails. 

Calculated from CR/PR at Tables IV-3 and IV-4. While Dubai Wire indicated that it only supplied collated nails,

the official import statistics reported that collated steel nails accounted for only about 61 percent by quantity and

62 percent by value of total subject imports from the UAE in 2006. Calculated from Id. at Tables IV-3 and IV-4;

Dubai Wire’s Postconference Brief at 3 and 4.

 130 CR/PR at Tables IV-7 and C-3. Responses from domestic producers and importers were mixed regarding

whether demand had increased during the period of investigation. However, the trend that many responding firms

describe is the same: demand rose in 2004 as a result of a housing boom and a strong hurricane season, remained

high or rose through 2005, and fell in 2006 as the housing boom slowed. CR at II-8; PR at II-6.

 131 CR/PR at II-1. Respondents argued that 2004 was “an aberrational year” and urged the Commission not to use

it as a benchmark. See, e.g., Conference Tr. at 15, 121 and 210; Chinese Producers’ Postconference Brief at 26-28. 

Petitioners contended that 2004 was not a boom year and urged the Commission to use the three-year period of

investigation beginning with 2004, which is consistent with longstanding Commission practice. Petitioners’

Postconference Brief at 16-18.

 132 CR/PR at Tables IV-7 and C-3.

 133 CR/PR at Table III-1. The Commission received questionnaire responses from 15 of the 17 U.S. producers. 

Id. at III-1. As discussed above, we determine that appropriate circumstances exist to exclude four U.S. producers

from the domestic industry as related parties for purposes of the preliminary phase of these investigations.

18

depending on the intended use. Steel nails are used primarily in the construction and industrial sectors.127

In the construction sector, nails are used in the building of houses and other structures, while in the

industrial sector, nails are used to make shipping crates and pallets. Nails are packaged either in bulk, i.e.,

loose in a container, or collated, i.e., joined with wire, paper or plastic strips, or glued into coils or straight

strips for use in pneumatic nailing tools.128 There has been a shift from bulk nail sales to collated nails

due in large part to the increased availability and affordability of nail guns.129

Apparent U.S. consumption of steel nails declined steadily during the period examined from

1.24 million short tons in 2004 to 1.15 million short tons in 2006, for an overall decrease of 6.8 percent.130

Demand for steel nails largely is determined by the size of the construction market, the single largest end

user of steel nails. According to questionnaire responses, demand for steel nails was high in 2004 and

2005 due to a boom in new construction and declined in the second half of 2006 due to a notable

slowdown in construction.131 This slowdown in construction is evident in apparent U.S. consumption for

interim period 2007 (199,261 short tons), which is 33.7 percent lower than interim period 2006 (300,597

short tons).132

2. Supply Conditions

During the period of investigation, there were 17 domestic producers accounting for *** U.S.

production of steel nails.133 The domestic industry’s capacity to produce steel nails has not only declined

substantially during the period of investigation, but its capacity utilization has also dropped; thus, the
 134 CR/PR at Table C-3. The domestic industry’s capacity declined by *** from 2004 to 2006. Id. Moreover,

capacity utilization decreased from *** in 2005, and then to *** in 2006. Id.

 135 CR at III-5 and Tables III-2 and C-3; PR at III-3 and Tables III-2 and C-3. Examples of closures and

consolidations include: Mid Continent *** a newly opened steel nail facility in Texas in 2004, but then in early

2007 discontinued its manufacturing of steel nails at the Texas plant and closed its Virginia plant; *** Keystone

Steel and Wire Co. shut down its nail production operations in December 2006, and is selling off its inventory and

equipment and exiting the nail business because “[o]ur business declined because we could not compete with the low

prices offered by dumped nail imports. . . . Keystone no longer finds it financially sensible to produce nails in this

country due to the import onslaught.” Id. and Conference Tr. at 20 and 37.

 136 CR/PR at Table IV-7.

 137 CR/PR at Table C-3. The U.S. market share held by domestic producers excluded from the domestic industry

as related parties also declined steadily from *** in 2006. Id.

 138 CR/PR at Tables IV-8 and C-3.

 139 CR/PR at Tables IV-8 and C-3. The volume of nonsubject imports also decreased by 51.3 percent from 2004

to 2006. Id. The sources of nonsubject imports are: Korea, Canada, Taiwan, Mexico, Poland, Malaysia, and 27

other countries. Id. at IV-5.

 140 Conference Tr. at 46.

 141 CR/PR at Table II-2.

 142 Chinese Producers’ Postconference Brief at 20-26; HKU’s Postconference Brief at 1-8; U.S. Importers’

Postconference Brief at 2-4; Dubai Wire’s Postconference Brief at 21-22.

 143 HKU’s Postconference Brief at 1-8; U.S. Importers’ Postconference Brief at 2-4; Chinese Producers’

Postconference Brief at 20-26 (***); see also Conference Tr. at 113-114 (“The first crucial statement that was made

that was wrong is that a nail is a nail. Prime Source sells more than a thousand different types of nails – framing

(continued...)

19

industry has substantial and increasing excess capacity.134 A number of U.S. producers of steel nails

reported both mill closures and the consolidation and curtailment of production from 2004 to 2006.135

The domestic industry historically has supplied only a portion of the U.S. market for steel nails

with the remainder supplied by imports.136 Domestic producers’ share of the U.S. market by quantity has

declined steadily from *** in 2004 to *** in 2006.137 Subject imports’ share of the U.S. market by

quantity has increased from 33.3 percent in 2004 to 60.5 percent in 2006.138 Finally, the U.S. market

share by quantity held by nonsubject imports decreased steadily from 38.1 percent in 2004 to 19.9 percent

in 2006.139

3. Substitutability and Other Conditions

Steel nails are produced to certain industry specifications, including ICC and ASTM.140 While

the type, size and finish may limit the interchangeability of a specific product for a particular end use, this

limitation applies whether it is a U.S. product, subject import, or non-subject import. Thus, the record

supports the conclusion that steel nails are generally interchangeable within type, size and finish,

regardless of where produced. The majority of responding U.S. producers and importers reported that the

U.S. product, the subject imports, and non-subject imports are frequently or always interchangeable.141

The parties, however, disagree on whether the types of nails supplied by the domestic producers

compete with nails imported from China and the UAE. Respondents allege that U.S. producers only

manufacture a limited range of products that does not compete with the wider range and variety of

packaging options available from Chinese or UAE producers.142 They allege there are numerous

categories of subject nails, including common varieties, that domestic producers do not produce and that

competition between domestically produced nails and a substantial volume of the subject imports is

therefore attenuated.143 Domestic producers counter that “the problem is not an inability of U.S.
 143 (...continued)

nails, drywall nails, siding nails, flooring nails, concrete nails. These nails are not interchangeable.”), 117, 119-120

(“we estimate, over 1,000 types of nails demanded by the market, many of these are not commercially available in

the United States. . . . Mid Continent promotes on their own catalog . . . 21 bulk nail SKUs, roughly three percent of

the product line. Gerdau Ameristeel, zero. Treasure Coast Fasteners, zero. Davis W[ire], 71 SKUs or 11 percent of

the product line. That’s bulk nails. Now collated nails. Mid Continent sells 23 SKUs, nine percent. Gerdau

Ameristeel, 38 SKUs, 15 percent. . . .Why aren’t we looking at an investigation on the very limited SKUs actually

produced here.”), 145 and 181-190.

We note that a Stock Keeping Unit (SKU) “is a code number, typically used as a machine-readable bar

code, assigned to a single item of inventory. As part of a system for inventory control, the SKU represents the

smallest unit of a product that can be sold from inventory, purchased, or added to inventory.” Encyclopaedia

Britannica. 2007. Enyclopaedia Britannica Online. 27 July 2007 (http://www.britannica.com/eb/article-9387747). 

Thus, a merchant may assign different SKUs to a product for inventory control purposes based on differences in

packaging, model variations, or locations of the inventory.

 144 Petitioners’ Postconference Brief at 16-17; Conference Tr. at 80 (Mid-Continent: “As far as our equipment is

concerned, it can produce any nail, except cut;” Davis Wire Pueblo: “at one point in time, we made a full line of

nails, much like Keystone. But, today, because of pricing, we do not make all the nails, but we can make them

again.”).

 145 Petitioners’ Postconference Brief at 16-19. According to Petitioners, “Domestic producers estimate that the

percentage of types of nails not currently produced in the United States is less than *** of the total market, and even

those types could be produced if a reasonable price was paid.” Id. at 17.

 146 CR at II-9; PR at II-6.

 147 CR at II-9; PR at II-6.

 148 CR at II-9 and II-12; PR at II-6 and II-8.

 149 CR at V-2 and V-3; PR at V-2.

 150 19 U.S.C. § 1677(7)(C)(i).

20

producers to supply nails or a lack of attempting to do so, it is an unwillingness of the purchasers to pay

the prices sought.”144 They also dispute the assertions of attenuated competition between subject imports

and the U.S. product and that “one-stop” shopping is available in China but not from U.S. producers;

Petitioners maintain that “[d]omestic producers can collectively supply the full range of nail products

needed.”145 In any final phase of these investigations, we will seek additional information regarding the

degree of overlap between the nails produced domestically and those imported from subject sources.

The majority of responding U.S. producers and importers reported that there were no direct

substitutes for steel nails.146 The most frequently offered substitutes are screws, staples, and powderactivated tool nails or fasteners, with other potential substitutes including concrete made from wire, glue

or epoxy, light duty anchors, and roofing nails.147 Each of the potential substitutes, however, is usable

only in certain specific applications.

Although quality is the most common non-price factor listed, as long as nails meet the

specifications required for the specific end use, price generally is the largest single factor affecting

purchase decisions.148 Steel nails are sold almost exclusively on a spot basis, and U.S. inland

transportation costs can range from 2 to 25 percent of the total delivered cost.149

B. 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.”150
 151 CR/PR at Table IV-2. Cumulated subject imports were 160,553 short tons in interim period 2006 and 123,833

short tons in interim period 2007. Id. Cumulated subject imports measured by value increased from $349.6 million

in 2004 to $469.5 million in 2005, and then to $563.9 million in 2006, for an overall increase of 61.3 percent from

2004 to 2006. Id. Imports of subject merchandise by domestic producers excluded from the domestic industry as

related parties accounted for 13.3 percent of total subject imports in 2006. Calculated from Id. at Tables III-6 and

IV-2.

 152 CR/PR at Table IV-8. The market share held by cumulated subject imports was 53.4 percent in interim period

2006 and 62.1 percent in interim period 2007. Id.

 153 Calculated from CR/PR at Table IV-2 and C-3.

 154 CR/PR at Table IV-8 and C-3. Apparent U.S. consumption declined by 6.8 percent from 2004 to 2006 and

was 33.7 percent lower in interim period 2007 compared with interim period 2006. Id.

 155 CR/PR at Table C-3. The U.S. market share held by domestic producers excluded from the domestic industry

as related parties also declined steadily from *** in 2006. Id.

 156 Commissioner Lane notes that domestic producers’ market share, including Specialty Fasteners, declined from

*** in 2006. CR/PR at Table C-2.

 157 CR/PR at Tables IV-2, IV-7, and IV-8. Nonsubject imports were 471,722 short tons in 2004, 343,963 short

tons in 2005, and 229,529 short tons in 2006; they were 70,797 short tons in interim period 2006 and 36,238 short

tons in interim period 2007. Id. at Tables IV-2 and IV-7. The U.S. market share held by nonsubject imports was

38.1 percent in 2004, 28.5 percent in 2005, and 19.9 percent in 2006; nonsubject imports’ market share was

23.6 percent in interim period 2006 and 18.2 percent in interim period 2007. Id. at Tables IV-8 and C-3.

 158 We note that there is limited information on the record regarding the role of nonsubject imports of steel nails in

the U.S. market. In any final phase investigations, we will seek information on the role of nonsubject imports of

steel nails in the U.S. market. We invite parties to comment in any final phase investigations on whether Bratsk

Aluminum Smelter v. United States, 444 F.3d 1369 (Fed. Cir. 2006) is applicable to the facts of these investigations. 

The Commission also invites parties to comment on what additional information the Commission should collect to

address the issues raised by the Court and how that information should be collected and to identify which of the

various nonsubject sources should be the focus of additional information gathering by the Commission in any final

phase investigations.

 159 Chairman Pearson and Commissioner Okun do not join the preceding footnote. The U.S. Court of Appeals for

the Federal Circuit did not address the application of its mandate in Bratsk Aluminum Smelter v. United States, 444

F.3d 1369 (Fed. Cir. 2006), to preliminary investigations. In that case the Court indicated that, in cases involving

commodity products in which imports from non-subject countries are price-competitive and are a significant factor

in the U.S. market, in order to establish a causal link between subject imports and material injury the Commission

must evaluate whether the non-subject imports would replace subject imports and thereby eliminate the benefit to the

domestic industry of an antidumping or countervailing duty order.

The legal standard for preliminary antidumping and countervailing duty determinations requires the

(continued...)

21

The volume of cumulated subject imports is significant and increased substantially from 2004 to

2006, both in absolute terms and relative to consumption and production in the United States. The

volume of cumulated subject imports measured by quantity increased from 412,726 short tons in 2004 to

561,038 short tons in 2005, and then to 698,662 short tons in 2006, for an overall increase of 69.3 percent

from 2004 to 2006.151 The market share by quantity held by cumulated subject imports increased from

33.3 percent in 2004 to 60.5 percent in 2006.152 The ratio of cumulated subject imports to U.S.

production rose steadily from *** in 2004 to *** in 2005, and then to *** in 2006.153

Subject imports made significant gains in market share over the period examined at a time of

declining consumption.154 The increase in the subject import share of the U.S. market from 2004 to 2006

was accompanied by a steady decline in domestic producers’ market share, from *** in 2004 to *** in

2006.155 156 Nonsubject imports, both in absolute terms and relative to U.S. consumption, also steadily

declined from 2004 to 2006.157 158 159 Thus, subject imports gained market share at the expense of the
 159 (...continued)

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 or threatened with material

injury by reason of the allegedly unfairly traded imports. 19 U.S.C. §§ 1671b(a), 1673b(a) (2000). Thus, Chairman

Pearson and Commissioner Okun conclude that they must conduct a Bratsk analysis as they would any other type of

causation analysis in a preliminary investigation. Based on the information available in these preliminary

investigations, Chairman Pearson and Commissioner Okun find that Bratsk is triggered. See Separate and

Additional Views of Chairman Daniel R. Pearson and Commissioner Deanna Tanner Okun Concerning Bratsk

Aluminum v. United States.

 160 CR/PR at Table C-3. U.S. importers’ inventories of subject imports as a share of subject imports increased

from 6.5 percent in 2004 to 8.1 percent in 2006. Id. at Table VII-4.

 161 19 U.S.C. § 1677(7)(C)(ii).

 162 CR/PR at Table II-2. 

 163 CR/PR at Table II-3. Nine of 16 responding U.S. producers reported that non-price differences between U.S.-

produced and Chinese-produced steel nails were never a factor in their sales of steel nails; similarly, eight of 13

responding U.S. producers reported that non-price differences between U.S.-produced and UAE-produced steel nails

were never a factor. Id. In contrast, only six of 32 responding U.S. importers reported that non-price differences

were never a factor between U.S.-produced and Chinese-produced steel nails, and only four of 15 responding U.S.

importers reported that such differences were never a factor regarding UAE-produced steel nails. Id.

22

domestic industry. Moreover, as the volume of subject imports increased and apparent U.S. consumption

declined, U.S. importers’ inventories of subject merchandise almost doubled, increasing from *** in

2006.160

For the foregoing reasons, we find for purposes of the preliminary phase of these investigations

that both the volume and increase in volume of cumulated subject imports were significant, both in

absolute terms and relative to consumption and production in the United States.

C. 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.161

The record reflects some divergence in views by market participants on the importance of price in

purchasing decisions. As noted above, the majority of responding domestic producers and importers

found that subject imports from China and the UAE were always or frequently interchangeable with

domestically produced steel nails.162 However, while the majority of responding domestic producers

reported that non-price differences between subject imports and the domestic like product were never a

factor in purchasing decisions, the majority of responding importers reported that non-price differences

were always, frequently, or sometimes an important factor, with only a few responding that such

differences were never a factor.163 
 164 The six types of steel nails for which pricing data were requested are: Product 1 – 3" by 0.131" bright smooth,

plastic-strip collated nails; Product 2 – 3" by 0.120" bright smooth, plastic-strip collated nails; Product 3 – 2d" by

0.113" bright screw and ring shank nails, plastic-strip collated; Product 4 – 31⁄4" by 0.148" 16D smooth vinyl-coated

sinkers, bulk; Product 5 – 2" by 0.113" bright drive screw, machine quality pallet nails, bulk; and Product 6 – 2" by

0.99" bright, drive screw, wire-welded collated in coils. CR at V-5; PR at V-4.

 165 CR at V-6; PR at V-4. By quantity, pricing data reported by responding firms accounted for 16.5 percent of

U.S. commercial shipments of U.S.-produced steel nails, 17.3 percent of U.S. commercial shipments of Chineseproduced steel nails, and 34.8 percent of U.S. commercial shipments of UAE-produced steel nails during the period

of January 2004-March 2007. Id.

 166 While the conversion issue does not seem to apply to the pricing data collected for two bulk nail products, the

responses reporting such data were limited to domestic product and subject imports from China. One product in

particular involved quantities that were too small to be reliable. CR/PR at Tables V-4 and V-5.

 167 CR/PR at Table C-3.

 168 CR/PR at Table C-3.

 169 CR/PR at Table C-3.

 170 The Commission confirmed *** of the alleged $14.7 million in lost sales that staff attempted to verify during

the period of investigation. CR at V-18 and V-19, and Table V-8; PR at V-11 and V-12, and Table V-8. The

Commission also confirmed *** of the alleged $727,282 in lost revenues that staff attempted to verify. CR at V-18

and V-19, and Table V-7; PR at V-11 and V-12, and Table V-7.

23

In these investigations, U.S. producers and importers provided quarterly pricing data for six types

of steel nails.164 While the Commission received a relatively adequate overall response, the pricing data

may be limited in their accuracy due to issues with unit conversion.165 Specifically, for the collated

products (Products 1, 2, 3, and 6), the pricing data were requested to be reported in short tons. However,

these collated products normally are sold in thousand count of nails. The methods used by responding

firms to convert quantities to short tons do not appear to be consistent. We find that the conversion issues

limit the accuracy and consequently the probative value of the collected pricing data both for a price

underselling analysis and for consideration of price movements over the period of investigation.166 In

addition, we find that consideration of average unit values would not provide a reliable substitute for a

price underselling analysis due to the wide variety of types of steel nails. Thus, we have no clear

evidence of price underselling of the domestic like product by the subject imports in the preliminary

phase of these investigations. In any final phase of these investigations, we will seek more accurate and

comparable pricing data, including data for collated nails on the basis of the number of nails rather than

tonnage.

While we have not relied on the evidence of collected price comparison data or average unit

values over the period examined, we find a reasonable indication that subject imports prevented domestic

price increases that otherwise would have occurred. The domestic industry’s cost of goods sold

(“COGS”) as a share of net sales increased over the period examined.167 While net unit sales values

increased from *** in 2004 to *** in 2005, these increases were not sufficient to completely offset the

increases in unit COGS, which rose from *** in 2004 to *** in 2005.168 Moreover, net unit sales values

declined overall to *** in 2006 and were not offset by declines in unit COGS, which decreased to *** in

2006.169 These data indicate that, as the domestic industry’s costs increased and significant volumes of

lower-priced subject imports entered the U.S. market, the domestic producers were unable to raise their

prices sufficiently to cover increasing costs. This evidence suggests some price suppression in the form

of a cost-price squeeze due in part to the subject imports. In addition, there is evidence of confirmed lost

sales and revenues, which provides additional support for our finding that subject imports have

suppressed prices to a significant degree.170
 171 In its notice of initiation, Commerce estimated the dumping margins for imports of subject steel nails from

China as 55.19 percent, 97.15 percent and 118.04 percent, and from the United Arab Emirates as 70.77 percent and

71.50 percent. 72 Fed. Reg. at 38821 (July 16, 2007).

 172 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.

 173 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.

 174 U.S. production declined from *** in 2004 to *** in 2005 and then *** in 2006; U.S. production was *** in

interim period 2007. CR/PR at Table C-3. U.S. shipments declined from *** in 2004 to *** in 2005 and *** in

2006; U.S. shipments were *** in interim period 2007. Id.

 175 Commissioner Lane notes that the declines in domestic producers’ U.S. production and U.S. shipments,

including Specialty Fasteners, were *** respectively, for 2004 to 2006. CR/PR at C-2.

 176 CR/PR at Table C-3. Capacity utilization was *** in interim period 2007. Id.

 177 CR/PR at Tables IV-8 and C-3.

 178 CR/PR at Table C-3.

 179 CR/PR at Table VII-4.

24

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

imports have prevented price increases, which otherwise would have occurred, to a significant degree. 

Thus, we find that subject imports have had significant adverse effects on domestic prices.

D. Impact of the Subject Imports on the Domestic Industry171

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.”172 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.”173

We have examined the performance indicators in the trade and financial data for the domestic

industry producing steel nails. These data indicate declining overall trends each year during the period

examined.

U.S. production, capacity utilization, shipments, and net sales quantity and value all declined

overall from 2004 to 2006. Domestic producers’ U.S. production and U.S. shipments of steel nails

declined each year for an overall decline of *** respectively, from 2004 to 2006.174 175 Although industry

capacity declined by *** from 2004 to 2006, capacity utilization followed production and shipment

trends and declined each year from 2004 to 2006. Capacity utilization decreased from *** in 2005, and

then to *** in 2006.176

As apparent U.S. consumption declined from 2004 to 2006, increasing subject imports gained

U.S. market share at the expense of the market share held by domestic producers.177 Domestic producers’

share of the U.S. market declined from *** in 2006, although the subject import share increased from

33.3 percent in 2004 to 60.5 percent in 2006.178 U.S. importers’ inventories of subject imports also

increased by 95.2 percent from 2004 to 2006 and rose as a share of subject imports from 6.5 percent in

2004 to 8.1 percent in 2006.179
 180 The average number of production workers declined from *** in 2004 to *** in 2006. The hours worked also

decreased from *** in 2004 to *** in 2006. The wages paid steadily decreased from *** in 2004 to *** in 2006,

even though the hourly wages fluctuated between years and declined *** from 2004 to 2006. Similar trends for all

employment indicators were reported in interim period 2007 compared to interim period 2006, except for hourly

wages, which increased. CR/PR at Table C-3.

 181 The domestic industry’s average unit labor costs were: *** in 2004, *** in 2005, and *** in 2006, for an

overall increase of ***. CR/PR at Table C-3.

 182 Productivity decreased from *** in 2004 to *** in 2005, and then to *** in 2006. CR/PR at Table C-3.

 183 CR/PR at Table C-3. Operating income decreased from *** in 2004 to *** in 2006; operating income/losses

were *** in interim period 2007. Id.

 184 CR/PR at Table C-3. The industry’s ratio of operating income/losses to net sales was *** in interim period

2007. Id.

 185 Commissioner Lane notes that with Specialty Fasteners included the absolute levels and trends in financial

results were ***. The domestic industry’s operating income was *** in 2006; operating income/losses were *** in

interim period 2007. The ratio of operating income to net sales was *** in 2006. In interim 2006 and 2007,

including Specialty Fasteners, the ratio of operating income/losses to net sales ***. CR/PR at C-2.

 186 CR/PR at Table C-3. Net sales measured by quantity declined from *** in 2004 to *** in 2005 and *** in

2006; net sales by quantity were *** in interim period 2007. Net sales measured by value decreased from *** in

2004 to *** in 2005 and then to *** in 2006; net sales by value were *** in interim period 2007. Id.

 187 CR/PR at Table C-3. 

 188 Calculated from CR/PR at Tables VI-1 and C-3, and ***.

 189 CR/PR at Table C-3.

 190 Domestic producers reported a *** decline in raw material costs in absolute value and as a share of cost of

goods sold from *** in 2006. Calculated from CR/PR at Tables VI-1 and C-3, and ***. This decrease in raw

material costs was reported despite a rise in the cost of the primary raw material, wire rod, over the period examined. 

CR/PR at V-1 and Figure V-1.

 191 Calculated from CR/PR at Tables VI-1 and C-3, and ***. The costs of both natural gas and electricity

increased, with natural gas prices rising by 20.8 percent and electricity prices raising by 16.0 percent from 2004 to

2006. CR/PR at V-1.

25

The average number of production and related workers, hours worked, and wages paid for

producing steel nails declined from 2004 to 2006.180 Despite fluctuations from year to year and ***

overall decline in hourly wages from 2004 to 2006, the domestic industry’s average unit labor cost rose

steadily over the period examined.181 Productivity declined steadily from 2004 to 2006.182

The domestic industry’s financial indicators – operating income, operating margins, and net sales

measured by quantity and value – declined steadily over the period of investigation. Operating income

declined in each successive year of the period examined.183 The industry’s ratio of operating income to

net sales followed a similar trend, declining from *** in 2006.184 185

Net sales measured both by quantity and value decreased each year, for an overall decline of ***

respectively, from 2004 to 2006.186 As discussed previously, COGS as a ratio to sales increased overall

from 2004 to 2006. COGS was *** of sales in 2004, *** in 2005 and *** in 2006.187 Even though the

net unit sales values increased from 2004 to 2005, this increase only partially offset even ***.188

Moreover, net unit sales values declined from *** in 2005 to *** in 2006, a level lower than reported in

2004 ***.189 Although some unit costs (unit raw material costs190 and unit direct labor expenses) declined

from 2004 to 2006, these declines in unit costs did not offset steady increases in unit other factory costs

(including increases in energy costs) and SG&A expenses.191 As the result of this cost/price squeeze, the
 192 Eight domestic producers reported capital expenditures for the domestic industry, including *** in 2006. 

CR/PR at Tables VI-5 and C-3. *** reported research and development expenses during the period examined. Id. at

Table VI-5.

26

industry reported steady declines at the operating and net income levels in each year of the period

examined.192

For purposes of these preliminary determinations, we conclude that subject imports are having an

adverse impact on the condition of the domestic industry during the period of investigation. In particular,

we find that the absolute and relative volumes of subject imports are significant, and that subject imports

have gained market share at the expense of the domestic industry, have adversely affected sales of the

domestic product, and have suppressed domestic prices to a significant degree. The suppressed domestic

prices, combined with the confirmed lost sales and revenues, have caused declines in the domestic

industry’s financial performance over the period of investigation.

CONCLUSION

For the reasons stated above, we find that there is a reasonable indication that the domestic

industry producing certain steel nails is materially injured by reason of cumulated subject imports of

certain steel nails from China and the UAE that allegedly are sold in the United States at less than fair

value.
 1

 444 F.3d at 1373 (Fed. Cir 2006), quoting Gerald Metals, Inc. v. United States, 132 F.3d 716, 722 (Fed. Cir.

1997). The Commission filed a petition for rehearing en banc, which the Court denied on July 24, 2006. The

Court’s mandate was issued on August 7, 2006.

 2

 Commissioner Okun did not participate in the underlying investigation nor the subsequent litigation.

 3

 444 F.3d at 1371, 1375-1376.

 4

 H.R. Doc. No. 103-316, Vol. I (1994) at 851-52 (“SAA”); Taiwan Semiconductor Industry Ass’n v. United

States, 266 F.3d at 1339, 1345 (Fed. Cir. 2001).

27

SEPARATE AND ADDITIONAL VIEWS OF CHAIRMAN DANIEL R.

PEARSON AND COMMISSIONER DEANNA TANNER OKUN CONCERNING

BRATSK ALUMINUM V. UNITED STATES

I. Legal Issues Concerning Bratsk Aluminum Smelter v. United States

In the recent case of Bratsk Aluminum Smelter et al. v. United States, 444 F.3d 1369 (Fed. Cir.

2006) (“Bratsk”), the Court of Appeals for the Federal Circuit reaffirmed that the requisite causal link to

subject imports is not demonstrated if such imports contributed only “‘minimally or tangentially to the

material harm.’”1 2

 Applying that standard to an investigation involving a commodity product, i.e.,

silicon metal, and the significant presence of non-subject imports, the Court held that the Commission had

not sufficiently explained whether non-subject imports simply would have replaced subject imports

during the period of investigation had an antidumping order been in place and continued to cause injury

to the domestic industry.3

As a threshold matter, it is not immediately clear how the Commission should interpret the Bratsk

opinion in terms of its effect on our analysis of causation in Title VII investigations. At a minimum, we

can discern at least two possible interpretations which differ substantially: (1) that Bratsk mandates

application of an additional test apparently not contemplated by the statute (the so-called

“replacement/benefit test”), and (2) that Bratsk is a further development of the causation approach

prescribed by Gerald Metals. 

A. Separate Causation Analysis – Replacement/Benefit Test

The statute sets forth specific factors for the Commission to consider in analyzing the volume,

price effects and impact of subject imports. 19 U.S.C. § 1677(7). The Uruguay Round Agreements Act

Statement of Administrative Action (“SAA”) explains further that in analyzing causation the Commission

must examine factors other than subject imports to ensure that it is not attributing injury from these

sources to the subject imports, but is not required to isolate the injury caused by other factors from injury

caused by unfair imports.4

 Beyond this, the statute does not provide any further limitations on how the

Commission’s causation analysis shall be conducted.

The Court’s decision, however, states that the Commission must perform an additional “specific”

causation analysis in the form of a replacement/benefit test. Using somewhat varying phrasing, the Court

stated that the Commission must determine “whether non-subject imports would have replaced subject

imports without any beneficial effect on domestic producers,” must “explain why the elimination of

subject imports would benefit the domestic industry instead of resulting in the non-subject imports’

replacement of the subject imports’ market share without any beneficial impact on domestic producers,”
 5

 444 F.3d at 1375-1376.

 6 SAA at 851-52, 885, 889-90. The Commission has indicated that the possibility that an order might not be

effective does not preclude a finding of present material injury. The Commission also has concluded that the statute

does not provide for the Commission to perform an additional injury test to predict the future effectiveness of import

relief:

{W}e note that nothing in the statute or case law requires (or allows) us to consider the likely

effectiveness of a dumping order in making our injury determination. The possibility that nonsubject imports will increase in the future after an antidumping order is imposed is . . . not relevant

to our analysis of whether subject imports are currently materially injuring the industry.

Wooden Bedroom Furniture From China, Inv. No. 731-TA-1058 (Final), USITC Pub. 3743, n.222 (Dec. 2004). 

 7

 Huaiyin Foreign Trade Corp. v. United States, 322 F.3d 1369, 1380 (Fed. Cir. 2003).

 8

 The Commission set out in detail its objections to the Court’s decision in its petition for rehearing to the Federal

Circuit. See Petition for Rehearing en Banc (May 25, 2006), Bratsk Aluminum Smelter et al. v. United States, 444

F.3d 1369 (Fed. Cir. 2006)(No. 05-1213) (petition denied July 24, 2006). As noted above, Commissioner Okun did

not participate in that proceeding.

 9

 While it is not an issue in these investigations, it is unclear whether the Court intended its approach to apply to

analyses of threat of material injury, or only to analyses of present material injury. Given that one of the Court’s

formulations of the standard is framed in terms of likely future events, we have interpreted the Court’s decision as

applying both to the context of present injury and threat of injury.

28

and must explain “why the non-subject imports would not replace the subject imports and continue to

cause injury to the domestic industry.”5

Such a “replacement/benefit” test is not among the statutory factors Congress has required the

Commission to consider. The statutory scheme contemplates that subject imports may remain in the U.S.

market after an order is imposed and even that the industry afterward may continue to suffer material

injury.6

 Thus, the decision in Bratsk misconstrues the purpose of the antidumping and countervailing

duty laws, which is not to bar subject imports from the U.S. market or award subject import market share

to U.S. producers, but instead to “level competitive conditions” by imposing a duty on subject imports at

a level to offset the amount of dumping or subsidization and thus enabling the industry to compete against

fairly traded imports.7

 It is not uncommon for subject imports to remain in the U.S. market in significant

quantities even after the issuance of an antidumping or countervailing duty order, as shown by the

hundreds of millions of dollars in antidumping and countervailing duties collected every year. 

Bratsk, therefore, appears to require that the Commission apply an extra-statutory causation test

with respect to non-subject imports and to determine that the domestic industry will benefit from the

antidumping duty or countervailing duty order. We respectfully disagree with the Court that such a

causation analysis is legally required.8

 However, given that the Federal Circuit’s mandate has now been

issued and the decision has become binding precedent, we discuss infra our interpretation of the Bratsk

standard and perform the analysis based on the record in these preliminary investigations.9
 10 Gerald Metals, 132 F.3d at 722.

 11 444 F.3d at 1372.

 12 444 F.3d at 1372.

 13 444 F.3d at 1373-1375.

 14 444 F.3d at 1375.

 15 444 F.3d at 1375.

 16 444 F.3d at 1375.

 17 19 U.S.C. § 1673d(b).

 18 S. Rep. No. 249, 96th Cong., 1st Sess. 46-47 (1979). 

29

B. Gerald Metals Causation Analysis

Alternatively, we also find support for interpreting the Bratsk decision to be reminding the

Commission of its obligation under Gerald Metals that the Commission may not satisfy the “by reason of”

causation requirement by showing that subject imports contributed only “minimally or tangentially to the

material harm.”10

This may be a reasonable interpretation of the Bratsk decision as the Court noted that the “sole

point of contention in this appeal is whether the Commission established that the injury to the domestic

industry was ‘by reason of’ the subject imports.”11 In explaining its conclusion, the Court emphasized

that the Commission had “dismissed” Gerald Metals as being factually distinguishable,12 extensively

explained its holdings in Gerald Metals and Taiwan Semiconductor,

13 and noted that the underlying

investigation in Bratsk “revealed the same conditions that triggered the additional causation inquiry in

Gerald Metals and Taiwan Semiconductor.”14 Further, the Court noted that

Gerald Metals thus requires the Commission to explain why – notwithstanding the

presence and significance of the non-subject imports – it concluded that the subject

imports caused material injury to the domestic industry. While there may be support for

the Commission’s ultimate determination of material injury in the record here, we find

that the Commission did not sufficiently explain its decision in this regard.15

Therefore, the Court may not have been creating a new extra-statutory causation test, but rather

was simply reminding the Commission of its existing obligation under Federal Circuit precedent. In other

words, the Bratsk Court’s relatively short discussion of the underlying determination may not have

established a new and rigid replacement/benefit test. Rather, the Court may have discussed the triggering

factors (i.e., commodity product and price-competitive non-subject imports) and the replacement/benefit

factors (i.e., whether non-subject imports would have replaced the subject imports without any beneficial

effect on domestic producers)16 as a reminder that the Commission, before it makes an affirmative

determination, must satisfy itself that it has not attributed material injury to factors other than subject

imports.

The statute requires the Commission to determine whether the domestic industry is “materially

injured by reason of” the unfairly traded imports.17 Thus, the Commission must evaluate the effects of the

unfairly traded imports on the domestic industry in order to determine if those imports are causing

material injury. In most investigations, there are other economic factors that also may be causing injury

to the domestic industry. The statute’s legislative history states that the Commission “will consider

information which indicates that harm is caused by factors other than less-than-fair-value imports.”18

While the statute is clear that the Commission is not to weigh or prioritize the factors that are
 19 S. Rep. No. 249, 96th Cong., 1st Sess. 74 (1979); H.R. Rep. No. 317, 96th Cong., 1st Sess. 46-47.

 20 Petitioners’ Postconference Brief at 33. 

 21 Chinese Producers’ Postconference Brief at 37-38.

30

independently causing material injury,19 the Commission cannot assign the cause of material injury to

factors other than subject imports. Under this interpretation, the reference in Bratsk to “whether nonsubject imports would have replaced subject imports without any beneficial effect on domestic producers”

could be asking the Commission to interpret “benefit” to mean that if the subject imports are indeed

causing harm, then the removal of the unfairly traded imports should “benefit” the domestic industry, but

if the removal of the unfairly traded imports would not benefit the domestic industry, the injury must be

attributable to other factors. Thus, the Commission must analyze the effects of the unfairly traded imports

in a way that enables the Commission to conclude that it has not attributed the effects of other factors to

the subject imports. 

If this interpretation of Bratsk is correct, then we concur with the Federal Circuit that the

Commission is required to identify and assess the competitive effects of subject imports to ensure that

they contribute more than “minimally or tangentially to the material harm” of the domestic industry. To

the extent that we had the relevant information, this analysis was included in the Commission’s causation

analysis. We will re-examine this in any final phase of these investigations once the Commission has

collected further relevant information (e.g., information about the market from purchasers).

II. Under the Bratsk Replacement/Benefit Test, Non-Subject Imports Likely Would Not Negate

the Beneficial Effect of an Order on Subject Imports from China and the United Arab

Emirates

Having found that there is a reasonable basis to determine that an industry in the United States is

materially injured by reason of subject imports from China and the United Arab Emirates, we now must

assess whether the facts of these investigations trigger a Bratsk analysis under the “replacement/benefit

test” interpretation of Bratsk. Based on the record, we conclude for purposes of these preliminary

investigations that Bratsk is triggered, but that non-subject imports likely would not negate the beneficial

effect of the orders on subject imports from China and the United Arab Emirates. We intend, however, 

to reexamine this issue in any final investigations.

A. Analysis

1. Triggering Factors

Petitioners assert that nails are not a commodity product within that meaning of Bratsk.20

Although recognizing that nails are made to specifications and compete with one another within those

specifications, Petitioners argue that replacement could occur only if third countries made the same type

of nails as China and the United Arab Emirates. Petitioners rely on respondent testimony to show that the

same types of nails cannot be obtained from subject countries and there are quality differences between

subject and non-subject imports. 

The Chinese producers argue that there is broad agreement among the parties that steel nails are a

commodity product. While recognizing that one type of nail may not be readily substituted for a nail of

another type, nails of one type produced by a variety of countries can be easily substituted.21

For purposes of these preliminary investigations, we find that steel nails are a commodity

product. The record supports the conclusion that steel nails of the same type are broadly interchangeable

for the same uses regardless of where it is produced. The majority of U.S. producers and importers

reported that the U.S. product, the subject imports, and non-subject imports are frequently or always
 22 CR/PR at Table II-2.

 23 Non-subject imports as a share of total imports by value also declined steadily from 58.3 percent in 2004 to

34.5 percent in 2006. CR/PR at Table IV-2.

 24 CR/PR at Table IV-2. Subject imports as a share of total imports by value also increased steadily from

41.7 percent in 2004 to 65.5 percent in 2006. Id.

 25 Non-subject imports as a share of apparent U.S. consumption by value also declined steadily from 36.5 percent

in 2004 to 24.6 percent in 2006. CR/PR at Table IV-8.

 26 CR/PR at Table IV-8.

 27 See CR/PR at Tables VII-6. The largest supplier of non-subject imports is Korea, which accounted for

7.9 percent of total U.S. imports in 2006; followed by Taiwan (4.3 percent), Canada (4.1 percent), Mexico

(3.6 percent), Poland (1.0 percent), Malaysia (1.0 percent), and 27 other countries ranging between less than

0.05 percent and 0.6 percent of total 2006 U.S. imports of steel nails. CR at IV-5 and VII-11. The U.S. market share

held by imports of steel nails from Korea was 6.3 percent of apparent U.S. consumption in 2006, followed by

Taiwan (3.5 percent), Canada (3.3 percent), Mexico (2.9 percent), Malaysia (0.8 percent), and Poland (0.78 percent). 

Calculated from CR/PR at Tables IV-7 and VII-6.

 28 CR at V-5, n.9.

 29 The small quantity of imports from Malaysia generally had higher unit values than imports from China, but

generally had lower than imports from the United Arab Emirates. CR/PR at Table VII-6.

 30 CR/PR at Tables IV-2 and VII-6, Table C-3. Steel nail imports from Malaysia have fluctuated between years

and overall declined from 9,749 short tons in 2004 to 9,598 short tons in 2006, and were 1,847 short tons in interim

period 2006 and 1,566 short tons in interim period 2007. Id.

31

comparable.22 While the size, type, and finish may limit the interchangeability of a specific product for a

particular end use, this limitation applies whether it is a U.S. product, subject import, or non-subject

import. In any final investigations, we intend to examine closely whether and to what extent the product

mix from both subject and non-subject countries impacts the commodity nature of the product. 

With respect to the second trigger factor (whether price competitive non-subject imports are a

significant factor in the U.S. market), non-subject imports as a share of total imports by quantity declined

steadily from 53.3 percent in 2004 to 24.7 percent in 2006.23 By comparison, subject imports accounted

for 46.7 percent of total imports (on a quantity basis) in 2004, 62.0 percent in 2005, and 75.3 percent in

2006.24 The U.S. market share of non-subject imports also declined steadily from 38.1 percent in 2004 to

19.9 percent in 2006,25 while that of subject imports ranged from 33.3 percent in 2004 to 60.5 percent in

2006.26 While subject imports have increased in absolute volume and market share over the period of

investigation, non-subject imports have declined, but to a lesser degree in value than in volume. While

non-subject imports experienced declines during the period, they remained a significant presence in the

U.S. market.27

The Commission requested, but did not receive, any price data for non-subject imported steel

nails. Therefore, the only information in the record on the pricing of non-subject imports is average unit

values derived from official import statistics.28 This evidence demonstrates that the imports from the

largest non-subject suppliers, Korea, Taiwan, and Canada, have had increasing average unit values

(“AUV”) that are substantially higher than the AUVs for subject imports from both China and the UAE. 

The average unit values of all non-subject imports, with one exception,29 were higher than those of

subject imports throughout the period of investigation, and were generally higher but more in line with

the domestic AUVs, particularly at the end of the POI.30 Given that there are potential differences in

product mix between imports from different countries and even from the same country in different years,

it is difficult to draw a conclusion about the price competitiveness of non-subject imports vis-a-vis the

subject product at this time. However, given the significant, although declining volumes of non-subject

imports during the period of investigation, we find that the second triggering factor is met for purposes of

these preliminary investigations.
 31 CR at Table C-3.

32

2. Replacement/Benefit Factors

Having determined that the Bratsk test is triggered for purposes of these preliminary

investigations, we now analyze whether non-subject imports are likely to replace subject imports and

continue to cause injury to the domestic industry. One of the relevant factors we must examine in

assessing this issue is the size of the non-subject supplier industries and the amount of excess capacity in

those industries. There is, however, no information on the record concerning the capacity of non-subject

suppliers, or their capacity utilization rates. Accordingly, we cannot determine whether non-subject

imports would be likely to have sufficient capacity to replace subject imports if the order were to be

imposed.

We note, however, that trends in the U.S. market share for subject and non-subject imports

relative to U.S. producers’ market share during the period examined may provide some indication of the

likely import pattern if subject imports were not in the U.S. market. Apparent U.S. consumption of steel

nails declined by 6.8 percent from 2004 to 2006, and declined by 33.7 percent in interim (Jan.-Mar.) 2007

compared with the same period in 2006.31 The market share of subject U.S. imports rose sharply

throughout the period examined, from 27.4 percent in 2004 to 53.3 percent in 2006. Subject import

market share was 56.5 percent in interim 2007 compared with 45.9 percent in interim 2006. The market

share of U.S. imports of non-subject steel nails, by contrast, declined steadily from 2004 to 2006, from

38.1 percent in 2004 to 19.9 percent in 2006, and was 18.2 percent in interim 2007 compared with

23.6 percent in interim 2006. The record thus indicates that subject imports were taking both domestic

and non-subject market share. The trends do not permit us to determine that non-subject imports would

replace subject imports and negate the beneficial effect of the order. In addition, while they may be of

limited probative value, the record shows that the AUVs of the non-subject imports were generally higher

than those of the subject imports. In any final phase of these investigations, we will seek information on

production capacity of major non-subject producers of steel nails in order to complete our analysis under

Bratsk. For purposes of these preliminary determinations, we determine that non-subject imports would

not negate any benefit to the domestic industry from the imposition of the orders. 
 1

 On June 22, 2007, the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and

Service Workers International Union was added as a co-petitioner.

 2

 The definition of the steel nails subject to these investigations (“steel nails”) is presented later in Part I of this

report under the section headers “The Subject Product,” “Commerce’s Scope.”

 3 Federal Register notices cited in the tabulation are presented in app. A.

I-1

PART I: INTRODUCTION

BACKGROUND

These investigations result from a petition filed by Davis Wire Corp. (“Davis Wire”), Irwindale,

CA); Gerdau Ameristeel Corp. (“Gerdau”), Tampa, FL; Maze Nails (“Maze Nails”), Peru, IL; Mid

Continent Nail Corp. (“Mid Continent”), Poplar Bluff, MO; and Treasure Coast Fasteners, Inc. (“Treasure

Coast”), Fort Pierce, FL, on May 29, 2007,1

 alleging that an industry in the United States is materially

injured or threatened with material injury by reason of less-than-fair-value (“LTFV”) imports of certain

steel nails2

 from China and the United Arab Emirates (“UAE”). Information relating to the background of

the investigations is provided below.3

Effective date Action

May 29, 2007 Petition filed with Commerce and the Commission; institution of the

Commission's investigations (72 FR 30831, June 4, 2007)

June 19, 2007 Commission’s conference1

June 21, 2007 Commission’s revised schedule (72 FR 34276)

July 16, 2007 Commerce’s notice of initiation (72 FR 38816)

July 20, 2007 Commission’s vote

July 30, 2007 Commission’s determinations and views transmitted to Commerce

 1 A list of witnesses appearing at the conference is presented in app. B.

ORGANIZATION OF THE REPORT

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.
 4

 Parker Metal ceased production in 2005.

I-2

Section 771(7)(C) of the Act (19 U.S.C. § 1677(7)(C)) further provides that--

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.

Part I of this report presents information on the subject merchandise, alleged 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.

U.S. MARKET SUMMARY

Consumption of steel nails totaled approximately $1.2 billion (1.2 million short tons) in the U.S.

market in 2006. Currently, 17 firms are known to produce steel nails in the United States.4

 U.S.

producers’ U.S. shipments of steel nails totaled $348.5 million (226,666 short tons) in 2006, and

accounted for 28.8 percent of apparent U.S. consumption by value and 19.6 percent by quantity. U.S.

imports from subject sources totaled $563.9 million (698,662 short tons) in 2006 and accounted for
 5

 This section is derived from Exhibit General 4 of the petition in these investigations.

 6

 42 FR 64942, December 29, 1977.

 7

 43 FR 51743, November 6, 1978.

 8 Steel Wire Nails from Canada, Investigation No. AA1921-189, USITC Pub. 937, February 1979.

 9

 45 FR 34941, May 23, 1980.

 10 Certain Steel Wire Nails From The Republic of Korea, Investigation No. 731-TA-26 (Final), USITC Pub. 1088,

August 1980.

 11 46 FR 34613-34615, July 2, 1981.

I-3

46.6 percent of apparent U.S. consumption by value and 60.5 percent by quantity. U.S. imports from

nonsubject sources totaled $297.3 million (229,529 short tons) in 2006 and accounted for 24.6 percent of

apparent U.S. consumption by value and 19.9 percent by quantity.

SUMMARY DATA AND DATA SOURCES

A summary of data collected in the investigations is presented in appendix C. Except as noted,

U.S. industry data are based on questionnaire responses of 17 firms that accounted for *** of U.S.

production of steel nails during 2006. U.S. imports are based on official statistics from the Department of

Commerce (“Commerce”) except where noted.

PREVIOUS AND RELATED INVESTIGATIONS5

On November 21, 1977, a complaint was filed by Armco Steel Corp.; Atlantic Steel Co.;

Bethlehem Steel Corp.; CF & I Steel Corp.; Keystone Steel & Wire Division of Keystone Consolidated

Industries, Inc.; Northwestern Steel & Wire Co.; and the Penn-Dixie Steel Corp., alleging that certain

steel wire nails from Canada were being sold at LTFV.6

 In November 1978, the Department of Treasury

(“Treasury”) determined that certain steel wire nails from Canada, except those produced by Tree Island

Steel Co., Ltd. and the Steel Co. of Canada, Ltd., were being, or were likely to be, sold in the United

States at LTFV.7

 In February 1979, the Commission determined that the domestic steel wire nails

industry was not being, and was not likely to be, injured and was not prevented from being established,

by reason of the importation of certain steel wire nails from Canada that were being, or were likely to be,

sold at LTFV.8

On April 20, 1979, Treasury, in conjunction with its administration of a “Trigger Price

Mechanism,” self-initiated an investigation to determine whether certain steel wire nails from Korea were

being sold at LTFV. The investigation was subsequently terminated under the Antidumping Act, but was

continued under section 731 of the Tariff Act of 1930, as amended. Commerce found that certain steel

wire nails from Korea were being sold at LTFV.9

 However, the Commission determined that the

domestic steel wire nails industry was not materially injured and was not threatened with material injury,

and that the establishment of an industry in the United States was not materially retarded, by reason of

imports of certain steel wire nails from Korea.10 

On July 2, 1981, Commerce self-initiated antidumping investigations concerning imports of

certain steel wire nails from Japan, the Republic of Korea, and Yugoslavia pursuant to additional

information developed under the trigger price mechanism.11 Specifically, Commerce found that subject

imports from these countries were likely being sold below trigger prices and, therefore, possibly at LTFV. 

Although the Commission made a negative material injury determination with respect to certain steel wire

nails from Korea in the previous year, Commerce found new evidence indicating that sales of Korean
 12 46 FR 34615, July 2, 1981.

 13 46 FR 41122, August, 14, 1981; and Certain Steel Wire Nails From Japan, The Republic of Korea, and

Yugoslavia, Investigation Nos. 731-TA-45, 46, and 47 (Preliminary), USITC Pub. 1175, August 1981.

 14 47 FR 35266, August 13, 1982.

 15 On September 18, 1984, the President established a national policy for the steel industry that led to the creation

of the Voluntary Restraint Agreements (“VRAs”). These VRAs established new measures limiting steel exports into

the United States from certain steel-supplying countries. 49 FR 36813, September 20, 1984. The VRAs expired on

March 31, 1992.

 16 50 FR 40045, October 1, 1985.

 17 47 FR 6458, February 8, 1982.

 18 47 FR 39549, September 8, 1982.

 19 Carbon and Alloy Steel Products, Investigation No. TA-201-51, USITC Pub. 1553, July 1984, p. 7.

 20 Ibid.

 21 The petitions were filed by Atlantic Steel Co.; Atlas Steel & Wire Corp.; Continental Steel Corp.; Dickson

Weatherproof Nail Co.; Florida Wire & Nail Co.; Keystone Steel & Wire Co.; Northwestern Steel & Wire Co.;

Virginia Wire & Fabric Co.; and Wire Products Co. 50 FR 27479, July 3, 1985.

 22 51 FR 4205, February 3, 1986, and 50 FR 35281, August 30, 1985.

 23 Certain Steel Wire Nails From The People's Republic of China, Investigation No. 731-TA-266 (Final), USITC

Pub. 1842, April 1986; 51 FR 10247, March 25, 1986. An antidumping duty order was imposed on certain steel

wire nails from China on May 21, 1986 (51 FR 18640), but because of changed circumstances (“petitioners’

(continued...)

I-4

nails may be having an injurious effect on the domestic industry.12 The investigation of imports from

Japan was subsequently terminated, while the investigation of imports from Yugoslavia resulted in a

negative material injury determination by the Commission.13 After a final affirmative material injury

determination by the Commission, an antidumping duty order was issued against steel wire nails from

Korea.14 The order against Korea was revoked effective October 1, 1984 following a Voluntary Restraint

Agreement15 concerning imports of nails from Korea.16 

On January 19, 1982, Armco Inc.; Tree Island Steel, Inc.; Atlantic Steel Co.; Florida Wire and

Nails; New York Wire Mills; and Virginia Wire and Fabric filed a petition alleging that certain steel wire

nails from the Republic of Korea were being subsidized.17 In September 1982, however, the

countervailing duty investigation was terminated following a determination by Commerce that Korean

producers and exporters of nails were not receiving benefits that constituted subsidies.18

On January 24, 1984, the United Steelworkers of America, AFL-CIO/CLC and Bethlehem Steel

Corp. filed a petition under section 201 of the Trade Act of 1974 alleging that carbon and certain alloy

steel products, including steel wire nails, were being imported into the United States in such increased

quantities as to be a substantial cause of serious injury, or the threat thereof, to the domestic industry

producing an article like or directly competitive with the imported articles.19 Following the Commission's

affirmative determinations in July 1984 for several of the products, including steel wire nails, the United

States negotiated various agreements to limit the importation of steel products into the United States, such

as the VRAs.20

On June 5, 1985, petitions were filed alleging that certain steel wire nails from China, Poland,

and Yugoslavia were being, or were likely to be, sold in the United States at LTFV.21 The petitions

concerning imports from Poland and Yugoslavia were subsequently withdrawn following VRAs with

Poland and Yugoslavia with respect to exports of steel wire nails to the United States. As a result,

Commerce terminated the investigations with respect to Poland and Yugoslavia.22 The investigation with

respect to China led to a finding that the domestic steel wire nails industry was materially injured by

reason of LTFV imports of certain steel wire nails from China.23
 23 (...continued)

affirmative statement of no interest in continuation of the antidumping duty order”), the order was revoked on

September 3, 1987 (52 FR 33463).

 24 The petition was filed by Air Nail Co.; Atlas Steel & Wire Corp.; CF & I Steel Corp.; Davis-Walker Corp.;

Dickson Weatherproof Nail Co.; Exposaic Industries, Inc.; Keystone Steel and Wire Co.; and Northwestern Steel &

Wire Co. 52 FR 18590, May 18, 1987; 52 FR 18591, May 18, 1987.

 25 52 FR 36987, October 2, 1987, and 52 FR 37196, October 5, 1987.

 26 60 FR 40568, August 9, 1995.

 27 The petition was filed by members of the Nail Committee of the American Wire Producers Association. 54 FR

15534, April 18, 1989.

 28 54 FR 36841, September 5, 1989.

 29 The petition was filed by Paslode Division of Illinois Tool Works Inc. 61 FR 67306, December 20, 1996.

 30 Collated Roofing Nails From China and Taiwan, Investigation Nos. 731-TA-757 and 759 (Final), USITC Pub.

3070, November 1997. 

 31 62 FR 51420, October 1, 1997, and 62 FR 53799, October 16, 1997.

 32 62 FR 61729, November 19, 1997, and 62 FR 61730, November 19, 1997.

 33 67 FR 70578, November 25, 2002.

 34 Steel, Investigation No. TA-201-73, USITC Pub. 3479, December 2001.

I-5

On April 20, 1987, a petition was filed alleging that certain steel wire nails from New Zealand

and Thailand were receiving bounties or grants.24 Commerce conducted a section 303 investigation and

made affirmative findings with respect to both countries and issued countervailing duty orders against

steel wire nails from Thailand and New Zealand in October 1987.25 On August 9, 1995, the orders were

revoked by Commerce as no domestic interested party requested a review.26

On March 22, 1989, a petition was filed alleging that certain steel wire nails from Malaysia were

receiving bounties or grants.27 Commerce, however, determined that no benefits which constitute

bounties or grants were being provided to Malaysian producers or exporters.28 

On November 26, 1996, a petition was filed alleging that collated roofing nails imported from

China, Korea, and Taiwan were being sold at LTFV.29 These investigations led to a finding that the

domestic collated roofing nails industry was threatened with material injury by reason of LTFV imports

of collated roofing nails from China and Taiwan.30 The investigation with respect to collated roofing

nails from Korea was terminated by the Commission following a negative determination by Commerce.31

On November 19, 1997, Commerce issued antidumping duty orders against collated roofing nails from

China and Taiwan.32 These orders were revoked effective November 19, 2002 because no domestic

interested party responded to Commerce’s notice of initiation of five-year reviews.33 

On July 3, 2001, following a request from the United States Trade Representative (“USTR”) and

subsequently a request from the Senate Finance Committee, a section 201 investigation was initiated by

the Commission to determine whether certain steel products were being imported into the United States in

such increased quantities as to be a substantial cause of serious injury, or the threat thereof, to the

domestic industry. The Commission, however, made a negative determination with respect to carbon and

alloy steel nails.34
 35 72 FR 38816, July 16, 2007.

 36 Dictionary.com. Unabridged (v 1.1). Random House, Inc. http://dictionary.reference.com/browse/Nail

(accessed June 01, 2007).

 37 72 FR 38816, July 16, 2007.

I-6

NATURE AND EXTENT OF ALLEGED SALES AT LTFV

Effective July 16, 2007, Commerce initiated the antidumping duty investigations concerning steel

nails from China and the United Arab Emirates. The alleged dumping margins for subject producers in

China range from 55.19 percent ad valorem to 118.04 percent ad valorem, for an average of 86.62 percent

ad valorem, and for producers in the United Arab Emirates range from 70.77 percent ad valorem to

71.50 percent ad valorem, for an average of 71.14 percent ad valorem.

35

THE SUBJECT PRODUCT

 The imported products subject to these investigations are steel nails. A nail is “a slender,

typically rod-shaped rigid piece of metal, usually in any of numerous standard lengths from a fraction of

an inch to several inches and having one end pointed and the other enlarged and flattened, for hammering

into or through wood, other building materials, etc., as used in building, in fastening, or in holding

separate pieces together.”36 Nails are produced in many different lengths, and with many different styles

of heads, shanks, and points, depending upon the intended use. Nails are produced uncoated (bright) or

with any of several different coatings such as zinc (to retard corrosion), cement (to provide better

adherence in the wood or other material into which the nail is to be driven), and paint (for improved

appearance).

Commerce’s Scope

Commerce has defined the imported product subject to these investigations as:37

certain steel nails having a shaft length up to 12 inches. Certain steel nails

include, but are not limited to, nails made of round wire and nails that are cut. 

Certain steel nails may be of one piece construction or constructed of two or

more pieces. Certain steel nails may be produced from any type of steel, and

have a variety of finishes, heads, shanks, point types, shaft lengths and shaft

diameters. Finishes include, but are not limited to, coating in vinyl, zinc

(galvanized, whether by electroplating or hot-dipping one or more times),

phosphate cement, and paint. Head styles include, but are not limited to, flat,

projection, cupped, oval, brad, headless, double, countersunk, and sinker. Shank

styles include, but are not limited to, smooth, barbed, screw threaded, ring shank

and fluted shank styles. Screw-threaded nails subject to these proceedings are

driven using direct force and not by turning the fastener using a tool that

engages with the head. Point styles include, but are not limited to, diamond,

blunt, needle, chisel and no point. Finished nails may be sold in bulk, or they

may be collated into strips or coils using materials such as plastic, paper, or

wire.

Certain steel nails subject to these proceedings are currently classified under the

Harmonized Tariff Schedule of the United States (HTSUS) subheadings

7317.00.55, 7317.00.65 and 7317.00.75.
 38 Conference transcript, p. 41 (Cannon).

 39 Conference transcript, p. 14 (Levine), p. 156 (Suro).

 40 Conference transcript, pp. 155-156, 199-200 (Suro).

I-7

Excluded from the scope of these proceedings are roofing nails of all lengths and

diameter, whether collated or in bulk, and whether or not galvanized. Steel

roofing nails are specifically enumerated and identified in ASTM Standard F

1667 (2005 revision) as Type I, Style 20 nails. Also excluded from the scope of

these proceedings are corrugated nails. A corrugated nail is made of a small

strip of corrugated steel with sharp points on one side. Also excluded from the

scope of these proceedings are fasteners suitable for use in powder-actuated

hand tools, not threaded and threaded, which are currently classified under

HTSUS 7317.00.20 and 7317.00.30. Also excluded from the scope of these

proceedings are thumb tacks, which are currently classified under HTSUS

7317.00.1000.

While the HTSUS subheadings are provided for convenience and customs

purposes, the written description of the scope of these investigations is

dispositive.

U.S. Tariff Treatment

Imports of steel nails are entered under subheadings 7317.00.55, 7317.00.65, and 7317.00.75 of

the Harmonized Tariff Schedule of the United States (“HTS”). Commerce’s scope excludes collated

roofing nails which are properly classified under statistical reporting number 7317.00.5501. Official

Commerce statistics for the above-named subheadings (minus those for statistical reporting number

7317.00.5501) are used for import data compilation purposes in this report. Table I-1 presents data on the

current tariff rates of the subheadings identified above.

THE DOMESTIC LIKE PRODUCT

The Commission’s determination regarding the appropriate domestic product that is “like” the

subject imported product is based on a number of factors, including (1) physical characteristics and uses;

(2) common manufacturing facilities and production employees; (3) interchangeability; (4) customer and

producer perceptions; (5) channels of distribution; and, where appropriate, (6) price.

Petitioners contend that there is a single domestic like product that is coextensive with the scope

of the case, and further argue that the minor variations in nail features do not justify segmenting various

types of nails into separate domestic like products.38 The respondents, with the exception of Black and

Decker, have not contested petitioners’ proposed domestic like product.39

Respondent Black and Decker requests that the Commission determine that there are two separate

domestic like products and two domestic industries producing steel nails. According to Black and

Decker, collated framing or finish nails (“woodworking nails”), produced by the multiple-wire method,

comprise a domestic like product separate from all other steel nails (“construction nails”).40 They state

that woodworking nails are generally of shorter length and smaller diameter than “construction nails,”

which is a name they give to steel nails other than woodworking nails. Woodworking nails are e to 21⁄2

inches in length and of 15 to 23 gage wire (0.072 to 0.0258 inch in diameter). Construction nails are

typically 2 to 31⁄2 inches in length and 0.099 to 0.162 inch in diameter. Further, construction nails are
 41 Conference transcript, pp. 157-158 (Suro).

I-8

used for stick framing, new construction, and deck and fence building, whereas woodworking nails are

used for molding installations, indoor use, and in cabinet and woodworking shops.41

Table I-1

Steel nails: HTS rates, 2007

HTS provision Article description

General Special Column 2

Rates (percent ad valorem)

7317.00

7317.00.55

02

03

05

07

08

11

18

19

20

30

40

50

60

70

80

90

7317.00.65

30

60

7317.00.75 00

Nails, tacks, drawing pins, corrugated nails, staples (other than

those of heading 8305) and similar articles, of iron or steel,

whether or not with heads of other material, but excluding such

articles with heads of copper:

Other:

Of one piece construction:

Made of round wire ............................

Collated nails:

Other than collated roofing nails:

Assembled in a wire coil:

Galvanized . . . . . . . . . . . . . . . . . . . . . . . . .

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Assembled in a plastic strip:

Galvanized . . . . . . . . . . . . . . . . . . . . . . . . .

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Assembled in a paper strip ...............

Assembled in a wire strip . . . . . . . . . . . . . . . .

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other: 

With a length of less than 25.4 mm and with a

diameter of less than 1.65 mm ...............

Other:

Smooth shank: 

Not coated, plated or painted . . . . . . . . . . .

Coated, plated or painted: 

Galvanized . . . . . . . . . . . . . . . . . . . . . . .

Vinyl, resin or cement coated . . . . . . . 

Other . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other: 

Not coated, plated or painted . . . . . . . . . . .

Coated, plated or painted:

Galvanized . . . . . . . . . . . . . . . . . . . . . . .

Vinyl, resin or cement coated . . . . . . . .

Other . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cut . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Of two or more pieces . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Free

Free

Free

3.5

5.5

8

Source: HTS (2007).
 42 According to petitioners, all steel nails share the same basic physical characteristics, consisting of a head, shaft,

and point; are produced to the same industry-wide standards; and although woodworking nails may have smaller

heads and may differ in length and diameter, the differences are minor and do not delineate separate like products. 

Petitioners’ postconference brief, p. 4.

 43 Roofing nails are generally from 3⁄4 to 13⁄4 inch in length; the diameters of the shafts and heads of roofing nails

are somewhat larger than those of common nails of the same length. Roofing nails are packaged both in bulk and

collated for use in pneumatic tools.

 44 This method was referred to as “stamp-and-cut.” Conference transcript, p. 173 (Tabor).

 45 Petitioners’ posthearing brief, exh. 2.

I-9

Physical Characteristics and Uses

Although most steel nails are produced of low-carbon steel, nails are also produced of stainless

steel (to resist corrosion) and of hardenable medium- to high-carbon steel.42 Nails are packaged for

shipment in bulk, that is, loose in a carton or other container, or collated, that is, joined with wire, paper

strips, plastic strips, or glue into coils or straight strips for use in pneumatic nailing tools. Although most

nails are produced from a single piece of steel, some nails are produced from two or more pieces. 

Examples include a nail with a decorative head, such as an upholstery nail; a masonry anchor that

comprises a zinc anchor and a steel wire nail; a nail with a large thin attached head (for nailing roofing

felt, for example); and a nail with a rubber or neoprene washer assembled over its shaft (to seal the nailhole in metal or fiberglass roofing or siding). The subject product in these investigations comprises all

steel nails, including all styles of heads, shanks, and points; with or without coatings of any type; of any

grade of steel; whether collated or in bulk; and whether of a single piece or of two or more pieces, with

the following exceptions: (1) nails suitable for use in powder (i.e., gunpowder)-actuated hand tools;

(2) roofing nails;43 and (3) nails over 12 inches in length. This section presents information on both

imported and domestically produced steel nails.

Manufacturing Processes

Most steel nails are produced from steel wire, and a small proportion of steel nails are produced

from steel plate and referred to as “cut nails.” Some producers of wire nails use purchased steel wire as a

starting raw material and are known as nonintegrated producers, whereas some producers utilize their

own facilities to produce wire for nails, using steel wire rod as their starting material; these producers are

called “integrated producers.” Some integrated producers are further integrated through the steelmaking

process, and produce steel wire rod from raw materials such as scrap, pig iron, and ferroalloys. Figure I-1

shows the general process for producing steel nails.

Wire nails are produced by one of two general methods: single wire and multiple wire. Using

the more common single-wire method,44 a large coil of wire is fed into a nail machine that automatically

straightens the wire, forms the head of the nail and cuts the nail from the wire, simultaneously forming the

point and ejecting the finished nail. Nail machines are of two general types: one, known as a “coldheading machine,” holds the wire near its end in gripper dies and forms the head by striking the leading

end of the wire, forcing the end of the wire to fill a die cavity of the desired shape. The wire is fed

through the grippers and shape cutters form the point and cut the nail free from the wire coming off of the

coil. The process is repeated for each individual nail produced by the cold-heading process.45 In the

second type of nail machine, known as a “rotary heading machine,” the wire is fed continuously and

cutting rollers cut individual nail blanks, simultaneously forming the point. The nail blanks are then

inserted into a die ring and the heads are formed by compression of the end of the nail between the 
 46 Petitioners’ posthearing brief, exh. 2.

 47 Conference transcript, p. 27 (Kerkvliet).

I-10

Figure I-1

Steel nails: General process of producing nails

Source: Kelley Drye Collier Shannon.

rotating ring and a heading roller. The completed nail is then ejected from the machine.46 Both types of

nail machines are used to produce all styles of nails, and some manufacturers have both types in their

facilities. These automatic machines are capable of producing a range of nail sizes and head and point

styles by changing tooling and adjustment.

Nails that have helical twist, serrations, and other configurations on the shanks require an

additional forming process. These nails are fed into other machines that roll, twist, stamp, or cut to

required forms. These operations may also require heating of the nails before forming.47
 48 In its request that nails of this type be considered as a separate domestic like product, Black & Decker refers to

such nails as woodworking-based nails, also commonly known as finish nails, and all other steel nails as

construction nails, also commonly known as framing nails. Conference transcript, p. 156 (Suro).

 49 Conference transcript, pp. 169-170 (Boutelle) and staff discussion with ***, June 19, 2007.

 50 Conference transcript, p. 39 (McMorrow).

 51 Postconference brief, Chinese producers, p. 21.

 52 Conference transcript, p. 80 (Stirnaman, Libla, Cronin, and Kerkvliet) and p. 59 (McMorrow).

 53 Black & Decker contends that construction nails and woodworking nails are not interchangeable because a

construction nailer will not fire a woodworking nail and a woodworking nailer will not fire a construction nail

(conference exhibit by Black & Decker (Suro)). According to Black & Decker, construction nails are typically

purchased by contractors, based on price and local code requirements, and are typically purchased in multiple-box

lots, whereas woodworking nails are typically purchased by the consumer for his or her own use and in smaller

quantities than typical construction nail purchases. Moreover, such factors as compatibility, quality, and

convenience, as well as a strong brand name, are more important factors with respect to woodworking nails. 

Conference transcript, pp. 160-161 (Suro) and conference exhibit by Black & Decker.

I-11

After forming, nails are tumbled on themselves in rotating drums to remove particles of head

flash and the whiskers, which often remain on the cut and pointed ends. The same drum may contain a

medium (such as sawdust) which effects cleaning and polishing of the nails during tumbling, otherwise

the tumbled nails can be transferred to units that clean the nails with solvents or vapor degreasers. After

tumbling and cleaning, the nails may be given subsequent processing, such as painting, resin coating, or

galvanizing. Finally, nails for use in pneumatic nailing tools are processed through automatic equipment

to collate the nails using paper strips, plastic strips, fine steel wire, or adhesive; nails for hand-driving are

packaged in bulk (loose) in cartons or other containers.

 The multiple-wire method is limited to the production of small-diameter nails with no head or a

countersinkable head, for use in a nailing tool for finish-carpentry work. Such nails are often called

“brads” or “finish nails.”48 As many as 120 individual spools of wire are loaded onto a machine, and

wires from the spools are fed side-by-side. The machine flattens the wires slightly and glue or tape is

applied, holding the wires close together in a band of a single layer. The band is then fed into a machine

which strikes the leading ends of the band, simultaneously forming the heads on all the wires across the

band, and the band is cut, simultaneously forming the points.49

Cut nails are produced from plate rather than from wire and are rectangular rather than round. 

Cut nails are used primarily for joining to masonry or concrete. Although cut nails may be made for any

carpentry use, the main use other than masonry is for flooring in applications where an antique

appearance is required. Cut nails are made from high-carbon steel plate that is sheared into strips. The

strips are fed into specially-designed nail machines, which shape the nails and form the heads. The cut

nails are then case-hardened in a furnace and packed in 50-pound cartons on pallets.50

Respondents have claimed that many of the nails imported from China and the UAE are types of

steel nails that are not made by domestic producers.51 However, according to domestic producers, the

domestic industry is collectively capable of producing the full range of nail products.52

Interchangeability and Customer and Producer Perceptions

U.S. producers of steel nails as well as importers of steel nails from China and the UAE generally

report that the U.S.-produced and imported product are always or frequently interchangeable.53 More

detailed information on interchangeability can be found in Part II of this report, Conditions of

Competition in the U.S. Market.
 54 Petition, p. 13.

 55 According to Black & Decker, the channels of distribution for construction nails are different from those for

woodworking nails, because, according to their analysis, woodworking nails are distributed primarily (58 percent)

through big retailers such as Home Depot and Lowe’s, whereas construction nails are distributed primarily

(82 percent) through specialty shops and only 18 percent through big retailers. Conference transcript, p. 159 (Suro)

and conference exhibit by Black & Decker. Petitioners assert that there is still a significant overlap in the channels

of distribution for both product types (petitioners’ postconference brief, p. 6).

I-12

Channels of Distribution

Both U.S. producers and U.S. importers reported selling most of their product to distributors of

steel nails (in 2006, 84.5 percent by producers and 86.5 percent by importers). In 2006, U.S. producers

reported selling 15.9 percent of their product to end users while importers reported selling 13.5 percent of

their product to end users. These trends held throughout the period for which data were collected in the

investigations (January 2004-March 2007). Table I-2 presents both producers’ and importers’ reported

methods of distribution. Petitioners indicated that the market for steel nails is highly price-sensitive, with

competition occurring between imports and domestic producers for sales on the basis of price.54

Additional information on channels of distribution can be found in Part II of this report, Conditions of

Competition in the U.S. Market.

55

Table I-2

Steel nails: U.S. producers’ and importers’ channels of distribution, 2004-06, January-March 2006,

and January-March 2007

Item

Calendar year January-March

2004 2005 2006 2006 2007

Producers:

Distributors (short tons) 305,536 254,334 189,646 58,871 30,420

End users (short tons) 48,059 47,798 35,744 10,099 8,545

Importers:

Distributors (short tons) 457,108 445,261 463,437 114,785 90,896

End users (short tons) 54,688 60,867 72,533 17,250 17,288

Total:

Distributors (short tons) 762,644 699,595 653,083 173,656 121,316

End users (short tons) 102,747 108,665 108,277 27,349 25,833

Source: Compiled from data submitted in response to Commission questionnaires.
 56 Petitioners’ postconference brief, p. 6.

 57 Conference transcript, p. 161 (Suro).

I-13

Price

Table I-3 and figure I-2 present average unit values for U.S. shipments of steel nails in the United

States from various sources. Petitioners assert that differences in prices between construction nails and

woodworking nails also exist for other types of nails in the product continuum, are associated with slight

variances in physical characteristics, and are within a reasonable range of a single domestic like product.56

Analysis by Black & Decker finds that the average retail price of woodworking nails was $2.74 per

pound, whereas the average retail price of construction nails was $0.81 per pound, indicating a difference

between the two proposed domestic like products based on this factor; however, it is not clear whether

there are similar differences across the continuum of other types of nails.57 Pricing practices and prices

reported for specific types of steel nails in response to the Commission’s questionnaires are presented in

Part V of this report, Pricing and Related Information.

Table I-3

Steel nails: Average unit values of U.S. shipments, by source, 2004-06, January-March 2006, and

January-March 2007

Item

Calendar year January-March

2004 2005 2006 2006 2007

Unit value (per short ton)

U.S. producers’ U.S. shipments $1,411 $1,515 $1,538 $1,537 $1,797

U.S. imports from--

 China 1,104 1,114 1,086 1,065 1,143

 United Arab Emirates *** *** *** *** ***

 Average, subject sources *** *** *** *** ***

 All other sources 1,413 1,519 1,516 1,623 1,623

 Average, all sources 1,246 1,250 1,194 1,205 1,243

Source: Compiled from data submitted in response to Commission questionnaires and official Commerce statistics.

Figure I-2

Steel nails: Average unit values of U.S. shipments, by source, 2004-06, January-March 2006, and

January-March 2007

* * * * * * *
 
 1

 Conference transcript, p. 115 (Zinman).

 2

 Conference transcript, pp. 115-116 (Zinman).

 3

 Throughout this section, the three divisions of ITW are treated as separate U.S. producers despite sharing

common ownership. Each division filled out its own questionnaire and ***.

II-1

PART II: CONDITIONS OF COMPETITION IN THE U.S. MARKET

U.S. MARKET CONDITIONS AND CHARACTERISTICS

U.S. producers’ U.S. commercial shipments of steel nails as well as U.S. shipments of imported

product from China and the UAE are made primarily to distributors. These distributors then sell the nails

to end users which are largely in the construction and industrial sectors. In the construction sector, nails

are used in the building of houses and other structures, while in the industrial sector, nails are used to

make crates and pallets, mostly used for shipping. Since construction is the single largest end use for

steel nails, demand for steel nails is largely determined by the size of the construction market. 

Responding firms indicated that demand was high in 2004 and 2005 due to a boom in new house

construction and then fell off in the second half of 2006 due to a notable slowdown in construction. 

Both collated and bulk nails are included in these investigations. According to testimony given at

the staff conference, sales of collated nails have increased at the expense of bulk nails over the past

several years.1

 According to this witness, the increase is due in large part to the increased availability and

affordability of nail guns.2

Markets do not appear to be limited geographically, with nine of 16 responding U.S. producers3

reporting nationwide sales and another five reporting sales to at least three regions. Nineteen of 37

responding importers also reported nationwide sales, with another seven reporting sales to at least three

regions. Seven importers reported shipping to only one region. These importers are located throughout

the United States with two making shipments only to the West Coast, two making shipments only to the

Northeast, two making shipments only to the Southeast, and one making shipments only to the Midwest.

CHANNELS OF DISTRIBUTION

Over the period January 2004 through March 2007, a large majority (84.8 percent) of U.S.

producers’ U.S. shipments of steel nails was shipped to distributors. U.S. shipments of subject imported

steel nails also went primarily to distributors. Over the period January 2004 through March 2007,

90.0 percent of U.S. shipments of steel nails imported from China and *** percent of U.S. shipments of

steel nails from the UAE were to distributors. Eleven of 16 responding U.S. producers, 18 of 32

responding importers of steel nails from China, and three of five responding importers of steel nails from

the UAE reported sales only to distributors, whereas four responding U.S. producers, five responding

importers of steel nails from China, and one responding importer of steel nails from the UAE reported

sales to both distributors and end users of steel nails. One U.S. producer, nine importers of steel nails

from China, and one importer of steel nails from the UAE reported sales only to end users. The firms that

supply only end users, however, are generally quite small. Table II-1 presents information on channels of

distribution for U.S. producers as well as for U.S. imports of subject product from China and the UAE.
II-2

Table II-1

Steel nails: U.S. producers’ and U.S. importers’ U.S. shipments by channels of distribution,

2004-06, January-March 2006, and January-March 2007 

Shipments

Calendar year January-March

2004 2005 2006 2006 2007

U.S. producers’ U.S. shipments (in short tons)

To distributors 305,536 254,334 189,646 58,871 30,420

To end users 48,059 47,798 35,744 10,099 8,545

U.S. importers’ U.S. shipments of imports from China (in short tons)

To distributors 191,677 232,588 295,195 66,550 61,511

To end users 9,729 26,068 40,080 9,473 10,671

U.S. importers’ U.S. shipments of imports from the UAE (in short tons)

To distributors *** *** *** *** ***

To end users *** *** *** *** ***

Share of U.S. producers’ U.S. shipments (in percent)

To distributors 86.4 84.2 84.1 85.4 78.1

To end users 13.6 15.8 15.9 14.6 21.9

Share of U.S. importers’ U.S. shipments of imports from China (in percent)

To distributors 95.2 89.9 88.0 87.5 85.2

To end users 4.8 10.1 12.0 12.5 14.8

Share of U.S. importers’ U.S. shipments of imports from the UAE (in percent)

To distributors *** *** *** *** ***

To end users *** *** *** *** ***

Source: Compiled from data submitted in response to Commission questionnaires.

Customers routinely buy from a variety of foreign and domestic sources. Lists of U.S. producers’

and importers’ top 10 customers provided in questionnaire responses show that the same customers are

supplied by U.S. producers and unaffiliated importers of nails. One customer will often appear in the top

10 list for two or more U.S. producers as well as two or more unaffiliated importers of steel nails from

China or the UAE. The same purchaser can buy nails imported from both China and the UAE. In

addition, U.S. producers that also sell imported steel nails (from either China or the UAE) will ship the

nails that are in stock—regardless of where they were made. As a result, the purchaser in such a situation

may not know where the nails were produced. 

SUPPLY AND DEMAND CONSIDERATIONS

U.S. Supply

Domestic Production

Based on available information, staff believes that U.S. producers of steel nails are likely to

respond to changes in demand with large changes in shipments of U.S.-produced steel nails to the U.S.

market. A large amount of unused capacity suggests a high degree of responsiveness, while the relative

absence of alternative markets and lack of production alternatives suggest a lower degree of

responsiveness.
II-3

Industry capacity

Total U.S. capacity fell slightly from 775,253 short tons in 2004 to 722,079 short tons in 2006. 

Capacity in January-March 2007 was 176,510 short tons, down slightly from 179,037 short tons in

January-March 2006. U.S. producers’ reported capacity utilization for steel nails fell from 46.6 percent in

2004 to 31.5 percent in 2006. Capacity utilization in January-March 2007 was 22.9 percent, down from

39.3 percent in January-March 2006. Overall, the level of capacity utilization indicates that U.S.

producers of steel nails have large amounts of currently available capacity with which they could increase

production of steel nails in the event of a price change.

Alternative markets

Overall, U.S. producers of steel nails export a very small share of total production. Exports as a

share of total production hovered near *** percent in 2004 and 2005 and rose *** to *** percent in 2006

and *** percent in January-March 2007. The low level of exports during the period indicates that

domestic producers have limited ability to shift shipments between the United States and other markets in

response to changes in the relative prices in those markets.

Inventory levels

U.S. producers’ inventories as a percentage of their total shipments rose from *** percent in 2004

to *** percent in 2006. Inventories in January-March 2007 were *** percent of total shipments, as

compared to *** percent in January-March 2006. These low-to-moderate inventories indicate that U.S.

producers have some ability to respond to changes in demand simply by increasing shipments from

inventory.

Production alternatives

Only one of the 17 responding U.S. producers reported producing other products on the same

equipment or machinery or using the same labor as is used to produce steel nails. This producer reported

that it manufactures PAT (Powder Actuated Tool) nails using the same equipment, machinery, and labor

as is used to make certain steel nails, and that production is divided equally between the two products. 

The fact that producers cannot, by and large, switch machinery and resources to other products limits the

flexibility to react to relative changes in the price of steel nails.

Subject Imports from China

According to official data from the Department of Commerce, imported steel nails from China as

a share of total U.S. imports of steel nails rose from 38.3 percent in 2004 to 66.3 percent in 2006, and

accounted for 70.3 percent of total U.S. imports of steel nails in January-March 2007. On an absolute

basis, U.S. subject imports from China rose from 339,002 short tons in 2004 to 615,548 short tons in

2006. Imports from China in January-March 2007 were 112,488 short tons, down from 137,913 short

tons in January-March 2006. 

Based on available information, producers of steel nails from China are likely to respond to

changes in demand with moderate changes in the quantity shipped to the U.S. market. While the

existence of alternative markets may suggest a large response, the response is limited by the modest size

of these alternative markets along with small inventories, a high capacity utilization rate, and an inability

to produce other products using the same equipment with which steel nails are produced.
II-4

Industry capacity 

Reported Chinese capacity grew from 345,910 short tons in 2004 to 580,282 short tons in 2006. 

At 140,125 short tons, capacity in January-March 2007 was 7.9 percent higher than in January-March

2006. Production more than kept pace with the growth in capacity as capacity utilization rose from

85.6 percent in 2004 to 90.4 percent in 2006. Capacity utilization stood at 83.9 percent in January-March

2007. These data indicate that Chinese suppliers of steel nails have modest excess capacity with which

they could increase production of steel nails in the event of a change in price or demand in the United

States.

Alternative markets 

According to questionnaire responses from Chinese producers of steel nails, exports to the United

States accounted for 84.5 percent of all exports of steel nails from China in 2006, similar to the 85.1

percent in 2004. Exports to the United States accounted for 74.7 percent of total shipments by these firms

during the period January 2004-March 2007, while only 11.2 percent of total shipments were consumed

by the home market and 14.0 percent were exported to other markets. Chinese producers, therefore, have

only limited ability to divert product from other markets in response to relative changes in the price of

steel nails between the United States and other markets.

Inventory levels

Chinese producers’ inventories, as a share of their total shipments, fell from 4.4 percent in 2004

to 3.5 percent in 2006 and stood at 4.0 percent in January-March 2007. These data indicate that these

producers have very limited ability to use inventories as a means of increasing shipments of steel nails to

the U.S. market.

Production alternatives

Only four of 47 responding Chinese producers indicated that they produced other products using

the same equipment used to produce steel nails. All four reported that they produced roofing nails on the

same equipment used to produce steel nails. For two of these producers, steel nails accounted for 93

percent and 35 percent of total production using common machinery.

Subject Imports from the UAE

According to official data from the Department of Commerce, imported steel nails from the UAE

as a share of total U.S. imports of steel nails rose from 8.3 percent in 2004 to 9.0 percent in 2006, and

accounted for 7.1 percent of total imports in January-March 2007. On an absolute basis, U.S. subject

imports from the UAE rose modestly from 73,724 short tons in 2004 to 83,115 short tons in 2006. 

Imports from the UAE in January-March 2007 were 11,346 short tons, down from 22,641 short tons in

January-March 2006. 

Based on available information provided in its questionnaire response, the sole producer of steel

nails from the UAE that exports to the United States (Dubai Wire) is likely to respond to changes in

demand with *** changes in the quantity shipped to the U.S. market. The response is limited by ***. 

Industry capacity 

Reported UAE capacity ***. Production rose from 2004 to 2005 but fell *** in 2006, and fell

*** between January-March 2006 and January-March 2007. As a result, capacity utilization rose from
 4

 ***.

 5

 ***.

II-5

*** percent in 2004 to *** percent in 2005, and fell *** to *** percent in 2006. Capacity utilization

stood at *** percent in January-March 2007, down *** from *** percent in January- March 2006. Aside

from January-March 2007, these data indicate that Dubai Wire has *** with which it could increase

production of steel nails in the event of a change in price or demand in the United States.

Alternative markets 

According to the questionnaire response of Dubai Wire, exports to the United States accounted

for *** percent of all exports of steel nails from the UAE throughout the period January 2004-March

2007. With *** to the home market, exports to the United States accounted for *** percent of total

shipments by Dubai Wire during the period January 2004-March 2007. Dubai Wire, therefore, has *** to

divert product from other markets in response to relative changes in the price of steel nails between the

United States and other markets.

Inventory levels

Dubai Wire’s inventories, as a share of total shipments, fell from *** percent in 2004 to ***

percent in 2006 and stood at *** percent in January-March 2007. These data indicate that this producer

has *** to use inventories as a means of increasing shipments of steel nails to the U.S. market.

Production alternatives

In its questionnaire response, Dubai Wire indicated that ***. 

U.S. Demand

Based on available information, U.S. consumers of steel nails are likely to respond to changes in

the price of steel nails with small changes in their purchases of steel nails. The main contributing factors

to the low responsiveness of demand are the low cost share accounted for by steel nails in most end uses

and the lack of products that can be substituted for steel nails in many end uses.

Demand Characteristics

Available data indicate that apparent U.S. consumption of steel nails fell from 1,238,523 short

tons in 2004 to 1,154,857 short tons in 2006. The slowdown in construction that took place in the latter

half of 2006 and into 2007 is evident in the apparent consumption data, as apparent consumption in

January-March 2007 was 199,261 short tons compared to 300,597 short tons in January-March 2006.

When asked if demand for steel nails had changed since January 1, 2004, eight of 16 responding

U.S. producers and 13 of 34 responding importers reported that demand had increased, whereas four U.S.

producers and nine importers responded that demand had decreased, and three U.S. producers and eight

importers responded that demand remained unchanged. One U.S. producer and importer4

 reported that

demand from the construction industry and the big box retail market decreased while industrial demand

increased. One importer5

 reported that demand increased for collated nails but fell for bulk nails. While

their answers may have differed, the trend that many of the responding firms describe is the same: 

demand rose in 2004 thanks to the housing boom and a strong hurricane season, remained high or rose
 6

 Conference transcript, p. 208 (Tabor).

 7

 Conference transcript, p. 151 (Hurwitz), p. 153 (Lock), p. 155 (Veth), pp. 149-150 (Frosio), and p. 208 (Tabor).

 8

 Conference transcript, pp. 117 and 119 (Zinman), p. 145 (Davis) .

 9

 Conference transcript, pp. 146-147 (Davis), p. 151 (Hurwitz), and p. 155 (Veth). 

 10 Conference transcript, p. 90 (Libla, Cronin, Kerkvliet, Dees) and p. 198 (Zinman).

II-6

through 2005, and fell in late 2006 as the housing boom slowed. Two importers reported that demand

increased in the first quarter of 2007.

Substitute Products

Eight of 13 responding U.S. producers and 17 of 30 responding importers reported that there are

no direct substitutes for steel nails. Five responding U.S. producers and 13 responding importers reported

that substitutes for steel nails do exist. The most commonly mentioned substitutes are screws (listed by

two U.S. producers and seven importers), staples (listed by three U.S. producers and six importers), and

powder activated tool nails or fasteners (listed by two U.S. producers and one importer). Other potential

substitutes listed include fluted concrete made from wire, glue or epoxy, light duty anchors, and roofing

nails. Each of these potential substitutes, however, is only usable in certain specific end uses.

Cost Share

Nails make up a very small share of the cost of construction and industrial end uses. According

to five importers and three U.S. producers, nails account for less than one percent of the cost of building

houses or other structures. One U.S. producer/importer reported that steel nails account for less than one

percent of the cost of cabinet production, hardwood floor installation, and decorative wood trim

installation. One producer reported that nails account for less than two percent of the total cost of framing

houses, while one importer reported that nails accounted for less than 10 percent of the cost of drywall

installation.

SUBSTITUTABILITY ISSUES

Factors Affecting Purchasing Decisions

It is generally agreed that as long as steel nails meet the specifications required for the specific

end use in question, then price is the largest single factor affecting purchase decisions. There may,

however, be some differences in quality between domestically produced product and product imported

from China. During the staff conference, a representative for the respondent interested parties reported

that there had been some quality issues with nails imported from China.6

 Respondent interested parties

testified that steel nails from the UAE, in contrast, are of very high quality.7

In addition, respondents allege that purchases of imported nails are often driven by the lack of

availability of suitable domestic nail varieties. They claim that while U.S. producers produce only a

limited product range, a much broader range can be bought from Chinese or UAE producers.8

 In

addition, Chinese and UAE producers reportedly offer a wider variety of packaging options or superior

packaging quality.9

 While the single producer in the UAE offers a wide variety of collated nails, bulk

nails are available only from Chinese or U.S. producers. 

According to testimony provided at the staff conference, aside from projects initiated by the U.S.

Government, nails are rarely subject to any formal or informal “Buy American” requirements.10
 11 One witness testified that government projects account for “less than one-tenth of one percent” of its sales. 

Conference transcript, p. 199 (Tabor).

 12 ***.

II-7

Furthermore, witnesses testified that accounts subject to such requirements account for a minimal

percentage of their sales.11

Comparisons of Domestic Products, Subject Imports, and Nonsubject Imports

Producers and importers were asked to report how frequently steel nails from different countries

are interchangeable (table II-2).

Table II-2

Steel nails: U.S. producers’ and importers’ perceived degree of interchangeability of products

produced in the United States and other countries1

Country comparison

U.S. producers U.S. importers

AFSN0AFSN 0

U.S. vs. China 10 3 3 0 0 19 12 3 0 1

U.S. vs. UAE 10 2 1 0 3 10 5 2 0 13

U.S. vs. Nonsubject 9 2 3 0 1 15 8 2 0 6

China vs. UAE 9 2 1 0 4 8 5 3 0 14

China vs. Nonsubject 9 2 2 0 2 10 8 2 0 10

U.A.E. vs. Nonsubject 9 1 1 0 4 7 3 3 0 15

 1 Producers and importers were asked if certain steel nails produced in the United States and in other countries

are 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.

Thirteen of 16 responding U.S. producers and 31 of 34 responding importers who reported having

knowledge of both Chinese and U.S.-produced steel nails reported that Chinese and U.S.-produced steel

nails are either always or frequently interchangeable. Twelve of 13 responding U.S. producers and 15 of

17 responding importers who reported having knowledge of both UAE and U.S.-produced steel nails

reported that nails produced in the UAE are either always or frequently interchangeable with U.S.-

produced steel nails. Steel nails from China and the UAE are also reported to be fairly interchangeable

with each other and with nonsubject steel nails. One U.S. producer/importer12 reported that collated nails

from different countries may not be interchangeable due to differences in the media used to collate the

nails as well as the angle at which the nails are collated. This producer/importer also noted that patented

nails are not interchangeable with other nails. Several other importers noted that interchangeability may

be limited by the fact that a wider product range of steel nails is available from China.

Producers and importers were also asked to assess how often differences other than price were

significant in sales of steel nails from the United States, China, the UAE, and nonsubject countries (table

II-3).
II-8

Table II-3

Certain steel nails: U.S. producers’ and importers’ perceptions concerning the importance of nonprice differences in purchases of steel nails from the United States and other countries1

Country comparison

U.S. producers U.S. importers

AFSN0AFSN 0

U.S. vs. China 1 1 5 9 0 10 4 12 6 2

U.S. vs. UAE 1 0 4 8 3 5 1 5 4 14

U.S. vs. Nonsubject 1 1 5 8 1 4 2 9 6 6

China vs. UAE 1 0 3 8 3 3 1 6 3 14

China vs. Nonsubject 1 1 4 8 1 2 2 9 4 10

UAE vs. Nonsubject 1 0 3 8 3 2 0 6 3 15

 1 Producers and importers were asked if differences other than price between steel nails produced in the United

States and in other countries are a significant factor in their firm’s sales of the product.

Note: “A” = Always, “F” = Frequently, “S” = Sometimes, “N” = Never, and “0” = No familiarity.

Source: Compiled from data submitted in response to Commission questionnaires.

 Nine of 16 responding U.S. producers reported that non-price differences between U.S.-produced

and Chinese-produced steel nails are never a factor in their sales of steel nails. Similarly, eight of 13

responding U.S. producers reported that non-price differences between U.S.-produced and UAE-produced

steel nails are never a factor in their sales of steel nails. In contrast, only six of 32 responding importers

agree with that assessment with respect to Chinese-produced nails, and only four of 15 responding

importers agree with that assessment with respect to UAE-produced nails. Fourteen of 32 responding

importers reported that non-price factors are always or frequently a factor in sales of steel nails from

China, while six of 15 responding importers reported that non-price factors are always or frequently a

factor in sales of steel nails from the UAE. Quality is the most commonly listed non-price factor. Several

responding importers reported that Chinese nails may be of lower quality. Importers also listed

availability as an important factor in sales. Several responding importers alleged that some products are

not available in the United States and must be imported.
 1

 Petition, pp. 2-5. 

 2

 Also, ITW provided separate data for its producers Paslode, Ramset, and Industrial Fastening.

 3

 Petitioners’ postconference brief, p. 7.

 4

 Conference transcript, p. 37 (Stirnaman).

III-1

PART III: U.S. PRODUCERS’ PRODUCTION, SHIPMENTS, 

AND EMPLOYMENT

U.S. PRODUCERS

The petition identified 15 U.S. producers of steel nails.1

 The Commission received completed

questionnaire responses from all 5 petitioners, from 8 of the other 10 firms identified in the petition, and

from 2 other firms that were identified after receiving the petition.2

 Table III-1 presents U.S. producers’

positions on the petition, ownership, plant locations, and shares of total reported U.S. production in 2006. 

Eleven producers support the position, three oppose it, and three take no position. Producers accounting

for *** percent of U.S. production in 2006 support the petition, producers accounting for *** percent

oppose the petition, and producers accounting for *** percent take no position. *** was the largest

producer in 2006, followed by ***, all of which collectively accounted for almost 75 percent of domestic

production in 2006. Table III-2 presents important industry events during 2004-07.

U.S. CAPACITY, PRODUCTION, AND CAPACITY UTILIZATION

Table III-3 presents data on U.S. producers’ capacity, production, and capacity utilization

between 2004 and 2006, and interim data for 2006 and 2007. Figure III-1 graphically presents data on

U.S. producers’ capacity, production, and capacity utilization during the period for which data were

collected in the investigations.

U.S. production of steel nails decreased from 361,136 short tons in 2004 to 227,611 short tons in

2006. Further, production is down in interim 2007 compared to interim 2006. Capacity also fell over the

period, and the average capacity utilization for U.S. producers fell from 46.6 percent in 2004 to

31.5 percent in 2006, and was 22.9 percent in interim 2007. U.S. producers’ capacity was below apparent

U.S. consumption in each year and interim period for which data were collected.

Generally, U.S. producers of steel nails reported mill closures and production consolidation and

curtailment from 2004 to 2006, which follows the trends of decreasing rates of capacity and capacity

utilization presented in table III-3. ***.3

 Finally, ***.4

Reported constraints in the manufacturing process for U.S. producers of steel nails include the

machinery used to produce the nails, as well as labor availability, maintenance of the machines, and

consistent orders.
III-2

Table III-1

Steel nails: U.S. producers, positions on the petition, ownership, plant locations, and shares of

total reported U.S. production, 2006

Firm 

Position

on

petition Firm ownership

U.S. plant 

location(s)

2006 U.S. production

Quantity

(short

tons)

Share 

(percent)

Air Nail/ISM Fastening

Systems

Take no

position

ISM Acquisition Corp.,

Butler, PA (parent

company) Butler, PA *** ***

Davis Wire Corp. Support

Heico Acquisitions,

Chicago, IL Irwindale, CA *** ***

Fox Valley Steel & Wire1 2 Support N/A Hortonville, WI 4,392 ***

Gerdau Ameristeel Corp. Support Gerdau SA (Brazil) Harahan, LA *** ***

ITW/Industrial Fastening Oppose ITW Elgin, IL *** ***

Keystone Steel & Wire Co. Support Contran Corp., Dallas, TX Peoria, IL *** ***

Maze Nails Support None Peru, IL *** ***

Mid Continent Nail Corp.2 Support

Libla Industries, Poplar

Bluff, MO

Poplar Bluff, MO;

Radford, VA;

Springdale, AR;

and Hillsboro, TX *** ***

Parker Metal Corp.2 3

Take no

position Parker Holdings, MA Worcester, MA *** ***

ITW/Paslode2 Oppose ITW Vernon Hills, IL *** ***

Pneu-Fast Co.1 Support N/A Evanston, IL 4,000 ***

ITW/Ramset Oppose ITW

Glendale Heights,

IL *** ***

Senco Products, Inc.2 *** Sencorp., Newport, KY Cincinnati, OH *** ***

Simplex Nails2 Support None Americus, GA *** ***

Specialty Fasteners

Systems, Inc.2 *** Falcon Enterprises Canada Prairie Grove, AR *** ***

Stanley Fastening Systems,

L.P. (“Bostitch”)2 ***

Stanley-Bostitch Holding

Corp. and The Stanley

Works, New Britain, CT

Clinton, CT; North

Kingstown, RI; East

Greenwich, CT *** ***

Treasure Coast Support None Fort Pierce, FL *** ***

Tree Island Wire USA, Inc.2 ***

Tree Island Industries, Ltd.

Richmond, BC Ontario, CA *** ***

Wheeling-LaBelle Nail Co. Support None Wheeling, WV *** ***

Total 236,003 100.0

 1 Public response to Commerce’s polling questionnaire. ***.

 2

 ***.

 3

 Parker did not produce in 2006.

Note.–Total U.S. production in this table includes Fox Valley Steel and Pneu-Fast which are not included anywhere else in this

report.

Source: Compiled from data submitted in response to Commission questionnaires and from public sources.
III-3

Table III-2

Steel nails: Important industry events, 2004-07

* * * * * * *

Table III-3

Steel nails: U.S. capacity, production, and capacity utilization, 2004-06, January-March 2006, and

January-March 2007

Item

Calendar year January-March

2004 2005 2006 2006 2007

Capacity (short tons) 775,253 725,027 722,079 179,037 176,510

Production (short tons) 361,136 300,745 227,611 70,414 40,434

Capacity utilization (percent) 46.6 41.5 31.5 39.3 22.9

Source: Compiled from data submitted in response to Commission questionnaires.

Figure III-1

Steel nails: U.S. capacity, production, and capacity utilization, 2004-06, January-March 2006, and

January-March 2007

Source: Table III-3.
 5

 U.S. producers of steel nails reported exporting to Australia, Canada, “Europe,” Japan, Korea, Kuwait, Mexico,

New Zealand, and the Netherlands.

III-4

U.S. PRODUCERS’ SHIPMENTS

Table III-4 presents information on U.S. producers’ shipments of steel nails between 2004 and

2006. Six U.S. producers reported exporting nails, which made up a minimal share of the quantity of

U.S. producers’ shipments of steel nails.5

Table III-4

Steel nails: U.S. producers’ shipments, by types, and shares, 2004-06, January-March 2006, and

January-March 2007

Item

Calendar year January-March

2004 2005 2006 2006 2007

Quantity (short tons)

Commercial shipments *** *** *** *** ***

Internal consumption *** *** *** *** ***

Transfers to related firms *** *** *** *** ***

U.S. shipments 354,075 302,694 226,666 69,246 39,190

Export shipments *** *** *** *** ***

Total shipments *** *** *** *** ***

Value (1,000 dollars)

Commercial shipments *** *** *** *** ***

Internal consumption *** *** *** *** ***

Transfers to related firms *** *** *** *** ***

U.S. shipments 499,569 458,473 348,505 106,437 70,427

Export shipments *** *** *** *** ***

Total shipments *** *** *** *** ***

Unit value (per short ton)

Commercial shipments $*** $*** $*** $*** $***

Internal consumption *** *** *** *** ***

Transfers to related firms *** *** *** *** ***

U.S. shipments 1,411 1,515 1,538 1,537 1,797

Export shipments *** *** *** *** ***

Total shipments *** *** *** *** ***

Table continued on next page.
 6

 Only *** reported producing roofing nails: ***.

III-5

Table III-4--Continued

Steel nails: U.S. producers’ shipments, by types, and shares, 2004-06, January-March 2006, and

January-March 2007

Item

Calendar year January-March

2004 2005 2006 2006 2007

Share of quantity (percent)

Commercial shipments *** *** *** *** ***

Internal consumption *** *** *** *** ***

Transfers to related firms *** *** *** *** ***

U.S. shipments *** *** *** *** ***

Export shipments *** *** *** *** ***

Total shipments 100.0 100.0 100.0 100.0 100.0

Share of value (percent)

Commercial shipments *** *** *** *** ***

Internal consumption *** *** *** *** ***

Transfers to related firms *** *** *** *** ***

U.S. shipments *** *** *** *** ***

Export shipments *** *** *** *** ***

Total shipments 100.0 100.0 100.0 100.0 100.0

1

 Not applicable.

Note.–Because of rounding, figures may not add to the totals shown.

Source: Compiled from data submitted in response to Commission questionnaires.

***, and transfers of steel nails to related firms were less than *** percent by quantity in any

year. U.S. producers’ commercial shipments of steel nails decreased by *** percent by quantity from

2004 to 2005, and such shipments decreased by a further *** percent between 2005 and 2006. ***’s

reported commercial shipments in 2006 were *** the quantity of its 2004 commercial shipments. ***

also all reported decreases in commercial shipments from 2004 to 2006. 

Table III-5 presents information on U.S. producers’ U.S. commercial shipments of steel nails by

type/finish in 2006.6

 Almost 80 percent of U.S. shipments of steel nails in 2006 were collated nails

(nearly 80 percent of which were collated-bright nails), and collated nails were 85 percent of the sales

value of steel nails. The average unit value of collated nails was higher than that of uncollated nails, and

for both collated and uncollated nails, the average unit value of galvanized nails was higher than the

average unit value of bright nails.
 7

 ***.

 8

 *** imported nonsubject nails as well.

 9

 U.S. producers imported nonsubject steel nails from Austria, Canada, Colombia, Denmark, “Europe,” Italy,

Korea, Malaysia, Spain, and Taiwan.

III-6

Table III-5

Steel nails: U.S. producers’ U.S. shipments by type of nail and finish, 2006

Type of nail/finish Quantity (short tons) Value ($1,000)

Unit value

(dollars per ton)

Collated: 

Bright (no finish) 137,414 177,326 1,290

Galvanized 37,432 107,233 2,865

Other 812 12,854 15,830

Total 175,658 297,413 1,693

Uncollated: 

Bright (no finish) 34,000 32,026 942

Galvanized 9,731 11,871 1,220

Other 7,277 7,194 989

Total 51,008 51,091 1,002

Source: Compiled from data submitted in response to Commission questionnaires.

U.S. PRODUCERS’ IMPORTS AND PURCHASES

During the period of investigation, eight U.S. producers imported steel nails from China, and two

imported steel nails from the UAE.7

 Two of these firms, ***, imported subject steel nails from both

subject countries (as well as nonsubject countries), *** imported from China and Canada, and ***

imported subject steel nails from only China.8

 Four U.S. producers imported steel nails from nonsubject

countries.9

 For the importing U.S. producers, the general trend was for the ratio of imports to production

to increase, specifically for *** which both had ratios of imports to production exceeding *** percent by

2006. Additionally, *** had a ratio of imports to production exceeding *** percent over the period, and

was importing *** percent more steel nails than it was producing in 2006. Seven companies (***) also

made purchases of steel nails over the period. 

Table III-6 presents data, by company, on domestic producers’ direct imports, purchases of

imported product, and purchases from other domestic producers.

Table III-6

Steel nails: U.S. producers’ imports, purchases, and ratios to production, 2004-06, January-March

2006, and January-March 2007

* * * * * * *
III-7

Table III-7 presents combined data of 11 domestic producers’ direct imports, purchases of

imported product, and purchases from other domestic producers. U.S. producers of steel nails made

purchases of steel nails from other domestic producers, China (both direct imports and purchases from

importers), the UAE (direct imports), and other countries (both direct imports and purchases). U.S.

producers’ imports from China and the UAE more than doubled from 2004 to 2006, while their imports

from nonsubject sources decreased by 34 percent. The reasons cited for making these imports and

purchases were generally to be able to offer products at lower prices, to complement a firm’s product line

with something it does not produce, to fill out inventory, to supplement capacity, and instead of

producing low-volume products.

Table III-7

Steel nails: U.S. producers’ imports, purchases, and ratios to production, 2004-06, January-March

2006, and January-March 20071

Item

Calendar year January-March

2004 2005 2006 2006 2007

Quantity (short tons)

U.S. production1 314,079 274,511 204,484 62,695 38,441

Purchases from China *** *** *** *** ***

Purchases to production (in percent) *** *** *** *** ***

Purchases from nonsubject sources *** *** *** *** ***

Purchases to production (in percent) *** *** *** *** ***

Purchases from domestic producers *** *** *** *** ***

Purchases to production (in percent) *** *** *** *** ***

Purchases from other sources *** *** *** *** ***

Purchases to production (in percent) *** *** *** *** ***

Total purchases 520 8,218 17,641 3,102 1,352

Purchases to production (in percent) 0.2 3.0 8.6 4.9 3.5

Imports from China 23,044 35,728 77,317 12,390 24,590

Imports to production (in percent) 7.3 13.0 37.8 19.8 64.0

Imports from the UAE *** *** *** *** ***

Imports to production (in percent) *** *** *** *** ***

Imports from nonsubject sources 91,882 73,297 60,313 19,808 7,940

Imports to production (in percent) 29.25 26.70 29.5 31.6 20.7

Total imports *** *** *** *** ***

Imports to production (in percent) *** *** *** *** ***

 1 Data are for 11 U.S. producers with imports and/or purchases of steel nails.

Source: Compiled from data submitted in response to Commission questionnaires.
III-8

U.S. PRODUCERS’ INVENTORIES

Table III-8, which presents end-of-period inventories for steel nails from 2004 to 2006, shows

that inventories were relatively low as a ratio to production and shipments over the period. Inventories as

a ratio to production were higher in the interim period January-March 2007 than in January-March 2006,

but this is due to a decrease in production in the second interim period rather than any increase in

inventories.

Table III-8

Steel nails: U.S. producers’ end-of-period inventories, 2004-06, January-March 2006, and JanuaryMarch 2007

* * * * * * *

U.S. PRODUCERS’ EMPLOYMENT, WAGES, AND PRODUCTIVITY

Table III-9 presents data on U.S. producers’ employment-related indicia. Employment of

production-related workers (“PRWs”) in the U.S. steel nail industry declined by 24.3 percent between

2004 and 2006, and hours worked similarly decreased. Wages paid to PRWs also declined from 2004 to

2006, as did productivity, and unit labor costs increased by 23.1 percent.

Table III-9

Steel nails: U.S. producers’ employment-related data, 2004-06, January-March 2006, and JanuaryMarch 2007

Item

Calendar year January-March

2004 2005 2006 2006 2007

Production and related workers (PRWs) 1,480 1,370 1,120 1,160 820

Hours worked by PRWs (1,000 hours) 3,212 2,912 2,319 629 409

Hours worked per PRW 2,177 2,133 2,078 545 500

Wages paid to PRWs (1,000 dollars) 44,110 36,093 34,212 9,198 5,884

Hourly wages $13.73 $12.39 $14.76 $14.62 $14.39

Productivity (pounds produced per 

1,000 hours) 112.4 103.3 98.2 111.9 98.9

Unit labor costs (per short ton) $122.14 $120.01 $150.31 $130.63 $145.51

Note.–Because of rounding, figures may not add to the totals shown.

Source: Compiled from data submitted in response to Commission questionnaires.
 1

 Of these importers, *** imported from both the UAE and China.

 2

 HTS subheadings 7317.00.55, excluding statistical reporting number 7317.00.5501 (roofing nails); 7317.00.65;

and 7317.00.75.

IV-1

PART IV: U.S. IMPORTS, APPARENT U.S. CONSUMPTION, 

AND MARKET SHARES

U.S. IMPORTERS

Table IV-1 presents information on U.S. importers. Thirty-three of the importers that submitted

data in response to the Commission’s U.S. importers’ questionnaire indicated that they imported steel

nails from China.1

 These 33 firms’ imports of steel nails from China account for more than half (***

percent) of total U.S. imports from China by quantity in the period 2004 to 2006, as measured in official

Commerce statistics.

Table IV-1

Steel nails: U.S. importers and imports, by source, 2006

* * * * * * *

*** of the importers that submitted data in response to the Commission’s U.S. importers’

questionnaire indicated that they imported steel nails from the UAE: ***. These *** firms’ imports of

steel nails from the UAE account for all (*** percent) of total U.S. imports from the UAE by quantity in

the period 2004 to 2006 as measured in official Commerce statistics.

U.S. IMPORTS

Table IV-2 and figure IV-1 present and depict U.S. imports of steel nails during 2004 to 2006 and

January-March 2006 and 2007. U.S. import data are based on official Commerce statistics excluding

roofing nails.2

 U.S. imports of steel nails from China nearly doubled, rising from 339,002 short tons in

2004 to 615,548 short tons in 2006. Such imports fell from 137,913 short tons in January-March 2006 to

112,488 short tons in the same period of 2007. Imports from the UAE rose by more than 12 percent from

73,724 short tons in 2004 to 83,115 short tons in 2006; the increase was accounted for by ***. 

Additionally, such imports dropped in half from 22,641 short tons in the interim period of 2006 to 11,346

short tons in the same period of 2007.

 Korea (accounting for 7.9 percent of total U.S. imports of steel nails during 2006), Canada

(4.1 percent), Taiwan (4.3 percent), Mexico (3.6 percent), Poland (1.0 percent), Malaysia (1.0 percent),

and 27 other countries (ranging between less than 0.05 percent and 0.6 percent of 2006 imports) also

exported steel nails to the United States during the period for which data were collected. These

nonsubject imports fell by 51.3 percent from 471,722 short tons in 2004 to 229,529 short tons in 2006,

and fell by a further 48.8 percent between the interim periods. The increase in subject imports between

2004 and 2006 is larger than the decrease in nonsubject imports, and between the interim periods both

sets of imports decreased.
IV-2

Table IV-2

Steel nails: U.S. imports, by sources, 2004-06, January-March 2006, and January-March 2007

Source

Calendar year January-March

2004 2005 2006 2006 2007

Quantity (short tons)

China 339,002 479,751 615,548 137,913 112,488

United Arab Emirates 73,724 81,287 83,115 22,641 11,346

Subtotal 412,726 561,038 698,662 160,553 123,833

Other sources 471,722 343,963 229,529 70,797 36,238

Total 884,448 905,001 928,191 231,351 160,071

Value (1,000 dollars)

1

China 274,183 391,159 485,994 105,632 90,820

United Arab Emirates 75,446 78,305 77,913 20,550 10,935

Subtotal 349,629 469,464 563,907 126,182 101,754

Other sources 488,453 413,416 297,291 86,462 50,381

Total 838,082 882,879 861,198 212,644 152,135

Unit value (per short ton)

1

China $809 $815 $790 $766 $807

United Arab Emirates 1,023 963 937 908 964

Subtotal 847 837 807 786 822

Other sources 1,035 1,202 1,295 1,221 1,390

Total 948 976 928 919 950

Share of quantity (percent)

China 38.3 53.0 66.3 59.6 70.3

United Arab Emirates 8.3 9.0 9.0 9.8 7.1

Subtotal 46.7 62.0 75.3 69.4 77.4

Other sources 53.3 38.0 24.7 30.6 22.6

Total 100.0 100.0 100.0 100.0 100.0

Share of value (percent)

China 32.7 44.3 56.4 49.7 59.7

United Arab Emirates 9.0 8.9 9.0 9.7 7.2

Subtotal 41.7 53.2 65.5 59.3 66.9

Other sources 58.3 46.8 34.5 40.7 33.1

Total 100.0 100.0 100.0 100.0 100.0

1

 Landed, duty-paid.

Source: Compiled from official Commerce statistics.
IV-3

Figure IV-1

Steel nails: Quantity of subject and nonsubject U.S. imports, 2004-06, January-March 2006, and

January-March 2007

Source: Table IV-2.

The quantity of subject imports increased by 35.9 percent between 2004 and 2005 and by

24.5 percent between 2005 and 2006, increasing the share of total imports accounted for by subject

imports from 46.7 percent in 2004 to 75.3 percent in 2006. Subject imports from China account for most

of the increase in subject imports over the period of investigation (imports from China increased from

38.3 percent of imports in 2004 to 66.3 percent of imports in 2006, while the share of imports from the

UAE increased very slightly, from 8.3 percent of imports to 9.0 percent). Total imports increased during

2004-06 by 4.9 percent.

According to the import data presented in table IV-2, subject imports from China had the lowest

average unit value for every year, and their average unit value decreased from 2004 to 2006. In 2004 the

UAE imports’ average unit value was closer to that of the nonsubject imports than to that of China, but by

2006 it had fallen from $1,023 to $937, while the average unit value for all nonsubject imports had

increased to $1,295. The average unit value for China and the UAE combined was 62.3 percent of the

average unit value for all other imports in 2006.
 3

 However, imports of collated steel nails from the UAE are possibly misclassified as uncollated steel nails. The

president of the sole known UAE exporter of steel nails to the United States stated that “in the last three years we’ve

been producing 100-percent collated nails” (conference transcript, p. 174 (Ved)). U.S. producers’ and importers’

U.S. shipments of collated and uncollated steel nails, based on questionnaire responses, are presented in appendix C,

table C-4.

IV-4

U.S. IMPORTS BY TYPE

Table IV-3 presents data on U.S. imports of collated steel nails. Table IV-4 presents data on U.S.

imports of uncollated steel nails. In 2006, 48.2 percent of U.S. imports of steel nails from the subject

countries was collated nails, and 51.8 percent was uncollated nails. From 2004 to 2006, collated nails

accounted for an increasing share of imports of steel nails from China and nonsubject sources, while they

apparently accounted for a decreasing share of imports from the UAE; total U.S. imports of steel nails

were predominantly uncollated, though U.S. importers increased their imports of collated steel nails and

decreased their imports of uncollated steel nails.3

Table IV-3

Collated steel nails:1

 U.S. imports, by sources, 2004-06, January-March 2006, and January-March

2007

Source

Calendar year January-March

2004 2005 2006 2006 2007

Quantity (short tons)

China 67,131 156,657 270,021 49,270 58,663

United Arab Emirates 54,805 51,747 49,904 15,468 7,302

Subtotal 121,936 208,404 319,926 64,739 65,966

Other sources 163,406 158,267 90,783 28,756 12,415

Total 285,342 366,671 410,708 93,494 78,381

Value (1,000 dollars)

2

China 61,793 141,122 231,600 42,838 50,642

United Arab Emirates 58,307 52,208 47,608 14,354 7,344

Subtotal 120,100 193,329 279,208 57,192 57,987

Other sources 185,596 189,276 116,073 34,605 17,571

Total 305,697 382,605 395,281 91,797 75,558

Unit value (per short ton)

2

China $920 $901 $858 $869 $863

United Arab Emirates 1,064 1,009 954 928 1,006

Subtotal 985 928 873 883 879

Other sources 1,136 1,196 1,279 1,203 1,415

Total 1,071 1,043 962 982 964

1

 Excludes HTS subheadings 7317.00.65 and 7317.00.75.

2

 Landed, duty-paid.

Source: Compiled from official Commerce statistics.
 4

 Sections 703(a)(1), 705(b)(1), 733(a)(1), and 735(b)(1) of the Act (19 U.S.C. §§ 1671b(a)(1), 1671d(b)(1),

1673b(a)(1), and 1673d(b)(1)).

IV-5

The unit values of both collated and uncollated steel nails imported from subject countries

generally decreased during 2004-06, while the unit values for both types of nails imported from

nonsubject countries increased over the period. Unit values for imported collated nails were higher than

the unit values for imported nails classified as uncollated nails for China, the UAE, and nonsubject

countries in each of the years and periods for which data were collected.

Table IV-4

Uncollated steel nails:1

 U.S. imports, by sources, 2004-06, January-March 2006, and JanuaryMarch 2007

Source

Calendar year January-March

2004 2005 2006 2006 2007

Quantity (short tons)

China 246,797 286,537 312,126 80,650 47,975

United Arab Emirates 18,171 28,722 32,059 7,154 4,043

Subtotal 264,968 315,259 344,184 87,804 52,018

Other sources 294,210 177,504 132,304 40,455 21,994

Total 559,178 492,763 476,488 128,259 74,012

Value (1,000 dollars)

2

China 184,983 208,339 217,109 53,889 33,281

United Arab Emirates 16,289 25,316 29,259 6,153 3,590

Subtotal 201,272 233,654 246,368 60,042 36,872

Other sources 267,011 197,976 156,403 45,863 27,313

Total 468,283 431,630 402,771 105,904 64,185

Unit value (per short ton)

1

China $750 $727 $696 $668 $694

United Arab Emirates 896 881 913 860 888

Subtotal 760 741 716 684 709

Other sources 908 1,115 1,182 1,134 1,242

Total 948 976 928 919 950

1

 Excludes HTS subheadings 7317.00.65 and 7317.00.75. 2

 Landed, duty-paid.

Source: Compiled from official Commerce statistics.

NEGLIGIBILITY

The statute requires that an investigation be terminated without an injury determination if imports

of the subject merchandise are found to be negligible.4

 Negligible imports are generally defined in the

Tariff Act of 1930, as amended, as imports from a country of merchandise corresponding to a domestic
 5

 Section 771(24) of the Act (19 U.S.C. § 1677(24)).

 6

 In determining the aggregate volume of the merchandise described above, the Commission is to disregard

imports from any country subject to any of the four cumulation exceptions noted in the section entitled

“Cumulation.”

 7

 Calculated from official Commerce statistics. 

 8

 The statistical reporting numbers under which the largest amounts of imports of steel nails from China entered

in 2006 (7317.00.5507 and 7317.00.5530) were also the numbers under which the largest amounts of imports of steel

nails from the UAE entered.

IV-6

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

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.5 6

 Subject imports accounted for 77.8 percent of total

imports of steel nails by quantity between May 2006 and April 2007; 69.8 percent were imports from

China and 8.0 percent were imports from the United Arab Emirates.7

CUMULATION

In assessing whether subject imports compete with each other for purposes of the statutory

assessment of cumulation of the subject imports, the Commission has generally considered four factors:

 (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

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

The degree of fungibility between the subject imports8

 and between imports and the domestic like

product is discussed in Part II of this report, as is the existence of common or similar channels of

distribution. The presence of sales in the same geographic markets is discussed below (and briefly in Part

II), as is whether the subject imports are simultaneously present in the market.

Geographic Markets

Table IV-5 presents the Customs districts of entry for subject imports of steel nails from 2004 to

2006. Los Angeles, CA, was the largest district of entry for imports from both countries, accounting for

23 percent of total imports from the two countries during 2004 to 2006 and more than three times the

quantity of imports landed at any other district in 2006. Imports of steel nails from China and the UAE

also ovelapped in several other districts of entry.
IV-7

Table IV-5

Steel nails: U.S. imports from subject countries, by country of origin and Customs district,

2004-06

Customs district

Calendar year

2004 2005 2006

Quantity (short tons)

China:

Los Angeles, CA 68,676 93,989 156,720

New York, NY 38,841 54,185 57,462

Savannah, GA 32,357 35,957 46,913

San Francisco, CA 23,462 25,432 38,572

Chicago, IL 17,955 26,332 37,563

Miami, FL 16,978 25,863 36,214

Cleveland, OH 21,228 26,348 30,818

Seattle, WA 12,134 22,415 24,562

New Orleans, LA 10,178 16,586 23,153

Dallas-Fort Worth, TX 11,299 20,574 22,649

Houston-Galveston, TX 15,216 19,612 21,534

Norfolk, VA 12,643 17,407 19,322

All other 58,036 95,052 100,066

Total 339,002 479,751 615,548

UAE:

Los Angeles, CA 23,082 23,701 16,674

Charleston, SC 10,895 12,507 15,030

Dallas-Fort Worth, TX 61 2,350 11,203

New York, NY 2,808 4,234 9,003

Houston-Galveston, TX 3,064 7,512 6,959

Tampa, FL 4,195 6,750 6,470

Norfolk, VA 3,194 3,426 5,209

San Francisco, CA 3,104 5,440 3,968

Chicago, IL 2,563 3,599 3,310

Boston, MA 3,540 2,341 339

Baltimore, MD 3,317 2,828 86

Savannah, GA 8,898 1,296 61

All other 5,001 5,303 4,802

Total 73,724 81,287 83,115

Grand total 412,726 561,038 698,662

Source: Compiled from official Commerce statistics.
IV-8

Presence in the Market

Table IV-6 presents information on the monthly presence of subject imports. As is shown, steel

nails enter at all times during the year, and imports from China and the UAE overlapped in all of the 39

months shown.

Table IV-6

Steel nails: U.S. imports, monthly entries into the United States, by source, 2004-06 and JanuaryMarch 2007

Source

Month Total number

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec of months

2004

China 12

UAE 12

2005

China 12

UAE 12

2006

China 12

UAE 12

2007

China 3

UAE 3

Note.--Shaded squares indicate that imports of steel nails entered into the United States in the specified month.

Source: Compiled from official Commerce statistics.

APPARENT U.S. CONSUMPTION, U.S. MARKET SHARES, AND 

RATIOS OF IMPORTS TO U.S. PRODUCTION

 Table IV-7 presents data on the apparent U.S. consumption of steel nails. Table IV-8 presents

data on U.S. market shares. Figure IV-2 graphically presents data on apparent U.S. consumption and U.S.

market shares.

Over the period of investigation, total apparent U.S. consumption decreased. Decreases in U.S.

producers’ U.S. shipments bore the brunt of the decrease in apparent U.S. consumption between 2004 and

2006. Imports increased over the period while U.S. producers’ U.S. shipments decreased. From 2004 to

2006, imports of steel nails increased from subject sources, while decreasing from nonsubject sources;

however, imports from both sources decreased between the interim periods.
IV-9

Table IV-7

Steel nails: Apparent U.S. consumption, by sources, 2004-06, January-March 2006, and JanuaryMarch 2007

Item

Calendar year January-March

2004 2005 2006 2006 2007

Quantity (short tons)

U.S. producers’ shipments 354,075 302,694 226,666 69,246 39,190

U.S. imports from--

China 339,002 479,751 615,548 137,913 112,488

UAE 73,724 81,287 83,115 22,641 11,346

Subtotal 412,726 561,038 698,662 160,553 123,833

All other sources 471,722 343,963 229,529 70,797 36,238

Total imports 884,448 905,001 928,191 231,351 160,071

Apparent U.S. consumption 1,238,523 1,207,695 1,154,857 300,597 199,261

Value (1,000 dollars)

U.S. producers’ shipments 499,569 458,473 348,505 106,437 70,427

U.S. imports from--

China 274,183 391,159 485,994 105,632 90,820

UAE 75,446 78,305 77,913 20,550 10,935

Subtotal 349,629 469,464 563,907 126,182 101,754

All other sources 488,453 413,416 297,291 86,462 50,381

Total imports 838,082 882,879 861,198 212,644 152,135

Apparent U.S. consumption 1,337,651 1,341,352 1,209,702 319,081 222,562

Source: Compiled from data submitted in response to Commission questionnaires and from official Commerce

statistics.
IV-10

Table IV-8

Steel nails: Market shares, by sources, 2004-06, January-March 2006, and January-March 2007

Item

Calendar year January-March

2004 2005 2006 2006 2007

Share of quantity (percent)

U.S. producers’ U.S. shipments 28.6 25.1 19.6 23.0 19.7

U.S. imports from--

China 27.4 39.7 53.3 45.9 56.5

United Arab Emirates 6.0 6.7 7.2 7.5 5.7

All subject countries 33.3 46.5 60.5 53.4 62.1

Nonsubject countries 38.1 28.5 19.9 23.6 18.2

All countries 71.4 74.9 80.4 77.0 80.3

Share of value (percent)

U.S. producers’ U.S. shipments 37.3 34.2 28.8 33.4 31.6

U.S. imports from--

China 20.5 29.2 40.2 33.1 40.8

United Arab Emirates 5.6 5.8 6.4 6.4 4.9

All subject countries 26.1 35.0 46.6 39.5 45.7

Nonsubject countries 36.5 30.8 24.6 27.1 22.6

All countries 62.7 65.8 71.2 66.6 68.4

Source: Compiled from data submitted in response to Commission questionnaires and from official Commerce 

statistics.

U.S. producers’ U.S. shipments’ share of the quantity and value of consumption of steel nails

decreased from 2004 to 2006, while imports from China increased in both share of quantity and share of

value. Subject imports, both from China and the UAE, accounted for a higher percentage of the U.S.

market with respect to quantity than with respect to value in each year. In 2004, the same was true for

nonsubject imports. However, in 2005 and 2006, nonsubject imports began to represent a higher share of

the market by value than by quantity (in 2006, nonsubject imports accounted for 19.9 percent of the U.S.

market by quantity, but 24.6 percent of the U.S. market by value).
IV-11

Figure IV-2

Steel nails: Apparent U.S. consumption, by sources, 2004-06, January-March 2006, and JanuaryMarch 2007

Source: Table IV-7.
IV-12

Table IV-9 presents information on the ratio of subject and nonsubject imports to U.S. production

of steel nails. Over the period of investigation, subject imports increased from approximately 114.3

percent of U.S. production in 2004 to 307.0 percent of U.S. production in 2006. As a ratio to U.S.

production, nonsubject imports decreased over the period of investigation.

Table IV-9

Steel nails: Ratios of U.S. imports to U.S. production, by sources, 2004-06, January-March 2006,

and January-March 2007

Item

Calendar year January-March

2004 2005 2006 2006 2007

U.S. production (in short tons) 361,136 300,745 227,611 70,414 40,434

Ratio to U.S. production (percent)

U.S. imports from--

China 93.9 159.5 270.4 195.9 278.2

United Arab Emirates 20.4 27.0 36.5 32.2 28.1

All subject countries 114.3 186.5 307.0 228.0 306.3

Nonsubject countries 130.6 114.4 100.8 100.5 89.6

All countries 244.9 300.9 407.8 328.6 395.9

Source: Compiled from data submitted in response to Commission questionnaires and from official Commerce 

statistics.
 1

 Source: U.S. Energy Information Administration, Monthly Energy Review, found at

http://www.eia.doe.gov/emeu/mer/contents.html, retrieved June 13, 2007.

V-1

PART V: PRICING AND RELATED INFORMATION

FACTORS AFFECTING PRICES

Raw Material Costs

The primary raw material used in the production of steel nails in the United States is carbon steel

wire. Producers can either form the wire from wire rod (in an “integrated” production operation) or

purchase pre-made wire (in a “non-integrated” operation). U.S. producers reported that raw material costs

as a percentage of cost of goods sold fell slightly from 62.7 percent in 2004 to 60.5 percent in 2006. This

decrease in raw materials costs occurred despite a rise in the cost of wire rod. Figure V-1 shows monthly

prices of wire rod from 2004 through March 2007. Overall, prices rose by 66.3 percent from January

2004 to March 2007, with most of that increase occurring during 2004. Energy inputs electricity and

natural gas are also used in the production process for steel nails. The costs of both natural gas and

electricity also increased since 2004 with natural gas prices rising by 20.8 percent from 2004 to 2006 and

electricity prices rising by 16.0 percent from 2004 to 2006 (on an annual basis).1

Figure V-1

Mesh wire rod: U.S. domestic prices, f.o.b. Midwest, monthly, January 2004-March 2007

Source: ***.
 2

 These estimates are based on HTS subheadings 7317.00.55 (excluding statistical reporting number

7317.00.5501 (roofing nails)), 7317.00.65, and 7317.00.75.

 3

 Throughout this section, the three divisions of ITW are treated as separate U.S. producers despite sharing

common ownership. Each division filled out its own questionnaire and ***.

 4

 Source: IMF International Financial Statistics. Downloaded from http://imfstatistics.org/imf/ifsBrowser.aspx,

June 5, 2007.

V-2

Transportation Costs to the U.S. Market

Transportation costs for certain steel nails to the United States (excluding U.S. inland costs) in

2006 are estimated to be equivalent to approximately 18.3 percent of the customs value for product from

China, and approximately 10.8 percent of the customs value for product from the UAE. These estimates

are up slightly from 17.6 percent for product from China and 9.4 percent for product from the UAE in

2004. These estimates are derived from official import data and represent the transportation and other

charges on imports valued on a c.i.f. basis, as compared with customs value.2

U.S. Inland Transportation Costs

U.S. inland transportation costs as a percent of total delivered cost for certain steel nails were

reported by 13 U.S. producers3

 and ranged from 3 percent to 12 percent, with nine of the 13 responding

U.S. producers reporting transportation costs of six percent or less. Reported U.S. inland transportation

costs ranged from 2 to 25 percent of the total delivered cost for the 30 responding importers of steel nails

from China or the UAE, with 27 of those importers reporting U.S. inland transportation costs of

10 percent or less.

Producers and importers were also asked to estimate the percentage of their sales that occurred

within certain distance ranges. Four of 16 responding U.S. producers reported shipping at least

50 percent of their sales under 100 miles, while only one U.S. producer reported shipping more than half

of its sales more than 1,000 miles. The remaining 11 responding U.S. producers reported shipping at least

50 percent of their sales between 100 and 1,000 miles. Twelve of 27 responding importers reported

shipping at least 50 percent of their sales less than 100 miles; 14 reported shipping at least 50 percent of

their sales between 100 and 1,000 miles; and three reported shipping at least 50 percent of their sales

more than 1,000 miles.

Exchange Rates

From 2000 to June of 2005, the Chinese currency was pegged at 8.28 yuan per U.S. dollar. 

There was a small revaluation in the third quarter of 2005, raising the value of the Chinese currency to

8.14 yuan per dollar, after which the yuan was moved to a crawling peg against the dollar. Since that

time, the yuan has appreciated slowly but steadily and averaged 7.76 yuan per dollar during JanuaryMarch 2007.4

Throughout the period for which data were collected, the UAE currency was pegged to the U.S.

dollar at a fixed rate of 3.67 dirham per U.S. dollar.
 5

 ***.

V-3

PRICING PRACTICES

Pricing Methods

Steel nails are sold almost exclusively on a spot basis. Fourteen of 16 responding U.S. producers

reported that 100 percent of their sales were made on a spot basis, with one more reporting that 85 percent

of its sales were made on a spot basis. One responding U.S. producer reported that 100 percent of its

sales were made on a short-term contract basis with contracts lasting one year. Twenty-six of

35 responding importers also reported that 100 percent of their sales were made on a spot basis, while

three reported that at least 85 percent of their sales were made on a spot basis. Four importers reported

that 100 percent of their sales were on a short-term contract basis and one reported that 90 percent of its

sales were on a short-term contract basis. One importer reported that 99.9 percent of its sales were made

on a long-term contract basis. Short-term contracts normally last from one to four months while longterm contracts last one to three years. 

Eleven of 15 responding U.S. producers reported making at least 75 percent of their sales from

inventory, whereas three reported making at least 80 percent of their sales on a produced-to-order basis. 

One U.S. producer reported that 60 percent of its sales were on a produced-to-order basis. Lead times for

sales from inventory range from immediate to two weeks while lead times on produced-to-order sales

range from one week to 90 days. Responding importers also sell both from inventory and on a producedto-order basis. Seven of 33 responding importers reported making 100 percent of their sales from

inventory, with another 10 importers reporting that at least 70 percent of their sales were from inventory. 

Nine responding importers reported that 100 percent of their sales were produced to order and another

two reported that at least 75 percent of their sales were on a produced-to-order basis. The remaining five

responding importers reported dividing their sales up fairly evenly between inventory and produced-toorder. Reported lead times on sales from inventory made by importers range from one day to two weeks

while lead times on produced-to-order sales range from six days to four months, with 28 of 29 responding

importers that sold on a produced-to-order basis reporting lead times of at least 45 days. 

While 10 of 16 responding U.S. producers reported having price lists, five of these 10 producers

also reported determining prices through transaction-by-transaction negotiations, and one reported

differences in price lists based on geographic location. One responding U.S. producer reported using only

transaction-by-transaction negotiations to determine price, two reported using a “cost-plus” method to

determine prices, and four stated that prices are largely determined by the price of competing imports. 

One U.S. producer5

 reported that the pricing technique ***. Twelve of 16 responding U.S. producers

reported having some sort of discount policy. Seven U.S. producers reported giving discounts based on

annual volumes, six reported giving discounts based on shipment quantity, and two reported giving

discounts based on early payment. 

Sixteen of 36 responding importers reported determining price through transaction-by-transaction

negotiations. Ten responding importers reported using price lists, though some of these also relied on

negotiations or regional pricing. Four responding importers reported using a “cost-plus” method to

determine price, and five reported that their prices were determined by market conditions. Twenty-one of

34 responding importers reported giving some sort of discounts. Most discounts are based on individual

order quantity (discounts for full truck loads) or annual volume. Two importers also reported giving

discounts for early payment while several reported that discounts are given on a case-by-case basis as a

result of negotiation. Thirteen importers reported that they have no discount policy.
 6

 ***.

 7

 ***. 

 8

 ***. 

 9

 No price data were received for nonsubject imported steel nails.

 10 ***.

 11 Petitioners’ postconference brief, p. 25.

V-4

PRICE DATA

The Commission requested U.S. producers and importers of steel nails to provide quarterly data

for the total quantity and f.o.b. (U.S. point of shipment) value of certain steel nails that were shipped to

unrelated customers in the U.S. market. Data were requested for the period January 2004 to March 2007. 

The products for which pricing data were requested are defined as follows:

Product 1.–3" by 0.131" bright smooth, plastic-strip collated nails

Product 2.–3" by 0.120" bright smooth, plastic-strip collated nails

Product 3.–2d" by 0.113" bright screw and ring shank nails, plastic-strip collated

Product 4.–31⁄4" by 0.148" 16D smooth vinyl-coated sinkers, bulk

Product 5.–2" by 0.113" bright drive screw, machine quality pallet nails, bulk

Product 6.–2" by 0.099" bright, drive screw, wire-welded collated in coils

Eleven U.S. producers,6

 26 importers of steel nails from China,7 and four importers of steel nails

from the UAE8

 provided usable pricing data for sales of the requested products, although not all firms

reported pricing for all quarters.9

 Tables V-1 through V-6 and figures V-2 through V-7 present f.o.b.

(U.S. point of shipment) selling prices to unrelated customers for the six products defined above produced

and sold in the United States as well as for products produced in China or the UAE and sold in the United

States. By quantity, pricing data reported by responding firms accounted for 16.5 percent of U.S.

commercial shipments of U.S.-produced steel nails, 17.3 percent of U.S. commercial shipments of

Chinese-produced steel nails, and 34.8 percent of U.S. commercial shipments of UAE-produced steel

nails during the period of January 2004-March 2007.

The data received by the Commission may be limited in their accuracy due to issues with unit

conversion. Specifically, for the collated products 1, 2, 3, and 6, staff requested quantity in short tons

while these products are normally sold in thousand count of nails. Moreover, the methods used to convert

these quantities to short tons do not appear to be consistent across responding firms. For example, for

product 2, while *** weighed and counted individual *** cartons sold to estimate the total weight, ***10

estimated the weight of a shipping crate to be *** and multiplied that weight by the number of shipping

crates sent. Still other parties may have used other conversion techniques. However, when asked about

conversion methods, ***11 reported a method identical to that used by the petitioners. 
V-5

Table V-1

Certain steel nails: Weighted-average f.o.b. prices and quantities of domestic and imported

product 11

 and margins of underselling/(overselling), by quarters, January 2004-March 2007

Period

United States China United Arab Emirates

Price

(per

short

ton)

Quantity

(short

tons)

Price

(per

short

ton)

Quantity

(short

tons)

Margin

(percent)

Price

(per short

ton)

Quantity

(short

tons)

Margin

(percent)

2004:

 Jan.-Mar. $756.74 5,796 $903.10 1,156 (19.3) $*** *** ***

 Apr.-June 934.11 5,772 878.87 1,841 5.9 *** *** ***

 July-Sept. 993.97 5,911 934.30 2,058 6.0 *** *** ***

 Oct.-Dec. 928.32 4,796 961.39 2,592 (3.6) *** *** ***

2005:

 Jan.-Mar. 937.28 4,081 947.95 2,675 (1.1) *** *** ***

 Apr.-June 905.60 5,332 801.01 3,658 11.5 *** *** ***

 July-Sept. 846.29 3,005 915.17 5,860 (8.1) *** *** ***

 Oct.-Dec. 816.07 3,286 920.13 6,057 (12.8) *** *** ***

2006:

 Jan.-Mar. 799.88 3,518 895.05 7,164 (11.9) *** *** ***

 Apr.-June *** *** 867.45 8,678 *** *** *** (4.1)

 July-Sept. *** *** 858.28 8,423 *** *** *** (6.6)

 Oct.-Dec. *** *** 844.19 5,394 *** *** *** (6.6)

2007:

 Jan.-Mar. 756.75 1,652 857.02 5,391 (13.2) *** *** ***

 1 3" by 0.131" bright smooth, plastic-strip collated nails.

Source: Compiled from data submitted in response to Commission questionnaires.

Figure V-2

Certain steel nails: Weighted-average prices of domestic and imported product 1, by quarters,

January 2004-March 2007

* * * * * * *
V-6

Table V-2

Certain steel nails: Weighted-average f.o.b. prices and quantities of domestic and imported

product 21

 and margins of underselling/(overselling), by quarters, January 2004-March 2007

Period

United States China United Arab Emirates

Price

(per short

ton)

Quantity

(short

tons)

Price

(per

short

ton)

Quantity

(short

tons)

Margin

(percent)

Price

(per short

ton)

Quantity

(short

tons)

Margin

(percent)

2004:

 Jan.-Mar. *** *** $953.23 379 *** $*** *** 3.7

 Apr.-June $943.76 3,776 1,138.71 607 (20.7) *** *** ***

 July-Sept. *** *** 1,046.17 800 *** *** *** (12.4)

 Oct.-Dec. 978.25 2,234 1,079.78 857 (10.4) *** *** ***

2005:

 Jan.-Mar. 927.40 2,503 981.76 2,084 (5.9) *** *** ***

 Apr.-June 917.91 3,779 986.89 2,606 (7.5) *** *** ***

 July-Sept. *** *** 978.59 2,252 *** *** *** (5.3)

 Oct.-Dec. *** *** 991.73 1,953 *** *** *** (3.2)

2006:

 Jan.-Mar. *** *** 931.59 3,432 *** *** *** (5.3)

 Apr.-June *** *** 902.19 5,541 *** *** *** (5.0)

 July-Sept. *** *** 901.16 3,501 *** *** *** (5.2)

 Oct.-Dec. *** *** 924.96 2,667 *** *** *** (6.3)

2007:

 Jan.-Mar. *** *** 815.37 3,216 *** *** *** (6.8)

 1 3" by 0.120" bright smooth, plastic-strip collated nails.

Source: Compiled from data submitted in response to Commission questionnaires.

Figure V-3

Certain steel nails: Weighted-average prices of domestic and imported product 2, by quarters,

January 2004-March 2007

* * * * * * *
V-7

Table V-3

Certain steel nails: Weighted-average f.o.b. prices and quantities of domestic and imported

product 31

 and margins of underselling/(overselling), by quarters, January 2004-March 2007

Period

United States China United Arab Emirates

Price

(per short

ton)

Quantity

(short

tons)

Price

(per short

ton)

Quantity

(short

tons)

Margin

(percent)

Price

(per short

ton)

Quantity

(short

tons)

Margin

(percent)

2004:

 Jan.-Mar. $967.83 689 $1,244.68 281 (28.6) $*** *** ***

 Apr.-June 1,182.61 746 1,386.69 375 (17.3) *** *** ***

 July-Sept. 1,384.76 648 1,398.51 457 (1.0) *** *** ***

 Oct.-Dec. 1,230.74 474 1,427.04 387 (15.9) *** *** ***

2005:

 Jan.-Mar. 1,152.95 467 1,266.15 604 (9.8) *** *** ***

 Apr.-June 1,155.66 554 1,261.26 833 (9.1) *** *** ***

 July-Sept. 1,116.31 591 1,284.20 766 (15.0) *** *** ***

 Oct.-Dec. 1,145.51 498 1,270.54 705 (10.9) *** *** ***

2006:

 Jan.-Mar. 1,084.05 480 1,181.11 957 (9.0) *** *** ***

 Apr.-June 1,085.45 514 1,155.10 1,063 (6.4) *** *** ***

 July-Sept. 1,109.92 388 1,190.10 891 (7.2) *** *** ***

 Oct.-Dec. *** *** 1,155.88 746 *** *** *** (3.9)

2007:

 Jan.-Mar. 1,065.79 302 1,099.43 841 (3.2) *** *** ***

 1 2d” by 0.113" bright screw and ring shank nails, plastic-strip collated nails.

Source: Compiled from data submitted in response to Commission questionnaires.

Figure V-4

Certain steel nails: Weighted-average prices of domestic and imported product 3, by quarters,

January 2004-March 2007

* * * * * * *
V-8

Table V-4

Certain steel nails: Weighted-average f.o.b. prices and quantities of domestic and imported

product 41

 and margins of underselling/(overselling), by quarters, January 2004-March 2007

Period

United States China United Arab Emirates

Price

(per short

ton)

Quantity

(short

tons)

Price

(per short

ton)

Quantity

(short

tons)

Margin

(percent)

Price

(per short

ton)

Quantity

(short

tons)

Margin

(percent)

2004:

 Jan.-Mar. $*** *** *** *** (8.1) $*** *** (4.2)

 Apr.-June *** *** *** *** 25.7 - 0 -

 July-Sept. *** *** *** *** (21.4) - 0 -

 Oct.-Dec. *** *** *** *** 25.7 - 0 -

2005:

 Jan.-Mar. *** *** *** *** 25.8 - 0 -

 Apr.-June *** *** *** *** 22.5 - 0 -

 July-Sept. *** *** $749.54 874 *** - 0 -

 Oct.-Dec. *** *** 694.06 1,802 *** - 0 -

2006:

 Jan.-Mar. *** *** 645.69 2,802 *** - 0 -

 Apr.-June *** *** 668.90 3,322 *** - 0 -

 July-Sept. *** *** 670.13 3,904 *** - 0 -

 Oct.-Dec. *** *** 737.48 1,115 *** - 0 -

2007:

 Jan.-Mar. *** *** 629.95 1,552 *** - 0 -

 1 31⁄4" by 0.148" 16D smooth vinyl-coated sinkers, bulk.

Source: Compiled from data submitted in response to Commission questionnaires.

Figure V-5

Certain steel nails: Weighted-average prices of domestic and imported product 4, by quarters,

January 2004-March 2007

* * * * * * *
V-9

Table V-5

Certain steel nails: Weighted-average f.o.b. prices and quantities of domestic and imported

product 51

 and margins of underselling/(overselling), by quarters, January 2004-March 2007

Period

United States China United Arab Emirates

Price

(per

short

ton)

Quantity

(short

tons)

Price

(per

short

ton)

Quantity

(short

tons)

Margin

(percent)

Price

(per

short

ton)

Quantity

(short

tons)

Margin

(percent)

2004:

 Jan.-Mar. $*** *** *** *** (10.8) - 0 -

 Apr.-June *** *** *** *** (4.3) - 0 -

 July-Sept. *** *** *** *** (2.4) - 0 -

 Oct.-Dec. *** *** *** *** 4.0 - 0 -

2005:

 Jan.-Mar. *** *** $990.44 52 *** - 0 -

 Apr.-June *** *** 1,034.90 72 *** - 0 -

 July-Sept. *** *** 899.07 244 *** - 0 -

 Oct.-Dec. *** *** 871.96 366 *** - 0 -

2006:

 Jan.-Mar. *** *** 868.51 388 *** - 0 -

 Apr.-June *** *** 810.03 608 *** - 0 -

 July-Sept. *** *** 766.96 878 *** - 0 -

 Oct.-Dec. *** *** 749.30 971 *** - 0 -

2007:

 Jan.-Mar. *** *** 736.29 753 *** - 0 -

 1 2" by 0.113" bright, drive screw, machine quality pallet nails, bulk.

Source: Compiled from data submitted in response to Commission questionnaires.

Figure V-6

Certain steel nails: Weighted-average prices of domestic and imported product 5, by quarters,

January 2004-March 2007

* * * * * * *
V-10

Table V-6

Certain steel nails: Weighted-average f.o.b. prices and quantities of domestic and imported

product 61

 and margins of underselling/(overselling), by quarters, January 2004-March 2007

Period

United States China United Arab Emirates

Price

(per short

ton)

Quantity

(short

tons)

Price

(per short

ton)

Quantity

(short

tons)

Margin

(percent)

Price

(per short

ton)

Quantity

(short

tons)

Margin

(percent)

2004:

 Jan.-Mar. $*** *** *** *** 5.4 *** *** 19.4

 Apr.-June *** *** *** 1,312 *** *** *** 18.1

 July-Sept. *** *** $1,042.12 *** 4.0 *** *** (31.4)

 Oct.-Dec. *** *** *** *** 15.3 *** *** (8.5)

2005:

 Jan.-Mar. *** *** 1,251.09 1,832 *** *** *** (6.7)

 Apr.-June *** *** 1,229.29 1,603 *** *** *** (10.1)

 July-Sept. *** *** 1,247.44 1,775 *** *** *** (1.3)

 Oct.-Dec. *** *** 1,251.70 1,915 *** *** *** 2.4

2006:

 Jan.-Mar. *** *** 1,248.02 2,126 *** *** *** 2.8

 Apr.-June *** *** 1,102.00 2,488 *** *** *** 1.9

 July-Sept. *** *** 1,058.83 1,931 *** *** *** (5.9)

 Oct.-Dec. *** *** 1,117.05 2,042 *** *** *** 10.5

2007:

 Jan.-Mar. *** *** 1,121.15 2,360 *** *** *** 6.5

 1 2" by 0.99" bright, drive screw, wire-welded collated in coils.

Source: Compiled from data submitted in response to Commission questionnaires.

Figure V-7

Certain steel nails: Weighted-average prices of domestic and imported product 6, by quarters,

January 2004-March 2007

* * * * * * *

Price Trends

U.S. producers’ average prices for products 1, 2, and 3 rose *** in 2004, peaked in ***, and fell

*** through the end of the period. U.S. prices for product 6 showed a similar pattern but peaked in ***

before falling through the end of the period. Prices for product 5 peaked in ***, fell *** through the first

quarter of 2006 but rose *** thereafter. Prices for product 4 move erratically throughout the period. 

However, *** during the period for which data were collected. As a result of the increase and subsequent

decline seen in these prices, overall, from January-March 2004 through January-March 2007, prices for

most products show only modest change, rising by less than 0.002 percent, *** percent, 10.1 percent, and

*** percent for products 1, 2, 3, and 6, respectively. Prices for product 5 showed a slightly different

pattern, increasing by *** percent from January-March 2004 to January-March 2007. While prices for
 12 Petitioners’ postconference brief, p. 25.

 13 Total value of the lost sale was not provided for all alleged lost sales. Staff estimated these “missing-value”

alleged lost sales to total to approximately $1.7 million.

 14 Confirmed lost sales or lost revenues allegations are instances in which purchasers responded “Agree” to the

allegations. Purchasers were instructed to respond “Agree” in instances where a sale was given to a Chinese or UAE

(continued...)

V-11

product 4 show a substantial increase of *** percent overall, the small quantity produced lessens the

importance of this result. 

Prices of U.S. shipments of all products imported from China show a pattern similar to that seen

in prices of U.S.-produced products. For the most part, prices rose through 2004 and sometimes into

early 2005 before falling during the remainder of the period. Over the course of the entire period, prices

for U.S. shipments of products 1, 2, 3, and 4 imported from China fell by 5.1 percent, 14.5 percent,

11.7 percent, and *** percent, respectively, whereas prices of U.S. shipments of products 5 and 6

imported from China rose by *** percent and *** percent, respectively.

Prices of U.S. shipments of products 1, 2, 3, and 6 imported from the United Arab Emirates ***,

with prices for each of these products peaking in ***. Over the course of the entire period, however,

prices for U.S. shipments of products 1, 2, 3, and 6 imported from the United Arab Emirates rose ***. 

Overall, prices of U.S. shipments of products 1, 2, 3, and 6 imported from the United Arab Emirates rose

by *** percent, *** percent, *** percent, and *** percent, respectively.

Price Comparisons

Overall, there is no clear-cut pattern of underselling among the six products from either China or

the UAE. In fact, aside from product 4 from China (which undersold its U.S.-produced counterpart in 10

of 13 quarters), products from China undersold their counterpart U.S.-produced products in only 13 of

65 possible quarters. Furthermore, eight of the 13 quarters in which Chinese products 1, 2, 3, 5, and 6

undersold their U.S. counterparts took place before July-September 2005. Petitioners claim that, “***.”12

Staff found this not to be the case. Due to the ***, staff found that the exclusion of its data ***. 

Furthermore staff found no compelling reason to exclude ***’s data. Products imported from the UAE

undersold their U.S. counterparts in 22 of 53 possible quarters (with 15 of these 22 quarters before JulySeptember 2005). Products 1 and 2 from the UAE—***—were priced higher than their U.S.

counterparts in all quarters after April-June 2005. On average over the entire period for which data were

collected, only products *** from the UAE and product 4 from China undersold their U.S. counterparts. 

For the remaining eight of the 11 possible product/country combinations, U.S.-produced product

undersold the imported counterpart product. Average margins of underselling for products 1 and 3 from

the UAE were small at *** percent and *** percent, respectively, while the average margin of

underselling for product 4 from China was 11.6 percent. Again, the minimal quantity of product 4

produced in the United States renders this result not meaningful.

LOST SALES AND LOST REVENUES

The petitioners provided a list of 255 alleged lost sales to Chinese or UAE competitors totaling

more than $17,079,41613 between January 2004 and March 2007. Staff attempted to contact

10 purchasers associated with $14,694,669, or approximately 86.0 percent, of those lost sales. In

addition, petitioners alleged another $914,458 of lost revenue attributable to lower prices on retained

contracts caused by competition from Chinese or UAE producers. Staff attempted to contact eight

customers involved in $727,282, or 79.5 percent of those alleged lost revenues. As of this writing, staff

was able to confirm $*** in total lost sales and $*** in lost revenues.14 Customers rejected the
 14 (...continued)

supplier over U.S. competitors due to differences in price or when the price paid was lowered due to competition

from Chinese or UAE suppliers. 

 15 ***. 

 16 ***.

V-12

allegations for $*** in lost sales and $*** in lost revenues. $*** of the rejected lost sales allegations and

*** of the rejected lost revenue allegations were rejected by one customer (***). This customer denied

the allegations for a variety of reasons. In some cases, no purchases were made in the month of the

allegation, whereas in other cases product was ordered from a U.S. producer during the month of the

allegation. For allegations concerning ***, this customer reported purchasing from a supplier that sells

both domestic and imported product, and whether the product purchased was domestic or imported was

not clear. This customer also reported that it switched away from one domestic producer due to issues

with quality rather than price, and that product availability and packaging options also played a role in the

purchase of imported product. The remainder, ***, of the rejected lost sales were rejected by one other

customer, ***. These lost sales were rejected for a variety of reasons as well. Some products listed in the

allegations were not carried by this customer in the period mentioned, while others were purchased in

quantities much smaller than alleged. One rejected allegation involved *** nails, which this customer

claimed are not made in the United States at all. Instead, the customer noted, the U.S. producers offer ***

as a substitute. ***. The large difference in price is seen in the lost sale allegation where the rejected

U.S. price in the allegation involving *** nails was $*** per 1,000 nails (same as that listed for the

allegation involving the same size *** nails), whereas the accepted import price for the *** nails was

$*** per 1,000 nails. Information on alleged lost revenues and lost sales can be seen in tables V-7 and V8. Since each customer contacted was involved with a large number of lost sales or lost revenue

allegations, the table presents the lost sale or lost revenue allegations aggregated by customer.

Table V-7 

Steel nails: U.S. producers’ lost revenue allegations

* * * * * * *

Table V-8

Steel nails: U.S. producers’ lost sales allegations

* * * * * * *

In addition to the lost sales and revenues alleged by the petitioners, three non-petitioning U.S.

producers15 provided examples of lost sales or revenues. Of these, only one U.S. producer16 gave details

and total dollar values lost. While this producer reported lost revenues totaling $*** due to competition

from imported nails, it did not report in which countries these imports were produced. Staff did not

attempt to verify these allegations.
 1

 The firms, including three separate responses filed by operating units of ITW, are: Air Nail/ISM; Davis Wire;

Gerdau; ITW-Industrial Fastening; ITW-Paslode; ITW-Ramset; Keystone; Maze Nails; Mid Continent; Senco;

Specialty Fasteners; Stanley Bostitch; Treasure Coast; Tree Island; and Wheeling-LaBelle. With the exception of

***, U.S. producers reported having a fiscal year that ends in December. Differences between data reported in the

trade and financial sections of the Commission’s producers’ questionnaire are mainly attributable to timing

differences and to the reporting by ***. *** responded only to the trade section of the Commission’s questionnaire

and provided data for 2004 and 2005; *** provided limited data for the trade section of its questionnaire response

but its incomplete data in the financial section of the Commission’s questionnaire were not used (***). As noted in

Part III of this report, ***.

VI-1

PART VI: FINANCIAL EXPERIENCE OF U.S. PRODUCERS

BACKGROUND

Fifteen producers1

 provided usable financial data on their operations producing steel nails. These

reported data are believed to represent over 90 percent of U.S. steel nails production in the period for

which data were collected.

OPERATIONS ON STEEL NAILS

Income-and-loss data for U.S. producers’ steel nails operations are presented in table VI-1, and

are briefly summarized here. Both the quantity and value of total sales fell sharply between 2004 and

2006 and again between January-March 2006 and the same period in 2007, leading to lower but still

positive values for operating profit, net income before taxes, and cash flow. The average unit value of

sales increased between 2004 and 2006 as well as between January-March 2006 and the same period in

2007, offsetting somewhat the fall in volume. The average unit value of cost of goods sold (“COGS”)

increased irregularly between 2004 and 2006 and increased sharply between January-March 2006 and the

same period in 2007. The average unit value of operating income increased slightly between 2004 and 

2006 and rose between January-March 2006 and the same period in 2007. Operating income, expressed

as a ratio to sales, declined slightly between 2004 and 2006 as well as between January-March 2006 and

the same period in 2007.
VI-2

Table VI-1

Steel nails: Results of operations of U.S. producers, fiscal years 2004-06, January-March 2006, and

January-March 2007 

Item

Fiscal year January-March

2004 2005 2006 2006 2007

Quantity (short tons)

Total net sales1 337,642 292,808 227,243 69,875 39,692

Value ($1,000)

Total net sales1 486,762 458,041 357,551 107,493 71,484

COGS:

 Raw materials 235,796 220,092 163,789 50,795 31,830

 Direct labor 46,100 43,026 32,584 9,056 6,751

 Other factory costs 94,207 90,019 74,436 22,847 14,197

 Total COGS 376,103 353,137 270,809 82,699 52,777

Gross profit 110,659 104,903 86,742 24,794 18,707

SG&A expenses 43,675 43,258 38,575 10,304 9,453

Operating income 66,984 61,645 48,167 14,489 9,253

Interest expense 723 741 1,367 213 370

Other expense 538 486 668 97 352

Other income 884 452 812 357 350

Net income 66,607 60,870 46,944 14,537 8,881

Depreciation 12,136 11,864 11,332 2,694 2,541

Cash flow 78,743 72,734 58,276 17,231 11,422

Ratio to total net sales (percent)

COGS:

 Raw materials 48.4 48.1 45.8 47.3 44.5

 Direct labor 9.5 9.4 9.1 8.4 9.4

 Other factory costs 19.4 19.7 20.8 21.3 19.9

 Total COGS 77.3 77.1 75.7 76.9 73.8

Gross profit 22.7 22.9 24.3 23.1 26.2

SG&A expenses 9.0 9.4 10.8 9.6 13.2

Operating income 13.8 13.5 13.5 13.5 12.9

Net income 13.7 13.3 13.1 13.5 12.4

Table continued on following page.
VI-3

Table VI-1--Continued

Steel nails: Results of operations of U.S. producers, fiscal years 2004-06, January-March 2006, and

January-March 2007

Item

Fiscal year January-March

2004 2005 2006 2006 2007

Unit value of net sales (dollars per short ton)

Total net sales 1,442 1,564 1,573 1,538 1,801

COGS:

 Raw materials 698 752 721 727 802

 Direct labor 137 147 143 130 170

 Other factory costs 279 307 328 327 358

 Total COGS 1,114 1,206 1,192 1,184 1,330

Gross profit 328 358 382 355 471

SG&A expenses 129 148 170 147 238

Operating income 198 211 212 207 233

Net income 197 208 207 208 224

Number of firms reporting2

Operating losses 2 6 6 5 7

Data 15 15 15 15 15

1

 ***.

2

 Includes the ***.

 

Note.--Because of rounding, figures may not add to the totals shown.

Source: Compiled from data submitted in response to Commission questionnaires.

Table VI-2 presents data on total net sales, COGS, selling, general, and administrative (“SG&A”)

expenses, and operating income on a firm-by-firm basis.

Table VI-2

Steel nails: Results of operations of U.S. producers, by firms, fiscal years 2004-06, January-March

2006, and January-March 2007

* * * * * * *

The decline in operating margins (operating income or loss as a percentage of net sales), while

minimal at the industry-wide level, did cut across most of the firms. From 2004 to 2006, 12 of the

15 producers reported lower operating margins, and 11 reported lower margins in the first three months of

2007 as compared to the first three months of 2006. Also, the number of firms reporting operating losses

increased from two to six between 2004 and 2005, remained at six in 2006, and increased to seven in the

first quarter of 2007.

There are considerable differences among the reporting firms. First, size is important as regards

profitability. Four firms, ***, each reported sales in excess of *** short tons and $*** in 2006. Together
 2

 This group of firms would account for only *** of U.S. producers’ operating income in 2006 of $*** if ***, and

only *** of U.S. producers’ operating income in 2006 of $*** if ***.

 3

 ***. Staff interviews with *** and ***.

 4

 This group of firms would account for only *** of U.S. producers’ operating income in 2006 of $*** if ***, and

*** of U.S. producers’ operating income in 2006 of $*** if ***.

 5

 Wheeling-LaBelle uses a process that cuts nails from high-carbon steel plate that is sheared into strips. 

Conference transcript, p. 39 (McMorrow). Making nails sheared from steel plate replaced the previous process of

hand-forging or making cut nails by machine from wrought iron, but has been largely supplanted by making nails

from drawn steel wire. For articles on the history of nails, see

http://wheeling.weirton.lib.wv.us/history/bus/nails.htm, http://www.appaltree.net/aba/nails.htm, and

http://www.glasgowsteelnail.com/nailmaking.htm. 

VI-4

they accounted for *** percent and *** percent of total producers’ sales by quantity and value,

respectively, and *** percent of the producers’ operating income in 2006.2

 Aggregated COGS plus

SG&A expenses of the four firms accounted for *** percent of the producers’ total in those categories. 

This group also accounted for *** percent of capital expenditures and *** percent of research and

development expenses of all U.S. producers in 2006. A second group of five firms, ***, reported sales

exceeding either *** short tons or $***.3

 In 2006, these five firms together accounted for *** percent of

total sales quantity of U.S. producers, *** percent of producers’ sales value, *** percent of aggregated

COGS plus SG&A expenses, and *** percent of the producers’ operating income.4

 ***. The remaining

firms accounted for the balance of the industry data and *** in 2006.

Second, product mix in terms of shipments of collated nails, higher value coatings, or specialized

fasteners, is loosely correlated with profitability. Within the first group above, three of the four firms,

***, reported U.S. shipments only of collated nails; ***. Each reported shipments of bright and

galvanized nails; the average unit value of galvanized nails is higher, sometimes several times higher,

compared to that of bright nails. With regard to the second group of five firms, ***. Again, the average

unit value of coated nails, primarily galvanized, was higher than that of the bright nails. Shipments of the

remaining firms in the U.S. industry were mixed: ***.

All U.S. producers, except Wheeling-LaBelle,5

 use steel wire as the immediate input to the nailmaking process, as described earlier in this report. No producer purchases nails and collates them. Two

reporting U.S. producers are fully integrated in that they melt and cast steel that they use to produce wire

rod which they draw into wire (***). Eight additional firms reported purchasing wire rod which they

draw into wire of the desired diameter prior to making nails (***), although *** reported purchasing

galvanized wire to make nails with a zinc coating. Last, *** reported purchasing wire which is drawn to

the desired gauge or used as-is in the nail-making process. Hence, raw material costs are those of steel

wire, including coatings as applicable. These costs would include the accumulated costs of making or

purchasing wire rod and drawing it into wire or purchasing wire. Table VI-3 presents data on the unit

values of the reporting U.S. producers’ raw material costs, and their ratios of raw material cost to total net

sales and to COGS.

Table VI-3

Steel nails: Raw material costs of U.S. producers, by firms, fiscal years 2004-06, January-March

2006, and January-March 2007

* * * * * * *
VI-5

A variance analysis for the 15 U.S. producers is presented in table VI-4. The information for this

variance analysis is derived from table VI-1. The variance analysis provides an assessment of changes in

profitability as related to changes in pricing, cost, and volume. Between 2004 and 2006, the unfavorable

operating income variance of $18.8 million was attributable primarily to a favorable variance on price

(higher unit prices) that was more than offset by unfavorable variances on net cost/expense and volume

(higher unit costs and lower volume). The decrease in operating income between January-March 2006

and the same period in 2007 of $5.2 million was attributable to the same factors.

Table VI-4

Steel nails: Variance analysis on results of operations of domestic producers, fiscal years 2004-

06, January-March 2006, and January-March 2007 

Item

Fiscal years January-March

2004-06 2004-05 2005-06 2006-07

Total net sales:

 Price variance 29,946 35,914 2,074 10,423

 Volume variance (159,157) (64,635) (102,564) (46,432)

 Total net sales variance (129,211) (28,721) (100,490) (36,009)

Cost of goods sold:

 Cost variance (17,681) (26,976) 3,255 (5,801)

 Volume variance 122,975 49,941 79,074 35,722

 Total cost of goods variance 105,294 22,965 82,329 29,922

Gross profit variance (23,917) (5,756) (18,161) (6,087)

SG&A expenses:

 Expense variance (9,181) (5,383) (5,003) (3,600)

 Volume variance 14,280 5,799 9,686 4,451

 Total SG&A variance 5,100 416 4,683 851

Operating income variance (18,817) (5,339) (13,478) (5,236)

Summarized as:

 Price variance 29,946 35,914 2,074 10,423

 Net cost/expense variance (26,861) (32,359) (1,748) (9,400)

 Net volume variance (21,902) (8,895) (13,803) (6,259)

Note.--Unfavorable variances are shown in parenthesis; all others are favorable. The data are comparable to

changes in operating income as presented in table VI-1.

Source: Compiled from data submitted in response to Commission questionnaires.
VI-6

CAPITAL EXPENDITURES, RESEARCH AND DEVELOPMENT EXPENSES,

AND INVESTMENT IN PRODUCTIVE FACILITIES

The responding firms’ data on capital expenditures and research and development (“R&D”)

expenses related to the production of steel nails are shown in table VI-5.

Table VI-5

Steel nails: Capital expenditures and R&D expenses of U.S. producers, fiscal years 2004-06,

January-March 2006, and January-March 2007

Item

Fiscal year January-March

2004 2005 2006 2006 2007

Value ($1,000)

Capital expenditures:

*** *** *** *** *** ***

*** *** *** *** *** ***

*** *** *** *** *** ***

*** *** *** *** *** ***

*** *** *** *** *** ***

*** *** *** *** *** ***

*** *** *** *** *** ***

*** *** *** *** *** ***

*** *** *** *** *** ***

*** *** *** *** *** ***

*** *** *** *** *** ***

*** *** *** *** *** ***

*** *** *** *** *** ***

 Total 15,155 8,309 7,102 2,677 737

R&D expenses:

*** *** *** *** *** ***

*** *** *** *** *** ***

*** *** *** *** *** ***

*** *** *** *** *** ***

*** *** *** *** *** ***

 Total 3,033 *** *** *** ***

Source: Compiled from data submitted in response to Commission questionnaires.
VI-7

ASSETS AND RETURN ON INVESTMENT

The Commission’s questionnaire requested data on assets used in the production, warehousing,

and sale of steel nails to compute return on investment (“ROI”) for 2004 to 2006. The data for total net

sales and operating income are from table VI-1. Operating income was divided by total assets, resulting

in ROI, shown in table VI-6.

Table VI-6

Steel nails: Value of assets used in the production, warehousing, and sale, and return on

investment, 2004-06

Item

Fiscal year

2004 2005 2006

Value (1,000 dollars)

Current assets:

Cash and equivalent 23,147 27,238 34,113

Accounts receivable, net 43,674 49,642 40,041

Inventories 42,138 39,529 42,817

All other current assets 11,884 16,612 10,806

Subtotal current assets 120,843 133,020 127,777

Noncurrent assets:

Original cost of property, plant, and equipment 215,998 200,679 175,217

Accumulated depreciation 155,400 140,756 124,155

Book value of property, plant, and equipment 60,598 59,924 51,063

Other noncurrent assets 23,702 31,169 27,153

Subtotal noncurrent assets 84,300 91,093 78,216

Total assets 205,143 224,113 205,993

Total net sales 486,762 458,041 357,551

Operating income or (loss) 66,984 61,645 48,167

Ratio (percent)

Return on investment 32.7 27.5 23.4

Source: Compiled from data submitted in response to Commission questionnaires.

CAPITAL AND INVESTMENT

The Commission requested U.S. producers to describe any actual or potential negative effects of

imports of steel nails from China and the UAE on the firms’ growth, investment, and ability to raise

capital or development and production efforts (including efforts to develop a derivative or more advanced

version of the product). Their responses are shown in appendix D.
 
 1

 Section 771(7)(F)(ii) of the Act (19 U.S.C. § 1677(7)(F)(ii)) provides that “The Commission shall consider *** .

. . 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

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
 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

 In July 2007, China reduced its export tax rebate from 13 percent to 5 percent for steel nails. Petitioners’

postconference brief, p. 44, and exh. 8, Chinese respondents’ postconference brief, p. 46 and exh. E, and 

http://online.wsj.com/article/SB118227762668940779.html?mod=googlenews_wsj, retrieved July 2, 2007.

VII-2

agricultural product or the processed agricultural product (but not

both),

(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 volume and pricing of imports of the subject merchandise is presented in Parts

IV and V. 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;” any other

threat indicators, if applicable; and any dumping in third-country markets, follows.

THE INDUSTRY IN CHINA

 The petition identified 75 alleged producers of steel nails in China. Table VII-1 lists information

on 43 responding Chinese firms in 2006. These firms accounted for about 71 percent of U.S. imports of

steel nails from China during 2006.3

 Table VII-2 presents data for these 43 firms during 2004-06,

January-March 2006, January-March 2007, and forecasts for 2007 and 2008. *** were the four largest

reporting Chinese producers of steel nails, together accounting for almost 38 percent of Chinese steel nail

imports. Reported Chinese capacity and production of steel nails increased considerably from 2004 to

2006, and capacity utilization increased somewhat. Reported Chinese exports of steel nails to the United

States nearly doubled from 2004 to 2006, but are projected to decrease in 2007 before increasing again in

2008, but not to 2006 levels. Several Chinese producers cited the expected downturn in the housing

market as the reason for the projected decrease in exports of steel nails to the United States. Exports to all

other markets have also doubled over the period, but are much smaller, in volume, than exports from

China to the United States.
VII-3

Table VII-1

Steel nails: Chinese firms, their 2006 production, exports to the United States, and share of

reported Chinese exports to the United States

* * * * * * *

Table VII-2

Steel nails: Chinese producers’ operations, 2004-06, January-March 2006, January-March 2007,

and projected 2007-08

Item

Actual experience Projections

2004 2005 2006

January-March

2006 2007 2007 2008

Quantity (short tons)

Capacity 345,910 456,164 580,282 129,920 140,125 542,769 567,526

Production 297,030 386,180 525,419 112,700 117,539 490,361 514,323

End of period inventories 13,823 20,018 20,349 17,553 22,065 19,586 23,874

Shipments:

Internal consumption *** *** *** *** *** *** ***

Home market *** *** *** *** *** *** ***

Exports to--

The United States 229,990 324,213 436,588 100,886 100,568 376,219 390,444

All other markets 40,416 57,323 80,352 15,916 25,863 100,940 111,305

Total exports 270,406 381,535 516,940 116,802 126,431 477,159 501,750

Total shipments 310,950 434,930 576,224 130,719 139,113 543,729 570,187

Ratios and shares (percent)

Capacity utilization 85.6 84.4 90.4 86.7 83.9 90.3 90.6

Inventories to production 4.7 5.2 3.9 3.9 4.7 4.0 4.6

Inventories to total 

shipments 4.4 4.6 3.5 3.4 4.0 3.6 4.2

Share of total shipments:

Internal consumption *** *** *** *** *** *** ***

Home market *** *** *** *** *** *** ***

Exports to--

The United States 74.0 74.5 75.8 77.2 72.3 69.2 68.5

All other markets 13.0 13.2 13.9 12.2 18.6 18.6 19.5

Total exports 87.0 87.7 89.7 89.4 90.9 87.8 88.0

Source: Compiled from data submitted in response to Commission questionnaires.
 4

 Dubai Wire is the sole exporter of steel nails to the United States (postconference brief of Dubai Wire, p. 1). 

Faxes and e-mails were sent to Samrat Wire and Steel Racks, ***. Samrat Wire was established in 1999 as the

successor to Wire & Wire Products Industries; the parent company is M/s Samarat Group of Companies. Samarat

Wire has planned to produce 12,000 metric tons of wire and wire products per year. The range of wire products to

be manufactured includes the following: wire nails (sinker nails, common box, finish, casting, panel pin, roofing

nails, tile nails, blued nails, wire collated nails, E.G. nails, spike & hot dip galvanized nails); cable armored wire;

black annealed wire; galvanized binding wire; A.C.S.R. wire; fish cage wire; and spring wire. 

http://www.mesteel.com/swil/, retrieved July 2, 2007.

Steel Racks responded *** indicates on its web site that it produces all sizes of “mild steel” wire nails

(common nails, roofing nails, and twisted nails), screws and bolts, and accessories for shop display fittings. 

http://www.showracksdubai.com/Steelracks/html/contactus.htm, retrieved July 2, 2007.

 5

 Postconference brief of Dubai Wire, p. 1.

VII-4

THE INDUSTRY IN THE UNITED ARAB EMIRATES

 The petition identified three alleged producers of steel nails in the UAE: Dubai Wire FZE

(“Dubai Wire”), Dubai, UAE; Samrat Wire Industry, LLC (“Samrat Wire”), Dubai, UAE; and Steel

Racks Factory (“Steel Racks”), Ajman, UAE.4

 Dubai Wire is the *** UAE steel nail producer during the

period of investigation,5

 and its information is presented in table VII-3. Dubai Wire’s capacity remained

constant during the period of investigation. Production peaked in 2005, but generally increased from

2004 to 2006. ***, it is projected to *** in 2007 and 2008. Shipments to the United States followed the

same trend. According to Dubai Wire, the decrease in production during the interim periods of 2006 and

2007 and the projected 2007-08 ***. Additionally, in 2006 exports to all other markets made up just over

*** percent of UAE’s shipments *** projected to *** percent of shipments in 2007 and 2008. Finally,

UAE exports of steel nails to the United States in 2006 were just over *** percent of the quantity of

Chinese exports of steel nails to the United States in 2006.

Dubai Wire indicated in its questionnaire response that ***. It also indicated that ***.

Table VII-3

Steel nails: Dubai Wire FZE’s operations, 2004-06, January-March 2006, January-March 2007, and

projected 2007-08

* * * * * * *

U.S. IMPORTERS’ INVENTORIES

Inventories of U.S. imports as reported are presented in table VII-4. Inventories of Chinese nails

increased from 2004 to 2006, as did the ratios of inventories to imports and to U.S. shipments of imports. 

Inventories from the UAE followed the same trend. Inventories from all other sources dropped over the

period, but the ratios of inventories to imports and inventories to U.S. shipments of imports increased

over the period for all other sources.
VII-5

Table VII-4

Steel nails: U.S. importers’ end-of-period inventories of imports, by source, 2004-06, JanuaryMarch 2006, and January-March 2007

Item

Calendar year January-March

2004 2005 2006 2006 2007

China:

Inventories (short tons) *** *** *** *** ***

Ratio of inventories to imports (percent) *** *** *** *** ***

Ratio to U.S. shipments of imports (percent) *** *** *** *** ***

UAE:

Inventories (short tons) *** *** *** *** ***

Ratio of inventories to imports (percent) *** *** *** *** ***

Ratio to U.S. shipments of imports (percent) *** *** *** *** ***

Subtotal (subject):

Inventories (short tons) 19,560 29,817 38,151 27,202 34,049

Ratio of inventories to imports (percent) 6.5 7.6 8.1 6.0 8.7

Ratio to U.S. shipments of imports (percent) 6.6 7.8 8.2 5.9 8.5

All other sources:

Inventories (short tons) 27,396 25,209 19,410 28,242 13,524

Ratio of inventories to imports (percent) 9.9 12.6 13.1 16.9 14.2

Ratio to U.S. shipments of imports (percent) 10.4 12.7 13.0 18.8 12.2

All sources:

Inventories (short tons) 46,956 55,026 57,562 55,444 47,573

Ratio of inventories to imports (percent) 8.1 9.3 9.3 8.9 9.8

Ratio to U.S. shipments of imports (percent) 8.4 9.5 9.4 9.1 9.3

Note.–Ratios were calculated using data from firms providing information on both inventories and imports or U.S.

shipments of imports. Partial-year ratios are based on annualized import/shipment data.

Source: Compiled from data submitted in response to the Commission’s questionnaire.
 6

 Petitioners’ postconference brief, pp. 44-45.

 7 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-6

U.S. IMPORTERS’ CURRENT ORDERS

Thirty-nine U.S. importers reported that they had placed orders for steel nails from China and/or

the UAE (77,194 short tons) scheduled for entry into the United States in 2007. Table VII-5 presents

U.S. importers’ 2007 orders for steel nails from China and the UAE; 13 importers either did not report

volumes or reported in quantities other than tonnage (e.g., containers, boxes).

Table VII-5

Steel nails: U.S. importers’ current orders, by sources, 2007

* * * * * * *

ANTIDUMPING AND COUNTERVAILING DUTY ORDERS 

IN THIRD-COUNTRY MARKETS

No producer, importer, or foreign producer reported any countervailing or antidumping duty

orders on steel nails from China or the UAE in third-country markets. However, petitioners report that in

2004, Mexico imposed an antidumping order on concrete steel nails from China that is still in effect.6

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:7

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.

Nonsubject Source Information

With respect to foreign industry data, the Commission sought publicly available information

regarding worldwide trade of steel nails. The Commission obtained official Commerce data for imports

from other than subject countries. The leading nonsubject countries are Korea (accounting for 7.9 percent

of total U.S. imports of steel nails during 2006), Canada (4.1 percent), Taiwan (4.3 percent), Mexico

(3.6 percent), Poland (1.0 percent), and Malaysia (1.0 percent), with 27 other countries ranging between

less than 0.05 percent and 0.6 percent of 2006 imports (table VII-6).
VII-7

Table VII-6

Steel nails: U.S. imports, by sources, 2004-06, January-March 2006, and January-March 2007

Source

Calendar year January-March

2004 2005 2006 2006 2007

Quantity (short tons)

China 339,002 479,751 615,548 137,913 112,488

United Arab Emirates 73,724 81,287 83,115 22,641 11,346

Subtotal 412,726 561,038 698,662 160,553 123,833

Korea 144,723 108,401 73,284 22,990 10,254

Canada 65,300 48,449 37,949 11,103 8,268

Taiwan 103,840 85,878 39,983 12,230 5,275

Mexico 53,919 49,748 33,649 11,980 5,190

Poland 11,019 9,234 9,002 3,418 2,066

Malaysia 9,749 8,264 9,598 1,847 1,566

Other sources 83,172 33,989 26,064 7,229 3,618

Total 884,448 905,001 928,191 231,351 160,071

Value (1,000 dollars)

1

China 274,183 391,159 485,994 105,632 90,820

United Arab Emirates 75,446 78,305 77,913 20,550 10,935

Subtotal 349,629 469,464 563,907 126,182 101,754

Korea 138,563 123,719 83,857 25,866 12,399

Canada 77,085 62,772 51,868 14,802 11,556

Taiwan 103,163 90,775 47,230 13,032 6,797

Mexico 44,638 50,228 35,722 12,848 5,386

Poland 11,127 10,661 11,007 4,174 2,688

Malaysia 9,301 8,145 8,480 1,702 1,216

Other sources 104,576 67,117 59,126 14,038 10,339

Total 838,082 882,879 861,198 212,644 152,135

Table continued on next page.
VII-8

Table VII-6--Continued

Steel nails: U.S. imports, by sources, 2004-06, January-March 2006, and January-March 2007

Source

Calendar year January-March

2004 2005 2006 2006 2007

Unit value (per short ton)

1

China $809 $815 $790 $766 $807

United Arab Emirates 1,023 963 937 908 964

Subtotal 847 837 807 786 822

Korea 957 1,141 1,144 1,125 1,209

Canada 1,180 1,296 1,367 1,333 1,398

Taiwan 993 1,057 1,181 1,066 1,289

Mexico 828 1,010 1,062 1,072 1,038

Poland 1,010 1,155 1,223 1,221 1,301

Malaysia 954 986 883 921 776

Other sources 1,257 1,975 2,269 1,942 2,857

Total 948 976 928 919 950

1

 Landed, duty-paid.

Source: Compiled from official Commerce statistics.

Table VII-7 presents data for the world for HTS heading 7317, which includes all nails and

staples, including nonsubject roofing nails and other nonsubject product. Except for roofing nails,

nonsubject product in the data is considered to be negligible. In the case of UAE, for which export data

are not available from the same source, partner country import data (called “mirror exports”) are

provided. In addition to China and the UAE, the top ten 2006 exporting countries are also listed. In 2006

China and the UAE accounted for 50.8 percent of world exports of nails and staples. The next ten largest

exporting countries totaled 37.5 percent of world exports in 2006.
VII-9

Table VII-7

Nails and staples: Reporting countries’ export statistics 2002-06

Source

Calendar year

2002 2003 2004 2005 2006

Quantity (short tons)

China 358,394 466,456 690,703 916,303 1,150,413

United Arab Emirates 46,919 81,287 83,115 22,641 11,346

Subtotal 405,313 547,743 773,818 938,944 1,161,759

Malaysia 221,432 417,806 591,869 362,718 428,561

Korea 183,364 159,632 164,159 121,532 85,198

Poland 55,205 58,396 60,323 60,542 66,030

Taiwan 112,929 116,936 135,918 107,200 54,756

Russia 51,700 65,055 52,423 46,938 49,665

United States 28,096 26,626 32,249 32,820 41,539

Mexico 47,587 45,358 59,368 55,926 37,123

Ukraine 15,795 26,678 37,712 37,108 33,088

Germany 29,925 28,782 33,104 30,528 31,657

Belgium 8,191 17,197 28,224 26,358 29,756

Subtotal 754,224 962,466 1,195,349 881,670 857,373

Other sources 233,137 198,006 237,153 268,568 266,156

Total 1,392,674 1,708,215 2,206,320 2,089,182 2,285,288

Source: Compiled from Global Trade Atlas.
 
A-1

APPENDIX A

FEDERAL REGISTER NOTICES

Federal Register / Vol. 72, No. 106 / Monday, June 4, 2007 / Notices 30831 

ACTION: Notice and request for 

comments. 

SUMMARY: In compliance with the 

Paperwork Reduction Act of 1995, the 

Office of Surface Mining Reclamation 

and Enforcement (OSM) is announcing 

its intention to request approval for the 

collections of information for 30 CFR 

Part 732—Procedures and Criteria for 

Approval or Disapproval of State 

Program Submissions, and 30 CFR Part 

874—General Reclamation 

Requirements. 

DATES: Comments on the proposed 

information collections must be 

received by August 3, 2007. 

ADDRESSES: Mail comments to John A. 

Trelease, Office of Surface Mining 

Reclamation and Enforcement, 1951 

Constitution Ave., NW., Room 210–SIB, 

Washington, DC 20240. Comments may 

also be submitted electronically to 

jtrelease@osmre.gov. 

FOR FURTHER INFORMATION CONTACT: To 

receive a copy of the information 

collection requests contact John A. 

Trelease at (202) 208–2783, or via Email at jtrelease@osmre.gov. 

SUPPLEMENTARY INFORMATION: The Office 

of Management and Budget (OMB) 

regulations at 5 CFR 1320, which 

implementing provisions of the 

Paperwork Reduction Act of 1995 (Pub. 

L. 104–13), require that interested 

members of the public and affected 

agencies have an opportunity to 

comment on information collection and 

recordkeeping activities [see 5 CFR 

1320.8(d)]. This notice identifies 

information collections that OSM will 

be submitting to OMB for extension. 

These collections are contained in 30 

CFR parts 732 and 874. 

OSM has revised burden estimates, 

where appropriate, to reflect current 

reporting levels or adjustments based on 

reestimates of burden or respondents. 

OSM will request a 3-year term of 

approval for these information 

collection activities. 

Comments are invited on: (1) The 

need for the collection of information 

for the performance of the functions of 

the agency; (2) the accuracy of the 

agency’s burden estimates; (3) ways to 

enhance the quality, utility and clarity 

of the information collections; and (4) 

ways to minimize the information 

collection burden on respondents, such 

as use of automated means of collection 

of the information. A summary of the 

public comments will accompany 

OSM’s submissions of the information 

collection requests to OMB. 

This notice provides the public with 

60 days in which to comment on the 

following information collection 

activities: 

Title: 30 CFR Part 732—Procedures 

and Criteria for Approval or Disapproval 

of State Program Submissions. 

OMB Control Number: 1029–0024. 

Summary: Part 732 establishes the 

procedures and criteria for approval and 

disapproval of State program 

submissions. The information submitted 

is used to evaluate whether State 

regulatory authorities are meeting the 

provisions of their approved programs. 

Bureau Form Number: None. 

Frequency of Collection: Once and 

annually. 

Description of Respondents: 24 State 

regulatory authorities. 

Total Annual Responses: 51. 

Total Annual Burden Hours: 6,405. 

Title: 30 CFR Part 874—General 

Reclamation Requirements. 

OMB Control Number: 1029–0113. 

Summary: Part 874 establishes land 

and water eligibility requirements, 

reclamation objectives and priorities 

and reclamation contractor 

responsibility. 30 CFR 874.17 requires 

consultation between the AML agency 

and the appropriate Title V regulatory 

authority on the likelihood of removing 

the coal under a Title V permit and 

concurrences between the AML agency 

and the appropriate Title V regulatory 

authority on the AML project boundary 

and the amount of coal that would be 

extracted under the AML reclamation 

project. 

Bureau Form Number: None. 

Frequency of Collection: Once. 

Description of Respondents: 23 State 

regulatory authorities and Indian tribes. 

Total Annual Responses: 23. 

Total Annual Burden Hours: 1,610. 

Dated: May 30, 2007. 

Kathryn S. O’Toole, 

Acting Chief, Division of Regulatory Support. 

[FR Doc. 07–2741 Filed 6–1–07; 8:45 am] 

BILLING CODE 4310–05–M 

INTERNATIONAL TRADE 

COMMISSION 

[Investigation Nos. 731–TA–1114 and 1115 

(Preliminary)] 

Certain Steel Nails From China and the 

United Arab Emirates 

AGENCY: United States International 

Trade Commission. 

ACTION: Institution of antidumping 

investigations and scheduling of 

preliminary phase investigations. 

SUMMARY: The Commission hereby gives 

notice of the institution of investigations 

and commencement of preliminary 

phase antidumping investigation Nos. 

731–TA–1114 and 1115 (Preliminary) 

under section 733(a) of the Tariff Act of 

1930 (19 U.S.C. 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 the 

United Arab Emirates of certain steel 

nails, provided for in subheadings 

7317.00.55, 7317.00.65, and 7317.00.75 

of the Harmonized Tariff Schedule of 

the United States, that are alleged to be 

sold in the United States at less than fair 

value. Unless the Department of 

Commerce extends the time for 

initiation pursuant to section 

732(c)(1)(B) of the Act (19 U.S.C. 

1673a(c)(1)(B)), the Commission must 

reach preliminary determinations in 

antidumping investigations in 45 days, 

or in this case by July 13, 2007. The 

Commission’s views are due at 

Commerce within five business days 

thereafter, or by July 20, 2007. 

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). 

DATES: Effective Date: May 29, 2007. 

FOR FURTHER INFORMATION CONTACT: Fred 

Ruggles (202–205–3187/ 

fred.ruggles@usitc.gov), 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 

this investigation 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 May 29, 2007, by Davis Wire 

Corporation (Irwindale, CA), Gerdau 

Ameristeel Corporation (Tampa, FL), 

Maze Nails (Peru, IL), Mid-Continent 

Nail Corporation (Poplar Bluff, MO), 

and Treasure Coast Fasteners, 

Incorporated (Fort Pierce, FL). 


rwilkins on PROD1PC63 with NOTICES
30832 Federal Register / Vol. 72, No. 106 / Monday, June 4, 2007 / Notices 

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 antidumping 

investigations. The Secretary will 

prepare a public service list containing 

the names and addresses of all persons, 

or their representatives, who are parties 

to these investigations 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 

these investigations, 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 June 19, 

2007, at the U.S. International Trade 

Commission Building, 500 E Street, 

SW., Washington, DC. Parties wishing to 

participate in the conference should 

contact Fred Ruggles (202–205–3187/ 

fred.ruggles@usitc.gov) not later than 

June 15, 2007, to arrange for their 

appearance. Parties in support of the 

imposition of 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 

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 

June 22, 2007, 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 

FR 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 FR 

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 these investigations 

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. 

Issued: May 29, 2007. 

By order of the Commission. 

Marilyn R. Abbott, 

Secretary to the Commission. 

[FR Doc. E7–10684 Filed 6–1–07; 8:45 am] 

BILLING CODE 7020–02–P 

INTERNATIONAL TRADE 

COMMISSION 

[Investigation Nos. 731–TA–919 and 920 

(Review)] 

Welded Large Diameter Line Pipe From 

Japan and Mexico 

AGENCY: United States International 

Trade Commission. 

ACTION: Revised schedule for the subject 

five-year reviews. 

DATES: Effective Date: Date of 

Commission action. 

FOR FURTHER INFORMATION CONTACT: 

Dana Lofgren (202–205–3185), 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 reviews may be viewed on the 

Commission’s electronic docket (EDIS) 

at http://edis.usitc.gov. 

SUPPLEMENTARY INFORMATION: On 

February 22, 2007, the Commission 

established a schedule for the conduct 

of the subject reviews (72 FR 9357, 

March 1, 2007). Due to a subsequent 

scheduling conflict, however, the 

Commission is revising its schedule. 

Under the Commission’s new schedule 

for the reviews, the hearing will be held 

at the U.S. International Trade 

Commission building at 9:30 a.m. on 

July 25, 2007. The Commission’s 

original schedule is otherwise 

unchanged. 

For further information concerning 

the conduct of these reviews and rules 

of general application, see the 

Commission’s notice cited above and 

the Commission’s Rules of Practice and 

Procedure, part 201, subparts A through 

E (19 CFR part 201), and part 207, 

subparts A and C (19 CFR part 207). 

Authority: These five-year reviews are 

being conducted under authority of title VII 

of the Tariff Act of 1930; this notice is 

published pursuant to section 207.62 of the 

Commission’s rules. 

Issued: May 29, 2007. 

By order of the Commission. 

Marilyn R. Abbott, 

Secretary to the Commission. 

[FR Doc. E7–10685 Filed 6–1–07; 8:45 am] 

BILLING CODE 7020–02–P 

DEPARTMENT OF JUSTICE 

Antitrust Division 

United States of America, et al. v. 

Arizona Hospital and Healthcare 

Association, et al.; Proposed Final 

Judgment and Competitive Impact 

Statement 

Notice is hereby given pursuant to the 

Antitrust Procedures and Penalties Act, 

15 U.S.C. Section 16(b) through (h), that 

a proposed Final Judgment, Stipulation 

and Competitive Impact Statement have 

been filed with the United States 

District Court for the District of the 

District of Arizona in United States of 

America, et al. v. Arizona Hospital and 

Healthcare Association, et al., Civil 

Action No. 2:07–cv–1030. On May 22, 

2007, the United States filed a 


rwilkins on PROD1PC63 with NOTICES
Federal Register / Vol. 72, No. 115 / Friday, June 15, 2007 / Notices 33203 

the antidumping duty order on stainless 

steel bar from France with respect to 

these companies. See Initiation of 

Antidumping and Countervailing Duty 

Administrative Reviews, 72 FR 20986 

(April 27, 2007). 

Partial Rescission of Review 

On May 24, 2007, Ugitech timely 

withdrew its request for an 

administrative review of its sales during 

the above–referenced period. Pursuant 

to 19 CFR 351.213(d)(1), the Secretary 

will rescind an administrative review, 

in whole or in part, if a party who 

requested the review withdraws the 

request within ninety days of the date 

of publication of notice of initiation of 

the requested review. Because Ugitech 

has withdrawn its request for review 

within the 90-day period and no other 

party requested a review of Ugitech, in 

accordance with 19 CFR 351.213(d)(1), 

we are rescinding this review with 

respect to Ugitech. 

The Department will issue 

appropriate assessment instructions 

directly to U.S. Customs and Border 

Protection (CBP) 15 days after the 

publication of this notice. The 

Department will direct CBP to assess 

antidumping duties at the cash deposit 

rate in effect on the date of entry for 

entries during the period March 1, 2006, 

through February 28, 2007. 

This notice is published in 

accordance with section 777(i)(1) of the 

Tariff Act of 1930, as amended, and 19 

CFR 351.213(d)(4). 

Dated: June 11, 2007. 

Stephen J. Claeys, 

Deputy Assistant Secretary for Import 

Administration. 

[FR Doc. E7–11609 Filed 6–14–07; 8:45 am] 

BILLING CODE 3510–DS–S 

DEPARTMENT OF COMMERCE 

International Trade Administration 

A–570–909, A–520–802 

Notice of Extension of the Deadline for 

Determining the Adequacy of the 

Antidumping Duty Petitions: Certain 

Steel Nails from the People’s Republic 

of China and the United Arab Emirates 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

EFFECTIVE DATE: June 15, 2007. 

FOR FURTHER INFORMATION CONTACT: 

Matthew Renkey (People’s Republic of 

China) or David Goldberger (United 

Arab Emirates), AD/CVD Operations, 

Offices 2 and 9, Import Administration, 

International Trade Administration, 

U.S. Department of Commerce, 14th 

Street and Constitution Avenue, NW, 

Washington, DC 20230; telephone: (202) 

482–2312 or (202) 482–4136, 

respectively. 

SUPPLEMENTARY INFORMATION: 

Initiation of Investigations 

The Petitions 

On May 29, 2007, the Department of 

Commerce (Department) received 

antidumping duty petitions (petitions) 

filed by Mid Continent Nail 

Corporation, Davis Wire Corporation, 

Gerdau Ameristeel Corporation (Atlas 

Steel & Wire Division), Maze Nails 

(Division of W.H. Maze Company), and 

Treasure Coast Fasteners, Inc. 

(collectively, the petitioners) on behalf 

of the domestic industry producing 

certain steel nails. 

Determination of Industry Support for 

the Petition 

Section 732(b)(1) of the Tariff Act of 

1930, as amended (the Act), requires 

that a petition be filed by or on behalf 

of the domestic industry. Section 

732(c)(4)(A) of the Act provides that the 

Department’s industry support 

determination be based on whether a 

minimum percentage of the relevant 

industry supports the petition. 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) if 

there is a large number of producers, 

determine industry support using a 

statistically valid sampling method to 

poll the industry. 

Extension of Time 

Section 732(c)(1)(A)(ii) of the Act 

provides that within 20 days of the 

filing of an antidumping duty petition, 

the Department will determine, inter 

alia, whether the petition has been filed 

by or on behalf of the U.S. industry 

producing the domestic like product. 

Section 732(c)(1)(B) of the Act provides 

that the deadline for the initiation 

determination, in exceptional 

circumstances, may be extended by 20 

days in any case in which the 

Department must ‘‘poll or otherwise 

determine support for the petition by 

the industry.’’ Because it is not clear 

from the petition whether the industry 

support criteria have been met, the 

Department has determined to extend 

the time for initiating an investigation in 

order to poll the domestic industry. On 

June 1, 2007, the Department began 

issuing polling questionnaires to all 

known domestic producers of certain 

steel nails identified in the petition. The 

questionnaires are on file in the Central 

Records Unit in room B–099 of the main 

Department of Commerce building. The 

Department requested that each 

company complete the polling 

questionnaire and fax their responses to 

the Department. 

The Department will need additional 

time to analyze the domestic producers’

responses to this request for 

information. Therefore, it is necessary to 

extend the deadline determining the 

adequacy of the petition for a period not 

to exceed 40 days from the filing of the 

petition. As a result, the initiation 

determination will now be due no later 

than July 9, 2007. 

International Trade Commission 

Notification 

The Department will contact the 

International Trade Commission (ITC) 

and will make this extension notice 

available to the ITC. 

Dated: June 11, 2007. 

Stephen J. Claeys, 

Deputy Assistant Secretary for Import 

Administration. 

[FR Doc. E7–11591 Filed 6–14–07; 8:45 am] 

BILLING CODE 3510–DS–S 

DEPARTMENT OF COMMERCE 

International Trade Administration 

Applications for Duty–Free Entry of 

Scientific Instruments 

Pursuant to Section 6(c) of the 

Educational, Scientific and Cultural 

Materials Importation Act of 1966 (Pub. 

L. 89–651, as amended by Pub. L. 106–

36; 80 Stat. 897; 15 CFR part 301), we 

invite comments on the question of 

whether instruments of equivalent 

scientific value, for the purposes for 

which the instruments shown below are 

intended to be used, are being 

manufactured in the United States. 

Comments must comply with 15 CFR 

301.5(a)(3) and (4) of the regulations and 

be filed within 20 days with the 

Statutory Import Programs Staff, U.S. 


jlentini on PROD1PC65 with NOTICES

34276 Federal Register / Vol. 72, No. 119 / Thursday, June 21, 2007 / Notices 

Collections Facility, Sonoma State 

University by Jodie Sanchez in 1991. In 

1992, some of the human remains were 

reburied. In 1997, additional human 

remains were located in the collection. 

No known individuals were identified. 

No associated funerary objects are 

present. 

The human remains from site CA–

MRN–254 date to an unknown time 

during prehistory. The site is located 

within the traditional Coast Miwok 

territory. 

In 1972, 1974, 1975, and 1977, human 

remains representing a minimum of 21 

individuals were removed from site CA–

SON–159, Cotati, Sonoma County, CA, 

as part of an ongoing archeological field 

methods class at Sonoma State 

University, under the direction of Dr. 

James A. Bennyhoff. The collection has 

been housed at the Archaeological 

Collections Facility, Sonoma State 

University since 1977 (accession #72–

01, 74–3, 75–28, and 77–11). In 1992, 

some of the human remains were 

reburied. In 1997, additional human 

remains were found. No known 

individuals were identified. No 

associated funerary objects are present. 

Analysis of artifacts found at site CA–

SON–159 indicate an occupation from 

the Laguna phase of the Middle Period 

(1000 B.C.–A.D. 500) to the Rincon and 

Gables phase of the Late Period (A.D. 

500–A.D. 1579). 

It is believed that prior to 2000 B.C. 

the occupants of central California were 

speakers of various Hokan languages. 

Between 2000 B.C. and 1000 B.C. a new 

population of Penutian speakers began 

to arrive from the north and east. 

Ancestral Miwok and Costonoan 

peoples were among the first Hokan 

language speakers to arrive in the San 

Francisco Bay area. Archeological 

evidence indicates that Coast Miwok 

people had settled in Marin County by 

1000 B.C., and that southern Sonoma 

County and the nearby coastal areas 

probably came under Coast Miwok 

control by 500 B.C.. Francis Drake 

documented contact with the Coast 

Miwok in 1579 near Bodega Bay, CA. By 

1850, a few Coast Miwok people were 

displaced by non–Indians and forced to 

relocate to areas outside Marin and 

Sonoma Counties, but many Coast 

Miwok remained in or returned to their 

traditional territory. Descendants of the 

Coast Miwok are members of the 

Federated Indians of Graton Rancheria, 

California. 

In 1998, the Archaeological 

Collections Facility, Sonoma State 

University determined that while there 

was evidence of a shared group identity 

(cultural affiliation) between the human 

remains and a particular Indian group, 

the human remains were ‘‘culturally 

unidentifiable’’ since the particular 

Indian group, the Federated Coast 

Miwok, was not recognized as an Indian 

tribe by the United States at that time. 

The Archeological Collections Facility 

requested that the Native American 

Graves Protection and Repatriation 

Review Committee recommend 

disposition of the human remains to the 

Federated Coast Miwok. On May 21, 

1999, the Review Committee’s 

Designated Federal Officer, writing on 

behalf of the Secretary of the Interior, 

recommended disposition of the human 

remains to the Federal Coast Miwok 

once concurrence with the proposal was 

obtained from federally recognized 

Indian tribes that currently resided in 

the immediate vicinity of where the 

human remains were recovered. 

Officials of the Archaeological 

Collections Facility, Sonoma State 

University consulted with five federally 

recognized Indian tribes: Dry Creek 

Rancheria of Pomo Indians of California; 

Elem Indian Colony of Pomo Indians of 

the Sulphur Bank Rancheria, California; 

Kashia Band of Pomo Indians of the 

Stewarts Point Rancheria, California; 

Middletown Rancheria of Pomo Indians 

of California; and Tuolumne Band of 

Me–Wuk Indians of the Tuolumne 

Rancheria of California. All five tribes 

supported the Federated Coast Miwok 

request for disposition. In 2000, the 

Federated Coast Miwok became the 

federally recognized Federated Indians 

of Graton Rancheria, California. 

Officials of the Archaeological 

Collections Facility, Sonoma State 

University determined that, pursuant to 

25 U.S.C. 3001 (9–10), the human 

remains described above represent the 

physical remains of 216 individuals of 

Native American ancestry. Officials of 

the Archaeological Collections Facility, 

Sonoma State University also have 

determined that, pursuant to 25 U.S.C. 

3001 (3)(A), the 216 objects described 

above are reasonably believed to have 

been placed with or near individual 

human remains at the time of death or 

later as part of the death rite or 

ceremony. Lastly, officials of the 

Archaeological Collections Facility, 

Sonoma State University have 

determined that, pursuant to 25 U.S.C. 

3001 (2), there is a relationship of 

shared group identity can be reasonably 

traced between the Native American 

human remains and associated funerary 

objects and the Federated Indians of 

Graton Rancheria, California. 

Representatives of any other Indian 

tribe that believes itself to be culturally 

affiliated with the human remains and 

associated funerary objects should 

contact Erica Gibson, NAGPRA Project 

Coordinator, Archaeological Collections 

Facility, Anthropological Studies 

Center, Sonoma State University, 

Rohnert Park, CA 94928, telephone 

(707) 664–2015, before July 23, 2007. 

Repatriation of the human remains and 

associated funerary objects to the 

Federated Indians of Graton Rancheria, 

California may proceed after that date if 

no additional claimants come forward. 

The Archaeological Collections 

Facility, Sonoma State University is 

responsible for notifying the Dry Creek 

Rancheria of Pomo Indians of California; 

Elem Indian Colony of Pomo Indians of 

the Sulphur Bank Rancheria, California; 

Federated Indians of Graton Rancheria, 

California; Kashia Band of Pomo Indians 

of the Stewarts Point Rancheria, 

California; Middletown Rancheria of 

Pomo Indians of California; and 

Tuolumne Band of Me–Wuk Indians of 

the Tuolumne Rancheria of California 

that this notice has been published. 

Dated: May 30, 2007. 

Sherry Hutt, 

Manager, National NAGPRA Program. 

[FR Doc. E7–11985 Filed 6–20–07; 8:45 am] 

BILLING CODE 4312–50–S 

INTERNATIONAL TRADE 

COMMISSION 

[Investigation Nos. 731–TA–1114 and 1115 

(Preliminary)] 

Certain Steel Nails From China and the 

United Arab Emirates 

AGENCY: United States International 

Trade Commission. 

ACTION: Revised schedule for the subject 

investigations. 

SUMMARY: On May 29, 2007, the 

Commission established a schedule for 

the conduct of the subject investigations 

(72 FR 30831, June 4, 2007). 

Subsequently, the Department of 

Commerce extended the date for its 

initiation of the investigations from June 

18 to July 9, 2007. The Commission, 

therefore, is revising its schedule to 

conform with Commerce’s new 

schedule. 

The Commission’s new schedule for 

the investigations is as follows: The 

deadline for filing written briefs is June 

26, 2007, and the administrative 

deadline for transmitting determinations 

and views to Commerce is July 30, 2007. 

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). 


jlentini on PROD1PC65 with NOTICES
Federal Register / Vol. 72, No. 119 / Thursday, June 21, 2007 / Notices 34277 

DATES: Effective Date: June 21, 2007. 

FOR FURTHER INFORMATION CONTACT: Fred 

Ruggles (202–205–3187/ 

fred.ruggles@usitc.gov), 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. 

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: June 18, 2007. 

Marilyn R. Abbott, 

Secretary to the Commission. 

[FR Doc. E7–12007 Filed 6–20–07; 8:45 am] 

BILLING CODE 7020–02–P 

DEPARTMENT OF JUSTICE 

Notice of Lodging of Consent Decree 

Pursuant to the Comprehensive 

Environmental Response, 

Compensation and LIability Act 

Pursuant to Section 122(d)(2) of the 

Comprehensive Environmental 

Response, Compensation, and Liability 

Act (‘‘CERCLA’’), 42 U.S.C. 9622(d)(2), 

and 28 CFR 50.7, notice is hereby given 

that a proposed Consent Decree 

embodying a settlement in United States 

v. James Campbell Company LLC, Civil 

Action No. 07–00308, was lodged on 

June 8, 2007, with the United States 

District Court for the District of Hawaii. 

In a Complaint filed concurrently 

with the lodging of the Consent Decree, 

the United States alleges that the 

defendant, James Campbell Company 

LLC, currently owns the Del Monte 

Fresh Produce (Hawaii), Inc., site 

located in Oahu, Hawaii (‘‘Site’’) 

pursuant to Section 107(a)(1) of 

CERCLA, owned the Site during the 

time of disposal of hazardous 

substances pursuant to Section 107(a)(2) 

of CERCLA, and seeks injunctive relief 

to require James Campbell Company 

LLC to remedy the imminent and 

substantial endangerment at the Site 

pursuant to Section 106 of CERCLA. 42 

U.S.C. 9606, 9607(a)(1), (2). 

Under the proposed Consent Decree, 

James Campbell Company LLC is 

required to implement specified 

institutional controls that are consistent 

with the ongoing remediation of the 

Site. The Consent Decree, including 

Appendices A–C to the Consent Decree, 

apply varied institutional controls to the 

Site. Generally, the Consent Decree 

required James Campbell Company LLC 

to implement institutional controls that 

restrict use of land and water to prevent 

exposure to the contaminated soil and 

the perched and basal aquifer 

groundwater impacted by Site 

contaminants; to prevent activities that 

might interfere with the effectiveness of 

the remedy; to restrict use in a manner 

that causes a threat to public health; and 

to make these restrictions binding on 

future owners of the property. 

The Department of Justice will receive 

for a period of thirty (30) days from the 

date of this publication, comments 

relating to the Consent Decree. 

Comments should be addressed to the 

Assistant Attorney General, 

Environment and Natural Resources 

Division, and either e-mailed to 

pubcomment-ee.enrd@usdoj.gov or 

mailed to P.O. Box 7611, U.S. 

Department of Justice, Washington, DC 

20044–7611, and should refer to United 

Stated v. James Campbell Company 

LLC, DOJ Ref. 90–11–3–082771/1. 

The Consent Decree may be examined 

at U.S. EPA Region 9, 75 Hawthorne 

Street, San Francisco, California 94105. 

During the public comment period, the 

Consent Decree may also be examined 

on the following Department of Justice 

website, http://www.usdol.gov/enrd/ 

open.html. A copy of the Consent 

Decree may also be obtained by mail 

from the Consent Decree Library, U.S. 

Department of Justice, P.O. Box 7611, 

Ben Franklin Station, Washington, DC 

20044–7611, or by faxing or e-mailing a 

request to Tonia Fleetwood 

(tonia.fleetwood@usdoj.gov), fax number 

(202) 514–0097, phone confirmation 

number (202) 514–1547. When 

requesting a copy from the Consent 

Decree Library, please enclose a check, 

payable to the U.S. Treasury, in the 

amount of $65.75 ($.25 per page 

reproduction cost). 

W. Benjamin Fisherow, 

Deputy Chief, Environmental Enforcement 

Section, Environment and Natural Resources 

Division. 

[FR Doc. 07–3043 Filed 6–20–07; 8:45 am] 

BILLING CODE 4410–15–M 

DEPARTMENT OF JUSTICE 

Notice of Lodging of Settlement 

Agreement Under the Comprehensive 

Environmental Response, 

Compensation, and Liability Act of 

1980 (‘‘CERCLA’’) 

Consistent with Section 122(d) of the 

Comprehensive Environmental 

Response, Compensation, and Liability 

Act of 1980, as amended (‘‘CERCLA’’) 

42 U.S.C. 9622(d), and 28 CFR 50.7, 

notice is hereby given that on May 24, 

2007, a proposed Settlement Agreement 

with Dean R. Soulliere et al. in United 

States v. Dean R. Soulliere and Colleen 

A. Soulliere, and Soulliere and Jackson, 

Inc., d/b/a One Hour Martinizing, No. 

8:07–cv–00203 (E.D. Missouri), was 

lodged with the United States District 

Court for the Eastern District of 

Missouri. 

In this action, the United States 

sought to establish the amount of the 

defendant’s liability, pursuant to 

Section 107 of CERCLA, 42 U.S.C. 9607, 

for the costs incurred and to be incurred 

by the United States in responding to 

the release and/or threatened release of 

hazardous substances at and from the 

10th Street Superfund Site in the southcentral portion of the City of Columbus 

in Platte County, Nebraska. Under the 

proposed Settlement Agreement, 

Defendants shall pay to the United 

States and EPA the amount of 

$100,000.00 to the United States 

Department of Justice in reimbursement 

of costs incurred by the United States at 

the Site. 

The Department of Justice will receive 

for a period of thirty (30) days from the 

date of this publication comments 

relating to the Settlement Agreement. 

Comments should be addressed to the 

Assistant Attorney General, 

Environment and Natural Resources 

Division, and either e-mailed 

pubcomment-ees.enrd@usdoj.gov or 

mailed to P.O. Box 7611, U.S. 

Department of Justice, Washington, DC 

200447–7611, and should refer to 

United States v. Dean R. Soulliere et al. 

(Settlement Agreement with Dean R. 

Soulliere et al., DOJ Ref. No. 90–11–2–

07430). 

The Settlement Agreement may be 

examined at U.S. EPA Region 7, 901 

North 5th Street, Kansas City, KS 66101. 

Please reference the EPA Region and 

Site-Spill ID number 07CS OU2 (contact 

Gearhardt Braeckel (931) 551–7108). 

Agreement may also be examined at 

United States Attorney’s Office for the 

District of Nebraska, 1620 Dodge Street, 

Suite 1400, Omaha, NE 681027–1506 

(contact Laurie Kelly (402) 661–3700). 

During the public comment period, the 


jlentini on PROD1PC65 with NOTICES
38816 Federal Register / Vol. 72, No. 135 / Monday, July 16, 2007 / Notices 

matters the premature disclosure of 

which would be likely to significantly 

frustrate implementation of an agency 

action as described in 5 U.S.C. 

552b(c)(9)(B), and the portion of the 

meeting dealing with matters that are 

(A) specifically authorized under 

criteria established by an Executive 

Order to be kept secret in the interests 

of national defense or foreign policy and 

(B) in fact properly classified pursuant 

to such Executive Order (5 U.S.C. 

552b(c)(1)(A) and (1)(B)), shall be 

exempt from the provisions relating to 

public meetings found in 5 U.S.C. app. 

2 10(a)(1) and 10(a)(3). All other 

portions of the DEAC meeting will be 

open to the public. 

For more information, please call 

Yvette Springer at (202) 482–2813. 

Dated: July 10, 2007. 

Yvette Springer, 

Committee Liaison Officer. 

[FR Doc. 07–3452 Filed 7–13–07; 8:45 am] 

BILLING CODE 3510–JT–M 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[A–570–912] 

[C–570–913] 

Extension of the Deadline for 

Determining the Adequacy of the 

Antidumping Duty and Countervailing 

Duty Petitions: New Pneumatic Off–

The-Road Tires from The People’s 

Republic of China 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

EFFECTIVE DATE: July 16, 2007. 

FOR FURTHER INFORMATION CONTACT: 

Laurel LaCivita or Charles Riggle, AD/ 

CVD Operations, Office 8 

(antidumping); or Mark Hoadley or 

Thomas Gilgunn, AD/CVD Operations, 

Office 6 (countervailing), Import 

Administration, International Trade 

Administration, U.S. Department of 

Commerce, 14th Street and Constitution 

Avenue, NW, Washington, DC 20230; 

telephone: (202) 482–4243, (202) 482–

0650, (202) 482–3148, and (202) 482–

4236, respectively. 

SUPPLEMENTARY INFORMATION: 

BACKGROUND 

The Petitions 

On June 18, 2007, the Department of 

Commerce (‘‘Department’’) received 

antidumping duty and countervailing 

duty petitions (‘‘petitions’’) filed in 

proper form by Titan Tire Corporation, 

a subsidiary of Titan International, Inc. 

(‘‘Titan’’), and the United Steel, Paper 

and Forestry, Rubber, Manufacturing, 

Energy, Allied Industrial and Service 

Workers International Union, AFL–CIOCLC (‘‘USW’’) (collectively, 

‘‘Petitioners’’), on behalf of the domestic 

industry producing new pneumatic off–

the-road tires (‘‘OTR tires’’). 

Determination of Industry Support for 

the Petitions 

Sections 702(b)(1) and 732(b)(1) of the 

Tariff Act of 1930, as amended (‘‘Act’’) 

require that antidumping and 

countervailing duty petitions be filed by 

or on behalf of the domestic industry. 

Sections 702(c)(4)(A) and 732(c)(4)(A) of 

the Act provide that the Department’s 

industry support determination be 

based on whether a minimum 

percentage of the relevant industry 

supports the petition. 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, sections 702(c)(4)(D) 

and 732(c)(4)(D) of the Act provide 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) if 

there is a large number of producers, 

determine industry support using a 

statistically valid sampling method to 

poll the industry. 

Extension of Time 

Sections 702(c)(1)(A)(ii) and 

732(c)(1)(A)(ii) of the Act provide that 

within 20 days of the filing of 

antidumping and countervailing duty 

petitions, the Department will 

determine, inter alia, whether the 

petitions have been filed by or on behalf 

of the U.S. industry producing the 

domestic like product. Sections 

702(c)(1)(B) and 732(c)(1)(B) of the Act 

provide that the deadline for the 

initiation determination can be 

extended by 20 days in any case in 

which the Department must ‘‘poll or 

otherwise determine support for the 

petition by the industry . . . .’’ Because 

it is not clear from the petitions whether 

the industry support criteria have been 

met, we have determined to extend the 

time limit for initiating the 

investigations in order to poll the 

domestic industry. We intend to issue 

polling questionnaires to all known 

domestic producers of OTR tires 

identified in the petitions. The 

questionnaires will be on file in the 

Central Records Unit in room B–099 of 

the main Department of Commerce 

building. The questionnaire requests 

each company to respond to the 

questions and fax its response to the 

Department. 

We will need additional time to 

analyze the domestic producers’

responses to our request for information. 

See the ‘‘Determination of Industry 

Support for the Petitions’’ section of this 

notice, above. Therefore, in accordance 

with sections 702(c)(1)(B) and 

732(c)(1)(B) of the Act, we are extending 

the deadline for determining the 

adequacy of the petitions until July 28, 

2007, which is 40 days from the filing 

date of the petitions. Because July 28, 

2007, falls on a Saturday, the initiation 

determination will be due no later than 

Monday, July 30, 2007, the first business 

day following the statutory deadline. 

International Trade Commission 

Notification 

Because the Department has extended 

the deadline for the initiation 

determinations, the Department has 

contacted the International Trade 

Commission (‘‘ITC’’) and has made this 

extension notice available to the ITC. 

Dated: July 6, 2007. 

David M. Spooner, 

Assistant Secretary for Import 

Administration. 

[FR Doc. E7–13719 Filed 7–13–07; 8:45 am] 

BILLING CODE 3510–DS–S 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[A–570–909, A–520–802] 

Certain Steel Nails from the People’s 

Republic of China and the United Arab 

Emirates:Initiation of Antidumping 

Duty Investigations 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

EFFECTIVE DATE: July 16, 2007. 

FOR FURTHER INFORMATION CONTACT: 

Nicole Bankhead (People’s Republic of 

China) or David Goldberger (United 

Arab Emirates), AD/CVD Operations, 

Offices 9 and 2, Import Administration, 

International Trade Administration, 

U.S. Department of Commerce, 14th 

Street and Constitution Avenue, NW, 

Washington, DC 20230; telephone: (202) 


hsrobinson on PROD1PC76 with NOTICES
Federal Register / Vol. 72, No. 135 / Monday, July 16, 2007 / Notices 38817 

482–9068 or (202) 482–4136, 

respectively. 

SUPPLEMENTARY INFORMATION: 

The Petitions 

On May 29, 2007, the Department of 

Commerce (the Department) received 

petitions concerning imports of certain 

steel nails from the People’s Republic of 

China (PRC) (PRC petition) and the 

United Arab Emirates (UAE) (UAE 

petition) filed in proper form by Mid 

Continent Nail Corporation, Davis Wire 

Corporation, Gerdau Ameristeel 

Corporation (Atlas Steel & Wire 

Division), Maze Nails (Division of W.H. 

Maze Company), Treasure Coast 

Fasteners, Inc., and the United Steel, 

Paper and Forestry, Rubber, 

Manufacturing, Energy, Allied 

Industrial and Service Workers 

International Union (collectively, 

petitioners). See the Petitions on Certain 

Steel Nails from the People’s Republic 

of China and the United Arab Emirates 

filed on May 29, 2007, and the 

petitioners’ submission dated June 22, 

2007. On June 1 and June 18, 2007, the 

Department issued requests for 

additional information and clarification 

of certain areas of the petitions. Based 

on the Department’s requests, the 

petitioners filed additional information 

on June 1, June 7 (three distinct 

submissions on General, PRC–only, and 

UAE–only material), and June 20, 2007. 

The period of investigation (POI) for the 

UAE is April 1, 2006, through March 31, 

2007. The POI for the PRC is October 1, 

2006, through March 31, 2007. See 19 

CFR 351.204(b). 

In accordance with section 732(b) of 

the Tariff Act of 1930, as amended (the 

Act), the petitioners allege that imports 

of certain steel nails from the PRC and 

the UAE 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 the 

petitioners filed these petitions on 

behalf of the domestic industry because 

the petitioners are interested parties as 

defined in section 771(9)(C) and (D) of 

the Act, and have demonstrated 

sufficient industry support with respect 

to the antidumping duty investigations 

that the petitioners are requesting that 

the Department initiate (see 

‘‘Determination of Industry Support for 

the Petitions’’ section below). 

Scope of Investigations 

The merchandise covered by each of 

these investigations includes certain 

steel nails having a shaft length up to 12 

inches. Certain steel nails include, but 

are not limited to, nails made of round 

wire and nails that are cut. Certain steel 

nails may be of one piece construction 

or constructed of two or more pieces. 

Certain steel nails may be produced 

from any type of steel, and have a 

variety of finishes, heads, shanks, point 

types, shaft lengths and shaft diameters. 

Finishes include, but are not limited to, 

coating in vinyl, zinc (galvanized, 

whether by electroplating or hot–

dipping one or more times), phosphate 

cement, and paint. Head styles include, 

but are not limited to, flat, projection, 

cupped, oval, brad, headless, double, 

countersunk, and sinker. Shank styles 

include, but are not limited to, smooth, 

barbed, screw threaded, ring shank and 

fluted shank styles. Screw–threaded 

nails subject to these proceedings are 

driven using direct force and not by 

turning the fastener using a tool that 

engages with the head. Point styles 

include, but are not limited to, 

diamond, blunt, needle, chisel and no 

point. Finished nails may be sold in 

bulk, or they may be collated into strips 

or coils using materials such as plastic, 

paper, or wire. 

Certain steel nails subject to these 

proceedings are currently classified 

under the Harmonized Tariff Schedule 

of the United States (HTSUS) 

subheadings 7317.00.55, 7317.00.65 and 

7317.00.75. 

Excluded from the scope of these 

proceedings are roofing nails of all 

lengths and diameter, whether collated 

or in bulk, and whether or not 

galvanized. Steel roofing nails are 

specifically enumerated and identified 

in ASTM Standard F 1667 (2005 

revision) as Type I, Style 20 nails. Also 

excluded from the scope of these 

proceedings are corrugated nails. A 

corrugated nail is made of a small strip 

of corrugated steel with sharp points on 

one side. Also excluded from the scope 

of these proceedings are fasteners 

suitable for use in powder–actuated 

hand tools, not threaded and threaded, 

which are currently classified under 

HTSUS 7317.00.20 and 7317.00.30. Also 

excluded from the scope of these 

proceedings are thumb tacks, which are 

currently classified under HTSUS 

7317.00.10.00. 

While the 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 petitions, we 

discussed the scope with the petitioners 

to ensure that it is an accurate reflection 

of the products for which the domestic 

industry is seeking relief. 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 within 20 calendar days of 

signature of this notice. Comments 

should be addressed to Import 

Administration’s Central Records Unit 

(CRU), 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. 

Comments on Product Characteristics 

for Antidumping Duty Questionnaires 

We are requesting comments from 

interested parties regarding the 

appropriate physical characteristics of 

certain steel nails to be reported in 

response to the Department’s 

antidumping questionnaires. For 

example, we are considering whether 

physical characteristics such as steel 

grade, shaft length, finish type, head 

style, shank style, and point style are 

relevant. 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 1) 

as general product characteristics and 2) 

as 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 certain steel 

nails, 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 model matching. 


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38818 Federal Register / Vol. 72, No. 135 / Monday, July 16, 2007 / Notices 

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 July 30, 2007. Additionally, 

rebuttal comments must be received by 

August 9, 2007. 

Determination of Industry Support for 

the Petitions 

Section 732(b)(1) of the Act requires 

that a petition be filed by or on behalf 

of the domestic industry. In order to 

determine whether a petition has been 

filed by or on behalf of the domestic 

industry, the Department, pursuant to 

section 732(c)(4)(A) of the Act, 

determines whether a minimum 

percentage of the relevant industry 

supports the petition. 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 any statistically 

valid sampling method. 

Section 771(4)(A) of the Act defines 

the ‘‘industry’’ as the producers 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 Algoma Steel Corp. 

Ltd. v. United States, 688 F. Supp. 639, 

642–44 (CIT 1988); see also High 

Information Content Flat Panel Displays 

and Display Glass Therefor From Japan: 

Final Determination; Rescission of 

Investigation and Partial Dismissal of 

Petition, 56 FR 32376, 32380–81 (July 

16, 1991). 

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, the petitioners do not offer a 

definition of domestic like product 

distinct from the scope of the 

investigations. Based on our analysis of 

the information submitted in the 

petitions, we have determined there is 

a single domestic like product, certain 

steel nails, which is defined further in 

the ‘‘Scope of the Investigations’’

section above, and we have analyzed 

industry support in terms of that 

domestic like product. See PRC 

Initiation Checklist at Attachment II and 

UAE Initiation Checklist at Attachment 

II. 

Based on information provided in the 

petitions, the share of total estimated 

U.S. production of the domestic like 

product in calendar year 2006 

represented by the petitioners did not 

account for more than 50 percent of the 

total production of the domestic like 

product. Therefore, in accordance with 

section 732(c)(4)(D) of the Act, we 

polled the industry. 

On June 1, 2007, we issued polling 

questionnaires to all known domestic 

producers of certain steel nails 

identified in the petitions and by the 

Department’s research. On June 6, 2007, 

we issued a polling questionnaire to an 

additional producer whose identity we 

learned from the ITC. The 

questionnaires are on file in the CRU in 

room B–099 of the main Department of 

Commerce building. We requested that 

each company complete the polling 

questionnaire and certify its response by 

faxing its response to the Department by 

the due date. For a detailed discussion 

of the responses received, see PRC 

Initiation Checklist at Attachment II and 

UAE Initiation Checklist at Attachment 

II. 

Section 732(c)(4)(B) of the Act states 

that (i) the Department ‘‘shall disregard 

the position of domestic producers who 

oppose the petition if such producers 

are related to foreign producers, as 

defined in section 771(4)(B)(ii), unless 

such domestic producers demonstrate 

that their interests as domestic 

producers would be adversely affected 

by the imposition of an antidumping 

duty order’’ and (ii) the Department 

‘‘may disregard the position of domestic 

producers of a domestic like product 

who are importers of the subject 

merchandise.’’ In addition, 19 CFR 

351.203(e)(4) states that the position of 

a domestic producer that opposes the 

petition (i) will be disregarded if such 

producer is related to a foreign producer 

or to a foreign exporter under section 

771(4)(B)(ii) of the Act, unless such 

domestic producer demonstrates to the 

Secretary’s satisfaction that its interests 

as a domestic producer would be 

adversely affected by the imposition of 

an antidumping order, and (ii) may be 

disregarded if the producer is an 

importer of the subject merchandise or 

is related to such an importer under 

section 771(4)(B)(ii) of the Act. 

Certain producers of the domestic like 

product that opposed the petition 

against the PRC are related to foreign 

producers and/or imported subject 

merchandise from the PRC. We have 

analyzed the information provided by 

these producers in their polling 

questionnaire responses and 

information provided in other 

submissions to the Department (see the 

petitioners’ June 18, 2007, submission 

and Illinois Tool Works Inc.’s June 25, 

2007, submission). Based on our 

analysis, we have determined that it 

would be appropriate to disregard the 

position of any of the opposing 

producers under section 732(c)(4)(B) of 

the Act. When the position of any of 

these producers is disregarded, the 

petitioners satisfy the statutory industry 

support requirements of section 

732(c)(4)(A) of the Act. See PRC 

Initiation Checklist at Attachment II and 

UAE Initiation Checklist at Attachment 

II. 

With regard to the PRC petition, the 

data collected demonstrate that the 

domestic producers of certain steel nails 

who support the PRC petition account 

for at least 25 percent of the total 

production of the domestic like product 

and, once the opposition of certain 

producers is disregarded, 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 PRC 


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petition. See PRC Initiation Checklist at 

Attachment II. 

Our analysis of the data collected 

with regard to the UAE petition 

indicates that the domestic producers of 

certain steel nails who support the UAE 

petition account for at least 25 percent 

of the total production of the domestic 

like product and 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 UAE petition. See 

UAE Initiation Checklist at Attachment 

II. We note that certain U.S. producers 

oppose the petition against the UAE; 

however, despite such opposition, the 

petitioners still 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 UAE 

petition. As a result, we need not 

examine whether the U.S. producers 

that opposed the petition against the 

UAE are related to, or import from, 

producers of the subject merchandise in 

the UAE. 

Therefore, the Department determines 

that the petitioners filed these petitions 

on behalf of the domestic industry 

because they are interested parties as 

defined in sections 771(9)(C) and (D) of 

the Act and they have demonstrated 

sufficient industry support with respect 

to the antidumping investigations that 

they are requesting the Department 

initiate. See PRC Initiation Checklist at 

Attachment II and UAE Initiation 

Checklist at Attachment II. 

Allegations and Evidence of Material 

Injury and Causation 

The 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). The petitioners contend that 

the industry’s injured condition is 

illustrated by reduced market share, lost 

sales, reduced production, reduced 

capacity and capacity utilization rate, 

reduced shipments, underselling and 

price depression or suppression, lost 

revenue, reduced employment, decline 

in financial performance, and an 

increase in import penetration. We have 

assessed the allegations and supporting 

evidence regarding 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 

PRC Initiation Checklist at Attachment 

III (Injury) and UAE Initiation Checklist 

at Attachment III (Injury). 

Allegations of Sales at Less Than Fair 

Value 

The following is a description of the 

allegations of sales at less than fair value 

upon which the Department based its 

decision to initiate these investigations 

of imports of certain steel nails from the 

PRC and the UAE. The sources of data 

for the deductions and adjustments 

relating to the U.S. price, constructed 

value (CV) (for the UAE), and the factors 

of production (for the PRC) are also 

discussed in the country–specific 

initiation checklists. See PRC Initiation 

Checklist and UAE 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. 

UAE 

Export Price (EP) 

The petitioners calculated two EPs 

using price offers for UAE–produced 

steel nails obtained from customer 

contacts. The petitioners made 

adjustments for the importer’s markup, 

U.S. inland freight, ocean freight, 

marine insurance, U.S. port fees, and 

foreign inland freight. The petitioners 

derived the importer profit margin from 

published financial statement data of a 

trading company that imports nails into 

the United States. The petitioners 

estimated U.S. inland freight based on 

their knowledge and experience in 

shipping steel nails within the United 

States. They calculated ocean freight 

and marine insurance based on the 

difference between the average per–unit 

customs value and the average per–unit 

CIF value reported in U.S. import 

statistics for the HTSUS category 

corresponding to the price data at the 

likely U.S. port of entry. U.S. port fees 

were based on standard U.S. 

government percentages, as applied to 

the petitioners’ estimate of entered 

value. Finally, the petitioners calculated 

foreign inland freight based on a UAE 

freight quote obtained through market 

research. See UAE Initiation Checklist. 

NV Based on CV 

With respect to NV, the petitioners 

provided information that the UAE 

home market is not viable. According to 

the petitioners, the UAE steel nail 

industry is geared almost exclusively to 

exports. See, e.g., Volume III of the UAE 

petition at 9 and Exhibit UAE 5. 

Through market research, the 

petitioners learned that the type of 

wood–frame construction used 

predominantly in North America makes 

the United States a desirable market for 

exports, while other types of specialty 

fasteners are more prevalent in the UAE 

home market. See Supplement to the 

UAE petition, dated June 1, 2007. 

Further, the petitioners provided 

information that no third–country 

market for the UAE’s principal exporter 

of the merchandise, Dubai Wire, is 

viable. Based on available export data 

from the UAE, the petitioners state that 

Germany is the next largest country to 

which subject merchandise was 

exported, and that the volume of 

merchandise exported to Germany was 

1.01 percent of the volume exported to 

the United States. See Volume III of the 

UAE petition at 9 and Exhibit UAE 5, 

and Supplement to the UAE petition, 

dated June 1, 2007. As this is less than 

the 5–percent threshold provided for in 

section 773(a)(1)(B)(ii)(II) of the Act, 

Germany is not a viable third–country 

market. Accordingly, the petitioners 

based NV on CV. 

Pursuant to section 773(e) of the Act, 

CV consists of the cost of manufacture 

(COM); selling, general and 

administrative (SG&A) expenses; 

financial expenses; packing expenses; 

and profit. In calculating COM and 

packing, the petitioners based the 

quantity of each of the inputs used to 

manufacture and pack steel nails on the 

production experience of two U.S. steel 

nail producers during the prospective 

POI, and multiplied it by the value of 

inputs used to manufacture steel nails 

in the UAE using either publicly 

available data or data obtained from a 

market research study. See Volume III of 

the UAE petition at 10–14, the June 7, 

2007, supplement to the UAE petition at 

Exhibit UAE Supp–12 and the June 20, 

2007, supplement to the UAE petition at 

3–5 and Exhibits UAE Supp2–12A, 

Supp2–12B and Supp2–20. 

Raw material (i.e., steel wire rod) is 

the most significant input used in the 

production of steel nails. The 

petitioners determined the usage of steel 

wire rod based on the quantities used by 

two U.S. manufacturers to produce a 

metric ton of steel nails. The value of 

steel wire rod was based on price data 

obtained through market research. The 

price data from the market research 

study were contemporaneous with the 

POI. The values for other inputs and 

packing (i.e., scrap, stearic acid, 

polypropylene, and vinyl resins) were 

based on statistics from the World Trade 

Atlas for the period of July 2005 to 

August 2006. See Volume III of the UAE 

petition at 10–11 and Exhibits UAE 13–

14, the June 1, 2007, supplement to the 

UAE petition at Exhibit 1, and the June 

7, 2007, supplement to the UAE petition 

at Exhibit UAE Supp–12. 


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The petitioners determined labor 

costs using the labor inputs derived 

from the experience of two U.S. steel 

nail producers and valued these inputs 

using UAE labor costs obtained from a 

market research study. Based on the 

study, the petitioners calculated an 

hourly rate using an average of four 

industrial sources in the UAE. For the 

value of indirect labor, the petitioners 

calculated an hourly rate using an 

average of two industrial sources in the 

UAE for accountants, engineers, 

managers, supervisors, and general 

managers. See Volume III of the UAE 

petition at 11 and Exhibit UAE 8, the 

June 1, 2007, supplement to the UAE 

petition at Exhibit 1, and the June 7, 

2007, supplement to the UAE petition at 

Exhibit UAE Supp–12. 

To calculate energy, factory overhead, 

and SG&A expenses, the petitioners 

relied on the financial statements of a 

steel fabricating company in the UAE, 

Arab Heavy Industries (AHI), for the 

fiscal year ending December 31, 2006, 

the period most contemporaneous with 

the POI. The petitioners stated that the 

surrogate financial statements did not 

separately itemize other operating 

expenses (i.e., energy, SG&A); therefore, 

to avoid double–counting energy 

expenses in the calculation of CV it was 

necessary to use a combined ratio for 

energy, factory overhead, and SG&A 

expenses. Specifically, the petitioners 

calculated the total of depreciation, 

other operating expenses, and other 

income from AHI’s financial statements 

as a percentage of materials and labor 

from AHI’s financial statements. This 

ratio was then applied to the materials 

(excluding packing) and labor costs 

calculated as discussed above. The 

petitioners believe this is a conservative 

calculation of the energy, factory 

overhead, and SG&A expenses as they 

have included all other income from 

AHI’s financial statements. 

Additionally, based on AHI’s financial 

statements, they believe packing 

expenses were included in the 

denominator of the energy, factory 

overhead, and SG&A ratio calculation, 

but not in the materials and labor figure 

to which they applied it (packing 

expenses were added after this 

calculation), thus potentially 

understating CV. See the June 20, 2007, 

supplement to the UAE petition at 3–5 

and Exhibits UAE Supp2–12A, Supp2–

12B and Supp2–20. 

To calculate the average financial 

expense and profit rates, the petitioners 

relied on the financial statements of the 

same UAE steel fabricator, AHI. The 

petitioners note that based on the 

surrogate financial statements, the 

financial expense ratio was zero. See the 

June 20, 2007, supplement to the UAE 

petition at 3–5 and Exhibits UAE 

Supp2–12A, Supp2–12B and Supp2–20. 

PRC 

EP 

The petitioners relied on three U.S. 

prices for certain steel nails 

manufactured in the PRC and offered for 

sale in the United States. The prices 

quoted were for three different types of 

steel nails falling within the scope of the 

PRC petition, for delivery to the U.S. 

customer within the POI. The 

petitioners deducted from the prices the 

costs associated with exporting and 

delivering the product, including U.S. 

inland freight, ocean freight and 

insurance charges, U.S. duty, port and 

wharfage fees, foreign inland freight 

costs, and foreign brokerage and 

handling. See PRC Initiation Checklist. 

The petitioners based the importer 

profit margin and U.S. inland freight on 

their knowledge and experience. The 

petitioners used the Department’s 

standard all–distance freight rate for 

foreign inland freight. They calculated 

ocean freight and marine insurance 

based on the difference between the 

average per–unit customs value and the 

average per–unit CIF value reported in 

U.S. import statistics for the HTSUS 

category corresponding to the price data 

at the likely U.S. port of entry. U.S. port 

fees were based on standard percentages 

of U.S. government fees. The petitioners 

estimated foreign brokerage and 

handling based on Indian surrogate 

value data applied in another 

Department proceeding. See Volume II 

of the PRC petition at 1–15, and Exhibits 

PRC 1A, 1B, 2A, 2B, 3A, 3B, 6A - 10F, 

and the June 7, 2007, PRC–only 

submission at 15–18, and Exhibit 10. 

PRC NV 

The petitioners stated that the PRC 

remains a non–market economy (NME) 

country and no determination to the 

contrary has yet been made by the 

Department. Recently, the Department 

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 Non–

Market Economy, dated May 15, 2006 

(This document is available online at 

http://ia.ita.doc.gov/download /prc–

nme-status/prc–nme-status–memo.pdf.) 

In addition, in two recent investigations, 

the Department also determined that the 

PRC is an NME country. See 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) and 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 19, 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 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 this 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. 

The petitioners selected India as the 

surrogate country arguing that, pursuant 

to section 773(c)(4) of the Act, India is 

an appropriate surrogate because it is a 

market economy country that is at a 

level of economic development 

comparable to that of the PRC and is a 

significant producer and exporter of 

certain steel nails. See Volume II of the 

PRC petition at 16–20. Based on the 

information provided by the petitioners, 

we believe that the use of India as a 

surrogate country is appropriate for 

purposes of initiation. After the 

initiation of the investigation, we will 

solicit comments regarding surrogate 

country selection. 

The petitioners provided dumping 

margin calculations using the 

Department’s NME methodology as 

required by 19 CFR 351.202(b)(7)(i)(C) 

and 19 CFR 351.408. However, because 

information regarding the factors of 

production consumed by Chinese 

producers is not available to the 

petitioners, the petitioners calculated 

NVs for each U.S. price discussed above 

based on consumption rates for 

producing certain steel nails as 

experienced by U.S. producers. See 

Volume II of the PRC petition at 19–20. 

The petitioners used U.S. producer 

consumption figures for 2006, stating 

that such information provides as 

contemporaneous a time period as 

possible with the POI and is reasonably 

available to the petitioners. See id. With 

the exception of labor, the petitioners 

state that U.S. input consumption 

quantities reflect efficient production 

methods and they provide a 

conservative estimate of the factors of 

production used by the Chinese. See id. 


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For labor, the petitioners adjusted the 

number of labor hours per unit of output 

to account for a known difference 

between the U.S. and Chinese 

production processes. Specifically, the 

petitioners stated that the production of 

subject merchandise is more labor 

intensive in the PRC than in the United 

States, requiring significantly more 

labor to produce the same amount of 

finished product. The petitioners 

provide affidavits to support this labor 

adjustment. See Volume II of the PRC 

petition at 20, Exhibits PRC 11A - 11C, 

and the June 7, 2007, PRC–only 

supplement to the PRC petition at 4 and 

Exhibit PRC 11. Accordingly, we found 

the petitioners use of the production 

data to be reasonable. 

For the NV calculations, the 

petitioners were unable to obtain 

surrogate value figures 

contemporaneous with the POI for all 

material inputs, and accordingly relied 

upon the most recent information 

available. The sources of these data 

include the published national market 

prices for carbon steel commodities by 

Joint Plant Committee of India and the 

World Trade Atlas compilation of 

Indian import statistics, which provided 

data through September 2006 at the time 

the petition was filed. See Volume II of 

the PRC petition at Exhibits PRC 14A 

and PRC 15. Where an input price 

reflected a period preceding the POI, the 

petitioners adjusted it for inflation using 

the wholesale price index for India 

reported by the Reserve Bank of India. 

See Volume II of the PRC petition at 

Exhibit PRC 13. For fuel-, energy-, and 

lubricant–related inputs, the petitioners 

used the energy–specific inflators 

published by the International Monetary 

Fund. See id. The petitioners excluded 

those values from countries previously 

determined by the Department to be 

NME countries and imports into India 

from Indonesia, the Republic of Korea 

and Thailand, because the Department 

has previously excluded prices from 

these countries because they maintain 

broadly available, non–industry-specific 

export subsidies, as well as imports 

from unspecified countries. See Hand 

Trucks and Certain Parts Thereof From 

the People’s Republic of China: Final 

Results of Administrative Review and 

Final Results of New Shipper Review, 72 

FR 27287 (May 15, 2007), and 

accompanying Issues and Decision 

Memorandum at Comment 23. The 

surrogate values used by the petitioners 

for the material and packing inputs 

consist of information reasonably 

available to the petitioners and are, 

therefore, acceptable for purposes of 

initiation. 

With respect to the surrogate financial 

expenses, the petitioners relied on the 

factory overhead, SG&A expenses and 

profitability of an Indian steel fastener 

producer, Lakshmi Precision Screws 

Ltd. (‘‘LPS’’), taken from the company’s 

most recently available annual report 

that is closest to the POI. See Volume II 

of the PRC petition at Exhibit PRC 20. 

The petitioners claim that LPS is a 

modern producer using state of the art 

equipment and is India’s only publicly 

traded producer of steel fasteners. The 

petitioners stated that they were unable 

to find public financial statements from 

other Indian nail producers; therefore, 

the petitioners argue, LPS provides the 

best information reasonably available as 

a surrogate for the production of certain 

steel nails in the PRC. We find that the 

petitioners’ use of LPS as the source for 

the surrogate financial expenses is 

appropriate for purposes of initiation. 

The Department made minor 

modifications to the surrogate financial 

ratios calculated by the petitioners. As 

a result, the calculations for the three 

NVs and the resulting margin 

calculations changed slightly. See PRC 

Initiation Checklist at Attachment V. 

Fair Value Comparisons 

Based on the data provided by the 

petitioners, there is reason to believe 

that imports of certain steel nails from 

the PRC and the UAE are being, or are 

likely to be, sold in the United States at 

less than fair value. Based on 

comparisons of EP to CV, calculated in 

accordance with section 773(a)(4) of the 

Act, the estimated dumping margins for 

certain steel nails from the UAE are 

70.77 and 71.50 percent. Based on 

comparisons of EP to NV, calculated in 

accordance with section 773(c) of the 

Act, the estimated dumping margins for 

certain steel nails from the PRC are 

55.19, 97.15 and 118.04 percent. 

Initiation of Antidumping 

Investigations 

Based upon the examination of the 

petitions on certain steel nails from the 

PRC and the UAE, the Department finds 

that the petitions meet the requirements 

of section 732 of the Act. Therefore, we 

are initiating antidumping duty 

investigations to determine whether 

imports of certain steel nails from the 

PRC and the UAE 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 will make our 

preliminary determinations no later 

than 140 days after the date of this 

initiation. 

Separate Rates and Quantity and Value 

Questionnaire 

The Department recently modified the 

process by which exporters and 

producers may obtain separate–rate 

status in NME investigations. 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 and Combination Rates Bulletin), 

available on the Department’s website at 

http://ia.ita.doc.gov/policy/bull05–

1.pdf. The process requires the 

submission of a separate–rate status 

application. Based on our experience in 

processing the separate–rate 

applications in the following 

antidumping duty investigations, we 

have modified the application for this 

investigation to make it more 

administrable and easier for applicants 

to complete. See Initiation of 

Antidumping Duty Investigations: 

Certain Lined Paper Products From 

India, Indonesia, and the People’s 

Republic of China, 70 FR 58374, 58379 

(October 6, 2005), Initiation of 

Antidumping Duty Investigation: 

Certain Artist Canvas From the People’s 

Republic of China, 70 FR 21996, 21999 

(April 28, 2005), and Initiation of 

Antidumping Duty Investigations: 

Diamond Sawblades and Parts Thereof 

from the People’s Republic of China and 

the Republic of Korea, 70 FR 35625, 

35629 (June 21, 2005). The specific 

requirements for submitting the 

separate–rate application in this 

investigation are outlined in detail in 

the application itself, which will be 

available on the Department’s website at 

http://ia.ita.doc.gov/ia–highlights-and–

news.html on the date of publication of 

this initiation notice in the Federal 

Register. The separate–rate application 

is due no later than September 7, 2007. 

NME Respondent Selection and 

Quantity and Value Questionnaire 

For NME investigations, it is the 

Department’s practice to request 

quantity and value information from all 

known exporters identified in the PRC 

petition. Although many NME exporters 

respond to the quantity and value 

information request, at times some 

exporters may not have received the 

quantity and value questionnaire or may 

not have received it in time to respond 

by the specified deadline. Therefore, the 

Department typically requests the 

assistance of the NME government in 

transmitting the Department’s quantity 

and value questionnaire to all 

companies that manufacture and export 

subject merchandise to the United 


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38822 Federal Register / Vol. 72, No. 135 / Monday, July 16, 2007 / Notices 

States, as well as to manufacturers that 

produce the subject merchandise for 

companies that were engaged in 

exporting subject merchandise to the 

United States during the POI. The 

quantity and value data received from 

NME exporters is used as the basis to 

select the mandatory respondents. 

The 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. 

Appendix I of this notice contains the 

quantity and value questionnaire that 

must be submitted by all NME exporters 

no later than July 30, 2007. In addition, 

the Department will post the quantity 

and value questionnaire along with the 

filing instructions on the IA website at 

http://ia.ita.doc.gov/ia–highlights-and–

news.html. The Department will send 

the quantity and value questionnaire to 

those companies identified in Exhibit I–

5 of Volume I of the PRC petition and 

those identified by the NME 

government. 

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 the PRC investigation. 

The Separate Rates and 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 and Combination 

Rates Bulletin, at 6. 

Distribution of Copies of the Petitions 

In accordance with section 

732(b)(3)(A) of the Act, copies of the 

public versions of the petitions have 

been provided to the representatives of 

the Governments of the PRC and the 

UAE. We will attempt to provide a copy 

of the public version of the petitions to 

the foreign producers/exporters, 

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 July 30, 2007, whether 

there is a reasonable indication that 

imports of certain steel nails from the 

PRC and the UAE 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: July 9, 2007. 

David M. Spooner, 

Assistant Secretaryfor Import Administration. 

Appendix – 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 your 

sales of merchandise covered by the 

scope of this investigation (see scope 

section of this notice), produced in the 

PRC, and exported/shipped to the 

United States during the period October 

1, 2006, through March 31, 2007. 

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 .............................................................................................................. ........................ ........................ ........................

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). 

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 


hsrobinson on PROD1PC76 with NOTICES
Federal Register / Vol. 72, No. 135 / Monday, July 16, 2007 / Notices 38823 

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: 

• 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. E7–13721 Filed 7–13–07; 8:45 am] 

BILLING CODE 3510–DS–S 

DEPARTMENT OF COMMERCE 

International Trade Administration 

Trade Mission Statement 

AGENCY: International Trade 

Administration, Department of 

Commerce. 

ACTION: Notice. 

Mission Statement 

Renewable Energy and Alternative 

Fuels Mission to Europe. September 10–

19, 2007. 

Mission Description 

The United States Department of 

Commerce, International Trade 

Administration, U.S. and Foreign 

Commercial Service will organize a 

Renewable Energy and Alternative Fuels 

Trade Mission to Germany, Hungary, 

the Slovak Republic, the Czech Republic 

and Poland, September 10–19, 2007. 

This event offers a timely and costeffective means for U.S. firms to enter 

promising markets for renewable 

energies equipment, technology and 

services. Target sectors holding high 

potential for U.S. exporters include 

biomass, biofuels, waste-to-energy, 

hydropower, wind, geothermal, solar 

and clean coal. During the Munich, 

Germany stop, the program will include 

a country briefing, a European Unionwide perspective on renewable energy, 

a reception for business and government 

contacts hosted by the U.S. Consulate, 

and one-on-one appointments with 

prospective business contacts. Each of 

the stops in Central Europe will include 

a country briefing, reception for 

business and government contacts 

hosted by the U.S. Ambassador or other 

high-ranking embassy official, one-onone appointments with prospective 

business contacts, and high-level 

meetings with government officials and 

business leaders. 

Commercial Setting 

Germany: The German economy is the 

world’s third largest and, after the 

expansion of the EU, accounts for nearly 

one-fifth of European Union GDP. 

Germany is the United States’ largest 

European trading partner and is the 

sixth largest market for U.S. exports. 

German business and consumer 

confidence is increasing rapidly as 

Germany continues to build upon last 

year’s 2.7 percent increase in GDP. 

Germany is once again becoming 

Europe’s economic engine with an 

expected GDP growth rate this year of 

approximately 2.3–2.8 percent. Since 

EU accession 2004, Hungary, the Slovak 

Republic and Czech Republic and 

Poland have experienced robust rates of 

economic growth, dramatically 

increased inflows of foreign direct 

investment and enhanced access to EU 

development funds. The need to reduce 

dependence on non-EU sources and the 

ambitious target set by the EU for 

renewables to comprise 20% of general 

energy consumption by 2020 are driving 

a significant demand for new 

equipment, technology and services. 

These developments have created robust 

business opportunities for U.S. firms 

operating within these sectors. 

Germany’s power plant capacity is 

currently roughly 11,000 MW, which is 

unlikely to increase as new power 

plants under construction or being 

planned will only replace older, existing 

plants. However, Germany’s energy 

supply is still based mainly on fossil 

resources. The finiteness of these 

resources and negative effects on the 

environment necessitate increased 

development of renewable energies to 

ensure future energy supply. Due to 

rising prices of fossil products, and to 

environmental protection measures 

mandated by Germany’s federal 

government and the EU, the use of 

regenerative energy in Germany has 

increased considerably in recent years 

and is expected to increase further, 

creating areas of opportunities for 

companies offering technology and 

know-how for this market segment. 

Germany’s energy industry is one of the 

largest investors in the country with 80 

billion euros ($106.5 billion USD) to be 

invested in networks and power plants 

by the end of 2020. However, as the 

world’s sixth largest producer of CO2

emissions, Germany is trying to slash its 

output of greenhouse gases and is 

planning to have renewable energy 

sources supply a quarter of its energy 

needs by 2020. Currently, renewable 

energy sources supply 12% of 

Germany’s energy, primarily from wind, 

water, biomass and photovoltaics. By 

2010, experts predict an increase in 

sales for the whole renewable energy 

sector of 45 billion euros ($60 billion 

USD) with an export share of 16 billion 

euros ($21.3 billion USD). 

Hungary: Hungary relies heavily on 

oil and gas from Russia, together with 

one nuclear plant, for most of its energy 

needs. Future diversity is key, and 

renewable sources are a priority. With 

power demand increasing 2% yearly, 

Hungary needs another 6,300 MW of 

capacity over 10–15 years. The 

renewable portion is expected to reach 

600 MW by 2020, from 170 MW now. 

U.S. know-how can help Hungary meet 

its goals. 

Slovak Republic: In 2005, nuclear 

plants provided almost 60% of the 


hsrobinson on PROD1PC76 with NOTICES
B-1

APPENDIX B

CONFERENCE WITNESSES

B-3

CALENDAR OF PUBLIC HEARING

Those listed below appeared as witnesses at the United States International Trade Commission’s

conference:

Subject: Certain Steel Nails from China and the United Arab Emirates

Inv. Nos.: 731-TA-1114 and 1115 (Preliminary)

Date and Time: June 19, 2007 - 9:30 a.m.

The conference was held in Room 101 (Main Hearing Room) of the United States International

Trade Commission Building, 500 E Street, SW, Washington, DC.

In Support of the Imposition of

 Antidumping Duty Orders:

Kelley Drye Collier Shannon

Washington, DC

on behalf of

Davis Wire Corp.

Gerdau Ameristeel Corp.

Maze Nails

Mid-Continent Nail Corp.

Treasure Coast Fasteners, Inc. 

David Libla, President, Mid Continent Nail Corp.

Jim Kerkvliet, Vice President and General Manager, Downstream Group,

Gerdau Ameristeel Corp.

Peter Cronin, Corporate Vice President, Sales and Marketing,

Hyco Wire Group, USA (Davis Wire Corp.)

M. John Dees, President, Treasure Coast Fasteners, Inc.

Denis McMorrow, President, Wheeling La-Belle Nail Co.

Vic Stirnaman, Executive Vice President, Keystone Steel Corp.

Chris Pratt, Director of Internal Audit and Reporting Systems,

 Mid Continent Nail Corp.

Gina Beck, Economist, Georgetown Economic Services

Paul Rosenthal )

Kathleen W. Cannon )–OF COUNSEL

Grace W. Kim )
B-4

In Opposition to the Imposition of

 Antidumping Duty Orders:

Vinson & Elkins LLP

Washington, DC

on behalf of

On behalf of Suzhou Xingya Nail Industry Co., Ltd.; Shanxi Yuci Broad Wire Products Co., Ltd.;

Huanghua Jinhai Hardware Products Co., Ltd.; Shanxi Pioneer Hardwire Industrial Co., Ltd.; Shandong

Oriental Cherry Hardware Group Co., Ltd.; Shandong Xinmaite Metal Mining Co., Ltd.; Shanxi Tianli

Industries Co., Ltd.; Ma'anshan Yulong Metal Products Co., Ltd.; Shouguang Meiqing Nail Industry Co.,

Ltd.; Dezhou Hualu Metal Products Co., Ltd.; Shanhai Tengjia Metal Products Co., Ltd.; Shanghai

Tengyu Hardware Tools Co., Ltd., Xi'an Dayang Metal & Mineral Products Import-Export Co., Ltd.;

Ming Guang Ruifeng Metal Products Co., Ltd.; Quingdao D&L Group Co., Ltd.; Beijing Pude Metal

Group Co., Ltd.; Beijing Hongsheng Machinery Industry Co., Ltd.; Xuzhou Risheng Machinery Industry

Co., Ltd.; Beijing Daruixing Nail Products Co., Ltd.; Shanghai Yueda Fasteners Co., Ltd.; Jiangsu Soho 

International Group Corp. Commerce Trade Co., Ltd.; Smart (Tianjin) Technology Development Co.,

Ltd.; Nanjing Yitian Metal Products Co., Ltd.; and Shanghai Yusuo Metal Facilities Co., Ltd.

Jacob Davis, President, S.T.O. Industries Inc./FANACO Fasteners

Daniel L. Porter ) – OF COUNSEL

McDermott Will & Emery LLP 

Washington, DC 

on behalf of 

 

On behalf of Illinois Tool Works Inc. (“ITW”)

 

Guenther Kram, Business Unit Manager, Paslode Construction Division, ITW 

Mark Boutelle, General Manager of Paslode Construction Division, ITW

David J. Levine )– OF COUNSEL 

McDermott Will & Emery LLP 

Washington, DC

on behalf of 

 

On behalf of Hitachi Koki USA, Ltd. 

 

Steve Karaga, Vice President, Hitachi Koki USA Ltd. 

Raymond Paretzky )- OF COUNSEL
B-5

In Opposition to the Imposition of

 Antidumping Duty Orders:

Garvey Schubert Barer

Washington, DC

on behalf of

On behalf of Coast to Coast Building Products Inc.; Unitech Fastening Mfg. Inc.; Shandex Industrial,

Inc.; Building Material Distributors, Inc. (“BMD”); United Sources Inc., Carrillos Nails Company;

Accent Wire Products; and 3-G’s Supply Co.

Garry Tabor, President and CEO, BMD

Bill Sims, President, Accent Wire Products

Lizbeth R. Levinson )– OF COUNSEL

Miller & Chevalier

Washington, DC

on behalf of

On behalf of Dubai Wire FZE

John Hurwitz, Vice President of Operations, Northeast Wholesale Nail

and Fastener Supply Co.

Rupak Ved, President, Dubai Wire

Hal Lock, Senior VP of Marketing and Business Development, 

Orco Construction Supply

James Veth, Vice President, Auxiliary Service & Hardware

Bob Frosio, President, Fastening Systems, Inc.

Peter Koenig ) – OF COUNSEL

Pepper Hamilton LLP

Washington, DC

on behalf of

On behalf of Continental Materials, Inc.

Peter Fischer, President, Continental Materials, Inc.

Gregory C. Dorris )– OF COUNSEL
B-6

In Opposition to the Imposition of

 Antidumping Duty Orders:

Sidley Austin LLP

Washington, DC

on behalf of

On behalf of XM International, Inc. and Shanghai Shengxiang Hardware Co.; Tianjin Jetcom

Manufacturing Co., Ltd.; Wuxi Baolin Nail Enterprises, Zhejiang Jinhua Nail Factory; Tianjin Everwin

Metal Products Co., Ltd.; XL Metal Works Co., Ltd.; and Hebei Development Metals Co., Ltd.

Neil R. Ellis )

 – OF COUNSEL Lawrence R. Walders )

Alston & Bird LLP

Washington, DC

on behalf of

On behalf of ITOCHU Building Products Co., Inc.

Mona Zinman, President, ITOCHU Building Products, Inc. and co-CEO,

Prime Source Building Products, Inc..

George Ikeda, Corporate Counsel, ITOCHU International, Inc. 

Kenneth G. Weigel ) – OF COUNSEL

Adduci Mastriani & Schaumberg LLP

Washington, DC

on behalf of

On behalf of Black & Decker (U.S.) Inc.

Eric Suro, Product Manager, Black and Decker

Will E. Leonard )– OF COUNSEL
C-1

APPENDIX C

SUMMARY DATA

Table C-1

Steel nails: Summary data concerning the U.S. market, 2004-06, January-March 2006, and January-March 2007

(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

January-March Jan.-Mar.

Item 2004 2005 2006 2006 2007 2004-06 2004-05 2005-06 2006-07

U.S. consumption quantity:

 Amount . . . . . . . . . . . . . . . . . . . . 1,238,523 1,207,695 1,154,857 300,597 199,261 -6.8 -2.5 -4.4 -33.7

 Producers' share (1) . . . . . . . . . . 28.6 25.1 19.6 23.0 19.7 -9.0 -3.5 -5.4 -3.4

 Importers' share (1):

 China . . . . . . . . . . . . . . . . . . . . . 27.4 39.7 53.3 45.9 56.5 25.9 12.4 13.6 10.6

 UAE . . . . . . . . . . . . . . . . . . . . . . 6.0 6.7 7.2 7.5 5.7 1.2 0.8 0.5 -1.8

 Subtotal . . . . . . . . . . . . . . . . . . 33.3 46.5 60.5 53.4 62.1 27.2 13.1 14.0 8.7

 Other sources . . . . . . . . . . . . . . 38.1 28.5 19.9 23.6 18.2 -18.2 -9.6 -8.6 -5.4

 Total imports . . . . . . . . . . . . . . 71.4 74.9 80.4 77.0 80.3 9.0 3.5 5.4 3.4

U.S. consumption value:

 Amount . . . . . . . . . . . . . . . . . . . . 1,337,651 1,341,352 1,209,702 319,081 222,562 -9.6 0.3 -9.8 -30.2

 Producers' share (1) . . . . . . . . . . 37.3 34.2 28.8 33.4 31.6 -8.5 -3.2 -5.4 -1.7

 Importers' share (1):

 China . . . . . . . . . . . . . . . . . . . . . 20.5 29.2 40.2 33.1 40.8 19.7 8.7 11.0 7.7

 UAE . . . . . . . . . . . . . . . . . . . . . . 5.6 5.8 6.4 6.4 4.9 0.8 0.2 0.6 -1.5

 Subtotal . . . . . . . . . . . . . . . . . . 26.1 35.0 46.6 39.5 45.7 20.5 8.9 11.6 6.2

 Other sources . . . . . . . . . . . . . . 36.5 30.8 24.6 27.1 22.6 -11.9 -5.7 -6.2 -4.5

 Total imports . . . . . . . . . . . . . . 62.7 65.8 71.2 66.6 68.4 8.5 3.2 5.4 1.7

U.S. imports from:

 China:

 Quantity . . . . . . . . . . . . . . . . . . . 339,002 479,751 615,548 137,913 112,488 81.6 41.5 28.3 -18.4

 Value . . . . . . . . . . . . . . . . . . . . . 274,183 391,159 485,994 105,632 90,820 77.3 42.7 24.2 -14.0

 Unit value . . . . . . . . . . . . . . . . . . $809 $815 $790 $766 $807 -2.4 0.8 -3.2 5.4

 Ending inventory quantity . . . . . *** *** *** *** *** *** *** *** ***

 UAE:

 Quantity . . . . . . . . . . . . . . . . . . . 73,724 81,287 83,115 22,641 11,346 12.7 10.3 2.2 -49.9

 Value . . . . . . . . . . . . . . . . . . . . . 75,446 78,305 77,913 20,550 10,935 3.3 3.8 -0.5 -46.8

 Unit value . . . . . . . . . . . . . . . . . . $1,023 $963 $937 $908 $964 -8.4 -5.9 -2.7 6.2

 Ending inventory quantity . . . . . *** *** *** *** *** *** *** *** ***

 Subtotal:

 Quantity . . . . . . . . . . . . . . . . . . . 412,726 561,038 698,662 160,553 123,833 69.3 35.9 24.5 -22.9

 Value . . . . . . . . . . . . . . . . . . . . . 349,629 469,464 563,907 126,182 101,754 61.3 34.3 20.1 -19.4

 Unit value . . . . . . . . . . . . . . . . . . $847 $837 $807 $786 $822 -4.7 -1.2 -3.5 4.6

 Ending inventory quantity . . . . . 19,560 29,817 38,151 27,202 34,049 95.0 52.4 28.0 25.2

 All other sources:

 Quantity . . . . . . . . . . . . . . . . . . . 471,722 343,963 229,529 70,797 36,238 -51.3 -27.1 -33.3 -48.8

 Value . . . . . . . . . . . . . . . . . . . . . 488,453 413,416 297,291 86,462 50,381 -39.1 -15.4 -28.1 -41.7

 Unit value . . . . . . . . . . . . . . . . . . $1,035 $1,202 $1,295 $1,221 $1,390 25.1 16.1 7.8 13.8

 Ending inventory quantity . . . . . 27,396 25,209 19,411 28,242 13,524 -29.1 -8.0 -23.0 -52.1

 All sources:

 Quantity . . . . . . . . . . . . . . . . . . . 884,448 905,001 928,191 231,351 160,071 4.9 2.3 2.6 -30.8

 Value . . . . . . . . . . . . . . . . . . . . . 838,082 882,879 861,198 212,644 152,135 2.8 5.3 -2.5 -28.5

 Unit value . . . . . . . . . . . . . . . . . . $948 $976 $928 $919 $950 -2.1 3.0 -4.9 3.4

 Ending inventory quantity . . . . . 46,956 55,026 57,562 55,444 47,573 22.6 17.2 4.6 -14.2

Table continued on next page.

C-3
Table C-1--Continued

Steel nails: Summary data concerning the U.S. market, 2004-06, January-March 2006, and January-March 2007

(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

January-March Jan.-Mar.

Item 2004 2005 2006 2006 2007 2004-06 2004-05 2005-06 2006-07

U.S. producers':

 Average capacity quantity . . . . . . 775,253 725,027 722,079 179,037 176,510 -6.9 -6.5 -0.4 -1.4

 Production quantity . . . . . . . . . . . 361,136 300,745 227,611 70,414 40,434 -37.0 -16.7 -24.3 -42.6

 Capacity utilization (1) . . . . . . . . . 46.6 41.5 31.5 39.3 22.9 -15.1 -5.1 -10.0 -16.4

 U.S. shipments:

 Quantity . . . . . . . . . . . . . . . . . . . 354,075 302,694 226,666 69,246 39,190 -36.0 -14.5 -25.1 -43.4

 Value . . . . . . . . . . . . . . . . . . . . . 499,569 458,473 348,505 106,437 70,427 -30.2 -8.2 -24.0 -33.8

 Unit value . . . . . . . . . . . . . . . . . . $1,411 $1,515 $1,538 $1,537 $1,797 9.0 7.4 1.5 16.9

 Export shipments:

 Quantity . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . . . . $*** $*** $*** $*** $*** $*** $*** $*** $***

 Ending inventory quantity . . . . . . *** *** *** *** *** *** *** *** ***

 Inventories/total shipments (1) . . *** *** *** *** *** *** *** *** ***

 Production workers . . . . . . . . . . . 1,481 1,370 1,120 1,160 821 -24.4 -7.5 -18.3 -29.2

 Hours worked (1,000s) . . . . . . . . 3,212 2,912 2,319 629 409 -27.8 -9.3 -20.4 -35.0

 Wages paid ($1,000s) . . . . . . . . . 44,110 36,093 34,212 9,198 5,884 -22.4 -18.2 -5.2 -36.0

 Hourly wages . . . . . . . . . . . . . . . . $13.73 $12.39 $14.76 $14.62 $14.39 7.5 -9.7 19.1 -1.6

 Productivity (tons/1,000 hours) . . 112.4 103.3 98.2 111.9 98.9 -12.7 -8.1 -4.9 -11.7

 Unit labor costs . . . . . . . . . . . . . . $122.14 $120.01 $150.31 $130.63 $145.51 23.1 -1.7 25.2 11.4

 Net sales:

 Quantity . . . . . . . . . . . . . . . . . . . 337,642 292,808 227,243 69,875 39,692 -32.7 -13.3 -22.4 -43.2

 Value . . . . . . . . . . . . . . . . . . . . . 486,762 458,041 357,551 107,493 71,484 -26.5 -5.9 -21.9 -33.5

 Unit value . . . . . . . . . . . . . . . . . . $1,442 $1,564 $1,573 $1,538 $1,801 9.1 8.5 0.6 17.1

 Cost of goods sold (COGS) . . . . . 376,102 353,138 270,809 82,699 52,777 -28.0 -6.1 -23.3 -36.2

 Gross profit or (loss) . . . . . . . . . . 110,659 104,903 86,742 24,793 18,707 -21.6 -5.2 -17.3 -24.5

 SG&A expenses . . . . . . . . . . . . . 43,675 43,258 38,575 10,304 9,453 -11.7 -1.0 -10.8 -8.3

 Operating income or (loss) . . . . . 66,984 61,645 48,167 14,489 9,253 -28.1 -8.0 -21.9 -36.1

 Capital expenditures . . . . . . . . . . 15,155 8,309 7,102 2,677 737 -53.1 -45.2 -14.5 -72.5

 Unit COGS . . . . . . . . . . . . . . . . . . $1,114 $1,206 $1,192 $1,184 $1,330 7.0 8.3 -1.2 12.3

 Unit SG&A expenses . . . . . . . . . . $129 $148 $170 $147 $238 31.2 14.2 14.9 61.5

 Unit operating income or (loss) . . $198 $211 $212 $207 $233 6.8 6.1 0.7 12.4

 COGS/sales (1) . . . . . . . . . . . . . . 77.3 77.1 75.7 76.9 73.8 -1.5 -0.2 -1.4 -3.1

 Operating income or (loss)/

 sales (1) . . . . . . . . . . . . . . . . . . . 13.8 13.5 13.5 13.5 12.9 -0.3 -0.3 0.0 -0.5

 (1) "Reported data" are in percent and "period changes" are in percentage points.

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
C-5

Table C-2

Steel nails: Summary data concerning the U.S. market, excluding ITW, Senco, and

Stanley-Bostitch, 2004-06, January-March 2006, and January-March 2007

* * * * * * *

Table C-3

Steel nails: Summary data concerning the U.S. market, excluding ITW, Senco, Stanley-Bostitch,

and Specialty Fasteners, 2004-06, January-March 2006, and January-March 2007

* * * * * * *
Table C-4

Steel nails: U.S. producers' and importers' U.S. shipments, by type, 2006

Quantity Value Unit value Quantity Value

Item (short tons) ($1,000) ($/short ton) share (percent) share (percent)

U.S. producers' U.S. shipments:

 Collated:

 Bright . . . . . . . . . . . . . . . . . . . . . . 137,414 177,326 1,290 60.6 50.9

 Galvanized . . . . . . . . . . . . . . . . . . 37,432 107,233 2,865 16.5 30.8

 Other . . . . . . . . . . . . . . . . . . . . . . . 812 12,854 15,830 0.4 3.7

 Total collated . . . . . . . . . . . . . . . 175,658 297,413 1,693 77.5 85.3

 Uncollated:

 Bright . . . . . . . . . . . . . . . . . . . . . . 34,000 32,026 942 15.0 9.2

 Galvanized . . . . . . . . . . . . . . . . . . 9,731 11,871 1,220 4.3 3.4

 Other . . . . . . . . . . . . . . . . . . . . . . . 7,277 7,194 989 3.2 2.1

 Total uncollated . . . . . . . . . . . . . 51,008 51,091 1,002 22.5 14.7

 Total U.S. shipments . . . . . . . . 226,666 348,504 1,538 100.0 100.0

U.S. shipments of imports from China:

 Collated:

 Bright . . . . . . . . . . . . . . . . . . . . . . 161,179 179,655 1,115 42.0 43.1

 Galvanized . . . . . . . . . . . . . . . . . . 37,503 51,749 1,380 9.8 12.4

 Other . . . . . . . . . . . . . . . . . . . . . . . 3,743 9,234 2,467 1.0 2.2

 Total collated . . . . . . . . . . . . . . . 202,424 240,638 1,189 52.7 57.7

 Uncollated:

 Bright . . . . . . . . . . . . . . . . . . . . . . 81,387 62,733 771 21.2 15.1

 Galvanized . . . . . . . . . . . . . . . . . . 44,142 57,270 1,297 11.5 13.7

 Other . . . . . . . . . . . . . . . . . . . . . . . 55,813 56,082 1,005 14.5 13.5

 Total uncollated . . . . . . . . . . . . . 181,342 176,084 971 47.3 42.3

 Total U.S. shipments . . . . . . . . 383,766 416,722 1,086 100.0 100.0

U.S. shipments of imports from the UAE:

 Collated:

 Bright . . . . . . . . . . . . . . . . . . . . . . *** *** *** *** ***

 Galvanized . . . . . . . . . . . . . . . . . . *** *** *** *** ***

 Other . . . . . . . . . . . . . . . . . . . . . . . *** *** *** *** ***

 Total collated . . . . . . . . . . . . . . . *** *** *** *** ***

 Uncollated:

 Bright . . . . . . . . . . . . . . . . . . . . . . 0 0 (1) 0.0 0.0

 Galvanized . . . . . . . . . . . . . . . . . . 0 0 (1) 0.0 0.0

 Other . . . . . . . . . . . . . . . . . . . . . . . 0 0 (1) 0.0 0.0

 Total uncollated . . . . . . . . . . . . . 0 0 (1) 0.0 0.0

 Total U.S. shipments . . . . . . . . *** *** *** *** ***

U.S. shipments of other imports:

 Collated:

 Bright . . . . . . . . . . . . . . . . . . . . . . 67,079 85,126 1,269 44.9 37.7

 Galvanized . . . . . . . . . . . . . . . . . . 24,287 72,927 3,003 16.3 32.3

 Other . . . . . . . . . . . . . . . . . . . . . . . 6,775 11,746 1,734 4.5 5.2

 Total collated . . . . . . . . . . . . . . . 98,142 169,799 1,730 65.7 75.2

 Uncollated:

 Bright . . . . . . . . . . . . . . . . . . . . . . 24,467 22,087 903 16.4 9.8

 Galvanized . . . . . . . . . . . . . . . . . . 10,770 16,795 1,559 7.2 7.4

 Other . . . . . . . . . . . . . . . . . . . . . . . 15,993 16,999 1,063 10.7 7.5

 Total uncollated . . . . . . . . . . . . . 51,230 55,880 1,091 34.3 24.8

 Total U.S. shipments . . . . . . . . 149,371 225,679 1,511 100.0 100.0

 (1) Not applicable.

Note.--Not all U.S. producers and importers provided data on steel nails broken out by type.

Source: Compiled from data submitted in response to Commission questionnaires.

C-6
D-1

APPENDIX D

ALLEGED EFFECTS OF SUBJECT IMPORTS ON 

PRODUCERS’ EXISTING DEVELOPMENT AND 

PRODUCTION EFFORTS, GROWTH, INVESTMENT, 

AND ABILITY TO RAISE CAPITAL

D-3

Responses of U.S. producers to the following question: Since January 1, 2004 has your firm

experienced any actual negative effects on its return on investment or its growth, investment, ability

to raise capital, existing development and production efforts (including efforts to develop a

derivative or more advanced version of the product), or the scale of capital investments as a result

of imports of steel nails from China or the United Arab Emirates?

* * * * * * *

Company responses to the following question: Does your firm anticipate any negative impact of

imports of steel nails from China or the United Arab Emirates?

* * * * * * *