Circular Welded Carbon-Quality Steel Pipe

From China

Investigation Nos. 701-TA-447 and 731-TA-1116 (Preliminary)

Publication 3938 July 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

Cynthia Trainor, Investigator

Olympia Hand, Investigator

Norman Van Toai, Industry Analyst

Gerald Benedick, Economist

Justin Jee, Accountant

Charles St. Charles, Attorney

Steven Hudgens, Statistician

Douglas Corkran, 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

Circular Welded Carbon-Quality Steel Pipe

From China

Investigation Nos. 701-TA-447 and 731-TA-1116 (Preliminary)

Publication 3938 July 2007

i

CONTENTS

Page

Determination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

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

Separate views of Chairman Daniel R. Pearson and Commissioner Deanna Tanner Okun 

concerning threat of material injury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

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

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

Statutory criteria and organization of the report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-2

U.S. circular welded pipe market summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-3

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

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

Previous and related safeguard investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-5

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

The subject merchandise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7

Commerce’s scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7

Tariff treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8

The domestic like product . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-10

Physical characteristics and uses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-10

Manufacturing process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-12

Channels of distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-13

Domestic like product issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-14

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

Channels of distribution and market characteristics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1

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

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

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

Foreign demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-8

Substitutability issues .......................................................... II-8

Factors affecting sales and purchases ........................................... II-9

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

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

U.S. capacity, production, and capacity utilization ................................... III-3

U.S. producers’ shipments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-4

U.S. producers’ inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-6

U.S. producers’ imports and purchases ............................................. III-7

U.S. employment, wages, and productivity ......................................... III-7

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

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

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

Apparent U.S. consumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-8

U.S. market shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-9
ii

CONTENTS

Page

Part IV: U.S. imports, apparent U.S. consumption, and market shares–Continued

Ratio of U.S. imports to U.S. production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-10

Comparison of U.S.-produced and imported circular welded pipe . . . . . . . . . . . . . . . . . . . . . . . . IV-10

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

Factors affecting pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1

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

Tariff rates and transportation costs to the U.S. market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-2

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

Exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-5

Pricing practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-6

Price data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-9

Announced selling price increases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-9

Questionnaire price data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-10

Lost revenues and lost sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-20

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

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

Operations on circular welded pipe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-1

Capital expenditures and research and development expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-6

Assets and return on investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-6

Capital and investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-8

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

The industry in China .......................................................... VII-1

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-1

Circular welded pipe operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-3

Alternative products ........................................................ VII-5

China’s export markets ...................................................... VII-7

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

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

Dumping in third-country markets ................................................ VII-10

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

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

Nonsubject source information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-11

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-11

Leading nonsubject sources of circular welded pipe ................................ VII-12

Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-14

India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-16

Korea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-17

Mexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-17

Taiwan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-18

Thailand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-19

Turkey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-20
iii

CONTENTS

Page

Appendixes

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

B. Calendar of public conference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1

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

D. Questionnaire selling price data for circular welded pipe products 1-4 imported

 from nonsubject countries and price comparisons with the U.S.-produced products . . . . . . D-1

E. Alleged effects of subject imports on U.S. producers’ existing development

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

F. Additional data regarding the Chinese industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1

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

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

 1

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

 2

 Vice Chairman Shara L. Aranoff, Commissioner Charlotte R. Lane, and Commissioner Irving A. Williamson

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

imports of circular welded carbon-quality steel pipe from China.

 3

 Chairman Daniel R. Pearson and Commissioner Deanna Tanner Okun determine that there is a reasonable

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

welded carbon-quality steel pipe from China.

 4

 Commissioner Dean A. Pinkert recused himself to avoid any conflict of interest or appearance of a conflict.

UNITED STATES INTERNATIONAL TRADE COMMISSION

Investigation Nos. 701-TA-447 and 731-TA-1116 (Preliminary)

CIRCULAR WELDED CARBON-QUALITY STEEL PIPE FROM CHINA

DETERMINATION

On the basis of the record1

 developed in the subject investigations, the United States International

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

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

in the United States is materially injured2

 or threatened with material injury3 by reason of imports from

China of circular welded carbon-quality steel pipe, provided for in subheading 7306.30 of the

Harmonized Tariff Schedule of the United States, that are alleged to be subsidized by the Government of

China and sold in the United States at less than fair value (LTFV).4

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

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

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

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

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

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

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

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

BACKGROUND

On June 7, 2007, a petition was filed with the Commission and Commerce by Allied Tube &

Conduit, Harvey, IL; IPSCO Tubulars, Inc., Camanche, IA; Northwest Pipe Co., Portland, OR; Sharon

Tube Co., Sharon, PA; Western Tube & Conduit Corp., Long Beach, CA; Wheatland Tube Co.,

Collingswood, NJ; and the United Steelworkers, Pittsburgh, PA, alleging that an industry in the United

States is materially injured and threatened with material injury by reason of subsidized and LTFV imports
of circular welded carbon-quality steel pipe from China. Accordingly, effective June 7, 2007, the

Commission instituted countervailing duty investigation No. 701-TA-447 (Preliminary) and antidumping

duty investigation No. 731-TA-1116 (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 14, 2007 (72 FR 32862). The conference was held in Washington, DC, on June 28, 2007, and all

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

 Chairman Pearson and Commissioner Okun determine that the domestic industry is threatened with material

injury by subject imports. See Separate Views of Chairman Daniel R. Pearson and Commissioner Deanna Tanner

Okun Concerning Threat of Material Injury. They join in parts I, II, III, IV, and V.A of these Views.

 2

 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.

 3

 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). 

 4

 The estimate of 77 percent of total exports from China came from questionnaire responses. Reported exports in

2006 were equivalent to 78 percent of 2006 imports of CWP from China according to official statistics (as adjusted

(continued...)

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 circular

welded carbon-quality steel pipe (“CWP”) from China that is allegedly subsidized by the government of

China and sold in the United States at less than fair value (“LTFV”).1

I. THE LEGAL STANDARD FOR PRELIMINARY DETERMINATIONS

 The legal standard for preliminary antidumping and countervailing duty determinations requires

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

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

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

reason of the allegedly unfairly traded imports.2

 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.”3

II. BACKGROUND

A. In General

CWP is produced in various grades of carbon, alloy, or stainless steel and is frequently

distinguished by its wide variety of end use applications, including plumbing applications, structural

applications, and more specific applications (e.g., shells for electrical conduit, scaffolding components,

and fencing). 

The petition was filed on June 7, 2007, by Allied Tube & Conduit, Harvey, IL; IPSCO Tubulars,

Inc., Camanche, IA; Northwest Pipe Co., Portland OR; Sharon Tube Co., Sharon, PA; Western Tube &

Conduit Corp., Long Beach, CA; Wheatland Tube Co., Collingswood, NJ; and the United Steelworkers,

Pittsburgh, PA. Twenty firms that are estimated to account for more than 90 percent of U.S. production

of CWP during 2006 provided responses to the Commission’s producer questionnaires. Of these firms,

three producers, Wheatland, Allied, and Bull Moose, together accounted for approximately *** percent of

reported 2006 production of CWP.

Chinese producers and exporters of CWP supplied 21 questionnaire responses, accounting for an

estimated 70 percent of production of CWP in China in 2006, and an estimated 77 percent of 2006

Chinese exports of CWP to the United States.4

 Reported data indicate that *** is the largest Chinese
 4

 (...continued)

to include dual-stenciled pipe for use in standard and structural applications).

 5

 Confidential Report (“CR”) and Public Report (“PR”) at Table VII-1.

 6

 CR/PR at I-3.

 7

 Each antidumping or countervailing duty investigation is sui generis, presenting unique interactions of the

economic variables the Commission considers, and therefore is not binding on the Commission in subsequent

investigations, even when the same subject country and merchandise are at issue. E.g. Nucor Corp. v. United States,

414 F.3d 1331, 1340 (Fed. Cir. 2005); Ugine-Savoie Imphy v. United States, 248 F. Supp. 2d 1208, 1220 (CIT

2002). Findings made in investigations under other statutory provisions, such as those in the section 201 and section

421 investigations discussed in this section, provide even lesser guidance in subsequent antidumping or

countervailing duty proceedings. Greenhouse Tomatoes from Canada, Inv. No. 731-TA-925 (Preliminary), USITC

Pub. 3424 (May 2001) at n.13 (“See Ranchers-Cattlemen Action Legal Foundation v. United States, 74 F. Supp. 2d

1353, 1379 (Ct. Int'l Trade 1999) (‘As the ITC explained that the previous [ITC] publication was not for an

antidumping investigation and the information and data gathered were not for the same time period as this

investigation, the Court finds the ITC did not abuse its discretion in apparently not relying on its previous finding in

this determination.’”); Live Cattle from Canada and Mexico, Inv. Nos. 701-TA-386 (Preliminary) and

731-TA-812-813 (Preliminary), USITC Pub. 3155 (Feb. 1999) at 5-6, n.20 (“determinations in Commission

investigations of live cattle conducted under section 201 of the Trade Act of 1974 in 1977 . . . offer limited guidance

in decisions under the antidumping/countervailing duty laws”). 

 8

 A summary of prior investigations regarding CWP appears in the CR and PR at Table I-1.

 9

 49 Fed. Reg. 19369 (May 7, 1984) (Taiwan), 51 Fed. Reg. 17784 (May 15, 1986) (Turkey AD); 51 Fed. Reg.

17384 (May 12, 1986) (India); 51 Fed. Reg. 8341 (Mar. 11, 1986) (Thailand); 51 Fed. Reg. 7984 (Mar. 7, 1986)

(Turkey CVD); 57 Fed. Reg. 49453 (Nov. 2, 1992) (Brazil, Korea, Mexico, Taiwan).

 10 Certain Welded Carbon Steel Pipes and Tubes from The People’s Republic of China, Inv. No. 731-TA-292

(Final), USITC Pub. 1885 (Aug. 1986); Circular Welded Non-Alloy Steel Pipe from China, Inv. No. 731-TA-943

(Final), USITC Pub. 3523 (Jul. 2002). 

 11 19 U.S.C. § 2251 et seq.

 12 Steel; Import Investigations, 66 Fed. Reg. 67304, December 28, 2001; Steel, Inv. No. TA-201-73, USITC Pub.

3479 at 157-170 (Dec. 2001). 

4

producer of CWP, followed by ***. Together these *** producers accounted for approximately ***

percent of both reported Chinese capacity and Chinese production as well as about *** of estimated total

CWP production in China.5

Twenty-nine firms responded to the Commission’s importer questionnaires. Three importers,

***, together accounted for approximately *** percent of reported U.S. imports of CWP from China.6

B. Previous and Related Investigations 7

CWP from a number of countries, including China, has been the subject of numerous

countervailing duty and antidumping duty investigations since the mid-1980s.8

 Antidumping duty orders

are currently outstanding on CWP from Brazil, India, Korea, Mexico, Taiwan, Thailand, and Turkey, and

a countervailing duty order is outstanding on CWP from Turkey.9

 In 1986 and 2001- 02, the Commission

conducted antidumping duty investigations concerning CWP from China and reached negative

determinations in those investigations.10

In 2001, the Commission also conducted a safeguard investigation of steel products, including

carbon and certain alloy welded pipe other than oil country tubular goods (encompassing standard pipe),

pursuant to section 201 et seq. of the Trade Act of 1974,11 and found that such welded pipe was being

imported into the United States in such increased quantities as to be a substantial cause of the threat of

serious injury to the domestic industries producing articles like or directly competitive with the imported

article.12 On March 5, 2002, the President announced safeguard measures, effective March 20, 2002, for a
 13 Presidential Proclamation 7529 of March 5, 2002, to Facilitate Positive Adjustment to Competition from

Imports of Certain Steel Products, 67 Fed. Reg. 10553, March 7, 2002. 

 14 Id. Dual/multiple-stenciled line pipe for use in CWP applications was not covered by this measure as it was

already covered by a separate measure on line pipe. CR at I-6 n.6, PR at I-5 n.6. The safeguard measures applied to

imports of subject steel products from all countries except Canada, Israel, Jordan, and Mexico, which had entered

into free trade agreements with the United States, and most developing countries that were members of the World

Trade Organization. The President’s initial proclamation also excluded numerous specific products from the

measures, and was followed by further exclusions. 67 Fed. Reg. 10558 (Mar. 7, 2002), 67 Fed. Reg. 16484 (Apr. 5,

2002), 67 Fed. Reg. 46221 (July 12, 2002); 67 Fed. Reg. 56183 (Aug. 30, 2002). 

 15 On July 18, 2002, Commerce announced proposed rules regarding a steel import licensing and surge

monitoring system (67 Fed Reg. 47338 (July 18, 2002)) and, on December 31, 2002, published regulations

establishing such a system. CR at I-7 n.13, PR at I-5 n.13. 

 16 Presidential Proclamation 7741 of December 4, 2003, To Provide for the Termination of Action Taken With

Regard to Imports of Certain Steel Products, 68 Fed. Reg. 68483, December 8, 2003.

 17 Proclamation 7741 terminated the tariff-rate quota and the increased import duties on certain steel products, but

directed the Secretary of Commerce to continue the monitoring system until the earlier of March 21, 2005, or such

time as the Secretary establishes a replacement program. On March 11, 2005, Commerce published an interim final

rule to implement a replacement program for the period beyond March 21, 2005. 70 Fed. Reg. 12133 (Mar. 11,

2005). On December 5, 2005, Commerce published its final rule. 70 Fed. Reg. 72373 (Dec. 5, 2005). On March

21, 2005, the Commission instituted an investigation under section 204(d) of the Trade Act of 1974 for the purpose

of evaluating the effectiveness of the relief action imposed by the President on imports of certain steel products. The

Commission’s report on the evaluation was transmitted to the President and the Congress on September 19, 2005.

 18 Circular Welded Non-Alloy Steel Pipe From China, Inv. No. TA-421-6, USITC Pub. 3807 (Oct. 2005).

 19 Presidential Proclamation 2006-7 of December 30, 2005, Presidential Determination on Imports of Circular

Welded Non-Alloy Steel Pipe from the People’s Republic of China, 71 Fed. Reg. 871 (January 6, 2006). 

 20 19 U.S.C. § 1677(4)(A).

5

period of three years and one day.13 Import relief relating to welded tubular products (other than OCTG)

consisted of an additional tariff of 15 percent ad valorem on imports in the first year, 12 percent in the

second year, and 9 percent in the third year.14 The President also instructed the Secretary of the Treasury

and the Secretary of Commerce to establish a system of import licensing to facilitate the monitoring of

imports of certain steel products.15 On December 4, 2003, the President terminated the safeguard

measures.16 Import licensing, however, remained in place through March 21, 2005, and continues in

modified form.17

In 2005, the Commission conducted a China-specific safeguard investigation on circular welded

nonalloy steel pipe under section 421 of the Trade Act of 1974 (19 U.S.C. § 2451). The Commission

determined that rapidly increasing imports of the subject product from China were a significant cause of

market disruption, defined as material injury or the threat of material injury to the domestic industry, and

proposed remedies for the President’s consideration.18 The President determined not to impose import

relief.19

III. DOMESTIC LIKE PRODUCT

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.”20 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
 21 19 U.S.C. § 1677(4)(A).

 22 19 U.S.C. § 1677(10).

 23 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).

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

 25 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.”).

 26 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).

 27 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).

 28 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).

6

constitutes a major proportion of the total domestic production of the product.”21 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 . . . .”22

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.23 No single factor is dispositive, and the Commission

may consider other factors it deems relevant based on the facts of a particular investigation.24 The

Commission looks for clear dividing lines among possible like products and disregards minor variations.25

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,26 the Commission

determines what domestic product is like the imported articles Commerce has identified.27 The

Commission must base its domestic like product determination on the record in this investigation. 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.28

B. Product Description

Commerce’s notice of initiation defines the imported merchandise within the scope of these

investigations as follows – 

[C]ertain welded carbon quality steel pipes and tubes, of circular cross

section, and with an outside diameter of 0.372 inches (9.45 mm) or more,

but not more than 16 inches (406.4 mm), whether or not stenciled,

regardless of wall thickness, surface finish (e.g., black, galvanized, or
7

painted), end finish (e.g., plain end, beveled end, grooved, threaded, or

threaded and coupled), or industry specification (e.g., ASTM,

proprietary, or other), generally known as standard pipe and structural

pipe (they may also be referred to as circular, structural, or mechanical

tubing).

Specifically, the term ‘‘carbon quality’’ includes products in which: (a)

iron predominates, by weight, over each of the other contained elements;

(b) the carbon content is 2 percent or less, by weight; and (c) none of the

elements listed below exceeds the quantity, by weight, as indicated: 

(i) 1.80 percent of manganese; (ii) 2.25 percent of silicon; (iii) 1.00

percent of copper; (iv) 0.50 percent of aluminum; (v) 1.25 percent of

chromium; (vi) 0.30 percent of cobalt; (vii) 0.40 percent of lead; (viii)

1.25 percent of nickel; (ix) 0.30 percent of tungsten; (x) 0.15 percent of

molybdenum; (xi) 0.10 percent of niobium; (xii) 0.41 percent of titanium

(xiii) 0.15 percent of vanadium; or (xiv) 0.15 percent of zirconium.

All pipe meeting the physical description set forth above that is used in,

or intended for use in, standard and structural pipe applications is

covered by the scope of this investigation. Standard pipe applications

include the low–pressure conveyance of water, steam, natural gas, air,

and other liquids and gases in plumbing and heating systems, air

conditioning units, automatic sprinkler systems, and other related uses.

Standard pipe may also be used for light load–bearing and mechanical

applications, such as for fence tubing, and as an intermediate product for

protection of electrical wiring, such as conduit shells. Structural pipe is

used in construction applications. 

Standard pipe is made primarily to American Society for Testing and

Materials (ASTM) specifications, but can be made to other

specifications. Standard pipe is made primarily to ASTM specifications

A–53, A–135, and A–795. Structural pipe is made primarily to ASTM

specifications A–252 and A–500. Standard and structural pipe may also

be produced to proprietary specifications rather than to industry

specifications. This is often the case, for example, with fence tubing.

Pipe multiple–stenciled to an ASTM specification and to any other

specification, such as the American Petroleum Institute (API) API–5L or

5L X–42 specifications, is covered by the scope of this investigation

when used in, or intended for use in, one of the standard applications

listed above, regardless of the Harmonized Tariff Schedule of the United

States (HTSUS) category under which it is entered. Pipe used for the

production of scaffolding (but not finished scaffolding) and conduit

shells (but not finished electrical conduit) are included within the scope

of these investigations. 

The scope does not include: (a) pipe suitable for use in boilers,

superheaters, heat exchangers, condensers, refining furnaces and

feedwater heaters, whether or not cold drawn; (b) mechanical tubing,

whether or not cold–drawn; (c) finished electrical conduit; (d) tube and

pipe hollows for redrawing; (e) oil country tubular goods produced to
 29 Initiation of Antidumping Duty Investigation: Circular Welded Carbon Quality Steel Pipe from the People’s

Republic of China, 72 Fed. Reg. 36663 (Jul. 5, 2007). The pipe products that are the subject of these investigations

are currently classifiable in the Harmonized Tariff Schedule of the United States (“HTSUS”) statistical reporting

numbers 7306.30.1000, 7306.30.5025, 7306.30.5032, 7306.30.5040, 7306.30.5055, 7306.30.5085, and

7306.30.5090. Id. The column 1- general (most-favored-nation) rate of duty for these statistical reporting numbers,

applicable to the CWP from China subject to these investigations, is free. 

 30 CR at I-14, PR at I-11.

 31 CR/PR at Table III-4, CR at III-4 - III-5, PR at III-1. 

 32 CR at I-13, PR at I-10.

 33 Id.

 34 CR/PR at Table I-4.

 35 19 U.S.C. § 1677(4)(A).

 36 United States Steel Group v. United States, 873 F. Supp. 673, 681-84 (Ct. Int’l Trade 1994), aff’d, 96 F.3d

1352 (Fed. Cir. 1996).

8

API specifications; and (f) line pipe produced to API specifications for

oil and gas applications.29 

 C. Analysis

Petitioners argue that the Commission should define a single domestic like product, coextensive

with the scope of these investigations; namely, circular welded carbon-quality steel pipe. No party

objects to this proposed domestic like product definition.

In the absence of any clear dividing lines among CWP, we find a single domestic like product

coterminous with Commerce’s scope. The principal use of CWP is the low-pressure conveyance of

water, steam, natural gas, air, and other liquids and gases in plumbing and heating systems, air

conditioning units, automatic sprinkler systems, and related uses.30 All CWP can be produced at the same

facilities with the same workers. Although the same facilities can also be used to produce other types of

pipe,31 CWP is commonly produced to ASTM specifications specific to standard pipe, while other types

of pipe are commonly used for different purposes and produced to different specifications.32 There is

limited interchangeability between standard pipe and other types of pipe.33 Dual stenciled pipe, which

satisfies both ASTM specifications for standard pipe and API specifications for line pipe applications, is

included within the scope only to the extent it is used or intended for use in standard pipe applications

and, therefore, there are no limits on interchangeability between dual-stenciled CWP used in standard

pipe applications and other similarly configured standard pipe. Channels of distribution for various types

of standard pipe are the same, as the vast majority of U.S. producers’ shipments are made through

distributors, with the remainder sold directly to end users.34 On the basis of the foregoing, we define the

domestic like product in these investigations as CWP coterminous with Commerce’s scope. 

IV. DOMESTIC INDUSTRY

The domestic industry is defined 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.”35 In defining the domestic industry, the Commission’s general

practice has been to include in the industry all domestic production of the domestic like product, whether

toll-produced, captively consumed, or sold in the domestic merchant market.36 Based on our finding that

the domestic like product is CWP, we find that the domestic industry consists of the domestic producers

of CWP. 

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
 37 19 U.S.C. § 1677(4)(B). 

 38 CR/PR at Table IV-1 (***). 

 39 The Commission has concluded that a domestic producer that does not itself import subject merchandise, or

does not share a corporate affiliation with an importer, may nonetheless be deemed a related party if it controls large

volumes of imports. The Commission has found such control to exist where the domestic producers were

responsible for a predominant proportion of an importer's purchases and the importer's purchases were substantial.

See, e.g., Certain Cut-to-Length Steel Plate from the Czech Republic, France, India, Indonesia, Italy, Japan, Korea,

and Macedonia, Inv. Nos. 701-TA-387-392 and 731-TA-815-822 (Preliminary), USITC Pub. 3181 at 12 (April

1999); Certain Brake Drums and Rotors from China, Inv. No. 731-TA-744 (Final), USITC Pub. 3035 at 10 n.50

(April 1997).

 40 CR/PR at Table III-7.

 41 Id.

 42 Questionnaire responses of ***.

 43 Negligibility is not an issue in this investigation under 19 U.S.C. § 1677(24), and no party argues that subject

imports from China are negligible. CR/PR at IV-4 n.2.

9

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.37 Exclusion

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

investigation. 

No party argues for exclusion of any related producers from the domestic industry. None of the

domestic producers is related to an exporter or importer of the subject merchandise and none imported

subject merchandise during the period examined.38 Although they did not import subject merchandise,

*** and *** purchased subject merchandise during the period of investigation.39 40

*** purchased *** short tons of subject merchandise in 2004, *** short tons in 2006, and ***

short tons in January-March (“interim”) 2007.41 However, *** does not appear to have purchased a

predominant proportion of any importer’s importations of the subject merchandise. Therefore, it does not

appear to be a related party by reason of those purchases. Specifically, *** purchased CWP from China

from *** U.S. importers, ***. *** did not list *** as a primary (i.e., top 10) customer. *** is one of the

*** U.S. importers of CWP from China. This importer did list *** as a purchaser of its subject CWP

imports, but those purchases accounted for only *** percent of *** sales of CWP from China during the

period. *** did not list its customers but imported virtually no *** from China, (***), suggesting that

any purchases by *** were minimal.42 Accordingly, there is no basis for concluding that *** is a related

party by reason of its purchases. 

 ***, also purchased subject merchandise during the period of investigation: *** short tons in

2006 and *** short tons in interim 2007. The volume of *** purchases is small; accordingly, there is no

indication in the record that would support a conclusion that *** is responsible for a predominant portion

of any importer’s purchases, and its purchases do not constitute a large proportion of total imports from

China. Consequently, we find no basis for concluding that *** became a related party producer by reason

of its purchasing activities.

 Accordingly, we find that appropriate circumstances do not exist to exclude either *** or ***

from the domestic industry.

V. REASONABLE INDICATION OF MATERIAL INJURY BY REASON OF ALLEGEDLY

SUBSIDIZED AND LESS THAN FAIR VALUE IMPORTS FROM CHINA43

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
 44 19 U.S.C. §§ 1671b(a) and 1673b(a).

 45 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).

 46 19 U.S.C. § 1677(7)(A).

 47 19 U.S.C. § 1677(7)(C)(iii).

 48 19 U.S.C. § 1677(7)(C)(iii).

 49 As noted, Chairman Pearson and Commissioner Okun determine that there is a reasonable indication that the

domestic CWP industry is threatened with material injury. 

 50 CR at II-8 - II-11, PR at II-5 - II-6; Petitioners’ Postconference Brief at 7; Conference Transcript at 101-103

(Magno, Filetti, and Barnes); Respondents’ Postconference Brief at 34-35.

 51 CR at I-14, PR at I-11.

 52 CR at I-14 - I-15, PR at I-11.

10

injured by reason of the imports under investigation.44 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.45 The statute defines “material injury” as “harm which is not inconsequential, immaterial, or

unimportant.”46 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.47 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.”48

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

industry producing CWP is materially injured by reason of subject imports from China.49

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

Demand for CWP is largely derived from nonresidential construction.50 Standard pipe, the

primary product within the scope of these investigations, is intended for the low-pressure conveyance of

water, steam, natural gas, air, and other liquids and gases in plumbing and heating systems, air

conditioning units, automatic sprinkler systems, and other related uses. Standard pipe may carry liquids

at elevated temperatures but may not be subject to the application of external heat. It is made primarily to

ASTM A-53, A-135, and A-795 specifications, but can also be made to other specifications, such as

British Standard (“BS”)-1387.51

Other standard applications for CWP include light load-bearing or mechanical applications, such

as conduit shells, and structural applications in general construction. Circular pipe used for above-ground

structural purposes, including fence posts, irrigation systems, and sprinkler systems, is also included in

this category. These products also are manufactured primarily to ASTM specifications (such as A-500 or

A-252), as well as to American Society of Mechanical Engineers (“ASME”) specifications.52

When measured by apparent U.S. consumption, U.S. CWP demand, after declining from 2.43

million short tons in 2004 to 2.37 million short tons in 2005, increased to 2.68 million short tons in 2006,
 53 CR/PR at Table C-1.

 54 CR at II-12, PR at I-6.

 55 CR at II-14 n.20, PR at II-8 n.20. While there are several substitutes for CWP overall, CR/PR at Table II-1,

substitutes are limited in the principal CWP applications, e.g., plumbing, sprinkler systems, handrails. Id.

 56 CR/PR at III-1, CR/PR at Table III-1.

 57 Id.

 58 CR/PR at Table C-1. The industry’s capacity declined from 2.7 million short tons in 2004 to 2.4 million short

tons in 2006, and was 592,064 short tons in interim 2007 compared with 652,041 short tons in interim 2006. CR/PR

at Tables III-2, C-1. Domestic production decreased from 1.5 million short tons in 2004 to 1.4 million short tons in

2006. Production then was 387,472 short tons in interim 2007 compared with 365,202 short tons in interim 2006. 

CR/PR at Tables III-2, C-1.

 59 CR/PR at Table C-1.

 60 CR/PR at Tables IV-5, C-1.

 61 CR/PR at Tables IV-5, C-1. 

 62 CR/PR at Table IV-3.

 63 CR at II-16, PR at II-8.

 64 CR at I-14, I-15, PR at I-11.

11

an increase of 10.5 percent from 2004 to 2006. Apparent U.S. consumption was 5.4 percent lower in

interim 2007, at 627,743 short tons, than it was in interim 2006, at 663,717 short tons.53

Price changes for CWP will likely have only a small effect on consumption because demand for

CWP is generally inelastic.54 Substitutes for CWP are limited in its principal applications, and CWP

tends to account for a small share of the cost of the projects in which it is used.55

2. Supply Conditions

Twenty responding U.S. producers are estimated to account for more than 90 percent of U.S.

CWP production in 2006.56 Three producers, Wheatland Tube Company, Allied Tube & Conduit, and

Bull Moose Tube, together account for approximately *** percent of reported 2006 U.S. CWP

production.57 The domestic industry’s production capacity declined by 10.0 percent from 2004 to 2006,

and was 9.2 percent lower in interim 2007 than in interim 2006. The industry’s production declined by

8.2 percent from 2004 to 2006, then and was 6.1 percent higher in interim 2007 than in interim 2006.58

Domestic producers’ share of the U.S. market, after increasing from 58.6 percent in 2004 to 59.4

percent in 2005, declined to 50.4 percent in 2006, and was 58.2 percent in interim 2007 compared with

52.6 percent in interim 2006.59 Subject imports’ share of the U.S. market increased from 11.5 percent in

2004 to 16.5 percent in 2005 and 26.7 percent in 2006; it was 26.3 percent in interim 2007 compared with

18.4 percent in interim 2006.60 The U.S. market share held by nonsubject imports declined during the

period examined, from 29.9 percent in 2004 to 24.1 percent in 2005 and 22.9 percent in 2006. 

Nonsubject imports’ share was 15.5 percent in interim 2007 compared with 29.0 percent in interim

2006.61 CWP from Brazil, India, Korea, Mexico, Taiwan, Thailand, and Turkey, which are subject to

antidumping orders and, in the case of Turkey, a countervailing duty order, accounted for about half of

the nonsubject imports over the period examined.62

3. Other Conditions

The degree of substitution between CWP produced in the United States and that imported from

China depends upon such factors as relative prices and certain non-price factors relating to conditions of

sales, purchaser supply requirements and, to some degree, product differentiation.63 CWP, regardless of

source, is generally produced to ASTM standards.64 Domestic producers and importers generally agreed

that the subject imports and the domestic like product are always or frequently interchangeable, making
 65 CR at II-16 - II-20, PR at II-8 - II-11, CR/PR at Table II-2 (a majority of responding market participants

indicated that there was a high degree of interchangeability between domestic and subject CWP); CR/PR at Table V10 (all purchasers reporting they shifted from domestic to subject CWP identified price as the reason for the shift). 

 66 Responding U.S. producers reported most frequently that differences in non-price factors among CWP

produced in the United States, imported from China, and imported from third countries were only sometimes or

never significant, whereas the responding U.S. importers were more divided in characterizing such factors as always,

frequently, sometimes, and never significant. CR/PR at Table II-3.

 67 Fifteen of the 17 responding U.S. producers and 16 of the 19 responding importers reported that lead times had

not changed since January 2004. The two remaining U.S. producers, ***, reported that their lead times have fallen

since January 2004 as their business has slowed reportedly due to increased imports of CWP from China. The three

remaining U.S. importers reported that their lead times have increased due to port congestion, lack of vessel

availability, and late shipments by Chinese mills. CR at V-10 - V-11, PR at V-8 - V-9. 

 68 CR at II-16, PR at II-8. Whereas Chinese CWP had perceived quality problems in the mid-1980s, see Certain

Welded Carbon Steel Pipes and Tubes from The People’s Republic of China, Inv. No. 731-TA-292 (Final), USITC

Pub. 1885 (Aug. 1986), the high degree of substitutability indicated by the present record between subject imports

and the domestic like product suggests that quality differences no longer significantly limit the ability of the Chinese

merchandise to compete in the U.S. market. See also CR/PR at Tables II-2, II-3, V-10; CR at II-16 - II-20, PR at II8 - II-11 (market participants, for the most part, indicating a high level of acceptance of subject CWP as equivalent

in quality to domestic CWP). 

 69 CR/PR at Table VI-3, CR at VI-12; see also CR/PR at Figure V-1 (U.S. purchase prices for hot-rolled sheet and

zinc). 

 70 Conference Transcript at 72 (Magno, Barnes). 

 71 E.g., CR at V-29, PR at V-22 (producer reporting that customers know that it cannot drop prices to meet very

low subject import prices), CR at V-36, PR at V-23 (a majority of purchasers reported that U.S. producers did not

lower prices to compete with subject imports); Conference Transcript at 72 (Barnes) (producer testimony that it does

not sell below its variable cost). 

 72 While Chairman Pearson and Commissioner Okun agree that the CWP industry has relatively high variable

costs, they intend to explore whether domestic producers adjust sales volume rather than prices when competing

with low-priced imports in any final phase of these investigations.

 73 Petitioners’ Postconference Brief at 9 & Answers to Questions from Staff at 9; Transcript at 27 (Magno). 

12

price an important factor in purchasing decisions.65 They differed somewhat on the importance of nonprice factors, such as transportation or delivery times.66 Most domestic producers and importers reported,

however, that lead time on orders for the domestic product and subject imports had not changed over the

period of investigation.67 Based on the reported information in these investigations, there appears to be a

relatively high degree of substitutability between CWP produced domestically and that imported from

China.68

The domestic industry’s cost of goods sold (“COGS”) per short ton and total cost (including

SG&A expenses) per short ton increased substantially from 2004 to 2005, driven mainly by changes in

costs of raw materials (largely hot-rolled steel) and fabrication (labor and factory overhead), then

decreased somewhat from 2005 to 2006, owing to decreased labor costs. Per-short ton COGS were

substantially higher in interim 2007 than in interim 2006 owing to increases in the costs of raw materials

(including, for some companies, zinc) and factory overhead.69

The ability or willingness of domestic producers to reduce prices to compete with subject imports

is limited by the high variable cost nature of production.70 The need to meet variable costs can lead

producers to adjust sales volume rather than prices when competing with low-priced product

offerings.71 72

Petitioners contend that the significance of master distributors in the U.S. spot market has grown

over the period of investigation and that this growth has enhanced the ability of the subject imports to

compete in the U.S. market.73 We intend to explore the role and significance of master distributors in the

CWP market in any final phase investigations.
 74 19 U.S.C. § 1677(7)(C)(i).

 75 CR/PR at Tables IV-2 and C-1.

 76 CR/PR at Tables IV-5. Subject imports as a ratio to U.S. production increased from 18.9 percent in 2004 to

27.4 percent in 2005 and to 53.0 percent in 2006. The ratio was 33.4 percent in interim 2006 and 42.6 percent in

interim 2007. CR/PR at Table IV-6. 

 77 The volume of nonsubject imports was 727,282 short tons in 2004, 571,490 short tons in 2005, and 616,007

short tons in 2006, an overall decrease of 15.3 percent between 2004 and 2006. The volume of nonsubject imports

was 49.4 percent lower in interim 2007 than in interim 2006: 97,515 short tons in interim 2007 compared with

192,672 short tons in interim 2006. CR/PR at Tables IV-2, C-1. Nonsubject imports’ share of U.S. apparent

consumption decreased from 29.9 percent in 2004 to 24.1 percent in 2005 and 22.9 percent in 2006. Nonsubject

imports’ share was lower in interim 2007, at 15.5 percent, than in interim 2006, at 29.0 percent. CR/PR at Tables

IV-5, C-1. 

 78 There is limited information on the record regarding the role of nonsubject imports of CWP in the U.S. market. 

See e.g., CR at Appendix D. In any final phase investigations, we will seek additional information on the role of

nonsubject imports of CWP in the U.S. market. We invite parties to comment in any final phase investigations on

whether the decision by the U.S. Court of Appeals for the Federal Circuit, 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.

 79 Respondents argue that consideration of quarterly data for the second half of 2006 and the first quarter of 2007

in isolation would indicate a declining trend in subject imports. However, the Commission’s practice is to consider

calendar year data and interim period data from prior years only as necessary for comparison with the more current

interim data. See generally, Nitrogen Solutions Fair Trade Committee v. United States, 358 F. Supp. 2d 1314, 1325-

26 (Ct. Int’l Trade 2005). We find no basis for departing from that practice in these investigations. 

13

B. Volume of Subject Imports

Section 771(7)(C)(i) 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.”74

The volume of subject imports of CWP was significant and increased significantly over the

period of investigation, both in absolute and relative terms. The volume of subject imports, measured by

quantity, increased by 157 percent from 2004 to 2006, from 278,191 short tons in 2004 to 391,007 short

tons in 2005 and 716,184 short tons in 2006. Subject imports from China were 35 percent higher in

interim 2007, at 165,088 short tons, than in interim 2006, at 122,139 short tons.75

The share of U.S. apparent consumption volume held by subject imports also increased, from

11.5 percent in 2004 to 16.5 percent in 2005 and 26.7 percent in 2006. In interim 2007, subject import

market share was 26.3 percent compared with 18.4 percent in interim 2006.76 

The volume of nonsubject imports decreased irregularly overall during the period of

investigation, both in absolute terms and relative to U.S. consumption.77 78

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

investigations that both the volume and increase in volume of subject imports were significant during the

period of investigation, both in absolute terms and relative to consumption and production in the United

States.79

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 –
 80 19 U.S.C. § 1677(7)(C)(ii).

 81 See CR at II-16 - II-20, PR at II-8 - II-11. 

 82 CR at V-16 - V-17, PR at V-11.

 83 CR at V-17 - V-18, PR at V-11.

 84 CR/PR at Table V-7. 

 85 Respondents’ Postconference brief at 27-31.

 86 CR at V-11 to V-16, PR at V-10 - V-11.

 87 CR/PR at Table C-1.

 88 See Conference transcript at 72-76 (domestic producers largely must meet at least variable costs on sales in

order to continue production).

 89 CR at V-36 and PR at V-23 (of 17 purchasers expressing on opinion, nine indicated that domestic producers did

not lower prices due to competition with subject imports, while seven indicated that domestic producers did lower

prices for that reason). 

14

 (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.80

As explained in the discussion of conditions of competition, there is a relatively high degree of

substitutability between the domestic like product and subject imports, and price is an important factor in

purchasing decisions, although factors other than price enter into purchasing decisions.81

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

CWP product categories produced in the United States and imported from China.82 By quantity, pricing

data reported by responding firms accounted for 23.1 percent of reported U.S. producers’ CWP shipments

and 30.8 percent of official U.S. imports of CWP from China during the period of investigation.83 Subject

imports undersold the domestic like product in all of the 52 quarterly price comparisons, with margins of

underselling ranging from 9.5 percent to 58.7 percent.84

Nevertheless, Respondents argue that underselling is not significant on this record because

domestic producers were able to raise prices by amounts that more than offset increased costs.85 The

record, however, does not indicate that domestic producers increased prices to such a degree. Moreover,

Respondents overlook that, in a high variable cost industry, the effects of underselling are more likely to 

be seen in the domestic industry’s sales volumes before affecting prices. In the face of rising costs,

domestic producers attempted to raise prices on various occasions, but met with only mixed success.86 As

a result, prices for the domestic product increased, but not sufficiently to offset rising production costs. 

As described below in more detail, the domestic industry’s COGS increased as a percentage of the

industry’s net sales, indicating that price increases did not keep pace with rising costs.87 Contrary to the

view of Respondents, therefore, price increases obtained by the domestic industry did not offset rising

COGS.

Moreover, Respondents overlook that in a high variable cost industry, such as the domestic CWP

industry, the effects of underselling are likely to be reflected in lost sales volumes before having an

impact on price. Because they must at least cover variable costs in order to continue production,88

domestic producers in a high variable cost industry will generally opt to cede sales volumes before

lowering prices when faced with competition from low-priced suppliers.89 In keeping with that

observation, the domestic industry lost market share and experienced declines in shipments and sales over

the period of investigation, as subject imports undersold the domestic product in increasing volumes and
 90 CR/PR at Table C-1 and V-7.

 91 CR/PR at Table V-10.

 92 We note, however, that the price levels among domestic producers and among U.S. importers differed

substantially for the same product category. CR at V-18 n.34, PR at V-12 n.34. In any final phase investigations we

intend to explore the reasons for such differences and whether they should affect our analysis of price effects of the

subject imports.

 93 For product 1, prices for the domestic product increased by a 53.3 percent over the period of investigation,

while prices for subject imports increased by 43.2 percent. For product 2, prices for the domestic product increased

by *** percent, while prices for subject imports increased by 42.1 percent. For product 3, prices for the domestic

product increased by 38.8 percent, while prices for the subject imports increased by 36.4 percent. For product 4,

prices for the domestic product increased by 22.8 percent, while prices for the subject imports increased by 61.2

percent. CR at V-27, PR at V-20.

 94 CR/PR at Table C-1. Unit COGS increased from $664 in 2004 to $826 in 2005, then declined to $817 in 2006. 

Unit COGS were $843 in interim 2007 compared with $776 in interim 2006. CR/PR at Tables VI-1, C-1. 

 95 CR/PR at Tables VI-1, C-1.

 96 See CR/PR at Table V-1 (price increases domestic producers announced over the period of investigation and

the extent to which they held). 

15

by generally increasing margins of underselling.90 Consistent with these data, 12 of 17 responding

purchasers reported that they shifted purchases from the domestic product to subject imports, with each of

the 12 citing price as the reason for the change.91

Based on record evidence that subject imports consistently undersold the domestic product by

substantial margins, that the domestic industry lost sales volume to subject imports, that purchasers

shifted to the subject imports on the basis of price, and that price increases obtained by the domestic

industry did not keep pace with rising COGS, we find, for purposes of these preliminary determinations,

we find that there has been significant underselling of the domestic like product by subject imports.92

We have also considered movements in CWP prices over the period of investigation. The

Commission’s pricing data show that the prices for the domestic and subject imports fluctuated but

increased overall during the period of investigation.93 As noted, however, domestic producers were not

able to increase prices sufficiently to cover increasing costs. The domestic industry’s COGS per short

ton, while fluctuating over the period, rose by 22.9 percent between 2004 and 2006, and was 8.7 percent

higher in interim 2007 compared with interim 2006.94 The industry’s COGS to net sales value ratio

increased from 80.8 percent in 2004 to 85.9 percent in 2005 and 86.2 percent in 2006; it was 84.2 percent

in interim 2006 and 91.5 percent in interim 2007.95 Thus, the domestic industry was unable to raise its

prices sufficiently to cover its increased costs.96 Given the rise in lower-priced subject import volumes

over the period of investigation, we find that subject imports suppressed domestic prices to a significant

degree.
 97 Six of the eight U.S. producers that responded to the Commission’s lost sales question indicated that they had

lost sales of U.S.-produced CWP to CWP from China during the period of investigation, with the other two U.S.

producers indicating that they had not lost sales to the imported products from China. One of the two U.S. producers

reporting no lost sales, ***, noted, however, that its profit margins had shrunk. CR at V-30 n.43, PR at V-22 n.43. 

The Commission confirmed $*** of the alleged lost sales allegations. CR/PR at Table V-9. Moreover, 12 of 17

purchasers that responded to questions regarding lost sales allegations for which domestic producers had not

sufficiently identified transaction details reported that they in fact had shifted purchases of CWP from the U.S.

producer to imports from China, and that they had done so on the basis of price. CR/PR at CR at V-36, PR at V-23. 

Seven of those 17 purchasers reported that U.S. producers had reduced their prices during the period of investigation

to compete with prices of the imported CWP from China. CR/PR at Table V-10. 

 98 The Commission was unable to confirm any of the lost revenue allegations. CR/PR at Table V-8. However, as

noted above, several purchasers reported that U.S. producers had reduced prices during the period of investigation to

compete with subject import prices. CR at V-36, PR at V-23. 

 99 In its notice of initiation, Commerce estimated the dumping margins for imports of subject CWP from China at

between 51.34 and 85.55 percent. 72 Fed. Reg. 36663, 36666 (Jul. 5, 2004).

 100 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.

 101 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.

 102 We intend to consider the significance of fuller data for 2007 in any final phase investigation.

 103 CR/PR at Tables III-2, C-1. 

 104 CR/PR at Tables III-2, C-1. 

16

Although most of the domestic producers’ lost sales allegations were too general to be confirmed,

some lost sales were confirmed, providing additional support for our finding that subject imports have

suppressed prices to a significant degree.97 98

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

that there has been significant underselling by subject imports and that such 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 prices for the domestic like product.

D. Impact of the Subject Imports on the Domestic Industry99

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.”100 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.”101

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

industry producing CWP. These data indicate generally declining overall trends from 2004 to 2006. In

interim 2007 relative to interim 2006, some indicators were lower while others were higher.102

The domestic industry’s production capacity declined from 2004 to 2006 by 10.0 percent, from

2.66 million short tons in 2004 to 2.54 million short tons in 2005 and to 2.40 million short tons in 2006.103

Capacity was 592,064 short tons in interim 2007, 9.2 percent lower compared with 652,041 short tons in

interim 2006. U.S. production of CWP declined 8.2 percent from 2004 to 2006, from 1.47 million short

tons in 2004 to 1.43 million short tons in 2005 and 1.35 million short tons in 2006.104 Domestic

production was 387,472 short tons in interim 2007, or 6.1 percent higher compared with 365,202 short
 105 CR/PR at Tables III-2, C-1. 

 106 CR/PR at Tables III-2, C-1.

 107 CR/PR at Tables III-2, C-1.

 108 CR/PR at Tables III-5, C-1.

 109 CR/PR at Tables VI-1, C-1.

 110 CR/PR at Tables VI-1, C-1.

 111 CR/PR at Tables IV-6, C-1.

 112 CR/PR at Table IV-5.

 113 CR/PR at Table IV-5. 

 114 CR/PR at Tables III-8, C-1. However, owing to increased productivity, unit labor costs decreased from $60.54

in 2004 to $57.79 in 2006, then declined to $54.81 in interim 2007 compared with $56.03 in interim 2006. Id. 

 115 CR/PR at Tables VI-1, C-1.

 116 Unit sales values increased from $823 in 2004 to $947 in 2006, and productivity (tons per 1,000 hours)

increased from 324.0 in 2004 to 347.4 in 2006. CR/PR at Table C-1. Unit sales value was $921 in both interim

2006 and interim 2007, while productivity increased by 6.6 percent to 384.9 in interim 2007 compared with 360.9 in

interim 2006. Id. 

 117 CR/PR at Table C-1.

17

tons in interim 2006.105 Capacity utilization increased by about one percentage point from 2004 to 2006,

from 55.2 percent in 2004 to 56.2 percent in 2005 and 56.3 percent in 2006.106 Capacity utilization was

65.4 percent in interim 2007 compared with 56.0 percent in interim 2006.107 Domestic producers’ U.S.

shipments of CWP declined by 5.0 percent from 2004 to 2006, from 1.42 million short tons in 2004 to

1.41 million short tons in 2005 and 1.35 million short tons in 2006. Domestic producers’ U.S. shipments

were 365,140 short tons in interim 2007 compared with 348,906 short tons in interim 2006.108 Net sales

volume declined from 1.50 million short tons in 2004 to 1.35 million short tons in 2005, but increased to

a smaller degree to 1.46 million short tons in 2006, for an overall decline of 2.5 percent from 2004 to

2006.109 Net sales volume was 375,622 short tons in interim 2007 compared interim 354,768 short tons in

interim 2006.110

 As apparent U.S. consumption increased overall by 10.5 percent from 2004 to 2006, subject

imports gained U.S. market share at the expense of domestic producers.111 Domestic producers’ share of

the U.S. market initially rose slightly from 58.6 percent in 2004 to 59.4 percent in 2005, before falling to

50.4 percent in 2006, while subject imports’ share increased from 11.5 percent in 2004 to 16.5 percent in

2005 and 26.7 percent in 2006.112 Domestic producers’ market share was 58.2 percent in interim 2007,

compared with 52.6 percent in interim 2006; the increase captured from nonsubject imports as subject

imports’ market share was higher in interim 2007, 26.3 percent, compared with interim 2006, 18.4

percent.113

The average number of the industry’s production related workers declined by 14.9 percent

between 2004 to 2006, from 2,449 in 2004 to 2,220 in 2005 and 2,084 in 2006. Production related

workers numbered 2,167 in interim 2007, compared with 2,068 in interim 2006, or 4.8 percent higher in

interim 2007. Hours worked declined 14.4 percent between 2004 and 2006, from 4.5 million hours 2004

to 4.1 million hours in 2005 and 3.9 million hours in 2006. Hours worked were 0.5 percent lower in

interim 2007 than in interim 2006. Hourly wages fluctuated but increased by 2.4 percent between 2004

and 2006, increasing from $19.61 in 2004 to $20.16 in 2005, before declining slightly to $20.07 in 2006. 

Hourly wages were 4.3 percent higher in interim 2007, at $21.09, than in interim 2006, at $20.22.114

Unit COGS rose sharply from $664 in 2004 to $826 in 2005, then remained high at $817 in 2006. 

Unit COGS was higher in interim 2007, at $843, than in interim 2006, at $776.115 Despite increased

prices and improvements in the industry’s productivity over the period of investigation,116 the COGS to

net sales ratio increased throughout the period of investigation, from 80.8 percent in 2004 to 85.9 percent

in 2005 and 86.2 percent in 2006. The ratio was 91.5 percent in interim 2007 compared to 84.2 percent in

interim 2006.117 Mainly due to rising costs, the industry’s operating income declined by 26.0 percent

between 2004 and 2006, from $172.7 million in 2004 to $127.9 million in 2006. Operating income was
 118 CR/PR at Table C-1. Respondents assert that the best measure of the industry’s performance is profit per short

ton and that, by that measure, the industry is healthy. Respondent’s Postconference Brief at 3-5. However, profit by

any measure is only one factor the Commission considers in assessing the impact of subject imports on the domestic

industry and, as discussed above, declining unit profits is among the factors providing a reasonable indication that

the industry is materially injured by the subject imports. 

18

67.0 percent lower in interim 2007, at $11.5 million, than in interim 2006, when it was at 34.7 million. 

The industry’s ratio of operating income to net sales was 14.0 percent in 2004, 9.5 percent in 2005, and

9.3 percent in 2006. This ratio was a sharply lower at 3.3 percent in interim 2007 compared with 10.6

percent in interim 2006.118

 For purposes of the preliminary phase of these investigations, we find a reasonable indication that

subject imports had an adverse impact on the condition of the domestic industry during the period of

investigation. In particular, we find that the absolute and relative volume of subject imports are

significant, that subject imports have gained market share at the expense of the domestic industry, that

they have undersold the domestic product to a significant degree, and have suppressed domestic prices to

a significant degree. The adverse volume and price effects of subject imports have led to significant

declines in the domestic industry’s performance. In particular, between 2005 and 2006, when subject

imports captured 10.2 percentage points of market share, almost entirely at the expense of the domestic

industry, the industry’s capacity, production, shipments, number of production workers, hours worked,

wages paid, COGS/sales ratio, and operating income/sales ratio all worsened. These declines in the

industry’s condition occurred despite strong growth in demand, as apparent U.S. consumption rose by

13.4 percent, and rising prices. Subject imports were higher in interim 2007 than in interim 2006, and

while some of the industry’s indicators improved, operating income and the operating income/sales ratio

fell sharply.

CONCLUSION

For the reasons stated above, we find that there is a reasonable indication that the domestic

industry producing CWP is materially injured by reason of subject imports of CWP from China that

allegedly are subsidized by the government of China and sold in the United States at less than fair value.
 119 19 U.S.C. § 1677(7)(F)(ii). 

 120 19 U.S.C. § 1677(7)(F)(ii).

 121 19 U.S.C. § 1677(7)(F)(i). These factors include: (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; (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 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). Id. Statutory

factor VII is inapplicable, as no imports of agricultural products are involved. Id. 

In its notice of initiation, Commerce estimated the dumping margins for imports of subject CWP from

China at between 51.34 percent and 85.55 percent. 72 Fed. Reg. 36663, 36666 (Jul. 5, 2007).

With regard to statutory factor I, Commerce initiated a countervailing duty investigation concerning alleged

subsidy programs, several of which involve export subsidies. 72 Fed. Reg. 36668, 36670-71 (Jul. 5, 2007).

19

SEPARATE VIEWS OF CHAIRMAN DANIEL R. PEARSON

AND COMMISSIONER DEANNA TANNER OKUN CONCERNING

THREAT OF MATERIAL INJURY

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

reasonable indication that an industry in the United States is threatened with material injury by reason of

circular welded carbon-quality steel pipe (“CWP”) from China that is allegedly subsidized by the

government of China and allegedly sold in the United States at less than fair value (“LTFV”).

We join our colleagues’ discussion regarding the legal standard, background, domestic like

product, domestic industry, and conditions of competition. We write separately to provide our analysis of

the statutory threat factors.

I. GENERAL LEGAL STANDARDS 

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

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

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

order is issued or a suspension agreement is accepted.”119 The Commission may not make such a

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

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

material injury by reason of subject imports would occur unless an order is issued.120 In making our

determination, we consider all statutory threat factors that are relevant to these investigations.121 Based on

our evaluation of the record compiled in the preliminary phase of these investigations, we have

determined that there is a reasonable indication that the CWP industry is threatened with material injury

by reason of subject imports from China.
 122 Chinese export shipments of CWP to the United States were 140,832 short tons in 2004, increasing to 329,940

short tons in 2005 and to 557,810 short tons in 2006. They totaled 109,226 short tons in interim 2006 and 159,261

short tons in interim 2007. They are projected to decline to 530,065 short tons in 2007 and to 522,373 short tons in

2008. CR/PR at Table VII-4.

 123 CR/PR at Table C-1.

 124 CR/PR at Table C-1.

 125 Chinese industry capacity for CWP was 3.60 million short tons in 2004, climbing to 4.07 million short tons in

2005 and to 4.68 million short tons in 2006. It was 1.05 million short tons in interim 2006 and 1.12 million short

tons in interim 2007. It is projected to grow to 4.89 million short tons in 2007 and to 4.92 million short tons in 2008. 

CR/PR at Table VII-4.

 126 U.S. capacity for CWP was approximately 2.40 million short tons in 2006, while Chinese capacity was

approximately 4.68 million short tons in that year. Compare CR/PR at Table III-2 with CR/PR at Table VII-4.

 127 Chinese production of CWP increased from 2.69 million short tons in 2004 to 3.09 million short tons in 2005,

then rose to 3.96 million short tons in 2006. It was 825,814 short tons in interim 2006 and 872,871 short tons in

interim 2007. It is projected to grow to 4.11 million short tons in 2007 and to 4.20 million short tons in 2008. 

CR/PR at Table VII-4.

 128 See CR/PR at Table VII-4.

 129 CR/PR at Table IV-4.

 130 In addition to CWP, Chinese producers manufacture small/medium diameter line pipe, large diameter line

pipe, OCTG, and other pipe on the same equipment and machinery used to produce subject merchandise. CR at

Table VII-5. However, while Chinese producers have some ability to product-shift from nonsubject merchandise to

subject merchandise, the production of nonsubject merchandise is a relatively small part of the operations of Chinese

CWP producers. Id. It is unknown whether Chinese producers have the economic incentive to shift production from

some higher-valued nonsubject pipe products (e.g., large diameter line pipe and OCTG) to subject pipe.

20

II. ANALYSIS OF STATUTORY THREAT FACTORS

The volumes and market penetration of subject imports from China were substantial throughout

the period.122 The volume of subject imports from China rose from 278,191 short tons in 2004 to 391,007

short tons in 2005, then rose further to 716,184 short tons in 2006. The volume of subject imports was

higher in interim 2007 (122,139 short tons in interim 2006 compared to 165,088 short tons in interim

2007). Subject import market share rose as well from 11.5 percent of the U.S. market in 2004 to 16.5

percent in 2005, then to 26.7 percent in 2006. Subject imports from China held 18.4 percent of the U.S.

market in interim 2006 and 26.3 percent in interim 2007.123

As apparent U.S. consumption increased overall by 10.5 percent from 2004 to 2006, the increase

in subject import market share did not reduce the domestic producers’ market share until 2006. Domestic

producers’ share of the market was 58.6 percent in 2004. It improved in 2005 to 59.4 percent before

declining to 50.4 percent in 2006. Over the interim periods, however, the domestic producers’ market

share improved and the increase in subject import market share was offset by a decrease in nonsubject

import share. In interim 2006, domestic producers’ market share was 52.6 percent, and it was 58.2

percent in interim 2007.124

The large capacity of Chinese producers to manufacture CWP, as well as increased production

over the period of investigation, indicate that the substantial and rising volumes of subject imports are

likely to continue. Chinese industry capacity,125 which is almost twice the size of U.S. capacity,126

increased steadily over the period of investigation, and is projected to grow even more in the imminent

future. Likewise, Chinese production increased, and it also is projected to grow in the imminent future.127

Chinese industry capacity in 2006 for CWP was 4.68 million short tons,128 far larger than U.S.

consumption of 2.68 million short tons.129 130 Moreover, the Chinese industry exports significant

quantities of CWP to the United States and to other countries. In 2006, Chinese producers exported 30.8
 131 CR/PR at Table VII-4. U.S. importers reported that 283,341 short tons of CWP are scheduled for delivery

after March 31, 2007. CR/PR at Table VII-8. 

 132 Throughout the period examined, exports of CWP from China received a “commodity export rebate” of 13

percent. However, in a document issued on June 19, 2007, China’s Ministry of Finance / State Administration of

Taxation declared this rebate to be abolished with respect to “general ordinary pipe products (except oil casing),”

effective July 1, 2007. CR at VII-9 n.11, PR at VII-5 n.11. In any final phase of these investigations, we intend to

explore the impact of this action on the volume of CWP exported from China.

 133 Chinese CWP inventories were 192,494 short tons in 2004, 218,270 short tons in 2005 and 220,845 short tons

in 2006. They totaled 231,267 short tons in interim 2006 and 215,336 short tons in interim 2007. They are projected

to remain at substantial levels in 2007 at 209,966 short tons and in 2008 at 211,403 short tons. CR/PR at Table VII4.

 134 U.S. importers’ inventories of Chinese CWP were 9,296 short tons in 2004, 8,028 short tons in 2005 and

39,080 short tons in 2006. They totaled 27,430 short tons in interim 2006 and 39,411 short tons in interim 2007. 

CR/PR at Table VII-9.

 135 CR at VII-16, PR at VII-10. Australia was the fifth leading market for CWP from China. CR/PR at Table 

VII-7.

 136 CR/PR at Table II-3 (nearly all U.S. producers and the majority of U.S. importers report that non-price factors

were only sometimes or never important in purchasing decisions); CR/PR at Table V-10 (all purchasers reporting

they shifted from domestic to subject CWP identified price as the reason for the shift); CR at II-16 - II-20, PR at II-8

- II-11.

 137 In these investigations, U.S. producers and importers provided quarterly pricing data for four CWP product

categories produced in the United States and imported from China. CR at V-16, PR at V-10. By quantity, pricing

data reported by responding firms accounted for 23.1 percent of reported U.S. producers’ CWP shipments and 30.8

percent of official U.S. imports of CWP from China during the period of investigation. CR at V-17 - V-18, PR at 

V-11.

 138 Subject imports undersold the domestic like product in all of the 52 quarterly price comparisons, with margins

of underselling ranging from 9.5 percent to 58.7 percent. CR/PR at Table V-7.

21

percent of their shipments of CWP. The Chinese industry’s ratio of exports to total shipments was 28.6

percent in interim 2006, and it was 42.2 percent in interim 2007.131 132

Subject foreign producers’ end-of-period inventories have been substantial during the period and

are projected to remain high.133 U.S. importers’ end-of-period inventories also have been substantial,

more than quadrupling in 2006, and were higher in March 2007 than in March 2006.134 Chinese CWP is

subject to an antidumping duty order in Australia, which was imposed on June 25, 2006.135

 This continued influx of products will likely enter the United States at low prices, widely

underselling the domestic product and likely causing price depression. The record in these preliminary

investigations indicates that price is an important factor in the sale of CWP, although factors other than

price enter into purchasing decisions.136 137 While there has been widespread underselling of the domestic

products by subject imports throughout the period examined,138 most domestic prices reached their
 139 CR/PR at Figures V-3a - V-3d. The exception was for product 4, which peaked in third quarter 2004. While

domestic prices for product 4 declined slightly thereafter, they remained steady through the rest of the period of

investigation. CR/PR at Table V-6 and Figure V-3d. 

For product 1, prices for the domestic product increased by 53.3 percent over the period of investigation,

while prices for subject imports increased by 43.2 percent. For product 2, prices for the domestic product increased

by nearly *** percent, while prices for subject imports increased by 42.1 percent. For product 3, prices for the

domestic product increased by 38.8 percent, while prices for the subject imports increased by 36.4 percent. For

product 4, prices for the domestic product increased by 22.8 percent, while prices for the subject imports increased

by 61.2 percent. CR at V-27, PR at V-20; CR/PR at Figures V-3a - V-3d.

 140 While domestic producer prices peaked in the fourth quarter of 2006, these increases were not sufficient to

offset rising production costs. CR/PR at Table VI-1.

 141 CR/PR at Tables V-3 and V-5. For product 2, domestic prices declined by *** percent from fourth quarter

2006 to first quarter 2007. CR/PR at Table V-4.

 142 U.S. capacity declined from 2.66 million short tons in 2004 to 2.54 million short tons in 2005 and to 2.40

million short tons in 2006. Capacity was 592,064 short tons in interim 2007, 9.2 percent lower compared with

652,041 short tons in interim 2006. CR/PR at Tables III-2, C-1.

 143 U.S. production declined from 1.47 million short tons in 2004 to 1.43 million short tons in 2005 and 1.35

million short tons in 2006. Domestic production was 365,202 short tons in interim 2006 and was higher at 387,472

short tons in interim 2007. CR/PR at Tables III-2, C-1.

 144 Capacity utilization was 55.2 percent in 2004, 56.2 percent in 2005, and 56.3 percent in 2006. Capacity

utilization was 56.0 percent in interim 2006 and was higher at 65.4 percent in interim 2007. CR/PR at Tables III-2 ,

C-1.

 145 Domestic producers’ U.S. shipments of CWP declined from 1.42 million short tons in 2004 to 1.41 million

short tons in 2005 and to 1.35 million short tons in 2006. Domestic producers’ U.S. shipments were 348,906 short

tons in interim 2006 and 365,140 short tons in interim 2007. CR/PR at Tables III-5, C-1.

 146 The domestic producers’ share of the market improved from 58.6 percent in 2004 to 59.4 percent in 2005 as

subject imports took market share from nonsubject imports. This reversed in 2006 as the domestic producers’ share

of the market declined to 50.4 percent. Over the interim periods, however, the industry’s share was 52.6 percent in

interim 2006 and 58.2 percent in interim 2007. CR/PR at Table IV-5. This higher interim 2007 market share came

at the expense of nonsubject imports’ share of the market.

22

highest levels at the end of 2006.139 140 In the first quarter of 2007, however, domestic prices declined

noticeably for the first time. For products 1 and 3, domestic prices declined by 9 percent and 12 percent,

respectively, from fourth quarter 2006 to first quarter 2007.141 The recent declines in prices indicate that

the increasing volumes of subject imports may have begun to have price depressing effects on domestic

producer prices. The record does not indicate that the underselling observed during the period examined

will not continue, particularly in view of the large volumes of subject imports that will likely increase in

the near future.

Domestic industry performance indicators moved in divergent directions during the period

examined. Most output-related indicators declined. The domestic industry’s production capacity

declined from 2004 to 2006 by 10.0 percent.142 U.S. production of CWP declined 8.2 percent from 2004

to 2006, however, it was 6.1 percent higher in interim 2007 compared to interim 2006.143 Capacity

utilization increased by about one percentage point from 2004 to 2006, and improved by 9.4 percentage

points when the interim periods are compared.144 U.S. producers’ U.S. shipments declined by 5.0 percent

from 2004 to 2006, but improved by 4.7 percent when the interim periods are compared.145 As U.S.

producers were unable to maintain the level of their shipments and as subject imports increased, U.S.

producers lost market share from 2005 to 2006.146

Likewise, employment and wages declined. The number of production and related workers

(“PRW”) for CWP declined by 14.9 percent between 2004 and 2006, but improved by 4.8 percent when
 147 The number of production and related workers declined from 2,449 in 2004 to 2,220 in 2005, then fell further

to 2,084 in 2006. The total was 2,068 in interim 2006 and 2,167 in interim 2007. CR/PR at Table III-8. 

 148 The hours worked by the production and related workers totaled 4.5 million in 2004, 4.1 million in 2005 and

3.9 million in 2006. They totaled 1.0 million in both interim 2006 and interim 2007. CR/PR at Table III-8. Wages

paid to the production and related workers fell from $89.0 million in 2004 to $82.2 million in 2005, then fell further

to $78.0 million in 2006. They totaled $20.5 million in interim 2006 and $21.2 million in interim 2007. CR/PR at

Table III-8.

 149 Productivity increased from 324.0 short tons produced per 1,000 hours in 2004 to 350.4 in 2005, before

declining slightly to 347.4 in 2006. Productivity was 360.9 in interim 2006 and 384.9 in interim 2007. CR/PR at

Table III-8.

 150 CR/PR at App. E.

 151 See Separate and Dissenting Views of Vice Chairman Deanna Tanner Okun and Commissioner Daniel R.

Pearson, Circular Welded Non-Alloy Steel Pipe from China, Inv. No. TA-421-6, USITC Pub. 3807 (Oct. 2005) at

63-64. These price increases were due in response to rapidly increasing raw material prices at that time. Id.

 152 USITC Pub. 3807 at 64.

 153 USITC Pub. 3807 at 72; CR/PR at Table VI-1.

 154 CR/PR at Table VI-1.

 155 CR/PR at Table VI-1. The industry’s 2006 capital expenditures were at their highest annual level during the

period examined. The industry’s 2006 research and development expenditures were at a period low, but steady as

compared to the level in 2005. CR/PR at Table VI-5.

 156 Operating income margins were 10.6 percent in interim 2006 and 3.3 percent in interim 2007. CR/PR at Table

VI-1. 

23

the interim periods are compared.147 PRW hours worked declined as well, as did PRW wages.148

Productivity, however, improved over the period of investigation and when the interim periods are

compared.149

Several U.S. producers reported that they anticipated continued negative effects on their

development and production efforts due to subject imports, including closure of facilities and job losses,

reduced capital investments, decreased sales, selling prices, and profit margins.150

Notwithstanding the decline in these domestic industry performance indicators, we do not find

the industry currently to be in a weakened state. The domestic industry operated profitably throughout

the period examined. The industry’s operating income ratio began the period examined at a peak of 14.0

percent following a significant increase in demand for CWP and all steel products generally. With this

increase in demand, the market was in tight supply in 2004 and allowed producers and importers to push

through large price increases for CWP, which reached then-record high levels.151 The tight market supply

in 2004 and the rapid rise in prices led distributors to fill their inventories, which had to be worked down

in early 2005.152 Following this market correction, the domestic industry returned to its more “traditional”

levels of profitability with an operating income ratio of 9.6 percent in 2005.153 This trend continued

through the end of the period examined. In 2006, the industry had an operating income ratio of 9.3

percent.154 While two of 19 domestic producers reported operating losses in 2004 and one reported such

losses in 2005, no domestic producer reported an operating loss in 2006.155 Operating income margins

only began to show a significant decline in interim 2007,156 but the industry as a whole remained

profitable throughout the period. We thus do not find the industry to be currently vulnerable. However,

for the purposes of these preliminary determinations, we find a reasonable indication that the continued or
 157 We note that the domestic industry’s cost of goods sold per short ton were substantially higher in interim 2007

than in interim 2006 owing to increases in the costs of raw materials (including, for some companies, zinc) and

factory overhead. CR/PR at Table VI-3, CR at VI-12; see also CR/PR at Figure V-1 (U.S. purchase prices for hotrolled sheet and zinc). 

 158 In any final phase of these investigations, we intend to explore whether distributors have once again

temporarily built-up high inventories, which they now may be drawing down. See, e.g., Hearing Transcript at 50-51

(Schagrin) (“We believe that inventories of Chinese pipe in U.S. importers’ yards at the ports, at U.S. distributors'

facilities, and I recognize that until you get purchaser questionnaires you won’t find out about distributors, but we

believe based on visits that these gentlemen make to their customers that the amount of Chinese pipe that distributors

are holding right now is absolutely massive. There’s a tremendous inventory overhang, and it’s because of the huge

volumes of Chinese pipe.”).

 159 19 U.S.C. §§ 1671b(a), 1673b(a) (2000).

 160 444 F.3d 1369, 1373 (Fed. Cir. 2006), quoting Gerald Metals, Inc. v. United States, 132 F.3d 716, 722 (Fed.

Cir. 1997).

 161 Bratsk, 444 F.3d at 1375-1376.

24

increased presence of subject imports at low prices will likely result in material injury to the domestic

industry unless antidumping duty and countervailing duty orders are issued.157 158

III. APPLICATION OF THE BRATSK ALUMINUM SMELTER V. UNITED STATES

REPLACEMENT/BENEFIT TEST

The U.S. Court of Appeals for the Federal Circuit did not address the application of its recent

mandate in Bratsk Aluminum Smelter et al. 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 nonsubject 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 nonsubject 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 duty 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 or

threatened with material injury by reason of the allegedly unfairly traded imports.159 Thus, we conclude

that we must conduct a Bratsk analysis as we would any other type of causation analysis in a preliminary

investigation.

Having reached an affirmative threat of material injury determination by application of the

statutorily mandated factors, we now turn to an additional analysis which can, in some circumstances,

negate an affirmative determination.

A. Legal Issues Concerning Bratsk Aluminum Smelter v. United States

In Bratsk, 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.’”160

Applying that standard to an investigation involving a commodity product, i.e., silicon metal, and the

significant presence of nonsubject imports, the Court held that the Commission had not sufficiently

explained whether nonsubject 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.161
 162 19 U.S.C. § 1677(7).

 163 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).

 164 Bratsk, 444 F.3d at 1375, 1376.

 165 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). 

 166 Huaiyin Foreign Trade Corp. v. United States, 322 F.3d 1369, 1380 (Fed. Cir. 2003).

25

As a threshold matter, it is not immediately clear how we should interpret the Bratsk opinion in

terms of its effect on our analysis of causation in Title VII investigations. We can discern at least two

possible interpretations that 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.

 

1. 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.162 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.163 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 nonsubject 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 nonsubject imports’

replacement of the subject imports’ market share without any beneficial impact on domestic producers,”

and must explain “why the nonsubject imports would not replace the subject imports and continue to

cause injury to the domestic industry.”164

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.165 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.166 It is not uncommon for subject imports to remain in the U.S. market in
 167 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). Commissioner Okun did not

participate in that proceeding. 

 168 Moreover, 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.

 169 Gerald Metals, 132 F.3d at 722.

 170 Bratsk, 444 F.3d at 1372.

 171 Bratsk, 444 F.3d at 1375.

 172 Bratsk, 444 F.3d at 1373-1375.

 173 Bratsk, 444 F.3d at 1375.

26

 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 nonsubject 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.167 However, given that the Federal Circuit’s mandate has been

issued and the decision has become precedent, we discuss infra our interpretation of the Bratsk standard

and attempt to perform the analysis based on the record in these preliminary investigations.168

2. 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.”169

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.”170 In explaining its conclusion, the Court emphasized

that the Commission had “dismissed” Gerald Metals as being factually distinguishable171 and explained

its holdings in Gerald Metals and Taiwan Semiconductor.

172 Further, the Court noted that:

Gerald Metals thus requires the Commission to explain why – notwithstanding the

presence and significance of the nonsubject 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.173

Therefore, the Court may not have been creating an extra-statutory causation test, but rather was

simply reminding the Commission of its existing obligation under the statute, as explained by 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 nonsubject imports)

and the replacement/benefit factors (i.e., whether nonsubject imports would have replaced the subject
 174 Bratsk, 444 F.3d at 1375.

 175 19 U.S.C. § 1673d(b).

 176 S. Rep. No. 249, 96th Cong., 1st Sess. 46-47 (1979). 

 177 S. Rep. No. 249, 96th Cong., 1st Sess. 74 (1979); H.R. Rep. No. 317, 96th Cong., 1st Sess. 46-47.

 178 Petitioners’ Postconference Brief at 5-6.

27

imports without any beneficial effect on domestic producers)174 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.175 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.”176

While the statute is clear that the Commission is not to weigh or prioritize the factors that are

independently causing material injury, 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.177 The Commission must analyze the effects of the unfairly

traded imports and other relevant factors 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 we are

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, we evaluated this issue in our threat 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).

B. Application of Bratsk Replacement/Benefit Test

Having found that there is a reasonable basis to determine that an industry in the United States is

threatened with material injury by reason of subject imports from China, we now must assess whether the

facts of this investigation trigger a Bratsk analysis under the “replacement/benefit test” interpretation of

Bratsk. Based on the record in these preliminary investigations, we conclude that Bratsk is triggered. 

Nevertheless, we find that the current record does not permit us to determine conclusively that nonsubject

imports would replace subject imports and negate the beneficial effect of the order on subject imports from

China.

1. Triggering Factors

Petitioners assert that CWP is a fungible commodity sold largely on the basis of price.178 Hence,

although they do not address this Bratsk triggering factor directly, they implicitly acknowledge that it is

met in that imports of CWP are fungible with domestic CWP, as well as imports from nonsubject
 179 Petitioners’ Postconference Brief; Answers to Questions from Staff at 1-5.

 180 CR/PR at Table II-2.

 181 CR/PR at Table IV-2. We note that imports of CWP from Brazil, India, Korea, Mexico, Taiwan, Thailand and

Turkey, accounting for about half of the nonsubject imports over the period examined, are subject to antidumping or

countervailing duty orders. CR/PR at Table I-1; CR/PR at Table IV-3.

 182 CR/PR at Table IV-2.

 183 CR/PR at Table IV-5.

 184 CR/PR at Table IV-2.

 185 CR/PR at Table IV-5.

 186 See CR/PR at Tables IV-2 and IV-4. The largest supplier of nonsubject imports in 2005 and 2006 was

Thailand, which, in quantity terms, accounted for 8.3 percent of total imports in 2005, and 5.8 percent in 2006. 

CR/PR at Tables IV-2 and IV-3. The U.S. market share held by imports of CWP from Thailand was 3.4 percent in

2005, and 2.9 percent in 2006. CR/PR at Table IV-5.

 187 CR at V-17; PR at V-11. Of these nine countries, India, Korea, Thailand, and Turkey are subject to either

antidumping or countervailing duty orders in the U.S. market.

 188 CR/PR at Tables D-1-D-9.

 189 CR/PR at Tables V-3-V-5; CR/PR at Table D-7. 

 190 Compare CR/PR at Table III-5 with CR/PR at Table IV-2.

28

countries.179 Indeed, questionnaire responses from both producers and importers indicate that, for the most

part, the domestic like product, subject imports, and nonsubject imports are viewed as always or frequently

interchangeable.180 Thus, based on the information available in the preliminary phase of these

investigations, we find that the domestic like product, subject imports, and nonsubject imports of CWP

generally are commodity products.

With respect to the second factor, whether price-competitive nonsubject imports are a significant

factor in the U.S. market, the record in the preliminary phase of these investigations indicates that

nonsubject imports were present throughout the period examined. Nonsubject import volume was 727,282

short tons in 2004, 571,490 short tons in 2005, and 616,007 short tons in 2006.181 Nonsubject imports

accounted for 72.3 percent of total imports (on a quantity basis) in 2004, 59.4 percent in 2005, and 46.2

percent in 2006.182 The U.S. market share of nonsubject imports ranged from 29.9 percent in 2004 to 24.1

percent in 2005 and to 22.9 percent in 2006.183 We note that subject imports accounted for 27.7 percent of

total imports in 2004, 40.6 percent in 2005, and 53.8 percent in 2006.184 The U.S. market share of subject

imports increased from 11.5 percent in 2004 to 16.5 percent in 2005 and then to 26.7 percent in 2006.185

We note that the volume of subject imports exceeded the volume of CWP imports from all nonsubject

countries combined by 2006.186

As to whether nonsubject imports are price competitive, the Commission requested productspecific price data from nonsubject countries in its importers’ questionnaires. The Commission received a

limited amount of price data for nonsubject imports from Guatemala, India, Japan, Korea, Oman, Romania,

Thailand, Turkey, and Venezuela.187 These data show predominant underselling of the domestic like

product by nonsubject imports.188 There were, however, wide variations in the pricing data of nonsubject

imports, and the prices of imports from Thailand, which was the largest nonsubject supplier in 2005 and

2006, were ***.189 The average unit value of all nonsubject imports was consistently below the average

unit value of U.S. shipments throughout the period examined.190 Therefore, for purpose of these

preliminary determinations, it appears that nonsubject imports of CWP, viewed as a whole, are pricecompetitive with the domestic like product, and thus appear to be a “significant factor” in the U.S. market.
 191 See generally CR at VII-18 - VII-30, PR at VII-10 to VII-21.

29

2. Replacement/Benefit Factors

As it appears that the Bratsk tests are triggered, we now analyze whether nonsubject imports are

likely to replace subject imports and continue to cause injury to the domestic industry. One of the key

factors we must examine in assessing this issue is the size of the nonsubject supplier industries and the

amount of excess capacity in those industries. Regrettably, there is no information on the record

concerning the capacity of nonsubject suppliers, or their capacity utilization rates.191 Accordingly, we

cannot determine whether nonsubject imports would be likely to have sufficient capacity to replace subject

imports if the orders were to be imposed.

We note, however, that trends in the U.S. market share for subject and nonsubject 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 increased

overall, by 10.5 percent, in terms of quantity, from 2004 to 2006. The market share of subject U.S.

imports rose sharply throughout the period examined, from 11.5 percent in 2004 to 26.7 percent in 2006. 

The market share of U.S. imports of nonsubject CWP, by contrast, declined steadily from 2004 to 2006,

from 29.9 percent in 2004 to 22.9 percent in 2006. In summary, the sum of the decline in U.S. producers’

market share from 2004 to 2006 (58.6 percent in 2004 to 50.4 percent in 2006 or 8.2 percentage points)

and the decline in the market share of nonsubject imports (7.0 percentage points) was equivalent to the rise

in subject imports’ market share over the same period (15.2 percentage points). Thus, subject imports took

approximately equal amounts of market share from U.S. producers and nonsubject imports during the

period examined. Hence, these trends may tend to support a finding that nonsubject imports would not

completely replace Chinese imports if such imports were removed from the market. Because we lack

information, however, on nonsubject foreign production capacity, we cannot reach a definite conclusion on

this point. In any final phase of these investigations, we will seek additional information on production

capacity of major nonsubject producers of CWP, both those subject to other antidumping and

countervailing duty orders in the U.S. market and those not subject to such orders, to complete our analysis

under Bratsk.

IV. CONCLUSION

For the reasons stated above, we find that there is a reasonable indication that the domestic

industry producing CWP is threatened with material injury by reason of subject imports of CWP from

China that allegedly are subsidized by the government of China and sold in the United States at less than

fair value.

 1

 As discussed in greater detail in the section of this chapter entitled “The Subject Merchandise,” for purposes of

these investigations, circular welded pipe consists of welded carbon-quality steel pipes and tubes, of circular cross

section, and with an outside diameter of 0.372 inches (9.45 mm) or more, but not more than 16 inches (406.4 mm),

whether or not stenciled, regardless of wall thickness, surface finish, end finish, or industry specification, generally

known as standard pipe and structural pipe. Circular welded pipe is provided for in subheading 7306.30 of the

Harmonized Tariff Schedule of the United States (“HTSUS”) with a normal trade relations tariff rate of free,

applicable to imports from China.

 2

 The petition alleged eight broad types of subsidies: preferential lending to the circular welded pipe industry,

income tax programs, indirect tax and import tariff programs, grant programs, currency manipulation, goods and

services provision, land issues, and government restraints on exports of input products. The petition also alleged

LTFV margins to be as follows: 81.67 - 88.00 percent for black plain end pipe and 70.89 - 76.02 percent for

galvanized plain end pipe. Based on a comparison of export price to normal value, Commerce calculated estimated

dumping margins of 51.34 - 85.55 percent. 72 FR 36663, July 5, 2007.

 3 Federal Register notices cited in the tabulation are presented in appendix A.

I-1

PART I: INTRODUCTION

BACKGROUND

These investigations result from a petition filed by the following petitioners on June 7, 2007:

C Allied Tube & Conduit, Harvey, IL; 

C IPSCO Tubulars, Inc., Camanche, IA; 

C Northwest Pipe Co., Portland OR; 

C Sharon Tube Co., Sharon, PA; 

C Western Tube & Conduit Corp., Long Beach, CA; 

C Wheatland Tube Co., Collingswood, NJ; and

C the United Steelworkers, Pittsburgh, PA.

The petition alleges that an industry in the United States is materially injured and threatened with material

injury by reason of subsidized and less-than-fair-value (LTFV) imports of circular welded pipe1 from

China.2

 Information relating to the background of the investigations is provided below.3

Date Action

June 7, 2007

Petition filed with Commerce and the Commission; institution of Commission

investigations (72 FR 32862, June 14, 2007)

June 28, 2007

Commission’s conference (a list of witnesses appearing at the conference is presented

in appendix B)

July 5, 2007

Commerce’s notices of initiation (72 FR 36663 (antidumping duty investigation) and

72 FR 36668 (countervailing duty investigation), July 5, 2007)

July 20, 2007 Commission’s vote

July 23, 2007 Commission’s determination transmitted to Commerce

July 30, 2007 Commission’s views transmitted to Commerce
I-2

STATUTORY CRITERIA AND 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.

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 subsidies and

dumping margins, and domestic like product. Part II of this report presents information on conditions of

competition and other relevant economic factors. Part III presents information on the condition of the

U.S. industry, including data on capacity, production, shipments, inventories, and employment. Parts IV

and V present the volume and pricing of imports of the subject merchandise, respectively. Part VI
 4

 Petition, exhibit 8, as modified by Petitioners’ postconference brief, exhibit 22.

I-3

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. CIRCULAR WELDED PIPE MARKET SUMMARY

Trade for circular welded pipe totaled approximately $2.2 billion (2.7 million short tons) in the

U.S. market in 2006. Currently, at least 20 firms produce circular welded pipe in the United States. The

three largest producers – Wheatland, Allied, and Bull Moose – accounted for approximately *** of

reported U.S. production in 2006, however. At least 25 firms have imported circular welded pipe from

China since 2004, including 7 that imported the product from China for the first time in 2006 or 2007. 

The three largest importers – *** – accounted for approximately *** of reported U.S. imports from China

in 2006. Finally, at least 20 firms produce circular welded pipe in China. The two largest producers –

*** – accounted for approximately *** of reported Chinese production in 2006, although three different

firms – *** – accounted for approximately *** of reported Chinese exports to the United States in 2006. 

Circular welded pipe is used in a wide variety of applications, including plumbing applications,

structural applications, and more specific applications (e.g., shells for electrical conduit, scaffolding

components, and fencing). U.S. producers’ U.S. shipments of circular welded pipe totaled 1.4 million

short tons in 2006, and accounted for 50.4 percent of apparent U.S. consumption by quantity. U.S.

imports from China totaled 716,184 short tons in 2006, and accounted for 26.7 percent of apparent U.S.

consumption by quantity, while U.S. imports from all other sources combined totaled 616,007 short tons

in 2006, and accounted for 22.9 percent of apparent U.S. consumption by quantity.

SUMMARY DATA AND DATA SOURCES

A summary of data collected in the investigations is presented in appendix C, table C-1. Except

as noted, U.S. industry data are based on questionnaire responses of 20 firms that accounted for more than

90 percent of U.S. production of circular welded pipe during 2007. U.S. imports are based on official

import statistics of Commerce, as modified to include dual-stenciled line pipe used in standard and

structural pipe applications (based on questionnaire responses) and to exclude mechanical tubing (based

on Statistics Canada data) from Canada.4

 Data regarding the Chinese industry are based on foreign

producer questionnaires, while information with respect to other foreign industries is drawn from

published sources.

PREVIOUS AND RELATED TITLE VII INVESTIGATIONS

The Commission has conducted a number of previous import relief investigations on circular

welded nonalloy steel pipe or substantially similar merchandise. Table I-1 presents data on previous and

related title VII investigations.
I-4

Table I-1

Certain welded pipe: Previous and related Title VII investigations

Product Inv. No.

Year of

petition Country

Original

determination Current status

Circular

welded pipe

701-TA-165 1982 Brazil Terminated (1)

701-TA-166 1982 France Terminated (1

)

701-TA-167 1982 Italy Negative (P) (1

)

701-TA-168 1982 Korea Affirmative ITA revoked--1985

701-TA-169 1982 West Germany Terminated (1

)

731-TA-132 1983 Taiwan Affirmative Order in place.

701-TA-220 1984 Spain Terminated (1

)

731-TA-183 1984 Brazil Terminated (1

)

731-TA-197 1984 Brazil Terminated (1

)

731-TA-198 1984 Spain Terminated (1

)

701-TA-242 1985 Venezuela Terminated (1

)

701-TA-251 1985 India ITA Negative (1

)

701-TA-252 1985 Taiwan ITA Negative (1

)

701-TA-253 1985 Turkey Affirmative Order in place.

731-TA-211 1985 Taiwan Negative (

1

)

731-TA-212 1985 Venezuela Terminated (1)

731-TA-252 1985 Thailand Affirmative Order in place.

731-TA-253 1985 Venezuela Terminated (1

)

731-TA-271 1985 India Affirmative Order in place.

731-TA-273 1985 Turkey Affirmative Order in place.

731-TA-274 1985 Yugoslavia Terminated (1

)

731-TA-292 1986 China Negative (1

)

731-TA-293 1986 Philippines Negative (1

)

731-TA-294 1986 Singapore Negative (1

)

701-TA-311 1991 Brazil ITA Negative (1

)

731-TA-532 1991 Brazil Affirmative Order in place.

731-TA-533 1991 Korea Affirmative Order in place.

731-TA-534 1991 Mexico Affirmative Order in place.

731-TA-535 1991 Romania Negative (1

)

731-TA-536 1991 Taiwan Affirmative Order in place.

731-TA-537 1991 Venezuela Affirmative ITC Negative--2000

731-TA-732 1995 Romania Negative (1

)

731-TA-733 1995 South Africa Negative (1)

731-TA-943 2001 China Negative (1)

731-TA-944 2001 Indonesia Negative (P) (1

)

731-TA-945 2001 Malaysia Negative (P) (1)

731-TA-946 2001 Romania Negative (P) (1)

731-TA-947 2001 South Africa Negative (P) (1)

 1 Not applicable.

Source: Certain Pipe and Tube from Argentina, Brazil, India, Korea, Mexico, Taiwan, Thailand, and Turkey, Inv. Nos. 701-TA-253

and 731-TA-132, 252, 271, 273, 409, 410, 532-534, and 536 (Second Review), USITC Publication 3867, July 2006, tables

OVERVIEW-2 and OVERVIEW-3.
 5

 19 U.S.C. § 2252.

 6

 The safeguard investigation did not cover dual-stenciled line pipe used in standard and structural applications,

however, as such product was already covered under Presidential Proclamation 7274, issued on February 18, 2000,

which imposed additional duties of 19 percent on line pipe imports of more than 9,000 short tons annually (exclusive

of “arctic grade” line pipe), declining to 15 percent in 2001 and to 11 percent in 2002 (as modified with respect to

Korea by Proclamation 7585, issued on August 28, 2002).

 7 Institution and Scheduling of an Investigation under Section 202 of the Trade Act of 1974 (19 U.S.C. 2252) (the

Act), 66 FR 35267, July 3, 2001.

 8

 19 U.S.C. § 2251.

 9 Consolidation of Senate Finance Committee Resolution Requesting a Section 201 Investigation with the

Investigation Requested by the United States Trade Representative on June 22, 2001, 66 FR 44158, August 22,

2001.

 10 Steel; Import Investigations, 66 FR 67304, December 28, 2001.

 11 Presidential Proclamation 7529 of March 5, 2002, To Facilitate Positive Adjustment to Competition From

Imports of Certain Steel Products, 67 FR 10553, March 7, 2002. 

 12 The increased duties were reduced from 15 percent to 12 percent on March 20, 2003.

 13 The Department of Commerce published regulations establishing such a system on December 31, 2002.

I-5

PREVIOUS AND RELATED SAFEGUARD INVESTIGATIONS

Following receipt of a request from the Office of the United States Trade Representative

(“USTR”) on June 22, 2001, the Commission instituted investigation No. TA-201-73, Steel, under section

202 of the Trade Act of 19745

 to determine whether certain steel products, including welded pipe of

carbon and alloy (other than stainless) steel,6

 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 industries

producing articles like or directly competitive with the imported article.7

 On July 26, 2001, the

Commission received a resolution adopted by the Committee on Finance of the U.S. Senate (“Senate

Finance Committee” or “Committee”) requesting that the Commission investigate certain steel imports

under section 201 of the Trade Act of 1974.8

 Consistent with the Senate Finance Committee’s resolution,

the Commission consolidated the investigation requested by the Committee with the Commission’s

previously instituted investigation No. TA-201-73.9

 On December 20, 2001, the Commission issued its

determinations and remedy recommendations. The Commission reached an affirmative determination

with respect to welded tubular products other than oil country tubular goods.10

On March 5, 2002, following determinations regarding serious injury or threat of serious injury

by the Commission under section 202 of the Trade Act of 1974, the President announced the safeguard

measures that he planned to implement to facilitate efforts by various domestic steel industries and their

workers to make a positive adjustment to import competition with respect to certain steel products. The

safeguard measures encompassed 10 different product categories for which the Commission made

affirmative determinations or was evenly divided. Presidential Proclamation 7529 implemented the

safeguard measures, principally in the form of tariffs and tariff-rate quotas, effective March 20, 2002, for

a period of three years and one day. Import relief relating to welded tubular products (other than OCTG)

consisted of an additional tariff of 15 percent ad valorem on imports in the first year, 12 percent in the

second year, and 9 percent in the third year.11 12 The President also instructed the Secretary of the

Treasury and the Secretary of Commerce to establish a system of import licensing to facilitate the

monitoring of imports of certain steel products.13

The safeguard measures applied to imports of subject steel products from all countries except

Canada, Israel, Jordan, and Mexico, which had entered into free trade agreements with the United States,

and most developing countries that were members of the World Trade Organization. The President’s
 14 Steel: Monitoring Developments in the Domestic Industry, Inv. No. TA-204-9, USITC Publication 3632,

September 2003.

 15 Steel: Monitoring Developments in the Domestic Industry, Inv. No. TA-204-9, Volume I, USITC Publication

3632, September 2003, p. xvi.

 16 Presidential Proclamation 7741 of December 4, 2003, To Provide for the Termination of Action Taken With

Regard to Imports of Certain Steel Products, 68 FR 68483, December 8, 2003.

 17 Proclamation 7741 terminated the tariff-rate quota and the increased import duties on certain steel products, but

directed the Secretary of Commerce to continue the monitoring system until the earlier of March 21, 2005, or such

time as the Secretary establishes a replacement program. On March 11, 2005, Commerce published an interim final

rule to implement a replacement program for the period beyond March 21, 2005. 70 FR 12133, March 11, 2005. On

December 5, 2005, Commerce published its final rule. 70 FR 72373, December 5, 2005.

 18 Presidential Proclamation 2006-7 of December 30, 2005, Presidential Determination on Imports of Circular

Welded Non-Alloy Steel Pipe from the People’s Republic of China, 71 FR 871 (January 6, 2006). 

 19 Petition, pp. 36-152.

I-6

initial proclamation also excluded numerous specific products from the measures, and was followed by

subsequent additional exclusions.

On September 19, 2003, the Commission submitted a mid-term report to the President and the

Congress on the results of its monitoring of developments in the steel industry, as required by section

204(a)(2) of the Trade Act of 1974.14 The Commission’s monitoring report noted that, since the

safeguard measures were instituted, the U.S. industry producing certain carbon and alloy welded pipe and

tube had increased its market share to 62.9 percent from 57.3 percent, that the total quantity of imports

from subject sources had declined, and that demand for welded pipe and tube during the relief period also

had declined. The review also noted that because of declining demand, the industry’s output-related

indicators were mixed.15

On December 4, 2003, President Bush terminated the U.S. measure with respect to increased

tariffs, following receipt of the Commission’s mid-point monitoring report in September 2003, and after

seeking information from the U.S. Secretary of Commerce and U.S. Secretary of Labor, having

determined that the effectiveness of the action taken had been impaired by changed circumstances.16

Import licensing, however, remained in place through March 21, 2005, and continues in modified form.17

On March 21, 2005, the Commission instituted an investigation under section 204(d) of the Trade

Act of 1974 for the purpose of evaluating the effectiveness of the relief action imposed by the President

on imports of certain steel products. The Commission’s report on the evaluation was transmitted to the

President and the Congress on September 19, 2005.

In 2005, the Commission conducted a China-specific safeguard investigation on circular welded

nonalloy steel pipe (Inv. No. TA-421-6). Following the Commission’s affirmative determination of

serious injury or threat of serious injury and its remedy recommendations, the President issued a

proclamation on December 30, 2005, determining not to impose temporary import relief.18 

NATURE AND EXTENT OF ALLEGED SUBSIDIES AND SALES AT LTFV

The petition alleged eight broad types of subsidies: preferential lending to the circular welded

pipe industry, income tax programs, indirect tax and import tariff programs, grant programs, currency

manipulation, goods and services provision, land issues, and government restraints on exports of input

products.19 The LTFV margins alleged in the petition upon which Commerce based its decision to initiate

its investigations, as adjusted by Commerce, are presented in table I-2.
I-7

Table I-2

Circular welded pipe: Allegations of LTFV imports

Country Basis of comparison

Estimated dumping margin

(percent)

China Based on a comparison of export price to normal value. 51.34 - 85.55

Source: 72 FR 36663, July 5, 2007.

THE SUBJECT MERCHANDISE

Commerce’s Scope

The scope of these investigations, as defined by Commerce, covers the following subject

merchandise: 

{C}ertain welded carbon quality steel pipes and tubes, of circular cross

section, and with an outside diameter of 0.372 inches (9.45 mm) or more,

but not more than 16 inches (406.4 mm), whether or not stenciled,

regardless of wall thickness, surface finish (e.g., black, galvanized, or

painted), end finish (e.g., plain end, beveled end, grooved, threaded, or

threaded and coupled), or industry specification (e.g., ASTM,

proprietary, or other), generally known as standard pipe and structural

pipe (they may also be referred to as circular, structural, or mechanical

tubing).

Specifically, the term ‘‘carbon quality’’ includes products in which: (a)

iron predominates, by weight, over each of the other contained elements;

(b) the carbon content is 2 percent or less, by weight; and (c) none of the

elements listed below exceeds the quantity, by weight, as indicated: 

(i) 1.80 percent of manganese; (ii) 2.25 percent of silicon; (iii) 1.00

percent of copper; (iv) 0.50 percent of aluminum; (v) 1.25 percent of

chromium; (vi) 0.30 percent of cobalt; (vii) 0.40 percent of lead; (viii)

1.25 percent of nickel; (ix) 0.30 percent of tungsten; (x) 0.15 percent of

molybdenum; (xi) 0.10 percent of niobium; (xii) 0.41 percent of

titanium; (xiii) 0.15 percent of vanadium; or (xiv) 0.15 percent of

zirconium.

All pipe meeting the physical description set forth above that is used in,

or intended for use in, standard and structural pipe applications is

covered by the scope of this investigation. Standard pipe applications

include the low–pressure conveyance of water, steam, natural gas, air,

and other liquids and gases in plumbing and heating systems, air

conditioning units, automatic sprinkler systems, and other related uses.

Standard pipe may also be used for light load–bearing and mechanical

applications, such as for fence tubing, and as an intermediate product for

protection of electrical wiring, such as conduit shells. Structural pipe is

used in construction applications. 

Standard pipe is made primarily to American Society for Testing and

Materials (ASTM) specifications, but can be made to other
 20 Initiation of Antidumping Duty Investigation: Circular Welded Carbon Quality Steel Pipe from the People’s

Republic of China, 72 FR 36663, July 5, 2007.

 21 Ibid.

I-8

specifications. Standard pipe is made primarily to ASTM specifications

A–53, A–135, and A–795. Structural pipe is made primarily to ASTM

specifications A–252 and A–500. Standard and structural pipe may also

be produced to proprietary specifications rather than to industry

specifications. This is often the case, for example, with fence tubing.

Pipe multiple–stenciled to an ASTM specification and to any other

specification, such as the American Petroleum Institute (API) API–5L or

5L X–42 specifications, is covered by the scope of this investigation

when used in, or intended for use in, one of the standard applications

listed above, regardless of the Harmonized Tariff Schedule of the United

States (HTSUS) category under which it is entered. Pipe used for the

production of scaffolding (but not finished scaffolding) and conduit

shells (but not finished electrical conduit) are included within the scope

of these investigations. 

The scope does not include: (a) pipe suitable for use in boilers,

superheaters, heat exchangers, condensers, refining furnaces and

feedwater heaters, whether or not cold drawn; (b) mechanical tubing,

whether or not cold–drawn; (c) finished electrical conduit; (d) tube and

pipe hollows for redrawing; (e) oil country tubular goods produced to

API specifications; and (f) line pipe produced to API specifications for

oil and gas applications.20 

Tariff Treatment

The pipe products that are the subject of these investigations are currently classifiable in the

Harmonized Tariff Schedule of the United States (“HTSUS”) statistical reporting numbers 7306.30.1000,

7306.30.5025, 7306.30.5032, 7306.30.5040, 7306.30.5055, 7306.30.5085, and 7306.30.5090.21 The

scope definition of “carbon quality” extends to “other alloy” products classified under the HTS within

subheading 7706.50. However, no U.S. importer reported imports of circular welded pipe of micro-alloy

steel. The column 1- general (most-favored-nation) rate of duty for these statistical reporting numbers,

applicable to the circular welded pipe from China subject to these investigations, is free. Table I-3

presents data on the tariff treatment used to generate official Commerce statistics on imports of subject

circular welded pipe.
I-9

Table I-3

Circular welded pipe: Tariff treatment, 2007

HTS provision Article description

General1 Special2 Column 23

Rates (percent ad valorem)

7306

7306.30

7306.30.1000 

7306.30.30004

7306.30.50

7306.30.50104

7306.30.50154

7306.30.50204

7306.30.5025

7306.30.50284

7306.30.5032 

7306.30.50354

7306.30.5040

7306.30.5055 

7306.30.5085

7306.30.5090 

Other tubes, pipes and hollow profiles (for example,

open seamed or welded, riveted or similarly closed),

of iron or steel (con.):

Other, welded, of circular cross section,

of iron or non-alloy steel:

Having a wall thickness of less than 

1.65 mm . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Having a wall thickness of 1.65 mm

of more:

Tapered steel pipes and tube

principally used as parts of 

illuminating articles4

 . . . . . . . . . . . . . . . 

Other: . . . . . . . . . . . . . . . . . . . . . . . . . .

Suitable for use in boilers, superheaters, heat exchangers, condensers, refining furnaces and

feedwater heaters, whether or 

not cold drawn

Other, cold-drawn4

Other, cold-rolled (cold-reduced)

with a wall thickness not exceeding 2.54 mm4

Other:

With an outside diameter not

exceeding 114.2 mm:

Galvanized:

Imported with coupling

Internally coated or lined

with a non-electrically insulating material, suitable for

use as electrical conduit4

Other

Other:

Tube and pipe hollows for

redrawing

Other, imported with

coupling

Other

With an outside diameter 

exceeding 114.3 mm but not

exceeding 406.4 mm:

Galvanized

Other

 . . . Free . . . . 

 . . . Free . . . .

 . . . Free . . . .

 . . . . . . . . . . . 

 . . . . . . . . . . . 

 . . . . . . . . . . .

 . . . 25.0

 . . . 45.0

 . . . 5.5

 1

 Normal trade relations, formerly known as the most-favored-nation duty rate. 

 2

 Special rates not applicable when General rate is free.

 3

 Applies to imports from a small number of countries that do not enjoy normal trade relations duty status.

 4

 Statistical reporting number or article description not subject to these investigations.

Source: Harmonized Tariff Schedule of the United States (2007).
 22 Information in this section is drawn to a large degree from the previous investigations and reviews on circular

welded non-alloy steel pipe. In particular, see, e.g., Certain Pipe and Tube from Argentina, Brazil, Canada, India,

Korea, Mexico, Singapore, Taiwan, Thailand, Turkey, and Venezuela, Inv. Nos. 701-TA-253 and 731-TA-132, 252,

271, 273, 276, 277, 296, 409, 410, 532-534, 536, and 537 (Review), USITC Publication 3316, July 2000, pp. CIRCI-17 to I-18. See also Circular Welded Non-Alloy Steel Pipe From China, Inv. No. 731-TA-943 (Final), USITC

Publication 3523, July 2002, pp. I-4 through I-6.

 23 Pipe dimensions (e.g., outside diameter (“O.D.”) and wall thickness) are standardized while tube dimensions

are design-specific. The HTS generally makes no distinction between pipes and tubes.

I-10

THE DOMESTIC LIKE PRODUCT

Physical Characteristics and Uses22

Steel pipes and tubes23 in general are produced in various grades of carbon, alloy, or stainless

steel. Tubular products frequently are distinguished by the following six end uses as defined by the

American Iron and Steel Institute (“AISI”).

C Standard pipe is ordinarily used for low-pressure conveyance of air, steam, gas, water, oil, or

other fluids for mechanical applications. It is used primarily in machinery, buildings, sprinkler

systems, irrigation systems and water wells rather than in pipe lines or utility distribution

systems. It may carry fluids at elevated temperatures which are not subject to external heat

applications. It is usually produced in standard diameters and wall thicknesses to ASTM

specifications.

C Line pipe is used for transportation of gas, oil, or water generally in a pipeline or utility

distribution system. It is produced to API-5L and American Water Works Association

(“AWWA”) specifications.

C Structural pipe and tubing is welded or seamless pipe and tubing generally used for structural or

load-bearing purposes above ground by the construction industry, as well as for structural

members in ships, trailers, farm equipment and other similar uses. It is produced in nominal wall

thicknesses and sizes to ASTM specifications in round, square, rectangular, or other

cross-sectional shapes. 

C Mechanical tubing is welded or seamless tubing produced in a large number of shapes of varied

chemical composition in sizes 3/16 inch to 103⁄4 inches O.D. inclusive for carbon and alloy

material. It is not normally produced to meet any specification other than that required to meet

the end use. It is produced to meet exact O.D. and decimal wall thickness.

C Pressure tubing is used to convey fluids at elevated temperatures or pressures, or both, and is

suitable to be subjected to heat applications. It is produced to exact O.D. and decimal wall

thickness in sizes 1⁄2 inch to 6 inches O.D. inclusive, usually to specifications such as ASTM.

C Oil country tubular goods (“OCTG”) are pipe produced to API specifications and used in wells in

oil and gas industries:

C Casing is the structural retainer for the walls of oil or gas wells and covers sizes

41⁄2 to 20 inches O.D. inclusive.

C Tubing is used within casing oil wells to convey oil to ground level and

ordinarily includes sizes 1.050 to 4.500 inches O.D. inclusive.

C Drill pipe is used to transmit power to a rotary drilling tool below ground level

and covers sizes 2d to 63⁄4 inches O.D. inclusive.
 24 Although the scope of these investigations provides for micro-alloy steel (steel with minor additions of

elements that technically place the product in the alloy steel range but do not functionally alter the product), there

were no reports of imported circular welded pipe of micro-alloy steel and, Staff believes, little or no domestic

production of such products.

 25 ASTM specification A-500 is applicable to common structural tubular products for above-ground use, while

ASTM specification A-252 applies to piling pipe (pipe that typically is filled with concrete and used as a permanent

load-carrying member below ground in foundation work). Circular Welded Non-Alloy Steel Pipe from China, Inv.

No. TA-421-6, USITC Publication 3807, October 2005, pp. I-7 through I-9.

In addition, ASTM specification A-589 is the standard specification for water-well pipe (including waterwell casing). However, testimony at the Staff Conference suggests that circular welded pipe produced to ASTM A53 and A-500 frequently are used for this application. Conference transcript, pp. 167-168 (Schmid).

I-11

Standard pipe of non-alloy steel24 is the primary product within the scope of these investigations

(see figure I-1). Standard pipe is intended for the low-pressure conveyance of water, steam, natural gas,

air, and other liquids and gases in plumbing and heating systems, air conditioning units, automatic

sprinkler systems, and other related uses. Standard pipe may carry liquids at elevated temperatures but

may not be subject to the application of external heat. It is made primarily to ASTM A-53, A-135, and A795 specifications, but can also be made to other specifications, such as British Standard (“BS”)-1387.

Figure I-1

Circular welded pipe: Cross section of welded pipe showing inside diameter “A” and wall

thickness “B”

Source: ASA Alloys, Inc., retrieved at http://www.asaalloys.com/diagrams.html.

Other uses of circular welded pipe include light load-bearing and mechanical applications, such

as for fence tubing; scaffolding components; and protection of electrical wiring, such as conduit shells. 

Fence tubing is commonly produced to ASTM specification F-1083, which covers hot-dipped galvanized

welded steel pipe used for fence structures. 

In addition, circular welded pipe is used for structural applications in general construction. 

Structural pipe is generally used for structural or load-bearing purposes above ground by the construction

industry, as well as for structural members in ships, trailers, farm equipment, and other similar uses. It is

produced in nominal wall thicknesses and sizes to ASTM specifications. These products also are

manufactured primarily to standard ASTM specifications (such as A-500 or A-252),25 as well as

American Society of Mechanical Engineers (“ASME”) specifications.

Standard pipe used in light load-bearing, mechanical, and structural applications may be

galvanized (zinc-coated by dipping in molten zinc), lacquered (black finish), or painted (black) to provide

corrosion resistance, which is important for storage in humid conditions or for ocean transport. End

finishes include plain end, which may be either cut, or beveled suitable for welding, or include threaded

ends, or threaded or coupled, as well as other special end finishes. Pipe with threaded ends is usually

provided “threaded and coupled,” meaning that a coupling is attached to one end of each length of pipe.
 26 The heat for welding is generated by the resistance of the steel to the flow of an electric current. In one

process, a low frequency (typically 60 to 360 hertz) is conducted to the strip edges by a pair of copper alloy discs

that rotate as the pipe is propelled under them. A second variation uses high frequency current (typically 400 to 500

kilohertz), which enters the tubing through shoes that act as sliding contacts. An induction coil can also be used with

this high frequency current to induce current in the edges of the steel to be welded together. No direct contact is

made between the induction coil and the tubing. See AISI, Steel Products Manual – Steel Specialty Tubular

Products, October, 1980, pp. 19-20; and United States Steel, The Making, Shaping and Treating of Steel, 10th Ed.

(Pittsburgh, PA: Herbick & Held, 1985), pp. 1030-1031.

I-12

Manufacturing Process

Circular welded pipes of the sizes subject to these investigations are manufactured by either the

electric resistance-welding (“ERW”) process or the continuous-welding (“CW”) process. The ERW

process is a cold-forming process. The raw material input is steel sheet which has been slit into strips of

appropriate width that will equal the diameter of the pipe to be welded. The strips, or “skelp,” are formed

into a tubular shape by passing it through a series of rollers, which provide the initial shaping into round

form, as well as guidance into the welding section (figure I-2).

Figure I-2

Circular welded pipe: Operations to make ERW tubes from steel strip

Source: AISI, Steel Products Manual – Steel Specialty Tubular Products, p. 20.

After the strips have been formed to a tubular shape, the edges are heated by electrical resistance26

and welded by a combination of heat and pressure. The welding pressure causes some of the metal to be

squeezed from the joint, forming a bead of metal on both the inside and outside of the tube. While still in

the continuous processing line, the tube is then subjected to post-weld heat treatment, as required. This

may involve heat treatment of the welded seam only, or treatment of the entire pipe. After heat treatment,

sizing rolls shape the tube to the accurate diameter. The product is cooled and then cut at the end of the

tube mill by a flying shear or saw, synchronized with the tube’s movement so that it is not necessary to
 27 United States Steel, The Making, Shaping and Treating of Steel, 10th Ed. (Pittsburgh, PA: Herbick & Held,

1985), p. 1029.

 28 The oil is a hardening transparent oil that leaves a lacquer finish. United States Steel, The Making, Shaping

and Treating of Steel, 10th Ed. (Pittsburgh, PA: Herbick & Held, 1985), p. 1062.

 29 United States Steel, The Making, Shaping and Treating of Steel, 10th Ed. (Pittsburgh, PA: Herbick & Held,

1985), p. 1065.

 30 See “Zinc Coatings,” American Galvanizers Association, found at

http://www.galvanizeit.org/showContent,289,333.cfm, retrieved April 10, 2006.

I-13

stop the process.27 The ERW process can be used to cover the full range of standard pipe diameters

pertinent to these investigations.

In the CW process, the entire strip is heated to approximately 2,450 degrees Fahrenheit in a gasfired, continuous furnace. As the strip leaves the furnace, a blower is normally furnished to provide a

blast of air to raise the temperature of the edges to approximately 2,600 degrees Fahrenheit for welding. 

The strip is formed into tubular shape by a series of rollers, and the edges are butted together under

pressure to form the weld. While still hot, the product may be processed through a stretch reduction mill,

which simultaneously reduces the diameter and wall thickness of the pipe. The continuous tube is then

cut into predetermined lengths by a flying saw or shear. The CW method can be used to produce pipe up

to 4.5 inches in O.D.

Finishing operations on standard pipe and tube may include hydrostatic testing, oiling,28 and

galvanizing. The process of galvanizing involves the application of a zinc coating to steel pipe for

protection from atmospheric corrosion. In a hot-dip process of galvanizing, cut lengths of steel pipe are

dipped in a bath of molten zinc maintained at a temperature of 820 to 860 degrees Fahrenheit.29 The

combination of the temperature of both the zinc and the steel, as well as the immersion time within the

zinc bath, determine the thickness of the coating.30 The zinc coating may be applied to the outside only,

or both the inside and outside of the steel pipe, depending on end-use application and industry

specification (e.g., ASTM). In a continuous galvanizing process, the zinc coating may be applied to the

outside of the pipe before the steel pipe is cut to length by passing it through a bath of molten zinc.

End finishing may include square cutting, beveling, threading, or grooving. Threaded pipe may

be furnished “threaded or coupled,” in which case both ends of each length of pipe are threaded and a

threaded coupling is applied to one end.

Channels of Distribution

The Commission’s questionnaire asked firms to report the quantity of U.S. shipments sold to

distributors and end users. Data compiled in response to Commission questionnaires concerning these

channels of distribution, by country, are presented in table I-4. 
 31 Petitioners’ postconference brief, p. 4.

 32 See generally Chinese producers’ and exporters’ postconference brief and postconference brief of Lida Pipe.

I-14

Table I-4

Circular welded pipe: U.S. producers’ and importers’ shares of reported U.S. shipments, by

sources and channels of distribution, 2004-06, January-March 2006, and January-March 2007

Item

Calendar year January-March

2004 2005 2006 2006 2007

Share of reported shipments (percent)

Domestic producers’ U.S. shipments of

circular welded pipe to:

Distributors 83.2 80.8 79.6 77.9 79.1

End users 16.8 19.2 20.4 22.1 20.9

U.S. importers’ U.S. shipments of circular

welded pipe from China to:

Distributors 89.9 95.0 97.7 96.2 99.3

End users 10.1 5.0 2.3 3.8 0.7

U.S. importers’ U.S. shipments of circular

welded pipe from all other countries to:

Distributors 96.8 94.9 96.3 97.7 95.0

End users 3.2 5.1 3.7 2.3 5.0

Source: Compiled from data submitted in response to Commission questionnaires.

DOMESTIC LIKE PRODUCT ISSUES

The petitioners contend that the Commission should find one domestic like product that is coextensive with the scope of merchandise subject to the investigations as identified by Commerce.31

Respondents do not address this issue.32
1

 As discussed in Part I of this report, circular welded pipe includes both standard and structural tubular

products. Standard pipe applications include low-pressure conveyance of water, steam, natural gas, air, and other

liquids and gases in plumbing and heating systems, air conditioning units, automatic sprinkler systems, and other

related uses. Standard pipe also may be used for light load-bearing and mechanical applications, such as for fence

tubing, and as an intermediate product for protection of electric wiring, such as conduit shells. Structural pipe is

used in construction applications.

2

 Circular welded pipe is produced in a variety of wall thicknesses, surface finishes (black, galvanized, or

painted), and end finishes (plain end, beveled end, threaded, or threaded and coupled), and may be certified to

industry specifications (ASTM A-53, A-135, A-795, or A-120), proprietary specifications (e.g., fence tubing), or

foreign specifications (e.g., British Standard 1387). Petition, pp. 3-4.

3

 Short-run effects discussed in the supply and demand sections refer to changes that could occur within 12

months, unless otherwise indicated.

4

 Data on U.S. circular welded pipe production, production capacity, capacity utilization, inventories, and

exports are shown in detail in Part III.

II-1

PART II: CONDITIONS OF COMPETITION IN THE U.S. MARKET

CHANNELS OF DISTRIBUTION AND MARKET CHARACTERISTICS

The reporting U.S. producers of circular welded pipe and the reporting U.S. importers of circular

welded pipe from China and from nonsubject countries shipped their circular welded pipe primarily to

U.S. distributors during January 2004-March 2007, with the remainder of the domestic and subject

imported circular welded pipe shipped to end users. The U.S. producers reported shipping 81.1 percent of

the quantity of their U.S. shipments of their circular welded pipe to U.S. distributors and the remaining

18.9 percent to U.S. end users during this period. U.S. importers reported shipping 94.8 percent of the

quantity of their U.S. shipments of the imported circular welded pipe from China to U.S. distributors and

5.2 percent to U.S. end users, and 95.8 percent of their U.S. shipments of the imported circular welded

pipe from nonsubject countries to U.S. distributors and 4.1 percent to U.S. end users.

The wide applicability of the various characteristics of circular welded pipe enables it to be used

in a broad variety of applications.1

 As a result, a large number of different circular welded pipe products2

 are produced to satisfy this varied demand and, accordingly, demand for circular welded pipe is

frequently derived from demand for the downstream products that use this product as an input.

SUPPLY AND DEMAND CONSIDERATIONS3

U.S. Supply4

U.S. Production

Based on available information, U.S. producers had the ability to respond to changes in U.S.

demand with relatively large changes in the quantity of shipments of U.S.-produced circular welded pipe

to the U.S. market during January 2004-March 2007. Factors contributing to this degree of

responsiveness of supply are discussed below.

Industry capacity

Based on U.S. producers’ reported capacity and production, the domestic industry’s capacity

utilization for circular welded pipe was relatively stable during 2004-06, averaging 55.9 percent during

this period, before increasing to 65.4 percent during January-March 2007. These levels of capacity
5

 U.S. producer questionnaire response, section IV-B-16a; the reported figures for variable and fixed costs were

weighted by each responding firm’s reported cost of goods sold to derive a weighted-average figure for the industry. 

The U.S. circular welded pipe producers were also requested to identify which costs they considered variable and

which they considered fixed. Ibid. The U.S. circular welded pipe producers identified a number of variable cost

items, such as raw materials, especially hot-rolled steel and zinc, electricity, natural gas, utilities, direct labor,

tooling, and packaging, etc., and a number of fixed cost items, such as direct and non-production labor, depreciation,

certain utilities, utilities, insurance, overhead, etc. (some U.S. producers considered direct labor and utility costs

variable costs and other U.S. producers considered such costs fixed costs). The primary raw material for all U.S.

producers was hot-rolled sheet, which averaged 64.8 percent of their costs to produce circular welded pipe in 2006;

this weighted-average figure was developed by weighting each firm’s response for hot-rolled sheet cost share by its

reported cost of goods sold.

6

 Some U.S. producers of circular welded pipe, like those with a continuous-weld mill and/or those with a hotdip process for galvanizing, may encounter higher costs than others in temporarily reducing production.–Conference

transcript, pp. 75-76 (Barnes, Schagrin, and Magno).

7

 Petitioners’ postconference brief, pp. 23-24.

8

 Conference transcript, pp. 72-73 (Barnes and Filetti).

II-2

utilization indicate that U.S. producers of circular welded pipe have a fairly substantial amount of

available capacity with which they could increase production of circular welded pipe in the short run in

the event of a price change. This supply flexibility may be constrained by limited capability of specific

U.S. mills to produce the required sizes (diameter and wall thickness) and surface finishes (black, painted,

or galvanized) of circular welded pipe.

U.S. producers reported producing several other products on the same equipment that they used

to produce circular welded pipe, such that measures of capacity and capacity utilization for each different

product, including circular welded pipe, is subject to allocations and may change as relative prices and

demand for the various types of products change. U.S. producers’ total reported plant capacity during

2004-06 remained fairly stable and averaged 7.3 million short tons annually during this period, for all the

products they produce, including circular welded pipe. U.S. producers assigned 34.5 percent of this total

capacity to circular welded pipe, whereas total U.S. circular welded pipe production during 2004-06

accounted for 29.1 percent (on a short ton basis) of all products that U.S. producers produced on this

equipment during this period.

The responding U.S. producers of circular welded pipe reported in their questionnaire responses

variable costs that averaged for all responding producers 79.7 percent of their costs to produce circular

welded pipe during 2006, while fixed costs were 20.3 percent.5

 Although low output levels potentially

lead to increased unit costs, significant variable costs likely moderate such an increase in unit costs.6

 In

the short run, firms with high variable costs to total costs tend to reduce production and maintain price

levels when faced with a downturn in demand.7

 U.S. producers reported that they will produce circular

welded pipe only if they cover at least their variable costs.8

Inventory levels

U.S. producers of circular welded pipe reported combined end-of-period inventory quantities that

were relatively stable during 2004-06, but decreased somewhat from 13.2 percent of U.S. producers’ total

shipments of the U.S.-produced circular welded pipe during 2004 to 12.6 percent during 2006; these

inventories averaged 14.3 percent and 12.3 percent during January-March 2006 and January-March 2007,

respectively. These levels of inventories suggest that U.S. producers have some ability to use inventories

to respond to price changes in the short run. This flexibility may be restrained in the short run to the

extent that U.S. producers’ inventories consist of products that are not required by the increased demand,

or consist of products already committed to customers in the U.S. and/or export markets.
9

 Data submitted by Chinese producers of circular welded pipe included capacity and production projections for

2007 and 2008. Based on these projections, capacity utilization rates would be 84.1 percent in 2007 and 85.3

percent in 2008. At those levels, Chinese producers would have some excess capacity with which they could

increase production.

II-3

Alternate markets

Responding U.S. producers’ total reported exports of their U.S.-produced circular welded pipe 

fluctuated modestly during January 2004-March 2007 and averaged 2.5 percent of the quantity of their

total shipments of U.S.-produced circular welded pipe during this period. The low level of exports during

the period indicates that domestic producers of circular welded pipe are constrained in their ability to shift

shipments between the United States and other markets in the short run in response to price changes. This

flexibility may be further restrained in the short run to the extent that U.S. producers’ sales of circular

welded pipe exported to third-country markets were not used/acceptable in the U.S. market or vice-aversa, or to the extent that U.S. producers have binding supply agreements longer than 12 months with

customers in the U.S. and/or export markets.

Production alternatives

Eighteen of 19 responding U.S. producers reported that the equipment and machinery that they

used to produce circular welded pipe was also be used to produce other products. U.S. producers reported

manufacturing products such as OCTG, small/medium/large-diameter line pipe, galvanized mechanical

rounds and squares, mechanical tubing (automotive use), and other products on the equipment used to

produce the subject circular welded pipe. The ability of U.S. producers to shift production between

circular welded pipe and other products enhances their supply responsiveness in the short run in response

to relative price changes between circular welded pipe and alternative production products.

Supply of Imported Circular Welded Pipe from China to the U.S. Market

Based on available information, staff believes that Chinese producers of circular welded pipe are

likely to respond to changes in demand with relatively large changes in shipments of circular welded pipe

to the U.S. market. Factors contributing to this degree of responsiveness of supply are discussed below.

Industry capacity

Responding Chinese producers reported total capacity utilization for circular welded pipe that

increased steadily from 74.7 percent during 2004 to 84.7 percent during 2006, as both their capacity and

production of circular welded pipe increased during this period. Chinese producers’ capacity utilization

was 78.1 percent during January-March 2007. These levels of capacity utilization indicate that Chinese

producers of circular welded pipe may have some available capacity with which they could increase

production of circular welded pipe in the short run in the event of a price change.9

Chinese producers reported producing several other products on the same equipment that they

used to produce circular welded pipe, such that measures of capacity and capacity utilization for each type

of product, including circular welded pipe, is subject to allocations and may change as relative prices and

demand for the various types of products change. Chinese producers’ total reported plant capacity during

2004-06 increased by 37.2 percent and averaged just over 4.8 million short tons annually during this

period, for all the products they produce, including circular welded pipe. Chinese producers assigned

85.4 percent of this average annual capacity to circular welded pipe, while total Chinese circular welded
10 During January 2004-March 2007, Chinese producers’ shipments to the home market averaged 73.1 percent

of their total shipment quantities of circular welded pipe; exports to third country markets averaged 14.4 percent of

the total; exports to the U.S. market averaged 11.0 percent of the total; and internal consumption/transfers accounted

for the remaining 1.5 percent.

II-4

pipe production during 2004-06 accounted for 84.8 percent (on a short ton basis) of all products that

Chinese producers produced on this equipment during this period.

Inventory levels

Responding Chinese producers of circular welded pipe reported combined end-of-period

inventories that were relatively stable during 2004-06, but decreased somewhat (as a percentage of total

shipments) from 7.2 percent during 2004 to 5.4 percent during 2006, and were 6.9 percent and 5.9 percent

during January-March 2006 and January-March 2007, respectively. These data indicate that Chinese

producers have some ability to use inventories as a means to increase shipments to the U.S. market in the

short run. This flexibility may be restrained in the short run to the extent that Chinese producers’

inventories consist of products not useable/acceptable in the U.S. market, or consist of products already

committed to customers in home and/or third-country markets.

Alternate markets

The responding Chinese producers of circular welded pipe reported that their products were

shipped principally to their home market, secondarily to third-country markets, thirdly to the U.S. market,

and the remainder was used for internal consumption/transfers during January 2004-March 2007; this

shipment pattern was projected to continue in 2007 and 2008.10 Although Chinese producers’ shipment

quantities to all of their markets increased during January 2004-March 2007, the share of total shipments

to the home market decreased during this period, while the shares to the U.S. market and to third-country

markets increased; this change in the pattern of shipment shares was projected to continue in 2007 and,

with the exception of a projected slight decrease in the share exported to the United States, in 2008. 

These data for alternate markets indicate that Chinese circular welded pipe producers have a strong home

market and other non-U.S. export markets from which they could shift shipments of circular welded pipe

to the United States in the short run in the event of a price change in the U.S. market. This flexibility may

be restrained in the short run to the extent that Chinese producers’ sales of circular welded pipe in their

home market and/or exported to third-country markets were not used/acceptable in the U.S. market, or to

the extent that Chinese producers have binding supply agreements longer than 12 months with customers

in the home and/or third-country markets.

Production alternates

The responding Chinese producers reported that the equipment and machinery that they used to

produce circular welded pipe was also be used to produce other products. Chinese producers reported

manufacturing products such as OCTG, small/medium/large-diameter line pipe, and other products on the

equipment used to produce the subject circular welded pipe. The ability of Chinese producers to shift

production between circular welded pipe and other products enhances their supply responsiveness in the

short run in response to relative price changes between circular welded pipe and alternative production

products.
11 Conference transcript, pp. 101-103 (Magno, Filetti, and Barnes).

12 Blue Chip Economic Indicators, Aspen Publishers, Inc., Vol. 32, No. 7, July 10, 2007, pp. 2-3.

13 Blue Chip Economic Indicators, Aspen Publishers, Inc., Vol. 32, No. 7, July 10, 2007, p. 5.

14 The nominal values were deflated by the quarterly price index for the component of Gross Domestic Product

involving Gross Private Fixed Investment of Nonresidential Structures reported by the U.S. Bureau of Economic

Analysis. As a result, the monthly nominal values in each quarter were each adjusted by the quarterly price index

for that quarter.

II-5

Supply of Nonsubject Imports of Circular Welded Pipe to the U.S. Market

Based on official import statistics of Commerce (presented in Part IV), a total of 50 nonsubject

countries exported circular welded pipe to the United States during January 2004-March 2007. 

Nonsubject imports accounted for 56.5 percent of the quantity of total U.S. imports of circular welded

pipe during this period. The share of imports of circular welded pipe from all nonsubject countries

decreased from 72.3 percent in 2004 to 46.2 percent in 2006, while the quantity of total U.S. imports of

circular welded pipe increased by 32.5 percent. Thailand, Mexico, and Canada were the largest

nonsubject country suppliers, accounting for 15.2 percent of the quantity of total U.S. imports of circular

welded pipe in 2006.

U.S. Demand

Demand for circular welded pipe, as measured by U.S. apparent annual consumption, fluctuated

during 2004-06, but increased by a total of 10.5 percent on a quantity basis during 2004-06; apparent U.S.

consumption was 5.4 percent lower in January-March 2007 than in January-March 2006.

Circular welded pipe is used in a variety of applications including commercial and residential

fencing, plumbing, transmission of air, water, and gas, and in sprinkler systems. Thus, U.S. demand for

circular welded pipe is largely derived from the level of demand for downstream products using these

pipe products. Overall U.S. demand for circular welded pipe reportedly tends to move with general

economic activity in the U.S. economy and with non-residential construction.11 U.S. real gross domestic

product (GDP) increased by 3.9 percent in 2004, 3.2 percent in 2005, and 3.3 percent in 2006; real GDP

is forecast to increase by 2.1 percent in 2007 and 2.9 percent in 2008.12 Quarterly real GDP, at annualized

rates, increased by 0.7 percent during January-March 2007, and is forecast to increase by 3.0 percent, 2.6

percent, and 2.8 percent in the following three quarters of 2007, respectively.13 Nominal and real (2004

dollars) values of U.S. private non-residential construction during January 2004-May 2007 are shown on

a monthly basis in figure II-I.14

Real private non-residential construction spending (2004 dollars) fluctuated but generally

decreased from a period-high initial value of $228.9 billion in January 2004 to a period low of $206.3

billion in April 2006, then thereafter fluctuated but increased to end near a period-high of $235.6 billion

in May 2007 (figure II-1). On the other hand, private non-residential construction spending in current

dollars (unadjusted for inflation) generally increased throughout the period from $228.9 billion in January

2004 to end in a period high of $343.1 billion in May 2007.
15 U.S. producer and importer questionnaire responses, sections IV-B-17 and III-B-16, respectively.

16 Petitioner suggests a U.S. demand elasticity for circular welded pipe ranging from -0.1 to -0.4 (petitioners’

postconference brief, p.7). The Commission staff in the recent China safeguard investigation had recommended a

somewhat higher U.S. demand elasticity, ranging from -0.5 to -0.75, but still inelastic Circular Welded Non-alloy

Steel Pipe from China, Inv. No. TA-421-6, October 2005, p. V-19.

II-6

Figure II-1

Nominal and real (2004) values of U.S. private non-residential construction spending, by months,

January 2004-May 2007

Note.--Monthly values are seasonally adjusted annual rates of construction spending.

Source: U.S. Census Bureau, Manufacturing, Mining and Construction Statistics, Construction Spending, historical

and current data available at http://www.census.gov, and Bureau of Economic Analysis National Economic Accounts,

National Income and Product Accounts Table 1.1.4–Price Indexes for Gross Domestic Product for Gross Private

Domestic Investment: Fixed Investment: Nonresidential: Structures, available at http://www.bea.gov/bea

U.S. producers and importers provided a mix of responses when reporting how U.S. demand for

circular welded pipe has changed since January 1, 2004.15 Two of the 19 responding U.S. producers did

not know if U.S. demand changed, while 4 producers indicated that U.S. demand had not changed. Five

of the 23 responding U.S. importers did not know if U.S. demand changed and 1 importer indicated that

U.S. demand had not changed. Responses of the 13 remaining U.S. producers and 17 remaining U.S.

importers, which indicated that some change had occurred, are shown in the following tabulation by the

number of responses for each type of response and any comments that the responding firms reported.

* * * * * * *

Based on available information, U.S. users/consumers of circular welded pipe are likely to

respond to changes in the price of circular welded pipe with moderately small changes in their purchases

of circular welded pipe, such that U.S. demand is likely price inelastic.16 The main contributing factor to
17 U.S. producer and importer questionnaire responses, sections IV-B-18 and III-B-17, respectively. The

producers and importers were requested to provide examples of the top two economic substitutes for circular welded

pipe and this request was preceded by the following explanation: “Substitution in demand refers to products that can,

based on market price considerations and consumer/industrial user preferences/technical requirements, reasonably be

expected to substitute for each other when the price of one product changes vis-a-vis the price of the other

product–some consumers/ industrial users may require greater price changes than others before they switch among

the alternative products.”

II-7

this level of responsiveness of demand is the relatively low cost share, whereas the existence of some

substitute products tends to enhance the responsiveness of demand. 

Substitute Products

Four of 15 responding U.S. producers and 5 of 14 responding U.S. importers reported that no

substitutes exist for circular welded pipe, whereas the remaining 11 U.S. producers and 9 U.S. importers

identified substitutes for circular welded pipe.17 The number of firms responding for each reported

substitute and associated application(s) are shown in table II-1.

Table II-1

Substitute products: Substitutes for circular welded pipe in the U.S. market, by products, number

of reporting firms, and application(s)

Substitute products

U.S.

producers

U.S.

importers

Total

number of

responses Applications

Angles, channels, steel

beams 2 - 2 Structural uses, trusses

API line pipe 2 2 4

Low pressure gas and oil

conveyance; sprinkler pipes,

plumbing, fencing, structural uses

Barbed wire - 1 1 Fencing and corrals

Block 1 - 1 Fencing

Copper pipe 1 - 1 Low-pressure fluid conveyance

Ductile iron 1 - 1 Water lines

Fiber glass tubing 1 - 1 Conveyance of liquids

Ornamental tubing/iron 1 1 2 Fence

Plastic/PVC pipe and

tubing 4 6 10 Plumbing

Seamless pipe 1 3 4 Gas, water, and oil conveyance

Wood 1 2 3 Fence

Note.–Some firms responded for more than one substitute product.

Source: Compiled from data submitted in response to Commission questionnaires.
18 U.S. producer and importer questionnaire responses, sections IV-B-18c and III-B-17c, respectively.

19 U.S. producer and importer questionnaire responses, sections IV-B-15 and III-B-15, respectively.

20 Unless the specific uses have substitutes, which for plumbing, sprinkler systems, handrails, etc., is unlikely,

the cost of the circular welded pipe in these uses may be more appropriately measured against the cost of the total

project (petitioners’ postconference brief, p. 6).

21 U.S. producer and importer questionnaire responses, sections IV-B-17 and III-B-16, respectively.

22 Respondent Chinese producers and exporters’ postconference brief, pp. 35-39.

II-8

Four of five responding U.S. producers and three of four responding U.S. importers reported that

relative price changes in substitutes vis-a-vis circular welded pipe would result in some substitution to the

lower priced product(s), and that the time lag for such switching would vary by product and end use.18

The remaining responding U.S. producer and importer indicated that relative price differences would not

affect the price or quantity of circular welded pipe.

Cost Share

As noted earlier, circular welded non-alloy steel pipe is used in residential and non-residential

construction applications. Based on useable responses of four responding U.S. producers and eight

responding U.S. importers, cost shares of circular welded pipe were reported for 6 types of uses.19

Circular welded pipe reportedly accounted for 30-80 percent of the total cost of installing fences and

corrals, for 20 percent of the cost of installing handrails, for 20-80 percent of installing various plumbing

systems, for 30 percent of the cost of installing sprinkler systems, for 20-30 of the cost of structural

applications, and for 20 percent of the cost of installing water wells. Many of these uses constitute

portions of larger building projects, such as an entire building, and, therefore, likely represent a much

smaller share of the total project.20

Foreign Demand

U.S. producers were requested in their questionnaire responses to comment on demand for

circular welded pipe outside of the United States since January 1, 2004.21 Seven of 13 responding U.S.

producers and 8 of 20 responding U.S. importers did not have information relating to foreign demand, 2

other U.S. producers and 1 other U.S. importer reported that foreign demand for circular welded pipe had

not changed during this period, while the remaining 4 U.S. producers and 11 U.S. importers reported

some change in foreign demand. These latter 15 firms and any comments are shown by three categories

of demand change that they reported–increased, decreased, or fluctuated--in the following tabulation.

* * * * * * *

In addition respondents cited reports of rapid future growth in spending in factories and industrial

buildings, housing construction, and factory equipment in several countries, including China, the Middle

East, India, and Russia.22 Demand for circular welded pipe is heavily influenced by economic activity in

these sectors.

SUBSTITUTABILITY ISSUES

The degree of substitution in demand between circular welded pipe produced in the United States

and that imported from China depends upon such factors as relative prices, conditions of sales (order lead

times, payment terms etc.), purchaser supply requirements, and product differentiation. Product
23 U.S. producer and importer questionnaire responses, sections IV-B-14 and III-B-14, respectively.

24 E-mail from ***, July 3, 2007.

25 Respondent Chinese producers and importers’ postconference brief, p.15. See also Circular Welded NonAlloy Steel Pipe from China, Inv. No. TA-421-6, USITC Publication 3807, October 2005, p. V-9 n.11 (U.S.

producers estimate “Buy American” coverage at 5-10 percent).

26 U.S. producer and importer questionnaire responses, sections IV-B-19 and III-B-18, respectively.

II-9

differentiation depends on factors such as the range of products, quality (grade standards, defect rates,

etc.), availability, reliability of supply, product services, and the market perception of these factors. 

Based on the reported information in these investigations, there appears to be a relatively high degree of

substitution in demand between circular welded pipe produced domestically and that imported from

China.

U.S. producers and importers of the subject circular welded pipe were requested in their

questionnaire responses to describe and significant changes in the product range or marketing of circular

welded pipe in the United States since January 2004.23 Seventeen of 19 responding U.S. producers and

20 of 24 responding U.S. importers reported no changes, while the 2 remaining producers and 4

remaining importers reported that changes had occurred. The two U.S. producers and three of the four

importers provided some comments. ***, a U.S. producer, reported that the Chinese impact was first felt

the hardest on the West Coast, which reportedly drove the firm out of this market. ***, another U.S.

producer, reported that concerted efforts are being made through the manufacturing trade association to

increase demand at the design and engineering level by focusing efforts at the major engineering

universities. ***, a U.S. importer, asserted that the Chinese pipe has been increasingly accepted over the

past three years, mainly due to improvements in quality and price, while the U.S. steel industry reportedly

has been forced to improve on productivity to lower its price, thereby providing for a win-win situation

for U.S. consumers. ***, a U.S. importer, reported that the biggest change it has seen is the overall

confidence of its customers in the Chinese quality and reliability. In the past three years, according to

***, its two main supplying Chinese mills have proven to be legitimate long-term suppliers to its U.S.

customers, such that customers request these mills specifically when they buy from ***. ***, a U.S.

importer, asserted that U.S. producers have been competing with the Chinese products, therefore,

decreasing the firm’s margin.

In addition to questionnaire responses, *** asserted that *** has developed and obtained approval

for lighter-walled fencing pipe (SS 30) that competes with the heavier walled Chinese schedule 40 or SS

40 for fence pipe.24 *** also asserted that *** has approval to sell lighter-walled pipe for sprinkler

applications than that imported from China. According to ***, these producers charge a premium for the

lighter-walled pipe, because of the higher strength steel needed to reduce the wall thickness; the

premiums reportedly range from $***-$*** per ton, or *** percent of the price.

The respondents asserted that 10-15 percent of the U.S. market for circular welded pipe is subject

to “Buy America” policies, especially non-residential construction projects undertaken by governments,

such that the imported products from China cannot compete for this segment of the market.25

Factors Affecting Sales and Purchases

The U.S. producers and importers of circular welded pipe were requested in their questionnaires

to report on the extent of interchangeability (products from different countries physically capable of being

used in the same applications) of circular welded pipe produced domestically, imported from China, and

imported from third countries.26 They were also asked to report the extent of any non-price differences
27 U.S. producer and importer questionnaire responses, sections IV-B-20 and III-B-19, respectively. Nonprice

factors referred to in the questionnaire request included quality, availability, transportation network, product range,

and technical support, but nonprice factors were not necessarily restricted to only these factors.

II-10

that would affect sales in the U.S. market among these various sources of circular welded pipe.27

Responses of the U.S. producers and importers regarding the degree of interchangeability between

domestic and imported circular welded pipe are summarized in table II-2, and their responses regarding

differences other than price affecting competition are summarized in table II-3. U.S. producers and

importers were also requested in their questionnaires to provide any comments where products are

sometimes or never interchangeable and where nonprice factors were always or frequently significant in

competition between the domestic and imported circular welded pipe. These comments are included in

the text.

For responses regarding the degree of interchangeability, 18 U.S. producers of circular welded

pipe and 19 U.S. importers of the Chinese products reported the requested information (table II-2). U.S.

producers most frequently asserted that circular welded pipe produced in the United States, imported from

China, and imported from third countries was always interchangeable among each other; whereas U.S.

importers asserted most frequently that the circular welded pipe from these sources was frequently

interchangeable. One U.S. producer, ***, provided an additional response, asserting that some endusers

cannot use imported products.

Table II-2

Circular welded pipe: Perceived degree of interchangeability of circular welded pipe produced in

the United States, imported from China, and imported from third countries and sold in the U.S.

market

Country pair

Number of U.S. producer

responses1

Number of U.S. importer

responses2

A F S N OA F S N O

United States vs.--

 China 12 4 1 - - 5 9 4 1 -

 Third countries 11 5 1 - - 7 10 2 1 -

China vs.--

 Third countries 11 2 1 - - 5 7 4 1 -

 1 One U.S. producer, ***, specified the following third country suppliers to the U.S. market–India, Mexico,

Russia, Korea, Taiwan, and Turkey; the other responding producers did not specify specific third countries.

 2

 Three U.S. importers of circular welded pipe from China, ***, specified the following third country suppliers to

the U.S. market–Guatemala, India, Indonesia, Malaysia, Oman, Philippines, Romania, South Africa, Korea,

Taiwan, Thailand, Turkey, and Vietnam; the other responding importers did not specify specific third countries.

Note.--A = Always, F = Frequently, S = Sometimes, N = Never, O = No familiarity.

Source: Compiled from data submitted in response to Commission questionnaires.

For responses regarding differences in factors other than price affecting competition, 18 U.S.

producers of circular welded pipe and 16 U.S. importer of the Chinese products reported the requested

information (table II-3). The responding U.S. producers asserted most frequently that differences in

nonprice factors among circular welded pipe produced in the United States, imported from China, and

imported from third countries were sometimes or never significant among sales of the domestic and
II-11

imported products, whereas the responding U.S. importers were divided in characterizing such factors as

always, frequently, sometimes, and never significant. Three U.S. producers and three U.S. importers

provided additional comments. ***, a U.S. producer, reported that availability and quality are worth

maybe 5-7 percent; unless the job is specified “domestic-only,” the products are all acceptable. ***, a

U.S. producer, reported that product is generally produced to specification, such that, when the Chinese

material is stocked at the port, according to the firm, there is little to no difference in factors other than

lower price of Chinese imports. ***, another U.S. producer, reported that transportation time and quality

are major factors other than price.

Table II-3

Circular welded pipe: Perceived importance of differences in factors other than price between

circular welded pipe produced in the United States, imported from China, and imported from third

countries and sold in the U.S. market

Country pair

Number of U.S. producer

responses1

Number of U.S. importer

responses2

A F S N OA F S N O

United States vs.--

 China 2 - 8 8 - 3 3 5 4 -

 Third countries 1 - 8 8 - 1 4 6 4 -

China vs.--

 Third countries 2 - 3 9 - - 5 4 3 -

 1 Two U.S. producers, ***, specified the following third country suppliers to the U.S. market–India, Mexico,

Russia, Korea, Taiwan, Thailand, and Turkey; the other responding producers did not specify specific third

countries.

 2

 Four U.S. importers of circular welded pipe from China, ***, specified the following third country suppliers to

the U.S. market–Germany, Guatemala, Greece, India, Japan, Oman, Korea, and Taiwan; the other responding

importers did not specify specific third countries.

Note.--A = Always, F = Frequently, S = Sometimes, N = Never, O = No familiarity.

Source: Compiled from data submitted in response to Commission questionnaires.

***, a U.S. importer of circular welded pipe from China, Guatemala, and India, asserted that

customers perceive that the products imported from China, Guatemala, and India are generally of a lower

quality than U.S. products. According to the firm, delivery times of the imported products also are

perceived as much less reliable (and extended). *** also asserted that import mills tend to offer limited

product ranges and technical support.

***, a U.S. importer of circular welded pipe from China, asserted that U.S. quality, availability,

and limited damage are much better than those for the Chinese products; whereas, for the same factors,

products from Oman, Korea, and Taiwan have some differences vis-a-vis the U.S.-produced products, but

less than those from China.

***, a U.S. importer of circular welded pipe from China, asserted that the U.S. material is better

than Chinese material, and U.S. producers have better lead times than Chinese producers, who require one

month to ship from China. The firm also asserted that the quality of products from India and other thirdcountry sources is worse than U.S. producers’ quality, whereas there are no differences in quality between

the U.S.-produced products and those produced in Japan or Europe.

III-1

PART III: U.S. PRODUCERS’ PRODUCTION, SHIPMENTS, AND

EMPLOYMENT

The Commission analyzes a number of factors in making injury determinations (see 19 U.S.C. §§

1677(7)(B) and 1677(7)(C)). Information on the alleged margin of dumping and the alleged subsidies

was presented earlier in this report and information on the volume and pricing of imports of the subject

merchandise is presented in Parts IV and V. Information on the other factors specified is presented in this

section and/or Part VI.

U.S. PRODUCERS

The Commission sent producer questionnaires to all firms identified in the petition as domestic

producers of circular welded pipe and to other domestic firms identified by public sources as producers of

welded pipe (including standard and line pipe and structural tubing). Twenty firms that are estimated to

account for more than 90 percent of U.S. production of circular welded pipe during 2006 provided

responses to the Commission’s producer questionnaire.

Presented in table III-1 is a list of current domestic circular welded pipe producers, each

company’s position on the petition, production locations, related and/or affiliated firms, and their share of

2006 domestic production of circular welded pipe. Three producers, Wheatland, Allied, and Bull Moose,

together accounted for approximately *** percent of reported 2006 production of circular welded pipe.

Table III-1

Circular welded pipe: U.S. producers, positions on the petition, U.S. production locations, related

and/or affiliated firms, and shares of 2006 reported U.S. production of circular welded pipe

Firm name

Position on

petition

U.S. production

locations Related and/or affiliated firms

Share of

production

(percent)

Allied Petitioner

Harvey, IL

Philadelphia, PA

De Pere, WI

Pine Bluff, AR

Phoenix, AZ Tyco International (US)1 ***

American Support Birmingham, AL None ***

Atlas Support Chicago, IL John Maneely Co. (US)1 2 ***

Bull Moose Support Chesterfield, MO Caparo Industries PLC (UK)1 ***

CSI Support Fontana, CA

JFE (US)3

Rio Doce LTD (US)3 ***

Hanna Support

Pekin, IL

Northport, AL Hanna Holdings (US)1 ***

IPSCO Petitioner

Camanche, IA

Blytheville, AR

IPSCO Inc. (Canada)1 4 IPSCO has

agreed to be acquired by SSAB (Svenskt

Stal AB) of Sweden ***

Leavitt Tube Support Chicago, IL None ***

Lone Star Petitioner Dallas, TX

Lone Star Technologies (US)5

U.S. Steel Corp. (US)6 ***

Maruichi Support Santa Fe Springs, CA 

Maruichi Steel Tube Co., Ltd. (Japan)7

Metal One Corp. (Japan)8 ***

Table continued on the following page.
III-2

Table III-1--Continued

Circular welded pipe: U.S. producers, positions on the petition, U.S. production locations, related

and/or affiliated firms, and shares of 2006 reported U.S. production of circular welded pipe

Firm name

Position

on

petition

U.S. production

locations Related and/or affiliated firms

Share of

production

(percent)

Maverick ***

Blytheville, AR

Hickman, AR

Counce, TN Tenaris S.A. (Luxemburg)1 9 ***

Northwest Petitioner

Portland, OR

Houston, TX

Atchison, KS None ***

Sharon Tube Support Sharon, PA John Maneely Co. (US)1 2 ***

Southland Tube *** Birmingham, AL None ***

Stupp Support Baton Rouge, LA Stupp Bros., Inc. (US)1 ***

Texas Tubular Support Lone Star, TX None ***

Tex-Tube *** Houston, TX

Visteel/Vi Capital (US)1

Tuberia Nacional (Mexico)10

S&P11 ***

U.S. Steel12 Support McKeesport, PA12 Lone Star Technologies, Inc. (US)13 ***

Western Tube Petitioner Long Beach, CA

Sumitomo Metal Industries, Ltd. (Japan)14

Sumitomo Corp. (Japan)

Sumitomo Corp. of America (US)

Sumikin Bussan International Corp. (US)

Sumitomo Pipe & Tube Co., Ltd. (Japan) ***

Wheatland Petitioner

Sharon, PA

Wheatland, PA

Warren, OH 

Chicago, IL 

Little Rock, AR

John Maneely Co. (US)2

DBO Holdings (US)1 ***

 1 Parent.

 2

 Atlas, Sharon Tube, and Wheatland Tube are sister companies. 

 3

 ***-percent owner.

 4

 Foreign producer and/or exporter.

 5

 Parent through June 14, 2007.

 6

 Parent after June 14, 2007.

 7

 ***-percent owner and/or exporter.

 8

 ***-percent owner.

 9

 Tenaris S.A. owns Maverick ***-percent directly and ***-percent through: Siderca S.A.I.C., Argentina (which is ***-percent

Tenaris S.A. and ***-percent TGS Uruguay), a Tenaris subsidiary, ***-percent and TAMSA S.A., Mexico (which is ***-percent Tenaris

S.A.

 10 Sister company and exporter.

 11 Sister company and importer.

 12 Production by Camp-Hill Corp. takes place under a toll agreement with U.S. Steel.

 13 Wholly owned subsidiary as of June 14, 2007.

 14 Extent of ownership is as follows: Sumitomo Metal Industries, Ltd. (Japan), *** percent; Sumitomo Corp. (Japan), *** percent;

Sumitomo Corp. of America (US), *** percent; Sumikin Bussan International Corp. (US), *** percent; and Sumitomo Pipe & Tube Co.,

Ltd. (Japan), *** percent.

Note.–Because of rounding, shares may not total 100.0 percent.

Source: Compiled from data submitted in response to Commission questionnaires.
III-3

U.S. CAPACITY, PRODUCTION, AND CAPACITY UTILIZATION

U.S. producers’ capacity, production, and capacity utilization data for circular welded pipe are

presented in table III-2. These data show a decline in the capacity to produce circular welded pipe of 10.0

percent from 2004 to 2006. Likewise, production of circular welded pipe fell overall by 8.2 percent from

2004 to 2006. Capacity utilization rose by 0.9 percentage point from 2004 to 2005, and by 0.2 percentage

point in 2006 to 56.3 percent. The overall decline in capacity over the period for which data were

collected reflects a steady shift in capacity away from standard and structural pipe by producers of energy

tubulars (line pipe and OCTG) and the closure of the former Sawhill facility by Wheatland in mid-2006.

Table III-2

Circular welded pipe: 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)

1 2,662,522 2,544,494 2,397,006 652,041 592,064

Production (short tons) 1,470,770 1,428,990 1,350,551 365,202 387,472

Capacity utilization (percent) 55.2 56.2 56.3 56.0 65.4

 1 The majority of U.S. producers reported capacity (production capability) based on operating 120-168 hours per

week, 52 weeks per year; however, five firms reported capacity based on operating fewer hours per week. ***

reported capacity based on operating *** hours per week, respectively.

Source: Compiled from data submitted in response to Commission questionnaires.

In the Commission’s questionnaire, U.S. producers were asked if they had experienced any plant

openings, relocations, expansions, acquisitions, consolidations, closures, or prolonged shutdowns because

of strikes or equipment failure; curtailment of production because of shortages of materials; or any other

change in the character of their operations or organization relating to the production of circular welded

pipe since January 1, 2004. Eleven firms reported such changes; their responses to this question are

presented in table III-3.

Table III-3

Circular welded pipe: U.S. producers’ comments concerning plant openings, relocations,

expansions, acquisitions, consolidations, closures, or prolonged shutdowns

* * * * * * *

*** of the U.S. producers of circular welded pipe that responded to the Commission’s

questionnaire reported the production of other products on the same equipment and machinery and using

the same production and related workers employed in the production of circular welded pipe. In the

aggregate, the producers reported the following products that were produced using the same production

and related workers employed to produce circular welded pipe and those products’ shares of total plant

production in 2006: small/medium line pipe (16.8 percent); large diameter line pipe (5.6 percent); OCTG

(21.4 percent); and other products (31.6 percent). Firms were also asked to provide total annual

production and capacity to produce all products. Aggregate data for the firms are presented in table III-4.
 1

 Transfers to related companies and internal consumption are accounted for by *** firms, ***.

 2

 Export shipments were reported by ***.

III-4

Table III-4

Circular welded pipe: U.S. producers’ total plant capacity and production, by products, 2004-06,

January-March 2006, and January-March 2007

Item

Calendar year January-March

2004 2005 2006 2006 2007

Quantity (short tons)

Total plant capacity1 7,305,572 7,344,644 7,380,550 1,877,054 1,870,000

Production:

Subject circular welded pipe 1,352,192 1,313,239 1,251,758 338,884 362,398

Small/medium line pipe2 657,305 695,849 853,877 192,102 202,858

Large diameter line pipe3 148,726 251,360 284,142 50,309 113,532

OCTG 840,448 1,093,893 1,087,633 264,922 215,066

Other4 1,564,132 1,588,262 1,606,072 391,578 365,062

Total, all products 4,562,803 4,942,603 5,083,482 1,237,795 1,258,916

Total plant capacity utilization (percent) 62.5 67.3 68.9 65.9 67.3

 1 The majority of U.S. producers reported capacity (production capability) based on operating 120-168 hours per

week, 52 weeks per year; however, five firms reported capacity based on operating fewer hours per week. ***

reported capacity based on operating *** hours per week, respectively.

 2

 Welded line pipe 16 inches or less in outside diameter (excluding dual-stenciled pipe used in

standard/structural applications).

 3

 Welded line pipe greater than 16 inches in outside diameter.

 4

 Other products include the following: rigid conduit, EMT, mechanical tubing, electrical conduit, mechanical

rounds and shapes, Gal-Z rounds and shapes, welded standard pipe greater than 16 inches OD, special fabrication

casing, ASTM A500 Grade A, Grade B square and rectangular tube, drawn over mandrel (“DOM”) tubing, hot

finished tubing (“HFT”), squares and rectangles 1 inch to 16 inch OD, AWWA and ASTM pipe in 18 to 24 inch OD,

and mill crop ends.

Source: Compiled from data submitted in response to Commission questionnaires.

U.S. PRODUCERS’ SHIPMENTS

Data on domestic producers’ shipments of circular welded pipe are presented in table III-5. 

Domestic commercial sales accounted for *** percent of U.S. producers’ U.S. shipments of circular

welded pipe and approximately *** percent of U.S. producers’ total shipments during 2004-06. The

domestic producers reported about *** percent of total U.S. shipments as transfers of circular welded pipe

to related firms and approximately *** percent of total U.S. shipments as internal consumption during

2004-06.1

Exports of circular welded pipe were reported by eight domestic circular welded pipe producers.2

These exports accounted for slightly more than 2 percent of U.S. producers’ total shipments during 2004-

06. All eight producers reported Canada as their primary export market, although Mexico was also cited

by one domestic producer.
III-5

While the aggregate trend in commercial shipments is downward during 2004-06, *** firms (***)

reported commercial shipment increases in 2006.

Table III-5

Circular welded pipe: U.S. producers’ shipments, by types, 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 1,423,859 1,405,502 1,352,176 348,906 365,140

Export shipments 35,710 37,571 30,742 7,203 10,561

Total shipments 1,459,569 1,443,073 1,382,918 356,109 375,701

Value (1,000 dollars)

Commercial shipments *** *** *** *** ***

Internal consumption *** *** *** *** ***

Transfers to related firms *** *** *** *** ***

U.S. shipments 1,251,328 1,379,367 1,328,602 321,377 337,465

Export shipments 33,898 37,187 28,189 6,996 8,931

Total shipments 1,285,226 1,416,554 1,356,791 328,373 346,396

Unit value (per short ton)

Commercial shipments $*** $*** $*** $*** $***

Internal consumption *** *** *** *** ***

Transfers to related firms *** *** *** *** ***

U.S. shipments 879 981 983 921 924

Export shipments 949 990 917 971 846

Total shipments 881 982 981 922 922

Table continued on next page.
III-6

Table III-5--Continued

Circular welded pipe: U.S. producers’ shipments, by types, 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 97.6 97.4 97.8 98.0 97.2

Export shipments 2.4 2.6 2.2 2.0 2.8

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 97.4 97.4 97.9 97.9 97.4

Export shipments 2.6 2.6 2.1 2.1 2.6

Total shipments 100.0 100.0 100.0 100.0 100.0

Note.–Because of rounding, figures may not add to the totals shown.

Source: Compiled from data submitted in response to Commission questionnaires.

*** firms reported involvement in a toll agreement regarding the production of circular welded

pipe. *** reported a toll agreement with ***, and *** reported toll agreements with ***. *** firm

reported production of circular welded pipe in a foreign trade zone.

U.S. PRODUCERS’ INVENTORIES

Data collected in these investigations on domestic producers’ end-of-period inventories of

circular welded pipe are presented in table III-6. U.S. producers’ inventories, which were equivalent to

between 12.6 and 13.5 percent of U.S. producers’ total shipments during 2004-06, were relatively stable

between 2004 and 2005, then declined in 2006. U.S. producers’ inventories as a percent of total

shipments were also lower in January-March 2007 than in January-March 2006. *** firms, ***, together

accounted for *** percent of the inventories held during the period for which data were collected.
 3

 ***’s imports *** during the period for which data were collected were as follows: 2004: *** short tons; 2005: 

*** short tons; 2006: *** short tons; interim January-March 2006: *** short tons; interim January-March 2007: ***

short tons. 

III-7

Table III-6

Circular welded pipe: U.S. producers’ end-of-period inventories, 2004-06, January-March 2006, and JanuaryMarch 2007

Item

Calendar year January-March

2004 2005 2006 2006 2007

Inventories (short tons) 192,684 194,451 174,107 203,345 185,525

Ratio of inventories to production (percent) 13.1 13.6 12.9 13.9 12.0

Ratio of inventories to U.S. shipments (percent) 13.5 13.8 12.9 14.6 12.7

Ratio of inventories to total shipments (percent) 13.2 13.5 12.6 14.3 12.3

Source: Compiled from data submitted in response to Commission questionnaires.

U.S. PRODUCERS’ IMPORTS AND PURCHASES

*** U.S. producer, ***, reported direct imports of circular welded pipe ***, during the period for

which data were collected.3

 Data concerning U.S. producers’ purchases of imported and domestically

produced circular welded pipe are shown in table III-7. *** reported purchases of circular welded pipe

from importers of product from China, citing purchase/production economies and sales to ***,

respectively. *** reported purchases of circular welded pipe from importers of product from nonsubject

sources, also citing purchase/production economics. *** purchased circular welded pipe from domestic

producers, citing size as the primary purchase factor. *** purchased circular welded pipe from other

sources, citing production plant conveyance usage as the reason for purchase.

Table III-7

Circular welded pipe: Purchases by U.S. producers, 2004-06, January-March 2006, and JanuaryMarch 2007

* * * * * * *

U.S. EMPLOYMENT, WAGES, AND PRODUCTIVITY

The U.S. producers’ aggregate employment data for circular welded pipe are presented in table

III-8. In the aggregate, U.S. circular welded pipe producers reported an overall decline of 14.9 percent in

the number of production and related workers employed in the manufacture of circular welded pipe

during 2004-06. However, *** firms (***) reported increases in the number of production and related

workers during the entire period for which data were collected. Likewise, the number of hours worked by

these employees fell by 14.4 percent and wages paid fell by 12.3 percent during the same time period. 

Hourly wages paid and productivity increased in 2005 and declined in 2006, while unit labor costs

decreased overall from 2004 to 2006. In January-March 2007, the number of PRWs was higher than in

January-March 2006, largely reflecting higher employment by ***, but hours worked were stable. 

Higher productivity offset higher reported wage rates, resulting in lower unit labor costs in JanuaryMarch 2007 than in January-March 2006.
III-8

Table III-8

Circular welded pipe: U.S. producers’ employment-related indicators, 2004-06, January-March

2006, and January-March 2007

Item

Calendar year January-March

2004 2005 2006 2006 2007

Production and related workers (PRWs) 2,449 2,220 2,084 2,068 2,167

Hours worked by PRWs (1,000 hours) 4,540 4,079 3,888 1,012 1,007

Wages paid to PRWs (1,000 dollars) 89,038 82,221 78,048 20,463 21,236

Hourly wages $19.61 $20.16 $20.07 $20.22 $21.09

Productivity (short tons produced per 1,000 hours) 324.0 350.4 347.4 360.9 384.9

Unit labor costs (per short ton) $60.54 $57.54 $57.79 $56.03 $54.81

Source: Compiled from data submitted in response to Commission questionnaires.
IV-1

PART IV: U.S. IMPORTS, APPARENT U.S. CONSUMPTION, 

AND MARKET SHARES

U.S. IMPORTERS

In response to Commission questionnaires sent to importers in these investigations, 29 firms

supplied usable data. Presented in table IV-1 are the responding 29 U.S. importers and 2006 coverage

based on responses to Commission questionnaires.

 

Table IV-1

Circular welded pipe: U.S. importers, locations, related and/or affiliated firms, and shares of

reported U.S. imports in 2006

Firm name Location(s) Related and/or affiliated firms

Share of 

2006

reported U.S.

imports 

(percent)

ArcelorMittal Chicago, IL

Arcelor Mittal1

Arcelor Mittal P&T Canada2

Mittal Steel Poland2

Mittal Steel Ostrava2

Mittal Steel Jakl Karvina2

Mittal Steel Iasi2

Mittal Steel Galati2

Mittal Steel Temirtau2

Mittal Steel Aktau2 ***

B & K

Industries, Inc.

Elk Grove Village,

IL

Mueller Industries, Inc.1

Mueller Comercial de Mexico3 ***

Commercial

Metals Irving, TX None. ***

DSL Houston, TX None. ***

Duferco Matawan, NJ

Nina Finance1

Duferco SA3

Tubac SA2 ***

Hyundai Gardena, CA Hyundai Corporation1 ***

James Steel Torrance, CA None. ***

IPSCO Camanche, IA IPSCO Inc.1

 ***

Kumkang Orange, CA Kumkang Industries, Co., Ltd. (*** percent)2 ***

Macsteel 

27 locations in

CA, GA, HI, IL, IN,

MI, NC, NH, NY,

OH, OK, PA, SC,

TN, TX, and VA

Macsteel Global B.V.1

Asoma3

Macsteel Pipe & Tube2 ***

MAN Ferrostaal Houston, TX

MAN Capital Corp.1

Ferrostaal GmbH3 ***

Table continued on the next page.
IV-2

Table IV-1--Continued

Circular welded pipe: U.S. importers, locations, related and/or affiliated firms, and shares of

reported U.S. imports in 2006

Firm name Location(s) Related and/or affiliated firms

Share of 2006

reported U.S. 

imports 

(percent)

MC Tubular Houston, TX Metal One Holding America, Inc.1 ***

MinMetals Pomona, CA China Minmetals Group Corp.1 ***

Mueller San Angelo, TX None. ***

MX Walnut, CA None. ***

Okaya 

Houston, TX

Torrance, CA Okaya & Co., Ltd.1 ***

Oxbow Pleasant Hill, CA None. ***

Pincoffs Houston, TX None. ***

Pusan Santa Fe Springs, CA SeAH Steel Corp. (*** percent)2 ***

SDB Trade Pasadena, TX SDB Trade, LLC (*** percent) ***

S&P Laredo, TX

VI Industries, Inc.1

Tuberia Nacional3

Tex-Tube4 ***

Stemcor New York, NY Stemcor Holdings, Ltd.1 ***

Sumitomo Houston, TX Sumitomo Corporation1 ***

Sunbelt Group Houston, TX

Sunbelt Group, Inc. (*** percent)

Femet Enterprises Corp. (*** percent) ***

Tata New York, NY

Tata Steel Limited1

Corus3

Tata Steel Tubes Division2 ***

Toyota Tsusho Houston, TX Toyota Tsusho Corp.1 ***

Tusco Tuscaloosa, AL None. ***

Uniwire New York, NY None. ***

Western

International Portland, OR Forest City Trading Group1 ***

 Total 100.0

 1 Parent.

 2

 Foreign producer.

 3

 Importer/exporter; sister company.

 4

 Domestic producer; sister company.

Note.–Because of rounding, figures may not add to the totals shown.

Source: Compiled from data submitted in response to Commission questionnaires.
 1

 Petition, exhibit 8, as modified by Petitioners’ postconference brief, exhibit 22.

IV-3

U.S. IMPORTS

U.S. imports are based on official import statistics of Commerce, as modified to include dualstenciled line pipe used in standard and structural pipe applications (based on questionnaire responses)

and to exclude mechanical tubing (based on Statistics Canada data) from Canada (table IV-2).1

Table IV-2

Circular welded pipe: 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 278,191 391,007 716,184 122,139 165,088

All other sources 727,282 571,490 616,007 192,672 97,515

Total 1,005,473 962,497 1,332,191 314,811 262,603

Value (1,000 dollars)

1

China 161,926 252,849 419,960 76,087 105,223

Nonsubject sources 492,462 467,208 466,588 138,668 83,521

Total 654,388 720,057 886,548 214,755 188,744

Unit value (per short ton)

1

China $582 $647 $586 $623 $637

Nonsubject sources 677 818 757 720 856

Total 651 748 665 682 719

Share of quantity (percent)

China 27.7 40.6 53.8 38.8 62.9

Nonsubject sources 72.3 59.4 46.2 61.2 37.1

Total 100.0 100.0 100.0 100.0 100.0

Share of value (percent)

China 24.7 35.1 47.4 35.4 55.7

Nonsubject sources 75.3 64.9 52.6 64.6 44.3

Total 100.0 100.0 100.0 100.0 100.0

1

 Landed, duty-paid.

Note.–Because of rounding, figures may not add to the totals shown.

Source: Compiled from official statistics of Commerce, adjusted in accordance with data submitted in response to

Commission questionnaires, Petition, exhibit 8, and Petitioners’ postconference brief, exhibit 22.
 2

 For the most recent 12-month period prior to the filing of the petition for which adjusted data are available

(April 2006 - March 2007), imports of circular welded pipe from China accounted for 59.3 percent of total imports

of circular welded pipe.

 3

 Staff notes that this is a conservative estimate, as Korea and Mexico traditionally have been suppliers of dualstenciled line pipe.

IV-4

The U.S. import data for China show increases in both quantity and value in each year between

2004 and 2006 and in a comparison of the January-March 2006-07 periods as well.2

 The unit value of

circular welded pipe imported from China increased irregularly from $582 per short ton in 2004 to $586

per short ton in 2006, peaking in 2005 at $647 per short ton. The U.S. import data for all other sources

show overall declines in both quantity and value over the period for which data were collected.

Data for commercial U.S. shipments of imports from China, as reported in responses to

Commission questionnaires, are presented in the following tabulation:

Item 2004 2005 2006 Jan.-Mar. 

2006

Jan.-Mar. 

2007

Commercial U.S. shipments of imports from China:

 Quantity (short tons) 165,541 250,731 683,066 116,136 191,034

 Value ($1,000) 113,777 181,256 441,393 75,079 132,758

 Unit value (dollars per short ton) $687 $723 $646 $646 $695

The questionnaire data for commercial U.S. shipments of imports from China show increases in

both quantity and value in each year between 2004 and 2006 and in a comparison of the January-March

2006-07 periods as well. The average unit value of commercial U.S. shipments of imports of circular

welded pipe from China decreased irregularly from 2004 to 2006; however, the average unit value of such

shipments was nearly $50 per short ton higher in January-March 2007 than in January-March 2006. 

Nonsubject imports of circular welded pipe, both covered and not covered by countervailing or

antidumping duty order or suspension agreement, are presented in table IV-3. Seven countries - Canada,

India, Korea, Mexico, Taiwan, Thailand, and Turkey - consistently accounted for approximately sixtenths of nonsubject imports during 2004-06.3
IV-5

Table IV-3

Circular welded pipe: U.S. imports from nonsubject countries, by sources, 2004-06, JanuaryMarch 2006, and January-March 2007

Source

Calendar year January-March

2004 2005 2006 2006 2007

Quantity (short tons)

Covered by order or suspension agreement

Brazil 1,428 1,784 570 3 159

India 81,515 38,416 47,856 21,079 1,923

Korea 49,670 34,867 44,348 12,713 7,430

Mexico 46,785 72,601 74,808 22,075 15,194

Taiwan 40,713 20,369 43,038 14,963 6,139

Thailand 65,787 80,799 77,832 24,608 16,030

Turkey 88,098 40,763 31,797 14,375 2,247

 Total (covered) 373,995 289,600 320,248 109,816 49,123

Not covered by order or suspension agreement

Canada 51,335 51,521 50,561 12,641 12,535

South Africa 23,409 18,317 26,588 11,343 141

Romania 35,123 28,703 24,192 4,246 0

Japan 21,130 25,062 18,453 4,871 4,433

Oman 32,791 16,433 16,112 4,329 1,833

Venezuela 16,509 8,978 15,846 4,601 1,954

Colombia 20,772 25,062 15,463 5,664 1,782

Indonesia 4,215 3,013 9,419 2,096 0

United Arab Emirates 12,457 7,717 6,389 3,747 403

Dominican Republic 2,161 5,008 3,374 1,535 861

Philippines 25,887 13,265 3,265 2,188 4,535

 Subtotal 245,787 203,079 189,662 57,262 28,476

All other sources 36,011 25,580 19,709 4,708 3,081

Dual-stenciled line pipe 71,489 53,231 86,388 20,885 16,835

 Subtotal (not covered) 353,287 281,890 295,758 82,855 48,392

Total nonsubject imports 727,282 571,490 616,007 192,672 97,515

Table continued on next page.
IV-6

Table IV-3--Continued

Circular welded pipe: U.S. imports from nonsubject countries, by sources, 2004-06, JanuaryMarch 2006, and January-March 2007

Source

Calendar year January-March

2004 2005 2006 2006 2007

Value (1,000 dollars)

1

Covered by order or suspension agreement

Brazil 969 1,807 841 7 301

India 51,620 27,768 32,145 14,072 1,841

Korea 30,778 28,524 35,399 9,561 6,517

Mexico 42,343 64,314 61,461 16,817 11,557

Taiwan 22,375 13,005 26,302 8,547 3,851

Thailand 37,075 58,397 52,738 16,370 11,514

Turkey 50,397 27,851 21,087 9,163 1,838

 Total (covered) 235,556 221,666 229,974 74,537 37,419

Not covered by order or suspension agreement

Canada 45,272 45,539 45,362 10,847 11,689

South Africa 13,075 12,531 15,568 6,558 70

Romania 19,773 18,637 14,187 2,580 0

Japan 19,477 35,533 24,665 6,522 5,966

Oman 20,411 11,158 10,470 2,654 1,277

Venezuela 9,753 9,083 13,504 3,695 2,761

Colombia 25,688 20,742 12,719 4,259 1,551

Indonesia 2,281 1,963 5,327 1,159 0

United Arab Emirates 9,009 7,173 5,340 3,213 288

Dominican Republic 1,624 3,097 2,512 1,177 605

Philippines 15,311 9,027 1,863 1,295 3,147

 Subtotal 181,673 174,483 151,516 43,958 27,355

All other sources 32,395 32,241 27,984 6,700 6,565

Dual-stenciled line pipe 42,838 38,817 57,114 13,473 12,182

 Subtotal (not covered) 256,906 245,542 236,614 64,131 46,102

Total nonsubject imports 492,462 467,208 466,588 138,668 83,521

Table continued on next page.
IV-7

Table IV-3--Continued

Circular welded pipe: U.S. imports from nonsubject countries, by sources, 2004-06, JanuaryMarch 2006, and January-March 2007

Source

Calendar year January-March

2004 2005 2006 2006 2007

Unit value (per short ton)

1

Covered by order or suspension agreement

Brazil $679 $1,013 $1,475 $1,888 $1,892

India 633 723 672 668 957

Korea 620 818 798 752 877

Mexico 905 886 822 762 761

Taiwan 550 638 611 571 627

Thailand 564 723 678 665 718

Turkey 572 683 663 637 818

 Total (covered) 630 765 718 679 762

Not covered by order or suspension agreement

Canada $882 $884 $897 $858 $933

South Africa 559 684 586 578 498

Romania 563 649 586 608

Japan 922 1,418 1,337 1,339 1,346

Oman 622 679 650 613 697

Venezuela 591 1,012 852 803 1,413

Colombia 1,237 828 823 752 871

Indonesia 541 652 566 553

United Arab Emirates 723 930 836 857 715

Dominican Republic 751 618 744 766 702

Philippines 591 680 571 592 694

 Subtotal 739 859 799 768 961

All other sources 900 1,260 1,420 1,423 2,131

Dual-stenciled line pipe 599 729 661 645 724

 Subtotal (not covered) 727 871 800 774 953

Total nonsubject imports 677 818 757 720 856

Source: Compiled from official Commerce statistics.
IV-8

APPARENT U.S. CONSUMPTION

Data collected in these investigations concerning apparent U.S. consumption of circular welded

pipe, as shown in table IV-4, are based on U.S. producers’ U.S. shipments of circular welded pipe

provided in response to Commission questionnaires and U.S. imports from official statistics as adjusted to

include dual-stenciled line pipe used in standard and structural applications and to exclude mechanical

tubing from Canada. In terms of quantity, apparent U.S. consumption rose irregularly from 2004 to 2006,

with a downturn in 2005. Overall, apparent U.S. consumption, in terms of quantity, increased by 10.5

percent from 2004 to 2006 and, in terms of value, consumption increased steadily by 16.2 percent during

the same time period. However, apparent U.S. consumption was lower in January-March 2007 than in

January-March 2006.

Table IV-4

Circular welded pipe: U.S. producers’ U.S. shipments, U.S. imports, by sources, and apparent U.S.

consumption, 2004-06, January-March 2006, and January-March 2007

Item

Calendar year January-March

2004 2005 2006 2006 2007

Quantity (short tons)

U.S. producers’ U.S. shipments 1,423,859 1,405,502 1,352,176 348,906 365,140

U.S. imports from--

China 278,191 391,007 716,184 122,139 165,088

Nonsubject countries 727,282 571,490 616,007 192,672 97,515

Total U.S. imports 1,005,473 962,497 1,332,191 314,811 262,603

Apparent U.S. consumption 2,429,332 2,367,999 2,684,367 663,717 627,743

Value (1,000 dollars)

1

U.S. producers’ U.S. shipments 1,251,328 1,379,367 1,328,602 321,377 337,465

U.S. imports from--

China 161,926 252,849 419,960 76,087 105,223

Nonsubject countries 492,462 467,208 466,588 138,668 83,521

Total U.S. imports 654,388 720,057 886,548 214,755 188,744

Apparent U.S. consumption 1,905,716 2,099,424 2,215,150 536,132 526,209

 1 F.o.b. U.S. port of entry.

Note.–Because of rounding, figures may not add to the totals shown.

Source: Compiled from data submitted in response to Commission questionnaires, official statistics of Commerce,

and petitioners’ postconference brief, exhibit 22.
IV-9

U.S. MARKET SHARES

U.S. market share data are presented in table IV-5. The share of subject imports from China

increased from 11.5 percent in 2004 to 26.7 percent in 2006, on the basis of quantity. Conversely, U.S.

producers’ share of the domestic market decreased irregularly from 58.6 percent in 2004 to 50.4 percent

in 2006. Nonsubject import market shares declined throughout 2004-06 as well, and into 2007, while the

U.S. market shares of the domestic industry and imports from China were higher in January-March 2007

than in January-March 2006.

Table IV-5

Circular welded pipe: Apparent U.S. consumption and market shares, 2004-06, January-March

2006, and January-March 2007

Item

Calendar year January-March

2004 2005 2006 2006 2007

Quantity (short tons)

Apparent U.S. consumption 2,429,332 2,367,999 2,684,367 663,717 627,743

Value (1,000 dollars)

Apparent U.S. consumption 1,905,716 2,099,424 2,215,150 536,132 526,209

Share of quantity (percent)

U.S. producers’ U.S. shipments 58.6 59.4 50.4 52.6 58.2

U.S. imports from--

China 11.5 16.5 26.7 18.4 26.3

Nonsubject countries 29.9 24.1 22.9 29.0 15.5

Total U.S. imports 41.4 40.6 49.6 47.4 41.8

Share of value (percent)

U.S. producers’ U.S. shipments 65.7 65.7 60.0 59.9 64.1

U.S. imports from--

China 8.5 12.0 19.0 14.2 20.0

Nonsubject countries 25.8 22.3 21.1 25.9 15.9

Total U.S. imports 34.3 34.3 40.0 40.1 35.9

Source: Compiled from data submitted in response to Commission questionnaires, official statistics of Commerce,

and petitioners’ postconference brief, exhibit 22.
IV-10

RATIO OF U.S. IMPORTS TO U.S. PRODUCTION

Information concerning the ratio of U.S. imports to U.S. production of circular welded pipe is

presented in table IV-6. Subject imports were equivalent to 18.9 percent of U.S. production during 2004. 

This level increased to 27.4 percent during 2005, to 53.0 percent during 2006, and was higher in JanuaryMarch 2007 (42.6 percent) than in January-March 2006 (33.4 percent).

Table IV-6

Circular welded pipe: Ratio of U.S. imports to U.S. production, by sources, 2004-06, JanuaryMarch 2006, and January-March 2007

Item

Calendar year January-March

2004 2005 2006 2006 2007

Ratio of U.S. imports to production (percent)

China 18.9 27.4 53.0 33.4 42.6

Nonsubject countries 49.4 40.0 45.6 52.8 25.2

All countries 68.4 67.4 98.6 86.2 67.8

Source: Compiled from data submitted in response to Commission questionnaires.

COMPARISON OF U.S.-PRODUCED AND IMPORTED CIRCULAR WELDED PIPE

Information concerning the physical attributes of U.S.-produced and imported circular welded

pipe is presented in table IV-7. As shown in that table, the majority of circular welded pipe from all

sources is certified to ASTM specifications, sometimes in conjunction with API specifications. While

imports are largely certified to ASTM A-53, domestically produced circular welded pipe is certified to the

general ASTM A-53 specification, fire suppression specifications, and specific structural specifications. 

Circular welded pipe from all sources is most commonly sold in smaller sizes and is generally sold black,

with substantial minorities sold galvanized. While U.S.-produced circular welded pipe is often sold plain

end, imports are frequently beveled.
IV-11

Table IV-7

Circular welded pipe: U.S. producers’ and subject importers’ U.S. shipments, by certification,

grade, size, end finish, surface finish, and length, by sources, 2006

Item

Share of U.S. shipments (in percent)

of circular welded pipe produced inUnited

States China

All other

sources

By certification:

Stenciled to meet only ASTM specifications 77.1 51.9 58.7

Stenciled to both ASTM & API specifications 9.5 10.2 28.3

Stenciled to proprietary specifications 1.5 3.4 0.7

Not stenciled to any specification 11.3 2.1 0.2

Other1 0.5 32.4 12.0

Total 100.0 100.0 100.0

By grade:

ASTM A-53A *** 48.4 42.0

ASTM A-53B *** 39.2 36.2

 ASTM A-135/795 21.0 0.1 3.2

ASTM A-500/A-252 14.0 1.0 1.4

Other2 30.5 11.3 17.3

Total 100.0 100.0 100.0

By size (outside diameter):

Less than or equal to 4.5" 73.5 47.3 57.4

Greater than 4.5 inches but less than or equal to 10.75" 19.0 41.1 28.8

Greater than 10.75" but less than or equal to 16" 7.4 11.6 13.8

Total 100.0 100.0 100.0

By end finish:

Plain end/square cut 71.7 36.6 25.8

Beveled 20.4 50.5 55.7

Threaded or threaded & coupled 6.7 12.2 17.9

Other3 1.3 0.7 0.6

Total 100.0 100.0 100.0

By surface finish:

Black 70.9 66.8 68.0

Painted 0.0 8.2 5.5

Galvanized 26.0 24.9 26.5

Other4 3.1 0.0 0.0

Total 100.0 100.0 100.0

By length:

Single random lengths (approximately 20 feet) 75.5 (5

) (5)

Double random lengths (approximately 40 feet) 17.0 (5

) (5)

Triple random lengths (approximately 60 feet) 2.1 (5

) (5)

Other6 5.3 (5

) (5)

Total 100.0 (5

) (5)

Footnotes continued on the following page.
IV-12

 1 Domestic producers included the following in the “other” category: fence, 18-24 inch ASTM and API grades; 10 3/4-24 inch

mill crop ends; 10 3/4 inch abrasive resistant pipe; 10 3/4-16 inch API line pipe; A 500; less than 2.875 inch OD. Importers

included the following: API; API/ASTM dual for line pipe application; API/ASTM dual for oil/gas transmission; BS 1387 UL-6 rigid

conduit; ANSI C-80.1 

 2

 Domestic producers included the following in the “other” category: no stencil fence; 18-24 inch ASTM and API grades; API

SL-X-grades; A 513; A 847; API; API dual/GR3; proprietary (C.P.); X46-X52 fence products F1083 and F1043. Importers included

the following: API X42/5LB/ASTM A53B triple or dual grade; ASTM and/or API limited service; BS 1387; A 523 grade A; A587/SW;

UL-6 rigid conduit; ANSI C-80.1; ASTM A53B/ASME SA-5331/AP5LB/X42; A 53-B/API grade (Band/or X42); A 1043; ASTM A513

medium tube. 

 3

 Domestic producers included the following in the “other” category: roll grove; victoria ends. Importers included the following: 

grooved and/or sledged.

 4

 Domestic producers included the following in the “other” category: bare unbolted pipe; UV fence coating. Importers included

structural pipe in this category.

 5

 Not available. 

 6

 Domestic producers included the following in the “other” category: approximately 100 feet. 

Source: Compiled from data submitted in response to Commission questionnaires.
 1

 The reported purchase prices of hot-rolled steel are intended primarily to indicate price trends; specific prices

any buyer pays reportedly will vary due to a number of factors, including volume, distribution issues, specification

variances, surcharges, packaging fees, and other market factors.

V-1

PART V: PRICING AND RELATED INFORMATION

FACTORS AFFECTING PRICING

U.S. prices of circular welded pipe can fluctuate based on demand factors such as overall U.S.

economic activity and sectoral demand fluctuations in sectors such as nonresidential construction and, to

a lesser extent, in residential construction. On the supply side, prices of circular welded pipe also differ

by a number of product specifications, including but not restricted to end finishing (plain or threaded end

with and without coupling) and surface finishing (black or galvanized). In addition, the prices of circular

welded pipe can fluctuate due to competitive pricing and the size of the shipment.

The various forms of circular welded pipe offer multiple performance properties that make

circular welded pipe useful in a wide range of standard pipe applications, such as low-pressure piping in

plumbing, heating, air conditioning, and automatic sprinkler systems; light mechanical applications in

fencing, electrical conduit shells, etc.; and a wide range of structural pipe applications in construction. 

Some alternative input products may substitute for circular welded pipe as relative prices of these

alternatives change vis-a-vis prices of circular welded pipe. Part II discusses in detail substitution

between circular welded pipe and alternative input products.

Raw Material Costs

Total raw material costs averaged 74.5 percent of the responding U.S. producers’ total costs of

goods sold to produce circular welded pipe in the United States during January 2004-March 2007. The

principal raw material input used to produce domestic circular welded pipe is hot-rolled steel sheet/coil,

while zinc is another important raw material for producing the galvanized circular welded pipe. U.S. spot

market quarterly purchase prices of hot-rolled steel sheet fluctuated but increased during January 2004-

March 2007, while spot market quarterly purchase-order averages of zinc prices increased markedly

during this period (figure V-1). U.S. purchase prices of hot-rolled steel sheet increased from $423 per

short ton during January-March 2004 to a period high of $704 per short ton by July-September 2004,

before decreasing to $465 per short ton by July-September 2005, then increased to $627 per short ton by

July-September 2006, and then decreased through the end the period to $517 per short ton during

January-March 2007.1

 Although not shown, U.S. prices of hot-rolled steel sheet increased to $553 per

short ton during April-June 2007. U.S. quarterly purchase-order prices of zinc remained stable during

January-September 2004, averaging about $0.51 per pound, but then began rising slowly at first and then

more sharply to a period high of $2.01 per pound by October-December 2006, before ending at $1.68 per

pound by January-March 2007.
 2

 As a ratio to the landed duty-paid value, these transportation charges averaged 11.2 percent during this period.

 3 U.S. producer and importer questionnaire responses, sections IV-B-10 and III-B-10, respectively. Relatively

fewer importers reported U.S. inland freight costs than did U.S. producers for circular welded pipe, likely because

U.S. importers typically reported that their customers arranged the U.S.-inland freight and U.S. producers typically

reported that they arranged U.S.-inland freight to their customers (Ibid). Seventeen of the 20 responding U.S.

(continued...)

V-2

Figure V-1

Hot-rolled steel sheet and zinc: U.S. purchase prices, by quarter, January 2004-March 2007

Source: American Metal Market (zinc), http://www.amm.com/priorprice/matprice.asp, and the Purchasing Magazine

Transaction Report (hot-rolled steel), both retrieved June 11, 2007.

Tariff Rates and Transportation Costs to the U.S. Market

The U.S. normal trade relations ad valorem import duty rate was free for imports of circular

welded pipe, including that from China, under HTS subheadings 7306.30.10 and 7306.30.50 during

January 2004-March 2007. Transportation charges to ship circular welded pipe from China to the U.S.

ports of entry, as a ratio to the U.S. official customs value, averaged 12.6 percent during January 2004-

March 2007,2

 increasing from 11.2 percent in 2004 to 13.4 percent in 2006.

U.S. Inland Transportation Costs

Thirteen responding U.S. producers of circular welded pipe and six responding U.S. importers of

the circular welded pipe from China reported in their questionnaire responses the average U.S. freight

costs to their U.S. customers locations.3

 U.S.-inland freight costs for the domestic products averaged 7.2
 3

 (...continued)

importers reported that their customers arranged the U.S.-inland freight, whereas 3 importers reporting arranging

freight to their customers’ locations. On the other hand, 16 of the 19 responding U.S. producers reported that they

arranged the U.S.-inland freight, whereas 3 U.S. producers reported that their customers arranged the freight.

 4 Two U.S. producers, ***, reported that, based on the value to weight ratio for circular welded pipe, U.S.-inland

freight costs do not constitute a substantial share of the delivered costs for this product. Petitioners’ postconference

brief, exhibits 1 and 2.

 5 Ibid.

 6 U.S. producer and importer questionnaire responses, sections IV-B-11 and III-B-11, respectively.

V-3

percent of the delivered prices, and U.S.-inland freight costs of the subject imported products averaged

6.2 percent of the delivered prices during January 2004-March 2007.4

 Eighteen U.S. producers and 19

importers estimated their U.S. shipments of the domestic and imported Chinese circular welded pipe,

during January 2004-March 2007, that were shipped to U.S. customers in three specified distance

categories.5

 The U.S. producers and importers reported shipment shares of the domestic and subject

imported circular welded pipe, by distance categories from their U.S. selling locations, are shown in the

following tabulation.

Distance shipped

Share of U.S. commercial shipments (percent)

U.S.-produced

products

Imported Chinese

products

Within 100 miles 15.6 47.2

101 to 1,000 miles 70.9 18.4

Over 1,000 miles 13.5 34.4

Total 100.0 100.0

Nineteen U.S. producers and 21 U.S. importers reported the U.S. geographic market area(s),

during January 2004-March 2007, that were served by the firms’ domestic and imported Chinese circular

welded pipe.6

 The number of U.S. producers and importers responding for each of the specified market

areas are shown in the following tabulation; several responding U.S. producers and importers reported for

more than a single geographic area.
 7

 U.S. producer and importer questionnaire responses, sections IV-B-11 and III-B-11, respectively.

 8 Ibid.

 9 According to ***, fence tubing is sold on a delivered basis, such that prices are the same in California, Utah,

and Texas.

V-4

Geographic area

U.S.-produced

products

Products imported

from China

National 10 5

West Coast 3 8

Northwest 1 5

Southwest 6 12

Rocky Mountains 5 4

Northeast 2 3

Mid-Atlantic 2 3

Southeast 4 7

Midwest 3 1

Total 36 48

Source: Compiled from data submitted in response to Commission

questionnaires.

Eight of 11 responding U.S. producers and 9 of 10 responding U.S. importers reported that the

U.S. market area for their circular welded pipe produced domestically and imported from China has not

changed since January 2004.7

 Three remaining U.S. producers and the remaining U.S. importer reported

on efforts to expand their U.S. markets.8

 ***, a U.S. producer, reported that it increased sales into the

***. ***, a U.S. producer, reported that its sales efforts to the West Coast have not been successful and,

according to the firm, this was due to increased imports of the subject goods. *** also asserted that while

the West Coast was the first to be impacted, subject imports are also impacting the Eastern and other U.S.

markets. ***, a U.S. producer, indicated that about *** percent of its fence pipe is sold in ***, which is

due to the cost of freight. The firm asserted that if it went further at the present prices, it would not be an

attractive cost for customers.9

 ***, a U.S. importer of circular welded pipe from China, asserted that

importers mainly target customers closest to the major U.S. ports such as Long Beach, CA, San Francisco,

CA, and Vancouver, WA, on the West Coast; and Houston, TX, New Orleans, LA, Tampa, FL, on the

Gulf Coast, and Savannah, GA and Camden, NJ, on the East Coast. According to the importer, customers

in these areas are more likely to accept import product and are usually in geographic markets where the

domestic mills reportedly are less competitive due to their inland locations.
 10 The quarterly nominal were calculated from quarterly-average nominal exchange rates reported by the IMF;

producer price data in China was not available to calculate real exchange rates vis-a-vis the U.S. dollar. The

exchange rate indices were based on exchange rates expressed in U.S. dollars per unit of the foreign currency, such

that index numbers below 100 represent depreciation and numbers above 100 represent appreciation of the foreign

currency vis-a-vis the U.S. dollar.

 11 The Chinese government effectively pegged the yuan to the U.S. dollar at 8.28 yuan per dollar during the early

part of this period. On July 21, 2005, the Chinese government announced that it would no longer peg the yuan to the

U.S. dollar but would tie the yuan to a basket of currencies. Within this new basket, the yuan was revalued upward

against the U.S. dollar by 2.1 percent, or from 8.28 yuan per dollar under the old peg to 8.11 yuan per dollar under

the new exchange rate policy. The Chinese government has not disclosed which currencies are in the new basket,

but indicated that the weight of the U.S. dollar represented less than 50 percent of the new basket of currencies.

V-5

Exchange Rates

Figure V-2 shows the quarterly nominal exchange rate index of the Chinese yuan relative to the

U.S. dollar during January 2004-March 2007.10 The nominal exchange rate for the Chinese yuan vis-a-vis

the U.S. dollar remained stable during January 2004-June 2005, with some appreciation (6.6 percent) of

the Chinese yuan against the U.S. dollar by January-March 2007.11

Figure V-2

Nominal exchange rate indices of the Chinese yuan relative to the U.S. dollar, by quarters, January

2004-March 2007

Note.--Index (Jan.-Mar. 2000=100). Exchange rates are in U.S. dollars per Chinese yuan.

Source: International Monetary Fund, International Financial Statistics, February 2006 and May 2007.
 12 Information on pricing practices discussed in this section was based on questionnaire responses of the U.S.

producers and importers of the domestic and imported Chinese circular welded pipe, unless otherwise noted.

 13 U.S. producer and importer questionnaire responses, sections IV-B-1 and III-B-1, respectively.

 14 Spot sales are usually one-time delivery, within 30 days of the purchase agreement; short-term sales are for

multiple deliveries for up to 12 months after the purchase agreement; and long-term sales are for multiple deliveries

for more than 12 months after the purchase agreement. Short-term and long-term sales can be arranged by contracts

or verbal agreements.

 15 U.S. producer and importer questionnaire responses, sections IV-B-4 and 5 and III-B-4 and 5, respectively. 

One of the responding U.S. importers, ***, reported that it was very difficult to purchase from an overseas mill and

sell on a spot basis, because the transit times to transport by break-bulk vessel can take up to two months alone.

 16 U.S. producer and importer questionnaire responses, sections IV-B-3 and III-B-3, respectively.

V-6

PRICING PRACTICES12

Eighteen U.S. producers and 23 U.S. importers of the domestic and Chinese circular welded pipe

reported their 2006 U.S. shipments by type of sale.13 U.S. producers and importers shares of their 2006

U.S. commercial shipments, by quantity, of the domestically produced and imported Chinese circular

welded pipe, by type of sale, are shown in the following tabulation.14

Type of sale

Share of 2006 U.S. commercial shipments (percent)

U.S.-produced

products

Imported Chinese

products

Spot sales 91.3 37.4

Short-term sales 7.8 62.3

Long-term sales 0.9 0.3

Total 100.0 100.0

Source: Compiled from data submitted in response to Commission questionnaires.

U.S. producers and importers reported that spot sales, short-term and long-term contract sales

were all negotiated on an individual transaction basis and U.S. producers also reported using price lists

but taking into consideration the price of steel, production costs, the level of capacity utilization, general

market conditions, and the size of the order.15 U.S. producers and importers reported the typical

provisions of their short-term sales agreements with their customers for circular welded pipe.16 Both U.S.

producers and importers reported that their short-term contract ranges from 2 to 9 months. U.S. producers

generally reported that prices of their short-term contracts can be renegotiated during the contract period,

whereas most responding importers reported that prices cannot be renegotiated in their short-term

contracts. The majority of both responding U.S. producers and importers reported that their short-term

contracts generally fix both price and quantity. The majority of U.S. producers reported that short-term

contracts have meet or release provisions, at least sometimes, whereas most of the responding importers

reported that their short-term contracts do not have meet or release provisions. The single U.S. producer

and single U.S. importer that reported having some long-term contracts with customers for the domestic

and subject imported circular welded pipe reported that prices can be renegotiated during the contract

period, and such contracts may fix price and quantity but do not have a meet or release provision.
 17 U.S. producer and importer questionnaire responses, sections II-10 and II-5, respectively.

 18 U.S. producer and importer questionnaire responses, sections IV-B-7 and III-B-7, respectively.

 19 U.S. producer and importer questionnaire responses, sections IV-B-6 and III-B-6, respectively.

 20 U.S. producer and importer questionnaire responses, sections IV-B-8 and III-B-8, respectively.

 21 U.S. producer and importer questionnaire responses, sections IV-B-13 and III-B-13, respectively.

 22 U.S. producer and importer questionnaire responses, sections IV-B-12 and III-B-12, respectively.

V-7

U.S. producers of circular welded pipe and importers of circular welded pipe from China and

from nonsubject countries reported their U.S. shipments by type of customer during January 2004-March

2007.17 U.S. producers and importers shares of their U.S. shipments during this period, by quantity, of

the domestically produced circular welded pipe and that imported from China and from nonsubject

countries, by type of customer, are shown in the following tabulation.

Type of

customer

Share of U.S. shipments (percent)

U.S.-produced

products

Imported Chinese

products

Imported products

from nonsubject

countries

Distributors 81.1 94.8 95.9

End users 18.9 5.2 4.1

Total 100.0 100.0 100.0

Source: Compiled from data submitted in response to Commission questionnaires.

Fourteen of the 19 responding U.S. producers and 20 of the 23 responding U.S. importers of the

domestic and imported Chinese circular welded pipe reported quoting prices on a U.S. f.o.b.

plant/warehouse/port-of-entry basis during January 2004-March 2007, whereas the remaining 5

responding U.S. producers and 3 importers reported selling on a delivered basis or both.18 Thirteen of 19

responding U.S. producers and 4 of 23 responding U.S. importers reported offering payment terms of 1/2-

2 percent discount for payment within 10 days or net 30 days for the domestic and subject imported

circular welded pipe, whereas the 6 remaining U.S. producers and the 19 remaining U.S. importers

offered payment terms of just net 30 days during January 2004-March 2007.19

The majority of responding U.S. producers and importers of the domestic and subject imported

circular welded pipe reported that they have no set quantity discount policies, but most reported that in

price negotiations, discounts are made to larger-volume customers.20 Fifteen of 18 responding U.S.

producers and all 23 responding U.S. importers of the domestic and subject imported circular welded pipe

reported that they did not sell their products over the internet, whereas the remaining 3 U.S. producers

reported internet sales, which ranged from less than *** percent to *** percent of the reporting firm’s

sales.21

Seventeen U.S. producers and 22 U.S. importers of the domestic and imported Chinese circular

welded pipe reported their 2006 commercial shipments, by quantity, that were shipped from U.S.

inventory or direct from U.S./Chinese production and the number of days of lead time from the date of

order to the date of delivery to U.S. customers.22 U.S. producers and importers shares of their 2006 U.S.

commercial shipments, by quantity, of the domestically produced and imported Chinese circular welded

pipe, from inventory and production, and the lead times, are shown in the following tabulation.
 23 Ibid.

 24 One of these three importers, ***, provided this detailed response. According to ***, lead times have been

roughly 5-6 months for delivery after order confirmation for West Coast customers and 6-7 months for delivery to

the Gulf and East Coast customers. However, the firm asserts that vessel space has become more challenging every

month and this has had a negative impact on its deliveries to customers. The firm reported that it is now

experiencing delays in deliveries up to an additional 30-60 days from its normal lead times. *** reported that it ships

steel pipes by ‘break-bulk’ vessels, which share space with other products like grain, coal, lumber, and even

chemicals. These vessel lines also include stops to other overseas ports in countries like Korea, which can cause an

additional delay in delivery along with shortage of space for Chinese steel pipes. As far as booking space with

vessel lines, *** asserts that it is usually based on a ‘first come, first serve’ basis and, of course, who is willing to

pay the highest rate, such that shipping from China reportedly has become quite challenging during the past 18

months. *** reported that any delays in shipment can cause a problem for customers expecting on-time delivery,

such that U.S. mills and distributors are given an opportunity to offer ‘spot’ sales to hold customers over until late

shipments arrive. *** asserted that the unreliable shipment from overseas mills is the one “Big” advantage domestic

mills have over import suppliers (emphasis in original). *** importer questionnaire response, section III-B-12.

V-8

Shipment source

U.S.-produced products Imported Chinese products

Share of U.S.

commercial shipments

(percent)

Lead

time

(days)

Share of U.S.

commercial shipments

(percent)

Lead

time

(days)

U.S. inventory 79.3 7 13.7 6

U.S./Chinese production 20.7 50 86.3 142

Total 100.0 100.0

Source: Compiled from data submitted in response to Commission questionnaires.

Fifteen of the 17 responding U.S. producers and 16 of the 19 responding importers of the

domestic and imported Chinese circular welded pipe reported that the reported lead times had not

changed since January 2004.23 The two remaining U.S. producers, ***, reported that their lead times

have fallen since January 2004 as their business has slowed reportedly due to increased imports of

circular welded pipe from China. On the other hand, the three remaining U.S. importers reported that

their lead times have increased due to port congestion, lack of vessel availability, and late shipments by

Chinese mills.24 In addition to questionnaire responses, Western International, a U.S. importer of circular

welded pipe from China, discussed at the conference the length and impact of lead times from China on

prices in the U.S. market.

“Western International’s average lag time for its shipments in the last few months has

been six months. We have always planned on at least six months between the customers'

purchase order date and shipment to the customer. By the way, more recently this has

turned into eight months because of difficulty in lining up shipping; and 75 percent of our

sales of imported products are back-to-back sales that we fulfill based on customer order. 

Thus, when you look at the import statistics and average unit value, you have to

remember that those statistics show sales made six months prior to the time of the

import's arrival.

Given this lead time, there is a natural discount that the Chinese must offer to

even be in the U. S. market. We estimate this discount has a threshold of 20 percent. If

the price for Chinese pipe is not at least 20 percent lower than the domestic pipe, our
 25 Conference transcript, pp. 115-116 (Schmid).

 26 U.S. producer and importer questionnaire responses, sections IV-B-9 and III-B-9, respectively.

 27 U.S. producer questionnaire response, section IV-B-9.

V-9

customers, that have domestic product available to them, would prefer to buy domestic

pipe.”25

PRICE DATA

Announced Selling Price Increases

U.S. producers and importers of circular welded pipe were requested in the questionnaire

responses to report any announced U.S. price increases since January 1, 2004 for sales of the domestic

and subject imported circular welded pipe.26 In addition, the firms were requested to identify the dates of

announced price increases, the extent to which they held, and the products that were covered by the price

increases. Thirteen U.S. producers and two U.S. importers reported their price increases, but did not

necessarily report for the full period since 2004, the extent to which the price increases held, or the

products that were included. Although a majority of firms reported percentage price increases (based on

the price level from one price increase to another), some firms reported absolute price increases, and some

firms just indicated the date of their price increases; in addition, some firms noted price decreases. The

reported price increases are shown as a range of price increases reported for each year, 2004-06, and yearto-date 2007, by U.S. producers and importers, in tables V-1 and V-2, respectively, as well as any

announced price decreases and the other requested information that was reported. Any additional

information reported are discussed by responding firm in the text. 

Table V-1

Circular welded pipe: U.S. producers’ announced price increases for their U.S.-produced circular

welded pipe, by years, 2004-06, and year-to date 2007

* * * * * * *

Table V-2

Circular welded pipe: U.S. importers’ announced price increases for their imported circular

welded pipe from China, by years, 2004-06, and year-to date 2007

* * * * * * *

According to ***,27 a U.S. producer of circular welded pipe, 2004 was an abnormal year, during

which there were numerous price increases of circular welded tube because there were real steel

shortages. *** indicated that, in the beginning of 2004, prices of circular welded pipe were *** and ***

in *** at ***, then began to *** to *** by the end of the year. In 2005, a typical year according to ***,

circular welded pipe continued to go *** through the year and by the end of 2005 the firm’s prices were

***. *** reported that its prices continued *** to *** by April 2006, but the firm had a price *** to ***

in *** and another *** in ***. Prices slowly *** through the rest of 2006, to ***. *** asserted that this

latter price level was not even near that of the Chinese products, which were as low as $***/ton; the firm

noted that it ignored such low prices since it reportedly would be bankrupt at such a low price. In 2007,

*** reported that it had to *** its prices ***.

Seven of nine responding U.S. importers reported that they do not announce price increases or

decreases, but negotiate prices on a transaction-by-transaction basis; the remaining two firms’ responses
 28 U.S. importer questionnaire responses, sections III-B-4, III-B-5, and III-B-9.

 29 U.S. importer questionnaire responses, section III-B-9.

 30 The petitioners suggested these product categories and indicated that collecting prices in dollars per short ton

was the appropriate price unit (Petition, p. 18). Based on list price sheets submitted by *** (U.S. producer) and ***

(U.S. importer), the only two firms responding to questionnaire requests for list price sheets, circular welded pipe

appears to be sold in the U.S. market by specific wall thicknesses or gauges, finishes, diameters, and lengths, and are

priced in dollars per hundred feet (cft). Petitioners indicated that (1) circular welded pipe is generally sold in

dollars/cft because customers buy pipe by length, often in 1,000's of feet, and want to know the price per hundred

feet; and (2) that some products are sold specifying outside diameter, like fence pipe, while other products, such as

pipe 1/2-inch to 6 inches in diameter used in industrial and plumbing applications, use internal diameter (conference

transcript, pp. 64-65 (Magno)). Petitioners also indicated that pricing in dollars/cft result in huge price differences

between a pipe 2 inches in diameter and a pipe 4 inches in diameter, noting that this difference made it necessary to

convert prices to dollars/ton, where (they contend) there are no differences in prices on a per ton basis among pipes

that range from 2-4 inches in diameter (conference transcript, pp. 68-69 (Schagrin)). A U.S. importer, ***, stated

that prices per ton do not change a great deal over the range of sizes because the dominant cost in a ton of steel pipe

is the cost of the steel. This importer also asserted that contractors purchasing circular welded pipe do not care about

the price per ton, they want to know the price per foot. E-mail from ***. 

V-10

were shown in table V-2.28 ***, an importer of circular welded pipe from China, provided a detailed

response regarding how it determines prices on an individual transaction basis.29 *** does not make

formal announcements regarding price increases and decreases. The firm stays in contact with its

customers and supplying mills on a regular basis and quotes prices based on its customers monthly or

quarterly requirements. When *** customers are ready to review their order requirements, the firm will

contact its supplying mills for current prices and shipment times, and then submit its offer to the

customer. During its regular contact with customers, *** is able to keep them advised of market trends

based on changes in either the U.S. or Chinese economies.

Questionnaire Price Data

U.S. selling value and quantity data were requested for sales to U.S. customers for the following

four circular welded pipe product categories produced in the United States and imported from China:30

Product category 1.--ASTM A-53 schedule 40 black plain-end, with nominal outside

diameter of 2-4 inches inclusive.

Product category 2.–ASTM A-53 schedule 40 galvanized plain-end, with nominal

outside diameter of 2-4 inches inclusive.

Product category 3.––ASTM A-53 schedule black plain-end, with nominal outside

diameter of 6-8 inches inclusive.

Product category 4.–Galvanized fence tube, with nominal outside diameter of 1-3/8 –

2-3/8 inches inclusive, and wall thickness of 0.055-0.075 inch.

The price data were based on quarterly net U.S. f.o.b. selling price data of U.S. producers and

importers for their shipments of the specified domestic and imported Chinese circular welded pipe
 31 If the reporting firms sold their circular welded pipe on a delivered basis, they were requested to estimate, to

the extent possible, the net delivered f.o.b. U.S. selling value (for instance, deduct from the U.S. delivered value the

U.S.-inland freight cost (or an estimate of this cost) it charged, or otherwise arranged, to deliver the circular welded

pipe to customers at their U.S. receiving location(s)). The firms were requested not to report sales transactions

where they were unable to report values, either actual or adjusted, on a f.o.b. U.S. point of shipment basis.

 32 Price data of circular welded pipe from the other five nonsubject countries involved the following countries:

Guatemala, Japan, Oman, Romania, and Venezuela.

 33 The four nonsubject countries that have antidumping and/or countervailing duty orders in place accounted for

78.5 percent of the total quantity of reported circular welded pipe price data from the nine nonsubject countries.

 34 The reported price data among U.S. producers and among U.S. importers were appreciably different among

some firms for the same product category and period, and do not appear to be the result of differences in quantities

shipped. Quarterly price differences within each of the four specified product categories ranged up to $200 per short

ton or more among responding U.S. producers and among U.S. importers. 

V-11

product categories, during January 2004-March 2007, to U.S. distributors unrelated to the selling firms.31

In addition, each U.S. importer was requested to provide the selling price data for the specified product

categories that they imported from their largest nonsubject country source.

Ten U.S. producers of circular welded pipe and 20 U.S. importers of the circular welded pipe

from China reported useable price information, but not necessarily for all product categories or periods. 

In addition, 11 U.S. importers of circular welded pipe also reported the requested price data for nine

nonsubject countries, three of which (India, Korea, and Thailand) have U.S. antidumping duty orders in

place and one (Turkey) has both U.S. antidumping and countervailing duty orders in place during the

period of investigation.32 The responding U.S. producers reported total sales quantities of the U.S.-

produced circular welded pipe for pricing purposes during January 2004-March 2007 that amounted to

987,966 short tons, or 23.1 percent of their total reported U.S. commercial shipments of the U.S.-

produced circular welded pipe during this period. The responding U.S. importers reported total sales

quantities for pricing purposes during January 2004-March 2007 that amounted to 476,836 short tons of

circular welded pipe from China, which accounted for 30.8 percent of total official U.S. imports of 

circular welded pipe from China during this period. In addition, the responding U.S. importers reported

total sales quantities for pricing purposes during January 2004-March 2007 that amounted to 162,869

short tons of circular welded pipe from the nine nonsubject countries,33 which accounted for 8.1 percent

of total official U.S. imports of circular welded pipe from nonsubject countries during this period.

Price Trends

Trends in weighted-average price of the domestic and imported Chinese circular welded pipe

products and comparisons of the weighted-average prices between the domestic and imported Chinese

circular welded pipe are based on the individual firms’ reported quarterly net f.o.b. U.S. selling price data

to distributors. Quarterly trends in weighted-average selling prices and total quantities of the domestic

and subject imported product categories 1-4 are shown by product categories in tables V-3 through V-6,

respectively; price comparisons between the domestic and the subject imported product categories are

also shown in these tables. The quarterly weighted-average selling prices and total quantities of the

domestic and subject imported circular welded pipe product categories are also shown by each product

category in figures V-3a through V-3d, respectively.34 In addition, price comparisons between domestic

circular welded pipe and that imported from nonsubject countries are shown in appendix D.
V-12

Table V-3

Circular welded pipe: Net weighted-average U.S. f.o.b. selling prices and quantities of domestic

and subject imported circular welded pipe product category 11

 and margins of underselling/

(overselling), by quarters, January 2004-March 2007

Period of

shipment

United States China

Price

(per 

short ton)

Quantity

(short tons)

No. of

firms

Price

(per 

short ton)

Quantity

(short tons)

No. of

firms

Margin

(percent)

2004:

 Jan.-Mar. $599.77 32,387 5 $455.41 2,307 5 24.1

 Apr.-June 830.60 31,549 5 711.56 4,264 6 14.3

 July-Sept. 891.48 20,297 5 681.10 4,672 7 23.6

 Oct.-Dec. 914.57 13,687 5 632.33 6,502 11 30.9

2005:

 Jan.-Mar. 914.04 19,829 6 723.86 5,178 9 20.8

 Apr.-June 906.73 23,728 6 728.48 7,034 9 19.7

 July-Sept. 855.85 24,447 6 695.50 9,396 10 18.7

 Oct.-Dec. 891.34 24,442 6 676.18 10,863 10 24.1

2006:

 Jan.-Mar. 954.04 22,084 6 640.10 9,870 11 32.9

 Apr.-June 945.07 25,926 6 666.49 12,407 10 29.5

 July-Sept. 1,004.68 27,128 6 667.32 17,921 13 33.6

 Oct.-Dec. 1,010.34 26,757 6 745.42 15,866 13 26.2

2007:

 Jan.-Mar. 919.35 28,954 6 652.06 20,064 16 29.1

Totals (2

) 321,215 6 (2) 126,344 17 (2)

 1 ASTM A-53 schedule 40 black plain-end, with nominal outside diameter of 2-4 inches inclusive.

 2

 Not applicable.

Source: Compiled from data submitted in response to Commission questionnaires.
V-13

Table V-4

Circular welded pipe: Net weighted-average U.S. f.o.b. selling prices and quantities of domestic

and subject imported circular welded pipe product category 21

 and margins of underselling/

(overselling), by quarters, January 2004-March 2007

Period of

shipment

United States China

Price

(per 

short ton)

Quantity

(short tons)

No. of

firms

Price

(per 

short ton)

Quantity

(short tons)

No. of

firms

Margin

(percent)

2004:

 Jan.-Mar. $*** *** 2 $505.18 6,424 6 ***

 Apr.-June *** *** 2 709.87 11,955 7 ***

 July-Sept. *** *** 2 733.17 10,127 6 ***

 Oct.-Dec. *** *** 2 692.18 9,910 10 ***

2005:

 Jan.-Mar. *** *** 2 728.57 4,853 9 ***

 Apr.-June *** *** 2 745.98 9,205 8 ***

 July-Sept. *** *** 2 778.65 9,595 10 ***

 Oct.-Dec. *** *** 2 726.48 6,807 9 ***

2006:

 Jan.-Mar. *** *** 2 661.20 11,051 11 ***

 Apr.-June *** *** 2 712.28 13,106 9 ***

 July-Sept. *** *** 2 669.02 22,575 15 ***

 Oct.-Dec. *** *** 2 653.14 14,403 13 ***

2007:

 Jan.-Mar. *** *** 2 718.11 17,886 14 ***

Totals (2

) *** 2 (2) 147,897 17 (2)

 1 ASTM A-53 schedule 40 galvanized plain-end, with nominal outside diameter of 2-4 inches inclusive.

 2

 Not applicable.

Source: Compiled from data submitted in response to Commission questionnaires.
V-14

Table V-5

Circular welded pipe: Net weighted-average U.S. f.o.b. selling prices and quantities of domestic

and subject imported circular welded pipe product category 31

 and margins of underselling/

(overselling), by quarters, January 2004-March 2007

Period of

shipment

United States China

Price

(per short

ton)

Quantity

(short tons)

No. of

firms

Price

(per 

short ton)

Quantity

(short tons)

No. of

firms

Margin

(percent)

2004:

 Jan.-Mar. $628.99 41,554 7 $489.43 457 4 22.2

 Apr.-June 837.27 43,518 7 637.82 86 3 23.8

 July-Sept. 930.85 32,383 7 746.49 4,013 6 19.8

 Oct.-Dec. 931.65 21,214 7 671.07 5,848 7 28.0

2005:

 Jan.-Mar. 937.04 22,785 8 725.09 8,206 9 22.6

 Apr.-June 902.36 29,506 8 751.57 14,401 11 16.7

 July-Sept. 845.95 32,492 8 765.80 11,890 11 9.5

 Oct.-Dec. 909.31 25,200 8 727.30 7,352 10 20.0

2006:

 Jan.-Mar. 920.98 26,626 8 609.85 8,320 9 33.8

 Apr.-June 929.50 32,927 8 678.83 9,383 9 27.0

 July-Sept. 998.75 22,070 8 657.68 11,161 9 34.2

 Oct.-Dec. 988.57 20,806 8 619.66 12,369 11 37.3

2007:

 Jan.-Mar. 872.91 23,569 8 667.56 15,605 11 23.5

Totals (2

) 374,650 8 (2) 109,091 15 (2)

 1 ASTM A-53 schedule black plain-end, with nominal outside diameter of 6-8 inches inclusive.

 2

 Not applicable.

Source: Compiled from data submitted in response to Commission questionnaires.
V-15

Table V-6

Circular welded pipe: Net weighted-average U.S. f.o.b. selling prices and quantities of domestic

and subject imported circular welded pipe product category 41

 and margins of underselling/

(overselling), by quarters, January 2004-March 2007

Period of

shipment

United States China

Price

(per 

short ton)

Quantity

(short tons)

No. of

firms

Price

(per 

short ton)

Quantity

(short tons)

No. of

firms

Margin

(percent)

2004:

 Jan.-Mar. $939.07 29,196 4 $484.28 1,725 4 48.4

 Apr.-June 1,301.87 21,195 4 *** *** 3 ***

 July-Sept. 1,361.53 14,297 4 562.72 5,575 4 58.7

 Oct.-Dec. 1,278.50 12,838 4 *** *** 2 ***

2005:

 Jan.-Mar. 1,251.24 23,232 4 716.15 2,541 6 42.8

 Apr.-June 1,250.23 23,824 4 718.66 2,306 5 42.5

 July-Sept. 1,163.01 18,214 4 635.50 11,400 6 45.4

 Oct.-Dec. 1,127.43 15,870 4 709.40 3,080 5 37.1

2006: 

 Jan.-Mar. 1,101.34 22,770 4 719.99 6,221 7 34.6

 Apr.-June 1,161.47 25,073 4 662.59 14,967 6 43.0

 July-Sept. 1,183.95 17,706 4 687.21 14,334 8 42.0

 Oct.-Dec. 1,196.86 12,213 4 683.17 16,331 5 42.9

2007:

 Jan.-Mar. 1,153.13 19,862 3 780.60 4,930 5 32.3

Totals (2

) 256,290 4 (2) 83,410 8 (2)

 1 Galvanized fence tube, with nominal outside diameter of 1-3/8 – 2-3/8 inches inclusive, and wall thickness of

0.055-0.075 inch.

 2

 Not applicable.

Source: Compiled from data submitted in response to Commission questionnaires.
V-16

Figure V-3a

Circular welded pipe: Net weighted-average U.S. f.o.b. selling prices and quantities of U.S.-

produced and subject imported product category 1,1

 by quarters, January 2004-March 2007

 1 ASTM A-53 schedule 40 black plain-end, with nominal outside diameter of 2-4 inches inclusive.

Source: Compiled from data submitted in response to Commission questionnaires.
V-17

Figure V-3b

Circular welded pipe: Net weighted-average U.S. f.o.b. selling prices and quantities of U.S.-

produced and subject imported product category 2, by quarters, January 2004-March 2007

* * * * * * *
V-18

Figure V-3c

Circular welded pipe: Net weighted-average U.S. f.o.b. selling prices and quantities of U.S.-

produced and subject imported product category 3,1

 by quarters, January 2004-March 2007

 1 ASTM A-53 schedule black plain-end, with nominal outside diameter of 6-8 inches inclusive.

Source: Compiled from data submitted in response to Commission questionnaires.
V-19

Figure V-3d

Circular welded pipe: Net weighted-average U.S. f.o.b. selling prices and quantities of U.S.-

produced and subject imported product category 4, by quarters, January 2004-March 2007

* * * * * * *

The weighted-average quarterly selling prices of the specified circular welded pipe product

categories produced domestically and imported from China fluctuated during January 2004-March 2007,

but tended to trend upward during this period (tables V-3 through V-6 and figures V-3a through V-3d). 

Price trends of the domestic circular welded pipe during January 2004-March 2007 appear to be

influenced, at least partially, by price fluctuations of hot-rolled steel and (for galvanized products) by

increasing prices of zinc. Quarterly selling prices of the U.S.-produced product category 1 increased by a

total of 53.3 percent during January 2004-March 2007, while prices of product category 1 imported from

China increased by a total of 43.2 percent. Selling prices of the U.S.-produced product category 2

increased by almost *** percent, while prices of product category 2 imported from China increased by

42.1 percent; prices of the domestic product category 3 increased by 38.8 percent, while prices of product

category 3 imported from China increased by 36.4 percent; and prices of the domestic product category 4

increased by 22.8 percent, while prices of product category 4 imported from China increased by 61.2

percent.

Total quarterly sales quantities reported by the U.S. producers and importers of the subject

imported circular welded pipe product categories fluctuated during January 2004-March 2007, with the

quantities of the domestic products trending downward during this period while quantities of the products

imported from China trended upward. U.S. producers’ quarterly shipment quantities of product category

1 decreased by 10.6 percent during January 2004-March 2007, while shipment quantities of product

category 1 imported from China increased by 770.0 percent during this period. During this period, U.S.

producers’ quarterly shipment quantities of product categories 2-4 decreased by *** percent, 43.3

percent, and 32.0 percent, respectively, while quarterly shipment quantities of the imported product

categories 2-4 from China increased by 178.4 percent, 331.5 percent, and 185.8 percent, respectively.

Price Comparisons

A total of 52 quarterly net weighted-average U.S. f.o.b. selling price comparisons were possible

between the domestic and imported Chinese circular welded pipe product categories 1-4 shipped to U.S.

distributor customers during January 2004-March 2007. In all of the 52 selling price comparisons, the

imported China products were priced less than the U.S.-produced products. The selling price

comparisons are shown by period and by product category in table V-7.
 35 *** reported these three lost sales allegations.

 36 *** each reported 12 lost sales allegations of a general nature; two purchasers, ***, were cited by both firms,

such that 22 different purchasers were identified in these 24 lost sales allegations. 

 37 Petition, Exh. 14.

V-20

Table V-7

Circular welded pipe: Number of quarterly net weighted-average U.S. f.o.b. selling price

comparisons between U.S.-produced and imported Chinese circular welded pipe during January

2004-March 2007

Period/

product category

Total price comparisons Underselling by imports

No.

Quantity1

(short tons) No.

Quantity1

(short tons)

Range of underselling

(percentage)

 2004 16 83,961 16 83,961 14.3 - 58.7

 2005 16 124,107 16 124,107 9.5 - 47.2

 2006 16 210,285 16 210,285 26.2 - 58.5

 Jan.-Mar. 2007 4 58,485 4 58,485 23.3 - 52.0

Totals 52 476,838 52 476,838 9.5 - 58.7

 Product category 12 13 126,344 13 126,344 14.3 - 33.6

 Product category 23 13 147,897 13 147,897 ***

 Product category 34 13 109,091 13 109,091 9.5 - 37.3

 Product category 45 13 93,506 13 93,506 32.3 - 58.7

Totals 52 476,838 52 476,838 9.5 - 58.7

 1 Quantity of U.S. sales of the specified circular welded pipe imported from China.

 2 ASTM A-53 schedule 40 black plain-end, with nominal outside diameter of 2-4 inches inclusive.

 3 ASTM A-53 schedule 40 galvanized plain-end, with nominal outside diameter of 2-4 inches inclusive.

 4 ASTM A-53 schedule black plain-end, with nominal outside diameter of 6-8 inches inclusive.

 5 Galvanized fence tube, with nominal outside diameter of 1-3/8 – 2-3/8 inches inclusive, and wall thickness of 0.055-0.075

inch.

Note.--All 52 possible price comparisons between the domestic specified products and the subject imported specified products

from China showed that the Chinese products were priced less than prices of the U.S.-produced products.

Source: Compiled from data submitted in response to Commission questionnaires.

LOST REVENUES AND LOST SALES

In the petition, three U.S. producers, ***, reported 27 lost sales allegations due to competition

from imports of circular welded pipe from China during January 2004-March 2007. Three of these

allegations provided some product information and specific time periods,35 whereas the remaining 24

allegations were typically general in nature without specifying transaction information, such as products,

time periods, or competing prices.36 *** asserted in the petition that the nature of the market for sales to

pipe and tube distributors made it difficult to obtain precise information on lost revenues and lost sales

due to competition from low-priced imports.37 At the conference, Wheatland Tube provided some

additional discussion of the types of information it is able to obtain in the U.S. market for circular welded
 38 Conference transcript, pp. 57-58 (Magno).

 39 Ibid.

 40 Ibid. Wheatland Tube asserted that it sees demand increasing due to increasing nonresidential construction,

but its sales have been decreasing, as, according to Wheatland Tube, its distributor customers report that their sales

are increasing (Ibid). 

 41 U.S. producer questionnaire responses, sections IV-D (lost revenues) and IV-E (lost sales).

 42 Seven of the 10 U.S. producers responding for lost revenues indicated that, since January 1, 2004, they had to

reduce prices and roll back announced price increases on their U.S.-produced circular welded pipe to avoid losing

sales to circular welded pipe imported from China, whereas the remaining 3 U.S. producers indicated that they did

not reduce prices or roll back price increases due to competition with China. One of the seven producers responding

affirmatively for lost revenues, ***, noted that ***. One of the three U.S. producers responding in the negative for

lost revenues, ***, noted, however, that ***.

 43 Six of the eight U.S. producers responding for lost sales indicated that, since January 1, 2004, they had lost

sales of the U.S.-produced circular welded pipe to circular welded pipe imported from China, whereas the remaining

two U.S. producers indicated that they had not lost sales to the imported products from China. One of the two U.S.

producers responding in the negative for lost sales, ***, noted, however, that ***.

 44 Only purchasers for which there were sufficient information for the staff to send enquiries are shown in tables

V-6 and V-7.

V-21

pipe that indicate that it has lost sales to the imported products from China.38 Wheatland Tube asserted

that, if th e firm’s distributor customers have competitors in the marketplace that are selling significantly

lower-priced material (in this particular case Chinese pipe), its customers “know that Wheatland Tube

cannot drop its prices 50 percent to compete on that level so they don't come to the U.S. producer with

those lost opportunities.”39 Wheatland Tube reportedly has close contact with its customers on a daily

basis, either by phone or visiting their facilities, and the firm sees the Chinese pipe in their yards; in

addition, these customers reportedly relay to Wheatland Tube the quantity and cost of their purchases of

the circular welded pipe from China.40

In producer questionnaire responses,41 three U.S. producers provided allegations of lost revenues

and four U.S. producers provided allegations of lost sales, but not all such allegations had sufficient

information for staff to follow up. In addition, 10 other U.S. producers responded for lost revenues 42 and

9 U.S. producers responded for lost sales,43 but were unable to provide any information. 

The purchasers cited in the lost revenue and lost sales allegations in the petition and questionnaire

responses,44 the transaction information supplied by the U.S. producers, and whether the responding

purchasers agreed or disagreed with the allegations are shown in tables V-8 and V-9, respectively. Any

additional comments of the responding purchasers are discussed below.

***. However, ***.

***.

Table V-8

Circular welded pipe: U.S. producers’ lost revenue allegations

* * * * * * *

Table V-9

Circular welded pipe: U.S. producers’ lost sales allegations

* * * * * * *
 45 In addition, *** alleged that it had lost revenues as a result of competition with the imported circular welded

pipe from China, but was not able to provide any specific details (U.S. producer questionnaire response, section IVD).

 46 The annual quantities of domestic circular welded pipe that *** alleged it had lost with each purchaser during

2006 to imports from China were much higher than the annual quantities it sold to *** of the *** purchasers during

2004-06.

V-22

*** identified *** purchasers where they alleged that they had lost sales of standard pipe to lowpriced imports of the products from China; the U.S. producers did not specify transactions, products, or

competing prices.45 *** reported the quantity of standard pipe from China that *** of its U.S. customers

have been buying annually, which totaled *** short tons, asserting that these quantities represented lost

sales. *** reported the quantity of standard pipe sales that it allegedly lost to *** of its U.S. customers in

2006 in competing with the imported Chinese pipe products, which totaled *** short tons.46 The 23

purchasers cited by ***, where transaction details were not specified, were asked whether they had

shifted their purchases of circular welded pipe from U.S. producers to suppliers of products from China

during January 2004-March 2007. In addition, these purchasers were asked whether U.S. producers

reduced their prices of circular welded pipe to compete with suppliers of circular welded pipe from China

during this period. The 23 purchasers named in the allegations of a general nature in both the petition and

questionnaire responses, and any responses received from these purchasers to the questions regarding lost

sales and lost revenues are shown in table V-10.

Table V-10

Circular welded pipe: Purchaser responses

* * * * * * *

Twelve of the 17 purchasers responding to the question about shifts in their purchases reported

that, since January 2004, they had shifted purchases of circular welded pipe from the U.S. producer to

imports from China; all 12 of these purchasers stated that price was the reason for the shift. The

remaining five responding purchasers reported that they had not shifted their purchases. Seven of the 17

purchasers responding to the question of reduced prices stated that, since January 2004, the U.S.

producers had reduced their prices of circular welded pipe to compete with prices of the imported

products from China. Nine other firms reported that U.S. circular welded pipe producers did not reduce

their prices in competition with the products imported from China, and the single remaining firm did not

know whether U.S. producers lowered their prices.
 1

 The producers with fiscal year ends other than December 31 are ***. ***. ***’s incomplete response did not

contain any financial data. Differences between data reported in the trade and financial sections of the

Commission’s producers’ questionnaire are largely attributable to timing differences. 

 2

 Per-unit factory overhead of all producers except for *** was higher in January-March 2007 than in JanuaryMarch 2006. Nine producers, ***, experienced substantially increased per-unit factory overhead. Their

supplemental responses to Commission staff’s inquiries about the substantial increases of factory overhead are

summarized for table VI-3.

 3

 The unit values of ***. 

VI-1

PART VI: FINANCIAL CONDITION OF U.S. PRODUCERS

BACKGROUND

Nineteen producers provided usable financial data on their operations producing circular welded

pipe.1

 The responding producers are believed to represent the substantial majority of U.S. production. 

Firms differ considerably in size in terms of sales volume and value. The largest producers, ***,

reported sales volumes *** times that of the next largest producer, ***. In contrast, *** firms reported

average annual sales of less than 10,000 short tons. Overall, net sales consisted primarily of commercial

sales, but *** U.S. producers, ***, reported both internal consumption (which accounted for

approximately *** percent of total net sales value in 2006) and related transfers (which reflected

approximately *** percent of sales value in 2006).

OPERATIONS ON CIRCULAR WELDED PIPE 

The results of operations of the responding firms on their circular welded pipe operations are

presented in table VI-1 which includes data on a per-short ton basis as well as operating income (loss) to

net sales ratios. The quantity of total sales decreased from 2004 to 2005 and then partially recovered

from 2005 to 2006. In contrast, total sales values increased continuously between 2004 and 2006, as unit

net sales values increased substantially from 2004 to 2005, and then fell slightly from 2005 to 2006. The

unit values of cost of goods sold (“COGS”) followed a pattern similar to those of unit sales values, due

primarily to the increased raw materials cost. The industry’s operating income decreased from $173

million in 2004 to $124 million in 2005, then increased in 2006 to $128 million as a result of higher sales

quantities. The ratio of operating income to net sales decreased by about 4.4 percentage points between

2004 and 2005 and by another 0.3 percentage point between 2005 and 2006.

While both net sales quantity and value were higher in January-March 2007 than in JanuaryMarch 2006, operating income was noticeably lower in interim 2007 ($11 million compared to $35

million), due mainly to higher per-unit total costs/expenses, especially raw materials cost and factory

overhead.2

 While the average unit sales values remained the same, average unit total cost was higher

($891 compared to $823) between the two interim periods. As a result, the operating income margin

decreased from 10.6 percent in interim 2006 to 3.3 percent in interim 2007.

With regard to internal consumption and related-company transfers, *** accounted for the

industry’s entire reported internal consumption (***, respectively, in terms of 2006 sales value) and

related-company transfers (***, respectively, in terms of 2006 sales value). ***.3
VI-2

Table VI-1

Circular welded pipe: Results of operations of U.S. producers, fiscal years 2004-06, JanuaryMarch 2006, and January-March 2007

Item

Fiscal year January-March

2004 2005 2006 2006 2007

Net sales: Quantity (short tons)

 Commercial sales *** *** *** *** ***

 Internal consumption *** *** *** *** ***

 Transfers to related firms *** *** *** *** ***

 Total net sales 1,496,511 1,352,728 1,459,037 354,768 375,622

Net sales: Value ($1,000)

 Commercial sales *** *** *** *** ***

 Internal consumption *** *** *** *** ***

 Transfers to related firms *** *** *** *** ***

 Total net sales 1,231,347 1,301,584 1,382,064 326,671 346,044

COGS 994,404 1,117,662 1,191,587 275,149 316,668

Gross profit 236,943 183,922 190,477 51,522 29,376

SG&A expenses 64,270 59,621 62,614 16,810 17,914

Operating income 172,673 124,301 127,863 34,712 11,462

Interest expense 12,578 11,889 15,965 1,270 18,827

Other expense 10,099 8,196 5,300 1,472 1,497

Other income 5,165 1,716 2,778 1,125 2,959

Net income (loss) 155,161 105,932 109,376 33,095 (5,903)

Depreciation/amortization 17,143 17,920 22,798 5,037 6,732

Cash flow 172,304 123,852 132,174 38,132 829

Table continued on next page.
VI-3

Table VI-1--Continued

Circular welded pipe: Results of operations of U.S. producers, fiscal years 2004-06, JanuaryMarch 2006, and January-March 2007

Item Fiscal year January-March

2004 2005 2006 2006 2007

Unit value (per short ton)

Net sales $823 $962 $947 $921 $921

COGS 664 826 817 776 843

Gross profit 158 136 131 145 78

SG&A expenses 43 44 43 47 48

Operating income 115 92 88 98 31

Ratio to net sales (percent) 

COGS 80.8 85.9 86.2 84.2 91.5

Gross profit 19.2 14.1 13.8 15.8 8.5

SG&A expenses 5.2 4.6 4.5 5.1 5.2

Operating income 14.0 9.6 9.3 10.6 3.3

Number of firms reporting

Operating losses 2 1 0 0 2

Data 19 19 19 19 19

Source: Compiled from data submitted in response to Commission questionnaires.

Selected financial data, by firm, are presented in table VI-2. Total net sales (quantities and

values), per-unit values (sales and COGS), operating income, and the ratio of operating income (loss) to

net sales are presented in this table on a firm-by-firm basis. Sixteen of 19 reporting producers generated

operating income in each fiscal year during 2004-06, while the remaining 3 producers reported operating

losses in one year during the period. However, the domestic industry’s operating income and operating

income margin decreased between 2004 and 2006 and were lower in January-March 2007 than in

January-March 2006. When comparing interim 2007 results to interim 2006 results, only four producers,

***, reported improved profitability (in terms of operating income). Two producers, ***, reported

operating losses in interim 2007, compared to none in interim 2006.

Table VI-2

Circular welded pipe: Results of operations of U.S. producers, by firm, fiscal years 2004-06,

January-March 2006, and January-March 2007

* * * * * * *

The data show that ***, achieved the highest dollar value of operating profits, and accounted for

over *** of the industry’s operating income during the period for which data were collected. This may be

due to relatively higher average unit sales values for *** compared with its relatively lower COGS. ***

per-unit COGS was lower than the industry average. However, *** operating income decreased
 4

 According to *** questionnaire response, its product mix is *** circular welded pipe, making its raw material

costs ***.

 5

 ***.

 6

 The majority of producers reported substantially increased factory overhead between the two interim periods. 

Their supplemental responses to Commission staff’s questions are as follows: ***.

VI-4

noticeably from interim 2006 to interim 2007 because its production cost rose substantially during the

same period.4

*** had unusually higher sales volume in *** compared to other periods and sales fell sharply in

***. *** explained in its supplemental response that it received a large order in *** which was not

repeated ***.

Wheatland reported ***. It explained that ***.

Selected aggregate per-short ton cost data of the producers on their operations, i.e., COGS and

selling, general, and administrative (“SG&A”) expenses, are presented in table VI-3. Overall per-short

ton COGS5

 and total cost (which includes SG&A expenses) increased substantially from 2004 to 2005,

driven mainly by changes in raw materials costs (i.e., reflecting changes in the cost of hot-rolled steel

coils) and fabrication costs (labor and factory overhead) and decreased somewhat from 2005 to 2006, due

to a decrease in labor costs. Per-short ton COGS increased substantially from interim 2006 to interim

2007, again due to the increases in the costs of raw materials (including, for some companies, zinc) and

factory overhead.6

 The ratio of total COGS to net sales increased continuously over the period.

Table VI-3

Circular welded pipe: Average unit costs 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

COGS: Value (per short ton)

 Raw materials $485 $616 $620 $574 $618

 Direct labor 50 64 52 64 69

 Factory overhead 129 146 145 138 156

 Total COGS 664 826 817 776 843

SG&A expenses 43 44 43 47 48

 Total cost 707 870 860 823 891

Source: Compiled from data submitted in response to Commission questionnaires. 

A variance analysis for the 19 U.S. producers is presented in table VI-4. A variance analysis

depicts the effects of changes in average prices and volume on the producers’ net sales, and of

costs/expenses and volume on their total cost. The data presented in table VI-4 are comparable to

changes in operating income as presented in table VI-1. The analysis is summarized at the bottom of the

table. The analysis indicates that the decrease in operating income ($44.8 million) between 2004 and

2006 was attributable mainly to the negative effect of increased costs/expenses ($222.0 million) and

decreased sales volume ($4.3 million) which was offset by the positive effect of increased price ($181.6

million). Between the two interim periods, it indicates that the decrease in operating income of $23.3
VI-5

million again resulted from the negative effect of increased costs/expenses, despite minor increases of

price and sales.

Table VI-4

Circular welded pipe: Variance analysis of operations of U.S. producers, fiscal years 2004-06,

January-March 2006, and January-March 2007

Item

Between fiscal years

JanuaryMarch

2004-06 2004-05 2005-06 2006-07

Value ($1,000)

Net sales:

 Price variance 181,551 188,543 (21,810) 171

 Volume variance (30,834) (118,306) 102,290 19,202

 Total net sales variance 150,717 70,237 80,480 19,373

Cost of sales:

 Cost variance (222,084) (218,799) 13,910 (25,345)

 Volume variance 24,901 95,541 (87,835) (16,174)

 Total cost variance (197,183) (123,258) (73,925) (41,519)

Gross profit variance (46,466) (53,021) 6,555 (22,146)

SG&A expenses:

 Expense variance 47 (1,526) 1,693 (116)

 Volume variance 1,609 6,175 (4,686) (988)

 Total SG&A variance 1,656 4,649 (2,993) (1,104)

Operating income variance (44,810) (48,372) 3,562 (23,250)

Summarized as:

 Price variance 181,551 188,543 (21,810) 171

 Net cost/expense variance (222,037) (220,325) 15,603 (25,461)

 Net volume variance (4,324) (16,590) 9,769 2,040

Note.--Unfavorable variances are shown in parentheses; 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.
 7

 As discussed in detail in table VI-6, *** accounted for *** of reported capital expenditures. ***.

VI-6

CAPITAL EXPENDITURES AND RESEARCH AND DEVELOPMENT EXPENSES

The responding firms’ aggregate data on capital expenditures and research and development

(“R&D”) expenses are presented in table VI-5. Even though all U.S. producers except for *** reported

capital expenditures, six producers incurred substantial amounts of capital expenditures during the period

for which data were collected.7

 Data for capital expenditures on a firm-by-firm basis are shown in table

VI-6. While capital expenditures increased continuously from 2004 to 2006, R&D expenses decreased

continuously during the same period. Capital expenditures were lower and R&D expenses were higher in

January-March 2007 relative to January-March 2006. Only four of the responding firms, ***, reported

R&D expenses.

Table VI-5

Circular welded pipe: Capital expenditures and R&D expenses by 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 expenditures1 22,879 43,138 44,966 8,890 6,293

 R&D expenses2

 *** *** *** *** ***

 1 All companies except *** reported capital expenditures. 

 2

 Only *** reported R&D expenses.

 

Source: Compiled from data submitted in response to Commission questionnaires.

Table VI-6

Circular welded pipe: Capital expenditures by U.S. producers, by firms, fiscal years 2004-06,

January-March 2006, and January-March 2007

* * * * * * *

ASSETS AND RETURN ON INVESTMENT

U.S. producers were requested to provide data on their assets used in the production and sales of

circular welded pipe during the period for which data were collected to assess their return on investment

(“ROI”). Although ROI can be computed in different ways, a commonly used method is income earned

during the period divided by the total assets utilized for the operations. Therefore, staff calculated ROI as

operating income divided by total assets used in the production and sales of circular welded pipe. Data on

the U.S. producers’ total assets and their ROI are presented in table VI-7. The return on investment

decreased continuously from 2004 to 2006. The trend of ROI over the period was the same as the trend

of the operating income margin shown in table VI-1.
 8

 ***.

 9

 ***. ***. 

 10 ***.

 11 Other variations and changes of the value of PPE may be attributable to the allocated assets based on the

relative sales value of the subject merchandise compared to the total sales.

VI-7

Table VI-7

Circular welded pipe: Value of assets and return on investment of U.S. producers, fiscal years

2004-06

Item

Fiscal year

2004 2005 2006

Value of assets Value ($1,000)

1. Current assets:

 A. Cash and equivalents 16,721 43,505 31,547

 B. Trade receivables (net) 197,339 219,947 159,804

 C. Inventories 242,000 217,253 321,837

 D. All other current 10,574 9,832 9,745

 Total current 466,634 490,537 522,933

2. Non-current assets:

 A. Productive facilities1 370,259 377,215 370,528

 B. Productive facilities 164,306 170,003 207,073

 C. Other non-current 17,632 20,379 128,697

 Total non-current 181,938 190,382 335,770

 Total assets 648,572 680,919 858,703

 Value ($1,000)

Operating income 172,673 124,301 127,863

Ratio of operating income to total assets (percent)

Return on investment 26.6 18.3 14.9

 1 Original cost of property, plant, and equipment (PPE).

 2

 Net book value of PPE (original cost less accumulated depreciation). 

Source: Compiled from data submitted in response to Commission questionnaires.

Even though the value of total assets, especially for the original cost of property, plant, and

equipment (“PPE”) remained at relatively the same level over the period examined, the data for individual

companies show a wide range of fluctuation during the same period.8

 9 10 11
VI-8

CAPITAL AND INVESTMENT

The Commission requested U.S. producers to describe any actual negative effects on their return

on investment, or their growth, investment, ability to raise capital, existing development and production

efforts, or the scale of capital investments as a result of imports of circular welded pipe from China. The

producers’ comments are presented in appendix E.
 1

 Petition, exhibit 5.

 2

 The estimate of 77 percent of total exports from China came from questionnaire responses and is presented in

table VII-2. Reported exports in 2006 were equivalent to 78 percent of 2006 imports of circular welded pipe from

China according to official statistics (as adjusted to include dual-stenciled line pipe for use in standard and structural

applications).

 3

 ***.

 4

 Shanghai Metals is an exporter of circular welded pipe produced by ***.

VII-1

PART VII: THREAT CONSIDERATIONS

The Commission analyzes a number of factors in making threat determinations (see 19 U.S.C. §

1677(7)(F)(I)). Information on the nature of the alleged subsidies was presented earlier in this report;

information on the volume and pricing of imports of the subject merchandise is presented in Parts IV and

V; and information on the effects of imports of the subject merchandise on U.S. producers’ existing

development and production efforts is presented in Part VI and appendix D. 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

Overview

The petition in these investigations identified 57 foreign producers in China allegedly producing

circular welded pipe.1

 The Commission sent foreign producer questionnaires to 31 firms that were

identified as possible producers/exporters of circular welded pipe in China. Counsel for Chinese

producers and exporters of circular welded pipe supplied 21 questionnaires, accounting for an estimated

70 percent of production in China in 2006, and an estimated 77 percent of 2006 Chinese exports of

circular welded pipe to the United States.2

 Questionnaire respondents included: 

• Bazhou Dong Sheng Hot-Dipped Galvanized Steel Pipes Co., Ltd. (“Bazhou”);

• CNNOC Kingland Pipeline Co., Ltd. (“CNNOC”);

• Guangdong Walsall Steel Pipe Industrial Co., Ltd. (“Guangdong”);

• Hengshui Jinghua Steel Pipe Co., Ltd. (“Hengshui”);

• Huludao Steel Pipe Industrial Co., Ltd. (“Huludao”);

• Jiangsu Guoqiang Zinc-Plating Industrial Co., Ltd. (“Jiangsu Guoqiang”);

• Jiangsu Yulong Steel Pipe Co., Ltd. (“Jiangsu Yulong”);

• Pangang Group Beihai Steel Pipe Corp. (“Pangang Group”);

• Liaoning Northern Steel Pipe Co., Ltd. (“Liaoning”);

• Shandong Fubo Group Co. (“Shandong”);3

• Shanghai Alison Steel Pipe Co., Ltd. (“Shanghai Alison”);

• Shanghai Metals and Minerals Import and Export Co. (“Shanghai Metals”);4

• Shanghai TIPO Steel Pipe Co., Ltd. (“Shanghai TIPO”);

• Shijiazhuang Zhongqing Import & Export Co., Ltd. and Bazhoushi Zhuofa Steel Pipe Co., Ltd.

(“Shijiazhuang”);

• Tai Feng Qiao Metal Products Co., Ltd. (“Tai Feng”);

• Tianjin BaoLai International Trade Co., Ltd. (“Tianjin BaoLai”);

• Tianjin Lifengyuda Steel Group Co., Ltd. (“Tianjin Lifengyuda”);

• Tianjin Shuangjie Steel Pipe Co., Ltd. (“Tianjin Shuangjie”);

• Weifang East Steel Pipe Co., Ltd. (“Weifang”);
 5

 There appeared to be only one discrepancy in how firms estimated their share of total exports from China and

how large their share of reported exports was compared with such estimations. With respect to ***, the estimates

and reported shares, as presented in table VII-2, were far apart, and reported shares were more than twice as high.

 6

 Only four firms in the industry devoted a minor amount of their sales (roughly ***) to the subject product: ***.

VII-2

• Xuzhou Guanghuan Steel Tube Co., Ltd. (“Xuzhou”); and

• Zhejiang Kingland Pipeline and Technologies Co., Ltd. (“Zhejiang”).

Table VII-1 presents data on the shares of 2006 reported capacity and production in China of

each of the 21 Chinese respondents, and their estimated shares of total 2006 production in China. The

production capacity in China appears to be dispersed among many of the 21 respondents. While the

responding firms were inconsistent in their estimates of their shares of overall Chinese capacity and

production, reported data indicate that *** is the largest producer, followed by ***, ***, and ***. 

Table VII-1

Circular welded pipe: Chinese producers’ reported capacity, production, shares of reported

capacity and production, and estimated shares of total production in China, 2006

* * * * * * *

Table VII-2 presents data on the shares of 2006 reported exports to the United States for each

respondent and their estimated shares of total exports to the United States from China in 2006. Exports

from China appeared to be dispersed among the 21 respondents. ***, ***, and *** appear to be the

largest exporters of circular welded pipe to the United States.5

Table VII-2

Circular welded pipe: Chinese producers’ reported exports to the United States, share of total

reported exports to the United States, and share of estimated total exports to the United States

from China, 2006

* * * * * * *

The estimated share of each respondent firm’s total sales represented by sales of circular welded

pipe varied widely by firm. Table VII-3 presents information by firm for 2006 sales. Most firms devoted

the vast majority of their sales to the subject product. Only seven firms devoted less than *** percent of

their sales to sales of circular welded pipe: ***.6

Table VII-3

Circular welded pipe: Chinese producers’ shares of total sales represented by sales of circular

welded pipe, 2006

* * * * * * *
 7

 Petitioners’ postconference brief, pp. 29-30, and exh. 16.

 8

 Respondents’ postconference brief, pp. 45-47.

VII-3

Circular Welded Pipe Operations

Information on the Chinese industry’s circular welded pipe operations is presented in table VII-4. 

Capacity and production increased during 2004-06, as did capacity utilization. Capacity and production

were higher in January-March 2007 than in January-March 2006, although capacity utilization was lower. 

Projections for 2007-08 included capacity and production increases for the Chinese industry producing

circular welded pipe, and increased capacity utilization by 2008. Capacity for responding firms was

based on a range of 8 to 168 hours per week, 3.3 to 50 weeks per year. Counsel for petitioners argued

that Chinese respondents have understated capacity by reporting in some cases very low operating rates in

hours per week and weeks per year, and that a conservative “maximum practical operating rate of 144

hours per week, 50 weeks per year” is a more valid picture of true capacity in China. Counsel for

petitioners allege an amount of unused capacity of *** short tons in 2006, using this maximum practical

capacity assumption, which exceeds the amount of production of the U.S. industry in that year.7

 Table F1 in appendix F presents firm by firm operating rates for circular welded pipe production in China. 

Production in China of circular welded pipe was almost triple that of the U.S. industry during

2006. However, counsel for respondents argued that the Chinese government has embarked on a program

to eliminate inefficient raw steel capacity, restrict new investment in steel capacity, consolidate and

improve production, and introduce greater private ownership.8
VII-4

Table VII-4

Circular welded pipe: Chinese producers’ production capacity, production, shipments, and

inventories, 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 3,596,031 4,070,067 4,675,052 1,050,551 1,118,027 4,888,512 4,920,169

Production 2,686,013 3,090,273 3,957,539 825,814 872,871 4,109,851 4,196,858

End of period inventories 192,494 218,270 220,845 231,267 215,336 209,966 211,403

Shipments:

Internal consumption 123,417 3,846 19,790 9,138 16,581 22,480 21,800

Home market 2,187,366 2,365,278 2,796,125 585,140 513,514 2,830,402 2,826,150

Exports to--

The United States 140,832 329,940 557,810 109,226 159,261 530,065 522,373

All other markets 209,195 410,794 696,118 128,651 227,507 804,276 898,154

Total exports 350,027 740,734 1,253,928 237,877 386,768 1,334,341 1,420,527

Total shipments 2,660,810 3,109,858 4,069,843 832,155 916,864 4,187,223 4,268,477

Ratios and shares (percent)

Capacity utilization 74.7 75.9 84.7 78.6 78.1 84.1 85.3

Inventories to production 7.2 7.1 5.6 7.0 6.2 5.1 5.0

Inventories to total

shipments 7.2 7.0 5.4 6.9 5.9 5.0 5.0

Share of total quantity of

shipments:

Internal consumption 4.6 0.1 0.5 1.1 1.8 0.5 0.5

Home market 82.2 76.1 68.7 70.3 56.0 67.6 66.2

Exports to--

The United States 5.3 10.6 13.7 13.1 17.4 12.7 12.2

All other markets 7.9 13.2 17.1 15.5 24.8 19.2 21.0

All export

markets 13.2 23.8 30.8 28.6 42.2 31.9 33.3

Note.–Because of rounding, figures may not add to the totals shown.

Source: Compiled from data submitted in response to Commission questionnaires.
 9

 Respondents argue that the Chinese industry is not “export oriented” but that the expansion in the steel sector

has been “for the sole purpose of feeding China’s enormous and expanding demand for steel.” Ibid, pp. 44-45.

 10 Internal consumption/transfers were reported by a few firms and were used for a variety of purposes, including

***.

 11 Throughout the period for which data were collected in these preliminary investigations, exports of circular

welded pipe from China received a “commodity export rebate” of 13 percent. However, in a document issued on

June 19, 2007, China’s Ministry of Finance / State Administration of Taxation declared this rebate to be abolished

with respect to “general ordinary pipe products (except oil casing),” effective July 1, 2007 (with the effective date

for certain transactions extended to July 20, 2007). Postconference brief of Chinese producers and exporters, exhibit

25. Respondents contend that this action will serve as a “significant impediment” to exports to overseas markets. 

Postconference brief of Chinese producers and exporters, p. 47. Petitioners, however, point to a wide range of

alleged subsidies (covering, as noted previously, eight broad areas) which, they contend, can replace and absorb the

elements of the rebate, resulting, they argue, in no reduction in the incentive to export to the United States. 

Petitioners’ postconference brief, p. 14.

Although early analysis of Chinese exports is extremely limited, there is some suggestion that higher prices

may lead to a reduction in import volume from China, but even this assessment is qualified based on other potential

factors (reportedly including seasonal demand, quality issues, and dependence on price-based competition). See

American Metal Market, “Chinese tubing imports lose ground on W. Coast,” July 13, 2007, found at 

http://amm.com/2007-07-13__10-27-32.html and retrieved July 16, 2007.

VII-5

Home market sales were a large component of shipments, but declined during 2004-06 as a share

of total shipments, while the share of total exports increased between each full and partial year.9

 Internal

consumption/transfers were small and decreased as a share of total shipments from 2004 to 2006.10 As a

share of total shipments, exports destined for the United States increased steadily during 2004-06, and

were higher in January-March 2007 then in January-March 2006. Projections for 2007 and 2008,

however, forecast that exports to the United States would decline as a share of total shipments and that

exports to all other markets would increase to fill in the potential gap left by that decline, resulting in an

expectation that exports would rise only slightly as a share of total shipments.11 Home market and

internal consumption/transfer shipments are projected to decline slightly as a share of total shipments

during 2007-08.

Table F-2 in appendix F presents firm-by-firm information on the basis for projections for 2007-

08 data included in table VII-4.

Inventories held by producers in China increased moderately between December 2004 and

December 2006, but were lower in March 2007 than in March 2008. No firm reported maintaining

inventories of circular welded pipe in the United States. No firm reported making sales over the internet.

Four out of 21 firms reported plans to add, expand, curtail, or shut down production capacity

and/or production of circular welded pipe in China:

* * * * * * *

Alternative Products

In addition to circular welded pipe, Chinese producers produce small/medium diameter line pipe,

large diameter line pipe, OCTG, and other pipe on the same equipment and machinery used to produce

circular welded pipe. As presented in table VII-5, the production of these other pipe products was a

relatively small part of the operations of Chinese circular welded pipe producers. The largest other

product was the category of “other pipe,” including primarily non-circular tubing. Following in

importance was OCTG. Tubular products other than the subject circular welded pipe grew in volume of

production during 2004-06, and gained very slightly in their share of overall pipe production, rising from

14.5 percent in 2004 to 15.0 percent in 2006.
VII-6

Table VII-5

Circular welded pipe: Chinese producers’ total plant capacity and production, by products, 2004-

06, January-March 2006, and January-March 2007

Item

Calendar year January-March

2004 2005 2006 2006 2007

Quantity (short tons)

Total plant capacity1 4,121,317 4,678,250 5,655,048 1,288,368 1,352,745

Production:

Subject circular welded pipe 2,667,115 3,057,631 3,902,553 813,456 859,546

Small/medium line pipe2 72,719 51,153 110,798 15,057 31,826

Large diameter line pipe3 *** *** *** *** ***

OCTG 89,538 107,788 148,616 52,191 30,062

Other4 *** *** *** *** ***

Total, all products 2,829,372 3,216,572 4,161,967 880,704 921,434

Total plant capacity utilization (percent) 76.3 75.9 82.3 78.7 76.1

 1 Capacity (production capability) is based on operating *** hours per week, *** weeks per year.

 2

 Welded line pipe 16 inches or less in outside diameter (excluding dual-stenciled pipe used in

standard/structural applications).

 3

 Welded line pipe greater than 16 inches in outside diameter.

 4

 Other products consist primarily of non-circular tubing.

Source: Compiled from data submitted in response to Commission questionnaires.

Most Chinese producers reported constraints on their capacity which are presented in table VII-6. 

These constraints consisted primarily of raw materials shortages, power cuts, and production equipment

issues.

Table VII-6

Circular welded pipe: Chinese producers’ constraints on capacity to produce circular welded pipe

in China

* * * * * * *
 12 HTS subheading 7306.30 is a broader tariff classification that includes tubular products that are not subject to

these investigations. 

 13 The data are compiled from the World Trade Atlas. 

 14 Average unit values should be viewed with caution as import valuations in the World Trade Atlas vary by

country (e.g., customs value for the United States and c.i.f. for Belgium).

VII-7

China’s Export Markets

Information regarding China’s export markets for circular welded pipe under HTS six-digit

subheading 7306.30 are presented in table VII-7.12 The data are based on the import records of China’s

trading partners.13 

The United States was the principal trading partner for China’s exports of circular welded pipe

and related tubular products during 2004-06. Other leading export markets during 2006 were Canada (8.5

percent of total exports), Belgium (5.9 percent), the United Kingdom (4.9 percent), and Australia (4.9

percent). The data, while over-broad, are consistent with the data in table VII-4 regarding Chinese

respondents’ exports of the subject product, which show roughly half of exports destined for the United

States. Average unit values of imports by the United States were generally higher than those of imports

in other destination markets, with the exception of the United Kingdom.14
VII-8

Table VII-7

Circular welded pipe: Imports from China by major trading partners, 2004-06

Destination

Calendar year

2004 2005 2006

Quantity (short tons)

United States 215,294 328,064 620,077

Canada 56,365 86,973 109,587

Belgium 20,102 39,028 76,826

United Kingdom 35,588 71,171 63,976

Australia 30,053 47,129 63,442

Hong Kong1 30,001 26,633 36,648

Philippines 4,435 23,706 34,374

Singapore 19,925 19,790 19,137

All other 62,006 139,326 269,948

Total 473,767 781,820 1,294,015

Unit value (per short ton)

United States $526 $535 $517

Canada 490 499 508

Belgium 472 544 481

United Kingdom 526 608 590

Australia 417 463 472

Hong Kong1 472 517 499

Philippines 472 481 481

Singapore 517 553 508

All other 486 525 507

Average 503 530 512

Shares of quantity (percent)

United States 45.4 42.0 47.9

Canada 11.9 11.1 8.5

Belgium 4.2 5.0 5.9

United Kingdom 7.5 9.1 4.9

Australia 6.3 6.0 4.9

Hong Kong1 6.3 3.4 2.8

Philippines 0.9 3.0 2.7

Singapore 4.2 2.5 1.5

All other 13.1 17.8 20.9

Total 100.0 100.0 100.0

1

 Excludes re-exports of Chinese-origin product. 2

 Not applicable or less than 0.05 percent.

Source: World Trade Atlas, importer records (HTS subheading 7306.30).
VII-9

U.S. IMPORTS SUBSEQUENT TO MARCH 31, 2007

U.S. importers responding to the Commission’s questionnaire provided information concerning

their imports of circular welded pipe from China scheduled for delivery after March 31, 2007. This

information is presented in table VII-8.

Table VII-8

Circular welded pipe: Subject U.S. imports scheduled for delivery after March 31, 2007

Time period Quantity (short tons)

April 2007 32,775

May 2007 67,654

June 2007 46,279

July 2007 63,865

August 2007 38,395

September 2007 33,124

After September 30, 2007 1,249

Total 283,341

Source: Compiled from data submitted in response to Commission questionnaires.

U.S. IMPORTERS’ INVENTORIES

Data collected in these investigations on U.S. importers’ end-of-period inventories of circular

welded pipe are presented table VII-9. U.S. importers’ inventories of circular welded pipe from China

decreased from 2004 to 2005, then more than quadrupled in 2006, and were higher in March 2007 than in

March 2006. These inventories as a share of imports and U.S. shipments of imports rose irregularly by

0.4 and 0.5 percentage points, respectively, during 2004-06. The share of inventories to imports

continued to rise, by 0.2 percentage point, during January-March 2006-07; however, the share of

inventories to U.S. shipments of imports declined by 0.6 percentage point during January-March 2006-07. 

Inventories of nonsubject product followed similar patterns during 2004-06 with less pronounced

increases; however, both shares of imports and shipments of imports of nonsubject product were sharply

higher in January-March 2007 as compared to January-March 2006. 
 15 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.

 16 In the silicon metal remand, Chairman Pearson noted “consistent with his views in Lined Paper School

Supplies From China, India, and Indonesia, Inv. Nos. 701-TA-442-443 and 731-TA-1095-1097 (Final), USITC Pub.

3884 (Sept. 2006) at 51, that while he agrees with the Commission that the Federal Circuit’s opinion suggests a

replacement/benefit test, he also finds that the Federal Circuit’s opinion could be read, not as requiring a new test,

but rather 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.” Silicon Metal from Russia, Inv. No. 731-TA991 (Second Remand), USITC Publication 3910, March 2007, p. 2, fn. 17. Commissioner Okun joined in those

separate and dissenting views in Lined Paper.

VII-10

Table VII-9

Circular welded pipe: U.S. importers’ end-of-period inventories of imports, by source, 2004-06,

January-March 2006, and January-March 2007

Item

Calendar year January-March

2004 2005 2006 2006 2007

China:

Inventories (short tons) 9,296 8,028 39,080 27,430 39,411

Ratio of inventories to imports (percent) 4.8 3.0 5.2 4.8 5.0

Ratio to U.S. shipments of imports (percent) 5.1 3.1 5.6 5.7 5.1

Nonsubject sources:

Inventories (short tons) 35,265 24,123 40,040 29,115 49,607

Ratio of inventories to imports (percent) 8.9 8.5 13.2 8.8 19.0

Ratio to U.S. shipments of imports (percent) 9.1 8.2 13.9 9.4 22.3

All sources:

Inventories (short tons) 44,561 32,151 79,120 56,545 89,018

Ratio of inventories to imports (percent) 7.5 5.8 7.5 6.3 8.5

Ratio to U.S. shipments of imports (percent) 7.8 5.8 8.1 7.1 9.0

Source: Compiled from data submitted in response to Commission questionnaires.

DUMPING IN THIRD-COUNTRY MARKETS

Chinese questionnaire respondents reported that circular welded pipe was subject to an

antidumping duty order in Australia imposed on June 25, 2006. Chinese respondents reported no

additional barriers to their exports of circular welded pipe. 

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:15 16
 17 IISI, Steel Statistical Yearbook 2006. Global and regional production data as published by IISI refer to all

welded pipe and tube (including, for example, OCTG and line pipe), and are therefore substantially broader than the

subject merchandise. As such, global and regional production data represent general trends and are for illustrative

purposes only.

 18 Data for 2006 are not yet available.

VII-11

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

During the preliminary phase of these investigations, the Commission sought pricing data from

U.S. importers of circular welded pipe from China and from all other countries. Those data are presented

in Part V (China) and appendix D (all other countries) of this report. With respect to foreign industry

data, the Commission sought publicly available information regarding producers of circular welded pipe

from the top seven sources of imports into the United States in 2006: Canada, India, Korea, Mexico,

Taiwan, Thailand, and Turkey. The information obtained is presented in the following sections.

Overview

Circular welded pipe is produced in substantial quantities by welded pipe producers throughout

the world. Although figures for global circular welded pipe production are not generally available, the

International Iron and Steel Institute (“IISI”) publishes data on the global production of the larger product

grouping of all welded pipe and tube.17 As shown in table VII-10, welded pipe production, primarily in

China, increased between 2003 and 2005.18

Table VII-10

Circular welded pipe: Global welded tube and pipe production, by region, 2003-05 

Region

Calendar year

2003 2004 2005

Quantity (1,000 short tons)

North America 6,196 4,892 6,662

European Union (15) 9,916 10,049 9,984

Asia, excluding China 14,315 15,200 14,601

China 11,363 14,344 17,274

Commonwealth of Independent States 3,891 -- --

South America5 -- -- --

Other 1,362 2,088 2,146

 Total 47,043 46,573 50,668

Note.–The data presented in this table are for all welded tubes, and so are substantially overstated with respect to the circular

welded pipe subject to these investiations. No Thai or Turkish production was reported during 2003-05. In addition, data were not

published for the Commonwealth of Independent States in 2004-05 or for South America in 2003-05. Original data were published

in metric tons, which were converted to short tons by multiplying by 1.102311. Because of rounding, figures may not add to the

totals shown.

Source: International Iron and Steel Institute, Steel Statistical Yearbook 2006.
VII-12

Leading Nonsubject Sources of Circular Welded Pipe

As shown in table VII-11, each of the leading nonsubject sources of circular welded pipe has

multiple producers capable of producing circular welded pipe, often in conjunction with other tubular

products.

Table VII-11 

Circular welded pipe: Locations, capacity,1

 product standards, and parent companies of

production facilities in non-subject countries

Firm

Production

location(s)

Capacity 1

(short

tons)

Product

standard(s)

Parent company/related foreign

producer

Canada 

Atlas Tube Inc.

(Canada) Harrow , Ontario

750,000

ASTM A-500

Atlas Tube Group (Canada) is an

affiliate of Carlyle Group (US)

Canada Phoenix

Steel Products

Ltd. Etobicoke, Ontario (2

) ASTM A-252 (2)

IPSCO Inc3

Calgary, Alberta 300,000

ASTM A-53,

 A-135, A-252, 

A- 500

SSAB Svenskt Stal AB (Sweden) is 

purchasing IPSCO3

Regina,

Saskatchewan 1,000,000

Red Deer, Alberta 155,000

OSM TubularCamrose Camrose, Alberta 320,000API 5L X 42

ASTM A 252

Purchased by Evraz (Russia)

Previous name: Camrose Pipe Co.

Delta Tube Co. Lasalle, Quebec (2

) (2)

Joint venture between Nova (60 percent

ownership) and Ispat Sidbec Inc. 

(a subsidiary of Mittal Canada Inc.)

Mittal Canada Inc. Montreal, Quebec 143,000

ASTM A-53, 

A-795 Arcelor Mittal

Lake Side Steel

Corp. Welland, Ontario 200,000

API 5L, 

ASTM A-53, A135, A-252, A500, A-795

Lake Side purchased Telpipe in

November 2005.

India

Asian Mills Pvt

Limited Taluk Kalol, Gujarat (2

)

API 5L, 

ASTM A-53 (2)

Maharashtra

Seamless Rajpura, Punjab 

165,000 API 5L, 

ASTM A-53, (2

)

Mukat Pipes Ltd. Rajpura, Punjab (2

) API 5L (2)

Ratnamani Metals

and Tubes Kadi, Mahsana (2

) API 5L (2)

Steel Authority of

India Rourkela, Orissa

143,000 API 5L, 

ASTM A-53, (2

)

Surindra

Engineering

Mumbai,

Maharashtra 55,000 API 5L Mukat Group of Companies

Surya Steel Pipe Rohtak, Haryana 331,000

APL 5L, 

ASTM A-53 Former name: Surya Roshni Ltd.

Welspun Gujarat

Stahl Rohren

Bharuch, Gujarat

1,102,000

API 5L, 

ASTM A-252 (2

)

Mumbai,

Maharashtra

Table continued on next page.
VII-13

Table VII-11–Continued

Circular welded pipe: Locations, capacity,1

 product standards, and parent companies of

production facilities in non-subject countries.

Firm’s name

Production

location(s)

Capacity 1

(short

tons)

Product

standards

Parent company/related foreign

producer

Korea

Dongbu Steel Seo Gu, Inchon 2,756,000

API 5L, 

ASTM A- 53, A135, A- 252, A500 (2

)

Husteel Co.

Daebul, ChullanamDo 331,000 API 5L, 

ASTM A-53, A252, A-500 (2

)

Dangjin,

Chungcheonnam-Do 551,000

Hyundai HYSCO Buk-Ku, Ulsan 1,102,000

API 5L, 

ASTM A-53, A135, A-252, A500 Hyundai Steel Pipe Co.

Miju Steel

Nam-Gu, Incheon

(

2

)

Standard,

ordinary uses,

structure,

scaffolding (

2

)

Pohang-Si,

Gyeongsangbuk-Do

 Suncheon -Si

Jeollanam-Do

SeAH Steel Corp.

Changwon City,

Gyongsannam-Do

1,300,000

API 5L, 

ASTM A-53, A135, A-252, A500 (2

)

Pohang City,

Gyungsangbuk-Do

Steel Flower

Kimhae City,

Kyungnam (2

) API 5L (2)

Mexico

Hylsa S.A.de C.V. Nuevo Leon (2

)

Conduction pipe;

structural tubing Ternium

Tubacero, S.A. de

C.V. Monterrey, N.L. 386,000 API 5L (2

)

Tuberia Laguna

Parque Industrial

Lagunero, Durango 138,000

API 5L, 

ASTM A-53 (2

)

Tuberia Nacional

S.A.de C.V. Nuevo Leon (2

)

Conduction pipe;

structural tubing Villacero

Taiwan

Femco Chiayi 159,000

API 5L, ASTM A53, A-252, A-500

Kao Hsing Chang

(KHC) KoaHsiung (2

)

API 5L, ASTM A53 (2

)

Kounan Steel Kaohsiung Shiann (2

)

Carbon and low

alloy,

 structural, round, (2

)

Yieh Loong Kaohsiung Hsieng 110,000

API 5L, ASTM A53(

2

)

Table continued on next page.
VII-14

Table VII-11–Continued

Circular welded pipe: Locations, capacity,1

 product standards, and parent companies of

production facilities in non-subject countries.

Firm’s name

Production

location(s)

Capacity 1

(short

tons)

Product

standards

Parent company/related foreign

producer

Thailand

Able Industries Pathumthani 120,000

APL 5L 

ASTM A-534

(

2

)

Saha Thai Steel

Pipe (2) 100,000

Black steel pipe,

galvanized steel

pipe5

Turkey

Borusan

Mannesmann

Boru

Gemlik, Bursa

827,000

API 5L, ASTM

A53, A135, A

252, A 500 (2 Sefakoy, Istanbul )

Emek Boru Sincan, Ankara 176,000

API 5L, ASTM

A252, A53 (2

)

Erciyas Steel Pipe

Industry Duzce/Bolu 187,000

API 5L, ASTM

A53, A252 (2

)

Hatboru Antakya Hatay 26,000 ASTM A53 (2)

HMD Steel Pipe

Industry & Trade Gebze-Kocaeli (2

) ASTM A252 (2)

Nosksel

Henrek-Sakarya 110,000 API 5L, ASTM

53, ASTM 252 (2 Iskenderun 110,000 )

Ufuk Spiral Pipe Sanliurfa 44,000

ASTM A-53, A252Previous name: Uyar Celik Section

Industry

Umran Steel Pipe

Akcakoca 551, 000 API 5L, ASTM 

A- 53, A-252 (2 Umraniye, Istanbul 220,000 )

 1

 Capacity may be overstated because circular welded pipe is only one among the many products manufactured

by the companies’ production lines.

 2 Unavailable. 3 SSAB is acquiring IPSCO for a total of $7.7 billion. 4 Found at http://www.able-industries.co.th/data/all_erw_std.htm, retrieved July 4, 2007. 5 Found at http://www.sahathai.com/prod01.htm, retrieved July 11, 2007.

Sources: Companies’ websites and The Simdex Steel Tube Manufacturers Worldwide Guide, 2007.

Canada

Production Profile

As shown in table VII-11, there are several companies in Canada producing circular welded pipe.

Some of these firms are owned by non-Canadian parent companies located in: 

C The United States - Atlas Tube in Canada and Atlas Tube in Plymouth, Michigan, are affiliates of

the Carlyle Group, a U.S. investment entity that purchased John Maneely, the parent company of

Sharon Pipe and Wheatland Tube;

C Russia - Evraz-Oregon Steel Mills owns OSM-Camrose in Alberta; and 
 19 International Iron and Steel Institute, Steel Statistical Yearbook 2006, Table 29. The data for 2004 and 2005

exceed capacity estimates in table VII-11 found in The Simdex Steel Tube Manufacturers Worldwide Guide, 2007. 

These different data sources have potentially different participants and are not expected to agree. Throughout the

remainder of this section, capacity and production data from different sources are not directly comparable.

 20 There are no U.S. restrictions on circular welded pipe imports from Canada.

VII-15

C Sweden - SSAB is in the process of purchasing IPSCO which also has production facilities in the

United States.

In total, it is estimated that Canada has a capacity to produce approximately 2.9 million tons per

year of circular welded pipe and related tubular products. This level serves as an approximated upper

limit for production capacity by reporting companies because of product shifting flexibility among

production lines. According to the IISI, Canadian production of welded pipe and tube increased from 2.6

million short tons in 2003 to 3.0 million short tons in 2004 and to 3.1 million short tons in 2005.19

Export Profile 

According to Global Trade Atlas, in 2006, Canada exported almost exclusively to the United

States, which accounted for nearly 98 percent of Canada’s total exports of circular welded pipe and

related tubular products in terms of quantity.20 Canada’s exports of circular welded pipe to Mexico, its

second-largest export destination, amounted to only 0.6 percent in 2006 and exports to other countries

accounted for about 0.3 percent or less each (table VII-12).

Table VII-12 

Circular welded pipe: Canada's exports of circular welded pipe, 2000-06, in short tons

Rank Country 2000 2001 2002 2003 2004 2005 2006

Export

share in

2006

(percent)

World 382,667 429,056 376,487 390,742 414,188 455,537 428,132 100.0

1 United States 378,132 376,239 364,970 386,351 409,872 446,526 419,271 97.9

2 Mexico 3,738 52,310 9,154 959 166 913 2,382 0.6

3 Australia 118 120 240 565 1,302 1,601 1,433 0.3

4 Chile 28 23 34 64 165 1,151 1,175 0.3

5 Germany 89 126 425 1,443 1,299 1,575 884 0.2

6 Peru 292 67 12 20 41 658 674 0.2

7 South Africa 0 0 0 14 26 206 315 0.1

8 Cuba 29 0 0 13 12 15 292 0.1

9 Russia 0 0 0 0 37 241 282 0.1

10 Malaysia 8 0 0 0 21 36 261 0.1

Source: Global Trade Atlas (data for HTS 7306.30).
 21 Welspun, a textile and steel tube maker, plans to form a joint venture with Lone Star, a Texas-based line pipe

producer, to make nonsubject large line pipe. The status of this joint venture is less certain following the purchase of

Lone Star by U.S. Steel earlier in 2007.

 22 IISI has no current estimates of Indian production of welded tubular products.

 23 Indian imports into the United States must pay antidumping duties ranging from zero to 87.39 percent. Preston

Pipe and Tube Reports, May, 2007, pp. 4-5.

 24 MBR, a London-based research and marketing firm which publishes the “Welded Steel Tube & Pipe Monthly,”

a well-regarded monthly publication in the pipe and tube industry.

 25 MBR, Welded Steel Tube & Pipe Monthly, April 2007, p. 7.

VII-16

India

Production Profile

India has several production facilities with a wide range of products including ASTM A-53 and

A-252, as well as APL 5L (which may be dual-stenciled to ASTM A-53). Table VII-11 shows a total

reported Indian capacity of approximately 1.8 million short tons per year. Welspun Gujarat Stahl Rohren

is the country’s leading producer of circular welded pipe and related tubular products with a capacity of

1.2 million short tons per year.21 22

Export Profile

According to Global Trade Atlas, India exports circular welded pipe and related tubular products

mostly to neighboring Sri Lanka and to the Middle East and Africa (table VII-13). The United States is

not listed among India’s top 10 export markets for these products.23 Metal Bulletin Reserach (“MBR”)24

reported that India’s relative proximity to the Middle East provides Indian steel tubular products with a

competitive advantage in this important regional market over those from the EU and Japan.25 

Table VII-13

Circular welded pipe: India's exports of circular welded pipe, 2000-06, in short tons

Rank Country 2000 2001 2002 2003 2004 2005 2006

Export

share in

2006

(percent)

World 607 1,905 3,734 2,965 3,741 6,584 13,186 100.0

1 Sri Lanka 323 936 315 701 1,485 3,250 5,667 43.0

2 UAE1 0 4 20 453 15 637 2,434 18.5

3 Djibouti 0 0 353 41 0 1,120 1,789 13.6

4 Ghana 0 0 0 18 22 30 387 2.9

5 Kuwait 2 0 0 0 25 23 387 2.9

6 Tanzania 7 9 0 0 0 45 376 2.9

7 Mali 0 0 0 0 0 30 274 2.1

8 Belgium 0 0 0 20 0 7 217 1.6

9 Congo 0 0 0 0 0 110 170 1.3

10 Mauritius 0 0 20 0 0 4 140 1.1

 1 United Arab Emirates.

Note.–Data reported for exports from India are believed to be substantially understated.

Source: Global Trade Atlas (data for HTS 7306.30).
 26 International Iron and Steel Institute, Steel Statistical Yearbook 2006, Table 29.

 27 Korea’s imports of circular welded pipe into the United States must pay antidumping duties between 0.71

percent and 4.8 percent. Preston Pipe and Tube Reports, May, 2007, pp. 4-5.

VII-17

Korea

Production Profile

Korea is an important global producer of pipe and tube with a total reported capacity of more than

6 million tons (table VII-11). According to the IISI, Korean production of welded tubes and pipes

increased from 4.673 million short tons in 2003 to 4.701 million short tons in 2004, but then decreased to

4.467 million short tons in 2005.26

Export Profile

Korea exported a substantial portion of its circular welded pipe and related tubular products to the

United States until 2002, when its exports to the United States began to diminish.27 In 2006, Japan was

Korea’s largest customer for circular welded pipe and related tubular products, followed by the United

States. Korean producers also export to several Asian countries (table VII-14). 

Table VII-14 

Circular welded pipe: Korea's exports of circular welded pipe, 2000-06, in short tons

Rank Country 2000 2001 2002 2003 2004 2005 2006

Export

share in

2006

(percent)

World 517,942 543,336 410,241 253,005 221,389 215,814 209,106 100.0

1 Japan 111,456 95,874 84,073 60,235 49,461 52,128 41,879 20.0

2 United States 259,958 280,236 168,342 45,351 56,151 45,772 36,650 17.5

3 Hong Kong 28,017 29,806 31,798 24,048 24,228 20,341 20,727 9.9

4 China 11,747 16,635 28,252 51,026 26,051 25,962 13,445 6.4

5 Chile 7,132 8,799 2,134 1,518 543 4,275 11,539 5.5

6 Singapore 9,579 14,957 13,583 7,992 9,914 10,279 10,638 5.1

7 Thailand 6,389 10,593 5,616 8,416 8,565 8,079 8,957 4.3

8 Australia 6,070 4,325 6,209 3,316 2,295 1,463 6,711 3.2

9 Canada 8,811 5,146 5,010 2,055 2,644 4,071 6,515 3.1

10 Taiwan 11,944 6,768 10,884 12,700 10,904 6,280 5,950 2.8

Source: Global Trade Atlas (data for HTS 7306.30).

Mexico 

Production Profile

Mexico’s four identified producers of circular welded pipe have a reported capacity of over

500,000 short tons per year (table VII-11). According to IISI, production of all welded tubular products
 28 International Iron and Steel Institute, Steel Statistical Yearbook 2006, Table 29.

 29 U.S. imports of circular welded pipe from Mexican companies must pay antidumping duties ranging from 2.92

percent to 32.62 percent. Preston Pipe and Tube Reports, May, 2007, pp. 4-5.

VII-18

in Mexico decreased from 625,000 short tons in 2003 to 611,777 short tons in 2004 and then increased to

639,334 short tons in 2005.28

Export Profile

Since at least 2000, the United States has been the largest market for Mexico’s circular welded

pipe and related tubular products (table VII-15).29 Other markets include Cuba, Guatemala, and,

increasingly, Costa Rica.

Table VII-15 

Circular welded pipe: Mexico's exports of circular welded pipe, 2000-06, in short tons

Rank Country 2000 2001 2002 2003 2004 2005 2006

World (1

) (1) (1) (1) (1) (1) (1)

1 United States 48,086 59,022 65,046 78,410 77,846 97,604 97,358

2 Cuba 261 71 1,163 1,670 632 1,695 737

3 Puerto Rico (U.S.) 2 0 0 432 958 1,022 496

4 Costa Rica 276 434 168 99 154 528 354

5 Guatemala 1,512 1,971 467 580 856 1,030 306

6 Germany 21 91 191 30 2 202 287

7 Taiwan 0 0 0 0 0 0 177

8 El Salvador 101 78 66 196 231 324 161

9 France 49 41 93 0 0 228 160

10 Belize 179 79 128 119 33 41 123

 1 Not available.

Source: Global Trade Atlas (data for HTS 7306.30).

Taiwan

Production Profile

As shown in table VII-11, several mills in Taiwan have the capacity to produce circular welded

pipe and related tubular products, although reported capacity is substantially understated. Taiwan is the

fourth largest producer of circular welded steel pipe and related tubular products in East Asia, behind

China, Japan, and Korea. The IISI reported that Taiwan’s production of welded tubes has fluctuated

around 1.1 million short tons since 1996.

Export Profile

The United States has been the dominant export market for Taiwan’s circular welded steel pipe

and related tubular products since at least 2000, accounting for almost 83 percent of Taiwan’s exports of
 30 Currently, for imports of standard and structural welded round pipe (from 3/8 of an inch to 16 inches O.D.) into

the United States, Taiwan’s companies must pay antidumping duties from 1.61 percent to 43.7 percent. Preston Pipe

and Tube Reports, May, 2007, p. 5.

 31 IISI has no current estimates of Thai production of welded tubular products.

 32 Saha Thai Steel Pipe Clinched Baht 2.1 Billion Revenues in First 6 Months, AsiaPRnews.com, October 6,

2005, found at http://www.asiaprnews.com/real-estate/saha-thai-steel-pipe-clinched-baht-2-1-billion-revenues

-in.html, retrieved July 4, 2007.

 33 Currently, for imports of standard and structural welded round pipe (from 3/8 of an inch to 16 inches O.D.) into

the United States, Saha Thai has to pay an antidumping duty of 2.26 percent while other Thai companies have to pay

a 16.67 percent duty. Preston Pipe and Tube Reports, May, 2007, pp. 4-5.

VII-19

these products in 2006 (table VII-16).30 In contrast, China, Taiwan’s second largest customer, accounted

for only over 4 percent of Taiwan’s exports of these products.

Table VII-16 

Circular welded pipe: Taiwan's exports of circular welded pipe, 2000–06, in short tons

Rank Partner

Country 2000 2001 2002 2003 2004 2005 2006 

Export 

share

(percent)

 World 97,007 75,331 75,210 46,902 60,056 36,868 61,050 100.0

1 United States 73,132 51,995 56,589 21,425 40,855 25,072 50,523 82.8

2 China 0 918 1,734 2,264 2,573 2,400 2,673 4.4

3 Vietnam 4,522 5,922 4,968 5,214 4,693 1,581 1,800 2.9

4 Thailand 45 660 885 355 1,452 2,134 1,733 2.8

5 Korea South 0 0 0 0 0 0 1,031 1.7

6 Australia 536 643 1,258 1,673 2,567 1,746 1,016 1.7

7 Japan 1,640 1,146 480 449 537 1,272 656 1.1

8 Singapore 272 400 0 368 457 191 528 0.9

9 Canada 0 0 0 0 0 209 412 0.7

10

United Arab

Emirates 5,164 2,275 1,102 860 111 86 214 0.4

Source: Global Trade Atlas, (data for HTS 7306.30).

Thailand 

Production Profile

Table VII-11 shows two producers of circular welded pipe and related tubular products in

Thailand, namely, Able Industries and Saha Thai Steel Pipe. These two producers reportedly have a total

capacity of approximately 220,000 short tons.31

Export Profile

Saha Thai claims to focus primarily on the domestic market and on exporting to Canada, Australia,

the EU, and Latin American markets.32 However, the United States has long been the leading market for

Thailand circular welded pipe exports and, in 2006, accounted for almost 70 percent of Thailand’s total

exports of circular welded pipe and related tubular products (table VII-17).33 Thailand also exports

circular welded pipe and related tubular products to neighboring Indonesia, Australia, and Singapore and

other ASEAN countries.
 34 1999 is the last year that Turkey provided the IISI with data on its production of welded tubes. Total Europe

(1999) includes the 25 EU countries and other European countries comprising of Bulgaria, Croatia, Macedonia,

Romania, Serbia and Montenegro, and Turkey. Steel Statistical Yearbook 2006, Table 29. 

 35 Currently, for imports of standard and structural welded round pipe (from 3/8 of an inch to 16 inches O.D.) into

the United States, Turkey’s companies must pay antidumping duties up to 25.01 percent and countervailing duties up

to 2.9 percent. Preston Pipe and Tube Reports, May, 2007, pp. 4-5.

 36 The EU27 includes Austria, Belgium, Bulgaria, Czech Republic, Cyprus, Denmark, Estonia, Finland, France,

Germany, Greece, Hungary, Italy, Ireland, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Romania,

Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom.

VII-20

Table VII-17 

Circular welded pipe: Thailand's exports of circular welded pipe, 2000-06, in short tons

Rank Country 2000 2001 2002 2003 2004 2005 2006

Export

share

(percent)

World 200,954 143,651 124,273 94,900 127,218 110,051 100,741 100.0

1 United States 110,794 73,137 87,402 55,486 91,959 79,282 69,849 69.3

2 Indonesia 0 0 521 1,577 2,747 12,986 8,898 8.8

3 Australia 5,073 6,059 7,298 13,813 13,856 1,647 4,499 4.5

4 Puerto Rico (U.S.) 0 0 0 0 0 6,335 3,287 3.3

5 Singapore 19,446 11,731 9,978 12,741 11,164 4,312 2,800 2.8

6 Vietnam 376 79 0 850 1 68 2,750 2.7

7 India 10 10 11 10 33 1,362 2,006 2.0

8 UAE1 154 578 551 50 114 192 1,505 1.5

9 Philippines 1 0 26 22 47 624 1,371 1.4

10 Qatar 0 0 0 0 225 642 984 1.0

 1 United Arab Emirates.

Source: Global Trade Atlas (data for HTS 7306.30).

Turkey

Production Profile

Turkey is a key producer of circular welded steel pipe and related tubular products in the world

with an estimated total production capacity of over 2.250 million short tons. The IISI reports that, in the

greater European region, Turkey’s production of welded tubes (at 2.1 million short tons) was only behind

those of Italy and Germany and accounted for over 15 percent of regional production of welded tubes in

1999.34 

Export Profile

Since 2000, Turkey exports to the United States has steadily increased, rising from 18,739 short

tons in 2000 to 153,220 short tons in 2005, accounting for over one third of total Turkey’s exports (table

VII-18).35 In 2002, the United States overtook the United Kingdom as the leading individual country

importer of Turkey’s circular welded products. As a group, however, the EU27 remains the largest

customer of Turkey’s exports.36
VII-21

Table VII-18 

Circular welded pipe: Turkey's exports of circular welded pipe, 2000–06, in short tons

Rank

Partner

Country 2000 2001 2002 2003 2004 2005 2006

Export

share in

20051

(percent)

 World 278,175 361,224 428,390 390,593 403,326 452,152 (1

) 100.0

1 United States 18,355 27,262 81,130 81,566 114,008 153,203 (1) 33.9

2

United

Kingdom 42,782 40,386 58,917 58,143 60,581 57,822 (1) 12.8

3 Italy 18,347 29,812 36,592 37,605 39,940 30,574 (1

) 6.8

4 Greece 14,093 14,922 12,691 19,427 19,883 21,353 (1

) 4.7

5 Romania 1,852 3,059 7,044 13,626 10,725 17,549 (1

) 3.9

6 Germany 36,409 39,270 35,472 30,293 22,935 16,204 (1

) 3.6

7 Belgium 0 0 18,221 5,997 15,560 14,508 (1

) 3.2

8 Iraq 0 0 0 4,252 7,075 11,948 (1

) 2.6

9

Turk. Rep. of

N. Cyprus 3,376 1,693 3,268 3,381 4,316 5,517 (1

)

 

1.2

10

Kayseri Free

Zone 0 805 5,959 4,720 3,457 5,261 (1

) 1.2

 1 According to Global Trade Atlas, Turkey‘s data were not fully reported in 2006. 

 

Source: Global Trade Atlas, (data for HTS 7306.30).

A-1

APPENDIX A

FEDERAL REGISTER NOTICES

32862 Federal Register / Vol. 72, No. 114 / Thursday, June 14, 2007 / Notices 

consider anonymous comments, and we 

will make available for inspection in 

their entirety all comments submitted 

by organizations or businesses or by 

individuals identifying themselves as 

representatives of organizations or 

businesses. 

Dated: June 4, 2007. 

Walter D. Cruickshank, 

Acting Director, Minerals Management 

Service. 

[FR Doc. E7–11517 Filed 6–13–07; 8:45 am]

BILLING CODE 4310–MR–P 

INTERNATIONAL TRADE 

COMMISSION 

[Investigation Nos. 701–TA–447 and 731–

TA–1116 (Preliminary)] 

Circular Welded Carbon-Quality Steel 

Pipe From China 

AGENCY: United States International 

Trade Commission. 

ACTION: Institution of countervailing 

duty and antidumping duty 

investigations and scheduling of 

preliminary phase investigations. 

SUMMARY: The Commission hereby gives 

notice of the institution of 

investigations, commencement of 

preliminary phase countervailing duty 

investigation No. 701–TA–447 

(Preliminary), and commencement of 

preliminary phase antidumping duty 

investigation No. 731–TA–1116 

(Preliminary) under sections 703(a) and 

733(a) of the Tariff Act of 1930 (19 

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

(the Act) 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 of circular welded 

carbon-quality steel pipe, provided for 

in subheadings 7306.30.10 and 

7306.30.50, as well as 7306.50.10 and 

7306.50.50, of the Harmonized Tariff 

Schedule of the United States, that are 

alleged to be subsidized by the 

Government of China and sold in the 

United States at less than fair value. 

Unless the Department of Commerce 

extends the time for initiation pursuant 

to sections 702(c)(1)(B) and 732(c)(1)(B) 

of the Act (19 U.S.C. 1671a(c)(1)(B) and 

1673a(c)(1)(B)), the Commission must 

reach preliminary determinations in 

countervailing duty and antidumping 

duty investigations in 45 days, or in this 

case by July 23, 2007. The Commission’s 

views are due at Commerce within five 

business days thereafter, or by 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). 

DATES: Effective Date: June 7, 2007. 

FOR FURTHER INFORMATION CONTACT: 

Cynthia Trainor (202–205–3354), Office 

of Investigations, U.S. International 

Trade Commission, 500 E Street SW., 

Washington, DC 20436. Hearingimpaired persons can obtain 

information on this matter by contacting 

the Commission’s TDD terminal on 202–

205–1810. Persons with mobility 

impairments who will need special 

assistance in gaining access to the 

Commission should contact the Office 

of the Secretary at 202–205–2000. 

General information concerning the 

Commission may also be obtained by 

accessing its Internet server (http:// 

www.usitc.gov). The public record for 

these investigations may be viewed on 

the Commission’s electronic docket 

(EDIS) at http://edis.usitc.gov. 

SUPPLEMENTARY INFORMATION: 

Background.—These investigations 

are being instituted in response to a 

petition filed on June 7, 2007, by Allied 

Tube & Conduit, Harvey, IL; IPSCO 

Tubulars, Inc., Camanche, IA; 

Northwest Pipe Co., Portland OR; 

Sharon Tube Co., Sharon, PA; Western 

Tube & Conduit Corp., Long Beach, CA; 

Wheatland Tube Co., Collingswood, NJ; 

and the United Steelworkers, Pittsburgh, 

PA. 

Participation in the investigations and 

public service list.—Persons (other than 

petitioners) wishing to participate in the 

investigations as parties must file an 

entry of appearance with the Secretary 

to the Commission, as provided in 

sections 201.11 and 207.10 of the 

Commission’s rules, not later than seven 

days after publication of this notice in 

the Federal Register. Industrial users 

and (if the merchandise under 

investigation is sold at the retail level) 

representative consumer organizations 

have the right to appear as parties in 

Commission countervailing duty and 

antidumping duty investigations. The 

Secretary will prepare a public service 

list containing the names and addresses 

of all persons, or their representatives, 

who are parties to 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 the 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 28, 

2007, at the U.S. International Trade 

Commission Building, 500 E Street SW., 

Washington, DC. Parties wishing to 

participate in the conference should 

contact Cynthia Trainor (202–205–3354) 

not later than June 25, 2007, to arrange 

for their appearance. Parties in support 

of the imposition of countervailing 

duties and antidumping duties in these 

investigations and parties in opposition 

to the imposition of such duties will 

each be collectively allocated one hour 

within which to make an oral 

presentation at the conference. A 

nonparty who has testimony that may 

aid the 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 

July 3, 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 the investigations 

must be served on all other parties to 

the investigation (as identified by either 


jlentini on PROD1PC65 with NOTICES
Federal Register / Vol. 72, No. 114 / Thursday, June 14, 2007 / Notices 32863 

the public or BPI service list), and a 

certificate of service must be timely 

filed. The Secretary will not accept a 

document for filing without a certificate 

of service. 

Authority: These investigations are being 

conducted under authority of title VII of the 

Tariff Act of 1930; this notice is published 

pursuant to section 207.12 of the 

Commission’s rules. 

By order of the Commission. 

Issued: June 11, 2007. 

William R. Bishop, 

Hearings and Meetings Coordinator. 

[FR Doc. E7–11472 Filed 6–13–07; 8:45 am] 

BILLING CODE 7020–02–P 

INTERNATIONAL TRADE 

COMMISSION 

[Inv. No. 337–TA–607] 

In the Matter of Certain Semiconductor 

Devices, DMA Systems, and Products 

Containing Same; Notice of 

Investigation 

AGENCY: U.S. International Trade 

Commission. 

ACTION: Institution of investigation 

pursuant to 19 U.S.C. 1337. 

SUMMARY: Notice is hereby given that a 

complaint was filed with the U.S. 

International Trade Commission on May 

7, 2007, under section 337 of the Tariff 

Act of 1930, as amended, 19 U.S.C. 

1337, on behalf of Samsung Electronics 

Co., Ltd. of Korea. Supplements were 

filed on May 23, 2007 and June 5, 2007. 

The complaint, as supplemented, 

alleges violations of section 337 in the 

importation into the United States, the 

sale for importation, and the sale within 

the United States after importation of 

certain semiconductor devices, DMA 

systems, and products containing same 

by reason of infringement of U.S. Patent 

Nos. 7,064,026 and 5,613,162. The 

complaint, as supplemented, further 

alleges that an industry in the United 

States exists as required by subsection 

(a)(2) of section 337. 

The complainant requests that the 

Commission institute an investigation 

and, after the investigation, issue a 

permanent limited exclusion order and 

a cease and desist order. 

ADDRESSES: The complaint and 

supplement, except for any confidential 

information contained therein, are 

available for inspection during official 

business hours (8:45 a.m. to 5:15 p.m.) 

in the Office of the Secretary, U.S. 

International Trade Commission, 500 E 

Street, SW., Room 112, Washington, DC 

20436, telephone 202–205–2000. 

Hearing impaired individuals are 

advised that information on this matter 

can be obtained 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 at http:// 

www.usitc.gov. The public record for 

this investigation may be viewed on the 

Commission’s electronic docket (EDIS) 

at http://www.usitc.gov/secretary/ 

edis.htm. 

FOR FURTHER INFORMATION CONTACT: 

Jeffrey T. Hsu, Esq., Office of Unfair 

Import Investigations, U.S. International 

Trade Commission, telephone (202) 

205–2579. 

Authority: The authority for institution of 

this investigation is contained in section 337 

of the Tariff Act of 1930, as amended, and 

in section 210.10 of the Commission’s Rules 

of Practice and Procedure, 19 CFR 210.10 

(2006). 

Scope of Investigation: Having 

considered the complaint, the U.S. 

International Trade Commission, on 

June 6, 2007, ordered that—

(1) Pursuant to subsection (b) of 

section 337 of the Tariff Act of 1930, as 

amended, an investigation be instituted 

to determine whether there is a 

violation of subsection (a)(1)(B) of 

section 337 in the importation into the 

United States, the sale for importation, 

or the sale within the United States after 

importation of certain semiconductor 

devices, DMA systems, and products 

containing same by reason of 

infringement of one or more of claims 

1–6 of U.S. Patent No. 7,064,026 and 

claims 1–11 of U.S. Patent No. 

5,613,162, and whether an industry in 

the United States exists as required by 

subsection (a)(2) of section 337; 

(2) For the purpose of the 

investigation so instituted, the following 

are hereby named as parties upon which 

this notice of investigation shall be 

served: 

(a) The complainant is—

Samsung Electronics Company, Ltd., 

Samsung Main Building, 250, 

Taepyung-ro 2-ka, Chung-ku, Seoul 

100–742, Korea. 

(b) The respondents are the following 

entities alleged to be in violation of 

section 337, and are the parties upon 

which the complaint, as supplemented, 

is to be served: 

Renesas Technology Corp., Marunouchi 

Building, 4–1, Marunouchi 2-chome, 

Chiyoda-ku, Tokyo 100–6334, Japan. 

Renesas Technology America, Inc., 450 

Holger Way, San Jose, California 

95134. 

(c) The Commission investigative 

attorney, party to this investigation, is 

Jeffrey T. Hsu, Esq., Office of Unfair 

Import Investigations, U.S. International 

Trade Commission, 500 E Street, SW., 

Room 401, Washington, DC 20436; and 

(3) For the investigation so instituted, 

the Honorable Carl C. Charneski is 

designated as the presiding 

administrative law judge. 

Responses to the complaint, as 

supplemented, and the notice of 

investigation must be submitted by the 

named respondents in accordance with 

section 210.13 of the Commission’s 

Rules of Practice and Procedure, 19 CFR 

210.13. Pursuant to 19 CFR 201.16(d) 

and 210.13(a), such responses will be 

considered by the Commission if 

received not later than 20 days after the 

date of service by the Commission of the 

complaint, as supplemented, and the 

notice of investigation. Extensions of 

time for submitting responses to the 

complaint, as supplemented, and the 

notice of investigation will not be 

granted unless good cause therefor is 

shown. 

Failure of a respondent to file a timely 

response to each allegation in the 

complaint, as supplemented, and in this 

notice may be deemed to constitute a 

waiver of the right to appear and contest 

the allegations of the complaint, as 

supplemented, and this notice, and to 

authorize the administrative law judge 

and the Commission, without further 

notice to the respondent, to find the 

facts to be as alleged in the complaint, 

as supplemented, and this notice and to 

enter an initial determination and a 

final determination containing such 

findings, and may result in the issuance 

of a limited exclusion order or cease and 

desist order or both directed against the 

respondent. 

Issued: June 6, 2007. 

By order of the Commission. 

Marilyn R. Abbott, 

Secretary to the Commission. 

[FR Doc. E7–11447 Filed 6–13–07; 8:45 am] 

BILLING CODE 7020–02–P 


jlentini on PROD1PC65 with NOTICES
Federal Register / Vol. 72, No. 128 / Thursday, July 5, 2007 / Notices 36663 

Secretary’s presumption that 

reimbursement of antidumping duties 

occurred and the subsequent assessment 

of double antidumping duties. 

We are issuing and publishing this 

notice in accordance with sections 

751(a)(1) and 777(i)(1) of the Act. 

Dated: June 27, 2007. 

Joseph A. Spetrini, 

Deputy Assistant Secretary for Import 

Administration. 

[FR Doc. E7–13009 Filed 7–3–07; 8:45 am] 

BILLING CODE 3510–DS–S 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[A–570–910] 

Initiation of Antidumping Duty 

Investigation: Circular Welded Carbon 

Quality Steel Pipe from the People’s 

Republic of China 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

EFFECTIVE DATE: July 5, 2007. 

FOR FURTHER INFORMATION CONTACT: 

Maisha Cryor or Mark Manning, AD/ 

CVD Operations, Office 4, Import 

Administration, International Trade 

Administration, U.S. Department of 

Commerce, 14th Street and Constitution 

Avenue, NW, Washington, DC 20230; 

telephone: (202) 482–5831 or (202) 482–

5253, respectively. 

INITIATION OF INVESTIGATION

The Petition 

On June 7, 2007, the Department of 

Commerce (Department) received a 

petition on imports of circular welded 

carbon quality steel pipe (CWP) from 

the People’s Republic of China (PRC) 

filed in proper form by Allied Tube & 

Conduit, Sharon Tube Company, IPSCO 

Tubulars, Inc., Western Tube & Conduit 

Corporation, Northwest Pipe Company, 

Wheatland Tube Co., i.e., the Ad Hoc 

Coalition For Fair Pipe Imports From 

China, and the United Steelworkers 

(collectively Petitioners). The period of 

investigation (POI) is October 1, 2006 - 

March 31, 2007. 

In accordance with section 732(b) of 

the Tariff Act of 1930, as amended (the 

Act), Petitioners alleged that imports of 

CWP from the PRC are being, or are 

likely to be, sold in the United States at 

less than fair value within the meaning 

of section 731 of the Act, and that such 

imports are materially injuring and 

threaten to injure an industry in the 

United States. The Department issued 

supplemental questions to Petitioners 

on June 11, 2007, and June 19, 2007, 

and Petitioners filed their responses on 

June 15, 2007, June 22, 2007, and June 

25, 2007, respectively. In addition, 

Petitioners filed an amendment to the 

petition on June 15, 2007. 

Scope of Investigation 

The scope of this investigation covers 

certain welded carbon quality steel 

pipes and tubes, of circular crosssection, and with an outside diameter of 

0.372 inches (9.45 mm) or more, but not 

more than 16 inches (406.4 mm), 

whether or not stenciled, regardless of 

wall thickness, surface finish (e.g., 

black, galvanized, or painted), end 

finish (e.g., plain end, beveled end, 

grooved, threaded, or threaded and 

coupled), or industry specification (e.g., 

ASTM, proprietary, or other), generally 

known as standard pipe and structural 

pipe (they may also be referred to as 

circular, structural, or mechanical 

tubing). 

Specifically, the term ‘‘carbon 

quality’’ includes products in which: (a) 

iron predominates, by weight, over each 

of the other contained elements; (b) the 

carbon content is 2 percent or less, by 

weight; and (c) none of the elements 

listed below exceeds the quantity, by 

weight, as indicated: 

(i) 1.80 percent of manganese; 

(ii) 2.25 percent of silicon; 

(iii) 1.00 percent of copper; 

(iv) 0.50 percent of aluminum; 

(v) 1.25 percent of chromium; 

(vi) 0.30 percent of cobalt; 

(vii) 0.40 percent of lead; 

(viii) 1.25 percent of nickel; 

(ix) 0.30 percent of tungsten; 

(x) 0.15 percent of molybdenum; 

(xi) 0.10 percent of niobium; 

(xii) 0.41 percent of titanium 

(xiii) 0.15 percent of vanadium; or 

(xiv) 0.15 percent of zirconium. 

All pipe meeting the physical 

description set forth above that is used 

in, or intended for use in, standard and 

structural pipe applications is covered 

by the scope of this investigation. 

Standard pipe applications include the 

low–pressure conveyance of water, 

steam, natural gas, air, and other liquids 

and gases in plumbing and heating 

systems, air conditioning units, 

automatic sprinkler systems, and other 

related uses. Standard pipe may also be 

used for light load–bearing and 

mechanical applications, such as for 

fence tubing, and as an intermediate 

product for protection of electrical 

wiring, such as conduit shells. 

Structural pipe is used in construction 

applications. 

Standard pipe is made primarily to 

American Society for Testing and 

Materials (ASTM) specifications, but 

can be made to other specifications. 

Standard pipe is made primarily to 

ASTM specifications A–53, A–135, and 

A–795. Structural pipe is made 

primarily to ASTM specifications A–252 

and A–500. Standard and structural 

pipe may also be produced to 

proprietary specifications rather than to 

industry specifications. This is often the 

case, for example, with fence tubing. 

Pipe multiple–stenciled to an ASTM 

specification and to any other 

specification, such as the American 

Petroleum Institute (API) API–5L or 5L 

X–42 specifications, is covered by the 

scope of this investigation when used 

in, or intended for use in, one of the 

standard applications listed above, 

regardless of the Harmonized Tariff 

Schedule of the United States (HTSUS) 

category under which it is entered. Pipe 

used for the production of scaffolding 

(but not finished scaffolding) and 

conduit shells (but not finished 

electrical conduit) are included within 

the scope of this investigation. 

The scope does not include: (a) pipe 

suitable for use in boilers, superheaters, 

heat exchangers, condensers, refining 

furnaces and feedwater heaters, whether 

or not cold drawn; (b) mechanical 

tubing, whether or not cold–drawn; (c) 

finished electrical conduit; (d) tube and 

pipe hollows for redrawing; (e) oil 

country tubular goods produced to API 

specifications; and (f) line pipe 

produced to API specifications for oil 

and gas applications. 

The pipe products that are the subject 

of this investigation are currently 

classifiable in HTSUS statistical 

reporting numbers 7306.30.10.00, 

7306.30.50.25, 7306.30.50.32, 

7306.30.50.40, 7306.30.50.55, 

7306.30.50.85, and 7306.30.50.90. 

However, the product description, and 

not the HTSUS classification, is 

dispositive of whether merchandise 

imported into the United States falls 

within the scope of the investigation. 

Comments on Scope of Investigation 

During our review of the petition, we 

discussed the scope with Petitioners to 

ensure that it accurately reflects the 

product for which the domestic industry 

is seeking relief. During this review, we 

noted that, while the Department 

typically prefers to rely upon physical 

characteristics to determine the scope of 

product coverage, the scope description 

proposed by Petitioners relied upon, in 

part, end–use applications as a method 

for determining scope coverage. On June 

20, 2007, we met with Petitioners to 

discuss the scope and its reliance upon 

end–use applications as a method for 

determining scope coverage. See 

Memorandum to The File, through 

Abdelali Elouaradia, Office Director, 


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Office 4, from Maisha Cryor, Import 

Compliance Specialist, titled ‘‘Circular 

Welded Carbon Quality Steel Pipe from 

the People’s Republic of China: Scope of 

the Petition,’’ dated June 22, 2007. As 

discussed in the preamble to the 

Department’s regulations, we are setting 

aside a period for interested parties to 

raise issues regarding product coverage. 

See Antidumping Duties; Countervailing 

Duties; Final rule, 62 FR 27296, 27323 

(May 19, 1997). The Department 

encourages all interested parties to 

submit such comments, including 

comments regarding the scope’s 

definition of covered merchandise based 

upon end–use application, and whether 

additional HTSUS numbers should be 

included in the scope description, 14 

calendar days after publication of this 

initiation notice. Rebuttal comments are 

due 7 calendar days thereafter. 

Comments should be addressed to 

Import Administration’s Central 

Records Unit in Room 1870, U.S. 

Department of Commerce, 14th Street 

and Constitution Avenue, NW, 

Washington, DC 20230 - Attention: 

Maisha Cryor, Room 3057. The period of 

scope consultations is intended to 

provide the Department with ample 

opportunity to consider all comments 

and consult with interested parties prior 

to the issuance of the preliminary 

determination. 

Determination of Industry Support for 

the Petition 

Section 732(b)(1) of the Act requires 

that a petition be filed by an interested 

party described in subparagraph (C), (D), 

(E), (F) or (G) of section 771(9) of the 

Act, or on behalf of the domestic 

industry. In order to determine whether 

a petition has been filed by or on behalf 

of the 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 a statistically 

valid sampling method. 

Section 771(4)(A) of the Act defines 

the ‘‘industry’’ as the producers as a 

whole of a domestic like product. Thus, 

to determine whether a petition has the 

requisite industry support, the statute 

directs the Department to look to 

producers and workers who produce the 

domestic like product. The International 

Trade Commission (ITC), which is 

responsible for determining whether 

‘‘the domestic industry’’ has been 

injured, must also determine what 

constitutes a domestic like product in 

order to define the industry. While both 

the Department and the ITC must apply 

the same statutory definition regarding 

the domestic like product (section 

771(10) of the Act), they do so for 

different purposes and pursuant to a 

separate and distinct authority. In 

addition, the Department’s 

determination is subject to limitations of 

time and information. Although this 

may result in different definitions of the 

like product, such differences do not 

render the decision of either agency 

contrary to law. See USEC, Inc. v. 

United States, 132 F. Supp. 2d 1, 8 (CIT 

2001), citing Algoma Steel Corp. Ltd. v. 

United States, 688 F. Supp. 639, 644 

(1988), aff’d 865 F.2d 240 (Fed. Cir. 

1989), cert. denied 492 U.S. 919 (1989). 

Section 771(10) of the Act defines the 

domestic like product as ‘‘a product 

which is like, or in the absence of like, 

most similar in characteristics and uses 

with, the article subject to an 

investigation under this title.’’ Thus, the 

reference point from which the 

domestic like product analysis begins is 

‘‘the article subject to an investigation,’’

(i.e., the class or kind of merchandise to 

be investigated, which normally will be 

the scope as defined in the petition). 

With regard to the domestic like 

product, Petitioners do not offer a 

definition of domestic like product 

distinct from the scope of the 

investigation. Based on our analysis of 

the information submitted on the 

record, we have determined that CWP 

constitutes a single domestic like 

product and we have analyzed industry 

support in terms of that domestic like 

product. For a discussion of the 

domestic like product analysis in this 

case, see Antidumping Investigation 

Initiation Checklist: Circular Welded 

Carbon Quality Steel Pipe from the 

People’s Republic of China, (Initiation 

Checklist) at Attachment I, (Analysis of 

Industry Support), on file in the Central 

Records Unit, Room B–099 of the main 

Department of Commerce building. 

In determining whether Petitioners 

have standing (i.e., those domestic 

workers and producers supporting the 

petition account for (1) at least 25 

percent of the total production of the 

domestic like product and (2) more than 

50 percent of the production of the 

domestic like product produced by that 

portion of the industry expressing 

support for, or opposition to, the 

petition), we considered the industry 

support data contained in the petition 

with reference to the domestic like 

product as defined in Attachment IV, 

(Scope of the Petition), to the Initiation 

Checklist. To establish industry support, 

Petitioners provided their shipments for 

the domestic like product for the year 

2006, as well as shipments from 

supporters of the petition, and 

compared them to shipments for the 

domestic like product for the industry. 

In their second petition supplemental 

submission, Petitioners demonstrated 

the correlation between shipments and 

production. See ‘‘Circular Welded 

Carbon Quality Steel Pipe from the 

People’s Republic of China/ Petitioner’s 

Response To The Department’s June 19, 

2007 Request For Clarification Of 

Certain Items Contained In The 

Petition,’’ dated June 22, 2007, (Second 

Petition Supplemental) at 7. Based on 

the fact that total industry production 

data for the domestic like product for 

2006 is not reasonably available, and 

that Petitioners have established that 

shipments are a reasonable proxy for 

production data, we have relied upon 

shipment data for purposes of 

measuring industry support. For further 

discussion see Initiation Checklist at 

Attachment I (Analysis of Industry 

Support). 

Our review of the data provided in the 

petition, supplemental submissions, and 

other information readily available to 

the Department indicates that 

Petitioners have established industry 

support. First, the petition established 

support from domestic producers (or 

workers) accounting for more than 50 

percent of the total production of the 

domestic like product and, as such, the 

Department is not required to take 

further action in order to evaluate 

industry support (e.g., polling). See Sec. 

732(c)(4)(D) of the Act. Second, the 

domestic producers have met the 

statutory criteria for industry support 

under 732(c)(4)(A)(i) because the 

domestic producers (or workers) who 

support the petition account for at least 

25 percent of the total production of the 

domestic like product. Finally, the 

domestic producers have met the 

statutory criteria for industry support 

under 732(c)(4)(A)(ii) because the 

domestic producers (or workers) who 

support the petition account for more 


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than 50 percent of the production of the 

domestic like product produced by that 

portion of the industry expressing 

support for, or opposition to, the 

petition. Accordingly, the Department 

determines that the petition was filed on 

behalf of the domestic industry within 

the meaning of section 732(b)(1) of the 

Act. See Initiation Checklist at 

Attachment I (Analysis of Industry 

Support). 

The Department finds that Petitioners 

filed the petition on behalf of the 

domestic industry because they are an 

interested party as defined in sections 

771(9)(C) and (D) of the Act and they 

have demonstrated sufficient industry 

support with respect to the antidumping 

investigation that they are requesting 

the Department initiate. See Initiation 

Checklist at Attachment I (Analysis of 

Industry Support). 

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 this investigation on 

imports of CWP from the PRC. The 

source of data for the deductions and 

adjustments relating to the U.S. price as 

well as normal value (NV) for the PRC 

are also discussed in the 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. 

Export Price 

Petitioners relied on five U.S. prices 

for CWP manufactured in the PRC and 

offered by U.S. distributors for sale in 

the United States. The prices quoted 

were for specific grades and quality of 

CWP falling within the scope of this 

petition, for delivery to the U.S. 

customer within the POI. Petitioners 

deducted from the prices the costs 

associated with exporting and 

delivering the product, including ocean 

freight and insurance charges, and 

foreign brokerage and handling. 

Petitioners did not deduct foreign 

inland freight charges from the export 

price (EP) because they were unable to 

establish the distances between the 

Chinese mills and the ports nearest to 

those mills. See Volume I of the petition 

at 35. Petitioners did deduct an amount 

for a U.S. distributor/importer mark–up. 

See Volume I of the petition at 34; see 

also Initiation Checklist. 

Normal Value 

Petitioners stated that the PRC is a 

non–market economy (NME) and no 

determination to the contrary has yet 

been made by the Department. In 

previous investigations, the Department 

has determined that the PRC is a NME. 

See 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); 

Final Determination of Sales at Less 

Than Fair Value: Magnesium Metal 

From the People’s Republic of China, 70 

FR 9037 (February 24, 2005); and Notice 

of Final Determination of Sales at Less 

Than Fair Value: Certain Tissue Paper 

Products from the People’s Republic of 

China, 70 FR 7475 (February 14, 2005). 

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 the purpose of initiating 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. 

Petitioners selected India as the 

surrogate country. See Volume I of the 

petition at 28. Petitioners argued that 

India is an appropriate surrogate 

country because it is a market–economy 

country that is at a comparable level of 

economic development to the PRC and 

is a significant producer and exporter of 

CWP. Id. Based on the information 

provided by Petitioners, we believe that 

its use of India as a surrogate country is 

appropriate for purposes of initiating 

this investigation. After the initiation of 

the investigation, we will solicit 

comments regarding surrogate country 

selection. Also, pursuant to 19 CFR 

351.301(c)(3)(i), interested parties will 

be provided an opportunity to submit 

publicly available information to value 

factors of production within 40 calendar 

days after the date of publication of the 

preliminary determination. 

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. Petitioners calculated NV 

based on consumption rates for inputs 

used to produce CWP experienced by 

U.S. producers. In accordance with 

section 773(c)(4) of the Act, Petitioners 

valued factors of production, where 

possible, on reasonably available, public 

surrogate country data. To value certain 

factors of production, Petitioners used 

official Indian government import 

statistics, excluding shipments from 

countries previously determined by the 

Department to be NME countries and 

excluding shipments 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. See, e.g., 

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 and Issues and 

Decision Memorandum at Comment 23 

(May 15, 2007). 

For inputs valued in Indian rupees 

and not contemporaneous with the POI, 

Petitioners used information from the 

wholesale price indices (WPI) in India 

as published in the International 

Financial Statistics of the International 

Monetary Fund (IMF) for input prices 

during the period preceding the POI. 

See Second Petition Supplemental at 1 

and Exhibit 1. In addition, Petitioners 

made currency conversions, where 

necessary, based on the POI–average 

rupee/U.S. dollar exchange rate for the 

POI, as reported on the Department’s 

website. Id. 

The Department calculates and 

publishes the surrogate values for labor 

to be used in NME cases on its website. 

Therefore, to value labor, Petitioners 

used a labor rate of $0.83 per hour, 

published on the Department website, 

in accordance with the Department’s 

regulations. See 19 CFR 351.408(c)(3) 

and Initiation Checklist. 

Petitioners valued electricity in the 

production of CWP based on the Indian 

electricity rate as reported in the Key 

World Energy Statistics 2003, published 

by the International Energy Agency for 

the year 2000. See ‘‘Circular Welded 

Carbon Quality Steel Pipe from the 

People’s Republic of China/ Petitioner’s 

Response To The Department’s June 11, 

2007 Request For Clarification Of 

Certain Items Contained In The 

Petition,’’ dated June 15, 2007 (Petition 

Supplemental) at 23 and Exhibit M. 

Petitioners originally inflated electricity 

to a POI value using the WPI published 

by the Reserve Bank of India. See 

Volume I of the petition at 31. However, 

Petitioners revised the inflator to the 

WPI published by the IMF at the 

direction of the Department. See 

Petition Supplemental at 23 and Exhibit 


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M; see also Initiation Checklist for 

further details. Petitioners valued 

natural gas in the production of CWP 

based on Indian natural gas prices 

charged to industrial users during a 

period overlapping the POI, as reported 

by CRISIL Research India. See Volume 

I of the petition at 32 and Volume II of 

the petition at Exhibit. However, the 

Department determined that the Gas 

Authority of India, Ltd. (GAIL) was 

more appropriate as the source for the 

valuation of natural gas. See Initiation 

Checklist for further details. Therefore, 

the Department requested that 

Petitioners recalculate the surrogate 

value for natural gas based upon values 

published by GAIL. See ‘‘Letter to 

Gilbert Kaplan, Counsel for Petitioners, 

from Mark Manning, Program Manager, 

Office 4, Regarding ‘Petition for the 

Imposition of Antidumping Duties: 

Circular Welded Carbon Quality Steel 

Pipe from the People’s Republic of 

China,’ ’’ dated June 19, 2007. As a 

result, Petitioners valued natural gas in 

the production of CWP based on Indian 

natural gas rates, published by GAIL for 

February 2005. See Second Petition 

Supplemental at Exhibit 4. Petitioners 

inflated natural gas to a POI value using 

the WPI published by the IMF. Id. 

For the NV calculations, Petitioners 

derived the figures for factory overhead, 

selling, general and administrative 

expenses, and profit from the financial 

ratios of two Indian producers of CWP: 

Zenith Birla (India) Limited and Surya 

Roshni Limited. 

Fair Value Comparisons 

Based on the data provided by 

Petitioners, there is reason to believe 

that imports of CWP from the PRC are 

being, or are likely to be, sold in the 

United States at less than fair value. 

Based upon comparisons of EP to the 

NV, calculated in accordance with 

section 773(c) of the Act, the estimated 

calculated dumping margins for CWP 

from the PRC range from 51.34 percent 

to 85.55 percent. 

Allegations and Evidence of Material 

Injury and Causation 

Petitioners allege that the U.S. 

industry producing the domestic like 

product is being materially injured, or is 

threatened with material injury, by 

reason of the imports of the subject 

merchandise sold at less than NV. 

Petitioners contend that the industry’s 

injured condition is illustrated by 

reduced market share, lost sales, 

reduced production, capacity and 

capacity utilization rate, reduced 

shipments and increased inventories, 

underselling and price depression or 

suppression, lost revenue, reduced 

employment, decline in financial 

performance and 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 

Initiation Checklist at Attachment II 

(Injury). 

Separate–Rates Application 

The Department modified the process 

by which exporters and foreign 

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–rates applications, 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–rates 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-andnews.html on the date of publication of 

this initiation notice in the Federal 

Register. Submission of the separate–

rates application is due no later August 

26, 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 

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 who manufacture and export 

subject merchandise to the United 

States, as well as to manufacturers who 

produce the subject merchandise for 

companies who 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–rates 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 18, 

2007. In addition, the Department will 

post the quantity and value 

questionnaire along with the filing 

instructions on the Department’s 

website at http://ia.ita.doc.gov/iahighlights-and-news.html. The 

Department will send the quantity and 

value questionnaire to those exporters 

identified in Volume II of the petition at 

Exhibit 5, and to 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 this investigation. The 

Separate–Rates and Combination Rates 

Bulletin states the following: 

{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 


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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. 

Initiation of Antidumping Investigation 

Based upon our examination of the 

petition on CWP from the PRC, we find 

that the petition meets the requirements 

of section 732 of the Act. Therefore, we 

are initiating an antidumping duty 

investigation to determine whether 

imports of CWP from the PRC are being, 

or are likely to be, sold in the United 

States at less than fair value. Unless 

postponed, we will make our 

preliminary determination no later than 

140 calendar days after the date of 

publication of this initiation notice. 

Distribution of Copies of the Petition 

In accordance with section 

732(b)(3)(A) of the Act, a copy of the 

public version of the petition has been 

provided to the government of the PRC. 

International Trade Commission 

Notification 

We have notified the ITC of our 

initiation, as required by section 732(d) 

of the Act. 

Preliminary Determination by the ITC 

The ITC will preliminarily determine, 

within 25 days after the date on which 

it receives notice of this initiation, 

whether there is a reasonable indication 

that imports of CWP from the PRC are 

causing material injury, or threatening 

to cause material injury, to a U.S. 

industry. See section 733(a)(2)(A)(i) of 

the Act. A negative ITC determination 

will result in the investigation being 

terminated; otherwise, this investigation 

will proceed according to statutory and 

regulatory time limits. 

This notice is issued and published 

pursuant to section 777(i) of the Act. 

Dated: June 27, 2007. 

Joseph A. Spetrini, 

Deputy Assistant Secretary for 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 Sales ............................................................................ ................................ ................................ ................................

TOTAL SALES ........................................................................................................ ................................ ................................ ................................

Total Quantity: 

• Please report quantity on a metric 

ton basis. If any conversions were 

used, please provide the conversion 

formula and source. 

Terms of Sales: 

• Please report all sales on the same 

terms, such as ‘‘free on board’’ at 

port of export. 

Total Value: 

• All sales values should be reported 

in U.S. dollars. Please provide 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 customer 

occurs before importation into the 

United States. 

• Please include any sales exported by 

your company directly to the 

United States. 

• Please include any sales exported by 

your company to a third–country 

market economy reseller where you 

had knowledge that the 

merchandise was destined to be 

resold to the United States. 

• If you are a producer of subject 

merchandise, please include any 

sales manufactured by your 

company that were subsequently 

exported by an affiliated exporter to 

the United States. 

• Please do not include any sales of 

merchandise manufactured in Hong 

Kong in your figures. 

Constructed Export Price Sales: 

• Generally, a U.S. sale is classified as 

a constructed export price sale 

when the first sale to an unaffiliated 

customer occurs after importation. 

However, if the first sale to the 

unaffiliated customer is made by a 

person in the United States 

affiliated with the foreign exporter, 

constructed export price applies 

even if the sale occurs prior to 

importation. 

• Please include any sales exported by 

your company directly to the 

United States. 

• Please include any sales exported by 

your company to a third–country 

market economy reseller where you 

had knowledge that the 

merchandise was destined to be 

resold to the United States. 

• If you are a producer of subject 

merchandise, please include any 

sales manufactured by your 

company that were subsequently 

exported by an affiliated exporter to 

the United States. 

• Please do not include any sales of 

merchandise manufactured in Hong 

Kong in your figures. 

Further Manufactured Sales: 

• Further manufacture or assembly 

(including re–packing) sales 

(‘‘further manufactured sales’’) 

refers to merchandise that 


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undergoes further manufacture or 

assembly in the United States 

before being sold to the first 

unaffiliated customer. 

• Further manufacture or assembly 

costs include amounts incurred for 

direct materials, labor and 

overhead, plus amounts for general 

and administrative expense, interest 

expense, and additional packing 

expense incurred in the country of 

further manufacture, as well as all 

costs involved in moving the 

product from the U.S. port of entry 

to the further manufacturer. 

[FR Doc. E7–13017 Filed 7–3–07; 8:45 am] 

BILLING CODE 3510–DS–S 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[A–533–810] 

Stainless Steel Bar from India: 

Extension of Time Limit for the Final 

Results of the Antidumping Duty 

Administrative Review 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

EFFECTIVE DATE: July 5, 2007. 

FOR FURTHER INFORMATION CONTACT: 

Scott Holland or Brandon Farlander, 

AD/CVD Operations, Office 1, Import 

Administration, International Trade 

Administration, U.S. Department of 

Commerce, 14th Street and Constitution 

Avenue, NW, Washington DC 20230; 

telephone (202) 482–1279 or (202) 482–

0182, respectively. 

SUPPLEMENTARY INFORMATION: 

Background 

On June 26, 2007, the Department of 

Commerce (‘‘the Department’’) 

published an extension of the time limit 

to complete the final results of the 

administrative review of the 

antidumping duty order on stainless 

steel bar from India covering the period 

February 1, 2005, through January 31, 

2006. See Stainless Steel Bar from India: 

Extension of Time Limit for the Final 

Results of the Antidumping Duty 

Administrative Review, 72 FR 35033 

(June 26, 2007). Due to a clerical error, 

the due date for the completion of the 

final results was listed as September 6, 

2007. The Department hereby amends 

the date on which the final results are 

due for completion. The final results are 

now due on September 4, 2007. 

Extension of Time Limits for Final 

Results 

Section 751(a)(3)(A) of the Tariff Act 

of 1930, as amended (‘‘the Act’’), 

requires the Department to issue the 

preliminary results of an administrative 

review within 245 days after the last day 

of the anniversary month of an 

antidumping duty order for which a 

review is requested and issue the final 

results within 120 days after the date on 

which the preliminary results are 

published. However, if it is not 

practicable to complete the review 

within the time period, section 

751(a)(3)(A) of the Act allows the 

Department to extend these deadlines to 

a maximum of 365 days and 180 days, 

respectively. 

In accordance with 782(i)(3) of the 

Act, the Department conducted on–site 

verification of responses submitted by 

two respondents in this review in May 

and June 2007. Accordingly, the 

Department must still issue the 

verification findings. Therefore, we find 

that it is not practicable to complete this 

review within the originally anticipated 

time limit (i.e., by July 5, 2007). Thus, 

the Department is extending the time 

limit for completion of the final results 

to no later than September 6, 2007, in 

accordance with section 751(a)(3)(A) of 

the Act. 

We are issuing and publishing this 

notice in accordance with sections 

751(a)(3)(A) and 777(i)(1) of the Act. 

Dated: June 28, 2007. 

Stephen J. Claeys, 

Deputy Assistant Secretary for Import 

Administration. 

[FR Doc. E7–13011 Filed 7–3–07; 8:45 am] 

BILLING CODE 3510–DS–S 
36668 Federal Register / Vol. 72, No. 128 / Thursday, July 5, 2007 / Notices 

undergoes further manufacture or 

assembly in the United States 

before being sold to the first 

unaffiliated customer. 

• Further manufacture or assembly 

costs include amounts incurred for 

direct materials, labor and 

overhead, plus amounts for general 

and administrative expense, interest 

expense, and additional packing 

expense incurred in the country of 

further manufacture, as well as all 

costs involved in moving the 

product from the U.S. port of entry 

to the further manufacturer. 

[FR Doc. E7–13017 Filed 7–3–07; 8:45 am] 

BILLING CODE 3510–DS–S 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[A–533–810] 

Stainless Steel Bar from India: 

Extension of Time Limit for the Final 

Results of the Antidumping Duty 

Administrative Review 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

EFFECTIVE DATE: July 5, 2007. 

FOR FURTHER INFORMATION CONTACT: 

Scott Holland or Brandon Farlander, 

AD/CVD Operations, Office 1, Import 

Administration, International Trade 

Administration, U.S. Department of 

Commerce, 14th Street and Constitution 

Avenue, NW, Washington DC 20230; 

telephone (202) 482–1279 or (202) 482–

0182, respectively. 

SUPPLEMENTARY INFORMATION: 

Background 

On June 26, 2007, the Department of 

Commerce (‘‘the Department’’) 

published an extension of the time limit 

to complete the final results of the 

administrative review of the 

antidumping duty order on stainless 

steel bar from India covering the period 

February 1, 2005, through January 31, 

2006. See Stainless Steel Bar from India: 

Extension of Time Limit for the Final 

Results of the Antidumping Duty 

Administrative Review, 72 FR 35033 

(June 26, 2007). Due to a clerical error, 

the due date for the completion of the 

final results was listed as September 6, 

2007. The Department hereby amends 

the date on which the final results are 

due for completion. The final results are 

now due on September 4, 2007. 

Extension of Time Limits for Final 

Results 

Section 751(a)(3)(A) of the Tariff Act 

of 1930, as amended (‘‘the Act’’), 

requires the Department to issue the 

preliminary results of an administrative 

review within 245 days after the last day 

of the anniversary month of an 

antidumping duty order for which a 

review is requested and issue the final 

results within 120 days after the date on 

which the preliminary results are 

published. However, if it is not 

practicable to complete the review 

within the time period, section 

751(a)(3)(A) of the Act allows the 

Department to extend these deadlines to 

a maximum of 365 days and 180 days, 

respectively. 

In accordance with 782(i)(3) of the 

Act, the Department conducted on–site 

verification of responses submitted by 

two respondents in this review in May 

and June 2007. Accordingly, the 

Department must still issue the 

verification findings. Therefore, we find 

that it is not practicable to complete this 

review within the originally anticipated 

time limit (i.e., by July 5, 2007). Thus, 

the Department is extending the time 

limit for completion of the final results 

to no later than September 6, 2007, in 

accordance with section 751(a)(3)(A) of 

the Act. 

We are issuing and publishing this 

notice in accordance with sections 

751(a)(3)(A) and 777(i)(1) of the Act. 

Dated: June 28, 2007. 

Stephen J. Claeys, 

Deputy Assistant Secretary for Import 

Administration. 

[FR Doc. E7–13011 Filed 7–3–07; 8:45 am] 

BILLING CODE 3510–DS–S 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[C–570–911] 

Notice of Initiation of Countervailing 

Duty Investigation: Circular Welded 

Carbon Quality Steel Pipe from the 

People’s Republic of China 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

EFFECTIVE DATE: July 5, 2007. 

FOR FURTHER INFORMATION CONTACT: 

Damian Felton, Yasmin Nair or Nancy 

Decker, AD/CVD Operations, Import 

Administration, International Trade 

Administration, U.S. Department of 

Commerce, 14th Street and Constitution 

Avenue, NW, Washington, DC 20230; 

telephone: (202) 482–0133, (202) 482–

3813 and (202) 482–0196, respectively. 

SUPPLEMENTARY INFORMATION: 

Initiation Of Investigations: 

The Petition 

On June 7, 2007, the Department of 

Commerce (‘‘the Department’’) received 

a petition filed in proper form by the Ad 

Hoc Coalition for Fair Pipe Imports from 

China and its individual members 

(Allied Tube & Conduit; IPSCO 

Tubulars, Inc.; Northwest Pipe 

Company; Sharon Tube Company; 

Western Tube & Conduit Corporation; 

Wheatland Tube Company; and the 

United Steelworkers) (collectively, 

‘‘petitioners’’). The Department received 

timely information from petitioners 

supplementing the petition on June 15, 

June 20 and June 25, 2007. 

In accordance with section 702(b)(1) 

of the Tariff Act of 1930, as amended 

(‘‘the Act’’), petitioners allege that 

manufacturers, producers, or exporters 

of circular welded carbon quality steel 

pipe (‘‘CWP’’) in the People’s Republic 

of China ( the ‘‘PRC’’), receive 

countervailable subsidies within the 

meaning of section 701 of the Act and 

that such imports are materially 

injuring, or threatening material injury 

to, an industry in the United States. 

The Department finds that petitioners 

filed the petition on behalf of the 

domestic industry because they are 

interested parties as defined in sections 

771(9)(C) and (D) of the Act and 

petitioners have demonstrated sufficient 

industry support with respect to the 

countervailing duty investigation (see 

‘‘Determination of Industry Support for 

the Petition’’ section below). 

Scope of Investigation 

The scope of this investigation covers 

certain welded carbon quality steel 

pipes and tubes, of circular crosssection, and with an outside diameter of 

0.372 inches (9.45 mm) or more, but not 

more than 16 inches (406.4 mm), 

whether or not stenciled, regardless of 

wall thickness, surface finish (e.g., 

black, galvanized, or painted), end 

finish (e.g., plain end, beveled end, 

grooved, threaded, or threaded and 

coupled), or industry specification (e.g., 

ASTM, proprietary, or other), generally 

known as standard pipe and structural 

pipe (they may also be referred to as 

circular, structural, or mechanical 

tubing). 

Specifically, the term ‘‘carbon 

quality’’ includes products in which: (a) 

iron predominates, by weight, over each 

of the other contained elements; (b) the 

carbon content is 2 percent or less, by 

weight; and (c) none of the elements 

listed below exceeds the quantity, by 

weight, as indicated: 

(i) 1.80 percent of manganese; 

(ii) 2.25 percent of silicon; 


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(iii) 1.00 percent of copper; 

(iv) 0.50 percent of aluminum; 

(v) 1.25 percent of chromium; 

(vi) 0.30 percent of cobalt; 

(vii) 0.40 percent of lead; 

(viii) 1.25 percent of nickel; 

(ix) 0.30 percent of tungsten; 

(x) 0.15 percent of molybdenum; 

(xi) 0.10 percent of niobium; 

(xii) 0.41 percent of titanium 

(xiii) 0.15 percent of vanadium; or 

(xiv) 0.15 percent of zirconium. 

All pipe meeting the physical 

description set forth above that is used 

in, or intended for use in, standard and 

structural pipe applications is covered 

by the scope of this investigation. 

Standard pipe applications include the 

low–pressure conveyance of water, 

steam, natural gas, air, and other liquids 

and gases in plumbing and heating 

systems, air conditioning units, 

automatic sprinkler systems, and other 

related uses. Standard pipe may also be 

used for light load–bearing and 

mechanical applications, such as for 

fence tubing, and as an intermediate 

product for protection of electrical 

wiring, such as conduit shells. 

Structural pipe is used in construction 

applications. 

Standard pipe is made primarily to 

American Society for Testing and 

Materials (ASTM) specifications, but 

can be made to other specifications. 

Standard pipe is made primarily to 

ASTM specifications A–53, A–135, and 

A–795. Structural pipe is made 

primarily to ASTM specifications A–252 

and A–500. Standard and structural 

pipe may also be produced to 

proprietary specifications rather than to 

industry specifications. This is often the 

case, for example, with fence tubing. 

Pipe multiple–stenciled to an ASTM 

specification and to any other 

specification, such as the American 

Petroleum Institute (API) API–5L or 5L 

X–42 specifications, is covered by the 

scope of this investigation when used 

in, or intended for use in, one of the 

standard applications listed above, 

regardless of the Harmonized Tariff 

Schedule of the United States (HTSUS) 

category under which it is entered. Pipe 

used for the production of scaffolding 

(but not finished scaffolding) and 

conduit shells (but not finished 

electrical conduit) are included within 

the scope of this investigation. 

The scope does not include: (a) pipe 

suitable for use in boilers, superheaters, 

heat exchangers, condensers, refining 

furnaces and feedwater heaters, whether 

or not cold drawn; (b) mechanical 

tubing, whether or not cold–drawn; (c) 

finished electrical conduit; (d) tube and 

pipe hollows for redrawing; (e) oil 

country tubular goods produced to API 

specifications; and (f) line pipe 

produced to API specifications for oil 

and gas applications. 

The pipe products that are the subject 

of these investigations are currently 

classifiable in HTSUS statistical 

reporting numbers 7306.30.10.00, 

7306.30.50.25, 7306.30.50.32, 

7306.30.50.40, 7306.30.50.55, 

7306.30.50.85, and 7306.30.50.90. 

However, the product description, and 

not the HTSUS classification, is 

dispositive of whether merchandise 

imported into the United States falls 

within the scope of the investigation. 

Comments on Scope of Investigation 

During our review of the petition, we 

discussed the scope with Petitioners to 

ensure that it accurately reflects the 

product for which the domestic industry 

is seeking relief. During this review, we 

noted that, while the Department 

typically prefers to rely upon physical 

characteristics to determine the scope of 

product coverage, the scope description 

proposed by Petitioners relied upon, in 

part, end–use applications as a method 

for determining scope coverage. On June 

20, 2007, we met with Petitioners to 

discuss the scope and its reliance upon 

end–use applications as a method for 

determining scope coverage. See 

Memorandum to The File, through 

Abdelali Elouaradia, Office Director, 

Office 4, from Maisha Cryor, Import 

Compliance Specialist, titled ‘‘Circular 

Welded Carbon Quality Steel Pipe from 

the People’s Republic of China: Scope of 

the Petition,’’ dated June 22, 2007. As 

discussed in the preamble to the 

Department’s regulations, we are setting 

aside a period for interested parties to 

raise issues regarding product coverage. 

See Antidumping Duties; Countervailing 

Duties; Final rule, 62 FR 27296, 27323 

(May 19, 1997). The Department 

encourages all interested parties to 

submit such comments, including 

comments regarding the scope’s 

definition of covered merchandise based 

upon end–use application, and whether 

additional HTSUS numbers should be 

included in the scope description, 14 

calendar days after publication of this 

initiation notice. Rebuttal comments are 

due 7 calendar days thereafter. 

Comments should be addressed to 

Import Administration’s Central 

Records Unit in Room 1870, U.S. 

Department of Commerce, 14th Street 

and Constitution Avenue, NW, 

Washington, DC 20230 - Attention: 

Maisha Cryor, Room 3057. The period of 

scope consultations is intended to 

provide the Department with ample 

opportunity to consider all comments 

and consult with interested parties prior 

to the issuance of the preliminary 

determination. 

Consultations 

Pursuant to section 702(b)(4)(A)(ii) of 

the Act, the Department invited 

representatives of the Government of the 

PRC for consultations with respect to 

the countervailing duty petition. The 

Department held these consultations in 

Beijing, China with representatives of 

the Government of the PRC on June 24, 

2007. See the Memoranda to The File, 

entitled, ‘‘Consultations with Officials 

from the Government of the People’s 

Republic of China’’ (June 24, 2007) 

(public documents on file in the CRU of 

the Department of Commerce, Room B–

099). 

Determination of Industry Support for 

the Petition 

Section 702(b)(1) of the Act requires 

that a petition be filed on behalf of the 

domestic industry. Section 702(c)(4)(A) 

of the Act provides that a petition meets 

this requirement if the domestic 

producers or workers who support the 

petition account for (1) at least 25 

percent of the total production of the 

domestic like product and (2) more than 

50 percent of the production of the 

domestic like product produced by that 

portion of the industry expressing 

support for or opposition to the petition. 

Moreover, section 702(c)(4)(D) of the 

Act provides that, if the petition does 

not establish support of domestic 

producers or workers accounting for 

more than 50 percent of the total 

production of the domestic like product, 

the Department shall: (i) poll the 

industry or rely on other information in 

order to determine if there is support for 

the petition, as required by 

subparagraph (A), or (ii) determine 

industry support using a statistically 

valid sampling method. 

Section 771(4)(A) of the Act defines 

the ‘‘industry’’ as the producers as a 

whole of a domestic like product. Thus, 

to determine whether the 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’’) is 

responsible for determining whether 

‘‘the domestic industry’’ has been 

injured and must also determine what 

constitutes a domestic like product in 

order to define the industry. While the 

Department and the ITC must apply the 

same statutory definition regarding the 

domestic like product, they do so for 

different purposes and pursuant to 

separate and distinct authority. See 

Section 771(10) of the Act. In addition, 

the Department’s determination is 


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1See USEC, Inc. v. United States, 25 CIT 49, 55- 

56, 132 F. Supp. 2d 1, 7-8 (Jan. 24, 2001) (citing 

Algoma Steel Corp. v. United States, 12 CIT 518, 

523, 688 F. Supp. 639, 642-44 (June 8, 1988)). 

subject to limitations of time and 

information. Although this may result in 

different definitions of the domestic like 

product, such differences do not render 

the decision of either agency contrary to 

law.1

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 domestic like product, 

petitioners do not offer a definition of 

domestic like product distinct from the 

scope of the investigation. Based on our 

analysis of the information presented by 

petitioners, we have determined that 

there is a single domestic like product, 

CWP, which is defined in the ‘‘Scope of 

Investigation’’ section above, and we 

have analyzed industry support in terms 

of the domestic like product. 

Our review of the data provided in the 

petition, the supplemental submission 

and other information readily available 

to the Department indicates that 

petitioners have established industry 

support. First, the petition established 

support from domestic producers (or 

workers) accounting for more than 50 

percent of the total production of the 

domestic like product and, as such, the 

Department is not required to take 

further action in order to evaluate 

industry support (e.g., polling). See Sec. 

702(c)(4)(D) of the Act. Second, the 

domestic producers have met the 

statutory criteria for industry support 

under 702(c)(4)(A)(i) because the 

domestic producers (or workers) who 

support the petition account for at least 

25 percent of the total production of the 

domestic like product. Finally, the 

domestic producers have met the 

statutory criteria for industry support 

under 702(c)(4)(A)(ii) because the 

domestic producers (or workers) who 

support the petition account for more 

than 50 percent of the production of the 

domestic like product produced by that 

portion of the industry expressing 

support for, or opposition to, the 

petition. Accordingly, the Department 

determines that the petition was filed on 

behalf of the domestic industry within 

the meaning of section 702(b)(1) of the 

Act. See Initiation Checklist at 

Attachment I (Analysis of Industry 

Support). See ‘‘Office of AD/CVD 

Operations Initiation Checklist for the 

Countervaling Duty Petition on Circular 

Welded Carbon Quality Steel Pipe from 

China,’’ at Attachment II (‘‘CVD 

Initiation Checklist’’). 

Injury Test 

Because the PRC is a ‘‘Subsidies 

Agreement Country’’ within the 

meaning of section 701(b) of the Act, 

section 701(a)(2) of the Act applies to 

this investigation. Accordingly, the ITC 

must determine whether imports of the 

subject merchandise from the PRC 

materially injure, or threaten material 

injury to, a U.S. industry. 

Allegations and Evidence of Material 

Injury and Causation 

Petitioners allege that imports of CWP 

from the PRC are benefitting from 

countervailable subsidies and that such 

imports are causing or threatening to 

cause, material injury to the domestic 

industry producing CWP. In addition, 

petitioners allege that subsidized 

imports exceed the negligibility 

threshold provided for under section 

771(24)(A) of the Act. 

Petitioners contend that the prices on 

imports from the PRC do not reflect 

recent increases in raw material costs, 

and that large margins of underselling 

exist, which are causing domestic 

producers to suffer. Petitioners assert 

that the industry’s injury is evidenced 

by a decline in production, U.S. 

shipments, capacity utilization, market 

share, employment and profitability. 

The allegations of injury and causation 

are supported by relevant evidence 

including U.S. Customs and Border 

Protection import data, lost sales, 

employment and pricing information. 

We have assessed the allegations and 

supporting evidence regarding material 

injury and causation and have 

determined that these allegations are 

properly supported by adequate 

evidence and meet the statutory 

requirements for initiation. See CVD 

Initiation Checklist. 

Initiation of Countervailing Duty 

Investigations 

Section 702(b) of the Act requires the 

Department to initiate a countervailing 

duty proceeding whenever an interested 

party files a petition on behalf of an 

industry that (1) alleges the elements 

necessary for an imposition of a duty 

under section 701(a) of the Act and (2) 

is accompanied by information 

reasonably available to the petitioners 

supporting the allegations. The 

Department has examined the 

countervailing duty petition on CWP 

from the PRC and found that it complies 

with the requirements of section 702(b) 

of the Act. Therefore, in accordance 

with section 702(b) of the Act, we are 

initiating a countervailing duty 

investigation to determine whether 

manufacturers, producers, or exporters 

of CWP in the PRC receive 

countervailable subsidies. For a 

discussion of evidence supporting our 

initiation determination, see CVD 

Initiation Checklist. 

We are including in our investigation 

the following programs alleged in the 

petition to have provided 

countervailable subsidies to producers 

and exporters of the subject 

merchandise in the PRC: 

Preferential Lending 

1. Government Policy Lending 

Program 

2. Loans and interest subsidies 

provided pursuant to the Northeast 

Revitalization Program 

Income Tax Programs 

3. ‘‘Two Free, Three Half’’ income tax 

program 

4. Income tax exemption for export–

oriented foreign investment 

enterprises (‘‘FIEs’’) 

5. Corporate income tax refund 

program for reinvestment of FIE 

profits in export–oriented 

enterprises 

6. Local income tax exemption and 

reduction program for ‘‘productive’’

FIEs 

7. Reduced income tax rates for FIEs 

based on location 

8. Reduced income tax rate for 

knowledge or technology intensive 

FIEs 

9. Reduced income tax rate for high or 

new technology FIEs 

10. Preferential tax policies for 

research and development at FIEs 

11. Income tax credits on purchases of 

domestically produced equipment 

by domestically–owned companies 

12. Income tax credits on purchases of 

domestically produced equipment 

by FIEs 

Provincial Subsidy Programs 

13. Program to rebate antidumping 

legal fees in Shenzen and Zhejiang 

provinces 

14. Funds for ‘‘outward expansion’’ of 

industries in Guangdong province 

15. Export interest subsidy funds for 

enterprises located in Shenzhen 

and Zhejiang province 

16. Loans pursuant to the Liaoning 

Province’s five-year framework 


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Indirect Tax Programs and Import Tariff 

Program 

17. Export payments characterized as 

VAT rebates 

18. VAT and tariff exemptions on 

imported equipment 

19. VAT rebates on domestically 

produced equipment 

20. Exemption from payment of staff 

and worker benefits for export–

oriented enterprises 

Grant Programs 

21. State Key Technology Renovation 

Program Fund 

22. Grants to loss–making state owned 

enterprises 

Provision Of Goods Or Services For Less 

Than Adequate Remuneration 

23. Hot–rolled steel 

24. Electricity and natural gas 

25. Water 

26. Land 

Government Restraints on Exports 

27. Zinc 

28. Hot–rolled steel 

For further information explaining why 

the Department is investigating these 

programs, see CVD Initiation Checklist. 

We are postponing our investigation 

of the following program until such time 

as we select our respondents because 

the allegation is company–specific: 

1. Loans to uncreditworthy companies 

For further information explaining why 

the Department is postponing 

investigation of this program, see CVD 

Initiation Checklist. 

We are not including in our 

investigation the following programs 

alleged to benefit producers and 

exporters of the subject merchandise in 

the PRC: 

1. Currency manipulation 

Petitioners allege that the GOC’s 

policy of maintaining an undervalued 

RMB is an export subsidy that provides 

either a direct transfer of funds or the 

provision of a good or service at less 

than adequate remuneration. Petitioners 

have not sufficiently alleged the 

elements necessary for the imposition of 

a countervailing duty and did not 

support the allegation with reasonably 

available information. Therefore, we do 

not plan to investigate the currency 

manipulation program. 

2. Tax reduction for enterprises 

making little profit 

Petitioners allege that ‘‘enterprises 

making little profit’’ are a de jure 

specific group. Petitioners have not 

established with reasonably available 

evidence that ‘‘enterprises making little 

profit’’ are a de jure specific group 

pursuant to section 771(5A)(D)(i) of the 

Act. Therefore, we do not plan to 

investigate tax reduction for enterprises 

making little profit. 

3. Tax incentives for companies 

engaging in research and 

development 

Petitioners allege that ‘‘domestic’’

companies (i.e., companies that are not 

FIEs) are a de jure specific group. 

Petitioners have not established with 

reasonably available evidence that this 

program is de jure specific pursuant to 

section 771(5A)(D)(i) of the Act. 

Therefore, we do not plan to investigate 

tax incentives for ‘‘domestic’’

companies engaging in research and 

development. 

4. Exemption of CWP from export 

taxes 

Petitioners allege that CWP producers 

have been exempted from the export 

taxes that were imposed on 142 steel 

products effective June 1, 2007. 

Petitioners have not sufficiently alleged, 

on the basis of reasonably available 

information, that CWP producers have 

been relieved from paying export taxes 

that would otherwise have been due. 

Consequently, we do not plan to 

investigation the exemption of CWP 

producers from export taxes. 

5. Funds for technology and research 

Petitioners allege that because the 

GOC did not provide the criteria for 

awarding funds under this program 

when they notified it to the Word Trade 

Organization, funds are awarded on a 

discretionary basis and, hence, specific. 

Petitioners have not adequately 

explained how this program is specific 

pursuant to section 771(5A)(D)(i) of the 

Act. Therefore, we do not plan to 

investigate funds for technology and 

research. 

6. Provision of goods or services for 

less than adequate remuneration - 

other companies 

Petitioners allege that the GOC’s 

policy of combining steel companies 

results in the provision of productive 

assets to the combined companies at 

less than adequate remuneration. 

Petitioners have not sufficiently alleged 

the elements necessary for the 

imposition of a countervailing duty and 

did not support the allegation with 

reasonably available information. 

Consequently, we do not plan to 

investigate this program. 

7. Loan guarantees from government–

owned banks 

As part of their Government Policy 

Lending allegation, petitioners include 

loan guarantees. To support this 

allegation, they point to a provincial 

guarantee program. However, the 

supporting evidence indicates that this 

program is for small and medium size 

enterprises, a non–specific group under 

our regulations. See 19 C.F.R. 

351.502(e). Accordingly, we do not plan 

to investigate loan guarantees from 

government–owned banks. 

8. Loan to Huludao Economic 

Development Zone 

Petitioners identify a loan to the 

Huludao Economic Development Zone 

and suggest that some portion of the 

loan would likely have gone to a CWP 

producer in the zone. However, the 

supporting information indicates that 

the money was used to support 

infrastructure development within the 

zone. Therefore, we do not plan to 

investigate the loan to Huludao 

Economic Development Zone program. 

For further information explaining 

why the Department is not initiating an 

investigation of these programs, see 

CVD Initiation Checklist. 

Application of the Countervailing Duty 

Law to the PRC 

Petitioners contend that there is no 

statutory bar to applying countervailing 

duties to imports from the PRC or any 

other non–market economy country. 

Citing Georgetown Steel, petitioners 

assert that the court deferred to the 

Department’s conclusion that it did not 

have the authority to conduct a CVD 

investigation, but did not affirm the 

notion that the statute prohibits the 

Department from applying 

countervailing duties to NME countries. 

See Petition, Volume I, at 38 (citing 

Georgetown Steel Corp. v. United States, 

801 F.2d 1308 (Fed. Cir. 1986) 

(‘‘Georgetown Steel’’)). Petitioners 

further argue that Georgetown Steel is 

not applicable as the countervailing 

duty law (section 303 of the Tariff Act 

of 1930) involved in the court’s decision 

has since been repealed and the statute 

has been amended to provide an explicit 

definition of a subsidy. See Petition, 

Volume I, at 39 (citing 777(5) of the 

Act). In addition, petitioners argue that 

the Chinese economy is entirely 

different from the economies 

investigated in Georgetown Steel and 

noted that the Department recently 

recognized in the CFS Investigation that 

the economic conditions of Georgetown 

Steel are not applicable to present-day 

China. See Petition, Volume I, at 41 

(citing Coated Free Sheet Paper from the 

People’s Republic of China; Amended 

Preliminary Affirmative Countervailing 

Duty Determination, 72 FR 17484, 

17486 (April 9, 2007) (‘‘CFS 

Investigation’’); and Memorandum for 

David M. Spooner, Assistant Secretary 

for Import Administration, entitled 

‘‘Countervailing Duty Investigation of 

Coated Free Sheet Paper from The 

People’s Republic of China Whether the 

Analytic Elements of the Georgetown 

Steel Opinion are Applicable to China’s 


sroberts on PROD1PC70 with NOTICES
36672 Federal Register / Vol. 72, No. 128 / Thursday, July 5, 2007 / Notices 

Present-day Economy,’’ (March 29, 

2007) (‘‘Georgetown Steel 

Memorandum’’)). Petitioners argue that 

the conditions of the CWP sector of the 

PRC economy are substantially the same 

as the Department found them to be in 

the CFS Investigation. Consequently, the 

countervailing duty law should be 

applied to the PRC in this investigation. 

The Department has treated the PRC 

as an NME country in all past 

antidumping duty investigations and 

administrative reviews. In accordance 

with section 771(18)(C)(i) of the Act, 

any determination that a country is an 

NME country shall remain in effect until 

revoked by the administering authority. 

See Tapered Roller Bearings and Parts 

Thereof, Finished and Unfinished, 

(‘‘TRBs’’) From the People’s Republic of 

China: Preliminary Results of 2001–

2002 Administrative Review and Partial 

Rescission of Review, 68 FR 7500, 7500–

1 (February 14, 2003), unchanged in 

TRBs from the People’s Republic of 

China: Final Results of 2001–2002 

Administrative Review, 68 FR 70488, 

70488–89 (December 18, 2003). In the 

CFS Investigation, the Department 

preliminarily determined that the 

current nature of China’s economy does 

not create obstacles to applying the 

necessary criteria in the CVD law. As 

such, the Department determined that 

the policy that gave rise to the 

Georgetown Steel litigation does not 

prevent us from concluding that the 

PRC government has bestowed a 

countervailable subsidy upon a Chinese 

producer. See Georgetown Steel 

Memorandum. Therefore, because 

petitioners have provided sufficient 

allegations and support of their 

allegations to meet the statutory criteria 

for initiating a countervailing duty 

investigation of CWP paper from the 

PRC, we continue to find that 

Georgetown Steel does not preclude us 

from initiating this investigation. For 

further information, see CVD Initiation 

Checklist. 

Distribution of Copies of the Petition 

In accordance with section 

702(b)(4)(A)(i) of the Act, a copy of the 

public version of the petition has been 

provided to the Government of the PRC. 

As soon as and to the extent practicable, 

we will attempt to provide a copy of the 

public version of the petition to each 

exporter named in the petition, 

consistent with 19 CFR 351.203(c)(2). 

ITC Notification 

We have notified the ITC of our 

initiation, as required by section 702(d) 

of the Act. 

Preliminary Determination by the ITC 

The ITC will preliminarily determine, 

within 25 days after the date on which 

it receives notice of the initiation, 

whether there is a reasonable indication 

that imports of subsidized CWP from 

the PRC are causing material injury, or 

threatening to cause material injury, to 

a U.S. industry. See section 703(a)(2) of 

the Act. A negative ITC determination 

will result in the investigation being 

terminated; otherwise, the investigation 

will proceed according to statutory and 

regulatory time limits. 

This notice is issued and published 

pursuant to section 777(i) of the Act. 

Dated: June 27, 2007. 

Joseph A. Spetrini, 

Deputy Assistant Secretary for Import 

Administration. 

[FR Doc. E7–13014 Filed 7–3–07; 8:45 am] 

BILLING CODE 3510–DS–S 

DEPARTMENT OF COMMERCE 

National Oceanic and Atmospheric 

Administration 

RIN 0648–XB19 

Issuance of Permit for Incidental Take 

of Threatened or Endangered Species 

AGENCY: National Marine Fisheries 

Service (NMFS), National Oceanic and 

Atmospheric Administration (NOAA), 

Commerce. 

ACTION: Notice. 

B-1

APPENDIX B

CALENDAR OF PUBLIC CONFERENCE

B-3

CALENDAR OF PUBLIC CONFERENCE

Those listed below appeared as witnesses at the United States International Trade Commission’s

conference:

Subject: Circular Welded Carbon-Quality Steel Pipe from China

Inv. Nos.: 701-TA-447 and 731-TA-1116 (Preliminary)

Date and Time: June 28, 2007 - 9:30 a.m.

The conference in connection with these investigations was held in the Main Hearing Room (room

101), 500 E Street, SW, Washington, D.C.

OPENING REMARKS:

Petitioners (Joseph W. Dorn, King & Spalding LLP)

Respondents (James P. Durling, Vinson & Elkins LLP)

In Support of the Imposition of 

Countervailing and Antidumping Duties:

King & Spalding LLP

Schagrin Associates

Washington, D.C.

on behalf of

The Ad Hoc Coalition For Fair Pipe Imports From China and the United Steelworkers

Armand Lauzon, Co-Chair, Ad Hoc Coalition For Fair Pipe Imports From China; 

Chief Executive Officer, John Maneely Company

Mark Magno, Vice President, Sales, Wheatland Tube Company and 

Sharon Tube Company

Rick Filetti, Co-Chair, Ad Hoc Coalition For Fair Pipe Imports From China; President,

Allied Tube & Conduit

Scott Barnes, Vice President, Commercial, IPSCO Tubulars, Inc.
B-4

In Support of the Imposition of 

Countervailing and Antidumping Duties (continued):

Holly Hart, Legislative Director, United Steelworkers

Bob Bussiere, General Manager, Sprinkler Sales & Services, 

Allied Tube & Conduit

Joseph W. Dorn, Esq. )

Gilbert B. Kaplan, Esq. ) – OF COUNSEL

Roger B. Schagrin, Esq. )

In Opposition to the Imposition of 

Countervailing and Antidumping Duties:

Vinson & Elkins, LLP

Washington, D.C.

on behalf of

Weifang East Steel Pipe Co., Ltd.

Shanghai Minminerals and Metals I & E Corp.

Huludao Steel Pipe Industrial Co., Ltd.

Tianjin Shuangjie Steel Pipe Co., Ltd.

Zhejiang Kingland Pipe and Technology Co., Ltd.

Tai Feng Qiao Metal Products Co., Ltd.

Xuzhou Guanghuan Steel Tube Co., Ltd.

Guangdong Walsall Street Industrial Co., Ltd.

Tianjin Machinery and Electronics Trading Group Co., Ltd.

Tianjin Baolai International Trade Co., Ltd

Jiangsu Guoqiang Galvanized Industrial Co., Ltd.

Pangang Group Beihai Steel Pipe Corp.

Shanghai Alison Steel Pipe Corp.

Shandong Fubo Group

Shanghai Sinopec Tianbao Steel Pipe Co., Ltd.

James P. Durling, Esq. )

Daniel L. Porter, Esq. ) – OF COUNSEL

Matthew P. McCullough, Esq. )
B-5

In Opposition to the Imposition of 

Countervailing and Antidumping Duties (continued):

Kirkland & Ellis LLP

Washington, D.C.

on behalf of

Western International Forest Products

Doug Rudolph, Senior Steel Buyer/Trader,

Western International Forest Products

Scott Schmid, Steel Division Manager, 

Western International Forest Products

Laura Fraedrich, Esq. ) – OF COUNSEL

REBUTTAL/CLOSING REMARKS:

Petitioners (Joseph W. Dorn, King & Spalding LLP)

Respondents (Matthew P. McCullough, Vinson & Elkins LLP)

C-1

APPENDIX C

SUMMARY DATA

Table C-1

Circular welded pipe: 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 . . . . . . . . . . . . . . . . . . . 2,429,332 2,367,999 2,684,367 663,717 627,743 10.5 -2.5 13.4 -5.4

 Producers' share (1) . . . . . . . . . 58.6 59.4 50.4 52.6 58.2 -8.2 0.7 -9.0 5.6

 Importers' share (1):

 China . . . . . . . . . . . . . . . . . . . . 11.5 16.5 26.7 18.4 26.3 15.2 5.1 10.2 7.9

 Other sources . . . . . . . . . . . . . 29.9 24.1 22.9 29.0 15.5 -7.0 -5.8 -1.2 -13.5

 Total imports . . . . . . . . . . . . . 41.4 40.6 49.6 47.4 41.8 8.2 -0.7 9.0 -5.6

U.S. consumption value:

 Amount . . . . . . . . . . . . . . . . . . . 1,905,716 2,099,424 2,215,150 536,132 526,209 16.2 10.2 5.5 -1.9

 Producers' share (1) . . . . . . . . . 65.7 65.7 60.0 59.9 64.1 -5.7 0.0 -5.7 4.2

 Importers' share (1):

 China . . . . . . . . . . . . . . . . . . . . 8.5 12.0 19.0 14.2 20.0 10.5 3.5 6.9 5.8

 Other sources . . . . . . . . . . . . . 25.8 22.3 21.1 25.9 15.9 -4.8 -3.6 -1.2 -10.0

 Total imports . . . . . . . . . . . . . 34.3 34.3 40.0 40.1 35.9 5.7 -0.0 5.7 -4.2

U.S. imports from:

 China:

 Quantity . . . . . . . . . . . . . . . . . . 278,191 391,007 716,184 122,139 165,088 157.4 40.6 83.2 35.2

 Value . . . . . . . . . . . . . . . . . . . . 161,926 252,849 419,960 76,087 105,223 159.4 56.2 66.1 38.3

 Unit value . . . . . . . . . . . . . . . . . $582 $647 $586 $623 $637 0.7 11.1 -9.3 2.3

 Ending inventory quantity . . . . 9,296 8,028 39,080 27,430 39,411 320.4 -13.6 386.8 43.7

 All other sources:

 Quantity . . . . . . . . . . . . . . . . . . 727,282 571,490 616,007 192,672 97,515 -15.3 -21.4 7.8 -49.4

 Value . . . . . . . . . . . . . . . . . . . . 492,462 467,208 466,588 138,668 83,521 -5.3 -5.1 -0.1 -39.8

 Unit value . . . . . . . . . . . . . . . . . $677 $818 $757 $720 $856 11.9 20.7 -7.3 19.0

 Ending inventory quantity . . . . 35,265 24,123 40,040 29,115 49,607 13.5 -31.6 66.0 70.4

 All sources:

 Quantity . . . . . . . . . . . . . . . . . . 1,005,473 962,497 1,332,191 314,811 262,603 32.5 -4.3 38.4 -16.6

 Value . . . . . . . . . . . . . . . . . . . . 654,388 720,057 886,548 214,755 188,744 35.5 10.0 23.1 -12.1

 Unit value . . . . . . . . . . . . . . . . . $651 $748 $665 $682 $719 2.3 14.9 -11.0 5.4

 Ending inventory quantity . . . . 44,561 32,151 79,120 56,545 89,018 77.6 -27.8 146.1 57.4

U.S. producers':

 Average capacity quantity . . . . . 2,662,522 2,544,494 2,397,006 652,041 592,064 -10.0 -4.4 -5.8 -9.2

 Production quantity . . . . . . . . . . 1,470,770 1,428,990 1,350,551 365,202 387,472 -8.2 -2.8 -5.5 6.1

 Capacity utilization (1) . . . . . . . . 55.2 56.2 56.3 56.0 65.4 1.1 0.9 0.2 9.4

 U.S. shipments:

 Quantity . . . . . . . . . . . . . . . . . . 1,423,859 1,405,502 1,352,176 348,906 365,140 -5.0 -1.3 -3.8 4.7

 Value . . . . . . . . . . . . . . . . . . . . 1,251,328 1,379,367 1,328,602 321,377 337,465 6.2 10.2 -3.7 5.0

 Unit value . . . . . . . . . . . . . . . . . $879 $981 $983 $921 $924 11.8 11.7 0.1 0.3

 Export shipments:

 Quantity . . . . . . . . . . . . . . . . . . 35,710 37,571 30,742 7,203 10,561 -13.9 5.2 -18.2 46.6

 Value . . . . . . . . . . . . . . . . . . . . 33,898 37,187 28,189 6,996 8,931 -16.8 9.7 -24.2 27.7

 Unit value . . . . . . . . . . . . . . . . . $949 $990 $917 $971 $846 -3.4 4.3 -7.4 -12.9

 Ending inventory quantity . . . . . 192,684 194,451 174,107 203,345 185,525 -9.6 0.9 -10.5 -8.8

 Inventories/total shipments (1) . 13.2 13.5 12.6 14.3 12.3 -0.6 0.3 -0.9 -1.9

 Production workers . . . . . . . . . . 2,449 2,220 2,084 2,068 2,167 -14.9 -9.4 -6.1 4.8

 Hours worked (1,000s) . . . . . . . 4,540 4,079 3,888 1,012 1,007 -14.4 -10.2 -4.7 -0.5

 Wages paid ($1,000s) . . . . . . . . 89,038 82,221 78,048 20,463 21,236 -12.3 -7.7 -5.1 3.8

 Hourly wages . . . . . . . . . . . . . . . $19.61 $20.16 $20.07 $20.22 $21.09 2.4 2.8 -0.4 4.3

 Productivity (tons/1,000 hours) . 324.0 350.4 347.4 360.9 384.9 7.2 8.1 -0.8 6.6

 Unit labor costs . . . . . . . . . . . . . $60.54 $57.54 $57.79 $56.03 $54.81 -4.5 -5.0 0.4 -2.2

 Net sales:

 Quantity . . . . . . . . . . . . . . . . . . 1,496,511 1,352,728 1,459,037 354,768 375,622 -2.5 -9.6 7.9 5.9

 Value . . . . . . . . . . . . . . . . . . . . 1,231,347 1,301,584 1,382,064 326,671 346,044 12.2 5.7 6.2 5.9

 Unit value . . . . . . . . . . . . . . . . . $823 $962 $947 $921 $921 15.1 16.9 -1.6 0.0

 Cost of goods sold (COGS) . . . . 994,404 1,117,662 1,191,587 275,149 316,668 19.8 12.4 6.6 15.1

 Gross profit or (loss) . . . . . . . . . 236,943 183,922 190,477 51,522 29,376 -19.6 -22.4 3.6 -43.0

 SG&A expenses . . . . . . . . . . . . 64,270 59,621 62,614 16,810 17,914 -2.6 -7.2 5.0 6.6

 Operating income or (loss) . . . . 172,673 124,301 127,863 34,712 11,462 -26.0 -28.0 2.9 -67.0

 Capital expenditures . . . . . . . . . 22,879 43,138 44,966 8,890 6,293 96.5 88.5 4.2 -29.2

 Unit COGS . . . . . . . . . . . . . . . . . $664 $826 $817 $776 $843 22.9 24.3 -1.2 8.7

 Unit SG&A expenses . . . . . . . . . $43 $44 $43 $47 $48 -0.1 2.6 -2.6 0.7

 Unit operating income or (loss) . $115 $92 $88 $98 $31 -24.0 -20.4 -4.6 -68.8

 COGS/sales (1) . . . . . . . . . . . . . 80.8 85.9 86.2 84.2 91.5 5.5 5.1 0.3 7.3

 Operating income or (loss)/

 sales (1) . . . . . . . . . . . . . . . . . . 14.0 9.5 9.3 10.6 3.3 -4.8 -4.5 -0.3 -7.3

 (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-3

D-1

APPENDIX D

QUESTIONNAIRE SELLING PRICE DATA

FOR CIRCULAR WELDED PIPE PRODUCTS 1-4

IMPORTED FROM NONSUBJECT COUNTRIES AND

 PRICE COMPARISONS WITH THE U.S.-PRODUCED PRODUCTS

D-3

Table D-1

Circular welded pipe: Net weighted-average U.S. f.o.b. selling prices and quantities of circular

welded pipe product categories 1 and 4 produced domestically and imported from Guatemala and

margins of underselling/(overselling), by quarters, January 2004-September 2005

Period of

shipment

United States Guatemala

Price

per 

short ton

Quantity

short tons

No. of

firms

Price

per 

short ton

Quantity

short tons

No. of

firms

Margin

percent

Product category 11

2004:

 Jan.-Mar. $599.77 32,387 5 $*** *** 1 ***

 Apr.-June 830.60 31,549 5 *** *** 1 ***

 July-Sept. 891.48 20,297 5 *** *** 1 ***

2005:

 Apr.-June 906.73 23,728 6 *** *** 1 ***

 July-Sept. 855.85 24,447 6 *** *** 1 ***

Subtotals (

3

) 132,408 6 (3) *** 1 (3)

Product category 42

2004:

 Jan.-Mar. $939.07 29,196 4 $*** *** 1 ***

Subtotals (

3

) 29,196 4 (3) *** 1 (3)

Totals (

3

) 161,604 8 (3) *** 1 (3)

 1 Product category 1: ASTM A-53 schedule 40 black plain-end, with nominal outside diameter of 2-4 inches

inclusive.

 2

 Product category 4: Galvanized fence tube, with nominal outside diameter of 1-3/8 – 2-3/8 inches inclusive,

and wall thickness of 0.055-0.075 inch.

 3

 Not applicable.

Source: Compiled from data submitted in response to Commission questionnaires.
D-4

Table D-2

Circular welded pipe: Net weighted-average U.S. f.o.b. selling prices and quantities of circular

welded pipe product categories 1-4 produced domestically and imported from India and margins of

underselling/(overselling), by quarters, July 2004-March 2007

Period of

shipment

United States India

Price

per 

short ton

Quantity

short tons

No. of

firms

Price

per 

short ton

Quantity

short tons

No. of

firms

Margin

percent

Product category 11

2007:

 Jan.-Mar. $919.35 28,954 6 $*** *** 1 ***

Subtotals (

5

) 28,954 6 (5) *** 1 (5)

Product category 22

2004:

 July-Sept. $*** *** 2 $*** *** 1 ***

2005:

 Oct.-Dec. *** *** 2 *** *** 1 ***

2006:

 July-Sept. *** *** 2 *** *** 1 ***

Subtotals (

5

) *** 2 (5) *** 3 (5)

Product category 33

2007

 Jan.-Mar. $872.91 23,569 8 $*** *** 1 ***

Subtotals (

5

) 23,569 8 (5) *** 1 (5)

Product category 44

2006:

 July-Sept. $1,183.95 17,706 4 $*** *** 1 ***

2007:

 Jan.-Mar. 1,153.13 19,862 3 *** *** 1 ***

Subtotals (

5

) 37,568 4 (5) *** 1 (5)

Totals (

5

) *** 10 (5) *** 3 (5)

 1 Product category 1: ASTM A-53 schedule 40 black plain-end, with nominal outside diameter of 2-4 inches

inclusive.

 2

 Product category 2: ASTM A-53 schedule 40 galvanized plain-end, with nominal outside diameter of 2-4 inches

inclusive.

 3

 Product category 3: ASTM A-53 schedule black plain-end, with nominal outside diameter of 6-8 inches

inclusive.

 4

 Produc categoryt 4: Galvanized fence tube, with nominal outside diameter of 1-3/8 – 2-3/8 inches inclusive,

and wall thickness of 0.055-0.075 inch.

 5

 Not applicable.

Source: Compiled from data submitted in response to Commission questionnaires.
D-5

Table D-3

Circular welded pipe: Net weighted-average U.S. f.o.b. selling prices and quantities of circular

welded pipe product category 1 produced domestically and imported from Japan and margins of

underselling/(overselling), by quarters, January 2005-March 2006

Period of

shipment

United States Japan

Price

per 

short ton

Quantity

short tons

No. of

firms

Price

per 

short ton

Quantity

short tons

No. of

firms

Margin

percent

Product category 11

2005:

 Jan.-Mar. $914.04 19,829 6 $*** *** 1 ***

2006:

 Jan.-Mar. $954.04 22,084 6 $*** *** 1 ***

Subtotals (

2

) 41,913 6 (2) *** 1 (2)

Totals (

2

) 41,913 6 (2) *** 1 (2)

 1 Product category 1: ASTM A-53 schedule 40 black plain-end, with nominal outside diameter of 2-4 inches

inclusive.

 2

 Not applicable.

Source: Compiled from data submitted in response to Commission questionnaires.
D-6

Table D-4

Circular welded pipe: Net weighted-average U.S. f.o.b. selling prices and quantities of circular

welded pipe product categories 1-4 produced domestically and imported from Oman and margins

of underselling/(overselling), by quarters, July 2004-December 2006

Period of

shipment

United States Oman

Price

per 

short ton

Quantity

short tons

No. of

firms

Price

per 

short ton

Quantity

short tons

No. of

firms

Margin

percent

Product category 11

2004:

 July-Sept. $891.48 20,297 5 $*** *** 1 ***

2006:

 Oct.-Dec. 1,010.34 26,757 6 *** *** 1 ***

Subtotals (

5

) 47,054 6 (5) *** 2 (5)

Product category 22

2006:

 Oct.-Dec. $*** *** 2 $*** *** 1 ***

Subtotals (

5

) *** 2 (5) *** 1 (5)

Product category 33

2004:

 July-Sept. $930.85 32,383 7 $*** *** 1 ***

Subtotals (

5

) 32,383 7 (5) *** 1 (5)

Product category 44

2006:

 Oct.-Dec. $1,196.86 12,213 4 $*** *** 1 ***

Subtotals (

5

) 12,213 4 (5) *** 1 (5)

Totals (

5

) *** 8 (5) *** 2 (5)

 1 Product category 1: ASTM A-53 schedule 40 black plain-end, with nominal outside diameter of 2-4 inches

inclusive.

 2

 Product category 2: ASTM A-53 schedule 40 galvanized plain-end, with nominal outside diameter of 2-4 inches

inclusive.

 3

 Product category 3: ASTM A-53 schedule black plain-end, with nominal outside diameter of 6-8 inches

inclusive.

 4

 Product category 4: Galvanized fence tube, with nominal outside diameter of 1-3/8 – 2-3/8 inches inclusive,

and wall thickness of 0.055-0.075 inch.

 5

 Not applicable.

Source: Compiled from data submitted in response to Commission questionnaires.
D-7

Table D-5

Circular welded pipe: Net weighted-average U.S. f.o.b. selling prices and quantities of circular

welded pipe product categories 1-3 produced domestically and imported from Romania and

margins of underselling/(overselling), by quarters, January 2004-March 2007

Period of

shipment

United States Romania

Price

per 

short ton

Quantity

short tons

No. of

firms

Price

per 

short ton

Quantity

short tons

No. of

firms

Margin

percent

Product category 11

2004:

 Jan.-Mar. $599.77 32,387 5 $*** *** 1 ***

 Apr.-June 830.60 31,549 5 *** *** 1 ***

 July-Sept. 891.48 20,297 5 *** *** 1 ***

 Oct.-Dec. 914.57 13,687 5 *** *** 1 ***

2005:

 Jan.-Mar. 914.04 19,829 6 *** *** 1 ***

 Apr.-June 906.73 23,728 6 *** *** 1 ***

 July-Sept. 855.85 24,447 6 *** *** 1 ***

2006:

 Apr.-June 945.07 25,926 6 *** *** 1 ***

 Oct.-Dec. 1,010.34 26,757 6 *** *** 1 ***

Subtotals (

4

) 218,607 6 (4) *** 1 (4)

Product category 22

2005:

 July-Sept. $*** *** 2 $*** *** 1 ***

 Oct.-Dec. *** *** 2 *** *** 1 ***

2006:

 Jan.-Mar. *** *** 2 *** *** 1 ***

 Apr.-June *** *** 2 *** *** 1 ***

Subtotals (

4

) *** 2 (4) *** 1 (4)

Table continued on next page.
D-8

Table D-5--Continued

Circular welded pipe: Net weighted-average U.S. f.o.b. selling prices and quantities of circular

welded pipe product categories 1-3 produced domestically and imported from Romania and

margins of underselling/(overselling), by quarters, January 2004-March 2007

Period of

shipment

United States Romania

Price

per 

short ton

Quantity

short tons

No. of

firms

Price

per 

short ton

Quantity

short tons

No. of

firms

Margin

percent

Product category 33

2004:

 Jan.-Mar. $628.99 41,554 7 $*** *** 1 ***

 Apr.-June 837.27 43,518 7 *** *** 1 ***

 July-Sept. 930.85 32,383 7 *** *** 1 ***

 Oct.-Dec. 931.65 21,214 7 *** *** 1 ***

2005:

 Jan.-Mar. 937.04 22,785 8 *** *** 1 ***

 Apr.-June 902.36 29,506 8 *** *** 1 ***

 July-Sept. 845.95 32,492 8 *** *** 1 ***

 Oct.-Dec. 909.31 25,200 8 *** *** 1 ***

2006:

 Jan.-Mar. 920.98 26,626 8 *** *** 1 ***

 Apr.-June 929.50 32,927 8 *** *** 1 ***

 July-Sept. 998.75 22,070 8 *** *** 1 ***

 Oct.-Dec. 988.57 20,806 8 *** *** 1 ***

2007:

 Jan.-Mar. 872.91 23,569 8 *** *** 1 ***

Subtotals (

4

) 374,650 8 (4) *** 1 (4)

Totals (

4

) 602,555 8 (4

) *** 1 (4)

 1 Product category 1: ASTM A-53 schedule 40 black plain-end, with nominal outside diameter of 2-4 inches

inclusive.

 2

 Product category 2: ASTM A-53 schedule 40 galvanized plain-end, with nominal outside diameter of 2-4 inches

inclusive.

 3

 Productcategory 3: ASTM A-53 schedule black plain-end, with nominal outside diameter of 6-8 inches

inclusive.

 4

 Not applicable.

Source: Compiled from data submitted in response to Commission questionnaires.
D-9

Table D-6

Circular welded pipe: Net weighted-average U.S. f.o.b. selling prices and quantities of circular

welded pipe product categories 1-4 produced domestically and imported from Korea and margins

of underselling/(overselling), by quarters, January 2004-March 2007

Period of

shipment

United States Korea

Price

per 

short ton

Quantity

short tons

No. of

firms

Price

per 

short ton

Quantity

short tons

No. of

firms

Margin

percent

Product category 11

2004:

 Jan.-Mar. $599.77 32,387 5 $*** *** 1 ***

 Apr.-June 830.60 31,549 5 *** *** 2 ***

 July-Sept. 891.48 20,297 5 *** *** 2 ***

 Oct.-Dec. 914.57 13,687 5 *** *** 2 ***

2005:

 Jan.-Mar. 914.04 19,829 6 *** *** 2 ***

 Apr.-June 906.73 23,728 6 *** *** 3 ***

 July-Sept. 855.85 24,447 6 *** *** 2 ***

 Oct.-Dec. 891.34 24,442 6 *** *** 2 ***

2006:

 Jan.-Mar. 954.04 22,084 6 *** *** 2 ***

 Apr.-June 945.07 25,926 6 *** *** 3 ***

 July-Sept. 1004.68 27,128 6 *** *** 2 ***

 Oct.-Dec. 1010.34 26,757 6 *** *** 2 ***

2007:

 Jan.-Mar. 919.35 28,954 6 *** *** 2 ***

Subtotals (

5

) 321,215 6 (5) *** 3 (5)

Product category 22

2004:

 Jan.-Mar. $*** *** 2 $*** *** 1 ***

 Apr.-June *** *** 2 *** *** 2 ***

 July-Sept. *** *** 2 *** *** 2 ***

 Oct.-Dec. *** *** 2 *** *** 2 ***

2006:

 Jan.-Mar. *** *** 2 *** *** 1 ***

Subtotals (

5

) *** 2 (5) *** 2 (5)

Table continued on next page.
D-10

Table D-6--Continued

Circular welded pipe: Net weighted-average U.S. f.o.b. selling prices and quantities of circular

welded pipe product categories 1-4 produced domestically and imported from Korea and margins

of underselling/(overselling), by quarters, January 2004-March 2007

Period of

shipment

United States Korea

Price

per 

short ton

Quantity

short tons

No. of

firms

Price

per 

short ton

Quantity

short tons

No. of

firms

Margin

percent

Product category 33

2004:

 Jan.-Mar. $628.99 41,554 7 $*** *** 1 ***

 Apr.-June 837.27 43,518 7 *** *** 2 ***

 July-Sept. 930.85 32,383 7 *** *** 2 ***

 Oct.-Dec. 931.65 21,214 7 *** *** 2 ***

2005:

 Jan.-Mar. 937.04 22,785 8 *** *** 2 ***

 Apr.-June 902.36 29,506 8 *** *** 2 ***

 July-Sept. 845.95 32,492 8 *** *** 2 ***

 Oct.-Dec. 909.31 25,200 8 *** *** 2 ***

2006:

 Jan.-Mar. 920.98 26,626 8 *** *** 2 ***

 Apr.-June 929.50 32,927 8 *** *** 2 ***

 July-Sept. 998.75 22,070 8 *** *** 2 ***

 Oct.-Dec. 988.57 20,806 8 *** *** 2 ***

2007:

 Jan.-Mar. 872.91 23,569 8 *** *** 2 ***

Subtotals (

5

) 374,650 8 (5) *** 2 (5)

Table continued on next page.
D-11

Table D-6--Continued

Circular welded pipe: Net weighted-average U.S. f.o.b. selling prices and quantities of circular

welded pipe product categories 1-4 produced domestically and imported from Korea and margins

of underselling/(overselling), by quarters, January 2004-March 2007

Period of

shipment

United States Korea

Price

per 

short ton

Quantity

short tons

No. of

firms

Price

per 

short ton

Quantity

short tons

No. of

firms

Margin

percent

Product category 44

2004:

 Jan.-Mar. $939.07 29,196 4 $*** *** 1 ***

 Apr.-June 1,301.87 21,195 4 *** *** 1 ***

 July-Sept. 1,361.53 14,297 4 *** *** 1 ***

 Oct.-Dec. 1,278.50 12,838 4 *** *** 1 ***

2005:

 Jan.-Mar. 1,251.24 23,232 4 *** *** 1 ***

 Apr.-June 1,250.23 23,824 4 *** *** 1 ***

 July-Sept. 1,163.01 18,214 4 *** *** 1 ***

 Oct.-Dec. 1,127.43 15,870 4 *** *** 1 ***

2006:

 Jan.-Mar. 1,101.34 22,770 4 *** *** 1 ***

 Apr.-June 1,161.47 25,073 4 *** *** 1 ***

 July-Sept. 1,183.95 17,706 4 *** *** 1 ***

 Oct.-Dec. 1,196.86 12,213 4 *** *** 1 ***

2007:

 Jan.-Mar. 1,153.13 19,862 3 *** *** 1 ***

Subtotals (

5

) 256,290 4 (5) *** 1 (5)

Totals (

5

) *** 10 (5

) *** 3 (5)

 1 Product category 1: ASTM A-53 schedule 40 black plain-end, with nominal outside diameter of 2-4 inches

inclusive.

 2

 Product category 2: ASTM A-53 schedule 40 galvanized plain-end, with nominal outside diameter of 2-4 inches

inclusive.

 3

 Product category 3: ASTM A-53 schedule black plain-end, with nominal outside diameter of 6-8 inches

inclusive.

 4

 Product category 4: Galvanized fence tube, with nominal outside diameter of 1-3/8 – 2-3/8 inches inclusive,

and wall thickness of 0.055-0.075 inch.

 5

 Not applicable.

Source: Compiled from data submitted in response to Commission questionnaires.
D-12

Table D-7

Circular welded pipe: Net weighted-average U.S. f.o.b. selling prices and quantities of circular

welded pipe product categories 1-3 produced domestically and imported from Thailand and

margins of underselling/(overselling), by quarters, January 2004-March 2007

Period of

shipment

United States Thailand

Price

per 

short ton

Quantity

short tons

No. of

firms

Price

per 

short ton

Quantity

short tons

No. of

firms

Margin

percent

Product category 11

2004:

 Jan.-Mar. $599.77 32,387 5 $*** *** 1 ***

 Apr.-June 830.60 31,549 5 *** *** 1 ***

 July-Sept. 891.48 20,297 5 *** *** 1 ***

 Oct.-Dec. 914.57 13,687 5 *** *** 1 ***

2005:

 Jan.-Mar. 914.04 19,829 6 *** *** 1 ***

 Apr.-June 906.73 23,728 6 *** *** 1 ***

 July-Sept. 855.85 24,447 6 *** *** 1 ***

 Oct.-Dec. 891.34 24,442 6 *** *** 1 ***

2006:

 Jan.-Mar. 954.04 22,084 6 *** *** 1 ***

 Apr.-June 945.07 25,926 6 *** *** 1 ***

 July-Sept. 1,004.68 27,128 6 *** *** 1 ***

 Oct.-Dec. 1,010.34 26,757 6 *** *** 1 ***

2007:

 Jan.-Mar. 919.35 28,954 6 *** *** 1 ***

Subtotals (

4

) 321,215 6 (4) *** 1 (4)

Table continued on next page.
D-13

Table D-7--Continued

Circular welded pipe: Net weighted-average U.S. f.o.b. selling prices and quantities of circular

welded pipe product categories 1-3 produced domestically and imported from Thailand and

margins of underselling/(overselling), by quarters, January 2004-March 2007

Period of

shipment

United States Thailand

Price

per 

short ton

Quantity

short tons

No. of

firms

Price

per 

short ton

Quantity

short tons

No. of

firms

Margin

percent

Product category 22

2004:

 Jan.-Mar. $*** *** 2 $*** *** 1 ***

 Apr.-June *** *** 2 *** *** 1 ***

 July-Sept. *** *** 2 *** *** 1 ***

 Oct.-Dec. *** *** 2 *** *** 1 ***

2005:

 Jan.-Mar. *** *** 2 *** *** 1 ***

 Apr.-June *** *** 2 *** *** 1 ***

 July-Sept. *** *** 2 *** *** 1 ***

 Oct.-Dec. *** *** 2 *** *** 1 ***

2006:

 Jan.-Mar. *** *** 2 *** *** 1 ***

 Apr.-June *** *** 2 *** *** 1 ***

 July-Sept. *** *** 2 *** *** 1 ***

 Oct.-Dec. *** *** 2 *** *** 1 ***

2007:

 Jan.-Mar. *** *** 2 *** *** 1 ***

Subtotals *** *** 2 *** *** 1 (4

)

Table continued on next page.
D-14

Table D-7--Continued

Circular welded pipe: Net weighted-average U.S. f.o.b. selling prices and quantities of circular

welded pipe product categories 1-3 produced domestically and imported from Thailand and

margins of underselling/(overselling), by quarters, January 2004-March 2007

Period of

shipment

United States Thailand

Price

per 

short ton

Quantity

short tons

No. of

firms

Price

per 

short ton

Quantity

short tons

No. of

firms

Margin

percent

Product category 33

2004:

 Jan.-Mar. $628.99 41,554 7 $*** *** 1 ***

 Apr.-June 837.27 43,518 7 *** *** 1 ***

 July-Sept. 930.85 32,383 7 *** *** 1 ***

 Oct.-Dec. 931.65 21,214 7 *** *** 1 ***

2005:

 Jan.-Mar. 937.04 22,785 8 *** *** 1 ***

 Apr.-June 902.36 29,506 8 *** *** 1 ***

 July-Sept. 845.95 32,492 8 *** *** 1 ***

 Oct.-Dec. 909.31 25,200 8 *** *** 1 ***

2006:

 Jan.-Mar. 920.98 26,626 8 *** *** 1 ***

 Apr.-June 929.50 32,927 8 *** *** 1 ***

 July-Sept. 998.75 22,070 8 *** *** 1 ***

 Oct.-Dec. 988.57 20,806 8 *** *** 1 ***

2007:

 Jan.-Mar. 872.91 23,569 8 *** *** 1 ***

Subtotals (

4

) 374,650 8 (4) *** 1 (4)

Totals (

4

) *** 8 (4

) *** 1 (4)

 1 Product category 1: ASTM A-53 schedule 40 black plain-end, with nominal outside diameter of 2-4 inches

inclusive.

 2

 Product category 2: ASTM A-53 schedule 40 galvanized plain-end, with nominal outside diameter of 2-4 inches

inclusive.

 3

 Product category 3: ASTM A-53 schedule black plain-end, with nominal outside diameter of 6-8 inches

inclusive.

 4

 Not applicable.

Source: Compiled from data submitted in response to Commission questionnaires.
D-15

Table D-8

Circular welded pipe: Net weighted-average U.S. f.o.b. selling prices and quantities of circular

welded pipe product categories 1-4 produced domestically and imported from Turkey and margins

of underselling/(overselling), by quarters, January 2004-June 2006

Period of

shipment

United States Turkey

Price

per 

short ton

Quantity

short tons

No. of

firms

Price

per 

short ton

Quantity

short tons

No. of

firms

Margin

percent

Product category 11

2004:

 Jan.-Mar. $599.77 32,387 5 $*** *** 1 ***

 Apr.-June 830.60 31,549 5 *** *** 1 ***

 July-Sept. 891.48 20,297 5 *** *** 1 ***

 Oct.-Dec. 914.57 13,687 5 *** *** 1 ***

2005:

 Jan.-Mar. 914.04 19,829 6 *** *** 1 ***

 Apr.-June 906.73 23,728 6 *** *** 1 ***

 July-Sept. 855.85 24,447 6 *** *** 1 ***

 Oct.-Dec. 891.34 24,442 6 *** *** 1 ***

2006:

 Jan.-Mar. 954.04 22,084 6 *** *** 1 ***

 Apr.-June 945.07 25,926 6 *** *** 1 ***

Subtotals (

5

) 238,376 6 (5) *** 1 (5)

Table continued on next page.
D-16

Table D-8--Continued

Circular welded pipe: Net weighted-average U.S. f.o.b. selling prices and quantities of circular

welded pipe product categories 1-4 produced domestically and imported from Turkey and margins

of underselling/(overselling), by quarters, January 2004-June 2006

Period of

shipment

United States Turkey

Price

per 

short ton

Quantity

short tons

No. of

firms

Price

per 

short ton

Quantity

short tons

No. of

firms

Margin

percent

Product category 22

2004:

 Jan.-Mar. $*** *** 2 $*** *** 1 ***

 Apr.-June *** *** 2 *** *** 1 ***

 July-Sept. *** *** 2 *** *** 1 ***

 Oct.-Dec. *** *** 2 *** *** 1 ***

2005:

 Jan.-Mar. *** *** 2 *** *** 1 ***

 Apr.-June *** *** 2 *** *** 1 ***

 July-Sept. *** *** 2 *** *** 1 ***

 Oct.-Dec. *** *** 2 *** *** 1 ***

2006:

 Apr.-June *** *** 2 *** *** 1 ***

Subtotals (

5

) *** 2 (5) *** 1 (5)

Table continued on next page.
D-17

Table D-8--Continued

Circular welded pipe: Net weighted-average U.S. f.o.b. selling prices and quantities of circular

welded pipe product categories 1-4 produced domestically and imported from Turkey and margins

of underselling/(overselling), by quarters, January 2004-June 2006

Period of

shipment

United States Turkey

Price

per 

short ton

Quantity

short tons

No. of

firms

Price

per 

short ton

Quantity

short tons

No. of

firms

Margin

percent

Product category 33

2004:

 Jan.-Mar. $628.99 41,554 7 $*** *** 1 ***

 Apr.-June 837.27 43,518 7 *** *** 1 ***

 July-Sept. 930.85 32,383 7 *** *** 1 ***

 Oct.-Dec. 931.65 21,214 7 *** *** 1 ***

2005:

 Jan.-Mar. 937.04 22,785 8 *** *** 1 ***

 Apr.-June 902.36 29,506 8 *** *** 1 ***

 July-Sept. 845.95 32,492 8 *** *** 1 ***

 Oct.-Dec. 909.31 25,200 8 *** *** 1 ***

2006:

 Jan.-Mar. 920.98 26,626 8 *** *** 1 ***

 Apr.-June 929.50 32,927 8 *** *** 1 ***

Subtotals (

5

) 308,205 8 (5) *** 1 (5)

Table continued on next page.
D-18

Table D-8--Continued

Circular welded pipe: Net weighted-average U.S. f.o.b. selling prices and quantities of circular

welded pipe product categories 1-4 produced domestically and imported from Turkey and margins

of underselling/(overselling), by quarters, January 2004-June 2006

Period of

shipment

United States Turkey

Price

per 

short ton

Quantity

short tons

No. of

firms

Price

per 

short ton

Quantity

short tons

No. of

firms

Margin

percent

Product category 44

2004:

 Jan.-Mar. $939.07 29,196 4 $*** *** 1 ***

 Apr.-June 1,301.87 21,195 4 *** *** 1 ***

 July-Sept. 1,361.53 14,297 4 *** *** 1 ***

 Oct.-Dec. 1,278.50 12,838 4 *** *** 1 ***

2005:

 Jan.-Mar. 1,251.24 23,232 4 *** *** 1 ***

 Apr.-June 1,250.23 23,824 4 *** *** 1 ***

 July-Sept. 1,163.01 18,214 4 *** *** 1 ***

 Oct.-Dec. 1,127.43 15,870 4 *** *** 1 ***

2006:

 Jan.-Mar. 1,101.34 22,770 4 *** *** 1 ***

 Apr.-June 1,161.47 25,073 4 *** *** 1 ***

Subtotals (

5

) 206,509 4 (5) *** 1 (5)

Totals (

5

) *** 10 (5

) *** 1 (5)

 1 Product category 1: ASTM A-53 schedule 40 black plain-end, with nominal outside diameter of 2-4 inches

inclusive.

 2

 Product category 2: ASTM A-53 schedule 40 galvanized plain-end, with nominal outside diameter of 2-4 inches

inclusive.

 3

 Product category 3: ASTM A-53 schedule black plain-end, with nominal outside diameter of 6-8 inches

inclusive.

 4

 Product category 4: Galvanized fence tube, with nominal outside diameter of 1-3/8 – 2-3/8 inches inclusive,

and wall thickness of 0.055-0.075 inch.

 5

 Not applicable.

Source: Compiled from data submitted in response to Commission questionnaires.
D-19

Table D-9

Circular welded pipe: Net weighted-average U.S. f.o.b. selling prices and quantities of circular

welded pipe product categories 1-3 produced domestically and imported from Venezuela and

margins of underselling/(overselling), by quarters, January 2004-March 2006

Period of

shipment

United States Venezuela

Price

per 

short ton

Quantity

short tons

No. of

firms

Price

per 

short ton

Quantity

short tons

No. of

firms

Margin

percent

Product category 11

2004:

 Jan.-Mar. $599.77 32,387 5 $*** *** 1 ***

 Apr.-June 830.60 31,549 5 *** *** 1 ***

 July-Sept. 891.48 20,297 5 *** *** 1 ***

 Oct.-Dec. 914.57 13,687 5 *** *** 1 ***

2005:

 Apr.-June 906.73 23,728 6 *** *** 1 ***

2006:

 Jan.-Mar. 954.04 22,084 6 *** *** 1 ***

Subtotals (

4

) 143,732 6 (4) *** 1 (4)

Product category 22

2004:

 July-Sept. $*** *** 2 $*** *** 1 ***

Subtotals (

4

) *** 2 (4) *** 1 (4)

Product category 33

2004

 Apr.-June $837.27 43,518 7 $*** *** 1 ***

 Oct.-Dec. 931.65 21,214 7 *** *** 1 ***

Subtotals (

4

) 64,732 7 (4) *** 1 (4)

Totals (

4

) *** 8 (4) *** 1 (4)

 1 Product category 1: ASTM A-53 schedule 40 black plain-end, with nominal outside diameter of 2-4 inches

inclusive.

 2

 Product category 2: ASTM A-53 schedule 40 galvanized plain-end, with nominal outside diameter of 2-4 inches

inclusive.

 3

 Product category 3: ASTM A-53 schedule black plain-end, with nominal outside diameter of 6-8 inches

inclusive.

 4

 Not applicable.

Source: Compiled from data submitted in response to Commission questionnaires.

E-1

APPENDIX E

ALLEGED EFFECTS OF SUBJECT IMPORTS ON U.S. PRODUCERS’

EXISTING DEVELOPMENT AND PRODUCTION EFFORTS,

 GROWTH, INVESTMENT, AND ABILITY TO RAISE CAPITAL

E-3

Responses of U.S. producers to the following questions:

1. 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 circular welded pipe from China?

Allied Tube & Conduit, Harvey, IL

***

American Steel Pipe, Birmingham, AL

***

Atlas Tube Co., Chicago, IL

***

Bull Moose Tube Co., Chesterfield, MO

***

California Steel Industries, Inc., Fontana, CA

***

Hanna Steel Corporation, Fairfield, AL

***

IPSCO Tubulars, Inc., Camanche, IA

***

Leavitt Tube Co., Chicago, IL

***

Lone Star Steel Company, Dallas, TX

***

Maruichi American Corp., Santa Fe Springs, CA

***
E-4

Northwest Pipe Co., Portland, OR

***

Sharon Tube Co., Sharon, PA

***

Southland Tube, Birmingham, AL

***

Stupp Corp., Baton Rouge, LA

***

Texas Tubular Products, Lone Star, TX

***

Tex-Tube Company, Houston, TX

***

U.S. Steel, Pittsburgh, PA

***

Western Tube & Conduit Corp., Long Beach, CA

***

Wheatland Tube Co., Collingswood, NJ

***

2. Does your firm anticipate any negative impact of imports of circular welded pipe from China?

Allied Tube & Conduit, Harvey, IL

***

American Steel Pipe, Birmingham, AL

***
E-5

Atlas Tube Co., Chicago, IL

***

Bull Moose Tube Co., Chesterfield, MO

***

California Steel Industries, Inc., Fontana, CA

***

Hanna Steel Corporation, Fairfield, AL

***

IPSCO Tubulars, Camanche, IA

***

Leavitt Tube Co., Chicago, IL

***

Lone Star Steel Company, Dallas, TX

***

Maruichi American Corp., Santa Fe Springs, CA

***

Northwest Pipe Co., Portland, OR

***

Sharon Tube Co., Sharon, PA

***

Southland Tube, Birmingham, AL

***

Stupp Corp., Baton Rouge, LA

***
E-6

Texas Tubular Products, Lone Star, TX

***

Tex-Tube Company, Houston, TX

***

U.S. Steel, Pittsburgh, PA

***

Western Tube & Conduit Corp., Long Beach, CA

***

Wheatland Tube Co., Collingswood, NJ

***
F-1

APPENDIX F

ADDITIONAL DATA REGARDING THE CHINESE INDUSTRY

F-3

Table F-1

Circular welded pipe: Chinese producers’ basis for reporting capacity of circular welded pipe,

2001-06

* * * * * * *

Table F-2

Circular welded pipe: Chinese producers’ basis for their projections on production, capacity, and

shipments of circular welded pipe in China, 2007-08

* * * * * * *