Light-Walled Rectangular Pipe and Tube

From China, Korea, Mexico, and Turkey

Investigation Nos. 701-TA-449 and 731-TA-1118-1121

(Preliminary)

Publication 3941 August 2007

Washington, DC 20436
U.S. International Trade Commission

COMMISSIONERS

Daniel R. Pearson, Chairman

Shara L. Aranoff, Vice Chairman

Deanna Tanner Okun

Charlotte R. Lane

Irving A. Williamson

Dean A. Pinkert

Robert A. Rogowsky

Director of Operations

Staff assigned

Russell Duncan, Investigator

Karl Tsuji, Industry Analyst

Ioana Mic, Economist

Justin Jee, Accountant

Lita David-Harris, Statistician

David Fishberg, Attorney

Douglas Corkran, Supervisory Investigator

 George Deyman, Supervisory 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

Light-Walled Rectangular Pipe and Tube

from China, Korea, Mexico, and Turkey

Investigation Nos. 701-TA-449 and 731-TA-1118-1121

(Preliminary)

Publication 3941 August 2007
 
i

CONTENTS

Page

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

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

Separate and additional views of Commissioner Deanna Tanner Okun concerning Bratsk 

Aluminum v. United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Separate views of Commissioner Charlotte R. Lane . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Dissenting views of Chairman Daniel R. Pearson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

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

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

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

Market summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-2

Summary data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-3

Previous investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-3

Nature and extent of alleged subsidies and sales at LTFV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-3

The subject merchandise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-5

The domestic like product . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-5

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

U.S. market segments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1

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

Substitutability issues .......................................................... II-4

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

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

U.S. production, capacity, and capacity utilization ................................... III-7

U.S. producers’ U.S. shipments and exports ........................................ III-10

U.S. producers’ imports and purchases ............................................. III-12

U.S. producers’ inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-12

U.S. employment, wages, and productivity ......................................... III-13

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

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

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

U.S. shipments of imports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-7

Negligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-9

Cumulation considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-9

Apparent U.S. consumption and U.S. market shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-12

Ratio of subject imports to U.S. production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-16

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

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

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

Price data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-5

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

CONTENTS--Continued

Page

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

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

Operations on LWR pipe and tube . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-1

Capital expenditures and research and development expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-5

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

Capital and investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-6

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

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

The industry in Korea .......................................................... VII-2

The industry in Mexico ......................................................... VII-4

The industry in Turkey ......................................................... VII-5

U.S. inventories of imported subject merchandise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-6

U.S. importers’ outstanding orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-7

Dumping in third-country markets ................................................ VII-8

Information on nonsubject sources ................................................ VII-8

Appendixes

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

B. Conference calendar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1

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

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

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

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

and therefore has been deleted from this report. Such deletions are indicated by asterisks.
 1

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

 2

 Commissioner Charlotte R. Lane determines that there is a reasonable indication that an industry in the United

States is materially injured by reason of imports of light-walled rectangular pipe and tube from China, Korea,

Mexico, and Turkey.

 3

 Vice Chairman Shara L. Aranoff, Commissioner Deanna Tanner Okun, and Commission Irving A. Williamson

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

by reason of imports of light-walled rectangular pipe and tube from China, Korea, Mexico, and Turkey.

 4

 Chairman Daniel R. Peason determines that there is a reasonable indication that an industry in the United States

is threatened with material injury by reason of imports of light-walled rectangular pipe and tube from China, Korea,

and Turkey, but that there is not a reasonable indication that an industry in the United States is materially injured or 

threatened with material injury by reason of imports of light-walled rectangular pipe and tube from Mexico.

 5

 Prior to February 3, 2007, the merchandise subject to these investigations was properly classified under

subheading 7306.60.50 of the Harmonized Tariff Schedule of the United States. 

 6

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

1

UNITED STATES INTERNATIONAL TRADE COMMISSION

Investigation Nos. 701-TA-449 and 731-TA-1118-1121 (Preliminary)

LIGHT-WALLED RECTANGULAR PIPE AND TUBE 

FROM CHINA, KOREA, MEXICO, AND TURKEY

DETERMINATIONS

On the basis of the record1

 developed in the subject investigations, the United States International

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

1930 (19 U.S.C. § 1671b(a) and 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 4 by reason of imports from

China, Korea, Mexico, and Turkey of light-walled rectangular pipe and tube, provided for in subheading

7306.61.50 of the Harmonized Tariff Schedule of the United States,5

 that are alleged to be subsidized by

the Government of China and that are alleged to be to be sold in the United States at less than fair value

(LTFV) from China, Korea, Mexico, and Turkey.6

COMMENCEMENT OF FINAL PHASE INVESTIGATIONS

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

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

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

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

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

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

investigations under section 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
 7

 Allied Tube and Conduit, Harvey, IL; Atlas Tube, Plymouth, MI; California Steel and Tube, City of Industry,

CA; EXLTUBE, Kansas City, MO; Hannibal Industries, Los Angeles, CA; Leavitt Tube Company LLC, Chicago,

IL; Maruichi American Corporation, Sante Fe Springs, CA; Searing Industries, Rancho Cucamonga, CA; Southland

Tube, Birmingham, AL; Vest Inc., Los Angeles, CA; Welded Tube, Concord, Ontario (Canada); and Western Tube

and Conduit, Long Beach, CA.

2

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 27, 2007, a petition was filed with the Commission and Commerce by twelve U.S.

producers,7

 alleging that an industry in the United States is materially injured by reason of subsidized

imports of light-walled rectangular pipe and tube from China and LTFV imports from China, Korea,

Mexico, and Turkey. Accordingly, effective June 27, 2007, the Commission instituted countervailing

duty investigation No. 701-TA-449 (Preliminary) and antidumping investigation Nos. 731-TA-1118-1121

(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 July 3, 2007 (72 FR 36479). The conference was held in Washington, DC, on July 18, 2007, and all

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

 Commissioner Charlotte R. Lane determines that there is a reasonable indication that an industry in the United

States is suffering material injury by reason of imports of LWR pipe and tube from China, Korea, Mexico, and

Turkey. See Separate Views of Commissioner Charlotte R. Lane Concerning Material Injury. She joins in parts I,

II, III, IV, V, and VI.B.1.2.a-e. of these Views.

 2

 Chairman Daniel R. Pearson determines that there is a reasonable indication that an industry in the United States

is threatened with material injury by reason of imports of LWR pipe and tube from China, Korea, and Turkey, but

that there is not a reasonable indication that an industry in the United States is materially injured or threatened with

material injury by reason of subject imports of LWR pipe and tube from Mexico. See Separate and Dissenting

Views of Chairman Daniel R. Pearson. He joins in parts I, II, III, IV, and V of these Views. 

 3

 Commissioner Dean A. Pinkert has recused himself from these investigations to avoid any conflict of interest or

appearance of a conflict.

 4

 19 U.S.C. § 1673b(a); 19 U.S.C. § 1671b(a); see, 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, 1001-04 (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.

 5

 American Lamb, 785 F.2d at 1001; see also Texas Crushed Stone Co. v. United States, 35 F.3d 1535, 1543

(Fed. Cir. 1994). 

 6

 CR at I-9.

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 threatened with material injury by reason of

imports of light-walled rectangular pipe and tube (“LWR pipe and tube”) from China, Korea, Mexico, and

Turkey that are allegedly sold in the United States at less than fair value (“LTFV”), and by reason of

imports of LWR pipe and tube from China allegedly subsidized by the government of China.1 2 3

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.4

 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.”5

II. BACKGROUND

A. In General

 LWR pipe and tube is an intermediate product employed in a variety of end uses not involving

the conveyance of liquids or gases, and is not designed to bear weight.6

 The main uses for LWR pipe and

tube include ornamental fencing, window guards and framing, cattle chutes, railings for construction and

agricultural applications, and more ornamental (but also functional) items such as metal furniture parts,
 7

 CR at I-9.

 8

 Ex-L-Tube is not a petitioner in the investigation regarding imports of LWR pipe and tube from Mexico.

 9 These producers account for approximately *** of reported U.S. production of light-walled rectangular pipe and

tube (“LWR pipe and tube”). Confidential Staff Report (“CR”) at Table III-1; Public Staff Report (“PR”) at Table

III-1. The Staff Report was revised in accordance with memorandum INV-EE-091 (Aug. 9, 2007).

 10 An entry of appearance was filed on behalf of Korean producers Miju Steel Mfg. Co., Ltd.; Histeel Co., Ltd.;

Nexteel Co., Ltd.; Kukje Steel Co., Ltd.; Dong-A Steel Co., Ltd.; Jinbang Steel Corp., Ltd.; and Han Gyu Rae Steel

Co., Ltd., but these companies did not appear at the conference or file a brief.

 11 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 (Ct.

Int’l Trade 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”). 

 12 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, 274, 409, 410, 532-534, and 536 (Second Review), USITC Pub. 3867 (July

2006); Light-Walled Rectangular Pipe and Tube from Mexico and Turkey, Inv. Nos. 731-TA-1054 and 1055 (Final)

USITC Pub. 3728 (Oct. 2004) at 15; Certain Pipe and Tube from Argentina, Brazil, Canada, India, Korea, Mexico,

Singapore, Taiwan, Thailand, Turkey, and Venezuela, Inv. Nos. 701-TA-253 (Review) and 731-TA-132, 252, 271,

273, 276, 277, 296, 409, 410, 532-534, 536, and 537 (Review) USITC Pub. 3316 (July 2000) at 13-14; Light-Walled

(continued...)

4

athletic equipment, lawn and garden equipment, store display shelves and racks, towel racks, and similar

items.7

The petition in these investigations was filed on June 27, 2007. The petitioners are Allied Tube

and Conduit, Atlas Tube, Bull Moose Tube Company, California Steel and Tube, Ex-L-Tube8

, Hannibal

Industries, Leavitt Tube, Maruichi American Corporation, Searing Industries, Southland Tube, Vest, Inc.,

Welded Tube, and Western Tube and Conduit (“Petitioners”).9

 Representatives from Allied Tube, Leavitt

Tube, and Searing Corp. appeared at the conference and Petitioners filed a postconference brief.

Mexican producers Hylsa S.A. de C.V., Maquilacero S.A. de C.V., Nacional de Acero S.A. de

C.V., Perfiles y Herrajes LM S.A. de C.V., Productos Laminados de Monterrey S.A. de C.V.

(“Prolamsa”), and Regiomontana de Perfiles y Tubos S.A. de C.V., and their affiliated importers,

Prolamsa, Inc., and Ternium International USA Corp., (“Mexican Respondents”) submitted a

postconference brief. A representative from Prolamsa appeared at the conference. No producer or

exporter of the subject merchandise from China, Korea, or Turkey appeared at the conference or

submitted a postconference brief.10

B. Previous and Related Investigations 11

LWR pipe and tube imports from a number of countries have been the subject of numerous

countervailing duty and antidumping duty investigations since the mid-1980s.12 The only antidumping
 12 (...continued)

Rectangular Pipe and Tube from Mexico, Inv. No. 731-TA-730 (Preliminary) USITC Pub. 2892 (May 1995) at I-6-I7; Certain Light-Walled Rectangular Pipes and Tubes from Argentina, Inv. No. 731-TA-409 (Final) USITC Pub.

2187 (May 1989) at 5, 15-16, 31, 37; Certain Light-Walled Rectangular Pipes and Tubes from Taiwan, Inv. No. 731-

TA-410 (Final), USITC Pub. 2169 (Mar. 1989) at 3-6, 51 n.2, 59, 67 n.1; Certain Welded Carbon Steel Pipes and

Tubes from Taiwan, Inv. No. 731-TA-349 (Final) USITC Pub. 1994 at 3-4 (July 1987); Certain Welded Carbon Steel

Pipes and Tubes from the Philippines and Singapore, Inv. Nos. 731-TA-293, 294, and 296 (Final) USITC Pub. 1907

(Nov. 1986); Certain Welded Carbon Steel Pipes and Tubes from Taiwan, Inv. No. 731-TA-211 (Final) USITC Pub.

1799 (Jan. 1986); Certain Welded Carbon Steel Pipes and Tubes from Brazil and Spain, Inv. Nos. 731-TA-197 and

198 (Preliminary) USITC Pub. 1569 (Aug. 1984); Certain Welded Carbon Steel Pipes and Tubes from the Republic of

Korea and Taiwan, Inv. Nos. 731-TA-131,132, and 138 (Final) USITC Pub. 1519 (Apr. 1984). A summary of prior

investigations regarding LWR pipe and tube appears in the CR/PR at Table I-1.

 13 71 Fed. Reg. 42118 (July 25, 2006).

 14 69 Fed. Reg. 53675, 53677 (Sept. 2, 2005); and Light-Walled Rectangular Pipe and Tube from Mexico and

Turkey, Inv. Nos 731-TA-1054 and 1055 (Final) USITC Pub. 3728 at 1 (Oct. 2004).

 15 19 U.S.C. § 1677(4)(A).

 16 19 U.S.C. § 1677(4)(A).

 17 19 U.S.C. § 1677(10).

 18 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

(continued...)

5

duty order currently in effect for LWR pipe and tube is on imports from Taiwan.13 There are no

outstanding countervailing duty orders on LWR pipe and tube in effect. The most recent antidumping

investigations involving subject countries were initiated on October 6, 2003 and covered imports from

Mexico and Turkey. After final affirmative LTFV determinations by the Department of Commerce

(“Commerce”), the Commission determined that the domestic LWR pipe and tube industry was neither

materially injured nor threatened with material injury by reason of imports of LWR pipe and tube from

Mexico and Turkey.14

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.”15 Section 771(4)(A) of the

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

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

constitutes a major proportion of the total domestic production of the product.”16 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 . . . .”17

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.18 No single factor is dispositive, and the Commission
 18 (...continued)

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

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

 20 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.”).

 21 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).

 22 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

748-52 (affirming Commission determination of six like products in investigations where Commerce found five

classes or kinds).

 23 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).

 24 72 Fed. Reg. 40275 (July 24, 2007). Commerce’ scope language defines “carbon-quality” in terms of the

“small amounts” of alloying elements contained in the steel. Id.

6

may consider other factors it deems relevant based on the facts of a particular investigation.19 The

Commission looks for clear dividing lines among possible like products and disregards minor variations.20

Although the Commission must accept the determination of Commerce as to the scope of the imported

merchandise allegedly sold at LTFV,21 the Commission determines what domestic product is like the

imported articles Commerce has identified.22 The Commission must base its domestic like product

determination on the record in these investigations. The Commission is not bound by prior

determinations, even those pertaining to the same imported products, but may draw upon previous

determinations in addressing pertinent like product issues.23

B. Product Description

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

investigations as follows – 

certain welded carbon-quality light-walled steel pipe and tube, of

rectangular (including square) cross section (LWR), having a wall

thickness of less than 4 mm.24
 25 In previous antidumping duty investigations, the Commission has defined LWR pipe and tube as a single

domestic like product, co-extensive with scopes that encompassed black and corrosion-resistant LWR pipe and tube. 

The scope language in these investigations is basically the same as in all the previous LWR pipe and tube

investigations since 1982, with minor revisions. Tr. at 64-65 (Schagrin).

 26 In their Postconference Brief, under a heading “Issues for Consideration by the Commission in any final

investigation,” Mexican Respondents state that in any final investigation the Commission should “reexamine

whether rectangular and round pipe and tube are separate like products.” Mexican Respondents’ Postconference

Brief at 32. At the outset, it is not clear what Mexican Respondents are asking the Commission to “reexamine” as

this issue has not been raised before in an investigation. Additionally, Mexican Respondents do not define “round

pipe and tube.” Moreover, because round pipe and tube is not included within the scope of these investigations, the

Commission cannot define rectangular pipe and tube and round pipe and tube as two separate domestic like products. 

Substantively, the limited information on the record of these investigations appears to support the fact that

rectangular and circular light-walled pipe and tube are produced with common production facilities, processes, and

employees; however, there appears to be different physical characteristics, channels of distribution, and end uses. 

Beyond the obvious difference in physical characteristics, as one product is rectangular and the other is circular,

LWR tubing is generally sold through distributors whereas most circular mechanical tubing is a tailored product sold

directly to original equipment manufacturers that produce parts for the automotive industry. See generally CR at I-7-

13, PR at I-6-10.

 27 Mexican Respondents also raise as an issue for consideration by the Commission in any final phase

investigation the fact that there “appears to be some confusion as to what constitutes the like-product, in particular,

whether so-called ‘structural’ tubing is part of the like product.” Mexican Respondents’ Postconference Brief at 31. 

Mexican Respondents submitted a list of firms that they allege produce the domestic like product, but were not

included in the petition. While it is true that the petition in these proceedings did not identify the entire universe of

LWR pipe and tube production in the United States, the firms it did identify are the primary producers of LWR pipe

and tube. CR at III-9, PR at III-4, 7. After contacting several of the producers identified by Mexican Respondents,

Commission Staff concluded that the current coverage of domestic producers is “high” based on questionnaire

responses “from all the major producers” of LWR pipe and tube. CR at III-9, PR at III-4, 7. In any final phase

investigations, the Commission will clarify reporting obligations as needed. 

 28 CR at I-8 n. 17 and I-10, PR at I-7 n. 17 and I-8.

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

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

 31 CR at I-12, PR at I-9.

7

 C. Analysis25

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

with the scope of these investigations; namely, LWR pipe and tube. For purposes of these preliminary

determinations, no party objects to this proposed domestic like product definition.26 27

In the absence of any clear dividing lines among LWR pipe and tube, we find a single domestic

like product coterminous with Commerce’s scope. 

LWR pipe and tube are used in a variety of applications, with its principal uses as railing for the

construction industry, fencing, and window guards.28 All LWR pipe and tube 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, LWR pipe and tube is commonly produced to ASTM A-500 or A-513 specifications, while

other types of pipe are commonly used for different purposes and produced to different specifications.29

There is limited interchangeability between LWR pipe and tube and other types of products due to design

criteria for specific applications and price competitiveness.30 Although some less expensive products,

including steel angle, bar, and rod, can be substituted for LWR pipe and tube for some applications, their

inferior strength-to-weight ratio serves to restrain their usage in numerous applications.31 Additionally,

circular light-walled pipe and tube could theoretically be substituted for LWR pipe and tube, but end user
 32 CR at I-11, PR at I-9.

 33 CR at I-12-13, PR at I-9-10. In contrast, mechanical tubing is generally sold directly to end users.

 34 19 U.S.C. § 1677(4)(A).

 35 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).

 36 No party argues for exclusion of any related producers from the domestic industry under 19 U.S.C. 

§1677(4)(B). 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. CR/PR at Table IV-1. 

Although they apparently did not import subject merchandise directly, both *** and *** purchased subject

merchandise during the period of investigation. CR/PR at Table III-7. 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).

From 2005 through interim 2007, domestic producer *** purchased *** short tons of ***-origin LWR pipe

imported by ***. CR/PR at Table III-1. There is no evidence on the record indicating that *** is affiliated with ***

in any way, or exerts direct or indirect control over ***. Moreover, it does not appear that *** purchased a

predominant proportion of *** importations of the subject merchandise during this period. Accordingly, there is no

basis for concluding that *** is a related party by reason of its purchases. 

 ***, purchased *** short tons of ***-origin LWR pipe and tube in 2006. There is no indication 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. 

8

specifications and long-standing customer preferences limit the interchangeability of these products.32

Channels of distribution for most LWR pipe and tube are the same, as the vast majority of U.S.

producers’ shipments is made through distributors, with the remainder sold directly to end users.33 On the

basis of the foregoing, we define the domestic like product in these investigations as LWR pipe and tube

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.”34 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.35 Based on our finding that

the domestic like product is LWR pipe and tube, we find that the domestic industry consists of the

domestic producers of LWR pipe and tube. The Commission obtained data from 22 domestic producers

estimated to account for the vast majority of U.S. production of LWR pipe and tube.36

V. CONDITIONS OF COMPETITION AND THE BUSINESS CYCLE

Several conditions of competition are pertinent to our analysis in the preliminary phase of these

investigations.
 37 Tr. at 5-6 (Schagrin); Mexican Respondents’ Postconference Brief at 6-8. 

 38 CR/PR at Table IV-8.

 39 CR at III-2, III-7-8, PR at III-2, 4, 7. Mexican Respondents argue that the data show a growing trend of captive

production within the domestic industry. Mexican Respondents’ Postconference Brief at 12. Mexican Respondents

argue that mills that are producing their own LWR pipe and tube are clearly not going to purchase the product from

domestic producers or others. They claim that the Commission did not receive any data on these producers, and in

the absence of this information, the Commission should not find that the industry is materially injured or threatened

with material injury. Our investigations have not demonstrated a significant gap in data obtained from domestic

producers, including captive producers. In any final investigations, we will seek to reconfirm our coverage of U.S.

producers and the domestic like product to ensure that we receive data from captive producers so that we may

determine what affect, if any, these producers have on the domestic industry.

 40 CR/PR at Table III-1 (reflecting that the individual shares of production for the four largest U.S. producers of

LWR pipe and tube range from *** to *** percent and for the four smallest from *** percent to *** percent during

the period examined). The 22 domestic producer questionnaire responses in these investigations are greater in

number than the questionnaire responses received by the Commission in the two most recent LWR pipe and tube

investigations. 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, 274, 409, 410, 532-534, and 536 (Second Review), USITC Pub.

3867 (July 2006) at LWR-III-1 (14 domestic producers responding); Light-Walled Rectangular Pipe and Tube from

Mexico and Turkey, Inv. Nos. 731-TA-1054 and 1055 (Final) USITC Pub. 3728 (Oct. 2004) at III-1 (18 domestic

producers responding). Mexican Respondents argue in these investigations that the Petitioners “have either

overlooked or ignored more than thirty producers of the domestic like product,” indicating that Mexican respondents

believe the U.S. LWR pipe and tube industry to be even more fragmented than our data would suggest. Mexican

Respondents’ Postconference Brief at 13.

 41 CR/PR at C-1.

 42 The industry’s capacity remained flat at approximately 1.16 million short tons in 2004 to 2006, and was

318,012 short tons in interim 2007 as compared with 292,117 short tons in interim 2006. Domestic production

decreased slightly from 675,178 in 2004 to 672,018 in 2006, and was 167,537 in interim 2007 as compared with

176,915 in interim 2006. CR/PR at Table III-3.

9

A. Demand Conditions

LWR pipe and tube is an intermediate product with many end-use applications, including fences,

gates, hand rails, furniture, sports equipment, and automotive equipment. Overall demand for LWR pipe

and tube is closely linked to demand for those end products. The parties agree that demand for LWR pipe

and tube increased between 2004 and 2006, before declining in the first quarter of 2007.37

When measured by apparent U.S. consumption, U.S. LWR pipe and tube demand increased

steadily throughout the period, from 945,340 short tons in 2004 to 1.07 million short tons in 2006, for an

increase of 13.1 percent. Apparent U.S. consumption was 4.7 percent lower in interim 2007, at 241,268

short tons, than it was in interim 2006, at 253,094 short tons.38 

B. Supply Conditions

The Commission received questionnaire responses from 22 U.S. producers, accounting for nearly

all of U.S. production of LWR pipe and tube in 2006.39 The record indicates that no one producer ***

within the U.S. LWR pipe and tube industry, in terms of production.40 The domestic industry’s capacity

exceeded apparent U.S. consumption throughout the period examined.41 The domestic industry’s

production capacity and production remained relatively flat during the period, although production

capacity was 8.2 percent higher in interim 2007 than in interim 2006, while production was 5.3 percent

lower in interim 2007 than in interim 2006.42
 43 CR/PR at Table IV-8. Domestic producers’ share of the U.S. market was 66.7 percent in interim 2007 as

compared with 70.7 percent in interim 2006.

 44 CR/PR at Table IV-8. Subject imports’ share of the U.S. market was 27.3 percent in interim 2007 as compared

with 20.5 percent in interim 2006.

 45 CR/PR at Table IV-8. Nonsubject imports’ share of the U.S. market was 6.0 percent in interim 2007 as

compared with 8.8 percent in interim 2006.

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

 47 CR/PR at Table II-1.

 48 CR at II-2, PR at II-2.

 49 No party argues that negligibility is an issue in these investigations. Subject imports from each of the subject

countries were above three percent of total imports for the most recent 12-month period preceding the filing of the

petition, June 2006 to May 2007. Specifically, subject imports from China accounted for 26.6 percent, subject

imports from Korea accounted for 5.5 percent, subject imports from Mexico accounted for 36.9 percent, and subject

imports from Turkey accounted for 12.7 percent of total imports of the merchandise in that period. Consequently,

we find that the subject imports are not negligible. CR at IV-14, PR at IV-9-10.

 50 19 U.S.C. § 1677(7)(F)(ii).

 51 19 U.S.C. § 1677(7)(F)(ii).

10

Domestic producers’ share of the U.S. market, by quantity, declined steadily during the period,

from 70.7 percent in 2004 to 62.2 percent in 2006, a decline of 8.5 percentage points.43 Subject imports’

share of the U.S. market increased steadily during the period, from 19.1 percent in 2004 to 29.5 percent in

2006, a 10.4 percentage point increase.44 The U.S. market share held by nonsubject imports, an

overwhelming majority imported from Canada, declined during the period examined, from 10.2 percent in

2004 to 8.3 percent in 2006, a 1.9 percentage point decrease.45

C. Interchangeability and Other Conditions

The parties generally agree that domestically produced and imported LWR pipe and tube are

considered interchangeable, commodity-like products.46 LWR pipe and tube is manufactured to ASTM

specifications (such as A-513 or A-500). All U.S. producers and a large majority of importers reported

that the domestic like product and the subject imports are always or frequently interchangeable.47

Moreover, the vast majority of U.S. producers and importers reported that product differences other than

price were either sometimes or never significant between U.S.-produced LWR pipe and tube and subject

imports.48

VI. REASONABLE INDICATION OF THREAT OF MATERIAL INJURY BY REASON OF

SUBJECT IMPORTS49

A. 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.”50 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.51 In making our
 52 19 U.S.C. § 1677(7)(F)(i). Statutory threat factor (VII) is inapplicable, as no imports of agricultural products

are involved. Id.

We observe that in its notice of initiation, Commerce estimated the alleged dumping margin for subject

imports ranged from 6.3 percent to 40.52 percent for China, 11.74 percent to 30.66 percent for Korea, 11.5 percent

for Mexico, and 15.28 percent to 41.71 percent for Turkey. Initiation of Antidumping Duty Investigations: LightWalled Rectangular Pipe and Tube from Republic of Korea, Mexico, Turkey, and the People’s Republic of China, 72

Fed. Reg. 40274 (July 24, 2007).

Moreover, in its notice of initiation, Commerce initiated investigations into 27 potentially countervailable

subsidy programs in China, including two related to preferential lending, ten related to preferential income tax

treatment, three related to provincial subsidies, four related to tariff treatment, two related to grants, four related to

allegedly subsidized provision of goods and services, and two related to export restraint programs. Notice of

Initiation of Countervailing Duty Investigation: Light-Walled Rectangular Pipe and Tube from the People’s

Republic of China, 72 Fed. Reg. 402281 (July 24, 2007). Initiation of an investigation into loans made to

uncreditworthy companies was postponed until such time that specific companies for investigation have been

identified.

 53 19 U.S.C. § 1677(7)(G)(I). There are four exceptions to the cumulation provision, none of which applies to

these investigations. See id. at 1677(7)(G)(ii). 

 54 The Uruguay Round Agreements Act, Statement of Administrative Action ("SAA"), H.R. Doc. No. 103-316,

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

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

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

11

determination, we consider all statutory threat factors that are relevant to these investigations.52 Based on

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

determined that there is a reasonable indication that the domestic LWR pipe and tube industry is

threatened with material injury by reason of subject imports from China, Korea, Mexico, and Turkey.

B. Cumulation

1. In General

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

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

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

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

market.53 In assessing whether subject imports compete with each other and with the domestic like

product,54 the Commission has generally considered four factors, including:

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

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

customer requirements and other quality related questions;

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

imports from different countries and the domestic like product;

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

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

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

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

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

 57 See, e,g., Wieland Werke, AG, 718 F. Supp. at 52 (“Completely overlapping markets are not required”).

 58 19 U.S.C. § 1677(7)(H).

 59 See Torrington Co. v. United States, 790 F. Supp. at 1172 (affirming Commission’s determination not to

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

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

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

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

 60 Petitioners’ Postconference Brief at 18.

 61 Mexican Respondents’ Postconference Brief at 34-35.

 62 See 19 U.S.C. § 1677(7)(G)(ii).

 63 Certain Cast-Iron Pipe Fittings from Brazil, the Republic of Korea, and Taiwan, Inv. Nos. 731-TA-278-280

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

Trade), aff’d, 859 F.2d 915 (Fed. Cir. 1988); Mukand Ltd. v. United States, 937 F. Supp. 910, 915 (Ct. Int’l Trade

(continued...)

12

(4) whether the subject imports are simultaneously present in the market.55

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

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

compete with each other and with the domestic like product.56 Only a “reasonable overlap” of

competition is required.57

For purposes of determining if a threat of material injury exists, cumulation is discretionary. 

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

the volume and price effects of subject imports from all countries as to which petitions were filed on the

same day if the requirements for cumulation for material injury analysis are satisfied.58 In addition to

considering the four cumulation factors described above, the Commission has considered other factors

such as the similarity of the volume trends and pricing data of subject imports from the countries under

investigation.59

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

analysis.60 Mexican Respondents contend that Mexico should not be cumulated for purposes of threat as

the record indicates diverging trends in import volume and prices for imports from Mexico and imports

from China, Korea, and Turkey.61

2. Analysis

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

respect to each of the subject countries on the same day, June 27, 2007. None of the cumulation

exceptions applies.62 Subject imports from China, Korea, Mexico, and Turkey are thus eligible for

cumulation. We consequently examine whether there is a reasonable overlap of competition between

subject imports from China, Korea, Mexico, and Turkey as well as between subject imports and the

domestic like product.

The Commission generally has considered whether subject imports would be likely to compete

with each other and with the domestic like product with reference to four factors: (1) fungibility; (2) sales

or offers in the same geographic markets; (3) common or similar channels of distribution; and (4)

simultaneous market presence.63
 63 (...continued)

1996). While no single factor is necessarily determinative, and the list of factors is not exclusive, these factors are

intended to provide the Commission with a framework for determining whether the imports compete with each other

and with the domestic like product. Only a “reasonable overlap” of competition is required. See Goss Graphic at

1087 (“cumulation does not require two products to be highly fungible”), aff’d, 216 F.3d 1357 (Fed. Cir. 2000);

 64 Petitioners’ Postconference Brief at 4; Tr. at 138 (Diederichs).

 65 CR/PR at Table II-1.

 66 CR/PR at Table II-1.

 67 CR/PR at II-1.

 68 CR/PR at II-1.

 69 CR/PR at Table IV-6.

 70 CR/PR at Table II-1.

 71 Tr. at 129 (Baisburd). Domestic producer Leavitt Tube testified that its Jackson, Mississippi plant has been

“devastated by imports from all four of these countries {which} are entering the Gulf Coast and Texas markets.” Tr.

25 (Klima).

13

a. Fungibility

Subject imports from the four subject countries appear to be fungible with both the domestic like

product and with each other. Both Petitioners and Mexican Respondents have described LWR pipe and

tube as a commodity product.64 The vast majority of U.S. producers and importers found domestically

produced LWR pipe and tube always or frequently interchangeable with LWR pipe and tube from China,

Korea, Mexico, and Turkey.65 Additionally, a vast majority of market participants who compared subject

imports from different sources also found them to be always or frequently interchangeable.66

b. Same Geographical Markets

There was significant geographical overlap among the subject merchandise from each subject

country and the domestic like product during the period of investigation. Five of 21 U.S. producers

reported selling LWR pipe and tube to all geographic regions of the United States, while the remaining 16

producers sell LWR pipe and tube to more than one specific geographic area.67 For example, eight U.S.

producers sell in the Central Southwest, eight sell in the Midwest, six sell in the Southeast and the Pacific

Coast, five sell in the Mountain Region, and two sell in the Northeast.68 Shipments of subject imports

from China and Korea showed the highest concentration in the West, but were also imported through the

Gulf Coast and other districts.69 Shipments from Turkey showed the highest concentration in the Gulf

Coast, but were also imported in other districts.70 Shipments from Mexico were imported almost

exclusively through Laredo, Texas, 99.0 percent in 2006. Mexican Respondents testified that although

Mexican imports were concentrated in the “central” region of the United States, “that is not to say that

Mexican exports don’t make their way through to other parts of the United States,” and that Mexican

producers “clearly sell in the Southeast” and “there has been, at times, sales west in California and other

regions as well.”71

The record demonstrates that subject imports from China, Korea, Mexico, and Turkey and the

domestic like product were each marketed and sold in common geographic regions. In any final phase

investigations, the Commission may consider whether to gather data from U.S. producers regarding their

shipments by region.
 72 CR at I-12-13, PR at I-9-10.

 73 CR/PR at Table IV-7.

 74 CR/PR at Table IV-7.

 75 CR/PR at Table IV-3. 

 76 CR/PR at Table V-4. Mexican Respondents argue that there are significant differences between Mexico and

the other subject countries regarding the yearly AUVs for each country. We rely principally on the specific pricing

data gathered in these investigations, rather than the AUV data, due to the potential differences among LWR pipe

and tube products. The Federal Circuit has criticized the use of AUV data as a basis for price trends when there are

issues of product mix and where the values may thus reflect different merchandise rather than differences in price. 

Allegheny Ludlum Corp. v. United States, 287 F.3d 1365, 1373-74 (Fed. Cir. 2002).

 77 CR/PR at Table V-4. Prices of imports from each of the subject countries generally followed similar trends

over the period examined.

14

c. Channels of Distribution

Domestic producer and importer shipments of LWR pipe and tube within the United States were

both more likely to go to distributors than to end users during the period of investigation. U.S. producers

sold 76.3 percent of their U.S. shipments to distributors during the period of investigation, and importers

sold 83.9 percent of their U.S. shipments to distributors.72 The record therefore demonstrates a substantial

overlap in the channels of distribution through which subject imports and the domestic like product are

distributed in the United States.

d. Simultaneous Presence

Imports from each of the subject countries have been present in the U.S. market throughout the

period of investigation. Specifically, subject imports from China, Korea, and Mexico were recorded in

every month of the period of investigation.73 Subject imports from Turkey were recorded in 35 of the 39

months.74 Thus, this factor supports cumulating subject imports.

e. Conclusion on Reasonable Overlap of Competition

We find that there is a reasonable overlap of competition among subject imports and between

the subject imports and the domestic like product. The record evidence indicates that subject imports and

the domestic like product are generally fungible and are sold through similar channels of distribution. 

The record also shows that imports from each of the subject countries were simultaneously present in the

U.S. market during the POI and that both the domestic like product and the subject imports from all

countries were sold in the same geographic markets.

f. Discretionary Factors

We find that imports from the subject countries exhibited similar volume and price trends during

the period for which data were collected. During the period of investigation, the volume of subject

imports from each of the four countries increased.75 From 2004 to 2006, imports from Mexico and Korea

increased by 9.5 percent and 13.8 percent, respectively, while imports from China and Turkey increased

by 839.8 percent and 382.3 percent, respectively, although starting from comparatively smaller import

volume levels. Additionally, pricing data indicated similar margins of underselling among the four

subject countries.76 The average margin of underselling during the period for imports from China was

14.9 percent, 15.8 percent for imports from Korea, 18.6 percent for imports from Mexico, and 30.2

percent for imports from Turkey.77 Based on an examination of all of the factors discussed above, we
 78 In any final phase investigations, Commissioner Okun intends to examine whether Mexico’s role as a

consistent and significant supplier of LWR to the U.S. market indicates that imports from Mexico are likely to

compete under different conditions of competition than imports from the other subject countries. See CR/PR at

Table IV-3, Light-Walled Rectangular Pipe and Tube from Mexico and Turkey, Inv. Nos. 731-TA-1054 and 1055

(Final), USITC Pub. 3728 (Oct. 2004) at Table IV-2. 

 79 There is limited information on the record regarding the role of nonsubject imports of LWR pipe and tube in

the U.S. market. See, e.g., CR at VII-17-19, PR at VII-8-11. In any final phase investigations, we will seek

additional information on the role of nonsubject imports of LWR pipe and tube 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.

 80 Commissioner Okun does not join the preceding footnote. The U.S. Court of Appeals for the Federal Circuit

did not address the application of its mandate in Bratsk Aluminum Smelter v. United States, 444 F.3d 1369 (Fed. 

Cir. 2006) to preliminary investigations. In that case the Court indicated that, in cases involving commodity

products in which imports from non-subject countries are price-competitive and are a significant factor in the U.S.

market, in order to establish a causal link between subject imports and material injury the Commission must evaluate

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

industry of an antidumping or countervailing duty order.

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

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

whether there is a reasonable indication that a domestic industry is materially injured or threatened with material

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

Commissioner Okun concludes that she must conduct a Bratsk analysis as she would any other type of causation

analysis in a preliminary investigation. Commissioner Okun finds that the record in the preliminary phase of these

investigations is insufficient to determine if Bratsk is triggered. See Separate and Additional Views of

Commissioner Deanna Tanner Okun Concerning Bratsk Aluminum v. United States.

 81 CR/PR at Table C-1. Subject imports increased from 180,719 short tons in 2004 to 250,312 short tons in 2005

to 315,302 in 2006, and were 65,937 short tons in interim 2007 compared with 51,959 short tons in interim 2006. 

CR/PR at Table IV-3.

 82 CR/PR at Table IV-8.

 83 CR/PR at Table C-1.

15

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

China, Korea, Mexico, and Turkey for purposes of these preliminary determinations.78

C. Analysis of Statutory Threat Factors 79 80

The volume and market penetration of the subject imports increased during the POI, indicating

the likelihood of substantially increased imports in the imminent future. The quantity of subject imports

increased overall by 74.5 percent from 2004 to 2006 and by 26.9 percent between interim periods.81

Subject imports’ U.S. market share, by quantity, increased by 10.4 percentage points, from 19.1 percent

to 29.5 percent between 2004 and 2006, and by 6.8 percentage points from interim 2006 to interim

2007.82 While domestic consumption of LWR pipe and tube increased by 13.1 percent from 2004 to

2006, subject imports captured most of the increased demand at the expense of the domestic industry.83

Data on subject country capacity and production also indicate the likelihood of substantially

increased imports in the imminent future. We note that the Commission did not receive a completed
 84 CR at VII-2, PR at VII-2.

 85 Combined production capacity for Korea, Mexico, and Turkey increased from 1.68 million short tons in 2004

to 1.77 million short tons in 2005 and to 2.19 million short tons in 2006, and was 581,238 short tons in interim 2007

compared with 557,329 in interim 2006. Production capacity is projected to increase to 2.32 million short tons in

full-year 2007 and 2.35 million short tons in 2008. Production increased from 1.15 million short tons in 2004 to 1.33

million short tons in 2005, and to 1.51 million short tons in 2006, and was 406,353 short tons in interim 2007

compared with 375,088 in interim 2006. Production is projected to increase to 1.71 million short tons in full-year

2007 and 1.76 million short tons in 2008. Foreign Producer Summation, Memorandum INV-EE-092.

 86 Producers in all subject countries could increase their production of LWR pipe and tube even further through

product shifting, i.e., by decreasing other tubular production such as for circular mechanical tubing in favor of LWR

pipe and tube. CR at VII-6, 8, 13, PR at VII-3-4. However, there appears to be enough unutilized capacity in each

of the subject countries that could be used to greatly increase LWR pipe and tube production without expanding

capacity or reducing circular and other tube production. Id.

 87 While the largest share of Korean producers’ total shipments went to its home market, Korean producers’

exports to the United States increased in each year of the period, and the United States was a substantial export

market for the Korean industry by the end of the period. CR/PR at Table VII-1. The share of Korea’s total

shipments of LWR pipe and tube exported to the United States was 3.3 percent in 2004, 6.7 percent in 2005, 10.5

percent in 2006, 7.8 percent in interim 2006, and 3.8 percent in interim 2007. The share of Korea’s total shipments

that was exported to all countries was 21.7 percent in 2004, 20.6 percent in 2005, 30.5 percent in 2006, 22.7 percent

in interim 2006, and 20.5 percent in interim 2007. CR/PR at Table VII-1.

Like Korea, the largest share of Mexican producers’ total shipments went to its home market; however, the

vast majority of the Mexican producers’ exports, over 20 percent of total shipments throughout the period, were

shipped to the United States. CR/PR at Table VII-3. The share of Mexico’s total shipments of LWR pipe and tube

exported to the United States was 23.9 percent in 2004, 26.3 percent in 2005, 21.2 percent in 2006, 17.3 percent in

interim 2006, and 16.8 percent in interim 2007. The share of Mexico’s total shipments that was exported to all

countries was 24.2 percent in 2004, 26.4 percent in 2005, 21.4 percent in 2006, 17.5 percent in interim 2006, and

16.9 percent in interim 2007. CR/PR at Table VII-3. 

The largest percentage of Turkish producers’ LWR pipe and tube shipments went to the home market. 

While Turkish producers exported over 27 percent of their total shipments during the period, exports to the United

States rose to a period high of 2.9 percent in 2006. CR/PR at Table VII-5. The share of Turkey’s total shipments of

LWR pipe and tube exported to the United States was 0.7 percent in 2004, 1.5 percent in 2005, 2.9 percent in 2006,

2.1 percent in interim 2006, and 0.6 percent in interim 2007. The share of Turkey’s total shipments that was

exported to all countries was 36.7 percent in 2004, 27.9 percent in 2005, 32.6 percent in 2006, 33.8 percent in

interim 2006, and 28.4 percent in interim 2007. CR/PR at Table VII-5. 

Based on official Commerce import statistics, we note that U.S. imports of LWR pipe and tube from each

(continued...)

16

questionnaire response from any producer of LWR pipe and tube in China.84 Based on the large increase

in imports from China during the period, 839.8 percent from 2004 to 2006, and 232.3 percent from

interim 2006 to interim 2007, it is apparent that the Chinese LWR pipe and tube industry has the ability

and incentive to ship substantially increased volumes of LWR pipe and tube to the United States. For

purposes of the preliminary phase of these investigations, we find that such an increase is likely to occur

in the imminent future.

With respect to the other three subject countries, the foreign producer data that the Commission

obtained from questionnaire responses, although somewhat limited in coverage, show that cumulated

subject countries’ LWR pipe and tube industries registered significant increases in capacity and

production during the POI, with further increases projected for full-year 2007 and 2008.85 In 2006, the

cumulated unused capacity of the subject countries was equal to approximately 65 percent of U.S.

apparent consumption, and that percentage is projected to increase based on full-year 2007 and 2008

projections.86

The LWR pipe and tube industries in Korea, Mexico, and Turkey all exported at least 20 percent

of their production during the period, and the U.S. market is a significant market for Korea and Mexico.87
 87 (...continued)

of these countries are greater than the reported amounts of exports.

 88 U.S. importers’ inventories of subject imports decreased from 4,441 short tons in 2004 to 2,774 short tons in

2005, before increasing to 6,896 short tons in 2006. CR/PR at Table VII-7. Between the interim periods,

inventories rose from 1,758 short tons in interim 2006 to 4,557 short tons in interim 2007. CR/PR at Table VII-7. 

End-of-period inventories for foreign subject producers decreased from 96,024 short tons in 2004 to 94,090 short

tons in 2005, but increased to 108,262 short tons in 2006, and were 112,040 short tons in interim 2007 compared

with 94,995 short tons in interim 2006. Foreign Producer Summation, Memorandum INV-EE-092.

 89 CR/PR at Table II-2 (nearly all U.S. producers and the majority of U.S. importers reported that differences

other than price between LWR pipe and tube produced in the United States and in other countries were only

sometimes or never important in their firm’s sales of LWR pipe and tube).

 90 By quantity, pricing data reported by responding firms accounted for 8.0 percent of reported U.S. producers’

LWR pipe and tube shipments and 38.7 percent of Chinese shipments, 15.2 percent of Korean shipments, 5.1 percent

of Mexican shipments, and 12.9 percent of Turkish shipments during the period of investigation. CR at V-6, PR at

V-6. In any final phase investigations, we invite the parties to provide additional pricing products.

 91 Subject imports undersold the domestic like product in 96 of 99 quarterly price comparisons, with margins of

underselling ranging from 7.4 percent to 39.2 percent. CR/PR at Table V-4.

 92 The Commission has confirmed a number of lost sales and lost revenues amounting to $***. CR/PR at Table

V-6. Commission Staff contacted 30 purchasers, representing the largest value of lost sales and lost revenues. 

Fourteen purchasers did not respond. For the lost sales, five purchasers reported that they disagreed with the

allegations, and three reported that they agreed, while for lost revenues, three purchasers disagreed and three

purchasers agreed. CR at V-15, PR at V-12.

 93 CR/PR at Figure V-3. 

 94 CR/PR at Table V-2. 

 95 CR/PR at Table C-1.

17

The record also shows that both importers’ and foreign producers’ inventories of subject merchandise

declined from 2004 to 2005, increased in 2006, and were higher in interim 2007 than in interim 2006,

albeit to levels that were still somewhat modest compared to apparent U.S. consumption. Thus, inventory

levels are another indication that subject import shipments in the United States will likely be even more

substantial in the imminent future.88 

The Commission considered pricing developments during the period examined and likely

developments in the imminent future. The record in these preliminary investigations indicates that price

is an important factor in the sale of LWR pipe and tube.89 The Commission collected pricing data on two

pricing products.90 There was consistent underselling of the domestic products by subject imports

throughout the period examined, by margins averaging between 10 and 20 percent.91 By pervasively

underselling the domestic like product, subject imports gained market share at the expense of the

domestic industry. We find it likely that the subject imports will enter the U.S. market at prices that are

likely to increase demand for further imports, causing the domestic industry to lose sales and market share

at an even greater rate than during the period examined.92 

Domestic prices fluctuated from 2004 to 2006.93 In the first quarter of 2007, domestic prices

declined noticeably. For products 1 and 2, domestic prices declined by approximately 4.9 percent and 2.8

percent, respectively, from fourth quarter 2006 to first quarter 2007.94 The recent declines in prices

indicate that the increasing volumes of subject imports may have begun to have significant pricedepressing effects on domestic producer prices, although reduced apparent U.S. consumption in the first

quarter of 2007 as compared to the first quarter of 2006 may help explain this decline as well. 

We find that subject imports will likely suppress domestic prices. The industry’s cost of goods

sold as a ratio of net sales (“COGS/sales”) increased from 76.8 percent in 2004 to 83.2 percent in 2005,

before declining to 80.8 percent in 2006.95 In interim 2007, when domestic prices fell, COGS/sales was at

a period high of 86.6 percent as compared to 81.1 percent in interim 2006. The average unit value of
 96 CR/PR at Table C-1.

 97 U.S. capacity slightly increased from 1.157 million short tons in 2004 to 1.160 million short tons in 2006. 

Capacity was 316,012 short tons in interim 2007, 8.2 percent higher compared with 292,117 short tons in interim

2006. CR/PR at Tables III-3 and C-1. The domestic industry’s capacity utilization showed little change during the

period examined until the interim period. Capacity utilization was between 57 percent and 58 percent from 2004 to

2006, and was 53.0 percent in interim 2007 as compared to 60.1 percent in interim 2007. CR/PR at Table III-3.

 98 U.S. production declined by 0.5 percent from 2004-2006, from 675,178 short tons in 2004 to 660,754 short tons

in 2005 before increasing slightly to 672,016 short tons in 2006. CR/PR at Tables III-3 and C-1. U.S. shipments

declined by 0.5 percent from 2004-2006, from 668,232 short tons in 2004 to 660,272 short tons in 2005 before

increasing slightly to 664,849 short tons in 2006. CR/PR at Tables III-3 and C-1.

 99 U.S. production was 167,537 short tons in interim 2007 as compared to 176,915 short tons in interim 2006. 

CR/PR at Tables III-3 and C-1. U.S. shipments were 160,824 short tons in interim 2007 as compared to 178,855

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

 100 CR/PR at Table C-1.

 101 Raw material costs, primarily the cost of hot-rolled steel coils, increased from $539 per short ton in 2004 to

$610 per short ton in 2005 before declining to $598 per short ton in 2006. Raw material costs were $608 per short

ton in interim 2007 as compared to $580 per short ton in interim 2006. CR/PR at Table VI-4.

 102 Employment declined from 676 workers in 2004 to 662 workers in 2005, and to 651 workers in 2006. 

Employment was lower in interim 2007, at 627 workers, than in interim 2006, when it was 630 workers. CR/PR at

Table C-1. Hourly wages increased from $17.51 in 2004 to $17.82 in 2005 and then to $18.75 in 2006. Hourly

wages were also higher in interim 2007 at $17.85 than in interim 2006 when they were $17.61. CR/PR at Table C-1.

Productivity increased from 397.2 tons per thousand hours in 2004 to 402.0 tons per thousand hours in 2005 and

then to 418.0 tons per thousand hours in 2006. However, in interim 2007 productivity was 406.1 tons per thousand

hours as compared to 420.7 tons per thousand hours in interim 2006. CR/PR at Table C-1.

 103 Capital expenditures increased from $9.8 million in 2004 to $10.9 million in 2005 and then to $24.0 million in

2006. Capital expenditures were $10.7 million in interim 2007 as compared to $3.1 million in interim 2006. CR/PR

at C-1.

18

COGS in interim 2007 was $773, its highest level of the period examined, as compared to $737 in interim

2006.96 We conclude that the domestic industry will be unlikely to raise its prices sufficiently to cover

growing costs, and that it will be unable to do so due in significant part to increased volumes of lowerpriced subject imports that are interchangeable with the domestic product.

Domestic industry performance indicators moved in divergent directions during the period

examined. While many output-related indicators remained steady, others declined. Notwithstanding

rising apparent U.S. consumption and excess capacity,97 the domestic industry’s production and U.S.

shipments remained relatively flat from 2004-2006.98 In interim 2007, when apparent U.S. consumption

declined, the domestic industry’s production declined by 5.3 percent, and its U.S. shipments also declined

by 10.1 percent as compared to interim 2006.99 U.S. producers lost market share as subject imports

increased.100 As discussed above, the ratio of COGS to sales increased to its highest levels in interim

2007.101 Employment declined throughout the period, while hourly wages increased as did productivity

until interim 2007.102 Capital expenditures more than doubled from 2004-2006, and were higher in

interim 2007 as compared to interim 2006.103

Several U.S. producers indicated that the subject imports had actual and potential negative effects

on their companies’ development and production efforts. For example, ***. ***. Several producers

reported eroding profit margins and revenue losses due to subject imports, as well as the cancellation,
 104 See CR/PR at Appendix D for a description of negative effects on development and production efforts of the

domestic industry.

 105 See Light-Walled Rectangular Pipe and Tube from Mexico and Turkey, Inv. Nos. 731-TA-1054 and 1055

(Final), USITC Pub. 3728 (Oct. 2004) at 14, 20. These price increases were partly in response to rapidly increasing

raw material prices at that time. Id.

 106 The domestic industry’s operating margins declined from 16.1 percent in 2004 to 10.6 percent in 2005, before

increasing to 12.2 percent in 2006. CR/PR at Table C-1.

 107 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-6.

 108 Raw material costs, primarily the cost of hot-rolled steel coils, increased from $539 per short ton in 2004 to

$610 per short ton in 2005 before declining to $598 per short ton in 2006. Raw material costs were $608 per short

ton in interim 2007 as compared to $580 per short ton in interim 2006. CR/PR at Table VI-4.

 109 CR at VI-13, PR at VI-3, 5. The domestic industry’s operating margins declined to 5.9 percent in interim 2007

compared to 11.2 percent in interim 2006. CR/PR at C-1.

19

postponement or rejection of expansion projects, denial or rejection of investment proposals, and the

reduction in the size of capital investments.104

Notwithstanding the recent declines in these domestic industry performance indicators, we do not

find the industry operated in a weakened state during 2004-2006. The domestic industry operated

profitably throughout the period examined. The industry’s operating income ratio began the period

examined at a peak of 16.1 percent following a significant increase in demand for LWR pipe and tube 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 LWR pipe and tube, which

reached then-record high levels.105 While operating margins declined from 2004 to 2006 as the market

corrected for the tight supply in 2004, the industry’s profitability improved from 2005 to 2006.106 No

more than two of 20 domestic producers reported operating losses from 2005 to 2006.107 However, in

interim 2007, the domestic industry’s operating margins declined by 5.3 percentage points as compared to

interim 2006 due to the negative effects of increased costs/expenses, primarily raw material costs,108

combined with decreases in prices and sales volumes that could not be forestalled by the numerous

producers in the domestic industry.109 Thus, for the purposes of these preliminary determinations, we

find a reasonable indication that the continued or 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.

CONCLUSION

For the foregoing reasons, we find that there is a reasonable indication that the domestic industry

producing LWR pipe and tube is threatened with materially injury by reason of subject imports of LWR

pipe and tube from China, Korea, Mexico and Turkey that are allegedly sold in the United States at less

than fair value, and by reason of subject imports of LWR pipe and tube from China allegedly subsidized

by the government of China.

 1

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

1997).

 2

 I did not participate in the underlying investigation nor the subsequent litigation.

 3

 444 F.3d at 1375-1376.

 4

 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, I have interpreted the Court’s decision as applying both to the context of present injury

and threat of injury.

 5

 For a complete statement of Commissioner Okun’s interpretation Bratsk in a preliminary investigation, see

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

Bratsk Aluminum V. United States in Sodium Hexametaphosphate from China, Inv. No. 731-TA-1110 (Preliminary),

USITC Pub. 3912 (Apr. 2007) at 19-25.

21

SEPARATE AND ADDITIONAL VIEWS OF COMMISSIONER DEANNA

TANNER OKUN CONCERNING BRATSK ALUMINUM V. UNITED STATES

I. Legal Issues Concerning Bratsk Aluminum Smelter v. United States

In the recent case of Bratsk Aluminum Smelter et al. v. United States, 444 F.3d 1369 (Fed. Cir.

2006) (“Bratsk”), the Federal Circuit reaffirmed that the requisite causal link to subject imports is not

demonstrated if such imports contributed only “‘minimally or tangentially to the material harm.’”1 2

Applying that standard to an investigation involving a commodity product, i.e., silicon metal, and the

significant presence of 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.3

As a threshold matter, it is not immediately clear how the Commission should interpret the Bratsk

opinion in terms of its effect on our analysis of causation in Title VII investigations. I discern at least two

possible interpretations that differ substantially. The first interpretation is that Bratsk mandates

application of an additional test apparently not contemplated by the statute (the so-called

“replacement/benefit test”). Under this interpretation, Bratsk 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. While I

respectfully disagree with the Court that such a causation analysis is legally required, I discuss infra my

interpretation of the Bratsk standard and attempt to perform the analysis based on the record in these

preliminary investigations.4

 The second interpretation is that Bratsk is a further development of the

causation approach prescribed by Gerald Metals. Under this interpretation I am 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, the Commission evaluated this issue in our threat analysis. I 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).5

II. 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, Mexico, Korea, and Turkey, I
 6 Bratsk, 444 F.3d at 1375.

 7

 Petitioners’ Postconference Brief at 4, A-1; Hearing Transcript at 60 (Klima) (“They’re pretty much commodity

products, interchangeable. In the industry, just about everything is price related.”).

 8

 Petitioners’ Postconference Brief at A-1.

 9

 CR/PR at Table II-1.

 10 CR/PR at Tables V-1-V-2.

 11 CR/PR at Tables V-1-V-2.

 12 CR/PR at Table C-1.

 13 In 2006, the average unit value for imports from Canada was $922 per short ton and the average unit value for

subject imports was $698 per short ton. CR/PR at Table IV-3.

 14 Nonsubject import volume was 96,388 short tons in 2004, 87,288 short tons in 2005, and 89,175 short tons in

2006. Nonsubject import volume was 22,280 short tons in interim 2006 and 14,506 short tons in interim 2007. 

CR/PR at Table IV-3.

22

now must assess whether the facts of this investigation trigger a Bratsk analysis under the

“replacement/benefit test” interpretation of Bratsk. Bratsk requires a two-step analysis. First, I must

determine whether Bratsk is triggered based on the facts of the investigation. Second, if it is triggered,

then I must consider whether the non-subject imports would have replaced the subject imports and

continue to cause injury to the domestic industry. Based on the record in these preliminary investigations,

I conclude that Bratsk is not triggered.

The Bratsk Court states that “{t}he obligation under Gerald Metals is triggered whenever the

antidumping investigation is centered on a commodity product, and price competitive non-subject imports

are a significant factor in the market.”6

 Thus, the Bratsk test purportedly is not required in every case,

only in cases involving a “commodity product” and where “price competitive non-subject imports are a

significant factor in the market.”

Petitioners assert that LWR is a fungible commodity sold largely on the basis of price.7

Petitioners also concede that the first Bratsk triggering factor is satisfied.8

 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.9

 While

recognizing that a level of interchangeability does not necessarily mean that a product is a commodity, for

purposes of this analysis I find, based on the record available in these preliminary investigations, that the

first Bratsk trigger is satisfied.

With respect to the second factor, whether nonsubject imports are price competitive, the

Commission requested product-specific price data from nonsubject countries in its importers’

questionnaires. The Commission received a limited amount of price data for nonsubject imports. These

data show predominant underselling of the domestic like product by nonsubject imports.10 The prices of

nonsubject imports show mixed overselling/underselling compared with prices of subject imports.11 The

average unit values of all nonsubject imports were consistently above the average unit values of subject

imports, but they were consistently below the average unit values of U.S. producers’ U.S. shipments from

2004 to 2006.12 I note that the average unit values for imports from Canada, the largest nonsubject

producer of LWR pipe and tube, were significantly higher than average unit values for subject imports

from China, Korea, Mexico, and Turkey.13 On balance, for purpose of these preliminary determinations,

it appears that nonsubject imports of LWR, viewed as a whole, are price-competitive with the domestic

like product. 

As to 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.14 Nonsubject imports accounted for 34.8 percent of total imports (on a
 15 CR/PR at Table IV-3.

 16 CR/PR at Table C-1.

 17 CR/PR at Table IV-3.

 18 CR/PR at Table C-1.

 19 See CR/PR at Table IV-3. The largest supplier of nonsubject imports was Canada, which, in quantity terms,

accounted for 28.0 percent of total imports in 2004, 22.6 percent in 2005 and 17.6 percent in 2006. Canada

accounted for 25.6 percent of total imports in interim 2006 and 16.9 percent in interim 2007. CR/PR at Table IV-3.

 20 CR/PR at Table IV-3, CR at VII-16 - VII-17, PR at VII-8 - VII-9.

 21 Imports of LWR from Canada declined from 77,643 short tons in 2004 to 76,230 short tons in 2005 and to

71,142 short tons in 2006. Imports from Canada were 18,986 short tons in interim 2006 and 13,631 short tons in

interim 2007. CR/PR at Table IV-3.

 22 Imports of LWR from nonsubject countries (excluding Canada) declined from 18,745 short tons in 2004 to

11,058 short tons in 2005 and to 18,033 short tons in 2006. Imports from nonsubject countries (excluding Canada)

were 3,294 short tons in interim 2006 and 875 short tons in interim 2007. CR/PR at Table IV-3.

 23 CR/PR at Table VII-10.

 24 While some of these trends and a corporate relationship between U.S. producers and nonsubject producers were

present in Certain Lined Paper School Supplies from China, India, and Indonesia, part of the domestic industry in

those investigations had closed U.S. facilities and had begun to source its supply from its facilities in nonsubject

countries. See Certain Lined Paper School Supplies from China, India, and Indonesia, Inv. Nos. 701-TA-442-443,

731-TA-1095-1097 (Final), USITC Pub. 3884 (Sept. 2006) at 69-70, 74 (finding that nonsubject imports were at

significant levels and were a “significant factor” in the U.S. market and noting the role of nonsubject imports in the

domestic industry’s financial declines in 2004). There is no indication that this is likely to occur in the present

investigations.

23

quantity basis) in 2004, 25.9 percent in 2005, and 22.0 percent in 2006. Nonsubject imports accounted

for 30.0 percent of total imports in interim 2006 and 18.0 percent in interim 2007.15 The U.S. market

share of nonsubject imports ranged from 10.2 percent in 2004 to 8.7 percent in 2005 and to 8.3 percent in

2006. The U.S. market share of nonsubject imports was 8.8 percent in interim 2006 and 6.0 percent in

interim 2007.16

Subject imports accounted for 65.2 percent of total imports (on a quantity basis) in 2004, 74.1

percent in 2005, and 78.0 percent in 2006. Subject imports accounted for 70.0 percent of total imports in

interim 2006 and 82.0 percent in interim 2007.17 The U.S. market share of subject imports increased from

19.1 percent in 2004 to 25.1 percent in 2005 and then to 29.5 percent in 2006. The U.S. market share of

subject imports was 20.5 percent in interim 2006 and 27.3 percent in interim 2007.18 The volume of

subject imports exceeded the volume of LWR imports from all nonsubject countries throughout the period

examined.19

According to official import statistics, Canada is the largest supplier of nonsubject LWR to the

United States. In 2006, Canada’s share of U.S. nonsubject imports was approximately 80 percent.20

Moreover, Canada appears to be a consistent supplier of LWR to the United States. While imports of

LWR from Canada recently have declined with the increasing volumes of subject imports,21 Canada has

remained a more consistent supplier of LWR to the United States than other nonsubject countries.22 In

addition, based on the limited information compiled during the preliminary phase of these investigations,

the largest Canadian producer of LWR is affiliated with U.S. producers of LWR.23 These trends and this

relationship suggest that nonsubject imports of LWR likely will not be a “significant factor” in the U.S.

market.24 In any final phase of these investigations, I will seek additional information about nonsubject

imports and their supply relationships to re-examine this issue and complete my analysis under Bratsk.
24

Because I find that nonsubject imports are not likely to be a significant factor in the U.S. market,

I therefore am not required to address “whether non-subject imports would have replaced subject imports

without any beneficial effect on domestic producers.”
 1

 There is limited information on the record regarding the role of nonsubject imports of LWR pipe and tube in the

U.S. market. See e.g., CR at VII-17-19, PR at VII-8-11. In any final phase investigations, I, along with my

colleagues, will seek additional information on the role of nonsubject imports of LWR pipe and tube in the U.S.

market. Parties are invited 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.

 2

 19 U.S.C. §§ 1671b(a) and 1673b(a).

 3

 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).

 4

 19 U.S.C. § 1677(7)(A).

 5

 19 U.S.C. § 1677(7)(C)(iii).

 6

 Id.

25

SEPARATE VIEWS OF COMMISSIONER CHARLOTTE R. LANE

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

reasonable indication that an industry in the United States is materially injured by reason of light-walled

rectangular pipe and tube (“LWR pipe and tube”) from China, Korea, Mexico, and Turkey that are

allegedly sold in the United States at less than fair value (“LTFV”), and by reason of imports of LWR pipe

and tube from China allegedly subsidized by the government of China. I join in parts I, II, III, IV, V,

VI.B.1., and 2. a-e of the Views of the Commission.

I. REASONABLE INDICATION OF MATERIAL INJURY BY REASON OF LESS THAN

FAIR VALUE IMPORTS OF LIGHT WALLED RECTANGULAR PIPE AND TUBE 1

A. General Legal Standards

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

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

injured by reason of the imports under investigation.2

 In making this determination, the Commission shall

consider the volume of subject imports, the effect of subject imports on prices for the domestic like

product, and the impact of the subject imports on domestic producers of the domestic like product, but

only in the context of U.S. product operations.3

 The statute defines “material injury” as “harm which is not

inconsequential, immaterial, or unimportant.”4

 In assessing whether there is a reasonable indication that

the domestic industry is materially injured by reason of subject imports, the Commission considers all

relevant economic factors that bear on the state of the industry in the United States.5

 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.”6

Based on an evaluation of the relevant statutory factors, I find there is a reasonable indication that

the domestic industry producing LWR pipe and tube is materially injured by reason of subject imports

from China, Korea, Mexico and Turkey. 
 7

 19 U.S.C. § 1677(7)(C)(i).

 8

 CR/PR Table IV-3; Table C-1.

 9

 Id.

 10 Id.

 11 CR/PR Table IV-8; Table C-1.

 12 Id.

 13 Id.

 14 CR/PR Table V-1.

 15 CR/PR Table V-2.

26

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.7

 

Based on the record evidence, I find the volume of subject imports of LWR pipe and tube is

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 74.5 percent from 2004 to 2006, from

180,719 short tons in 2004 to 250,312 short tons in 2005 and 315,302 short tons in 2006, an overall

increase of 134,583 short tons.8

 From 2004 to 2006, overall domestic consumption increased by 13.1

percent, or 123,986 short tons.9

 In interim 2007, subject imports continued to increase while domestic

consumption decreased by 4.7 percent.10 Thus, during the period of investigation increases in subject

imports exceeded increases in domestic consumption both on an absolute and percentage basis. Further,

subject import volumes continued to increase in interim 2007 and were 26.9 percent higher in interim

2007, at 65,937 short tons as compared to 51,959 short tons in interim 2006.11

During this same period of time, the market share of U.S. apparent consumption volume held by

subject imports increased, from 19.1 percent in 2004 to 25.1 percent in 2005 and to 29.5 percent in 2006.12

In interim 2007, subject import market share was 27.3 percent compared with 20.5 percent in interim

2006.13

For the foregoing reasons, I find that both the volume and increase in volume of

subject imports to be significant.

C. Price Effects of Subject Imports

Section771(C)(ii) of the Act provides that, in evaluating the price effects of subject imports, the

Commission shall consider whether (I) there has been significant price underselling by the imported

merchandise as compared with the price of domestic like products in 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.

I find that subject imports significantly undersold the domestic like product, and

both depressed and suppressed domestic prices to a significant degree.

Domestic prices, as reflected in the pricing data collected, exhibited a downward trend during the

period of investigation. For product 1, average quarterly prices for U.S. producers fell in 2005, and then

rose in 2006, before dropping significantly in interim 2007.14 Product 2 data reveal a fairly steady

downward trend for reported U.S. producers’ prices.15 Thus, while prices fluctuated during the period,

there were overall price declines for these products, indicating price depression. 
 16 CR/PR Table C-1.

 17 Id.

 18 Id.

 19 Id.

 20 CR/PR Table V-1; Table C-1.

 21 CR/PR Table C-1.

 22 CR p. V-15, PR p. V-11.

27

 Furthermore I find there is strong evidence of a cost/price squeeze on the domestic

industry, which indicates that needed domestic price increases were suppressed by lower-priced subject

imports. Both the cost of goods sold and the unit value of sales for the domestic industry increased over

the period of investigation; however, the unit value of sales did not keep pace with the cost of goods sold. 

The unit value of cost of goods sold increased by $69 between 2004 and 2006 while the unit value of sales

increased by only $41.16 Moreover, for the interim periods examined, the unit value of sales declined by

$16 while the unit value of cost of goods sold increased by $36.17 Cost of goods sold as a ratio to net sales

increased between 2004 and 2005, before decreasing slightly in 2006.18 Notwithstanding these

fluctuations, I find the overall increase in this ratio between 2004 and 2006 to be significant. Moreover, in

the most recent interim period, cost of goods sold as a ratio to net sales increased from 81.1 percent to

86.6 percent, as subject import volumes were higher than they had been in the corresponding period in

2006.19 The reported average prices for the subject imports remained below the reported average prices for

the domestic product for most of the products sold during the most recent period, and unit values of subject

imports were significantly below the unit value of domestic shipments by U.S. producers.20 The domestic

industry’s inability to increase its unit value of sales to cover the increased cost of goods sold from 2004

through 2006 and the drop in unit value of sales, even as cost of goods sold continued to increase in

interim 2007, occurred concurrently with significant increases in the volume of these significantly lower

priced subject imports.21 This is a strong indication that subject imports restricted the U.S. producers'

ability to raise prices to recover increased costs. 

The Commission was able to confirm three out of six allegations of lost revenue by

Petitioners, and of the 8 lost sales allegations on which the Commission received responses, three were

confirmed and one was agreed to by the purchaser with regard to price but not quantity.22 This evidence

further supports my conclusion that subject imports have had a significant adverse impact on domestic

prices. 

In sum, the record indicates significant underselling by subject imports during the

period of investigation, and it further indicates that subject imports have depressed and/or suppressed

domestic prices to a significant degree. Accordingly, I find that subject imports have had significant

adverse effects on domestic prices during the period of investigation. 

D. Impact of Subject Imports

In examining the impact of the subject imports on the domestic industry, the Commission

considers all relevant economic factors that bear on the state of the industry in the United States. These

factors include output, sales, inventories, capacity utilization, market share, employment, wages,

productivity, profits, cash flow, return on investment, ability to raise capital, and research and

development. 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.” 
 23 CR/PR Table C-1.

 24 Id.

 25 Id.

 26 Id.

 27 CR/PR Table III-3; III-5; Table C-1.

 28 CR/PR Table VI-4; Table C-1.

 29 CR/PR Table C-1.

 30 CR/PR Table III-7; Table C-1.

 31 CR/PR Table III-8; Table C-1.

 32 Id.

 33 CR/PR Table VI-1; Table C-1.

 34 Id.

 35 CR/PR Table VI-1; Table C-1.

28

Subject imports had a significant adverse impact on the domestic industry’s performance during

the period of investigation. As noted above, apparent U.S. consumption increased by 13.1 percent

between 2004 and 2006, and declined only slightly, by 4.7 percent, in the interim 2007 relative to interim

2006.23 Even though the domestic industry was profitable throughout the period of investigation, most

indicators of its financial condition showed declines during this time. Additionally, the domestic industry

finished with a greatly weakened performance in interim 2007 as compared to interim 2006.24 

During the period of investigation, the domestic industry’s output did not keep pace with the

overall consumption increase in the U.S. market. Domestic output decreased 0.5 percent between 2004

and 2006, and was 5.3 percent lower in interim 2007 as compared to interim 2006.25 Capacity utilization

decreased modestly by 0.4 percentage points between 2004 and 2006 but this decline worsened as capacity

utilization was 7.6 percentage points lower in interim 2007 relative to interim 2006.26

In addition to declines in overall output, U.S. producers’ U.S. shipment volumes decreased slightly

by 0.5 percent between 2004 and 2006.27 Although the average unit value of shipments increased during

the period of investigation, by 4.0 percent between 2004 and 2006, this increase in unit value of shipments

was far outpaced by an increase in the unit value of cost of goods sold which increased by 10.0 percent

between 2004 and 2006.28 Moreover, the value of U.S. shipments decreased by 12.4 percent in interim

2007 as compared to interim 2006 as unit cost of goods sold increased by 5.0 percent.29 Domestic

inventory volume was generally stable, resulting in a *** decreasing ratio of inventories to total shipments

throughout the period of investigation, but inventories increased as a ratio of total shipments in interim

2007 reaching *** percent.30

Employment indicators showed declines between 2004 and 2006, with the number of workers and

hours worked decreasing. The number of workers decreased from 676 in 2004 to 651 in 2006, a decrease

of 3.7 percent, and dropped further to 627 in interim 2007 as compared to 630 in interim 2006.31

Similarly, hours worked dropped by 3.8 percent between 2004 and 2006 and showed a bigger decline than

the decline in workers in interim 2007 as hours worked were 2.5 percent lower in interim 2007 as

compared to interim 2006.32 Productivity increased slightly throughout the period of investigation from

2004 through 2006, but declined in interim 2007.33

The industry’s financial performance declined in 2005 as compared to 2004 although it rebounded

partially in 2006 and remained profitable throughout the remainder of the period of investigation.34 

However, overall, the industry’s profitability and employee levels declined from 2004 to 2006 and its

performance in general declined even more dramatically in interim 2007.35 Operating income decreased
 36 Id.

 37 Id.

 38 Id.

 39 Id.

 40 Id.

 41 Id.

 42 Id.

 43 Id.

 44 CR/PR Table VI-1.

 45 CR/PR Table VI-8.

 46 CR/PR Table VI-6.

 47 CR/PR Table C-1.

29

between 2004 and 2005 from $93 million to $61 million, but increased somewhat to $71.6 million in 2006

which was still 23.3 percent below the operating income level in 2004.36 Operating income on a per-unit

basis followed the same trend, decreasing by 20.8 percent between 2004 and 2006.37 Operating margins

decreased from 16.1 percent in 2004 to 10.6 percent in 2005, before increasing to 12.2 percent in 2006.38

This drop in the ratio of operating income to net sales from 2004 to 2006 represents a decline of 3.9

percentage points, or a 24.2 percent decrease.39 

Operating income in interim 2007 was well below the amount in interim 2006, dropping to $7.9

million in interim 2007 as compared to $17.3 million in interim 2006.40 This equals a decrease in

operating income of 54.2 percent from interim 2006 to interim 2007.41 Operating income on a per-unit

basis dropped significantly in interim 2007 as compared to interim 2006, dropping from $102 to $53.42

Operating margins decreased 5.3 percentage points in interim 2007 as compared to interim 2006, dropping

from 11.2 percent to 5.9 percent.43

Out of twenty responding companies, operating losses during the period of investigation were

reported by 1 company in 2004, 2 in 2005, 2 in 2006, and 4 in interim 2007.44 The domestic industry’s

return on assets between 2004 and 2006 declined by 5.1 percentage points, or 19 percent, between 2004

and 2006.45 Even in the face of declining profits, the domestic industry’s capital expenditures increased

between 2004 and 2006, and capital expenditures and research and development expenses were higher in

interim 2007 as compared to interim 2006.46 Thus, the domestic industry as a whole operated profitably

throughout the period of investigation, but at a declining rate of profitability, including dramatic declines

in interim 2007.

The domestic industry’s declining operating results are attributable to its inability to increase its

average sales values to match increases in production costs. As noted above, even though the domestic

industry increased its average unit value of sales from 2004 to 2006, these increases did not keep pace with

the increases in the average unit costs of goods sold. Moreover, while the increasing unit cost of goods

sold continued into interim 2007, the unit value of sales actually declined.47 This cost-price squeeze was

occurring as domestic consumption remained relatively stable but the subject imports were increasing

significantly in absolute quantities and in market share.

In light of my finding that subject imports have suppressed and/or depressed prices to a significant

degree, and the correlation between increasing subject imports and deteriorating financial performance of

the domestic industry, I find that subject imports have had a significant adverse impact on the domestic

industry. 
30

Based on the foregoing, I find that there is a reasonable indication that the domestic industry

producing LWR pipe and tube is materially injured by reason of subject imports of LWR pipe and tube

from China, Korea, Mexico, and Turkey that allegedly are sold in the United States at less than fair value,

and by reason of subject imports of LWR pipe and tube allegedly subsidized by the government of China.
 1 19 U.S.C. § 1673b(a); see also American Lamb Co. v. United States, 785 F.2d 994, 1001-04 (Fed Cir. 1986);

Ranchers-Cattlemen Action Legal Foundation v. United States, 74 F.Supp.2d 1353, 1368-69 (CIT 1999); Aristech

Chemical Corp. v. United States, 20 CIT 353, 354-55 (1996).

 2 American Lamb, 785 F.2d at 1001; see also Texas Crushed Stone Co. v. United States, 35 F.3d 1535, 1543

(Fed. Cir. 1994).

 3 19 U.S.C. § 1677(7)(G)(i).

31

DISSENTING VIEWS OF CHAIRMAN DANIEL R. PEARSON

Based on the record in these preliminary investigations, I find that there is a reasonable indication

that an industry in the United States is threatened with material injury by reason of imports of light-walled

rectangular (“LWR”) pipe and tube from China that are allegedly subsidized and imports of LWR pipe

and tube from China, Korea, and Turkey that are allegedly sold in the United States at less than fair value

(“LTFV”). I find there is no reasonable indication that an industry in the United States is materially

injured or threatened with material injury by reason of imports of LWR pipe and tube from Mexico that

are allegedly sold at LTFV. I adopt as my own the discussion of domestic like product, domestic

industry, related parties, and conditions of competition as laid out in sections I–V of the Views of the

majority, but write separately on the issues of cumulation, material injury, threat of material injury, and

the application of Bratsk. 

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

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

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

reason of the allegedly unfairly traded imports.1

 In applying this standard, the Commission weighs the

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

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

evidence will arise in a final investigation.”2

II. CUMULATION

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

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

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

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

the U.S. market.3

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

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

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

between imports and the domestic like product, including consideration of

specific customer requirements and other quality-related questions;

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

imports from different countries and the domestic like product;

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

from different countries and the domestic like product; and
 4 See Certain Cast-Iron Pipe Fittings from Brazil, the Republic of Korea, and Taiwan, Inv. Nos. 731-TA-278-280

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

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

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

 6 The SAA (at 848) expressly states that “the new section will not affect current Commission practice under

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

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

1988). See Goss Graphic Sys., Inc. v. United States, 33 F. Supp. 2d 1082, 1087 (Ct. Int’l Trade 1998) (“cumulation

does not require two products to be highly fungible”); Wieland Werke, AG, 718 F. Supp. at 52 (“Completely

overlapping markets are not required.”).

 7 CR/PR at Table II-1.

 8 CR/PR at Table II-2.

 9 CR at II-8, PR at II-5.

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

32

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

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

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

imports compete with each other and with the domestic like product.5

 Only a “reasonable overlap” of

competition is required.6

A. Fungibility

The majority of responding domestic producers reported that the domestic like product is always

interchangeable with subject imports and with nonsubject imports; responding domestic producers also

reported that subject imports are always interchangeable with other imports. Importers were more likely

to report that imports were only “sometimes” interchangeable with the domestic like product, but a

majority of all responding importers reported that the domestic like product is always interchangeable

with subject imports and other imports, as well as reporting that subject imports are interchangeable with

each other and with nonsubject imports.7

 Most domestic producers reported that non-price differences

between the domestic like product and imports were only sometimes or never important; similarly, few

responding importers found LWR pipe and tube from different sources to have significant non-price

differences.8

 The record indicates that some differences may exist that limit the interchangeability of

LWR pipe and tube from different sources, such as differences in inventory based on metric sizing,

differences in surface quality, and delivery time.9

 Nonetheless, the record suggests a degree of

interchangeability between the domestic like product, subject imports, and nonsubject imports. 

B. Same geographical markets

Five of 21 domestic producers sell throughout the U.S. market; another 16 sell in multiple

regions. There are a significant number selling product in the Midwest, Southeast, Central Southwest,

and on the Pacific coast.10 Subject imports from China and Korea were most likely to enter the U.S.

market through the Los Angeles district. However, significant volumes of imports from each country

entered the U.S. market through a Texas port, as did the majority of all subject import volume from both
 11 CR/PR at Table IV-6.

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

 13 CR at I-12-I-13, PR at I-9-I-10. The majority of subject imports from each of the subject countries was also

sold to distributors. CR at I-13 n.35, PR at I-10, n.35.

 14 CR/PR at Table IV-7.

 15 I note that negligibility is not an issue in these investigations. Subject imports from China accounted for 26.6

percent of all LWR pipe and tube imports in the 12-month period ending in May 2007; subject imports from Korea

were 5.5 percent; subject imports from Mexico were 36.9 percent; and subject imports from Turkey accounted for

12.7 percent. CR at IV-14, PR at IV-9. 

 16 19 U.S.C. §§ 1671b(a) and 1673b(a).

 17 19 U.S.C. § 1677(7)(B)( i). The Commission “may consider such other economic factors as are relevant to the

(continued...)

33

Mexico and Turkey.11 A significant number of importers also reported selling on the Pacific Coast, the

Southeast, Central Southwest, and the Midwest.12

C. Channels of distribution

U.S. producers sold 76.3 percent of their U.S. shipments to distributors. Importers sold 83.9

percent of their U.S. shipments to distributors as well.13 

D. Simultaneous presence

 The domestic like product was available in the U.S. market throughout the POI. Subject imports

from China, Korea, and Mexico entered the U.S. market in every quarter of the POI; subject imports from

Turkey entered the U.S. market in 35 of 39 months.14

E. Conclusion

The record indicates that both U.S.-produced LWR pipe and tube and subject imports from

China, Korea, Mexico, and Turkey are sufficiently fungible to support a finding of a reasonable overlap

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

simultaneously present in the U.S. market during the entire period of investigation. I consequently

conclude that the subject imports from China, Korea, Mexico, and Turkey compete with each other and

with the domestic like product, and I cumulatively assess the volume and effects of subject imports in

making my determination as to whether there is a reasonable indication of material injury by reason of

subject imports.

III. NO REASONABLE INDICATION OF MATERIAL INJURY BY REASON OF THE

SUBJECT IMPORTS15

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

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

injured by reason of the imports under investigation.16 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.17 The statute defines “material injury” as “harm which is not inconsequential, immaterial, or
(...continued)

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).

 18 19 U.S.C. § 1677(7)(A).

 19 19 U.S.C. § 1677(7)(C)(iii).

 20 19 U.S.C. § 1677(7)(C)(iii).

 21 Tr. at 5-6 (Schagrin); Mexican Respondents’ Postconference Brief at 6-8. 

 22 CR/PR at Table C-1.

 23 CR at III-2, III-7-8, PR III-2, III-4, III-7. Mexican Respondents argue that the data show a growing trend of

captive production within the domestic industry. Mexican Respondents’ Postconference Brief at 12. Mexican

Respondents argue that mills that are producing their own LWR pipe and tube are clearly not going to purchase the

product from domestic producers or others. They claim that the Commission did not receive any data on these

producers, and in the absence of this information, the Commission should not find that the industry is materially

injured or threatened with material injury. Our investigations have not demonstrated a significant gap in data

obtained from domestic producers, including captive producers. In any final investigation, we will seek to reconfirm

our coverage of U.S. producers and the domestic like product to ensure that we receive data from captive producers

so that we may determine what effect, if any, these producers have on the domestic industry.

34

unimportant.”18 In assessing whether there is a reasonable indication that the domestic industry is

materially injured by reason of subject imports, all relevant economic factors that bear on the state of the

industry in the United States are considered.19 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.”20

For the reasons discussed below, I find that there is no reasonable indication that the domestic

industry producing LWR pipe and tube is materially injured by reason of cumulated subject imports from

China, Korea, Mexico, and Turkey.

A. Conditions of Competition and the Business Cycle

Several conditions of competition are pertinent to the analysis in the preliminary phase of these

investigations.

1. Demand Conditions

LWR pipe and tube is an intermediate product with many end-use applications, including fences,

gates, hand rails, furniture, sports equipment, and automotive equipment. Overall demand for LWR pipe

and tube is derived from demand for those end products. The parties acknowledge that demand for LWR

pipe and tube increased between 2004 and 2006, before declining in the first quarter of 2007.21

When measured by apparent U.S. consumption, U.S. LWR pipe and tube demand increased

steadily throughout the period, from 945,340 short tons in 2004 to 1.07 million short tons in 2006, for a

period increase of 13.1 percent. Apparent U.S. consumption was 4.7 percent lower in interim 2007, at

241,268 short tons, than it was in interim 2006, at 253,094 short tons.22 

2. Supply Conditions

The Commission received questionnaire responses from 22 U.S. producers, accounting for nearly

all of U.S. production of LWR pipe and tube in 2006.23 The domestic industry’s capacity exceeded
 24 CR/PR at C-1.

 25 The industry’s capacity remained flat at 1.16 million short tons in 2004 to 2006, and was 316,012 short tons in

interim 2007 as compared with 292,117 short tons in interim 2006. Domestic production decreased slightly from

675,178 short tons in 2004 to 672,016 short tons in 2006, and was 167,537 short tons in interim 2007 as compared

with 176,915 short tons in interim 2006. CR/PR at C-1.

 26 CR/PR at C-1. Domestic producers’ share of the U.S. market was 66.7 percent in interim 2007 as compared

with 70.7 percent in interim 2006.

 27 CR/PR at C-1. Subject imports’ share of the U.S. market was 27.3 percent in interim 2007 as compared with

20.5 percent in interim 2006.

 28 CR/PR at C-1. Nonsubject imports’ share of the U.S. market was 6.0 percent in interim 2007 as compared

with 8.8 percent in interim 2006.

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

 30 CR/PR at Table II-1.

 31 CR/PR at Table II-2.

 32 19 U.S.C. § 1677(7)(C)(i).

35

apparent U.S. consumption throughout the period examined.24 The domestic industry’s production

capacity and production remained relatively flat during the period, although production capacity was 8.2

percent higher in interim 2007 than in interim 2006, while production was 5.3 percent lower in interim

2007 than in interim 2006.25

Domestic producers’ share of the U.S. market declined steadily during the period from 70.7

percent in 2004 to 62.2 percent in 2006, a decline of 8.5 percentage points.26 Subject imports’ share of

the U.S. market increased steadily during the period from 19.1 percent in 2004 to 29.5 percent in 2006, a

10.4 percentage point increase.27 The U.S. market share held by nonsubject imports, an overwhelming

majority imported from Canada, declined during the period examined from 10.2 percent in 2004 to 8.3

percent in 2006, a 1.9 percentage point decrease.28

3. Interchangeability and Other Conditions

The parties generally agree that domestically produced and imported LWR pipe and tube are

considered interchangeable, commodity-like products.29 LWR pipe and tube is manufactured to ASTM

specifications (such as A-513 or A-500). Virtually all U.S. producers and a large majority of importers

reported that the domestic like product and the subject imports are always or frequently interchangeable.30

Moreover, the vast majority of U.S. producers and importers reported that product differences other than

price were either sometimes or never significant between U.S. produced LWR pipe and tube and subject

imports.31

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.”32

The cumulated volume of subject imports increased by 74.5 percent between 2004 and 2006,

rising from 180,719 short tons to 315,302 short tons. The increase was fairly steady: subject imports
 33 CR/PR at Table IV-3.

 34 CR/PR at Table C-1.

 35 CR/PR at Table C-1.

 36 19 U.S.C. § 1677(7)(C)(ii).

36

increased by 69,593 short tons in 2005 and by 64,990 short tons in 2006. Subject import volume in

interim 2007 was 65,937 short tons, 26.9 percent higher than the interim 2006 volume.33

The increase in import volume occurred at a time when apparent U.S. domestic consumption was

also increasing. Apparent U.S. consumption rose by 5.6 percent in 2005 and by 7.2 percent in 2006, for

an overall increase between 2004 and 2006 of 13.1 percent. But increases in subject import volume

outstripped increases in overall apparent U.S. consumption, and the share of apparent U.S. consumption

accounted for by subject imports also increased, from 19.1 percent in 2004 to 29.5 percent in 2006.34

This increase in market share came largely at the expense of the domestic industry. Shipments of

the domestic like product were relatively steady between 2004 and 2006, with shipments in 2006 a few

thousand tons lower than in 2004. Given the increase in subject import volume, however, shipments of

the domestic like product accounted for 62.2 percent of apparent U.S. consumption in 2006, down from a

share of 70.7 percent in 2004. Both shipments and market share in interim 2007 were lower than in

interim 2006.35

While the volume of subject imports was increasing, the volume of nonsubject imports was

declining. Nonsubject import volume in 2006 was 89,175 short tons, down 7.5 percent from the 2004

level of 96,388 short tons. Nonsubject imports accounted for 8.3 percent of apparent U.S. consumption in

2006, down from 10.2 percent in 2004. The volume of nonsubject imports in interim 2007 was 14,506

short tons, nearly 35 percent lower than the volume of subject imports in interim 2006; in interim 2007

nonsubject imports accounted for only 6.0 percent of apparent U.S. consumption.

Thus, the record indicates that subject import volume increased at a rate faster than overall

apparent domestic consumption. The market share of subject imports increased between 2004 and 2006,

and that increase came mostly at the expense of the domestic industry. At a time when overall demand

increased by 13.1 percent, shipments of the domestic like product were flat and imports of nonsubject

LWR pipe and tube declined. The share of the market held by subject imports increased substantially

between 2004 and 2006. For these reasons, I find for purposes of the preliminary phase of these

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

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

C. Price Effects of the Subject Imports

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

the Commission shall consider whether – (I) there has been significant price underselling

by the imported merchandise as compared with the price of domestic like products of the

United States, and (II) the effect of imports of such merchandise otherwise depresses

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

occurred, to a significant degree.36

The Commission staff gathered quarterly pricing data on two specific products. The quarterly

pricing data gathered accounted for 8.0 percent of U.S. producers’ commercial shipments during the POI;

38.7 percent of shipments of subject imports from China; 15.2 percent of subject imports from Korea; 5.1
 37 CR at V-6, PR at V-5.

 38 CR/PR at Table V-3.

 39 CR/PR at Table V-4.

 40 CR/PR at Tables V-1, V-2, and V-3.

 41 CR/PR at Table C-1.

 42 In its notice of initiation, Commerce estimated the following dumping margins: China, 6.3-40.52 percent;

Korea, 11.74-30.66 percent; Mexico, 11.5 percent; and Turkey, 15.28-41.71 percent. 72 Fed. Reg. 40274 (July 24,

2007).

 43 19 U.S.C. § 1677(7)(C)(iii); see also SAA at 851, 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.

37

percent of subject imports from Mexico; and for 12.9 percent of subject imports from Turkey.37

Comparisons were available for most quarterly product/country combinations.38

The product-specific data indicate that subject imports generally undersold the domestic like

product. Of the 99 quarterly comparisons available, subject imports undersold the domestic like product

in 96 comparisons, and subject imports from China and Mexico undersold the domestic like product in

every quarterly comparison. Average underselling margins ranged from 14.9 percent for China to 30.2

percent for Turkey; for subject imports overall, the average underselling margin was 17.8 percent.39

However, the record does not indicate any clear relationship between subject imports and the

prices received for domestic like products. The peak price for domestically produced products 1 and 2

occurred in 2004, as did the lowest price recorded for both products. The same pattern held true for

subject imports combined, with both the peak and the trough occurring in 2004 for product 1, and both

the trough and the near-peak in 2004 for product 2. After that, prices for products 1 and 2 did not follow

a pattern that seemed related to subject import volume or prices. After peaking in late 2004, prices

received for the domestic like product generally fell in 2005 and rose in 2006; prices in the third quarter

2006 were generally significantly higher than prices received in the same quarter of the prior year.40

Nor does the record indicate price suppression by reason of subject imports throughout most of

the POI. The average unit values (AUVs) for U.S. shipments of the domestic like product rose by 4.0

percent between 2004 and 2006. Unit cost of goods sold (COGS) were 10.0 percent higher in 2006 than

in 2004, but also down somewhat from 2005 levels. Unit operating income was lower in 2006 than in

2004, but 2004 likely represented a cyclical peak for this and other steel products. Unit operating income

in 2006 was 17.1 percent higher than in 2005.41

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

imports undersold the domestic like product to a significant degree, but I do not find that subject imports

depressed or suppressed prices for the domestic like product. Thus, I find that subject imports did not

have significant adverse effects on domestic prices.

D. Impact of the Subject Imports42

Section 771(7)(C)(iii) 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.”43 These factors include output, sales, inventories, capacity utilization, market

share, employment, wages, productivity, profits, cash flow, return on investment, 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.”
 44 CR/PR at Table C-1.

 45 CR/PR at Table C-1.

 46 19 U.S.C. § 1673b(a)(1)(A).

 47 19 U.S.C. § 1677(7)(H).

38

The domestic industry in 2006 looked much like the domestic industry in 2004. Production

capacity was essentially unchanged, as was production and capacity utilization. Domestic shipments

were a few thousand tons lower, export shipments *** higher. Average unit values for domestic

shipments were up 4.0 percent. Inventories were lower by a modest margin. The number of production

and related workers declined by less than four percent, as did hours worked, but hourly wages rose by 7.1

percent and productivity by 5.2 percent.44 

Total cost of goods sold rose by 6.5 percent and gross profit declined by 16.4 percent between

2004 and 2006. Operating income declined by 23.3 percent and operating income as a share of sales was

12.2 percent in 2006, down from 16.1 percent in 2004. However, while most financial measures were

lower in 2006 than in 2004, virtually all showed an increase over 2005 levels. Gross profit was up by

16.9 percent in 2006, operating income increased by 17.7 percent, and operating income as a percentage

of sales rose from 10.6 percent to 12.2 percent. The operating profit per unit rose from $98 in 2005 to

$115 in 2006. Capital expenditures in 2006 were more than double those made in either 2004 or 2005.45

Subject import volume increased by the same amount in 2006 as in 2005, yet industry

performance in 2006 was in almost every way superior to that in 2005. The record in these preliminary

investigations suggests that the domestic industry reached a cyclical peak in 2004, a year in which prices

quickly jumped from trough to peak, despite the presence of imports. Some decline from that peak was

inevitable, as markets recovered from the price shocks and raw material supply constraints of 2004. The

industry’s performance in 2006 suggests that the domestic industry adjusted well and successfully,

improving its 2006 operating profit and margin over 2005 levels. 

Therefore, I find no reasonable indication that subject imports had a significant impact on the

domestic industry.

IV. REASONABLE INDICATION OF THREAT OF MATERIAL INJURY BY REASON OF

CUMULATED IMPORTS FROM CHINA, KOREA, AND TURKEY

In accordance with section 733(a)(1)(A) of the Tariff Act of 1930,46 I find a reasonable indication

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

merchandise from China, Korea, and Turkey. I find a reasonable indication that an industry in the United

States is not threatened with material injury by reason of imports of the subject merchandise from

Mexico.

A. Cumulation

I use the discretion offered by section 771(7)(H) of the Tariff Act of 193047 to cumulate the

volume and price effects of subject imports from China, Korea, and Turkey. Cumulating the subject

imports of China, Korea, and Turkey is permissible under the statute because the petitions were filed on

the same day and because the imports from these three countries compete with each other and with the

domestic like product in the U.S. market. My evaluation of the traditional factors touching on the

statutory requirement that the imports "compete with each other and with the domestic like product": 

(a) fungibility; (b) same geographical markets; (c) channels of distribution; and (d) simultaneous

presence, is the same as found in part II of this opinion, supra.
 48 CR/PR at Tables VII-1 (Korea), VII-3 (Mexico), and VII-5 (Turkey). No producer in China submitted a

questionnaire response. CR at VII-2, PR at VII-1.

 49 19 U.S.C. § 1677(7)(F).

 50 CR/PR at Table IV-8.

 51 CR/PR at Table IV-8.

 52 CR/PR at Table IV-8.

 53 CR/PR at Table IV-8.

 54 CR/PR at Tables VII-1 & VII-5. Note that no data are available for China.

 55 CR/PR at Table VII-1.

 56 CR/PR at Table VII-5.

 57 CR/PR at Table VII-1.

 58 CR/PR at Table VII-5.

39

While producers in Korea and Turkey have expanded their collective production capacities over

the period of investigation, and plan to expand their capacities further over the next two years, producers

in Mexico have increased capacity modestly and do not have ambitious expansion plans for the next two

years.48 The Mexican industry has a robust home market for its product, absorbing more than 70 percent

of its output and it has no other export markets from which it might divert to the U.S. market. 

Conversely, the U.S. market receives a much smaller share of the exports from Korea and Turkey, thus

leaving a much larger amount of production that might be shifted to the U.S. market.

For the above reasons, I find that the subject imports from China, Korea, and Turkey should be

cumulated for purposes of evaluating a threat of material injury, but that subject imports from Mexico

should not be cumulated.

B. Reasonable Indication of Threat of Material Injury by Reason of Subject Imports

from China, Korea, and Turkey

I find, in accordance with section 771(7)(F) of the Trade Act of 1930,49 a reasonable indication

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

Over the period 2004-2006, subject imports from China, Korea, and Turkey increased by 122,028

short tons (252 percent).50 This increase in import volume occurred against a backdrop of an increase in

U.S. consumption of 123,986 short tons (13.1 percent).51 Increased volumes of subject imports captured

virtually all of the increase in domestic consumption. 

Coincident with these increases in import volumes, the collective share of U.S. consumption held

by subject imports from China, Korea, and Turkey roughly tripled over the period 2004-2006. In quantity

terms, the collective share of these three countries rose from 5.1 percent to 15.9 percent and, in value

terms, from 4.0 percent to 11.7 percent.52 The increased share of U.S. consumption gained by these three

countries was accompanied by a reduction in the share of U.S. consumption served by U.S. producers

over the period 2004-2006 from 70.7 percent to 62.2 percent in quantity terms and from 73.8 percent to

67.3 percent in value terms.53 Subject imports also captured market share from nonsubject imports.

 Over the period 2004-2006, combined production capacity in Korea and Turkey grew by 44.0

percent, and responding subject producers forecast capacity to rise by an additional 9.9 percent.54 Subject

producers were not successful in filling the capacity added between 2004 and 2006, as capacity utilization

rates fell steadily both in Korea55 from 90.0 percent to 76.6 percent and irregularly in Turkey56 from 65.6

percent to 62.3 percent. Capacity utilization rates in both countries were even lower in the first quarter of

2007 (67.2 percent in Korea57 and 60.7 percent in Turkey58). Some increase is forecast for those

utilization rates going into the future, but data for the 2004-2006 period suggest that subject producers
 59 CR/PR at Table VII-1.

 60 CR/PR at Table VII-7.

 61 Calculated from CR/PR at Tables VII-1 and VII-5.

 62 CR/PR at Tables VII-1 and VII-5.

 63 CR/PR at Table VII-1.

 64 CR at VII-15, PR at VII-8.

 65 CR at VII-16, PR at VII-8. The Department of Commerce instituted an investigation of a wide variety of

allegedly countervailable subsidies supplied by the government of China to its LWR pipe and tube industry. See 72

Fed. Reg. 40281 (July 24, 2007).

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

 67 CR at VII-13, PR at VII-6.

 68 CR/PR at Tables VII-1 & VII-2 (for Korea); CR at VII-3, n.4, PR at VII-3, n.4 (stating that between 80-100

percent of Korean exports to the United States is covered by the questionnaire data).

 69 CR/PR at Tables VII-5 & VII-6 (for Turkey); CR at VII-10, n.16, PR at VII-5, n.16 (stating that between ***

percent of the industry in Turkey is covered by the questionnaire data).

40

may have some difficulty in finding markets for new capacity. Future production capacity forecast by

Korean producers in response to questionnaires shows *** percent growth in capacity between 2006-

2008.59 Such a *** increase in capacity has the potential *** to increase unused Korean production

capacity especially because Korean producers of the subject merchandise have already experienced a

decrease in domestic shipments (i.e., within Korea) by 11.7 percent (in quantity terms) between 2004-

2006. The record indicates that a significant amount of unused capacity in the subject countries will be

available. 

While inventories held by importers of the subject imports are not significant,60 inventories held

in their domestic markets by the Korean and Turkish producers of the subject imports are large. The

amount of subject merchandise held in inventory by subject producers in Korea and Turkey at the end of

2006 was 74,119 short tons. This level of inventories is equal to 85 percent of the level of 2006 U.S.

shipments of subject imports from Korea and Turkey, and about 6.9 percent of 2006 U.S. consumption. 

Inventories at the end of 2007 were expected to be even higher (81,461 short tons). Inventories of this

size indicate that there is some potential for additional quantities of subject LWR pipe and tube to be

directed to the U.S. market.61

Subject producers in both Korea and Turkey direct a majority of shipments to their home market,

but exports were significant for subject producers in both countries, and subject producers in both

countries directed the majority of their exports to non-U.S. markets.62 This indicates that should domestic

demand weaken in Korea or Turkey, or in other major export markets, significant additional volumes of

subject merchandise could be available for shipment to the U.S. market. This phenomenon may be at

work in Korea, which saw its share of home market consumption fall from 78.3 percent to 69.5 percent

over the period 2004-2006. This home market share continued to fall to 59.7 percent into the first quarter

of 2007.63 Access to other export markets is already limited, as antidumping orders were placed by

Canadian authorities in November 2003 on imports sent from Korea and Turkey.64 In May 2007,

Australia levied antidumping duties against imports from China.65

A closely related product, circular mechanical tubing, is produced using the same facilities and

production workers,66 and could be converted into LWR pipe and tube and shipped to the U.S. market.67

The record contains data on production of circular mechanical tubing for Korea68 and Turkey.69 These

responses indicate that total production of the circular mechanical tubing in both Korea and Turkey is

about one-quarter of the production of LWR pipe and tube. Nonetheless, this current production of
 70 Note that, with respect to certain welded pipe, antidumping or countervailing duty orders are currently in place

against Brazil, India, Korea, Mexico, Taiwan, Thailand, and Turkey. See Circular Welded Carbon-Quality Steel

Pipe from China, 701-TA-447 and 731-TA-1116 (Preliminary), Table I-1. In that matter, the Commission

determined that there is a reasonable indication that an industry in the U.S. is materially injured or threatened with

material injury by reason of imports from China. 72 Fed. Reg. 43295 (Aug. 3, 2007). Thus, there are orders in place

with respect to circular mechanical tubing against imports from all four countries involved in the present proceeding.

 71 CR/PR at Table V-4.

 72 CR/PR at Tables V-1-V-2.

 73 CR/PR at Table VI-1.

 74 CR/PR at Table VI-8.

 75 CR/PR at Table C-1.

41

circular mechanical pipe represents a potential additional production of 250,000 short tons in Korea and

Turkey.70

The record indicates likely capacity increases and other sources of additional product available

for export to the U.S. market. The record also indicates that subject producers found significant

additional volumes to ship to the U.S. market over the POI, as well as an ability to capture most of the

growth in demand over the POI and to gain market share at the expense of both the domestic industry and

other nonsubject import sources. These factors suggest a likelihood of increased imports in the imminent

future.

The Commission gathered pricing data on two products. Subject imports undersold U.S.

producers in 70 out of 73 possible quarterly comparisons across both products.71 The margins of

underselling ranged as high as *** percent for China (product 1), *** percent for Korea (product 2), and

*** percent for Turkey (product 1). The three documented periods of overselling all occurred in 2005.72

The record does not indicate that underselling by subject imports over the POI had a clear effect on prices

for the domestic like product, but underselling is likely to continue.

U.S. producers saw improvements in operating income between 2005 and 2006, both in absolute

numbers (from $60.9 million to $71.6 million) and as a ratio to net sales (from 10.6 percent to 12.2

percent). Figures for gross profit showed similar trends. However, 2006 industry performance in most

measures was below that registered in 2004.73 Figures for the domestic industry on return on investment

also showed increases between 2005 and 2006 (from 20.5 percent to 23.1 percent), but again these

represented only a partial recovery of erosion experienced between 2004 and 2005.74 Most performance

measures were lower in interim 2007 than in interim 2006.75

The record indicates that subject import volume increased significantly over the POI and captured

virtually all of the increase in apparent U.S. consumption. The record also indicates that the LWR pipe

and tube industries in the subject countries are expanding and will have available additional unused

capacity and inventories to direct to the U.S. market. I conclude, based on the foregoing considerations,

that there is a reasonable indication that a domestic industry in the United States is threatened with injury

by reason of subject imports from China, Korea, and Turkey.

V. NO REASONABLE INDICATION OF A THREAT OF MATERIAL INJURY BY

REASON OF IMPORTS FROM MEXICO

I find, in accordance with section 771(7)(F) of the Trade Act of 1930, no reasonable indication

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

Mexico. 
 76 CR/PR at Table IV-8.

 77 CR/PR at Table IV-8.

 78 CR/PR at Table IV-8.

 79 CR/PR at Table VII-3.

 80 CR/PR at Table VII-4.

 81 CR/PR at Table VII-7.

 82 CR/PR at Table VII-1.

 83 CR/PR at Tables VII-3 and Table C-1.

 84 CR/PR at Table VII-3.

 85 CR/PR at Table VII-3.

 86 CR at I-10, PR at I-7-I-8.

 87 CR/PR at Tables VII-3 & VII-4; CR at VII-7, n.11, PR at VII-4, n.11 (stating that between *** percent of

Mexican exports to the United States is covered by the questionnaire data). 

42

Over the period 2004-2006, subject imports from Mexico increased by 9.5 percent in quantity

terms.76 These changes occurred against a backdrop of increases in U.S. consumption of 13.1 percent in

quantity terms and 13.5 percent in value terms.77 Mexico’s volume trends roughly paralleled those of

broader U.S. consumption, and the share of U.S. consumption held by subject imports from Mexico

decreased modestly over the POI, from 14.0 percent to 13.6 percent.78

Production capacity in Mexico increased by only 9.1 percent over the period 2004-2006, and

subject producers in Mexico forecast that production capacity will grow by less than three percent

between 2007 and 2008.79 Capacity utilization rose significantly over 2004-2006. Capacity utilization in

the Mexican industry was at 80.1 percent in 2006, a notable increase over the 2004 utilization rate of

68.0 percent, and subject producers project operating at rates at or above the 2006 peak in 2007 and 2008. 

In 2008 the industry should have significantly less unused capacity, both in absolute volume and relative

to total capacity, than in 2004.80 

Inventories held by the importers of subject imports from Mexico only amount to about

*** percent of imports.81 More significant are the inventories held inside Mexico by the producers

themselves. The ratio of inventories to production was lower in 2006 than in 2004 and is projected to

continue to decline in 2008, as are actual inventory levels.82 A modest increase in inventories in 2006 had

no apparent effect on imports into the U.S. market, which declined that year.83 

The industry in Mexico directed three quarters or more of its annual shipments to its home

market. In 2006, the home market’s share was *** percent; in interim 2007, it was *** percent, and the

home market is projected to account for *** percent in 2008 as well.84 There were no antidumping orders

against LWR pipe and tube from Mexico in other markets, but the U.S. market is the industry’s only

substantial export market, even though pricing data indicate that LWR from Mexico is price-competitive

with other subject imports. Producers in Mexico have little in the way of alternate foreign markets from

which to divert product to the U.S. market in the future. Furthermore, the industry in Mexico does not

seem particularly focused on exports, as there are no barriers to exports and products are competitively

priced, yet export shipments actually declined as a share of total shipments over the POI.85

A closely related product, circular mechanical tubing, is produced using the same facilities and

production workers,86 and could be converted into LWR pipe and tube and shipped to the U.S. market. 

Data were reported on production of circular mechanical tubing for Mexico.87 The reported production
 88 Note that, with respect to certain welded pipe, antidumping or countervailing duty orders are currently in place

against Brazil, India, Korea, Mexico, Taiwan, Thailand, and Turkey. See Circular Welded Carbon-Quality Steel

Pipe from China, 701-TA-447 and 731-TA-1116 (Preliminary), Table I-1.

 89 CR/PR at Table V-4.

 90 CR/PR at Table IV-8.

 91 CR/PR at Table VI-1.

 92 CR/PR at Table VI-8.

 93 CR/PR at Table IV-8.

 94 444 F.3d 1369 (Fed. Cir. 2006) 

 95 444 F.3d at 1373, quoting Gerald Metals, Inc. v. United States, 132 F.3d 716, 722 (Fed. Cir. 1997).

 96 444 F.3d at 1375-76.

43

for circular mechanical tubing is significant relative to LWR pipe and tube exports to the U.S. market, but

this available capacity had little apparent effect on exports to the U.S. market over the POI.88

In product-specific price comparisons, Mexican prices were shown to be lower than U.S.

producers’ prices in all 26 quarterly comparisons. The average margin of underselling over the 13

quarters was 18.6 percent.89 However, this record of consistent underselling appeared to have little effect

on domestic prices and did not lead to significant increases in subject import volume over the POI.

While there was underselling of subject imports from Mexico throughout the POI, U.S. producers

were able to increase AUVs of U.S. shipments between 2004 and 2006.90 Operating margins in the

domestic industry remained healthy over the period,91 as did return on investment.92 During the first two

years of this period, Mexico was the largest import source for the United States and had about double the

volume of subject imports as did the other three countries combined.93 It appears that the U.S. industry

has adjusted to the presence of Mexican imports in this market.

The record indicates that the industry in Mexico is not likely to expand significantly in the near

future. The industry has a large home market. Subject import volume increased over the POI, but at a

level somewhat more modest than apparent U.S. consumption; market share remained steady, despite

underselling. I conclude, based on the foregoing considerations, that there is no reasonable indication that

a domestic industry in the United States is threatened with injury by reason of subject imports from

Mexico.

VI. APPLICATION OF THE BRATSK ALUMINUM SMELTER V. UNITED STATES

REPLACEMENT/BENEFIT TEST

A. Legal Issues Concerning Bratsk Aluminum Smelter v. United States

In the recent case of Bratsk Aluminum Smelter et al. v. United States94 (“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.’”95 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.96

As a threshold matter, it is not immediately clear how the Commission should interpret the Bratsk

opinion in terms of its effect on my analysis of causation in Title VII investigations. I discern at least two

possible interpretations that differ substantially. The first interpretation is that Bratsk mandates

application of an additional test apparently not contemplated by the statute (the so-called

“replacement/benefit test”). Under this interpretation, Bratsk appears to require that the Commission
 97 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, I have interpreted the Court’s decision as applying both to the context of

present injury and threat of injury.

 98 For a complete statement of Chairman Pearson’s interpretation Bratsk in a preliminary investigation, see

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

Bratsk Aluminum v. United States in Sodium Hexametaphosphate from China, Inv. No. 731-TA-1110 (Preliminary),

USITC Pub. 3912 (Apr. 2007) at 19-25.

 99 Petitioners’ postconference brief, Answers to Staff Questions, at A-1.

 100 CR/PR at Table C-1.

44

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. While I

respectfully disagree with the Court that such a causation analysis is legally required, I attempt to perform

the analysis based on the record in these preliminary investigations.97 The second interpretation is that

Bratsk is a further development of the causation approach prescribed by Gerald Metals. Under this

interpretation I am 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. I

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).98

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, Korea, and Turkey, I now must

assess whether the facts of these investigations trigger a Bratsk analysis under the “replacement/benefit

test” interpretation of Bratsk. Based on the record in these preliminary investigations, I conclude that

Bratsk is triggered. Nevertheless, I find that the current record does not permit me to determine

conclusively that nonsubject imports would replace subject imports and negate the beneficial effect of the

order on subject imports from China, Korea, and Turkey.

1. Triggering Factors

Petitioners agree that the first Bratsk trigger is present, as LWR pipe and tube is a commodity

product.99 As noted above, the vast majority of responding producers and importers find domestically

produced LWR pipe and tube to be interchangeable with imports from both subject and nonsubject

sources. While recognizing that a level of interchangeability does not necessarily mean that a product is a

commodity, for purposes of this analysis I find, based on the record available in these preliminary

investigations, that the first Bratsk trigger is met.

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 imports from Mexico

accounted for 13.6 percent of apparent U.S. consumption in 2006, and other nonsubject imports

accounted for 8.3 percent. As recently as 2004, nonsubject imports from countries other than Mexico

accounted for 10.2 percent of apparent U.S. consumption.100 

As to whether nonsubject imports are price competitive, the Commission requested productspecific price data from nonsubject countries in its importers’ questionnaires. The Commission received

pricing data on products from Mexico as well as products from other nonsubject countries. These data

show predominant underselling of the domestic like product by all nonsubject imports, including those
 101 CR/PR at Tables V-1-V-2.

 102 See generally CR at VII-18 to VII-30, PR at VII-10 to VII-21.

 103 CR/PR at Table VII-3.

 104 CR/PR at Table VII-9.

 105 CR/PR at Table VII-10.

45

from Mexico.101 Average unit values for nonsubject imports were also consistently below AUVs for the

domestic like product; AUVs for nonsubject imports from Mexico in particular were closer to AUVs for

subject imports. Therefore, for purpose of these preliminary determinations, it appears that nonsubject

imports of LWR pipe and tube, viewed as a whole, are price-competitive with the domestic like product,

and thus appear to be a “significant factor” in the U.S. market.

2. Replacement/Benefit Factors

As it appears that the Bratsk tests are triggered, I 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 I 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, aside from the

information regarding the industry in Mexico.102 The industry in Mexico has unused production capacity,

but its capacity is not sufficient to replace subject imports.103 Furthermore, LWR pipe and tube from

Mexico has been in the U.S. market at consistent volumes throughout the POI; while subject import

volumes increased by 252 percent between 2004 and 2006, subject imports from Mexico increased by

less than 10 percent, though pricing data indicate that LWR pipe and tube from Mexico should have been

very competitive with other imports. Thus, the record does not suggest that subject imports from Mexico

would increase to the point of significantly replacing subject imports if the orders were imposed. 

Welded pipe and tube, of which LWR pipe and tube is a subset, is made throughout the world,

and production of various types of welded pipe exceeded 50 million tons in 2005.104 Canada in particular

has nine producers capable of making LWR pipe and tube.105 The record, however, does not contain

sufficient detail on the industries in other countries to determine whether nonsubject imports could in fact

replace subject imports.

Because the record lacks information on nonsubject foreign production capacity, I cannot reach a

definite conclusion on this point. In any final phase of these investigations, I will seek additional

information on production capacity of major nonsubject producers of LWR pipe and tube to complete the

analysis under Bratsk.

VII. CONCLUSION

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

producing LWR pipe and tube is threatened with material injury by reason of subject imports of LWR

pipe and tube from China that allegedly are subsidized and sold in the United States and by subject

imports of LWR pipe and tube from China, Korea, and Turkey that are allegedly sold at less than fair

value. I find that there is no reasonable indication that the domestic industry producing LWR pipe and

tube is materially injured by, or threatened with material injury by, subject imports of LWR pipe and tube

from Mexico that allegedly are sold in the United States at less than fair value.

 1

 Allied Tube and Conduit, Harvey, IL (“Allied”); Atlas Tube, Plymouth, MI (“Atlas”); California Steel and

Tube, City of Industry, CA (“California”); Ex-L-Tube, Kansas City, MO (“Ex-L-Tube”); Hannibal Industries, Los

Angeles, CA (“Hannibal”); Leavitt Tube Company LLC, Chicago, IL (“Leavitt”); Maruichi American Corporation,

Sante Fe Springs, CA (“Maruichi”); Searing Industries, Rancho Cucamonga, CA (“American”); Southland Tube,

Birmingham, AL (“Southland”); Vest Inc., Los Angeles, CA (“Vest”); Welded Tube, Concord, Ontario (Canada)

(“Welded”); and Western Tube and Conduit, Long Beach, CA (“Western”). Bull Moose Tube, Inc. (“Bull Moose”)

joined the original 12 petitioning firms over the course of these investigations, resulting in a total of 13 petitioning

U.S. producers of LWR pipe and tube.

 2 Federal Register notices cited in the tabulation are presented in app. A.

I-1

PART I: INTRODUCTION

BACKGROUND

These investigations result from a petition filed on behalf of 12 U.S. producers of carbon-quality

light-walled rectangular pipe and tube (“LWR pipe and tube”)1

 alleging that an industry in the United

States is materially injured and threatened with material injury by reason of less-than-fair-value (“LTFV”)

imports of LWR pipe and tube from China, Mexico, Korea, and Turkey and by reason of imports of

subsidized LWR pipe and tube from China. The following tabulations provides information relating to

the background of these investigations:2

Effective date Action

June 27, 2007

Petition filed with Commerce and the Commission;

institution of Commission investigations (72 FR 36479,

July 3, 2007)

July 18, 2007 Commission’s conference

July 24, 2007

Commerce’s notices of initiation (72 FR 40274

(antidumping) and 72 FR 40281 (countervailing))

August 10, 2007 Commission’s vote

August 13, 2007 Commission’s determinations transmitted to Commerce

August 20, 2007 Commission’s views transmitted to Commerce

 1 A list of witnesses appearing at the conference is presented in app. B.

STATUTORY CRITERIA AND ORGANIZATION OF 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.
I-2

Section 771(7)(C) of the Act (19 U.S.C. § 1677(7)(C)) further provides that--

In evaluating the volume of imports of merchandise, the Commission

shall consider whether the volume of imports of the merchandise, or any

increase in that volume, either in absolute terms or relative to production

or consumption in the United States is significant.

. . .

In evaluating the effect of imports of such merchandise on prices, the

Commission shall consider whether. . .(I) there has been significant price

underselling by the imported merchandise as compared with the price of

domestic like products of the United States, and (II) the effect of imports

of such merchandise otherwise depresses prices to a significant degree

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

significant degree.

. . .

In examining the impact required to be considered under subparagraph

(B)(i)(III), the Commission shall evaluate (within the context of the

business cycle and conditions of competition that are distinctive to the

affected industry) all relevant economic factors which have a bearing on

the state of the industry in the United States, including, but not limited to

. . . (I) actual and potential decline 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.

Information on the subject merchandise, alleged margins of dumping, and domestic like product

is presented in Part I. Information on conditions of competition and other relevant economic factors is

presented in Part II. Part III presents information on the condition of the U.S. industry, including data on

capacity, production, shipments, inventories, and employment. The volume and pricing of imports of the

subject merchandise are presented in Parts IV and V, respectively. Part VI presents information on the

financial experience of U.S. producers. The statutory requirements and information obtained for use in

the Commission’s consideration of the question of threat of material injury are presented in Part VII.

MARKET SUMMARY

Trade in the U.S. market for LWR pipe and tube totaled nearly $912 million during 2006, of

which approximately 67 percent related to sales of U.S.-produced LWR pipe and tube, 24 percent related

to imports from subject sources, and 9 percent related to imports from nonsubject sources

(overwhelmingly Canada). Twenty-two firms supplied the Commission with data on their U.S. LWR

pipe and tube operations. Thirty-three firms responded that they imported subject merchandise during

the period of investigation. LWR pipe and tube is used for a variety of applications, such as ornamental

fencing, display racks, sports equipment, furniture, hand rails, scaffolding, and carports. 
 3

 Some structural tube producers may produce small quantities of merchandise which qualifies as LWR pipe and

tube and which has not been gathered in these proceedings. Additionally, several small producers of LWR pipe and

tube have failed to provide the Commission with a response to its request for information in this preliminary phase of

these investigations. However, all major U.S. producers of subject merchandise have provided the Commission with

useable data on their U.S. operations. For a further discussion of U.S. industry coverage and coverage issues see

Part III of this report.

 4 Initiation of Antidumping Duty Investigations: Light–Walled Rectangular Pipe and Tube from Republic of

Korea, Mexico, Turkey, and the People’s Republic of China, 72 FR 40274, July 24, 2007.

 5

 Ibid.

 6 Notice of Initiation of Countervailing Duty Investigation: Light–Walled Rectangular Pipe and Tube from the

People’s Republic of China, 72 FR 40281, July 24, 2007.

I-3

SUMMARY DATA

Table C-1 in appendix C presents a summary of data collected in these investigations. Except as

noted, U.S. industry data are based on the questionnaire responses from U.S. producers, which account

for the vast majority of U.S. production of LWR pipe and tube during the period examined (see Part III of

this report).3

 U.S. import data are based on official Commerce statistics, while information on U.S.

importers’ U.S. shipments is based on data compiled from responses to the Commission’s U.S. importers’

questionnaire (see Part IV of this report). Information on LWR pipe and tube industries in China, Korea,

Mexico, and Turkey was compiled from responses to the Commission’s foreign producers’/exporters’

questionnaire (see Part VII of this report).

PREVIOUS INVESTIGATIONS

Since 1980, the Commission has looked at the U.S. LWR pipe and tube industry several times

both in import-injury investigations and in studies associated with steel safeguard measures. Three of

antidumping duty investigations resulted in the imposition of orders on imports of LWR pipe and tube. 

Following the Commission’s second five-year review investigations concerning LWR pipe and tube in

2005, which resulted in a negative determination regarding Argentina and an affirmative determination

regarding Taiwan, the order on Taiwan is the only current outstanding antidumping duty order in effect

on LWR pipe and tube imports into the United States. Table I-1 presents data on previous investigations

concerning LWR pipe and tube in the United States since 1980. 

NATURE AND EXTENT OF ALLEGED SUBSIDIES AND SALES AT LTFV

Sales at LTFV

On July 24, 2007, the Commission received notification of Commerce’s initiation of antidumping

investigations concerning LWR pipe and tube from China, Korea, Mexico, and Turkey.4

 The alleged

dumping margins range from 6.3 to 40.52 percent for LWR pipe and tube producers in China, 11.74 to

30.66 percent for LWR pipe and tube producers in Korea, 11.5 percent for LWR pipe and tube producers

in Mexico, and 15.28 to 41.71 percent for LWR pipe and tube producers in Turkey.5

Subsidies

On July 24, 2007, the Commission received notification of Commerce’s initiation of

countervailing duty investigations concerning LWR pipe and tube from China.6

 Commerce initiated

investigations into 27 potentially countervailable subsidy programs, including two relating to preferential
I-4

Table I-1

LWR pipe and tube: Previous investigations

Source Inv. No.

USITC Publication

Number Date Result

Korea 731-TA-138 (F) USITC 1519 April 1984 Affirmative; revoked October

1985 following VRA

Spain 731-TA-198 (P) USITC 1569 August 1984 Terminated after preliminary;

petition withdrawn

Taiwan 731-TA-211 (F) USITC 1799 January 1986 Negative

Singapore 731-TA-296 (F) USITC 1907 November 1986 Affirmative

731-TA-296

(Review)

USITC 3316 July 2000 Revoked

Taiwan 731-TA-349 (F) USITC 1994 July 1987 Negative

Argentina 731-TA-409 (F) USITC 2187 May 1989 Affirmative

731-TA-409

(Review)

USITC 3316 July 2000 Order continued

731-TA-409 (Second

Review)

USITC 3867 July 2006 ITC Negative

Taiwan 731-TA-410 (F) USITC 2169 March 1989 Affirmative

731-TA-410

(Review)

USITC 3316 July 2000 Order continued

731-TA-410 (Second

Review)

USITC 3867 July 2006 Order continued

Mexico 731-TA-730 (P) USITC 2892 May 1995 ITC Negative

World wide 201-TA-73 USITC 3479 December 2001 Additional tariffs and tariff-rate

quotas;1

 relief did not apply to

imports from Mexico or Turkey

204-TA-9

332-TA-452

USITC 3632 September 2003 The President terminated the

import relief shortly after these

investigations2

Mexico 731-TA-1054 (F) USITC 3728 October 2004 ITC Negative

Turkey 731-TA-1055 (F) USITC 3728 October 2004 ITC Negative

1

 Following affirmative determinations of serious injury and remedy recommendations by the Commission,

President Bush issued a proclamation on March 5, 2002, imposing temporary import relief for a period not to exceed

three years and one day. Presidential Proclamation 7529 of March 5, 2002 (67 FR 10553, March 7, 2002). Import

relief relating to LWR pipe and tube 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. 2

 Following receipt of the Commission’s mid-term monitoring report “Steel: Monitoring Developments in the

Domestic Industry” (Inv. No. TA-204-9) and “Steel-Consuming Industries: Competitive Conditions With Respect to

Steel Safeguard Measures” (Inv. No. 332-452), the President terminated the steel safeguard tariffs and tariff-rate

quotas. Presidential Proclamation 7741 of December 4, 2003 (68 FR 68483, December 8, 2003). The Commission

issued a final evaluation of the safeguard measures in its final evaluation report “Steel: Evaluation of the

Effectiveness of Import Relief” (Inv. No. 204-12).

Source: Cited Commission publications.
 7

 Ibid.

 8

 Ibid.

 9 Initiation of Antidumping Duty Investigations: Light-Walled Rectangular Pipe and Tube from Republic of

Korea, Mexico, Turkey, and the People’s Republic of China, 72 FR 40275 (July 14, 2007). 

 10 The Commission has previously considered whether corrosion-resistant LWR pipe and tube was a separate

domestic like product from black LWR pipe and tube. In the final phase investigations on LWR pipe and tube from

Mexico and Turkey in 2004, the Commission found a single domestic like product consisting of all LWR pipe and

tube. Data on U.S. production and U.S. imports of corrosion-resistant and black LWR pipe and tube are discussed in

parts III and IV of this report. In the current investigations, however, no party has argued for separate domestic like

products based on corrosion resistance. 

 11 Conference transcript, p. 56 (Schagrin); and petitioners’ postconference brief, p. 3.

I-5

lending, ten related to preferential income tax treatment, three related to provincial subsidies, four related

to tariff treatment, two related to grants, four related to allegedly subsidized provision of goods or

services, and two related to export restraints.7

 Initiation of an investigation into loans made to

uncreditworthy companies was postponed until such time as specific companies for investigation have

been identified.8

THE SUBJECT MERCHANDISE

Commerce’s Scope

Commerce has defined the scope of these investigations as:

“certain welded carbon–quality light–walled steel pipe and tube, of

rectangular (including square) cross section (LWR), having a wall thickness

of less than 4mm.”9

Tariff Treatment

LWR pipe and tube is classifiable in the Harmonized Tariff Schedule of the United States

(“HTS”) under subheading 7306.61.50 (after February 3, 2007) and 7306.60.50 (prior to February 3,

2007). Certain LWR pipe and tube is misclassified under HTS subheading 7306.69.50 (between January

1, 2007 and February 3, 2007). LWR pipe and tube imported from China, Korea, Mexico, Turkey enter

the U.S. market at a column 1-general duty rate of “free.” The HTS subheadings are provided for

convenience and Customs purposes, and Commerce's scope of these investigations is dispositive.

THE DOMESTIC LIKE PRODUCT

The Commission’s decision regarding the appropriate domestic products that are “like” the

subject imported product is based on a number of factors, including (1) physical characteristics and uses;

(2) common manufacturing facilities and production employees; (3) interchangeability; (4) customer and 

producer perceptions; (5) channels of distribution; and, where appropriate, (6) price. In previous

antidumping investigations involving LWR pipe and tube, the Commission defined a single domestic like

product co-extensive with the scope of investigations as defined by Commerce.10 

For the preliminary phase of investigations of LWR pipe and tube from China, Korea, Mexico,

and Turkey, the petitioners argue that the Commission should find a single domestic like product coextensive within Commerce’s scope.11 By contrast, Mexican respondents urge the Commission to “re-
 12 Mexican respondents contend that rectangular and circular light-walled pipe and tube have similar physical

characteristics and uses; common channels of distribution; and common production facilities, processes, and

employees. Also, according to the Mexican respondents, U.S. producers can readily shift production between

rectangular and circular light-walled pipe and tube. Mexican respondents’ postconference brief, p. 32. 

 13 Although petitioners agree that rectangular and circular light-walled pipe and tube are produced with common

production facilities, processes, and employees, they note the different channels of distribution and end uses. LWR

tubing is generally sold through distributors whereas most circular mechanical tubing is a tailored product sold

directly to original equipment manufacturers that produce parts for the automotive industry. Conference transcript,

pp. 89-91 (Schagrin).

 14 Tubes and pipes are also classified according to end uses by the AISI, including standard pipe, line pipe,

structural pipe and tubing, mechanical tubing, pressure tubing, and oil country tubular goods.

 15 Ornamental tubing is a subset of mechanical tubing. Because most mechanical tubing has a circular cross

section, such tubing is not referred to by industry participants as “ornamental tubing.” Conference transcript, pp. 14-

15 (Baker) and pp. 34-35 (Schagrin and Baker).

 16 Petitioners’ counsel did not provide a numerical estimate as to the extent of the overlap of LWR tubing and

HSS. Conference transcript, pp. 37-38 (Schagrin).

I-6

examine” whether or not rectangular and circular tubing are two separate like products.12 13 Information

on the Commission’s domestic like product factors is set forth below.

Physical Characteristics and Uses

In common usage, and generally in the HTS, the terms “pipes,” “tubes,” and “tubular products”

are interchangeable. Producers of tubular products, however, typically characterize pipes as circular

cross-sectional tubular products produced in a few standard sizes, while tubes, conversely, may be of any

cross-sectional shape, including circular, square, and rectangular, among others. Steel pipes and tubes

can be divided into two general categories according to the method of manufacture-either welded or

seamless; however, only welded steel tubular products are subject to these investigations. Steel pipes and

tubes are also distinguished by specific end uses.14 LWR pipe and tube, shown in figure I-1, is often

referred to by industry participants as “ornamental” or “mechanical tubing.”15 

Figure I-1

LWR pipe and tube: Examples

Source: www.alibaba.com.

A small portion, the upper range of this product in terms of wall thickness, may be considered by industry

participants as a hollowed structural section (“HSS”).16 In the United States, steel pipes and tubes are
 17 Product-standard organizations for steel pipe and tube include ASTM International (formerly the American

Society of Testing and Materials (“ASTM”)) and the American Society of Mechanical Engineers (“ASME”). 

Domestically produced and subject imported LWR pipe and tube are typically manufactured to meet ASTM

specifications A-513 (Standard Specification for Electric-Resistance-Welded Carbon and Alloy Steel Mechanical

Tubing) or, less frequently, A-500 (Standard Specification for Cold-Formed Welded and Seamless Carbon Steel

Structural Tubing in Rounds and Shapes). ASTM A-513 is a specification with lower tensile and yield strengths

than for A-500. Conference transcript, pp. 14 and 39 (Baker). Nevertheless, there is also considerable overlap

between these two specifications, particularly for smaller sized tubing. Conference transcript, pp. 39-40 (Schagrin

and Baker).

 18 Circular mechanical tubing, by contrast, is used in the auto and industrial vehicles, conveyor belts, water

heaters, office furniture, playground equipment, scaffolding, and the like. 

 19 Light-Walled Rectangular Pipe and Tube from Mexico and Turkey (Inv. Nos. 731-TA-1054 and 1055 (Final)),

USITC Publication 3728, October 2004, p. I-9.

 20 Ibid.

I-7

generally produced according to industrial standards and specifications by standards-setting

organizations.17

 LWR tubing is also a distinct category of pipe and tube employed in a variety of end uses not

involving the conveyance of liquids or gases, and is not designed to bear weight. The main uses for LWR

pipe and tube include ornamental fencing; window guards and framing; cattle chutes; railings for

construction and agricultural applications; and more ornamental (but also functional) items such as metal

furniture parts, athletic equipment, lawn and garden equipment, store display shelves and racks, towel

racks, and similar items.18

LWR pipe and tube is also distinguished according to coating types: 

• Corrosion-resistant LWR tubing is produced from hot-rolled and cold-rolled sheet that is

either clad, plated, or coated with corrosion-resistant metals such as zinc, aluminum, or zinc-,

aluminum-, nickel-, or iron-based alloys, whether or not painted, varnished or coated with

plastics or other nonmetallic substances in addition to the metallic coating. 

• Black LWR tubing is blackened, pickled, and/or coated with a thin layer of oil or lacquer for

weather and rust protection; and does not meet the description above for corrosion-resistant

products.

Generally, the physical properties (strength, hardness, and ductility) and the mechanical

characteristics of black and corrosion-resistant LWR pipe and tube are not affected by the galvanizing

process.19 Although reportedly both black and corrosion-resistant LWR pipe and tube can be used in the

same applications, depending upon customer specification and quality, galvanized products are used in

applications where corrosion resistance is an important service requirement (e.g., air conditioning

equipment, automotive parts, outdoor signs, etc.).20

Manufacturing Process

The process of manufacturing LWR pipe and tube begins by slitting flat-rolled steel is first slit

(cut) into strips lengthwise to the width necessary for the desired pipe or tube diameter. The steel strips

are then fed into machinery that bends it into tubular form. The edges of the strip are then pressed

together and heated to approximately 2,600 degrees Fahrenheit to form a weld. After welding, the round

tube is passed through additional forming rolls to shape the tube into rectangular or square cross sections. 
 21 A succinct description of the production process which is still valid today can be found in Certain Light-Walled

Rectangular Pipes and Tubes from Taiwan (Inv. No. 731-TA-410 (Final)), USITC Publication 2169, March 1989,

pp. A-4-A-5.

 22 Light-Walled Rectangular Pipe and Tube from Mexico and Turkey (Inv. Nos. 731-TA-1054 and 1055 (Final)),

USITC Publication 3728, October 2004, p. I-10.

 23 Conference transcript, p. 14 (Baker), p. 18 (Kurasz), and p. 23 (Klima). Some mills may be limited to specific

wall thickness ranges, and there may be a tendency to utilize smaller mills for LWR tubing and larger mills for

heavier-walled tubing. Conference transcript, pp. 36-37 (Klima and Schagrin).

 24 While there is an overlap between producers of LWR pipe and tube and circular mechanical tubing, the

mechanical tubing industry is substantially larger, encompassing an estimated 70 to 80 producers in the United

States. Staff e-mail correspondence with ***.

 25 Conference transcript, p. 14 (Baker). In previous LWR tubing investigations, the share of domestic production

utilizing pre-galvanized sheet was estimated as a small portion of the total volume. Light-Walled Rectangular Pipe

and Tube from Mexico and Turkey (Inv. Nos. 731-TA-1054 and 1055 (Final)), USITC Publication 3728, October

2004, p. I-10.

I-8

The tube is then cooled and cut to length.21 U.S. producers currently employ two methods for

manufacturing LWR pipe and tube— either two-stage forming (from flat coil, to round tube, to

rectangular tube) or direct forming (from flat coil to rectangular tube).22 LWR pipe and tube is frequently

produced on the same equipment, by the same employees, as for circular and other non-circular tubing,

and for heavier-walled (structural) tubing.23 24

Corrosion-resistant galvanized products are subject to galvanizing, the process of coating steel

with a thin film of zinc to protect the steel from corrosion. The most common galvanizing method is the

hot-dip process, which involves dipping the tube into a molten zinc bath. Alternatively, some producers

manufacture LWR tubing from purchased pre-galvanized sheet and subsequently re-galvanize the weld

zone.25 Figure I-2 graphically depicts the manufacturing process for LWR pipe and tube with in-line

galvanizing.

Figure I-2

LWR pipe & tube: Manufacturing process

Note.--This image does not demonstrate the additional step necessary for the production of square and rectangular

shapes which would involve additional rollers following the welding step to shape the circular pipe into the appropriate

shape. Note also that this image demonstrates the production of corrosion-resistant pipe through a zinc bath. Black

product would be cut following the rolling into squares or rectangles (black product as well as corrosion resistant

product might also be painted, pickled, oil, et cetera). In terms of corrosion-resistant product, another production

method is possible which would involve welding pre-galvanized or already corrosion-resistant sheet into pipe.

Source: Prolamsa, Inc.
 26 A domestic producer representative testified that “...Chinese and Mexican producers manufacture LWR

products to either industry specifications or to the specifications required by most original equipment

manufacturers.” Conference transcript, p. 19 (Kurasz). According to a witnesses for the largest exporter of LWR

tubing from Mexico, Mexican producers manufacture “commodity products the same as the U.S. produced

commodity product.” Conference transcript, pp. 118 and 138 (Diederichs).

 27 Light-Walled Rectangular Pipe and Tube from Mexico and Turkey (Inv. Nos. 731-TA-1054 and 1055 (Final)),

USITC Publication 3728, October 2004, p. 15; and Certain Pipe and Tube from Argentina, Brazil, Canada, India,

Korea, Mexico, Singapore, Taiwan, Thailand, Turkey, and Venezuela (Inv. Nos. 731-TA-296 and 409-410 (Review)),

USITC Publication 3316, July 2000, p. LWR-I-11.

 28 Conference transcript, pp. 73-74 (Schagrin).

 29 Light-Walled Rectangular Pipe and Tube from Mexico (Inv. No. 731-TA-730 (Preliminary)), USITC

Publication 2892, May 1995, p. II-4.

 30 Light-Walled Rectangular Pipe and Tube from Mexico and Turkey (Inv. Nos. 731-TA-1054 and 1055 (Final)),

USITC Publication 3728, October 2004, p. I-12.

 31 Ibid.

 32 Petitioners’ representatives testified that the proportion of their sales have increased over the past few years to

distributors. Conference transcript, p. 44 (Klima) and p. 45 (Baker). One of petitioners’ witnesses attributed the

decline of end-use customers to import competition for downstream LWR-tubing-containing products. Conference

transcript, pp. 44-45 (Baker).

 33 In contrast, mechanical tubing is generally sold to end users. Certain Circular, Welded, Non-Alloy Steel Pipes

and Tubes from Brazil, Korea, Mexico, Romania, Taiwan, and Venezuela, (Inv. Nos. 731-TA532-537 (Final)),

USITC Publication 2564, October 1992, p. I-23 (88 percent of hot-rolled mechanical tubing sold directly to end

users).

I-9

Interchangeability and Customer and Producer Perceptions

In the current investigations, both petitioners and Mexican respondents agree that domestically

produced and imported LWR pipe and tube are considered interchangeable, commodity-like products,

with meeting common customer specifications.26 Because manufacturing processes and technologies are

similar throughout the world, LWR pipe and tube from different sources are generally viewed as

interchangeable across a range of applications.27 In addition, LWR tubing must meet common standards

regarding materials, dimensions, and testing, established by standard authorities.

Design criteria for specific applications and price competitiveness, key considerations for the use

of LWR pipe and tube, tend to limit interchangeability with other products.28 Although other, generally

less expensive products, including steel angle, bar, rod, and channel can be utilized in place of LWR pipe

and tube in many applications, their inferior strength-to-weight ratio serves to restrain their usage in many

other instances.29 Also, circular light-walled pipe and tube could theoretically be substituted for LWR

pipe and tube, but end-user specifications and long standing customer preferences limit the

interchangeability of these products.30 Industry participants report that although black and corrosionresistant LWR pipe and tube can be interchangeable in most applications, specific applications and

customers may require the use of the corrosion-resistant product (e.g., manufacturers of carports).31 

Channels of Distribution

During the period of investigation, both U.S. producers32 and importers sold the majority of their

LWR pipe and tube to distributors, who in turn sell the product to end users.33 U.S. producers sold 76.3

percent of their U.S. shipments to distributors over the entire period of investigation, whereas U.S.
 34 Responses to Commission’s producer’s and importer’s questionnaires. There are individual firms with a higher

proportion of their shipments to end users rather than to distributors. For example, a petitioners’ witness testified

that for the Mechanical Tube Division of Allied Pipe and Tube and Conduit, only 30 percent of its business is with

distributors. Conference transcript, p. 45 (Kurasz).

 35 Percentage of U.S. shipments going to distributors broken out by subject source: 93.2 percent China, 100.0

percent Korea, 78.1 percent Mexico, and 100.0 Turkey.

 36 Conference transcript, p. 15 (Baker).

I-10

importers sold 83.9 percent of their U.S. shipments to distributors.34 35 Some end users are large enough

to purchase directly from domestic mills, from importers, or both.36

Price

Pricing practices and prices reported for LWR pipe and tube in response to Commission’s

questionnaires are presented in Part V of this report.
 1

 Responses of 27 of 30 firms that submitted questionnaires are discussed in this section since 3 firms, *** did not

provide usable pricing and narrative data.

II-1

PART II: CONDITIONS OF COMPETITION IN THE U.S. MARKET

U.S. MARKET SEGMENTS

LWR pipe and tube is used in a wide variety of applications. Uses cited by questionnaire

respondents included automotive applications, fences, shelving, furniture, windows, athletic equipment,

steel ramps, gas grills, agricultural equipment, utility and boat trailers, RV equipment, store fixtures,

ornamental/railings, shelters, metal buildings, greenhouses, light posts, and cow stalls.

In most cases, U.S. producers and importers of product from the subject countries sell LWR pipe

and tube in one or more specific regions of the United States. Five of 21 U.S. producers reported that

they sell throughout the continental United States. The majority of the remaining 16 producers sells LWR

pipe and tube in multiple geographic areas: eight sell in the Central Southwest, eight sell in the Midwest,

six sell in the Southeast and the Pacific Coast, five sell in the Mountain region, and 2 sell in the Northeast. 

One producer, ***, reported that it sells only to ***. Of the 27 responding importers, 13 sell to the

Pacific Coast, 13 sell to the Central Southwest, 11 sell to the Southeast, 3 to the Midwest, and 1 to the

Mountain region.1 One importer, ***, sells only to Puerto Rico, one importer, ***, sells only to ***, and

one importer, ***, did not report any geographical area.

U.S. inland shipping distances for U.S.-produced LWR pipe and tube and imports from China,

Korea, Mexico, and Turkey were reported during the review period. Of the 21 responding producers,

only 5 producers reported the majority of their U.S. sales occurring within 100 miles of their production

or storage facilities. Most producers, 15 of 21, sold the majority of their LWR pipe and tube within

distances of 101 to 1,000 miles. Nonetheless 14 producers sold up to 10 percent of their LWR pipe and

tube at distances of over 1,000 miles. Similarly, only 4 of 20 responding importers had the majority of

their U.S. sales occurring within 100 miles of their production or storage facilities. Nine importers sold

the majority of their LWR pipe and tube within distances of 101 to 1,000 miles while three importers sold

the majority of their LWR pipe and tube at distances of over 1,000 miles. 

Delivery lead times from inventories varied widely for both U.S.-produced and imported LWR

pipe and tube. For U.S. producers, they ranged from 1 day to as much as 60 days. For importers, they

ranged from three days to as much as four months. Delivery lead times from produced-to-order LWR

pipe and tube averaged about one month for U.S. producers and over three months for importers. Most

imports are produced to order, while U.S. producers the produced to order and sold from inventory. 

SUPPLY AND DEMAND CONSIDERATIONS

U.S. Supply

The sensitivity of the domestic supply of LWR pipe and tube to changes in price depends on 

several factors including the level of excess capacity, the availability of alternate markets for U.S.-

produced LWR pipe and tube, inventory levels, and the ability to shift to the manufacture of other

products. The overall evidence in the preliminary phase of these investigations indicates that the

domestic industry has a high degree of flexibility in expanding output and U.S. shipments in response to

an increase in price, chiefly due to the low industry capacity utilization rates and relatively high ratios of

inventories to shipments. U.S. producers’ annual aggregate capacity utilization rates were generally

below 60 percent during the period for which the data were collected in the investigation. They ranged
 2

 The Commission received no questionnaire responses from Chinese suppliers; therefore, no analysis of Chinese

suppliers responsiveness is made at the preliminary phase of these investigations. 

II-2

from a low of 57.1 percent in 2005 to a high of 58.3 percent in 2004. During January-March 2006 and

2007, the rates were 60.6 and 53.0 percent. However, export quantities were consistently small during

2004-06. In each of these years, exports, as a percent of total shipments, ranged between *** percent in

2005 and *** percent in 2006. During January-March 2007, the ratio of exports to total U.S. shipments

was *** percent. The ratio of U.S. producers’ end-of-period inventories to their total shipments ranged

from *** to *** percent during 2004-06. During January-March 2007, the ratio was *** percent. 

Questionnaire responses show that producers make other kinds of pipe and tube using the same

production equipment and production and related workers employed in making LWR pipe and tube. 

Circular mechanical tubing was most commonly cited, and electrical conduit, structural tubing, rollformed shapes, and other products were also mentioned. This information suggests that the industry has

flexibility in shifting its product mix. 

Supply of Subject Imports to the U.S. Market

The responsiveness of supply of imports from subject countries to changes in price in the U.S.

market is affected by such factors as capacity utilization rates, the availability of home markets, other

export markets, and inventories. Based on available information, suppliers of subject imports are likely to

respond in changes in demand with moderate to high changes in the quantity of shipments of LWR pipe

and tube to the U.S. market.2

Subject Imports from Korea

During 2004-06, the capacity utilization rate for Korean producers of LWR pipe and tube was

between *** percent; it is projected to be *** percent in 2007 and *** in 2008. Available data indicate

that Korean LWR pipe and tube producers’ inventories, as a percentage of total shipments, ranged from a

low of *** percent to a high of *** percent. The majority (*** percent) of LWR pipe and tube shipments

were sold commercially in the Korean home market during this period. Korean LWR pipe and tube

producers’ exports to non-U.S. markets, as a percentage of shipments, ranged from a low of *** percent

to a high of *** percent. 

Subject Imports from Mexico

During 2004-06, the capacity utilization rate for Mexican producers of LWR pipe and tube was

between *** percent; it is projected to remain around *** percent in 2007-08. Available data indicate

that Mexican LWR pipe and tube producers’ inventories, as a percentage of total shipments, ranged from

a low of *** percent to a high of *** percent. The majority (*** percent) of LWR pipe and tube

shipments were sold commercially in the Mexican home market during this period. Mexican LWR pipe

and tube producers’ exports to non-U.S. markets, as a percentage of shipments, ranged from a low of *** 

to a high of ***. 
II-3

Subject Imports from Turkey

During 2004-06, the capacity utilization rate for Turkish producers of LWR pipe and tube was

between *** percent; it is projected to remain around *** percent in 2007-08. Available data indicate

that Turkish LWR pipe and tube producers’ inventories, as a percentage of shipments, ranged from a low

of *** percent to a high of *** percent. The majority (*** percent) of LWR pipe and tube shipments

were sold commercially in the Turkish home market during this period. Turkish LWR pipe and tube

producers’ exports to non-U.S. markets, as a percentage of shipments, ranged from a low of *** to a high

of ***. 

U.S. Demand

Demand Characteristics 

Since LWR pipe and tube is an intermediate product with many end-use applications, including

fences, gates, hand rails, furniture, sports equipment, automotive equipment, and others as discussed

above, the overall demand for LWR pipe and tube is closely linked to the demand for those end use

products. The price elasticity of demand for LWR pipe and tube is probably moderate due to the fact that 

LWR pipe and tube products have substitutes for some applications and they often account for a

substantial share of the final cost of products in which they are used as inputs. 

When asked how the U.S. demand for LWR pipe and tube had changed since January 1, 2004,

responses from U.S. producers were mixed: 6 of 17 producers reported that demand had increased, 4

reported that demand decreased, and 7 reported that demand either fluctuated or did not change. The

producers reporting increased demand attributed the rise to economic factors such as population,

increased construction, and relocation of northern manufacturing to the Southeast. The producers

reporting reduced demand attributed the decline to their customers moving production outside of the

producers’ sales region or to an increase in imports of finished products. Five importers reported that

demand increased, five importers reported no change in demand, and no importers reported that demand

decreased during the review period. The importers reporting increased demand attributed the rise to

factors such as increases in exports and GDP. 

Apparent U.S. consumption of LWR pipe and tube increased from 945,340 short tons in 2004 to

1,069,326 short tons in 2006. During January-March 2007, apparent U.S. consumption was 241,268

short tons as compared to 253,094 short tons during the same period in 2006. 

Substitute Products

U.S. producers and importers were asked to list any products that may be substituted for LWR

pipe and tube, the relevant applications and end uses, and to indicate whether changes in the prices of the

substitutes affected the price for LWR pipe and tube. Eight of 21 producers mentioned substitute

products for different end uses, including angle steel for fencing and shelving; roll-formed sections and

lumber for racks and shelving; chain link; block wall; plastic and wood for fences; steel channels;

seamless tube construction; drawn mandrel for automotive and hydraulics; hydroformed tube for

automotive; and aluminum for furniture and plastic. Only three of these eight producers reported that the

prices of the substitutes affect the price of LWR pipe and tube. Nine of the 10 responding importers

reported a few substitutes including plastic; wood and circular pipe for fences; purlin; aluminum tube and

round pipe and tube; and solid steel bars. The petitioner stated that generally there are no available

substitutes, although wire mesh or wood might be a substitute for LWR pipe and tube in some instances
 3

 Conference transcript, pp. 73-74 (Schagrin).

 4

 Conference transcript, p. 146 (Diederichs).

II-4

such as building a fence.3 However, the Mexican respondents contend that wood, plastic, and especially

aluminum are also good substitutes for LWR pipe and tube.4

Cost Share

Producers and importers were asked to estimate the cost of LWR pipe and tube products as a

share of the cost of the end use products in which they are used as inputs. Eight producers and two

importers provided estimates for various products. The firms reported that LWR pipe and tube often

accounts for a substantial share of the final product cost, although the cost share varies widely. A

summary of the share of total cost of the end-use products is presented below. 

End use

Share of total

cost of end-use

product 

(percent)

Agricultural equipment 50

Athletic equipment 25-90

Autos 90

Consumer carports/shelters 50

Cow stalls 25

Fences 20-80

Furniture 1-92

Gas grills 70-75

Greenhouses 30

Metal/fabric buildings 35

Shelving 2-80

Utility trailers 70

Windows 33-65

SUBSTITUTABILITY ISSUES

The extent of substitutability between domestic products and subject and nonsubject imports,

between subject imports from different sources, and between subject and nonsubject imports is examined

in this section. The discussion is based upon the results of questionnaire responses from producers and

importers. 

Comparisons of Domestic Products and Subject Imports

In order to determine whether U.S.-produced LWR pipe and tube can generally be used in the

same applications as imports from China, Korea, Mexico, and Turkey, producers and importers were

asked whether the product can “always,” “frequently,” “sometimes,” or “never” be used interchangeably. 

The vast majority of producers that compared LWR pipe and tube from these four countries with that

produced in the United States reported that they are always interchangeable (table II-1).
II-5

Table II-1

LWR pipe and tube: Interchangeability of product from different sources1

Country comparisons U.S. producers U.S. importers

A F S N 0 A F S N 0

U.S. vs. China 16 2 1 - 1 11 - 5 - -

U.S. vs. Korea 10 2 - - 1 10 2 - - -

U.S. vs. Mexico 10 - - - 1 9 3 1 - -

U.S. vs. Turkey 16 2 - - 1 7 3 4 - -

U.S. vs. Nonsubject 12 1 - - 1 8 - 1 - -

China vs. Korea 10 - - - 1 9 1 1 - -

China vs. Mexico 10 - - - 1 9 - 2 - -

China vs. Turkey 10 - - - 1 7 2 2 - -

China vs. Nonsubject 3 - - - 1 7 - 1 - -

Korea vs. Mexico 10 - - - 1 9 - 1 - -

Korea vs. Turkey 10 - - - 1 7 - 2 - -

Korea vs. Nonsubject 10 - - - 1 7 - 1 - -

Mexico vs. Turkey 10 - - - 1 9 - 3 - -

Mexico vs. Nonsubject 10 - - - 1 9 - 1 - -

Turkey vs. Nonsubject 10 - - - 1 7 - 1 - -

 1 Producers and importers were asked if LWR pipe and tube produced in the United States and in other countries

is used interchangeably.

Note: “A” = Always, “F” = Frequently, “S” = Sometimes, “N” = Never, and “0” = No familiarity.

Source: Compiled from data submitted in response to Commission questionnaires.

For importers that compared U.S. products with those from China, Korea, Mexico, and Turkey,

the majority reported that the products from these countries can always or frequently be used

interchangeably, with a few reporting that the product is only sometimes interchangeable. However, for

China and Turkey, five and four importers, respectively, reported that U.S.-produced and Turkish LWR

pipe and tube are only sometimes interchangeable.

Three importers that compared the domestic products and subject imports with respect to

interchangeability made additional comments on factors that limit or preclude interchangeability. One

firm stated that price and availability of shipping vessels limit interchangeability. Another firm indicated

that the use of the metric system makes current home-market inventories in other countries unmarketable

in the United States with regard to both the length and the exterior shape of the products. A third firm

reported several factors including poor surface quality, impossible delivery time for an OEM, no respect

of the ASTM specifications and very little traceability, and difficulty obtaining certain cost specifications. 

Producers and importers were also asked to compare U.S.-produced products with imports from

each of the subject countries in terms of product differences other than price such as quality, availability,

product range, and technical support. Again, firms were asked whether these product differences are

always, frequently, sometimes, or never significant (table II-2). Of the producers that compared the U.S.

product with those from China, Korea, Mexico, and Turkey, most said that the differences are sometimes

or never significant. Two producers said that differences between the U.S. and Mexican products are

frequently significant and two said that the differences are always significant. Two producers said that

differences between the U.S. and Chinese products are frequently significant and two said that the

differences are always significant. Two producers said that differences between the U.S. and Turkish
II-6

products are frequently significant and one said that the differences are always significant. Among the

importers, the majority said that the differences are sometimes or never significant for all four countries,

with a few reporting that differences are always or frequently significant.

Table II-2

LWR pipe and tube: Differences other than price between products from different sources1

Country comparisons U.S. producers U.S. importers

A F S N 0 A F S N 0

U.S. vs. China 2 2 8 7 1 1 - 7 7 -

U.S. vs. Korea - - 4 5 1 - - 7 4 -

U.S. vs. Mexico 2 2 8 7 1 - 2 6 4 -

U.S. vs. Turkey 2 1 8 7 1 1 2 6 3 -

U.S. vs. Nonsubject 1 - 6 7 1 - 1 3 4 -

China vs. Korea - - 4 5 1 1 - 6 3 -

China vs. Mexico - - 4 5 1 1 2 3 4 -

China vs. Turkey - - 4 5 1 - - 4 4 -

China vs. Nonsubject - - 4 5 1 - 1 3 3 -

Korea vs. Mexico - - 4 5 1 - 2 4 4 -

Korea vs. Turkey - - 4 5 1 - - 4 4 -

Korea vs. Nonsubject - - 4 5 1 - 1 3 3 -

Mexico vs. Turkey - - 3 6 1 - 1 5 4 -

Mexico vs. Nonsubject - - 3 6 1 - 2 3 4 -

Turkey vs. Nonsubject - - 4 5 1 - 1 3 3 -

 1 Producers and importers were asked if differences other than the price between LWR pipe and tube produced in

the United States and in other countries are a significant factor in their firms’ sales of LWR pipe and tube.

Note: “A” = Always, “F” = Frequently, “S” = Sometimes, “N” = Never, and “0” = No familiarity.

Source: Compiled from data submitted in response to Commission questionnaires.

Comparisons of Domestic Products and Nonsubject Imports

Producers and importers from all sources were also asked to compare U.S.-produced LWR pipe

and tube with nonsubject imports both in terms of interchangeability and product specifications. Twelve

responding producers that compared the interchangeability of the domestic product with nonsubject

imports said that they are always interchangeable and one producer reported that the product is frequently

interchangeable. The majority of responding producers that compared the domestic product with

nonsubject imports in terms of product differences said that the differences are either sometimes or never

significant, while one producer reported that the differences are always significant. Of the importers that

compared the domestic product with nonsubject imports in terms of interchangeability, the majority stated

that they are always interchangeable. The majority of importers that compared the domestic product with

nonsubject imports in terms of product differences said that the differences are always or sometimes

significant. 
II-7

Comparisons of Subject Imports and Nonsubject Imports

U.S. producers and importers of LWR pipe and tube from all sources were also asked to

separately compare imports from China, Korea, Mexico, and Turkey with nonsubject imports, both in

terms of interchangeability and product differences. All U.S. producers that compared imports from

China, Korea, Mexico, and Turkey with nonsubject imports in terms of interchangeability said that the

products are always interchangeable. All U.S. producers that compared imports from China, Korea,

Mexico, and Turkey with nonsubject imports in terms of product differences said that the differences are

sometimes or never significant. Of the importers that compared products from the four countries with

nonsubject imports in terms of interchangeability, the majority said that they are always interchangeable. 

One importer reported that the products are only sometimes interchangeable. 

Comparisons of Subject Products from the Subject Countries

U.S. producers and importers of LWR pipe and tube from all sources were also asked to compare

imports from China, Korea, Mexico, and Turkey both in terms of interchangeability and product

differences. All responding producers that compared products from the four countries in terms of

interchangeability said that they are always interchangeable. All of the U.S. producers that compared

products from China, Korea, Mexico, and Turkey in terms of product differences said that the differences

are sometimes or never significant. Of the importers that compared products from the four countries in

terms of interchangeability, a majority said that they are always or sometimes interchangeable. Of the

importers that compared products from the four countries in terms of product differences, the majority

said that the differences are only sometimes or never significant. 

III-1

PART III: U.S. PRODUCERS’ PRODUCTION, SHIPMENTS, AND

EMPLOYMENT

U.S. PRODUCERS

Table III-1 lists 22 U.S. producers of LWR pipe and tube, their plant locations, positions on the

petition, and shares of reported production over the period for which data were collected. 

Table III-1

LWR pipe and tube: U.S. producers, their positions on the petition, production locations, U.S.

production, and shares of reported U.S. production, January 2004-March 2007 aggregated

Firm

Position on

the petition

Production

location(s)

Total

number

of mills

Total

production

(short tons)

Share of

production

(percent)

AK Tube Support Walbridge, OH *** *** ***

Allied Support Harvey, IL

Philadelphia, PA

Phoenix, AZ

Pine Bluff, AR

DePere, WI *** *** ***

Atlas (Chicago) Support Chicago, IL *** *** ***

Atlas (Plymouth) Support Plymouth, MI *** *** ***

Bull Moose Support Chicago Heights, IL

Elkhart, IN

Gerald, MO

Masury, OH

Trenton, GA *** *** ***

California Support City of Industry, CA *** *** ***

Dundee Support Dundee, MI *** *** ***

Ex-L-Tube Support, except

no position on

Mexico1

Kansas City, MO

Kansas City, KS

*** *** ***

Hanna Support Pekin, IL

Tuscaloosa, AL *** *** ***

Hannibal Support Vernon, CA ***2 *** ***

Hofmann Support Sinking Spring, PA ***3 *** ***

Jackson *** Charlotte, NC

Pioua, OH ***4 *** ***

Leavitt Support Chicago, IL

Jackson, MS ***5 *** ***

Leggett & Platt *** Carrollton, KY

LaVergne, TN

West Point, MS ***6 *** ***

Longhorn Support Dallas, TX *** *** ***

Table continued on next page.
 1

 Staff believes that the data collected in the preliminary phase of these investigations represents the large

majority of domestic U.S. LWR pipe and tube production. Some small producers of LWR pipe and tube have not

supplied (and in some instances refused to supply) data, as discussed below.

 2 http://www.alliedtube.com.

 3 http://www.atlastube.com.

 4 http://www.californiasteelandtube.com.

 5 http://www.exltube.com. 

 6 http://www.hannibalindustries.com.

 7 http://www.leavitt-tube.com.

 8 http://www.macsfs.com. 

 9 http://www.searingindustries.com.

III-2

Table III-1--Continued

LWR pipe and tube: U.S. producers, their positions on the petition, production locations, U.S.

production, and shares of reported U.S. production, January 2004-March 2007 aggregated

Firm

Position on

the petition

Production

location(s)

Total

number

of mills

Total

production

(short tons)

Share of

production

(percent)

Maruichi Support Santa Fe Springs,

CA *** *** ***

Northwest Support Houston, TX *** *** ***

Searing Support Rancho

Cucamonga, CA *** *** ***

Southland Support Birmingham, AL *** *** ***

Vest Support Vernon, CA *** *** ***

Welded Support Berkeley, SC

Delta, OH *** *** ***

Western Support Long Beach, CA *** *** ***

 Total 124 2,175,485 100.0

 1 ***.

 2 ***.

 3 ***.

 7 ***.

 5 ***. ***.

 7 ***.

Source: Compiled from data submitted in response to Commission questionnaires.

The 22 firms represented in table III-1 account for the vast majority of U.S. production of LWR

pipe and tube.1

 The petition in these investigations identified 17 U.S. firms as producers of LWR pipe

and tube. While the number of U.S. producers of LWR pipe and tube is larger than the information than

indicated in the petition, the remaining U.S. producers have tended to represent smaller operations. The

firms identified in the petition include the original 12 petitioning firms: Allied Tube and Conduit,

Harvey, IL;2

 Atlas Tube, Plymouth, MI;3 California Steel and Tube, City of Industry, CA;4 Ex-L-Tube,

Kansas City, MO;5

 Hannibal Industries, Los Angeles, CA;6 Leavitt Tube Co., LLC, Chicago, IL;7

Maruichi American Corp., Sante Fe Springs, CA;8 Searing Industries, Rancho Cucamonga, CA;9
 10 http://www.southlandtube.com.

 11 http://www.vestinc.com.

 12 http://www.weldedtube.com.

 13 http://www.westerntube.com.

 14 Petition, exhibit 1.

 15 http://www.bullmoosetube.com. Bull Moose subsequently joined the petitioning firms.

 16 http://www.longhorntube.com.

 17 http://www.hannasteel.com.

 18 http://www.leggett.com.

 19 http://www.nwpipe.com.

 20 http://www.jamessteel.com. This firm apparently operates a single light-gauge mill, but was unable to gather

the data requested in the Commission’s questionnaire in the time allotted. Staff telephone interviews with ***.

 21 http://www.valmont.com This firm primarily produces irrigation tubing, but also some subject merchandise

***. 

 22 http://www.aktube.com. AK Tube supplied data in these investigations.

 23 http://www.dundeeproducts.com. Dundee Products supplied data in these investigations.

 24 http://www.sterlingpipeandtube.com. Sterling has been unresponsive to Commission inquiries.

 25 http://www.jackson-tube.com. Jackson Tube supplied data in these investigations.

 26 http://www.centurytube.net. Century Tube has been unresponsive to Commission inquiries.

 27 http://www.tarponind.com. Tarpon Industries apparently owns the Eugene Welding Company, Steelbank

Tubular, Inc., and SpaceRak. It is a publicly traded company on the American Stock and Options Exchange under

the symbol TPO. Tarpon has been extremely unresponsive to Commission inquiries, including at one point hanging

up on Commission staff. 

 28 http://www.hofmann.com. Hofmann Industries supplied a partial response to the Commission’s U.S.

producers’ questionnaire, including ***.

 29 http://www.lockjointtube.com. Lock Joint Tube has been unresponsive to Commission inquiries. 

 30 http://www.nationalmetalwares.com. National Metalwares initially indicated a willingness to provide the

Commission data, but then was subsequently unresponsive to Commission inquiries. Staff telephone interview, ***.

III-3

Southland Tube, Birmingham, AL;10 Vest Inc., Los Angeles, CA;11 Welded Tube, Concord, Ontario

(Canada);12 and Western Tube and Conduit, Long Beach, CA.13 14 In addition to these 12 firms, the

petition identified Bull Moose Tube, Chesterfield, MO;15 Longhorn Tube, LP, Dallas, TX;16 Hanna Steel,

Fairfield, AL;17 Leggett & Platt, Carthage, MO;18 and Northwest Pipe, Portland, OR.19 All of the firms

identified in the petition have supplied the Commission with data in these investigations. 

Additional producers are believed to include James Steel & Tube Co., Madison Heights, MI;20

Valmont, Omaha, NE;21 AK Tube LLC, Walbridge, OH;22 Dundee Products Co., Dundee, MI;23 Sterling

Pipe & Tube, Inc., Toledo, OH;24 Jackson Tube Service, Inc., Piqua, OH;25 Century Tube Corporation,

Somerville, NJ;26 Tarpon Industries, Inc., Marysville, MI;27 Hofmann Industries, Sinking Spring, PA;28

Lock Joint Tube, South Bend, IN;29 and National Metalware, LP, Aurora, IL.30 Of these, three (AK Tube,

Dundee and Jackson) provided completed responses indicating that they produce subject merchandise,

one (Hofmann) provided a partial questionnaire response with data on its LWR pipe and tube operations,

and the remaining firms have been unresponsive to Commission inquiries. 

In the Commission’s previous investigations on LWR pipe and tube from Mexico and Turkey,

four additional firms were identifiable as potential producers of subject merchandise; however, their total
 31 Light-walled Rectangular Pipe and Tube From Mexico and Turkey, Inv. Nos. 731-TA-1054 and 1055 (October

2004), USITC Publication 3728, p. III-5.

 32 http://www.dothantube.com.

 33 http://www.gltube.com.

 34 http://www.lonestarsteel.com. Note that according to its web site, Lone Star does not produce LWR pipe and

tube.

 35 http://www.mchoneind.com.

 36 Atlas Tube acquires Copperweld structural tube business, press release, Atlas Tube, August 15, 2005.

 37 Dofasco Completes Acquisition of Copperweld Mechanical Tubing and Automotive Components Businesses,

press release, Dofasco, October 4, 2005. 

 38 Staff telephone interview with ***.

 39 Tenaris to Acquire Maverick Tube Corporation, press release, Tenaris, June 12, 2006.

 40 *** U.S. producers’ questionnaire response, question II-2.

 41 Conference transcript, p.116 (Baisburd).

 42 Respondents’ postconference brief, exh. 6.

III-4

aggregate production at the time, i.e., in 2003, was estimated to account for fewer than *** short tons.31

These firms include: Dothan Tubular Products, Dothan, AL;32 Great Lakes Tubular Products, Aurora,

IL;33 Lone Star Tube (now part of U.S. Steel), Dallas, TX;34 and McHone Industries, Inc.35 These four

firms were not contacted in this preliminary phase of these investigations.

Certain U.S. producers identified in previous Commission investigations and reviews no longer

produce LWR pipe and tube. Former U.S. producer Copperweld, which operated certain light-gauge

tubing mills in Chicago, IL, was purchased in 2005. Copperweld’s Chicago-based mills are currently

being operated by Atlas Tube36 and are reported by Atlas in the data gathered in these proceedings. 

Assets relating to Copperweld’s mechanical tubing lines out of Pittsburgh, PA, were sold by Atlas to

Dofasco,37 but produce heavy-walled or structural tubing otherwise known as hollowed structural sections

(“HSS”) in the industry that are not subject to these investigations.38 Similarly, former U.S. producer

Maverick, which operated certain heavy-gauge mills in Chesterfield, MO, that occasionally ran minimal

quantities of material subject to these investigations, was acquired by the Argentine firm Tenaris in 200639

and the structural tube assets were sold and acquired by U.S. producer Atlas. Atlas ***, however, this

production is related to HSS and not to subject merchandise. Former U.S. producer Dallas Tube &

Rollform was ***,40 but ***. 

Table III-2 presents information on U.S. producers’ ownership structure, business, and LWR pipe

and tube’s share of total sales.

Industry Coverage

At the staff conference, Mexican respondents alleged that the Commission did not collect data on

the entire universe of U.S. producers of LWR pipe and tube.41 In their postconference submission,

Mexican respondents provided a list of firms that they believe produce subject merchandise.42 Some of

the firms identified are “structural tube” producers, such as Dofasco and IPSCO, that operate mills

capable of producing subject rectangular tubing at the low end of their production range. However, the

volumes of actual production of LWR pipe and tube on these mills are or are believed to be minimal to
III-5

Table III-2

LWR pipe and tube: Parent companies, additional product lines, and LWR pipe and tube’s share of

total sales, 2006

Firm Parent company

Additional product lines

 (i.e., other than LWR pipe and

tube)

LWR pipe and

tube’s share of

total sales, 2006

(percent)

AK Tube

AK Investments, Inc.,

Middletown, OH

AK Tube produces and sells other

carbon and stainless steel tubular

products. ***

Allied

Tyco International,

Princeton, NJ1

Allied produces and sells primarily

circular pipe and tube including

mechanical tubing, fire sprinkler

pipe, and electrical conduit. ***

Atlas (Chicago)

Atlas (USA) Holding Inc.,

Harrow, Ontario,

Canada2

Atlas also produces and sells

circular mechanical pipe and

structural tubing. ***

Atlas (Plymouth)

Atlas (USA) Holding Inc.,

Harrow, Ontario,

Canada2

Atlas produces and sells circular

mechanical pipe and heavy-walled

rectangular pipe. Atlas (the

Canadian parent) claims to be

North America’s largest

manufacturer of hollow structural

sections. ***

Bull Moose

Caparo Industries, PLC,

London, the United

Kingdom

Bull Moose also produces and sells

structural pipe, sprinkler pipe, and

other non-rectangular mechanical

pipe. ***

California

MacSteel Service

Centers USA3

California Steel and Tube produces

and sells primarily mechanical

tubing, including subject

merchandise. ***

Dundee None

Dundee Products also produces

round tubing. ***

Ex-L-Tube

Steel and Pipe Supply

Co., Manhattan, KS

Ex-L-Tube primarily produces and

sells structural tubing (i.e., HSS),

but also circular mechanical and

standard pipe. ***

Hanna

Hanna Holdings,

Fairfield, AL

Hanna also produces and sells

circular mechanical tubing and line

pipe ***

Hannibal

Mitsui Steel Holdings,

Inc., New York, NY4

Hannibal Industries advertises

itself as a diversified metal

fabricator. Its tube mills also

produce circular mechanical pipe. ***

Hofmann None

Hofmann also produces and sells

circular mechanical tubing and

other shapes. ***

Table continued on next page.
III-6

Table III-2--Continued

LWR pipe and tube: Parent companies, additional product lines, and LWR pipe and tube's share

of total sales, 2006

Firm Parent company

Additional product lines

 (i.e., other than LWR pipe and

tube)

Share of LWR

pipe and tube

out of total

sales, 2006

(in percent)

Jackson None

Jackson Tube produces and sells

primarily circular mechanical

tubing. ***

Leavitt None

Leavitt Tube produces and sells

mechanical round tubing, structural

tubing, and standard pipe. ***

Leggett & Platt None

Leggett & Platt is a diversified

manufacturer of engineered

components. Its tube mills also

produce circular mechanical pipe,

ovals, and heavy-walled squares. ***

Longhorn None

Longhorn also produces HSS and

custom shapes. ***

Maruichi

Maruichi Steel Tube Co.

Ltd., Osaka, Japan (***)

and Metal One Corp.,

Tokyo, Japan (***)

Maruichi American also produces

and sells circular mechanical pipe,

standard pipe, and structural pipe. ***

Northwest None

Northwest also produces and sells

circular mechanical pipe. ***

Searing None

Searing Industries also produces

and sells circular mechanical pipe. ***

Southland None

Southland Tube also produces and

sells circular mechanical pipe and

HSS. ***

Vest JFE Shoji Trade USA5

Vest also produces and sells

circular mechanical pipe and HSS. ***

Welded

Welded Tube of Canada

Holdings, Concord, ON,

Canada

Welded also produces and sells

circular mechanical and structural

pipe. Welded (Canada) also

produces HSS, alloy tubular

products, line pipe, and oil country

tubular goods. ***

Western

Sumitomo Metals

Industries, Ltd., Tokyo,

Japan (***)

Western Tube also produces and

sells circular mechanical pipe,

electrical conduit, and fence. ***

 1 ***.

 2

 Atlas merged with the John Maneely Co. (owner of Wheatland Tube) in 2006. The John Maneely Co. is

currently under the stewardship of the private equity firm, the Carlyle Group. Atlas Tube announces merger with

John Maneely Co., a subsidiary of the Carlyle Group, press release, Atlas Tube, October 25, 2006.

 3

 ***.

 4

 ***.

 5

 ***.

Source: Compiled from data submitted in response to Commission questionnaires and from public sources. 
 43 Staff telephone interview, with ***.

 44 IPSCO’s website indicates that its produces HSS between 0.120" to 0.375" in wall thickness. 

http://www.ipsco.com/Products/ProductsTubularHSS.asp.

 45 http://www.coopertube.com and http://www.metal-matic.com. 

 46 http://www.tubemethods.com.

 47 Mexican respondents' postconference brief, pp. 12-13.

 48 Staff e-mail correspondence, ***.

III-7

nonexistent.43 44 Some of the firms identified by respondents as potential producers of LWR pipe and

tube such as Cooper & Cooper and Metal-Matic appear to produce primarily circular mechanical tubing

for engineering (auto, boilers, and hydraulic) uses.45 At least one firm identified by respondents as a 

potential producer of LWR pipe and tube, Tube Methods, appears to produce nonsubject alloy tubing.46

Other firms otherwise identified as potential LWR pipe and tube producers in respondents’

postconference brief are indeed small producers of LWR pipe and tube, (***), such as Dundee Products,

Eugene Welding Co. (a subsidiary to Tarpon Industries), and James Steel, among others. Mexican

respondents also identify three U.S. producers of carports with potential production of subject

merchandise consumed internally in their production of carports.47 Staff contacted these carport

manufacturers, and one firm, ***, indicated production of *** short tons of subject merchandise.48

Overall, upon review staff believes that current coverage of U.S. pipe and tube production is high based

on responses the Commission has received of completed U.S. producers’ questionnaires from all the

major U.S. producers of subject merchandise. 

U.S. PRODUCTION, CAPACITY, AND CAPACITY UTILIZATION

Table III-3 and figure III-1 present U.S. producers’ production, capacity, and capacity utilization

calculated based on product allocation. 

Table III-3

LWR pipe and tube: U.S. producers’ production, capacity, and capacity utilization, 2004-06,

January-March 2006, and January-March 2007

Item

Calendar year January-March

2004 2005 2006 2006 2007

Quantity (short tons)

Capacity 1,157,452 1,157,204 1,159,650 292,117 316,012

Production 675,178 660,754 672,016 176,915 167,537

Ratio (percent)

Capacity utilization 58.3 57.1 57.9 60.6 53.0

Note.–*** indicated that the Commission should look at its mills’ total unutilized capacity regardless of product mix

allocations. 

Source: Compiled from data submitted in response to Commission questionnaires.
 49 The following compilation was developed from data submitted in response to question II-2 in the U.S.

producers’ questionnaire on “changes in operations.”

III-8

Figure III-1

LWR pipe and tube: U.S. producers’ production, capacity, and capacity utilization, 2004-06,

January-March 2006, and January-March 2007

Source: Table III-3.

All producers of LWR pipe and tube produce circular mechanical tube by virtue of the fact that

all steel pipe and tube milling technologies weld pipe of circular cross section first, which is then flattened

with rollers to produce the square and rectangular tubing. In this sense, all U.S. producers of LWR pipe

and tube produce circular mechanical tubing. Some U.S. producers of LWR pipe and tube, like ***,

produce and market primarily subject merchandise as their core business, while for the majority of U.S.

producers of LWR pipe and tube, subject merchandise makes up a relatively small share of their overall

tubular goods sales (see table III-2). The primary other product produced by U.S. producers of LWR pipe

and tube was circular mechanical tubing. Other products that shared the same equipment as LWR pipe

and tube include electrical conduit, structural tubing (which for the purposes of these investigations are

any rectangular or round carbon steel tubing products with a wall thickness of greater than 4 mm), rollformed shapes (which are steel products rolled to specific shapes, such as street sign posts, but not welded

into tubular goods), and light-walled specialty tubing such as ovals, tears, and triangles. Table III-4

presents information on U.S. producers’ production of LWR pipe and tube, circular mechanical tubing,

and all other carbon steel tubular and rolled-formed products produced on the same equipment as LWR

pipe and tube.

Overall production shares among light-walled products (LWR pipe and tube, circular mechanical

tubing, and other products) remained virtually constant over the January 2004 to March 2007 period. On

an individual basis, most U.S. producers indicated some changes to their U.S. operations:49 *** indicated

that it reduced production and lost market share; *** shut down a mill at its *** facility in 2006 “due

largely to the loss of volume to imports and its inability to compete with import prices for LWR and

circular product;” *** experienced production curtailments, layoffs, and shortened work weeks; ***

reduced production at a LWR pipe and tube mill to a single shift between ***, and then completed a sale

of a LWR pipe and tube mill due to lack of demand for the product; *** consolidated some tube 

0

200

400

600

800

1,000

1,200

1,400

2004 2005 2006 Jan-Mar 2006Jan-Mar 2007

Quantity

(1,000 short tons )

0%

20%

40%

60%

80%

100%

Ratio

(percent )

Capacity (left axis) Production (left axis) Capacity utilization (right axis)
 50 No party in these investigations has argued that black and corrosion-resistant LWR pipe and tube constitute

separate domestic like products. 

 51 Not all U.S. producers supplied useable data on their breakout of corrosion-resistant and black LWR pipe and

tube.

III-9

Table III-4

Light-walled tubular products: U.S. producers’ production of subject and related products, 2004-

06, January-March 2006, and January-March 2007 

Item

Calendar year January-March

2004 2005 2006 2006 2007

Quantity (short tons)

Capacity 2,298,605 2,346,106 2,333,799 584,435 600,339

Production of--

 LWR pipe and tube 675,178 660,754 672,016 176,915 167,537

 Circular mechanical tubing 543,216 538,133 516,526 138,189 125,632

 Other products 132,352 131,794 141,902 37,012 32,175

 Total, all light-wall 1,350,746 1,330,681 1,330,444 352,116 325,344

Shares and ratios (percent)

Capacity utilization (overall tubular) 58.8 56.7 57.0 60.2 54.2

Share of total production--

 LWR pipe and tube 50.0 49.7 50.5 50.2 51.5

 Circular mechanical tubing 40.2 40.4 38.8 39.2 38.6

 Other products 9.8 9.9 10.7 10.5 9.9

 Total 100.0 100.0 100.0 100.0 100.0

Note.–Data in this table only report production and capacity for light-walled (less than 4 mm wall thickness) goods.

Source: Compiled from data submitted in response to Commission questionnaires.

manufacturing at *** into its *** facility, and has also had to alternate mill shutdowns since October

2006 due to lack of volume; *** indicated a decrease of 50 percent in its production; *** indicated that it

recently sold two of its LWR pipe and tube mills in July 2007 (past the end of the period for which data

were gathered in these investigations) *** due to “***;” *** indicated that it experienced a 90 percent

reduction in production on two mills producing LWR pipe and tube; *** indicated that is experienced a

production curtailment without providing greater details; *** indicated that its LWR pipe and tube mills

have been idled due to the “economics of import competition”; *** indicated that it experienced

production curtailments with layoffs; *** indicated that it has not experienced its historical norm of 10

shifts for the production of subject merchandise since October 2004; and *** indicated that it acquired

certain steel tube assets *** from a firm called ***.

In the preliminary phase of these investigations, data have been gathered on U.S. producers’

production of corrosion-resistant LWR pipe and tube versus black LWR pipe and tube.50 While not all

U.S. producers provided useable data on the breakout between these two types of LWR pipe and tube,

data submitted indicate that corrosion-resistant LWR pipe and tube accounted for 22.6 percent of U.S.

production in 2006, while black LWR pipe and tube accounted for the remaining 77.4 percent of U.S.

production, based on approximately two-thirds of total production.51
III-10

U.S. PRODUCERS’ U.S. SHIPMENTS AND EXPORTS

Table III-5 and figure III-2 present data on the U.S. producers’ shipments during the period for

which data were collected. 

Table III-5

LWR pipe and tube: U.S. producers’ shipments, by type, 2004-06, January-March 2006, and

January-March 2007 

Item

Calendar year January-March

2004 2005 2006 2006 2007

Quantity (short tons)

Commercial shipments *** *** *** *** ***

Transfers to related firms and

internal consumption1 *** *** *** *** ***

 U.S. shipments 668,232 660,272 664,849 178,855 160,824

Export shipments *** *** *** *** ***

 Total shipments *** *** *** *** ***

Value (1,000 dollars)

Commercial shipments *** *** *** *** ***

Transfers to related firms and

internal consumption1 *** *** *** *** ***

 U.S. shipments 592,681 597,395 613,234 159,946 140,043

Export shipments *** *** *** *** ***

 Total shipments *** *** *** *** ***

Unit value (per short ton)

Commercial shipments $*** $*** $*** $*** $***

Transfers to related firms and

internal consumption1 *** *** *** *** ***

 U.S. shipments 887 905 922 894 871

Export shipments *** *** *** *** ***

 Total shipments *** *** *** *** ***

Share of quantity (percent)

Commercial shipments *** *** *** *** ***

Transfers to related firms and

internal consumption1 *** *** *** *** ***

 U.S. shipments *** *** *** *** ***

Export shipments *** *** *** *** ***

 Total shipments 100.0 100.0 100.0 100.0 100.0

Table continued on next page.
III-11

Table III-5--Continued

LWR pipe and tube: U.S. producers’ shipments, by type, 2004-06, January-March 2006, and

January-March 2007 

Item

Calendar year January-March

2004 2005 2006 2006 2007

Share of value (percent)

Commercial shipments *** *** *** *** ***

Transfers to related firms and

internal consumption1 *** *** *** *** ***

 U.S. shipments *** *** *** *** ***

Export shipments *** *** *** *** ***

 Total shipments 100.0 100.0 100.0 100.0 100.0

 1 U.S. producer *** was the only producer to report internal consumption of LWR pipe and tube, and only very

minimal quantities not greater than *** short tons in any year or partial year period. The vast majority (greater than

*** percent) of data reported in transfers to related firms and internal consumption relates to ***. 

Source: Compiled from data submitted in response to Commission questionnaires.

Figure III-2

LWR pipe and tube: U.S. producers’ U.S. shipments, 2004-06, January-March 2006, and JanuaryMarch 2007

Source: Table III-5.

Data gathered for the period 2004 to 2006 indicate that the quantity of U.S. shipments of U.S.-

produced LWR pipe and tube remained relatively constant, while average unit values of these U.S.

shipments increased steadily at approximately 2 percent per year. U.S. producers’ U.S. shipments of

LWR pipe and tube dropped both in quantity (by 10.1 percent) and average unit value (by 2.6 percent)

when comparing January-March 2007 with January-March 2006. All but four of the 22 U.S. producers

indicated lower U.S. shipments of LWR pipe and tube in January-March 2007 compared to January0

200

400

600

800

1,000

1,200

2004 2005 2006 Jan-Mar 2006 Jan-Mar 2007

Quantity

(1,000 short tons )

$0

$125

$250

$375

$500

$625

$750

$875

$1,000

Average unit value 

(per short ton )

Quantity of U.S. shipments (left axis) Average unit values of U.S. shipments (right-axis)
 52 The sister company did not provide the Commission with a completed U.S. importers’ questionnaire in these

proceedings.

 53 The parent company had been one of the 70 firms collectively accounting for less than *** percent of imports

based on official Commerce statistics and was not sent a U.S. importers’ questionnaire. 

 54 *** purchases of *** origin LWR pipe and tube accounted for *** percent of its production in 2004, ***

percent in 2005, *** percent in 2006, and *** percent in interim 2007.

III-12

March 2006, of which *** reported the largest decreases in absolute terms, while *** reported the largest

decrease in terms of percentage change (***). 

U.S. PRODUCERS’ IMPORTS AND PURCHASES

Several U.S. producers also imported and purchased LWR pipe and tube over the period for

which data were gathered. Both *** and *** (***) imported LWR pipe and tube from ***. According to

data used to compile official Commerce statistics, *** was the *** U.S. importer of LWR pipe and tube

in 2006, and *** was the ***. A third U.S. producer, ***, apparently has a sister company in *** that

serves as a U.S. importer of record for imports of some *** LWR pipe and tube.52 Finally, the parent firm

*** of a U.S. producer (***) apparently ***.53 Table III-6 presents data on *** U.S. production and U.S.

imports of LWR pipe and tube.

Table III-6

LWR pipe and tube: *** and ***’s U.S. production, imports from Canada, and imports as a ratio to

production, 2004-06, January-March 2006, and January-March 2007

* * * * * * *

Three U.S. producers reported purchases of LWR pipe and tube. *** reported a single purchase

of *** origin LWR pipe and tube in 2006 of *** short tons that accounted for less than *** percent of its

production of LWR pipe and tube over the period for which data were collected. *** reported purchases

of *** origin LWR pipe and tube in 2005 and 2006 that accounted for approximately *** percent of its

U.S. production.54 ***. *** reported purchases of *** origin LWR pipe and tube each year between

2004 and 2006 equivalent to less than *** percent of its U.S. production.

U.S. PRODUCERS’ INVENTORIES

Table III-7 presents data on U.S. producers’ inventories during the period for which data were

collected. U.S. producers held greater quantities of end-of-period inventories at the end of March 2007

then they did at the end of March 2006.
III-13

Table III-7

LWR pipe and tube: U.S. producers’ end-of-period inventories, 2004-06, January-March 2006, and

January-March 2007

Item

Calendar year January-March

2004 2005 2006 2006 2007

Quantity (short tons)

End-of-period inventories 75,343 71,536 71,781 67,272 76,582

Ratio (percent)

Ratio to production 11.2 10.8 10.7 9.5 11.4

Ratio to U.S. shipments 11.3 10.8 10.8 9.4 11.9

Ratio to total shipments *** *** *** *** ***

Note.--January-March ratios were calculated using annualized production or shipment data.

Source: Compiled from data submitted in response to Commission questionnaires.

U.S. EMPLOYMENT, WAGES, AND PRODUCTIVITY

Table III-8 shows the U.S. producers’ employment-related data during the period for which data

were collected. Production and related workers and hours worked decreased slightly in each year and

period for which data were collected. Wages paid decreased slightly in 2005, then increased in 2006 and

decreased marginally again during the interim periods. Hourly wages increased in each year and period,

as did unit labor costs.

Table III-8

LWR pipe and tube: Average number of production and related workers, hours worked, wages

paid to such employees, hourly wages, productivity, and unit labor costs, 2004-06, January-March

2006, and January-March 2007

Item

Calendar year January-March

2004 2005 2006 2006 2007

Production and related workers

(number) 676 662 651 630 627

Hours worked (1,000) 1,581 1,544 1,521 397 387

Hours worked per worker 2,339 2,332 2,336 630 617

Wages paid ($1,000) 27,682 27,511 28,513 6,998 6,913

Hourly wages $17.51 $17.82 $18.75 $17.61 $17.85

Productivity (short tons per 1,000

hours) 397.2 402.0 418.0 420.7 406.1

Unit labor costs (per short ton) $44.08 $44.33 $44.85 $41.86 $43.96

Note.--Data for four U.S. producers (***) were unuseable or not supplied and are therefore not reflected in the data

presented in this table.

Source: Compiled from data submitted in response to Commission questionnaires.

 1

 These firms were identified through a review of materials submitted in the petition and ***. 

 2

 *** identified 70 additional firms that acted as U.S. importers of record for the remaining 2.7 percent of imports

under HTS subheading 7306.60.50 in 2006. These firms were not sent U.S. importers’ questionnaires.

 3

 Two of the 33 “accepted” firms provided certification that they did not import LWR pipe and tube: ***, which

indicated that material it had imported under HTS subheading 7306.60.50 was in fact nonsubject merchandise

(“closet rods and poles” of “circular cross-section”) and should have been classified under a different HTS statistical

reporting number, and ***. *** had been one of the firms identified as a potential U.S. importer from materials

supplied in the petition and not from ***. 

Of the remaining 29 firms not to have adequately responded to the Commission’s U.S. importers’

questionnaire, (i) two firms (***) supplied deficient data (these two firms accounted for *** percent of 2006 imports

based official Commerce statistics, (ii) two firms (***) have provided the Commission with certification that they

did not import LWR pipe and tube, however, *** (responses still pending) (these two firms represent *** percent of

2006 imports based on official Commerce statistics); (iii) two *** (***) that served as U.S. importers of record for

shipments they made to U.S. customers did not provide the Commission with U.S. importers’ questionnaire

responses (these two firms accounted for *** percent of 2006 imports based on official Commerce statistics); and

(iv) two firms *** (***) did not supply the Commission with responses to its U.S. importers’ questionnaire

(although the quantities involved were ***, accounting for only *** percent of 2006 imports based on official

Commerce statistics; in the case of *** but the quantity ***). Were the Commission to receive acceptable U.S.

importers’ questionnaires responses from these eight outstanding firms in addition to the firms that have already

supplied the Commission with data, the coverage universe for U.S. importers would increase from 33 firms to 41

firms accounting for 84.0 percent (or an additional 14 percentage points) of U.S. imports of LWR pipe and tube in

2006. The remaining 21 firms that have not responded to the Commission’s U.S. importers’ questionnaires account

for 13.3 percent of 2006 imports based on Commerce statistics.

 4

 Petition, pp. 6-7. 

IV-1

PART IV: U.S. IMPORTS, APPARENT CONSUMPTION, AND

MARKET SHARES

U.S. IMPORTERS

Commission staff sent U.S. importers’ questionnaires to 62 firms identified as possible importers

of subject merchandise.1

 The 62 firms contacted represent 97.3 percent of official Commerce statistics of

imports of material under subheading 7306.60.50 of the HTS in 2006.2

 Of the 62 importers contacted, 33

firms provided acceptably completed U.S. importers’ questionnaire responses. These firms’ responses

represent a majority (70.0 percent) of 2006 imports based on official Commerce statistics.3

 U.S. imports

of LWR pipe and tube are based on official Commerce statistics, with data presented from responding

U.S. importers in select data tables as appropriate. For the preliminary phase of these investigations,

imports under both HTS subheadings 7306.61.50 and 7306.69.50 have been used for compilation of

import data for the January-March 2007 partial period (see discussion below in the section entitled

“Subject Imports in 2007”).4

Table IV-1 presents data on U.S. importers of LWR pipe and tube that responded to the

Commission’s U.S. importers’ questionnaire.

Table IV-1

LWR pipe and tube: U.S. importers, their locations, and the countries of origin for their imports,

2004-06 and January-March 2007 combined

* * * * * * *
 5

 *** has not provided a completed U.S. importers’ questionnaire response to reflect its role as an importer of

record for certain shipments to U.S. customers. ***. 

 6

 *** appears to have ceased its importation of *** LWR pipe and tube in 2005 in favor of Chinese-produced

LWR pipe and tube.

 7

 *** appears to have first begun importing *** LWR pipe and tube in the January-March 2007 period. In this

period, *** reported no imports from other subject or nonsubject sources.

IV-2

Table IV-2 presents a comparison of data submitted in U.S. importers’ questionnaire responses to

U.S. imports based on official Commerce statistics.

Table IV-2

LWR pipe and tube: U.S. imports, by data source, 2004-06, January-March 2006, and JanuaryMarch 2007

Item

Calendar year January-March

2004 2005 2006 2006 2007

Quantity (short tons)

U.S. imports, official Commerce

statistics 277,108 337,600 404,477 74,239 80,444

U.S. imports, from U.S. importers’

questionnaire responses 187,668 250,033 274,371 57,456 56,202

Ratio (percent)

1

U.S. importers’ questionnaire data

to official Commerce statistics1 67.7 74.1 67.8 77.4 69.9

 1 Note that this ratio is not a perfect measure of import data coverage since data submitted in Commission

questionnaire responses do not match perfectly with underlying Commerce data. As was stated earlier, the U.S.

importers that supplied the Commission with data account for 70.0 percent of U.S. imports in official Commerce

statistics for LWR pipe and tube in 2006 (or 283,045 short tons). Data reported by those U.S. importers in their

questionnaire responses apparently indicate that they imported 8,674 fewer short tons of LWR pipe and tube than

what was reported in official statistics.

Source: Compiled from data submitted in response to Commission questionnaires and official Commerce statistics.

*** is the single largest U.S. importer of LWR pipe and tube, accounting for *** percent of

imports from all sources based on official Commerce statistics in 2006. *** imports relate to LWR pipe

and tube produced ***. The next-largest U.S. importer, ***, accounted for *** percent of LWR pipe and

tube imports from all sources in 2006. *** imports are ***. The third-largest U.S. importer of LWR pipe

and tube in 2006 was ***. This firm served as the importer of record for U.S. Customs purposes on

shipments *** to U.S. customers. *** imports accounted for *** percent of all imports of LWR pipe and

tube in 2006. *** was the fourth-largest U.S. importer of subject merchandise (from a ***) in 2006,

accounting for *** percent of imports based on official Commerce statistics. *** imports of LWR pipe

and tube relate primarily to product ***. The fifth- and sixth-largest U.S. importers of LWR pipe and

tube based on official Commerce statistics in 2006 were both ***, accounting for *** and *** percent of

total U.S. imports of LWR pipe and tube in 2006, respectively.5

 Both firms *** to their U.S. customers. 

The seventh-largest U.S. importer of LWR pipe and tube in 2006 was the first of the U.S. importers when

ranked by quantity of imports to have imported subject merchandise from a source ***. This firm was

***, and it imported subject merchandise from ***, accounting for *** percent of total LWR pipe and

tube imports in 2006.6

 The eighth-largest U.S. importer of LWR pipe and tube in 2006 based on official

Commerce statistics, ***, imported subject mercandise from ***.7

 *** imports accounted for *** percent

of official Commerce statistics. The ninth largest U.S. importer of LWR pipe and tube in 2006, ***,
 8

 While *** submitted some data in response to the Commission’s U.S. importers’ questionnaire, its response

contained no useable data relating to its import operations relating to *** LWR pipe and tube or pricing of imported

materials in the United States. Commission staff has been unable to get *** to revise its response to contain the data

requested. 

IV-3

imported its product exclusively from ***. Its imports accounted for *** percent of total imports of

LWR pipe and tube in 2006. The tenth-largest U.S. importer of subject merchandise, ***, also imports

LWR pipe and tube from *** exclusively. Its imports accounted for *** percent of total imports of LWR

pipe and tube in 2006.8

 These ten firms’ imports accounted for 55.6 percent of total U.S. imports of LWR

pipe and tube in 2006.

U.S. IMPORTS

Official Commerce statistics were used to measure total U.S. imports of LWR pipe and tube. 

Figure IV-1 and table IV-3 present data on U.S. import statistics by source.

Table IV-3

LWR pipe and tube: U.S. imports, by source, 2004-06, January-March 2006, and 

January-March 2007

Source

Calendar year January-March

2004 2005 2006 2006 2007

Quantity (short tons)

China 8,859 40,801 83,259 7,446 24,745

Korea 27,389 22,733 31,167 9,542 4,817

Mexico 132,369 156,262 144,924 30,682 30,588

Turkey 12,102 30,517 55,952 4,289 5,787

 Subtotal, subject imports 180,719 250,312 315,302 51,959 65,937

Canada 77,643 76,230 71,142 18,986 13,631

All other sources1 18,745 11,058 18,033 3,294 875

 Subtotal, nonsubject imports 96,388 87,288 89,175 22,280 14,506

 Total, imports from all sources 277,108 337,600 404,477 74,239 80,444

Landed-duty paid value (1,000 dollars)

China 5,849 28,293 50,182 4,775 14,389

Korea 16,478 15,738 20,541 6,338 3,434

Mexico 98,041 122,203 113,714 22,377 21,494

Turkey 9,479 23,264 35,584 3,815 3,670

 Subtotal, subject imports 129,846 189,498 220,021 37,306 42,988

Canada 68,424 69,074 65,584 16,991 12,322

All other sources1 12,528 8,524 12,852 2,436 1,073

 Subtotal, nonsubject imports 80,952 77,598 78,437 19,427 13,396

 Total, imports from all sources 210,798 267,095 298,458 56,733 56,384

Table continued on next page. 
IV-4

Table IV-3--Continued

LWR pipe and tube: U.S. imports, by source, 2004-06, January-March 2006, and 

January-March 2007

Source

Calendar year January-March

2004 2005 2006 2006 2007

Unit value (per short ton)

China $660 $693 $603 $641 $582

Korea 602 692 659 664 713

Mexico 741 782 785 729 703

Turkey 783 762 636 890 634

 Average, subject imports 718 757 698 718 652

Canada 881 906 922 895 904

All other sources1 668 771 713 739 1,226

 Average, nonsubject imports 840 889 880 872 923

 Average, total imports 761 791 738 764 701

Share of quantity (percent)

China 3.2 12.1 20.6 10.0 30.8

Korea 9.9 6.7 7.7 12.9 6.0

Mexico 47.8 46.3 35.8 41.3 38.0

Turkey 4.4 9.0 13.8 5.8 7.2

 Subtotal, subject imports 65.2 74.1 78.0 70.0 82.0

Canada 28.0 22.6 17.6 25.6 16.9

All other sources1 6.8 3.3 4.5 4.4 1.1

 Subtotal, nonsubject imports 34.8 25.9 22.0 30.0 18.0

 Total, imports from all sources 100.0 100.0 100.0 100.0 100.0

Share of value (percent)

China 2.8 10.6 16.8 8.4 25.5

Korea 7.8 5.9 6.9 11.2 6.1

Mexico 46.5 45.8 38.1 39.4 38.1

Turkey 4.5 8.7 11.9 6.7 6.5

 Subtotal, subject imports 61.6 70.9 73.7 65.8 76.2

Canada 32.5 25.9 22.0 30.0 21.9

All other sources1 5.9 3.2 4.3 4.3 1.9

 Subtotal, nonsubject imports 38.4 29.1 26.3 34.2 23.8

 Total, imports from all sources 100.0 100.0 100.0 100.0 100.0

 1 All other sources includes Brazil, Thailand, Costa Rica, and others. 

Source: Official Commerce statistics (HTS subheadings 7306.60.50, 7306.61.50, and 7306.69.50).

As demonstrated in table IV-3 and figure IV-1, subject imports increased in quantity in every

period over the entire period for which data were collected (for an increase of 74.5 percent between 2004

and 2006), while nonsubject imports decreased irregularly over the period for which data were collected

(for a decrease of 7.5 percent between 2004 and 2006). Within subject sources, imports from China and

Turkey each increased their share of total imports, while imports from Korea and Mexico decreased as a
IV-5

share of total imports by quantity. ***. Individual U.S. importers’ questionnaire responses confirm a

shift to imports of Chinese-origin LWR pipe and tube, although as table IV-3 demonstrates, Mexico

remains the primary source of subject imports in the U.S. market.

Figure IV-1

LWR pipe and tube: U.S. imports, by source, 2004-06, January-March 2006, and January-March

2007

Source: Table IV-3.

Figure IV-2 presents aggregate data for U.S. imports from principal sources over the period for

which data were collected and figure IV-3 presents data on shares of the quantity of U.S. imports.

Figure IV-2

LWR pipe and tube: U.S. imports by principal sources, 2004-06 and January-March 2007

aggregated

Source: Table IV-3.

0

150

300

450

600

China Korea Mexico Turkey Canada All other

Subject Nonsubject

Quantity

(1,000 short tons )

0.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

2004 2005 2006 Jan-Mar 2006 Jan-Mar 2007

Quantity

(1,000 short tons )

Subject Nonsubject
 9

 Presidential Proclamation 8097, To Modify the Harmonized Tariff Schedule of the United States, To Adjust

Rules of Origin Under the United States- Australia Free Trade Agreement and for Other Purposes, 72 FR 453,

January 4, 2007.

 10 Modifications to the Harmonized Tariff Schedule of the United States Under Section 1206 of the Omnibus

Trade and Competitiveness Act of 1988, USITC Publication 3898, December 2006, retrieved at

http://hotdocs.usitc.gov/docs/tata/hts/Pub3898.pdf. 

 11 “Other tubes, pipes and hollow profiles... other, welded, of noncircular cross section... of square or rectangular

cross section... having a wall thickness of less than 4 mm.... of iron or nonalloy steel.” Emphasis added.

 12 “Other tubes, pipes and hollow profiles... other, welded, of noncircular cross section.... of other non circular

cross section... having a wall thickness of less than 4 mm.... of iron or nonalloy steel.” Emphasis added.

 13 Presidential Proclamation 8097, To Modify the Harmonized Tariff Schedule of the United States, To Adjust

Rules of Origin Under the United States- Australia Free Trade Agreement and for Other Purposes, 72 FR 453,

January 4, 2007.

IV-6

Figure IV-3

LWR pipe and tube: Shares of quantity of U.S. imports by principal sources, 2004-06, JanuaryMarch 2006, and January-March 2007

Source: Table IV-3.

Subject Imports in 2007

On January 4, 2007, President Bush issued a Presidential Proclamation modifying the HTS.9

 

This proclamation instructed Customs to implement changes in the U.S. tariff schedule pursuant to

changes proposed in the Commission’s annual Omnibus Trade and Competitiveness Act report.10 Among

other changes enacted, the President’s proclamation modified the previous U.S. HTS subheading for

LWR pipe and tube, 7306.60.50, by superseding it with two new subheadings: 7306.61.50 and

7306.69.50. The new subheading 7306.61.50 relates specifically to subject merchandise in these

investigations,11 while the other new subheading 7306.69.50 relates to nonsubject merchandise, namely

light-walled specialty shapes.12 This modification as well as all the other modifications from the

President’s proclamation became effective February 4, 2007.13 Prior to February 4, 2007, subject

merchandise was provided for under the old subheading 7306.60.50, and after February 4, 2007, subject

merchandise was provided for under the new subheading 7306.61.50. For import data between January 1,

2007 and February 4, 2007, Customs reclassified all material that had been recorded under the old HTS

designation (7306.60.50) as having been imported under the second of the new HTS designations

Jan-Mar 2006 Jan-Mar 2007

China

Korea

Mexico

Turkey

Canada

All other

0%

25%

50%

75%

100%

2004 2005 2006
 14 Staff telephone interview, ***.

 15 No party in these investigations has argued that black and corrosion-resistant LWR pipe and tube constitute

separate domestic like products. 

 16 U.S. importers indicated that approximately 21.6 percent of their imports in 2006 from China were corrosionresistant product, 13.8 percent for Korea, 21.6 percent for Mexico, 0.0 percent for Turkey, 17.7 percent aggregating

all subject sources, and *** percent for all other sources.

IV-7

(7306.69.50), i.e., under the nonsubject merchandise number.14 Therefore, material reported in official

statistics under HTS subheading 7306.61.50 in 2007 understate the actual quantity of LWR pipe and tube

imported for the period January-March 2007. Further, since data are not available based on this new

classification methodology in the partial period January-March 2006, both numbers have been retained

for the U.S. import data used in the January-March 2007 period. Table IV-4 presents data on imports

reported under the new classification system between January 2007 and March 2007. 

Table IV-4

LWR pipe and tube: U.S. imports, by HTS designation, January-March 2007

Designation

2007

January February March

JanuaryMarch

Quantity (short tons)

HTS -- 7306.61.50 -- squares and rectangles 248 17,902 27,994 46,143

HTS -- 7306.69.50 -- specialty shapes 26,007 4,828 3,466 34,301

 Total 26,254 22,729 31,460 80,444

Note.--The new HTS subheadings went into effect on February 4, 2007; certain shipments with an “import date” in

January that were processed after February 4 are recorded under the 7306.61.50 subheading. Additionally, some of

the material with an “import date” in February that were entered prior to February 4 are potentially still

misclassifications due to Customs’ reclassification of material entered under the old number. March 2007 was the

first full month for which the new classification system was in effect. 

Source: Official Commerce statistics.

Corrosion-Resistant and Black Imports

U.S. importers were asked to provide separate data on their U.S. imports of corrosion-resistant

and black product in 2006.15 For the U.S. importers that supplied the Commission with useable data,

approximately 17.5 percent of U.S. imports of LWR pipe and tube were corrosion-resistant and 82.5

percent were black.16 These shares are approximately equivalent to data supplied by U.S. producers

indicating that approximately 22.7 percent of their domestic production of LWR pipe and tube was

corrosion-resistant product and 77.3 percent was black in 2006. 

U.S. SHIPMENTS OF IMPORTS

Table IV-5 presents questionnaire data on U.S. importers’ U.S. shipments of LWR pipe and tube

by source over the period for which data were collected. U.S. shipments of imports from subject sources

combined had lower average unit values than U.S. shipments of imports from nonsubject sources in each

year and period. Additionally, U.S. shipments of imports from all sources (both subject and nonsubject)

were lower than the average unit values of U.S. producers’ U.S. shipments; however, U.S. shipments

from nonsubject sources (primarily Canada) were much closer in average unit values to U.S. producers’ 
 17 ***. 

IV-8

Table IV-5

LWR pipe and tube: U.S. shipments of imports, by source, 2004-06, January-March 2006, and

January-March 2007

U.S. shipments 

of imports from--

Calendar year January-March

2004 2005 2006 2006 2007

Quantity (short tons)

China *** 20,405 46,292 5,274 13,714

Korea 14,086 15,116 17,089 4,867 2,203

Mexico 109,903 139,625 124,457 29,650 30,574

Turkey *** 24,359 28,768 2,926 2,089

 Subject sources 138,365 199,505 216,606 42,717 48,580

 Nonsubject sources *** *** *** *** ***

 All sources *** *** *** *** ***

Value (1,000 dollars)

China *** 14,857 31,597 3,966 8,741

Korea 9,571 11,987 12,135 3,454 1,712

Mexico 84,782 106,367 95,059 21,483 23,700

Turkey *** 14,529 15,372 1,660 1,397

 Subject sources 104,343 147,740 154,163 30,563 35,550

 Nonsubject sources *** *** *** *** ***

 All sources *** *** *** *** ***

Unit value (per short ton)

China $*** $728 $683 $752 $637

Korea 679 793 710 710 777

Mexico 771 762 764 725 775

Turkey *** 596 534 567 669

 Subject sources 754 741 712 715 732

 Nonsubject sources *** *** *** *** ***

 All sources *** *** *** *** ***

Note.–Reporting U.S. importers account for 70.0 percent of U.S. imports in official Commerce statistics.

Source: Compiled from data submitted in response to Commission questionnaires.

U.S. shipments than U.S. shipments of Chinese, Korean, Mexican, and Turkish LWR pipe and tube: the

average unit values of Chinese LWR pipe and tube were lower than U.S. shipments of U.S.-produced

LWR pipe and tube by $142 to $240; the average unit values of Korean LWR pipe and tube were lower

than U.S. shipments of U.S.-produced LWR pipe and tube by $94 to $212; the average unit values of

Mexican LWR pipe and tube were lower than U.S. shipments of U.S.-produced LWR pipe and tube by

$96 to $159;17 and, the average unit values of Turkish LWR pipe and tube were lower than U.S.

shipments of U.S.-produced LWR pipe and tube by $202 to $388. Figures IV-4 and IV-5 present data on

U.S. importers’ and U.S. producers’ U.S. shipments of LWR pipe and tube over the period for which data

were collected.
 18 19 U.S.C. § 1677(24)(A)(ii).

 19 Calculated from official Commerce statistics. 

IV-9

Figure IV-4

LWR pipe and tube: Average unit values of U.S. shipments of subject merchandise, by import

source, 2004-06, January-March 2006, and January-March 2007

* * * * * * *

Figure IV-5

LWR pipe and tube: Average unit values of U.S. producers’ U.S. shipments and U.S. importers’

U.S. shipments of subject merchandise, by source, 2004-06, January-March 2006, and JanuaryMarch 2007

Note.--Data on the average unit values of nonsubject imports were suppressed from this figure.

Source: Tables IV-5 and III-5 .

NEGLIGIBILITY

The Tariff Act of 1930 provides for the termination of an investigation if imports of the subject

product from a country are less than 3 percent of total imports, or, if there is more than one such country,

their combined share is less than or equal to 7 percent of total imports, during the most recent 12 months

for which data are available preceding the filing of the petition.18 On an aggregated basis, subject imports

accounted for 81.7 percent of total imports of LWR pipe and tube by quantity between June 2006 and

May 2007, of which 26.6 percent were imports from China, 5.5 percent were imports from Korea, 36.9

percent were imports from Mexico, and 12.7 percent were imports from Turkey.19 

CUMULATION CONSIDERATIONS

In assessing whether imports compete with each other and with the domestic like product, the

Commission has generally considered four factors: (1) fungibility, (2) presence of sales or offers to sell

U.S. shipments of--

650

725

800

875

950

2004 2005 2006 Jan-Mar

2006

Jan-Mar

2007

Average unit values

(per short ton )

U.S.-produced merchandise (highest)

Nonsubject imports (SUPPRESSED)

Subject imports (lowest)
IV-10

in the same geographical market, (3) common or similar channels of distribution, and (4) simultaneous

presence in the market. Issues concerning fungibility are addressed in Part II of this report and channels

of distribution are discussed in Parts I and II. 

Table IV-6 presents data on U.S. imports by Customs district, and table IV-7 presents data on

monthly presence of imports of LWR pipe and tube by source. 

Table IV-6

LWR pipe and tube: U.S. imports from subject countries, by Customs district, 2004-06, JanuaryMarch 2006, and January-March 2007

Source / District

Calendar year January-March

2004 2005 2006 2006 2007

Quantity (short tons)

China--

 Los Angeles, CA 4,486 22,333 39,017 5,679 13,112

 Houston-Galveston, TX 0 10,823 29,687 253 7,164

 Columbia-Snake, OR 2,076 671 5,656 385 966

 San Francisco, CA 621 3,608 2,622 434 908

 San Juan, PR 1,113 1,169 1,896 0 0

 All other districts 564 2,196 4,381 696 2,595

 Total, imports from China 8,859 40,801 83,259 7,446 24,745

Korea--

 Los Angeles, CA 15,343 10,771 10,342 3,040 822

 Columbia-Snake, OR 2,380 3,005 6,555 2,030 751

 Houston-Galveston, TX 1,841 4,945 4,389 1,996 0

 New Orleans, LA 112 375 1,107 108 1,586

 All other districts 7,714 3,637 8,774 2,368 1,657

 Total, imports from Korea 27,389 22,733 31,167 9,542 4,817

Mexico--

 Laredo, TX 130,534 154,763 144,132 30,372 30,493

 All other districts 1,835 1,498 791 310 95

 Total, imports from Mexico 132,369 156,262 144,924 30,682 30,588

Turkey--

 Houston-Galveston, TX 10,365 18,765 28,182 1,682 1,742

 Tampa, FL 1,402 5,233 8,866 1,683 2,310

 All other districts 335 6,519 18,904 925 1,735

 Total, imports from Turkey 12,102 30,517 55,952 4,289 5,787

Table continued on next page.
IV-11

Table IV-6--Continued

LWR pipe and tube: U.S. imports from subject countries, by Customs district, 2004-06,

January-March 2006, and January-March 2007

Source / District

Calendar year January-March

2004 2005 2006 2006 2007

Share of quantity (percent)

China--

 Los Angeles, CA 50.6 54.7 46.9 76.3 53.0

 Houston-Galveston, TX 0.0 26.5 35.7 3.4 29.0

 Columbia-Snake, OR 23.4 1.6 6.8 5.2 3.9

 San Francisco, CA 7.0 8.8 3.1 5.8 3.7

 San Juan, PR 12.6 2.9 2.3 0.0 0.0

 All other districts 6.4 5.4 5.3 9.3 10.5

 Total, imports from China 100.0 100.0 100.0 100.0 100.0

Korea--

 Los Angeles, CA 56.0 47.4 33.2 31.9 17.1

 Columbia-Snake, OR 8.7 13.2 21.0 21.3 15.6

 Houston-Galveston, TX 6.7 21.8 14.1 20.9 0.0

 New Orleans, LA 0.4 1.7 3.6 1.1 32.9

 All other districts 28.2 16.0 28.2 24.8 34.4

 Total, imports from Korea 100.0 100.0 100.0 100.0 100.0

Mexico--

 Laredo, TX 98.6 99.0 99.5 99.0 99.7

 All other districts 1.4 1.0 0.5 1.0 0.3

 Total, imports from Mexico 100.0 100.0 100.0 100.0 100.0

Turkey--

 Houston-Galveston, TX 85.6 61.5 50.4 39.2 30.1

 Tampa, FL 11.6 17.1 15.8 39.2 39.9

 All other districts 2.8 21.4 33.8 21.6 30.0

 Total, imports from Turkey 100.0 100.0 100.0 100.0 100.0

Source: Official Commerce statistics.
IV-12

Table IV-7

LWR pipe and tube: U.S. imports, monthly presence of imports, by source, January 2004 - March

2007

Source

Month

Total

number of

months

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec present

2004

China 12

Korea 12

Mexico 12

Turkey 10

 All subject sources 12

2005

China 12

Korea 12

Mexico 12

Turkey 11

 All subject sources 12

2006

China 12

Korea 12

Mexico 12

Turkey 11

 All subject sources 12

2007

China 3

Korea 3

Mexico 3

Turkey 3

 All subject sources 3

Note.--Shaded squares indicate that more than zero short tons of LWR pipe and tube entered into the United States in the

indicated month.

Source: Compiled from Official Commerce statistics.

APPARENT U.S. CONSUMPTION AND U.S. MARKET SHARES

Table IV-8 presents apparent U.S. consumption and U.S. market shares during the period for

which data were collected. 

Consistent with testimony relating to demand for LWR pipe and tube at the staff conference,

apparent U.S. consumption as measured by U.S. producers’ U.S. shipments and official Commerce

statistics increased between 2004 and 2006. During this time, U.S. producers’ share of the U.S. market

decreased 8.5 percentage points from 70.7 percent in 2004 to 62.2 percent in 2006. Comparing the period

of January to March 2007 to January to March 2006, apparent U.S. consumption decreased, at the same

time that subject (and total) imports were higher, indicating a loss of market share for U.S. producers,

especially when measured by quantity. Over the period for which data were collected, subject imports

(collectively) gained market share while the share of the U.S. market held by U.S. producers’ U.S.

shipments and by U.S. imports from nonsubject sources declined. 
IV-13

Table IV-8

LWR pipe and tube: Apparent U.S. consumption and U.S. market shares, 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 668,232 660,272 664,849 178,855 160,824

Imports from--

 China 8,859 40,801 83,259 7,446 24,745

 Korea 27,389 22,733 31,167 9,542 4,817

 Mexico 132,369 156,262 144,924 30,682 30,588

 Turkey 12,102 30,517 55,952 4,289 5,787

 Subject sources 180,719 250,312 315,302 51,959 65,937

 Nonsubject sources 96,388 87,288 89,175 22,280 14,506

 All sources 277,108 337,600 404,477 74,239 80,444

Apparent U.S. consumption 945,340 997,872 1,069,326 253,094 241,268

Value (1,000 dollars)

U.S. producers’ U.S. shipments 592,681 597,395 613,234 159,946 140,043

Imports from--

 China 5,849 28,293 50,182 4,775 14,389

 Korea 16,478 15,738 20,541 6,338 3,434

 Mexico 98,041 122,203 113,714 22,377 21,494

 Turkey 9,479 23,264 35,584 3,815 3,670

 Subject sources 129,846 189,498 220,021 37,306 42,988

 Nonsubject sources 80,952 77,598 78,437 19,427 13,396

 All sources 210,798 267,095 298,458 56,733 56,384

Apparent U.S. consumption 803,478 864,490 911,691 216,679 196,427

Unit value (per short ton)

U.S. producers’ U.S. shipments $887 $905 $922 $894 $871

Imports from--

 China 660 693 603 641 582

 Korea 602 692 659 664 713

 Mexico 741 782 785 729 703

 Turkey 783 762 636 890 634

 Subject sources 718 757 698 718 652

 Nonsubject sources 840 889 880 872 923

 All sources 761 791 738 764 701

Average all U.S. shipments 850 866 853 856 814

Table continued on next page.
IV-14

Table IV-8--Continued

LWR pipe and tube: Apparent U.S. consumption and U.S. market shares, 2004-06, January-March

2006, and January-March 2007

Item

Calendar year January-March

2004 2005 2006 2006 2007

Market share by quantity (percent)

U.S. producers’ U.S. shipments 70.7 66.2 62.2 70.7 66.7

Imports from--

 China 0.9 4.1 7.8 2.9 10.3

 Korea 2.9 2.3 2.9 3.8 2.0

 Mexico 14.0 15.7 13.6 12.1 12.7

 Turkey 1.3 3.1 5.2 1.7 2.4

 Subject sources 19.1 25.1 29.5 20.5 27.3

 Nonsubject sources 10.2 8.7 8.3 8.8 6.0

 All sources 29.3 33.8 37.8 29.3 33.3

Apparent U.S. consumption 100.0 100.0 100.0 100.0 100.0

Market share by value (percent)

U.S. producers’ U.S. shipments 73.8 69.1 67.3 73.8 71.3

Imports from--

 China 0.7 3.3 5.5 2.2 7.3

 Korea 2.1 1.8 2.3 2.9 1.7

 Mexico 12.2 14.1 12.5 10.3 10.9

 Turkey 1.2 2.7 3.9 1.8 1.9

 Subject sources 16.2 21.9 24.1 17.2 21.9

 Nonsubject sources 10.1 9.0 8.6 9.0 6.8

 All sources 26.2 30.9 32.7 26.2 28.7

Apparent U.S. consumption 100.0 100.0 100.0 100.0 100.0

Source: Tables III-5 and IV-3.

Figures IV-6 and IV-7 present data on the volume of apparent U.S. consumption and market

shares, respectively, of the different sources of LWR pipe and tube.
IV-15

Figure IV-6

LWR pipe and tube: Apparent U.S. consumption, by source, 2004-06, January-March 2006, and

January-March 2007

Source: Table IV-8.

Figure IV-7

LWR pipe and tube: U.S. market shares by quantity, by source, 2004-06, January-March 2006, and

January-March 2007

Source: Table IV-8.

0

200

400

600

800

1000

1200

2004 2005 2006 Jan-Mar

2006

Jan-Mar

2007

Quantity 

(1,000 short tons )

Imports from all other sources (top)

Imports from Turkey (second to top)

Imports from Mexico (third to top)

Imports from Korea (third to bottom)

Imports from China (second to bottom)

U.S.-produced (bottom)

70.7 66.2 62.2 70.7 66.7

19.1 25.1 29.5 20.5 27.3

10.2 8.7 8.3 8.8 6.0

0%

25%

50%

75%

100%

2004 2005 2006 Jan-Mar

2006

Jan-Mar

2007

Market share by quantity

(percent )

U.S.-produced (bottom) Subject (middle) Nonsubject (top)
IV-16

RATIO OF IMPORTS TO U.S. PRODUCTION

Table IV-9 presents data on ratios of U.S. imports of LWR pipe and tube to U.S. production over

the period for which data were collected. 

Table IV-9

LWR pipe and tube: Ratio of U.S. imports to U.S. production, 2004-06, January-March 2006, and

January-March 2007

Source

Calendar year January-March

2004 2005 2006 2006 2007

Quantity (short tons)

U.S. production 675,178 660,754 672,016 176,915 167,537

Ratio to imports from (percent)

China 1.3 6.2 12.4 4.2 14.8

Korea 4.1 3.4 4.6 5.4 2.9

Mexico 19.6 23.6 21.6 17.3 18.3

Turkey 1.8 4.6 8.3 2.4 3.5

 Subject sources 26.8 37.9 46.9 29.4 39.4

 Nonsubject sources 14.3 13.2 13.3 12.6 8.7

 Total, all sources 41.0 51.1 60.2 42.0 48.0

Source: Calculated from tables III-3 and IV-3.
 1

 The estimated transportation costs were obtained by subtracting the customs value from the c.i.f. value of the

imports for 2006 and then dividing by the customs value. 

V-1

PART V: PRICING AND RELATED INFORMATION

FACTORS AFFECTING PRICES

Raw Material Costs

Raw material costs account for a major share of the cost of producing LWR pipe and tube. 

During 2004-07, these costs consistently were about 78 or 79 percent of the cost of goods sold. Hotrolled and cold-rolled sheet are raw material inputs for black LWR pipe and tube and those corrosionresistant LWR pipes and tubes that are made corrosion-resistant through a zinc bath. Hot dipped

galvanized sheet is the raw material input for some producers of LWR pipe and tube that produce

corrosion resistant LWR pipe and tube with pre-galvanized materials. Zinc is the raw material input for

those producers that produce galvanized LWR pipe and tube through the zinc-dipping process. Prices for

hot-rolled, cold-rolled, and galvanized sheet and zinc are shown in figure V-1.

Figure V-1

Monthly average prices for raw materials for LWR pipe and tube

Source: American Metal Market‘s (AMM’s) on-line “Historical Pricing Archives” website at

http://amm.com/priorprice/hprices/histpric.asp

Transportation Costs to the U.S. Market

Transportation costs for LWR pipe and tube shipped from subject countries to the United States

were 12.1 percent for China, 11.8 percent for Korea, 3.4 percent for Mexico, and 6.1 percent for Turkey. 

These estimates are derived from official import data and represent the transportation and other charges

on imports.1
 2

 Real exchange rates are calculated by adjusting the nominal rates for movements in producer prices in the

United States and each of the subject countries. 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-2

U.S. Inland Transportation Costs

Transportation costs on U.S. inland shipments of LWR pipe and tube generally account for a

small share of the delivered price of these products. For U.S. producers, reported costs ranged from 2 to 6

percent of the delivered price. For importers that made estimates, these costs ranged from 0 percent to 7

percent. 

Exchange Rates

Nominal and real exchange rate data for China, Korea, Mexico, and Turkey are presented on a 

quarterly basis in figure V-2.2

Figure V-2

Exchange rates: Indexes of nominal and real values of the currencies of China, Korea, Mexico, and

Turkey relative to the U.S. dollar, by quarters, January 2004-March 2007

Figure continued on next page.
V-3

Figure V-2--Continued

Exchange rates: Indexes of nominal and real values of the currencies of China, Korea, Mexico, and

Turkey relative to the U.S. dollar, by quarters, January 2004-March 2007

Source: International Monetary Fund, International Financial Statistics, July 2007.
 3

 These methods included establishing price sheets which are subject to change without notice and adjusting 

pricing depending upon the impending need for business at the time. 

 4

 This importer reported adding up the actual cost as well as the margin in excess of f.o.b. prices (f.o.b. vessel in

Chinese ports). 

 5

 Producers making f.o.b. quotes reported, among others f.o.b. warehouse, ***. Importers making f.o.b. quotes

usually quote f.o.b. port of entry.

V-4

PRICING PRACTICES

Firms reported that prices of LWR pipe and tube are determined in a variety of ways. U.S.

producers most commonly cited transaction-by-transaction negotiations as their method for arriving at

prices (reported by 17 producers). In addition, eight producers reported that prices are determined by

contracts. Also, eight producers reported that they use price lists and three producers reported other

methods.3 The majority of the reporting importers (21 of 27) also negotiate prices on a transaction-bytransaction basis. Three importers reported that they use price lists, two importers reported contracts, and

one importer reported a different method.4

Discount policies vary widely among U.S. producers and importers of LWR pipe and tube. 

Questionnaire responses indicate that producers are more likely to provide discounts than importers. 

Annual total volume discounts were reported by 10 producers and quantity discounts were mentioned by

nine producers. Four producers mentioned other methods such as negotiating prices with each customer

or giving discounts based on payment terms as opposed to volume discounts if attractive financial terms

can be met. Twenty-three of 27 importers said they have no discount policy, while four importers

reported discounts, including customer-based discounts and a one-percent discount for prompt payment. 

The majority of U.S. producers (15 of 20) and the majority of importers (23 of 27) quote prices

on f.o.b. basis.5 The remaining five responding producers and four responding importers of commonly

quote prices on a delivered basis. 

While LWR pipe and tube is commonly sold both on a spot and on a contract basis, contract sales

are more common among producers than among importers. Four producers reported that they sell LWR

pipe and tube on long- and short-term contracts and on a spot basis. Ten other producers sell their

product on a short-term contract basis and on a spot sale basis, but not on a long-term contract basis. In

addition, one producer sells 100 percent of its LWR pipe and tube on a short-term basis and one other

producer sells its subject product on only a long-term contract basis. Of the responding importers, 17

firms sell subject product only on a spot sale basis, seven firms reported only short-term contracts, and

one firm reported only long-term contracts. In addition, one firm reported that it sells 10 percent of its

LWR pipe and tube on a short-term contract basis and 90 percent on a spot sale basis. 

Five U.S. producers reported that their long-term contracts ranged from 12 months to 5 years,

while one producer and the one reporting importer, ***, reported that the time frame for their contracts

was not limited. All firms reported renegotiation of contracts. Producers and importers reported similar

short-term contract characteristics. In most cases, short-term contract periods range from 3 to 6 months,

although one U.S. producer reported that its short-term contracts are one year in duration. While the

majority of the producers’ short-term contracts get renegotiated, the majority of the importers’ short-term

contracts do not get renegotiated. Similarly, all producers’ long-term contracts get renegotiated, while

only one importer, ***, reported that its long-term contracts get renegotiated. Three responding

producers reported that prices and quantities are fixed and two firms reported that only price is fixed

during the long-term contract period. Seven responding producers reported that prices and quantities are

fixed, seven firms reported that only price is fixed, and one firm reported that only quantity is fixed

during the short-tem contract period. All but two responding importers reported that both price and
 6

 One importer, reported that only price is fixed during the long-term contract period, and another importer

reported that only quantity is fixed during the short-term contract period. 

 7

 One importer, ***, provided pricing data for ***. These data are not included in the tables because staff

believes the pricing data to be double-counted, since *** is not the importer of record in several cases. ***. ***.

*** submitted revised pricing data as well. 

V-5

quantity are fixed during the contract period.6

 The majority of producers and importers reported that

contracts do not have meet-or-release provisions. 

PRICE DATA

U.S. producers and importers of LWR pipe and tube were asked to provide quarterly data for the

total quantity and f.o.b. (U.S. point of shipment) value of selected products that were shipped to unrelated

customers in the U.S. market from January 2004 through March 2007. The products for which pricing

data were requested were as follows:

Product 1.– ASTM A-513 (mechanical) or A-500 grade A or B (ornamental), carbon

welded, not pickled and oiled, 2 inch square, 0.120 inch (+ or - 10 percent) wall thickness

(11 gauge), 20 foot or 24 foot lengths.

Product 2.– ASTM A-513 (mechanical) or A-500 grade A or B (ornamental) tubing, carbon

welded, pickled and oiled, 1 inch square, 0.065 inch nominal wall thickness (+ or - 10 

percent) (16 gauge), 20 foot or 24 foot lengths.

Twenty-one U.S. producers and 26 importers provided price data. Pricing data reported by U.S. 

producers accounted for approximately 8.0 percent of U.S. producers’ commercial shipments during

January 2004-March 2007 and the following percentages of import shipments from each country: China-

-38.7 percent, Korea--15.2 percent, Mexico--5.1 percent, Turkey--12.9 percent, all other countries--6.9 

percent. Quarterly, weighted-average prices for the above products are shown in tables V-1 and V-2 and

figure V-3.7

 A summary of price trends is shown in table V-3 and a summary of underselling/overselling

is shown in table V-4. Overall, after increasing during the first part of 2004, prices fluctuated throughout

January 2004-March 2007. U.S. producer prices for products 1 and 2 were higher than prices for

imported products from subject countries in nearly every pricing comparison. 
V-6

Table V-1

LWR pipe and tube: Weighted-average f.o.b. selling prices and quantities for product 1, and

margins of underselling/(overselling), January 2004-March 2007

Period

United States China Korea

Price Quantity Price Quantity Margin Price Quantity Margin

per

short

ton

short

tons

per

short

ton

short

tons percent

per

short

ton

short

tons percent

2004:

 January-March $635 11,046 *** *** *** *** *** ***

 April-June 892 8,177 *** *** *** *** *** ***

 July-September 985 7,729 *** *** *** 798 294 19.0

 October-December 980 6,303 *** *** *** 825 642 15.9

2005:

 January-March 906 7,397 720 254 20.5 *** *** ***

 April-June 833 6,988 681 228 18.3 883 481 (6.0)

 July-September 773 8,789 676 233 12.5 *** *** ***

 October-December 820 7,452 577 230 29.6 715 550 12.8

2006:

 January-March 819 8,897 666 729 18.7 696 601 15.0

 April-June 862 9,234 691 1,652 19.8 *** *** ***

 July-September 914 7,187 677 1,417 26.0 744 582 18.7

 October-December 863 6,393 713 1,285 17.4 *** *** ***

2007:

 January-March 821 7,719 727 1,758 11.5 *** *** ***

Period

United States Mexico Turkey

Price Quantity Price Quantity Margin Price Quantity Margin

per 

short

ton

short

tons

per 

short

ton

short

tons percent

per 

short

ton

short

tons percent

2004:

 January-March $635 11,046 $492 1,028 22.6 *** *** ***

 April-June 892 8,177 762 793 14.6 - - -

 July-September 985 7,729 *** *** *** - - -

 October-December 980 6,303 832 733 15.1 *** *** ***

2005:

 January-March 906 7,397 *** *** *** *** *** ***

 April-June 833 6,988 696 1,462 16.4 695 942 16.6

 July-September 773 8,789 622 1,204 19.5 *** *** ***

 October-December 820 7,452 635 1,202 22.5 509 406 37.9

2006:

 January-March 819 8,897 655 1,061 19.9 553 605 32.4

 April-June 862 9,234 689 2,279 20.1 *** *** ***

 July-September 914 7,187 *** *** *** 536 643 41.4

 October-December 863 6,393 *** *** *** 719 458 16.8

2007:

 January-March 821 7,719 666 1,354 18.9 624 669 24.0

Table continued on next page.
V-7

Table V-1-- Continued

LWR pipe and tube: Weighted-average f.o.b. selling prices and quantities for product 1, and

margins of underselling/(overselling), January 2004-March 2007

Period

United States All subject countries Other countries

Price Quantity Price Quantity Margin Price Quantity

per 

short ton

short

tons

per 

short ton

short

tons percent

per 

 short

ton

short

tons

2004:

 January-March $635 11,046 $483 1,181 23.9 $604 972

 April-June 892 8,177 707 1,087 20.7 713 857

 July-September 985 7,729 846 1,451 14.1 *** ***

 October-December 980 6,303 849 1,710 13.4 *** ***

2005:

 January-March 906 7,397 800 2,309 11.7 *** ***

 April-June 833 6,988 724 3,113 13.1 *** ***

 July-September 773 8,789 642 2,174 16.9 694 383

 October-December 820 7,452 627 2,388 23.6 689 385

2006:

 January-March 819 8,897 645 2,996 21.2 622 941

 April-June 862 9,234 631 5,883 26.8 753 456

 July-September 914 7,187 684 3,940 25.2 *** ***

 October-December 863 6,393 711 2,847 17.7 676 997

2007:

 January-March 821 7,719 690 4,097 15.9 *** ***

Product 1 – ASTM A-513 (mechanical) or A-500 grade A or B (ornamental), carbon welded, not pickled and oiled, 2 inch

square, 0.120 inch (+ or - 10 percent) wall thickness (11 gauge), 20 foot or 24 foot lengths.

Note.--Margins are calculated from unrounded data and may not be directly calculated from the price data presented in this

table.

Source: Compiled from data submitted in response to Commission questionnaires.
V-8

Table V-2

LWR pipe and tube: Weighted-average f.o.b. selling prices and quantities for product 2, and

margins of underselling/(overselling), January 2004-March 2007

Period

United States China Korea

Price Quantity Price Quantity Margin Price Quantity Margin

per

short

ton

short

tons

per

short

ton

short

tons percent

per

short

ton

short 

tons percent

2004:

 January-March $755 6,084 *** *** *** *** *** ***

 April-June 1,031 5,265 *** *** *** *** *** ***

 July-September 1,044 4,558 *** *** *** *** *** ***

 October-December 1,059 3,690 *** *** *** *** *** ***

2005:

 January-March 999 4,259 *** *** *** *** *** ***

 April-June 965 4,551 *** *** *** *** *** ***

 July-September 928 4,756 *** *** *** *** *** ***

 October-December 931 4,163 *** *** *** *** *** ***

2006:

 January-March 891 4,810 *** *** *** *** *** ***

 April-June 921 5,473 760 3,644 17.5 *** *** ***

 July-September 990 4,146 752 5,181 24.0 *** *** ***

 October-December 949 3,687 750 1,048 21.0 *** *** ***

2007:

 January-March 921 3,881 786 2,221 14.6 *** *** ***

Period

United States Mexico Turkey

Price Quantity Price Quantity Margin Price Quantity Margin

per

short

ton

short

tons

per 

short

ton

short

tons percent

per

short

ton

short

tons percent

2004:

 January-March $755 6,084 $623 409 17.5 *** *** ***

 April-June 1,031 5,265 *** *** *** - - -

 July-September 1,044 4,558 *** *** *** - - -

 October-December 1,059 3,690 *** *** *** *** *** ***

2005:

 January-March 999 4,259 *** *** *** *** *** ***

 April-June 965 4,551 *** *** *** *** *** ***

 July-September 928 4,756 *** *** *** *** *** ***

 October-December 931 4,163 744 378 20.0 *** *** ***

2006:

 January-March 891 4,810 721 315 19.1 *** *** ***

 April-June 921 5,473 784 482 14.9 *** *** ***

 July-September 990 4,146 866 306 12.5 *** *** ***

 October-December 949 3,687 *** *** *** *** *** ***

2007:

 January-March 921 3,881 702 332 23.8 - - -

Table continued on next page.
V-9

Table V-2-- Continued

LWR pipe and tube: Weighted-average f.o.b. selling prices and quantities for product 2, and

margins of underselling/(overselling), January 2004-March 2007

Period

United States All subject countries Other countries

Price Quantity Price Quantity Margin Price Quantity

per 

short ton

short

tons

per 

short ton

short

tons percent

per 

short ton short tons

2004:

 January-March $755 6,084 $597 2,454 20.9 *** ***

 April-June 1,031 5,265 775 893 24.8 *** ***

 July-September 1,044 4,558 *** *** *** *** ***

 October-December 1,059 3,690 815 1,550 23.1 *** ***

2005:

 January-March 999 4,259 799 2,707 20.1 *** ***

 April-June 965 4,551 820 2,551 15.0 *** ***

 July-September 928 4,756 766 3,469 17.4 *** ***

 October-December 931 4,163 766 1,823 17.7 *** ***

2006:

 January-March 891 4,810 754 2,552 15.4 *** ***

 April-June 921 5,473 759 4,351 17.6 *** ***

 July-September 990 4,146 757 5,676 23.5 *** ***

 October-December 949 3,687 730 1,373 23.0 *** ***

2007:

 January-March 921 3,881 774 2,615 16.0 *** ***

Product 2 – ASTM A-513 (mechanical) or A-500 grade A or B (ornamental) tubing, carbon welded, pickled and oiled, 1 inch

square, 0.065 inch nominal wall thickness (+ or - 10 percent) (16 gauge), 20 foot or 24 foot lengths.

Note.--Margins are calculated from unrounded data and may not be directly calculated from the price data presented in this

table.

Source: Compiled from data submitted in response to Commission questionnaires.

Figure V-3

LWR pipe and tube: Weighted-average f.o.b. selling prices for products 1 and 2, January 2004-

March 2007

* * * * * * *
V-10

Table V-3

LWR pipe and tube: Summary of weighted-average sales prices, by country and by product

Country

Product 1 Product 2

Number of

quarters High price

Low 

price

Number of

quarters High price

Low

 price

United States 13 $985 $635 13 $1,059 $755

China 13 908 456 13 808 675

Korea 13 900 475 13 *** ***

Mexico 13 869 492 13 927 623

Turkey 11 938 384 10 *** ***

Other 13 810 604 13 *** ***

 Source: Compiled from data submitted in response to Commission questionnaires.

Table V-4

LWR pipe and tube: Summary of underselling/overselling, by country

Country

Number of quarters of

underselling

Number of quarters of

overselling

Average margin of

underselling

China:

 2004.....................

 2005......................

 2006......................

 2007 (Jan.-Mar.)...

***

***

8

2

***

***

0

0

***

***

17.1

11.1

 Subtotal............ 26 0 14.9

Korea:

 2004.....................

 2005......................

 2006......................

 2007 (Jan.-Mar.)...

***

***

***

***

***

***

***

***

***

***

***

***

 Subtotal............ 24 2 15.8

Mexico:

 2004.....................

 2005......................

 2006......................

 2007 (Jan.-Mar.)...

8

8

8

2

0

0

0

0

14.9

19.4

19.6

21.2

 Subtotal............ 26 0 18.6

Turkey:

 2004.....................

 2005......................

 2006......................

 2007 (Jan.-Mar.)...

***

***

***

***

***

***

***

***

***

***

***

***

 Subtotal............ 20 1 30.2

 Total...................... 96 3 17.8

Source: Compiled from data submitted in response to Commission questionnaires.
 8

 One additional purchaser, ***, reported that it was unable to respond. 

 9

 One additional purchaser, ***, reported that it disagrees with the allegation, although it only disagreed with the

quantity and not with the price. 

V-11

LOST SALES AND LOST REVENUES

In the petition, the petitioning firms provided numerous allegations of lost sales from China and

four allegations of lost sales from Mexico during January 2004-March 2007. There were no allegations

of lost sales from Korea or Turkey. The petitioning firms also provided numerous lost revenue

allegations from China during January 2004-March 2007. There were no allegations of lost revenues

from Korea, Mexico, or Turkey. Staff contacted 30 purchasers, representing the largest value of lost sales

and lost revenues, to investigate these allegations. Fourteen purchasers, including some accounting for

largest volume allegations, did not respond. For the lost sales, five respondents reported that they

disagreed, and three reported that they agreed with the allegations.8 The three confirmed lost sales totaled

$2.3 million. For the lost revenues, three firms disagreed and three firms reported that they agreed with

the allegations.9 The three confirmed lost revenues totaled $***. Information regarding lost sales is

presented in table V-5 and information regarding lost revenues is presented in table V-6. Information is

only presented for purchasers which responded to the staff’s request for information. Responses from

purchasers are discussed below.

Table V-5

LWR pipe and tube: Selected U.S. producers’ lost sales allegations

* * * * * * *

Table V-6

LWR pipe and tube: U.S. producers' lost revenue allegations 

* * * * * * *

*** disagreed with the lost revenue allegation, stating, “I do not recall receiving an offer from a

domestic supplier, responding that their price was too high, the domestic supplier lowering their price,

and accepting the lower offer.”

*** agreed with the lost sale allegation, and provided no further comment.

*** disagreed with the lost revenue allegation. It stated, “during the referenced time frame,

domestic producers lowered their prices less than *** percent and it was due, in large part, to increased

domestic competition and an anticipated and/or actual reduction in their raw material cost.”

*** disagreed with the lost revenue allegation. It said that it buys *** tons per year, not *** tons;

that it purchases about *** percent from domestic producers and about *** percent from China and

Europe; and that the percentage purchased from U.S. producers has not changed over the years regardless

of price. It further said, “***.”

*** disagreed with the lost sale allegation, stating “our company does not import raw material

pipe or tubing from ***; we purchase any such product from a U.S. producer.”

*** agreed with the lost sale allegation, and provided no further comment.

*** stated that it purchased nothing during the period referenced (***) in the allegation. It stated,

however, “in 2005, we purchased approx. $*** in tube from trading companies.” It further stated, “the

2005 tube was manufactured in ***. Typically the price is approximately *** percent lower than U.S.-

produced.”
V-12

*** said that it was unable to respond. It stated that it did not recall soliciting such a quote over

the past year and generally does not respond to unsolicited quotes. It further stated, “No business has a

right to claim they lost our business merely because we failed or refused to respond to, or declined, an

unsolicited quote, nor should it be assumed that price alone is/was the reason for our decision to disregard

an unsolicited offer.”

*** agreed with ***, and provided no further comment.

*** disagreed with the lost revenue allegation, stating that the difference in price was *** to ***

percent, not *** percent.

*** disagreed with the lost sale allegation but agreed with the lost revenue allegation. It stated,

“our purchases from *** were above the range you listed by $*** to $*** per ton because we made sure

the material we bought was excellent quality.”

*** disagreed with the lost sale allegation. It stated, “the prices here locally for *** tons are

pretty much about *** percent, they are based in $*** CWT coming from *** versus $*** or $*** at the

most locally.”

*** agreed with the lost revenue allegation, although it said the volume offered by the U.S.

producer was *** tons, not ***, as stated in the allegation.

*** stated that it did not recall rejecting a U.S. offer for purchases of LWR pipe and tube. It said

that it has purchased both domestic and imported products for years but that purchases are not always

based on price. Other factors considered include logistics, demand, quality, and terms.
 1

 The producers with fiscal year ends other than December 31 are ***. However, the financial data of *** were

submitted on a calendar year basis. ***. ***. Differences between data reported in the trade and financial sections

of the Commission’s producers’ questionnaire mainly are attributable to timing differences. 

 2

 ***.

 3

 Per-unit conversion costs, which included direct labor and factory overhead, generally increased from JanuaryMarch 2006 to January-March 2007 except for ***. Five producers, ***, experienced substantially increased perunit conversion costs between the two interim periods. Their supplemental responses to Commission staff’s

inquiries about the substantial increases of conversion costs are summarized in footnote 6.

 4

 ***.

VI-1

PART VI: FINANCIAL CONDITION OF U.S. PRODUCERS

BACKGROUND

Twenty producers provided usable financial data on their operations producing LWR pipe and

tube.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 average annual sales volumes over *** short tons. In contrast, *** firms reported average

annual sales of less than *** short tons. Overall, net sales consisted of commercial sales, and no U.S.

producer reported either internal consumption or related transfers.2

OPERATIONS ON LWR PIPE AND TUBE 

The results of operations of the responding firms on their LWR pipe and tube 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 decreased somewhat from 2004 to 2005 due to the

decreased sales quantity and increased from 2005 to 2006, as unit net sales values increased continuously

between 2004 to 2006. The unit values of cost of goods sold (“COGS”) increased substantially from

2004 to 2005, due primarily to increased raw material costs, and then fell slightly from 2005 to 2006 as

raw material costs decreased. The combined producers’ operating income decreased from $93 million in

2004 to $61 million in 2005, then increased in 2006 to $72 million as a result of higher sales quantities

and higher per-unit sales prices. The ratio of operating income to net sales decreased by about 5.5

percentage points between 2004 and 2005 and increased by 1.6 percentage points between 2005 and

2006.

Since the both net sales quantity and value were lower in January-March 2007 than in JanuaryMarch 2006, operating income was noticeably lower in interim 2007 ($8 million compared to $17

million), due mainly to the decreased per-unit sales price as well as to increased per-unit total

costs/expenses, especially raw material costs and conversion costs.3

 While the average unit sales values

decreased by $16 per short ton, average unit total cost (COGS plus selling, general, and administrative

(“SG&A”) expenses) increased ($840 compared to $807) between the two interim periods. As a result,

the operating income margin decreased from 11.2 percent in interim 2006 to 5.9 percent in interim 2007.

There is some toll processing done by two producers, ***.4

 Toll processing revenue accounted

for less than *** percent of the total net sales value for all firms combined in 2006 and toll operations

were not reflected in the aggregate results of operations of LWR pipe and tube due to their completely

different revenue and cost structures *** toll-processed for *** and *** toll-processed for ***. In toll

processing, the firm that owns raw materials (the tollee) arranges for unrelated processors (the tollers) to 
VI-2

Table VI-1

LWR pipe and tube: Results of operations of U.S. producers, fiscal years 2004-06, January-March

2006, and January-March 2007

Item

Fiscal year January-March

2004 2005 2006 2006 2007

Quantity (short tons)

Net sales 642,103 618,469 621,612 169,013 149,701

Value ($1,000)

Net sales 579,981 571,975 586,997 153,595 133,660

COGS 445,462 475,751 474,502 124,494 115,773

Gross profit 134,519 96,224 112,495 29,101 17,887

SG&A expenses 41,129 35,351 40,846 11,840 9,985

Operating income 93,390 60,873 71,649 17,261 7,902

Interest expense 3,992 3,764 4,757 1,123 1,284

Other expense 3,437 2,296 3,114 415 326

Other income 1,057 1,127 1,903 210 288

Net income 87,018 55,940 65,681 15,933 6,580

Depreciation/amortization 10,963 11,411 11,188 3,186 2,855

Cash flow 97,981 67,351 76,869 19,119 9,435

Unit value (per short ton)

Net sales $903 $925 $944 $909 $893

COGS 694 769 763 737 773

Gross profit 209 156 181 172 119

SG&A expenses 64 57 66 70 67

Operating income 145 98 115 102 53

Ratio to net sales (percent) 

COGS 76.8 83.2 80.8 81.1 86.6

Gross profit 23.2 16.8 19.2 18.9 13.4

SG&A expenses 7.1 6.2 7.0 7.7 7.5

Operating income 16.1 10.6 12.2 11.2 5.9

Number of firms reporting

Operating losses 1 2 2 3 4

Data 20 20 20 20 20

Source: Compiled from data submitted in response to Commission questionnaires.

process the materials for a fee, and then the tollee arranges for the final sale of the products to other 

parties. Aggregate income-and-loss data for two tollers on their toll-processing operations are presented

in table VI-2. While the quantity and value of the toll-processing operations decreased from 2004 to 2005

and increased from 2005 to 2006 and again from interim 2006 to interim 2007, toll processing net income

continuously increased between 2004 and 2006 because processing revenue increased during the period.
 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-3

Table VI-2

LWR pipe and tube: Tolling operations of U.S. producers, fiscal years 2004-06, January-March

2006, and January-March 2007

* * * * * * *

Selected financial data, by firm, are presented in table VI-3. 

Table VI-3

LWR pipe and tube: Results of operations of U.S. producers, by firm, fiscal years 2004-06,

January-March 2006, and January-March 2007

* * * * * * *

Total net sales (quantities and values), per-unit values (sales and COGS), operating income (loss),

and the ratio of operating income (loss) to net sales are presented in this table on a firm-by-firm basis. 

Sixteen of the 20 reporting producers generated operating income in each fiscal year during 2004-06,

while the remaining four reported operating losses in one or two years during the period. However,

operating income and operating income margins of all 20 producers combined 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 margin). Four producers, ***, reported operating losses in interim 2007, compared to

three in interim 2006.

The data show that ***. This may be due to relatively higher average unit sales values for ***

compared with its relatively lower COGS. However, *** operating income decreased noticeably (by ***

percent) from interim 2006 to interim 2007 principally because its production costs rose and its average

unit sales values fell substantially during the same period. 

Allied experienced ***. Atlas (Chicago) reported ***. It explained that ***. Longhorn entered

the LWR pipe and tube business when it purchased the assets of the closed Dallas Tube and Rollform in

September 2005. Therefore, its ***.

Selected aggregate per-short ton cost data of the producers on their operations, i.e., COGS and

SG&A expenses, are presented in table VI-4. 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 total cost increased further slightly

from 2005 to 2006, due to increases in conversion costs and SG&A expenses. Per-short-ton COGS

increased from interim 2006 to interim 2007, again due to the increases in raw materials cost and

conversion costs.6

 The ratio of total COGS to net sales increased substantially from January-March 2006

(81.1 percent) to January-March 2007 (86.6 percent).

A variance analysis for the 20 U.S. producers is presented in table VI-5. 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-5 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 ($21.7 million) between 2004 and 
VI-4

Table VI-4

LWR pipe and tube: 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 $539 $610 $598 $580 $608

 Direct labor 54 59 62 58 62

 Factory overhead 100 100 103 98 103

 Total COGS 694 769 763 737 773

SG&A expenses 64 57 66 70 67

 Total cost 758 826 829 807 840

Source: Compiled from data submitted in response to Commission questionnaires. 

Table VI-5

LWR pipe and tube: Variance analysis of operations of U.S. producers, fiscal years 2004-06,

January-March 2006, and January-March 2007

Item

Between fiscal years-- January-March

2004-06 2004-05 2005-06 2006-07

Value ($1,000)

Net sales:

 Price variance 25,525 13,341 12,115 (2,385)

 Volume variance (18,509) (21,347) 2,907 (17,550)

 Total net sales variance 7,016 (8,006) 15,022 (19,935)

Cost of sales:

 Cost variance (43,256) (46,685) 3,667 (5,504)

 Volume variance 14,216 16,396 (2,418) 14,225

 Total cost variance (29,040) (30,289) 1,249 8,721

Gross profit variance (22,024) (38,295) 16,271 (11,214)

SG&A expenses:

 Expense variance (1,030) 4,264 (5,315) 502

 Volume variance 1,313 1,514 (180) 1,353

 Total SG&A variance 283 5,778 (5,495) 1,855

Operating income variance (21,741) (32,517) 10,776 (9,359)

Summarized as:

 Price variance 25,525 13,341 12,115 (2,385)

 Net cost/expense variance (44,285) (42,421) (1,649) (5,002)

 Net volume variance (2,980) (3,437) 309 (1,972)

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 presented and discussed in some detail in table VI-7, *** accounted for a substantial portion of reported

capital expenditures.

VI-5

2006 was attributable mainly to the negative effect of increased costs/expenses ($44.3 million) and

decreased sales volume ($3.0 million) which was offset by the positive effect of increased price ($25.5

million). Between the two interim periods, it indicates that the decrease in operating income of $9.4

million again resulted from the negative effects of increased costs/expenses combined with decreases in

prices and sales volume. 

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-6. All U.S. producers except for *** reported capital

expenditures, while eight producers incurred substantial amounts of capital expenditures during the

periods examined.7

 Data for capital expenditures on a firm-by-firm basis are shown in table VI-7. While

capital expenditures increased continuously and substantially from 2004 to 2006 and into 2007, due

primarily to ***, R&D expenses decreased between 2004 and 2006. Both capital expenditures and R&D

expenses increased from interim 2006 to interim 2007. Only two of the responding firms, ***, reported

R&D expenses.

Table VI-6

LWR pipe and tube: 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 9,817 10,923 24,005 3,114 10,650

 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-7

LWR pipe and tube: 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

LWR pipe and tube 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 LWR pipe and tube. Data on

the U.S. producers’ total assets and their ROI are presented in table VI-8. The return on investment

decreased from 2004 to 2005 and increased from 2005 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 ***.

 12 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 total sales.

VI-6

Table VI-8

LWR pipe and tube: 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 28,182 44,065 40,555

 B. Trade receivables (net) 64,870 71,758 57,318

 C. Inventories 123,098 78,995 100,317

 D. All other current 7,514 6,636 6,294

 Total current 223,664 201,454 204,484

2. Non-current assets:

 A. Productive facilities1

investments

225,336 226,084 247,338

 B. Productive facilities2

 (net)2 95,433 87,283 95,873

 C. Other non-current 7,529 8,139 9,292

 Total non-current 102,962 95,422 105,165

 Total assets 326,626 296,876 309,649

 Value ($1,000)

Operating income 93,390 60,873 71,649

Ratio of operating income to total assets (percent)

Return on investment 28.6 20.5 23.1

 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.

While the value of total assets fluctuated over the period, the original cost of property, plant, and

equipment (“PPE”) increased steadily. As net book value of PPE followed the pattern of total assets over

the period examined, the data for individual companies show a wide range of fluctuation during the same

period.8

 9 10 11 12

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 LWR pipe and tube from China, Korea,

Mexico, or Turkey. The producers’ comments are presented in appendix E.
 1

 Section 771(7)(F)(ii) of the Act (19 U.S.C. § 1677(7)(F)(ii)) provides that “The Commission shall consider

{these factors} . . . as a whole in making a determination of whether further dumped or subsidized imports are

imminent and whether material injury by reason of imports would occur unless an order is issued or a suspension

agreement is accepted under this title. The presence or absence of any factor which the Commission is required to

consider . . . shall not necessarily give decisive guidance with respect to the determination. Such a determination

may not be made on the basis of mere conjecture or supposition.”

VII-1

PART VII: THREAT CONSIDERATIONS

Section 771(7)(F)(i) of the Act (19 U.S.C. § 1677(7)(F)(i)) provides that--

In determining whether an industry in the United States is threatened with

material injury by reason of imports (or sales for importation) of the

subject merchandise, the Commission shall consider, among other

relevant economic factors1

--

(I) if a countervailable subsidy is involved, such information as may be

presented to it by the administering authority as to the nature of the

subsidy (particularly as to whether the countervailable subsidy is a

subsidy described in Article 3 or 6.1 of the Subsidies Agreement), and

whether imports of the subject merchandise are likely to increase,

(II) any existing unused production capacity or imminent, substantial

increase in production capacity in the exporting country indicating the

likelihood of substantially increased imports of the subject merchandise

into the United States, taking into account the availability of other export

markets to absorb any additional exports,

(III) a significant rate of increase of the volume or market penetration of

imports of the subject merchandise indicating the likelihood of

substantially increased imports,

(IV) whether imports of the subject merchandise are entering at prices

that are likely to have a significant depressing or suppressing effect on

domestic prices, and are likely to increase demand for further imports,

(V) inventories of the subject merchandise,

(VI) the potential for product-shifting if production facilities in the foreign

country, which can be used to produce the subject merchandise, are

currently being used to produce other products,

(VII) in any investigation under this title which involves imports of both a

raw agricultural product (within the meaning of paragraph (4)(E)(iv))

and any product processed from such raw agricultural product, the

likelihood that there will be increased imports, by reason of product

shifting, if there is an affirmative determination by the Commission under

section 705(b)(1) or 735(b)(1) with respect to either the raw agricultural

product or the processed agricultural product (but not both),
 2

 Section 771(7)(F)(iii) of the Act (19 U.S.C. § 1677(7)(F)(iii)) further provides that, in antidumping

investigations, “. . . the Commission shall consider whether dumping in the markets of foreign countries (as

evidenced by dumping findings or antidumping remedies in other WTO member markets against the same class or

kind of merchandise manufactured or exported by the same party as under investigation) suggests a threat of material

injury to the domestic industry.”

 3

 ***, at the high end, indicated that its 2006 production accounted for approximately *** percent of overall

LWR pipe and tube production in Korea, which would indicate industry-wide production of approximately 157,000

short tons; whereas ***, at the low end, indicated that its 2006 production accounted for approximately *** percent

of overall LWR pipe and tube production in Korea, which would indicate industry-wide production of approximately

119,000 short tons. Staff notes, however, that data *** is potentially subject to revision.

VII-2

(VIII) the actual and potential negative effects on the existing

development and production efforts of the domestic industry, including

efforts to develop a derivative or more advanced version of the domestic

like product, and

(IX) any other demonstrable adverse trends that indicate the probability

that there is likely to be material injury by reason of imports (or sale for

importation) of the subject merchandise (whether or not it is actually

being imported at the time).2

Information in relation to subsidies in China is presented in Part I; information on the volume and

pricing of imports of the subject merchandise is presented in Parts IV and V; and information on the

effects of imports of the subject merchandise on U.S. producers’ existing development and production

efforts is presented in Part VI. Information on inventories of the subject merchandise; foreign producers’

operations, including the potential for “product-shifting;” any other threat indicators, if applicable; and

any dumping in third-country markets, follows.

THE INDUSTRY IN CHINA

Of the 53 firms sent foreign producers’/exporters’ questionnaires in China, no firm submitted a

completed response indicating any LWR pipe and tube production. Several firms responded indicating

that they did not produce subject merchandise. No party put in an entry of appearance on behalf of any

Chinese interest in these proceedings.

THE INDUSTRY IN KOREA

Six Korean firms provided the Commission with foreign producers’ questionnaire responses: 

Hanguk Steel Co., Ltd (“Hanguk”); Histeel Co., Ltd. (“Histeel”); Jinbang Steel Korea Co., Ltd.

(“Jinbang”); Kukje Stee. Co., Ltd. (“Kukje”); Miju Steel Mfg. Co., Ltd. (“Miju”); and Nexteel Co., Ltd.

(“Nexteel”). Based on estimates provided in several Korean producers’ questionnaire responses as to

their share of overall production of LWR pipe and tube in Korea, these firms represent the large majority

of Korean LWR pipe and tube production, which was estimated at between 119,000 and 157,000 short

tons in 2006.3

 Tables VII-1 and VII-2 present data on the Korean industry. Data for Korean producers

*** have not been included in the compilation of the Korean industry data due to outstanding data issues. 

If data included in the uncorrected foreign producers’ questionnaire responses from *** were accurate
 4

 These six firms reported exports accounting for between 80 and 100 percent of imports of LWR pipe and tube

from Korea as reported in official Commerce statistics between 2004 and 2006. 

 5

 *** reported projected export shipments in 2007 to the United States that were *** times its actual experience in

2006, and reported projected export shipments in 2008 to the United States that were *** times its actual experience

in 2006.

 6

 In aggregate export shipments to all other markets beside the United States were reportedly higher than export

shipments to the United States. Other Korean export markets include: countries in the Middle East for ***;

Panama, Chile, Australia for ***; countries in South America, East Asia, and the Middle East, as well as New

Zealand and Australia for ***.

VII-3

and included in table VII-1, Korean producers’ reported exports to the United States would account for

nearly all of official U.S. import statistics from Korea.4

 

Table VII-1

LWR pipe and tube: Data for producers in Korea, 2004-06, January-March 2006, January-March

2007, and projected 2007-08

* * * * * * *

Table VII-2

Overall light-walled steel pipe and tube: Data for producers in Korea, 2004-06, January-March

2006, and January-March 2007

* * * * * * *

Over the period for which data were collected, Korean producers reported increased capacity but

lower production of LWR pipe and tube. The increasing reported capacity between 2004 and 2006 was

accounted for by *** entering the market for LWR pipe and tube by bringing online new LWR pipe and

tube operations in Korea at the beginning of the period for which data were collected, while the industry’s

decreasing production was accounted for by apparent decreases in both *** home market sales in Korea

between 2004 and 2006. Projections for production and export shipments of LWR pipe and tube to the

United States in 2007 and 2008 are higher than the most recent actual experience due to two firms: ***. 

*** reported relatively high projections for 2007 and 2008 compared to its actual experience in 2006, and

its expected export shipments to the United States account for most of the increase in the overall Korean

industry’s projected increases in export shipments to the United States.5

 ***, on the other hand, reported

the ***. *** reported relatively high projections for 2007, returning to its 2004 LWR pipe and tube

production levels after decreasing production and decreasing home market sales in Korea between 2004

and 2006; its 2008 projections were even more optimistic than its 2007 projections. While *** expects

most of its increased business to occur because of increases in home market sales in Korea and increases

in export shipments to markets other than the United States, it, ***, also reported higher projected export

shipments to the United States than its most recent actual experience. In general, home market sales in

Korea accounted for the majority of Korean producers’ shipments of LWR pipe and tube over the period

for which data were collected, while the United States is a substantial export market for Korean-produced

LWR pipe and tube after the domestic Korean market.6

 

Like any producer of LWR pipe and tube, Korean producers could increase their production of

subject merchandise through product shifting, i.e. by decreasing other tubular production such as for

circular mechanical tubing in favor of LWR pipe and tube. As a whole, however, the industry could first

utilize its unutilized production capacity; however, most of the unutilized capacity reported in table VII-2

relates to ***. Reported total unutilized light-walled mill capacity by the reporting Korean producers

equaled *** percent of U.S. imports from Korea in 2006. 
 7

 Prior to November 2005, Galvak, S.A. de C.V., was a sister company of Hylsa. Hylsa merged Galvak into

Hylsa in November 2005. Hysla’s foreign producer questionnaire response, question II-2.

 8

 *** foreign producers’ questionnaire response, question I-4.

 9

 Mexican producer *** supplied the Commission with incomplete and inconsistent data in its questionnaire

response, which, in turn, had been submitted late.

 10 Light-Walled Rectangular Pipe and Tube From Mexico and Turkey, Inv. Nos. 731-TA-1054-1055 (Final),

USITC Publication 3728 (October 2004), p. VII-2. 

 11 Including ***, these seven Mexican firms accounted nearly all (***) of U.S. imports of LWR pipe and tube

from Mexico as reported in official Commerce statistics between 2004 and 2006. 

 12 Foreign producers’ questionnaire responses, question II-2. Other firms that reported changes in their operations

indicated that these changes did not have an effect on the data reported in their questionnaires, such as: ***, which

relocated some production equipment within Mexico; and ***, which added a paint line for its subject merchandise.

VII-4

THE INDUSTRY IN MEXICO

Seven producers of LWR pipe and tube in Mexico provided the Commission with foreign

producers’ questionnaire responses in these proceedings: Arco Metal S.A. de C.V. (“Arco”);

Hylsa, S.A. de C.V. (“Hylsa”),7

 which was purchased by Ternium (an Argentinian producer of steel pipe

and tube) in 2005; Industrias Monterrey, S.A. de C.V. (“IMSA”);8

 Maquilacero, S.A. de C.V.

(“Maquilacero”); Perfiles y Herrajes LM S.A. de C.V. (“Perfiles y Herrajes”); Productos Laminados de

Monterrey, S.A. de C.V. (“Prolamsa”); and Regiomontana de Perfiles y Turbos, S.A. de C.V. (“Regio”).9

All of these firms participated in the Commission’s previous investigations into LWR pipe and tube from

Mexico in 2004 and apparently represent all known Mexican production of LWR pipe and tube.10 Data

submitted by these Mexican producers relating to their exports to the United States correspond closely to

official U.S. import statistics for Mexico.11 Tables VII-3 and VII-4 present data on the Mexican industry. 

Over the period for which data were collected, Mexican producers reported both increased

capacity and production of LWR pipe and tube. The following Mexican producers reported changes to

their operations with implications for capacity and production of subject merchandise: *** apparently

began its LWR pipe and tube operations in January 2004, at the very beginning of the period for which

data were collected; *** increased its production capacity through productivity improvements; and ***

reported replacing old production equipment with new production equipment with a larger wall thickness

range and greater capacity for production.12 

Table VII-3

LWR pipe and tube: Data for producers in Mexico, 2004-06, January-March 2006, January-March

2007, and projected 2007-08

* * * * * * *

Table VII-4

Overall light-walled steel pipe and tube: Data for producers in Mexico, 2004-06, January-March

2006, and January-March 2007

* * * * * * *

Home market sales in Mexico consistently accounted for the majority of Mexican producers’

shipments of LWR pipe and tube over the period for which data were collected. The United States was

the second largest market for Mexican-produced LWR pipe and tube as reported in the Mexican
 13 Exports to other markets were minimal, accounting for less than 1 percent of total shipments.

 14 In other words, ***.

 15 Light-Walled Rectangular Pipe and Tube From Mexico and Turkey, Inv. Nos. 731-TA-1054-1055 (Final),

USITC Publication 3728 (October 2004), p. VII-5. 

 16 Ibid., table VII-3. Data gathered in these proceedings on the operations of Tosçelik and Yucel alone in 2004

account for *** percent of data gathered in the earlier LWR pipe and tube investigation for 2002. By that measure,

staff estimates that coverage of the Turkish LWR pipe and tube industry in these investigations is approximately ***

percent, with potentially better coverage in 2005 and 2006 as reporting Turkish producers expanded capacity for and

increased their production of LWR pipe and tube.

VII-5

producers’ questionnaire responses.13 While Mexican producers have some ability to shift production to

LWR pipe and tube from their production of circular and other tubular products, there also exists

unutilized light-walled mill capacity that could be used to increase production and export shipments to the

United States of LWR pipe and tube. The total unutilized capacity by the reporting Mexican producers

equaled *** percent of U.S. imports from Mexico in 2006.14

THE INDUSTRY IN TURKEY

According to the Commission’s 2004 investigation into LWR pipe and tube from Turkey, there

were 10 known producers of LWR pipe and tube in Turkey: Borusan Birlesik Boru Earrikalari A.S.

(“Borusan”); Erbosan Erciyas Boru Sanayii ve Ticaret A.S. (“Erbosan”); Goktas Yassi Hadde Marnulleri

Tic ve San A.S. (“Goktas”); Guven Boru ve Panfil Sanayi ve Ticovet Ltd. Std. (“Guven”); Mannesmann

Boru Endustrisi T.A.S. (“Mannesmann”); MMZ Onur Boru Profil Uretim San ve Tic A.S. (“MMZ”);

Noksel Celik Boru Sanyi A.S. (“Noksel”); Ozdemir Boru Profil San ve Tic Ltd. Std. (“Ozdemir”);

Ozborsan Boru San ve Tic A.S. (“Ozborsan”); and Umran Celik Boru Sanayii A.S. (“Umran”).15 These

firms plus five additional firms identified in the petition were sent foreign producers’ / exporters’

questionnaires in these proceedings. In these investigations, the Commission received completed

questionnaire responses from four firms, including Guven, Noksel, Tosçelik Profil ve Sac Endustrisi A.S.

(“Tosçelik”), and Yucel Boru ve Profil Endustrisi A.S. (“Yucel”). Compared to data gathered from the

Commission’s previous investigation into LWR pipe and tube from Turkey in 2004, the new responding

firms Tosçelik and Yucel ***.16 Tables VII-5 and VII-6 present data on the Turkish industry based on

data gathered in these proceedings. 

Table VII-5

LWR pipe and tube: Data for producers in Turkey, 2004-06, January-March 2006, January-March

2007, and projected 2007-08

* * * * * * *

Table VII-6

Overall light-walled steel pipe and tube: Data for producers in Turkey, 2004-06, January-March

2006, and January-March 2007

* * * * * * *

Over the period for which data were collected, Turkish producers reported increased capacity and

production of LWR pipe and tube. *** reported the opening of a new LWR pipe and tube production

facility in ***, Turkey with a nameplate capacity of *** short tons as well as the expansion of existing

production lines. *** reported added four new production lines, two of which related to the production of

subject merchandise between 2005 and 2006. *** reported adding two new production lines in 2004, one
 17 Other export markets include countries in the European Union for ***. 

VII-6

new production line in 2005, and a fourth additional production line in 2007. *** reported closing its

production facility at ***, Turkey, but then opening an expanded facility in *** Turkey. Projections for

capacity and production of LWR pipe and tube are higher than the Turkish firms’ actual experience in

2006 due primarily to ***. Exports to the United States reported in table VII-5 account for between ***

and *** percent of official U.S. imports from Turkey between 2004 and 2006. According to Turkish

producers’ questionnaire responses, exports to the United States accounted for *** percent of their total

shipments at their highest level in 2006.17 Turkish producers expect to ship fewer short tons of LWR pipe

and tube to the United States in 2007 than they did in either 2005 or 2006. In fact, ***, which ***,

reported *** projected shipments to the United States in 2007 or 2008. Other Turkish producers

indicated *** projected shipments for 2007 and 2008, but in all cases at quantities ***. On the other

hand, Turkish producers projected increases in their home market sales and increases in their exports to

markets other than the United States in both 2007 and 2008.

Circular mechanical tubing accounted for a substantial share of production by Turkish producers

throughout the period for which data were collected. While Turkish producers could increase their

production of subject merchandise through product shifting, i.e. by decreasing other tubular production

such as circular mechanical tubing in favor of LWR pipe and tube, there was enough unutilized capacity

on the Turkish mills to account for an increase of *** times the quantity of U.S. imports of LWR pipe and

tube from Turkey without expanding capacity or cutting into circular mechanical tube production.

U.S. INVENTORIES OF IMPORTED SUBJECT MERCHANDISE

Table VII-7 presents data on U.S. importers’ inventories of LWR pipe and tube over the period of

investigation.

Table VII-7

LWR pipe and tube: U.S. importers’ end-of-period inventories, 2004-06, January-March 2006, and

January-March 2007

Item

Calendar year January-March

2004 2005 2006 2006 2007

Imports from China–

Inventories (short tons) *** *** *** *** ***

Ratio of inventories to imports (percent) *** *** *** *** ***

 Ratio of inventories to U.S. shipments of

imports (percent) *** *** *** *** ***

Imports from Korea–

Inventories (short tons) *** *** *** *** ***

Ratio of inventories to imports (percent) *** *** *** *** ***

 Ratio of inventories to U.S. shipments of

imports (percent) *** *** *** *** ***

Imports from Mexico–

Inventories (short tons) *** *** *** *** ***

Ratio of inventories to imports (percent) *** *** *** *** ***

 Ratio of inventories to U.S. shipments of

imports (percent) *** *** *** *** ***

Table continued on next page.
VII-7

Table VII-7--Continued

LWR pipe and tube: U.S. importers’ end-of-period inventories, 2004-06, January-March 2006, and

January-March 2007

Item

Calendar year January-March

2004 2005 2006 2006 2007

Imports from Turkey–

Inventories (short tons) *** *** *** *** ***

Ratio of inventories to imports (percent) *** *** *** *** ***

 Ratio of inventories to U.S. shipments of

imports (percent) *** *** *** *** ***

Imports from subject sources–

Inventories (short tons) 4,441 2,774 6,896 1,758 4,557

Ratio of inventories to imports (percent) 3.2 1.4 3.1 1.1 2.5

 Ratio of inventories to U.S. shipments of

imports (percent) 3.2 1.4 3.2 1.0 2.3

Imports from nonsubject sources–

Inventories (short tons) *** *** *** *** ***

Ratio of inventories to imports (percent) *** *** *** *** ***

 Ratio of inventories to U.S. shipments of

imports (percent) *** *** *** *** ***

Imports from all sources–

Inventories (short tons) *** *** *** *** ***

Ratio of inventories to imports (percent) *** *** *** *** ***

 Ratio of inventories to U.S. shipments of

imports (percent) *** *** *** *** ***

 1 Not applicable.

Source: Compiled from data submitted in response to Commission questionnaires.

U.S. IMPORTERS’ OUTSTANDING ORDERS

Table VII-8 presents data on imports arranged for importation after March 31, 2007 by quarter.

Table VII-8

LWR pipe and tube: U.S. importers’ arranged imports, April 2007- March 2008

Item

2007 2008

Apr.-June July-Sep. Oct.-Dec. Jan.-Mar. Total

Quantity (short tons)

Imports arranged from--

China *** *** *** *** ***

Korea *** *** *** *** ***

Mexico *** *** *** *** ***

Turkey *** *** *** *** ***

 Subject sources 53,691 26,861 5,688 0 86,240

 Nonsubject sources 0 0 0 0 0

 All sources 53,691 26,861 5,688 0 86,240

Note.--While U.S. importers reported few arranged imports in later periods, that does not necessarily indicate a trend for future

imports as importers may not have arranged for shipments that far in advance.

Source: Compiled from data submitted in response to Commission questionnaires.
 18 Final Determination - Steel Structural Tubing, Canada Border Services Agency, December 2, 2003, found at

http://www.cbsa-asfc.gc.ca/sima/anti-dumping/ad1303f-e.html. 

 19 Certain Hollow Structural Sections Exported from the People’s Republic of China, Australian Customs

Service, May 24, 2007, found at http://www.customs.gov.au/webdata/resources/notices/ACDN0722.pdf.

 20 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.

 21 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 (September 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-8

DUMPING IN THIRD COUNTRY MARKETS

On November 17, 2003, the Canadian antidumping authority made a final determination of

dumping regarding structural tubing known as hollow structural sections, made of carbon and alloy steel,

welded, in sizes up to and including 16.0 inches (406.4 mm) in outside diameter for round products and

up to and including 48.0 inches (1219.2 mm) in periphery for rectangular and square products originating

in or exported from the Republic of Korea, South Africa, and Turkey.18 The scope of the orders on steel

structural tubing in Canada include both product subject (LWR pipe and tube) and not subject to these

investigations (such as heavy-walled rectangular pipe and tube and circular carbon welded pipe and tube). 

The Canadian order assessed dumping margins of 17.5 percent for imports of Turkish-origin steel

structural tubing.

On May 24, 2007, the Australia antidumping authorities imposed interim duties on certain hollow

structural sections exported from China.19 Product subject to the interim Australian antidumping duties

include both product subject (LWR pipe and tube) and not subject to these investigations (such as heavywalled rectangular pipe and tube, and circular carbon welded pipe and tube). Interim duties ranged from

2.5 percent to 14.6 percent.

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:20 21

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.
 22 IISI, Steel Statistical Yearbook 2006. Global and regional production data as published by IISI refer to all

welded pipe and tube (including, e.g., mechanical tubing, structural tubing, OCTG, and line pipe), and are therefore

substantially broader than the subject merchandise. As such, global and regional production data represent general

trends and are for illustrative purposes only.

 23 Data for 2006 are not yet available.

VII-9

Nonsubject Source Information

During the preliminary phase of these investigations, the Commission sought pricing data from

U.S. importers of LWR pipe and tube from all sources, presented in Part V of this report. With respect to

foreign industry data, the Commission sought publicly available information regarding producers of LWR

tubing from Canada, the predominant source of nonsubject imports into the United States in 2004-06 and

January-March 2007 (table IV-3 and figures IV-2 and IV-3). The information obtained is presented in the

following sections.

Overview

LWR pipe and tube is produced in substantial quantities by welded pipe and tube producers

throughout the world. Although figures specifically for global LWR tubing 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.22 As shown in table VII-9, welded pipe and tube

production, especially in China, increased between 2003 and 2005.23

Table VII-9

LWR pipe and tube: Global welded pipe and tube 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 America — — —

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 pipe and tube, and so are substantially overstated with

respect to LWR pipe and tube subject to these investigations. Data were not published for the Commonwealth of

Independent States in 2004-05 or for South America in 2003-05. The 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-10

Canada

As shown in table VII-10, there are several producers in Canada capable of producing LWR pipe

and tube, often in conjunction with other tubular products.

Table VII-10 

LWR pipe and tube: Locations, capacity,1

 and parent companies of production facilities in Canada

subject countries

Firm

Production

location

Capacity 1

(short

tons)

Product

standard(s)

Parent company/related foreign

producer

Canada 

Acme Davis Pipe & Tube

Mississauga,

Ontario (2

)

ASTM A-409,

ASTM A-530

Acquired by Universal Stainless &

Alloys Inc. (Canada) in January 2004

Atlantic Tube and Steel

Mississauga,

Ontario (2

) ASTM A-513

Atlas Tube Inc.

Harrow,

Ontario 600,000

ASTM A-500

Atlas Tube Group (Canada) is an

affiliate of Carlyle Group (US)

Winnipeg,

Manitoba 30,000

Bolton Steel Tube Co. Ltd.

Bolton,

Ontario

(

2

)

ASTM A-500,

ASTM A-513

Mississauga,

Ontario

Bull Moose Tube Ltd.

Burlington,

Ontario (2)

ASTM A-500,

ASTM A-513

Affiliated with Bull Moose Tube Co.

(US), the North American operations of

the Caparo Tube Group (UK)

Delhi-Solac

Delhi,

Ontario

(

2

)

ASTM A-513,

ASTM A-787

St. Jérôme,

Quebec

Dofasco Tubular Products

Brampton,

Ontario

(

2

)

ASTM A-500,

ASTM A-513 ArcelorMittal (Luxembourg/Netherlands)

Hamilton,

Ontario

Mississauga,

Ontario

Nova Tube Inc.

Baie d’Urfé,

Quebec 80,000 (2

)

NovaAmerican Steel (Canada), with

LWR tubing manufacturing facilities in

the United States

Welded Tube of Canada

Ltd.3

Concord,

Ontario (2) (2)

 1

 Capacity may be overstated because LWR pipe and tube is only one among the many products manufactured

by the companies’ production lines.

 2 Not available. 3 Welded Tube also has manufacturing facilities in the United States.

Source: Companies’ Internet sites and The Simdex Steel Tube Manufacturers Worldwide Guide, 2007.
 24 IISI, Steel Statistical Yearbook 2006, Table 29 (Production of Welded Tubes). The data for 2004 and 2005

differ from capacity estimates in table VII-10 reported in companies’ Internet sites and The Simdex Steel Tube

Manufacturers Worldwide Guide, 2007. These different data sources have potentially different participants and are

not expected to agree.

VII-11

Production Profile

Some Canadian producers of LWR tubing in table VII-10 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 Luxembourg/Netherlands– ArcelorMittal owns Dofasco Tubular Products in Ontario; and 

C The United Kingdom– Bull Moose Tube Ltd. is affiliated with Bull Moose Tube Inc. (United

States), the North American operations of the Caparo Tube Group (United Kingdom).

Table VII-10 shows a total reported Canadian capacity of 710,000 short tons per year. According

to the IISI, Canadian production of all welded pipes and tubes increased from 2.7 million short tons in

2003 to 3.0 million short tons in 2004, and to 3.1 million short tons in 2005.24

Export Profile 

Petitioners *** are the major U.S. importers of nonsubject LWR pipe and tube from Canada

(table III-6). Canada’s AUVs were the highest of any (subject or nonsubject) U.S. import source (table

IV-3), whereas the AUVs of importers’ shipments from nonsubject sources (including Canada) were

slightly lower than domestic shipment values (figure IV-5). According to World Trade Atlas, Canada

exported almost exclusively to the United States in 2004-06, which accounted for nearly 100 percent of

all Canadian exports of nonalloy steel welded pipe and related tubular products (HS 730660), including

LWR pipe and tube, in terms of quantity. In 2006, Mexico and Taiwan were the second- and third-largest

Canadian export destinations, but together along with all other destinations, accounted for about 0.02

percent of Canada’s exports of these products.

A-1

APPENDIX A

FEDERAL REGISTER NOTICES

Federal Register / Vol. 72, No. 127 / Tuesday, July 3, 2007 / Notices 36479 

1Prior to February 3, 2007, the merchandise 

subject to these investigations was properly 

classified under subheading 7306.60.50 of the 

Harmonized Tariff Schedule of the United States. 

the Federal Register notice of a meeting 

15 days prior to the meeting date. 

II. Public Comment Procedures 

Members of the public may make oral 

statements to the Advisory Board on 

July 30, 2007, at the appropriate point 

in the agenda. This opportunity is 

anticipated to occur at 3 p.m., local 

time. Persons wishing to make 

statements should register with the BLM 

by noon on July 30, 2007, at the meeting 

location. Depending on the number of 

speakers, the Advisory Board may limit 

the length of presentations. At previous 

meetings, presentations have been 

limited to three minutes in length. 

Speakers should address the specific 

wild horse and burro-related topics 

listed on the agenda. Speakers must 

submit a written copy of their statement 

to the address listed in the ADDRESSES

section or bring a written copy to the 

meeting. 

Participation in the Advisory Board 

meeting is not a prerequisite for 

submission of written comments. The 

BLM invites written comments from all 

interested parties. Your written 

comments should be specific and 

explain the reason for any 

recommendation. The BLM appreciates 

any and all comments, but those most 

useful and likely to influence decisions 

on management and protection of wild 

horses and burros are those that are 

either supported by quantitative 

information or studies or those that 

include citations to and analysis of 

applicable laws and regulations. Except 

for comments provided in electronic 

format, speakers should submit two 

copies of their written comments where 

feasible. The BLM will not necessarily 

consider comments received after the 

time indicated under the DATES section 

or at locations other than that listed in 

the ADDRESSES section. 

In the event there is a request under 

the Freedom of Information Act (FOIA) 

for a copy of your comments, the BLM 

will make them available in their 

entirety, including your name and 

address. However, if you do not want 

the BLM to release your name and 

address in response to a FOIA request, 

you must state this prominently at the 

beginning of your comment. The BLM 

will honor your request to the extent 

allowed by law. The BLM will release 

all submissions from organizations or 

businesses, and from individuals 

identifying themselves as 

representatives or officials of 

organizations or businesses, in their 

entirety, including names and 

addresses. 

Electronic Access and Filing Address 

Speakers may transmit comments 

electronically via the Internet to: 

ramona_delorme@blm.gov. Please 

include the identifier ‘‘WH&B’’ in the 

subject of your message and your name 

and address in the body of your 

message. 

Dated: June 27, 2007. 

Bud Cribley, 

Acting Assistant Director, Renewable 

Resources and Planning. 

[FR Doc. E7–12800 Filed 7–2–07; 8:45 am] 

BILLING CODE 4310–84–P 

INTERNATIONAL TRADE 

COMMISSION 

[Investigation Nos. 701–TA–449 and 731–

TA–1118–1121 (Preliminary)] 

Light-Walled Rectangular Pipe and 

Tube From China, Korea, Mexico, and 

Turkey 

AGENCY: United States International 

Trade Commission. 

ACTION: Institution and scheduling of a 

preliminary phase countervailing duty 

investigation and preliminary phase 

antidumping investigations. 

SUMMARY: The Commission hereby gives 

notice of the institution of investigation 

and commencement of preliminary 

phase countervailing duty investigation 

No. 701–TA–449 (Preliminary) under 

section 703(a) of the Tariff Act of 1930 

(19 U.S.C. 1671b(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 lightwalled rectangular pipe and tube, 

currently provided for in subheading 

7306.61.50 of the Harmonized Tariff 

Schedule of the United States,1 that are 

alleged to be subsidized by the 

Government of the People’s Republic of 

China. The Commission also hereby 

gives notice of the institution of 

investigations and commencement of 

preliminary phase antidumping 

investigations Nos. 731–TA–1118–1121 

(Preliminary) under section 733(a) of the 

Tariff Act of 1930 (19 U.S.C. 1673b(a)) 

(the Act) to determine whether there is 

a reasonable indication that an industry 

in the United States is materially 

injured or threatened with material 

injury, or the establishment of an 

industry in the United States is 

materially retarded, by reason of 

imports from China, Korea, Mexico, and 

Turkey of light-walled rectangular pipe 

and tube, currently provided for in 

subheading 7306.61.50 of the 

Harmonized Tariff Schedule of the 

United States,1 that are alleged to be 

sold in the United States at less than fair 

value. Unless the Department of 

Commerce extends the time for 

initiation pursuant to section 

702(c)(1)(B) of the Act (19 U.S.C. 

1671a(c)(1)(B)), the Commission must 

reach preliminary determinations in 

antidumping and countervailing duty 

investigations in 45 days, or in this case 

by Monday, August 13, 2007. The 

Commission’s views are due at 

Commerce within five business days 

thereafter, or by Monday, August 20, 

2007. 

For further information concerning 

the conduct of these investigations and 

rules of general application, consult the 

Commission’s Rules of Practice and 

Procedure, part 201, subparts A through 

E (19 CFR part 201), and part 207, 

subparts A and B (19 CFR part 207). 

DATES: Effective Date: June 27, 2007. 

FOR FURTHER INFORMATION CONTACT: 

Russell Duncan 

(russell.duncan@usitc.gov), Office of 

Investigations, U.S. International Trade 

Commission, 500 E Street SW., 

Washington, DC 20436. Hearingimpaired persons can obtain 

information on this matter by contacting 

the Commission’s TDD terminal on 202–

205–1810. Persons with mobility 

impairments who will need special 

assistance in gaining access to the 

Commission should contact the Office 

of the Secretary at 202–205–2000. 

General information concerning the 

Commission may also be obtained by 

accessing its Internet server (http:// 

www.usitc.gov). The public record for 

these investigations may be viewed on 

the Commission’s electronic docket 

(EDIS) at http://edis.usitc.gov. 

SUPPLEMENTARY INFORMATION: 

Background. These investigations are 

being instituted in response to a petition 

filed on June 27, 2007, by the following 

firms: Allied Tube and Conduit, Harvey, 

IL; Atlas Tube, Plymouth, MI; California 

Steel and Tube, City of Industry, CA; 

Ex-L-Tube, Kansas City, MO; Hannibal 

Industries, Los Angeles, CA; Leavitt 

Tube Company LLC, Chicago, IL; 

Maruichi American Corporation, Sante 

Fe Springs, CA; Searing Industries, 

Rancho Cucamonga, CA; Southland 

Tube, Birmingham, AL; Vest Inc., Los 

Angeles, CA; Welded Tube, Concord, 


jlentini on PROD1PC65 with NOTICES
36480 Federal Register / Vol. 72, No. 127 / Tuesday, July 3, 2007 / Notices 

Ontario (Canada); and Western Tube 

and Conduit, Long Beach, CA. 

Participation in the investigations and 

public service list. Persons (other than 

petitioners) wishing to participate in the 

investigations as parties must file an 

entry of appearance with the Secretary 

to the Commission, as provided in 

sections 201.11 and 207.10 of the 

Commission’s rules, not later than seven 

days after publication of this notice in 

the Federal Register. Industrial users 

and (if the merchandise under 

investigation is sold at the retail level) 

representative consumer organizations 

have the right to appear as parties in 

Commission antidumping 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 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 

Wednesday, July 18, 2007, at the U.S. 

International Trade Commission 

Building, 500 E Street SW., Washington, 

DC. Parties wishing to participate in the 

conference should contact Russell 

Duncan (russell.duncan@usitc.gov) not 

later than Monday, July 16, 2007, to 

arrange for their appearance. Parties in 

support of the imposition of 

countervailing and of antidumping 

duties in these investigations and 

parties in opposition to the imposition 

of such duties will each be collectively 

allocated one hour each 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 

Monday, July 23, 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 investigations (as identified by 

either the public or BPI service list), and 

a certificate of service must be timely 

filed. The Secretary will not accept a 

document for filing without a certificate 

of service. 

Authority: These investigations are being 

conducted under authority of title VII of the 

Tariff Act of 1930; this notice is published 

pursuant to section 207.12 of the 

Commission’s rules. 

Issued: June 28, 2007. 

By order of the Commission. 

Marilyn R. Abbott, 

Secretary to the Commission. 

[FR Doc. E7–12846 Filed 7–2–07; 8:45 am] 

BILLING CODE 7020–02–P 

DEPARTMENT OF JUSTICE 

Drug Enforcement Administration 

Importer of Controlled Substances; 

Notice of Application 

Pursuant to 21 U.S.C. 958(i), the 

Attorney General shall, prior to issuing 

a registration under this Section to a 

bulk manufacturer of a controlled 

substance in schedule I or II and prior 

to issuing a registration under 21 U.S.C. 

952(a)(2) authorizing the importation of 

such a substance, provide 

manufacturers holding registrations for 

the bulk manufacture of the substance 

an opportunity for a hearing. 

Therefore, in accordance with 21 CFR 

1301.34(a), this is notice that on March 

29, 2007, Applied Science Labs, 

Division of Alltech Associates Inc., 2701 

Carolean Industrial Drive, State College, 

Pennsylvania 16801, made application 

by renewal to the Drug Enforcement 

Administration (DEA) to be registered as 

an importer of the basic classes of 

controlled substances listed in schedule 

I and II: 

Drug Schedule 

Heroin (9200) ............................... I 

Cocaine (9041) ............................. II 

Codeine (9050) ............................. II 

Methadone (9250) ........................ II 

The company plans to import these 

controlled substances for the 

manufacture of reference standards. 

Any manufacturer who is presently, 

or is applying to be, registered with DEA 

to manufacture such basic classes of 

controlled substances may file 

comments or objections to the issuance 

of the proposed registration and may, at 

the same time, file a written request for 

a hearing on such application pursuant 

to 21 CFR 1301.43 and in such form as 

prescribed by 21 CFR 1316.47. 

Any such written comments or 

objections being sent via regular mail 

should be addressed, in quintuplicate, 

to the Drug Enforcement 

Administration, Office of Diversion 

Control, Federal Register Representative 

(ODL), Washington, DC 20537, or any 

being sent via express mail should be 

sent to Drug Enforcement 

Administration, Office of Diversion 

Control, Federal Register Representative 

(ODL), 2401 Jefferson Davis Highway, 

Alexandria, Virginia 22301; and must be 

filed no later than August 2, 2007. 

This procedure is to be conducted 

simultaneously with, and independent 

of, the procedures described in 21 CFR 

1301.34(b), (c), (d), (e) and (f). As noted 

in a previous notice published in the 

Federal Register on September 23, 1975, 

(40 FR 43745–46), all applicants for 

registration to import a basic class of 

any controlled substances in schedule I 

or II are and will continue to be required 

to demonstrate to the Deputy Assistant 

Administrator, Office of Diversion 

Control, Drug Enforcement 

Administration, that the requirements 

for such registration pursuant to 21 

U.S.C 958(a), 21 U.S.C 823(a), and 21 

CFR 1301.34(b), (c), (d), (e) and (f) are 

satisfied. 


jlentini on PROD1PC65 with NOTICES
40274 Federal Register / Vol. 72, No. 141 / Tuesday, July 24, 2007 / Notices 

Way Management LLC and will be 

operated by REO Distribution Services. 

No specific manufacturing requests 

are being made at this time. Such 

requests would be made to the Board on 

a case–by-case basis. 

In accordance with the Board’s 

regulations, a member of the FTZ Staff 

has been designated examiner to 

investigate the application and report to 

the Board. 

Public comment is invited from 

interested parties. Submissions (original 

and 3 copies) shall be addressed to the 

Board’s Executive Secretary at the 

address below. The closing period for 

their receipt is September 24, 2007. 

Rebuttal comments in response to 

material submitted during the foregoing 

period may be submitted during the 

subsequent 15–day period to October 9, 

2007. 

A copy of the application and 

accompanying exhibits will be available 

for public inspection at each of the 

following locations: 

Culpeper County Chamber of 

Commerce, 109 South Commerce 

Street, Culpeper, Virginia 22701 

Office of the Executive Secretary, 

Foreign–Trade Zones Board, U.S. 

Department of Commerce, Room 

2111, 1401 Constitution Avenue, 

NW, Washington, DC 20230 

For further information contact 

Claudia Hausler at 

Claudia_Hausler@ita.doc.gov or (202)- 

482–1379. 

Dated: July 13, 2007. 

Andrew McGilvray, 

Executive Secretary. 

[FR Doc. E7–14322 Filed 7–23–07; 8:45 am] 

BILLING CODE 3510–DS–S 

DEPARTMENT OF COMMERCE 

International Trade Administration 

(A–549–817) 

Certain Hot–Rolled Carbon Steel Flat 

Products from Thailand: Notice of 

Extension of Time Limit for the 

Preliminary Results of the 

Antidumping Duty Administrative 

Review 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

EFFECTIVE DATE: July 24, 2007. 

FOR FURTHER INFORMATION CONTACT: 

Dena Crossland or Stephen Bailey, AD/ 

CVD Operations, Office 7, Import 

Administration, International Trade 

Administration, U.S. Department of 

Commerce, 14th Street and Constitution 

Avenue, NW, Washington, DC 20230; 

telephone: (202) 482–3362 or (202) 482–

0193, respectively. 

SUPPLEMENTARY INFORMATION: 

Background 

On December 27, 2006, the 

Department of Commerce (‘‘the 

Department’’) published a notice of 

initiation of administrative review of the 

antidumping duty order on certain hot–

rolled carbon steel flat products from 

Thailand, covering the period November 

1, 2005, through October 31, 2006. See 

Initiation of Antidumping and 

Countervailing Duty Administrative 

Reviews, 71 FR 77720 (December 27, 

2006). The preliminary results for this 

review are currently due no later than 

August 2, 2007. 

Statutory Time Limits 

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 order for 

which a review is requested and the 

final results of review within 120 days 

after the date on which the preliminary 

results are published. 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. 

Extension of Time Limits for 

Preliminary Results 

The deadline for the preliminary 

results of this administrative review is 

currently August 2, 2007. The 

Department determines that completion 

of the preliminary results within the 

statutory time period is not practicable. 

On May 30, 2007, the Department 

issued a section D questionnaire to 

respondent G Steel Public Company 

Limited (‘‘G Steel’’). On June 20, 2007, 

the Department issued G Steel a 

supplemental sales questionnaire 

requesting additional information 

regarding the business operations of 

certain affiliated companies. G Steel 

submitted its section D and 

supplemental sales questionnaire 

responses on June 27, 2007, and July 11, 

2007, respectively. The Department 

requires additional time to review and 

analyze G Steel’s questionnaire 

responses, to issue additional 

supplemental sales and cost 

questionnaires to G Steel and/or G 

Steel’s affiliates, and to conduct 

verification of the questionnaire 

responses, if necessary. 

Therefore, given the additional time 

needed to conduct a complete analysis 

for this administrative review, in 

accordance with section 751(a)(3)(A) of 

the Act, the Department is extending the 

time period for completion of the 

preliminary results to 365 days. 

Therefore, the preliminary results are 

now due no later than November 30, 

2007. The final results continue to be 

due no later than 120 days after 

publication of the notice of the 

preliminary results. 

This notice is published in 

accordance with sections 751(a)(3)(A) 

and 777(i)(1) of the Act. 

Dated: July 16, 2007. 

Stephen J. Claeys, 

Deputy Assistant Secretary for Import 

Administration. 

[FR Doc. E7–14288 Filed 7–23–07; 8:45 am] 

BILLING CODE 3510–DS–S 

DEPARTMENT OF COMMERCE 

International Trade Administration 

(A–580–859, A–201–835, A–489–815, A–570–

914) 

Initiation of Antidumping Duty 

Investigations: Light–Walled 

Rectangular Pipe and Tube from 

Republic of Korea, Mexico, Turkey, and 

the People’s Republic of China. 

AGENCY: AGENCY: Import 

Administration, International Trade 

Administration, Department of 

Commerce. 

EFFECTIVE DATE: July 24, 2007. 

FOR FURTHER INFORMATION CONTACT: 

David Cordell (Republic of Korea), John 

Drury (Mexico), Fred Baker (Turkey), or 

Jeffrey Pedersen (People’s Republic of 

China), AD/CVD Operations, Office 7 

and Office 4, Import Administration, 

International Trade Administration, 

U.S. Department of Commerce, 14th 

Street and Constitution Avenue, NW, 

Washington, DC 20230; telephone: (202) 

482–0408, (202) 482–0195, (202) 482–

2924, or (202) 482–2769, respectively. 

SUPPLEMENTARY INFORMATION: 

The Petition 

On June 27, 2007, the Department of 

Commerce (the Department) received a 

petition on imports of light–walled 

rectangular pipe and tube (LWR) from 

the Republic of Korea (Korea), Mexico, 

Turkey, and the People’s Republic of 

China (PRC), filed in proper form by 

Allied Tube and Conduit, Atlas Tube, 

California Steel and Tube, EXLTUBE, 

Hannibal Industries, Leavitt Tube 

Company, Maruichi American 

Corporation, Searing Industries, 

Southland Tube, Vest Inc., Welded 

Tube, and Western Tube and Conduit 

mstockstill on PROD1PC66 with NOTICES

Federal Register / Vol. 72, No. 141 / Tuesday, July 24, 2007 / Notices 40275 

(the petitioners). See Antidumping Duty 

Petition on Light–Walled Rectangular 

Pipe and Tube from Korea, Mexico, the 

People’s Republic of China, and Turkey 

and Countervailing Duty Petition on 

Light–Walled Rectangular Pipe and 

Tube from the People’s Republic of 

China (June 27, 2007) (petition). Bull 

Moose Tube Company later joined the 

petitioning firms. See petitioners’ letter 

dated July 9, 2007, at 7. On June 29, 

2007, and July 3, 2007, the Department 

issued requests for additional 

information and clarification of certain 

areas of the petition. Petitioners filed 

their response to our request for 

information on July 6, 2007. On July 10, 

2007, the Department issued another 

request for information and clarification 

of certain areas of the petition. We 

received petitioners’ response to our 

request for information on July 12, 2007. 

In accordance with section 732(b) of 

the Tariff Act of 1930, as amended (the 

Act), the petitioners allege that imports 

of light–walled rectangular pipe and 

tube from Korea, Mexico, Turkey, and 

the PRC, are being, or are likely to be, 

sold in the United States at less than fair 

value, within the meaning of section 

731 of the Act, and that such imports 

are materially injuring, or threatening 

material injury to, an industry in the 

United States. 

The Department finds the petitioners 

filed this petition on behalf of the 

domestic industry because the 

petitioners are interested parties as 

defined in section 771(9)(C) of the Act, 

and the petitioners have demonstrated 

sufficient industry support with respect 

to the investigations the petitioners are 

requesting the Department to initiate. 

(See ‘‘Determination of Industry 

Support for the Petition’’ below.) 

Scope of Investigations 

The merchandise that is the subject of 

these investigations is certain welded 

carbon–quality light–walled steel pipe 

and tube, of rectangular (including 

square) cross section (LWR), having a 

wall thickness of less than 4 mm. 

The term carbon–quality steel 

includes both carbon steel and alloy 

steel which contains only small 

amounts of alloying elements. 

Specifically, the term carbon–quality 

includes products in which none of the 

elements listed below exceeds the 

quantity by weight respectively 

indicated: 1.80 percent of manganese, or 

2.25 percent of silicon, or 1.00 percent 

of copper, or 0.50 percent of aluminum, 

or 1.25 percent of chromium, or 0.30 

percent of cobalt, or 0.40 percent of 

lead, or 1.25 percent of nickel, or 0.30 

percent of tungsten, or 0.10 percent of 

molybdenum, or 0.10 percent of 

niobium, or 0.15 percent vanadium, or 

0.15 percent of zirconium. The 

description of carbon–quality is 

intended to identify carbon–quality 

products within the scope. The welded 

carbon–quality rectangular pipe and 

tube subject to these investigations is 

currently classified under the 

Harmonized Tariff Schedule of the 

United States (‘‘HTSUS’’) subheadings 

7306.61.50.00 and 7306.61.70.60. While 

HTSUS subheadings are provided for 

convenience and Customs purposes, our 

written description of the scope of these 

investigations is dispositive. 

Comments on the Scope of the 

Investigations 

During our review of the petition, we 

discussed the scope with the petitioners 

to ensure that it is an accurate reflection 

of the products for which the domestic 

industry is seeking relief. Moreover, as 

discussed in the preamble to the 

regulations (Antidumping Duties; 

Countervailing Duties; Final Rule, 62 FR 

27296, 27323 (May 19, 1997)), we are 

setting aside a period for interested 

parties to raise issues regarding product 

coverage. The Department encourages 

all interested parties to submit such 

comments within 20 calendar days of 

the publication of this notice. 

Comments should be addressed to 

Import Administration’s Central 

Records Unit (CRU), Room 1870, U.S. 

Department of Commerce, 14th Street 

and Constitution Avenue, NW, 

Washington, DC 20230. The period of 

scope consultations is intended to 

provide the Department with ample 

opportunity to consider all comments 

and to consult with parties prior to the 

issuance of the preliminary 

determinations. 

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 

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 light–

walled rectangular pipe and tube 

constitutes a single domestic like 

product and we have analyzed industry 

support in terms of that domestic like 

product. For a discussion of the 

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domestic like product analysis in this 

case, see ‘‘Antidumping Investigation 

Initiation Checklist: Light–Walled 

Rectangular Pipe and Tube from the 

Republic of Korea’’ (Korea Initiation 

Checklist) at Attachment II (Industry 

Support), ‘‘Antidumping Investigation 

Initiation Checklist: Light–Walled 

Rectangular Pipe and Tube from 

Mexico’’ (Mexico Initiation Checklist) at 

Attachment II (Industry Support), and 

‘‘Antidumping Investigation Initiation 

Checklist: Light–Walled Rectangular 

Pipe and Tube from Turkey’’ (Turkey 

Initiation Checklist) at Attachment II 

(Industry Support), ‘‘Antidumping 

Investigation Initiation Checklist: Light–

Walled Rectangular Pipe and Tube from 

the People’s Republic of China’’ (PRC 

Initiation Checklist) at Attachment II 

(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 

petitions 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 

petitions), we considered the industry 

support data contained in the petition 

with reference to the domestic like 

product as defined in Attachment I 

(Scope of the Petitions) to the Korea 

Initiation Checklist, Mexico Initiation 

Checklist, Turkey Initiation Checklist, 

and PRC Initiation Checklist. To 

establish industry support, petitioners 

provided their production of the 

domestic like product for the year 2006, 

and compared that to production of the 

domestic like product for the industry. 

For further discussion see the Korea 

Initiation Checklist, Mexico Initiation 

Checklist, and Turkey Initiation 

Checklist, and PRC Initiation Checklist 

at Attachment II (Industry Support). 

Our review of the data provided in the 

petitions, supplemental submissions, 

and other information readily available 

to the Department indicates petitioners 

have established industry support. First, 

the domestic producers have met the 

statutory criteria for industry support 

under 732(c)(4)(A)(i) of the Act because 

the domestic producers (or workers) 

who support the petition account for at 

least 25 percent of the total production 

of the domestic like product. Second, 

the domestic producers have met the 

statutory criteria for industry support 

under 732(c)(4)(A)(ii) of the Act because 

the domestic producers (or workers) 

who support the petitions 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 petitions. Because the petitions 

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 section 732(c)(4)(D) of the 

Act. Accordingly, the Department 

determines that the petitions were filed 

on behalf of the domestic industry 

within the meaning of section 732(b)(1) 

of the Act. See Korea Initiation 

Checklist, Mexico Initiation Checklist, 

Turkey Initiation Checklist, and the PRC 

Initiation Checklist, at Attachment II 

(Industry Support). 

The Department finds petitioners filed 

the petitions on behalf of the domestic 

industry because they are an interested 

party as defined in section 771(9)(C) of 

the Act and they have demonstrated 

sufficient industry support with respect 

to the antidumping investigation they 

are requesting the Department initiate. 

See Korea Initiation Checklist, Mexico 

Initiation Checklist, Turkey Initiation 

Checklist, and PRC Initiation Checklist 

at Attachment II (Industry Support). 

Allegations and Evidence of Material 

Injury and Causation 

Petitioners allege that the U.S. 

industry producing the domestic like 

product is being materially injured, or is 

threatened with material injury, by 

reason of the imports of the subject 

merchandise sold at less than normal 

value (NV). Petitioners contend the 

industry’s injured condition is 

illustrated by reduced market share, lost 

sales, reduced production, reduced 

capacity, and reduced 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. In addition, 

petitioners allege that imports of the 

subject merchandise exceed the 

negligibility threshold provided for 

under section 771(24)(A) of the Act. 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 the 

Korea Initiation Checklist, Mexico 

Initiation Checklist, Turkey Initiation 

Checklist, and PRC Initiation Checklist 

at Attachment III (Injury). 

Periods of Investigation 

In accordance with section 19 C.F.R. 

351.204(b) of the Department’s 

regulations, because the petition was 

filed on June 27, 2007, the period of 

investigation (POI) for Korea, Mexico, 

and Turkey, is April 1, 2006, through 

March 31, 2007, and the POI for the PRC 

is October 1, 2006, through March 31, 

2007. 

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 has based 

its decision to initiate investigations 

with respect to Korea, Mexico, Turkey, 

and the PRC. The sources of data for the 

deductions and adjustments relating to 

U.S. price and NV are discussed in 

greater detail in the Korea Initiation 

Checklist, Mexico Initiation Checklist, 

the Turkey Initiation Checklist, and the 

PRC Initiation Checklist. Should the 

need arise to use any of this information 

as facts available under section 776 of 

the Act, we may reexamine the 

information and revise the margin 

calculation, if appropriate. 

Korea 

Export Price 

Petitioners calculated EP using prices 

at which the subject merchandise was 

offered for sale in the United States, and 

also on the AUVs for import data for the 

POI obtained from the U.S. Census 

Bureau IM–145 data for Korea. 

Petitioners based one EP on the FAS 

(Free Alongside Ship) AUV of the 

appropriate HTSUS numbers under 

which LWR is imported into the United 

States and that fall within the scope of 

the investigations for the period of 

investigation. These HTSUS numbers 

contain imports of products which were 

most similar to the product on which 

the Petitioners based normal value (NV) 

in the petition. HTSUS number 

7306.60.50.00 was the appropriate 

number for all of 2006. In 2007, 

merchandise that previously entered 

under 7306.60.50.00 in 2006 was 

divided between two new HTSUS 

numbers. The appropriate HTSUS for 

LWR is 7306.61.50.00 in 2007. From 

both the price quotes and the AUVs 

petitioners deducted an amount for 

international freight from the EP for the 

margin calculation to reflect the 

proposed delivery terms of sale. 

International freight was calculated as 

the difference between the IM–45 FAS 

and the IM–45 CIF values derived from 

U.S. Census data. Petitioners also 

deducted a three percent dealer mark up 

from the price quotes to reflect the 

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estimated expenses the U.S. trader/ 

importer incurred in selling the 

merchandise. See Korea Initiation 

Checklist. 

Normal Value 

Petitioners stated they were unable to 

obtain reliable pricing data directly from 

home market producers or trading 

companies. Therefore, petitioners based 

home market prices on a January 2007 

edition of the Korean Metal Journal. The 

publication listed the prices at which 

various metal products, including light–

walled rectangular pipe and tube, are 

sold in Korea. The Korean Metal Journal 

listed a single wholesale price and 

various consumer prices based on 

location in South Korea. Petitioners 

used the lower ‘‘wholesale price’’ as a 

conservative measure. Petitioners 

converted prices from Korean won to 

U.S. dollars and from a per–meter to a 

per–hundred-weight (cwt) basis because 

subject merchandise is typically sold on 

a per–cwt basis in the United States. 

Petitioners claim the prices in the 

Korean Metal Journal are an actual 

offering of the subject merchandise for 

sale in Korea. Petitioners made no 

deduction for freight in calculating NV, 

claiming the terms of sale for the 

wholesale prices were ex–factory. 

Mexico 

Export Price 

The petitioners calculated a single EP 

using the AUVs for import data 

collected by the U.S. Census Bureau for 

Mexico. The petitioners used the FAS 

AUV of the appropriate HTSUS 

numbers under which light–walled 

rectangular pipe and tube is imported 

into the United States and that fall 

within the scope of the investigations. 

These HTSUS numbers contain imports 

of products which were most similar to 

the product on which the petitioner 

based NV in Mexico. 7306.60.50.00 was 

the appropriate HTSUS number for 

subject merchandise during 2006. In 

2007 the HTSUS number was changed, 

and now subject merchandise is 

imported under HTSUS 7306.61.50.00. 

These HTSUS numbers account for 100 

percent of the volume of imports from 

Mexico. See Mexico Initiation Checklist. 

Petitioners made an adjustment to 

U.S. price for inland freight from the 

plant to the port of importation, 

specifically Laredo, Texas. Petitioners 

based the inland freight charge on a 

comparison market price quote for 

inland freight within Mexico, adjusted 

for differences in distance between 

Laredo and the quoted destination of the 

comparison market quote. See Mexico 

Initiation Checklist. 

Normal Value 

Petitioners stated that, since it does 

not sell light–walled rectangular pipe 

and tube in the Mexican market, it does 

not have specific knowledge of how the 

subject product is sold, marketed, or 

packaged in that domestic market. 

Petitioners were able to determine 

domestic Mexican prices for light–

walled rectangular pipe and tube by 

obtaining a price quotation, through an 

economic consultant, from a Mexican 

manufacturer of the subject product. See 

memorandum ‘‘Light–walled 

Rectangular Pipe and Tube: Telephone 

Call to Market Research Firm ‘‘ dated 

July 16, 2007. The price quotation 

identified specific terms of sale and 

payment terms. Petitioner did not make 

any adjustments to the quoted prices, as 

the terms of delivery were FOB (‘‘Free 

on Board’’) at the manufacturing facility. 

See Mexico Initiation Checklist. 

Turkey 

Export Price 

Petitioners calculated EP based on a 

price quote from a U.S. seller of subject 

pipe and tube (U.S. dealer), and also on 

AUVs obtained from U.S. Census 

Bureau IM 145 import statistics. For the 

price quotes, petitioners deducted an 

amount for international freight. 

Petitioners also deducted a value of 

three percent of the U.S. price to cover 

inland freight from the U.S. port to the 

U. S. dealer, as well as the U.S. dealer’s 

expenses and profit. See Turkey 

Initiation Checklist. 

Petitioners also calculated EP based 

on AUVs. Petitioners based one EP on 

the FAS AUV of the appropriate HTSUS 

numbers under which LWR is imported 

into the United States and that fall 

within the scope of the investigations 

for the period of investigation. These 

HTSUS numbers contain imports of 

products which were most similar to the 

product on which the Petitioners based 

NV in the petition. HTSUS number 

7306.60.50.00 was the appropriate 

number for all of 2006. In 2007, 

merchandise that previously entered 

under 7306.60.50.00 in 2006 was 

divided between two new HTSUS 

numbers. The appropriate HTSUS for 

LWR is 7306.61.50.00 in 2007. 

Petitioners did not make an adjustment 

for international freight because they 

calculated the AUV prices on the FAS 

value of the merchandise. See Turkey 

Initiation Checklist. 

Normal Value 

Petitioners based NV on two price 

quotes from each of two Turkish 

producers of light–walled rectangular 

pipe and tube. Petitioners obtained 

these prices by engaging a consultant, 

who hired a research firm with an agent 

in Turkey. See memorandum ‘‘Light–

walled Rectangular Pipe and Tube: 

Telephone Call to Market Research 

Firm,’’ dated July 16, 2007. Except 

where terms of sale were ex–works, 

petitioners made a deduction for a 

three–percent markup representing the 

distributor’s freight, selling expenses, 

and profit. For one of the producers, 

petitioners also made a deduction for a 

discount the producer offered. See 

Turkey Initiation Checklist. 

People’s Republic of China 

Export Price 

The dumping margins in the petition 

are based on 10 different EPs for LWR. 

Petitioners based one EP on the FAS 

AUV of the appropriate HTSUS 

numbers under which LWR is imported 

into the United States and that fall 

within the scope of the investigations 

for the period of investigation. These 

HTSUS numbers contain imports of 

products which were most similar to the 

product on which the Petitioners based 

NV in the petition. HTSUS number 

7306.60.50.00 was the appropriate 

number for all of 2006. In 2007, 

merchandise that previously entered 

under 7306.60.50.00 in 2006 was 

divided between two new HTSUS 

numbers. The appropriate HTSUS for 

LWR is 7306.61.50.00 in 2007. 

Petitioners made no adjustments to the 

AUVs in calculating EPs (foreign inland 

freight charges were not deducted from 

the AUVs as the distances between the 

Chinese producers and the nearest ports 

are not known). See PRC Initiation 

Checklist. 

Petitioners calculated nine EPs using 

price quotes from distributors of subject 

pipe manufactured in the PRC. 

Petitioners calculated EPs from the price 

quotes by deducting foreign brokerage 

charges, international freight charges, 

and commission expenses from the 

prices. See Exhibit II–1 of the petition 

and the PRC Initiation Checklist. Each 

price quote was for a specific grade and 

quality of light–walled rectangular pipe 

and tube that is within the scope of this 

petition and that was to be delivered to 

the U.S. customer within the POI. 

Normal Value 

Petitioners stated that the PRC was a 

non–market economy (NME) and no 

determination to the contrary has been 

made by the Department. In previous 

investigations, the Department has 

determined that the PRC is an NME. See 

Notice of Final Determination of Sales 

at Less Than Fair Value: Chlorinated 

Isocyanurates From the People’s 

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Republic of China, 70 FR 24502 (May 

10, 2005), Notice of Final Determination 

of Sales at Less Than Fair Value and 

Affirmative Critical Circumstances: 

Magnesium Metal from the People’s 

Republic of China, 70 FR 9037 (Feb. 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 

(Feb. 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 

purposes of the initiation of this 

investigation. Accordingly, because 

available information does not permit 

the NV of the merchandise to be 

determined under section 773(a) of the 

Act, 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 identified India as the 

surrogate country, arguing that India is 

an appropriate surrogate, pursuant to 

section 773(c)(4) of the Act, because it 

is a market economy country that is at 

a level of economic development 

comparable to that of the PRC and is a 

significant producer and exporter of 

subject pipe and tube. See Volume II of 

the petition at pages II–1 and II–2. Based 

on the information provided by 

petitioners, we believe their use of India 

as a surrogate country is appropriate for 

purposes of initiating this investigation. 

After the initiation of the investigation, 

the Department will solicit comments 

regarding surrogate country selection. 

Also, pursuant to 19 CFR 

351.301(c)(3)(i) of the agency’s 

regulations, interested parties will be 

provided an opportunity to submit 

publicly available information to value 

factors of production within 40 days 

after the date of publication of the 

preliminary determination. 

Petitioners provided information to 

calculate NV as required by 19 CFR 

351.202(b)(7)(i)(C). See Volume II of the 

petition at Exhibits II–I and 6, as revised 

in Exhibit 2 of the July 12, 2007 

supplement to the petition. Specifically, 

petitioners provided surrogate values 

and factors of production information 

on which they based NV. Petitioners 

based the amounts and types of inputs 

used to produce light–walled 

rectangular pipe and tube on their own 

production experience because they 

claimed that they are not aware of any 

generally available information 

regarding the factors of production used, 

and the factor consumption rates 

experienced, by PRC producers of 

subject pipe and tube. 

According to petitioners, the cost 

model provided in Exhibit II–6 of the 

petition, as revised in Exhibit 2 of the 

July 12, 2007, supplement to the 

petition, reflects the cost of producing 

LWR with the following dimensions: 

1′′x1′′x.063′′ and 2′′x2′′x.063.′′ These are 

the sizes of LWR for which petitioners 

provided price quotes. Petitioners also 

claim that these are the sizes of 

commonly sold LWR models on which 

the ITC based its determination in a 

prior LWR antidumping investigation. 

Thus, petitioners claim that these sizes 

of LWR will result in representative 

dumping margins. See pages II–2 and II–

3 of the petition and PRC Initiation 

Checklist. 

In accordance with section 773(c)(4) 

of the Act, petitioners valued factors of 

production, where possible, using 

reasonably available, public surrogate 

country data. Specifically, petitioners 

valued input materials by multiplying 

the quantity of the input used to 

produce a metric ton of LWR by a 

surrogate value. See Exhibit II–6 of the 

petition. Petitioners valued the hot–

rolled steel coil input using prices 

published online by ‘‘Steel Rx 

Corporation.’’ However, petitioners’

steel coil prices are available in only 

four Indian cities. The Department 

prefers to use broad market average 

prices in valuing factors of production. 

See Fresh Garlic from the People’s 

Republic of China: Final Results and 

Partial Rescission of the Eleventh 

Administrative Review and New 

Shipper Reviews, 72 FR 34438 (June 22, 

2007). Thus, we recalculated the 

surrogate value for steel coils using data 

from the Monthly Statistics of the 

Foreign Trade of India, as compiled by 

World Trade Data Atlas (WTA). WTA 

data are readily available and represent 

broad market averages. We used WTA 

prices for coils of a thickness that would 

be used to produce the LWR for which 

petitioners provided U.S. prices. See 

PRC Initiation Checklist. Since the 

Indian WTA import values are 

expressed in a foreign currency, 

petitioners converted these values into 

U.S. dollars using the exchange rates on 

Import Administration’s website, 

ia.ita.doc.gov/exchange/india.txt, for 

the period during which the imports 

were made. See Exhibit II–6 of the 

petition. 

Petitioners valued labor using the 

Department’s regression–based wage 

rate for the PRC ($0.83 per hour) in 

accordance with 19 CFR 351.408(c)(3). 

See the PRC Initiation Checklist. 

Petitioners valued the various forms 

of energy used to produce LWR using 

the following surrogates: (1) the Indian 

electricity rate as reported by the 

International Energy Agency for the year 

2000, inflated to a POI value using the 

Wholesale Price Index (WPI) published 

by the International Monetary Fund 

(IMF) (see Volume II of the petition at 

page 9 and Exhibit II–9); and (2) Indian 

natural gas prices charged to industrial 

users during a period overlapping the 

POI, as reported by CRISIL Research 

India. See Volume II of the petition at 

Exhibit II–10. We revalued natural gas 

using February 2005 Indian natural gas 

rates published by GAIL. These rates 

were recently used in the initiation of 

the antidumping duty investigation of 

circular pipe from the PRC. See 

Initiation of Antidumping Duty 

Investigation: Circular Welded Carbon–

Quality Steel Pipe from the People’s 

Republic of China, 72 FR 36663, 36666 

(July 5, 2007). We inflated the natural 

gas price to a POI value using the WPI 

published by the IMF. 

Petitioners calculated surrogate 

financial ratios (i.e., the overhead, 

selling, general, and administrative 

(SG&A), and profit ratios) using the 

2005–2006 Annual Report of the Indian 

LWR producer Zenith Birla (India) 

Limited. See Volume II of the petition 

at page II–4 and Exhibit II–4. We revised 

petitioners’ financial ratios by including 

in the denominator of the overhead and 

SG&A ratios certain financial statement 

line items that were omitted from those 

denominators. We also revised the 

denominator of the profit ratio. See PRC 

Initiation Checklist. 

Fair Value Comparisons 

Based on a comparison of EP to NV, 

we find that a dumping margin of 11.50 

percent exists for Mexico, that dumping 

margins exist for Korea ranging from 

11.74 percent to 30.66 percent; for 

Turkey ranging from 15.28 percent to 

41.71 percent; and for the PRC ranging 

from 6.30 percent to 40.52 percent. 

Therefore, in accordance with section 

773(a) of the Act, there is reason to 

believe that imports of light–walled 

rectangular pipe and tube from Mexico, 

Korea, Turkey, and the PRC, are being, 

or are likely to be, sold in the United 

States at less than fair value. 

Initiation of Antidumping 

Investigations 

Based upon the examination of the 

petition on light–walled rectangular 

pipe and tube from Korea, Mexico, 

Turkey, and the PRC, and other 

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information reasonably available to the 

Department, the Department finds that 

the petition meets the requirements of 

section 732 of the Act. Therefore, we are 

initiating antidumping duty 

investigations to determine whether 

imports of light–walled rectangular pipe 

and tube from Korea, Mexico, Turkey, 

and the PRC are being, or are likely to 

be, sold in the United States at less than 

fair value. In accordance with section 

733(b)(1)(A) of the Act, unless 

postponed, we will make our 

preliminary determinations no later 

than 140 days after the date of this 

initiation. 

Separate Rates and Quantity and Value 

Questionnaire 

The Department recently modified the 

process by which exporters and 

producers may obtain separate–rate 

status in NME investigations. See Policy 

Bulletin 05.1: Separate–Rates Practice 

and Application of Combination Rates 

in Antidumping Investigations 

involving Non–Market Economy 

Countries (Separate Rates and 

Combination Rates Bulletin), (April 5, 

2005), available on the Department’s 

website at http://ia.ita.doc.gov/policy/ 

bull05–1.pdf. The process requires the 

submission of a separate–rate status 

application. Based on our experience in 

processing the separate–rate 

applications in the following 

antidumping duty investigations, we 

have modified the application for this 

investigation to make it more 

administrable and easier for applicants 

to complete: 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) (Artist 

Canvas from the PRC) 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) (Sawblades from 

the PRC and Korea). The specific 

requirements for submitting the 

separate- rate application in this 

investigation are outlined in detail in 

the application itself, which will be 

available on the Department’s website at 

http://ia.ita.doc.gov/ia–highlights-and–

news.html on the date of publication of 

this initiation notice in the Federal 

Register. The separate–rate application 

is due no later than September 21, 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. In addition, the Department 

typically requests the assistance of the 

NME government in transmitting the 

Department’s quantity and value 

questionnaire to all companies that 

manufacture and export subject 

merchandise to the United States, as 

well as to manufacturers that produce 

the subject merchandise for companies 

that were engaged in exporting subject 

merchandise to the United States during 

the POI. The quantity and value data 

received from NME exporters are used 

as the basis to select the mandatory 

respondents. 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. 

The Department requires that the 

respondents submit a response to both 

the quantity and value questionnaire 

and the separate–rate application by the 

respective deadlines in order to receive 

consideration for separate–rate status. 

This procedure will be applied to this 

and all future NME investigations. See 

Artist Canvas from the PRC, 70 FR at 

21999, Sawblades from the PRC and 

Korea, 70 FR at 35629, and Initiation of 

Antidumping Duty Investigation: 

Certain Activated Carbon from the 

People’s Republic of China, 71 FR 

16757, 16760 (April 4, 2006). Appendix 

I of this notice contains the quantity and 

value questionnaire that must be 

submitted by all NME exporters no later 

than August 7, 2007. In addition, the 

Department will post the quantity and 

value questionnaire along with the filing 

instructions on the IA website: http:// 

ia.ita.doc.gov/ia–highlights-and–

news.html. The Department will send 

the quantity and value questionnaire to 

those PRC companies identified in 

Exhibit I–10 of Volume I of the petition, 

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: 

[w]hile continuing the practice of 

assigning separate rates only to 

exporters, all separate rates that the 

Department will now assign in its 

NME investigations will be specific 

to those producers that supplied the 

exporter during the period of 

investigation. Note, however, that 

one rate is calculated for the 

exporter and all of the producers 

which supplied subject 

merchandise to it during the period 

of investigation. This practice 

applies both to mandatory 

respondents receiving an 

individually calculated separate 

rate as well as the pool of non–

investigated firms receiving the 

weighted–average of the 

individually calculated rates. This 

practice is referred to as the 

application of ‘‘combination rates’’

because such rates apply to specific 

combinations of exporters and one 

or more producers. The cash–

deposit rate assigned to an exporter 

will apply only to merchandise 

both exported by the firm in 

question and produced by a firm 

that supplied the exporter during 

the period of investigation. 

Separate Rates and Combination Rates 

Bulletin, at page 6. 

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 representatives of the 

Governments of Korea, Mexico, Turkey, 

and the PRC. We will attempt to provide 

a copy of the public version of the 

petition to the foreign producers/ 

exporters named in the petition. 

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 

International Trade Commission 

The ITC will preliminarily determine, 

no later than August 13, 2007, whether 

there is a reasonable indication that 

imports of light–walled rectangular pipe 

and tube from Korea, Mexico, Turkey, 

and the PRC, are materially injuring, or 

threatening material injury to a U.S. 

industry. A negative ITC determination 

will result in the investigations being 

terminated; otherwise, these 

investigations will proceed according to 

statutory and regulatory time limits. 

This notice is issued and published 

pursuant to section 777(i) of the Act. 

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40280 Federal Register / Vol. 72, No. 141 / Tuesday, July 24, 2007 / Notices 

Dated: July 17, 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 ...................................................................................... ................................ ................................ ................................

Total Sales .......................................................................................................... ................................ ................................ ................................

Total Quantity: 

• Please report quantity on a metric 

ton basis. If any conversions were 

used, please provide the conversion 

formula and source. 

Terms of Sales: 

• Please report all sales on the same 

terms (e.g., free on board). 

Total Value: 

• All sales values should be reported 

in U.S. dollars. Please indicate any 

exchange rates used and their 

respective dates and sources. 

Export Price Sales: 

• Generally, a U.S. sale is classified as 

an export price sale when the first 

sale to an unaffiliated person occurs 

before importation into the United 

States. 

• Please include any sales exported by 

your company directly to the 

United States; 

• Please include any sales exported by 

your company to a third–country 

market economy reseller where you 

had knowledge that the 

merchandise was destined to be 

resold to the United States. 

• If you are a producer of subject 

merchandise, please include any 

sales manufactured by your 

company that were subsequently 

exported by an affiliated exporter to 

the United States. 

• Please do not include any sales of 

merchandise manufactured in Hong 

Kong in your figures. 

Constructed Export Price Sales: 

• Generally, a U.S. sale is classified as 

a constructed export price sale 

when the first sale to an unaffiliated 

person occurs after importation. 

However, if the first sale to the 

unaffiliated person is made by a 

person in the United States 

affiliated with the foreign exporter, 

constructed export price applies 

even if the sale occurs prior to 

importation. 

• Please include any sales exported by 

your company directly to the 

United States; 

• Please include any sales exported by 

your company to a third–country 

market economy reseller where you 

had knowledge that the 

merchandise was destined to be 

resold to the United States. 

• If you are a producer of subject 

merchandise, please include any 

sales manufactured by your 

company that were subsequently 

exported by an affiliated exporter to 

the United States. 

• Please do not include any sales of 

merchandise manufactured in Hong 

Kong in your figures. 

Further Manufactured: 

• Further manufacture or assembly 

costs include amounts incurred for 

direct materials, labor and 

overhead, plus amounts for general 

and administrative expense, interest 

expense, and additional packing 

expense incurred in the country of 

further manufacture, as well as all 

costs involved in moving the 

product from the U.S. port of entry 

to the further manufacturer. 

[FR Doc. E7–14284 Filed 7–19–07; 8:45 am] 

BILLING CODE 3510–DS–S 

DEPARTMENT OF COMMERCE 

International Trade Administration 

(A–412–822) 

Stainless Steel Bar from the United 

Kingdom: Notice of Rescission of 

Antidumping Duty Administrative 

Review 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

EFFECTIVE DATE: July 24, 2007. 

FOR FURTHER INFORMATION CONTACT: Kate 

Johnson or Rebecca Trainor, AD/CVD 

Operations, Office 2, Import 

Administration, International Trade 

Administration, U.S. Department of 

Commerce, 14th Street and Constitution 

Avenue, NW, Washington, DC 20230; 

telephone: (202) 482–4929 or (202) 482–

4007, respectively. 

SUPPLEMENTARY INFORMATION: 

Background 

On March 2, 2007, the Department of 

Commerce (the Department) published 

in the Federal Register a notice of 

‘‘Opportunity To Request 

Administrative Review’’ of the 

antidumping duty order on stainless 

steel bar from the United Kingdom for 

the period March 1, 2006, through 

February 28, 2007. See Antidumping or 

Countervailing Duty Order, Finding, or 

Suspended Investigation; Opportunity 

to Request Administrative Review, 72 

FR 9505 (March 2, 2007). On March 22, 

2007, Sandvik Limited trading as 

Sandvik Bioline requested an 

administrative review of its sales for this 

period. On March 29, 2007, Enpar

Special Alloys Limited (Enpar)

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Federal Register / Vol. 72, No. 141 / Tuesday, July 24, 2007 / Notices 40281 

requested an administrative review of 

its sales for this period, and on March 

30, 2007, Corus Engineering Steels 

(CES), a division of Corus UK Limited, 

requested an administrative of its sales 

for this period. On April 27, 2007, the 

Department published a notice of 

initiation of an administrative review of 

the antidumping duty order on stainless 

steel bar from the United Kingdom with 

respect to these companies. See 

Initiation of Antidumping and 

Countervailing Duty Administrative 

Reviews, 72 FR 20986 (April 27, 2007). 

Rescission of Review 

On June 4, 2005, Sandvik Bioline 

timely withdrew its request for an 

administrative review of its sales during 

the above–referenced period. One June 

27 and July 6, 2007, Enpar and CES, 

respectively, also withdrew their 

requests for an administrative review of 

their sales during the above–referenced 

period. Section 351.213(d)(1) of the 

Department’s regulations stipulates that 

the Secretary will rescind an 

administrative review if the party that 

requests a review withdraws the request 

within 90 days of the date of publication 

of notice of initiation of the requested 

review. In this case, Sandvik, Enpar and 

CES have withdrawn their requests for 

review within the 90-day period. As 

these three companies were the only 

parties to request the initiation of the 

review, we are rescinding this review of 

the antidumping duty order on stainless 

steel bar from the United Kingdom 

pursuant to 19 CFR 351.213(d)(1). 

Accordingly, we will instruct U.S. 

Customs and Border Protection to 

liquidate entries of the subject 

merchandise made during the period 

March 1, 2006, through February 28, 

2007, at the rate in effect for each 

company upon the date of entry. 

This notice is published in 

accordance with section 751 of the 

Tariff Act of 1930, as amended, and 19 

CFR 351.213(d)(4). 

Dated: July 16, 2007. 

Stephen J. Claeys, 

Deputy Assistant Secretary for Import 

Administration. 

[FR Doc. E7–14287 Filed 7–23–07; 8:45 am] 

BILLING CODE 3510–DS–S 

DEPARTMENT OF COMMERCE 

International Trade Administration 

(C–570–915) 

Notice of Initiation of Countervailing 

Duty Investigation: Light–Walled 

Rectangular Pipe and Tube from the 

People’s Republic of China 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

EFFECTIVE DATE: July 24, 2007. 

FOR FURTHER INFORMATION CONTACT: 

Damian Felton, Shane Subler or 

Brandon Farlander, 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) 482–0189 and (202) 

482–0182, respectively. 

SUPPLEMENTARY INFORMATION: 

The Petition 

On June 27, 2007, the Department of 

Commerce (‘‘the Department’’) received 

a petition filed in proper form by Allied 

Tube & Conduit; Atlas Tube; Bull Moose 

Tube Company; California Steel and 

Tube; EXLTUBE; Hannibal Industries; 

Levitt Tube Company LLC, Maruichi 

American Corporation; Searing 

Industries; Southland Tube; Vest Inc.; 

Welded Tube; and Western Tube and 

Conduit (collectively, ‘‘petitioners’’). 

The Department received timely 

information from petitioners 

supplementing the petition on July 6, 

July 9 and July 12, 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 light–walled rectangular (‘‘LWR’’) 

pipe and tube 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 merchandise that is the subject of 

this investigation is certain welded 

carbon–quality light–walled steel pipe 

and tube, of rectangular (including 

square) cross section (LWR), having a 

wall thickness of less than 4mm. 

The term carbon–quality steel 

includes both carbon steel and alloy 

steel which contains only small 

amounts of alloying elements. 

Specifically, the term carbon–quality 

includes products in which none of the 

elements listed below exceeds the 

quantity by weight respectively 

indicated: 1.80 percent of manganese, or 

2.25 percent of silicon, or 1.00 percent 

of copper, or 0.50 percent of aluminum, 

or 1.25 percent of chromium, or 0.30 

percent of cobalt, or 0.40 percent of 

lead, or 1.25 percent of nickel, or 0.30 

percent of tungsten, or 0.10 percent of 

molybdenum, or 0.10 percent of 

niobium, or 0.15 percent vanadium, or 

0.15 percent of zirconium. The 

description of carbon–quality is 

intended to identify carbon–quality 

products within the scope. The welded 

carbon–quality rectangular pipe and 

tube subject to this investigation is 

currently classified under the 

Harmonized Tariff Schedule of the 

United States (‘‘HTSUS’’) subheadings 

7306.61.50.00 and 7306.61.70.60. While 

HTSUS subheadings are provided for 

convenience and Customs purposes, our 

written description of the scope of these 

investigations is dispositive. 

Comments on Scope of Investigation 

During our review of the petition, we 

discussed the scope with the petitioners 

to ensure that it is an accurate reflection 

of the products for which the domestic 

industry is seeking relief. Moreover, as 

discussed in the preamble to the 

regulations (Antidumping Duties; 

Countervailing Duties; Final Rule, 62 FR 

27296, 27323 (May 19, 1997)), we are 

setting aside a period for interested 

parties to raise issues regarding product 

coverage. The Department encourages 

all interested parties to submit such 

comments within 20 calendar days of 

the publication of this notice. 

Comments should be addressed to 

Import Administration’s Central 

Records Unit (‘‘CRU’’), Room 1870, U.S. 

Department of Commerce, 14th Street 

and Constitution Avenue, NW, 

Washington, DC 20230. The period of 

scope consultations is intended to 

provide the Department with ample 

opportunity to consider all comments 

and to consult with parties prior to the 

issuance of the preliminary 

determinations. 

Consultations 

Pursuant to section 702(b)(4)(A)(ii) of 

the Act, the Department invited 

representatives of the Government of the 

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40282 Federal Register / Vol. 72, No. 141 / Tuesday, July 24, 2007 / Notices 

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 July 16, 

2007. See the Memoranda to The File, 

entitled, ‘‘Consultations with Officials 

from the Government of the People’s 

Republic of China’’ (July 16, 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: (i) at least 25 

percent of the total production of the 

domestic like product; and (ii) more 

than 50 percent of the production of the 

domestic like product produced by that 

portion of the industry expressing 

support for, or opposition to, the 

petition. Moreover, section 702(c)(4)(D) 

of the Act provides that, if the petition 

does not establish support of domestic 

producers or workers accounting for 

more than 50 percent of the total 

production of the domestic like product, 

the Department shall: (i) poll the 

industry or rely on other information in 

order to determine if there is support for 

the petition, as required by 

subparagraph (A), or (ii) determine 

industry support using a statistically 

valid sampling method. 

Section 771(4)(A) of the Act defines 

the ‘‘industry’’ as the producers as a 

whole of a domestic like product. Thus, 

to determine whether a petition has the 

requisite industry support, the statute 

directs the Department to look to 

producers and workers who produce the 

domestic like product. The International 

Trade Commission (‘‘ITC’’), which is 

responsible for determining whether 

‘‘the domestic industry’’ has been 

injured, must also determine what 

constitutes a domestic like product in 

order to define the industry. While both 

the Department and the ITC must apply 

the same statutory definition regarding 

the domestic like product (section 

771(10) of the Act), they do so for 

different purposes and pursuant to a 

separate and distinct authority. In 

addition, the Department’s 

determination is subject to limitations of 

time and information. Although this 

may result in different definitions of the 

like product, such differences do not 

render the decision of either agency 

contrary to law. See USEC, Inc. v. 

United States, 132 F. Supp. 2d 1, 8 (CIT 

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 subtitle.’’ Thus, 

the reference point from which the 

domestic like product analysis begins is 

‘‘the article subject to an investigation,’’

(i.e., the class or kind of merchandise to 

be investigated, which normally will be 

the scope as defined in the petition). 

With regard to the domestic like 

product, petitioners do not offer a 

definition of domestic like product 

distinct from the scope of the 

investigation. Based on our analysis of 

the information submitted on the 

record, we have determined that LWR 

pipe and tube constitutes a single 

domestic like product and we have 

analyzed industry support in terms of 

that domestic like product. For a 

discussion of the domestic like product 

analysis in this case, see Countervailing 

Duty Investigation Initiation Checklist: 

Light–Walled Rectangular Pipe and 

Tube from the People’s Republic of 

China, (China Initiation Checklist) at 

Attachment II, (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 I, 

(Scope of the Petition), to the China 

Initiation Checklist. To establish 

industry support, petitioners provided 

their production of the domestic like 

product for the year 2006, and 

compared that to production of the 

domestic like product for the industry. 

For further discussion see the China 

Initiation Checklist at Attachment II 

(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 domestic producers 

have met the statutory criteria for 

industry support under section 

702(c)(4)(A)(i) of the Act because the 

domestic producers (or workers) who 

support the petition account for at least 

25 percent of the total production of the 

domestic like product. Second, the 

domestic producers have met the 

statutory criteria for industry support 

under section 702(c)(4)(A)(ii) of the Act 

because the domestic producers (or 

workers) who support the petition 

account for more than 50 percent of the 

production of the domestic like product 

produced by that portion of the industry 

expressing support for, or opposition to, 

the petition. Because the petition 

established support from domestic 

producers (or workers) accounting for 

more than 50 percent of the total 

production of the domestic like product, 

the Department is not required to take 

further action in order to evaluate 

industry support (e.g., polling). See 

section 702(c)(4)(D) of the Act. 

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 the China Initiation Checklist 

at Attachment II (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 

countervailing duty investigation that 

they are requesting the Department 

initiate. See China Initiation Checklist at 

Attachment II (Analysis of Industry 

Support). 

Injury Test 

Because the PRC, is a ‘‘Subsidies 

Agreement Country’’ within the 

meaning of section 701(b) of the Act, 

section 701(a)(2) of the Act applies to 

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 LWR 

pipe and tube 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 LWR pipe and tube. In 

addition, petitioners allege that 

subsidized imports exceed the 

negligibility threshold provided for 

under section 771(24)(A) of the Act. 

Petitioners contend that the industry’s 

injured condition is illustrated by 

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Federal Register / Vol. 72, No. 141 / Tuesday, July 24, 2007 / Notices 40283 

reduced market share, lost sales, 

reduced production, reduced 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 

China Initiation Checklist at Attachment 

III (Injury). 

Initiation of Countervailing Duty 

Investigation 

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 LWR 

pipe and tube 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 LWR pipe and tube in the PRC 

receive countervailable subsidies. For a 

discussion of evidence supporting our 

initiation determination, see China 

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’’ program 

4. Income tax exemption program 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 Zhejiang province 

14. Export interest subsidy funds for 

enterprises located in Zhejiang 

province 

15. Loans pursuant to the Liaoning 

Province’s five–year framework 

Indirect Tax Programs and Import 

Tariff Program 

16. Export payments characterized as 

VAT rebates 

17. VAT and tariff exemptions on 

imported equipment 

18. VAT rebates on domestically 

produced equipment 

19. Exemption from payment of staff 

and worker benefits for export–

oriented enterprises 

Grant Programs 

20. State Key Technology Renovation 

Program Fund 

21. Grants to loss–making state owned 

enterprises 

Provision Of Goods Or Services For 

Less Than Adequate Remuneration 

22. Hot–rolled steel 

23. Electricity and natural gas 

24. Water 

25. Land 

Government Restraints on Exports 

26. Zinc 

27. Hot–rolled steel 

For further information explaining 

why the Department is investigating 

these programs, see China 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 China 

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 Government 

of China’s (‘‘GOC’’) 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 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. 

3. Exemption of LWR pipe and tube 

from export taxes 

Petitioners allege that LWR pipe and 

tube 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 LWR pipe 

and tube producers have been relieved 

from paying export taxes that would 

otherwise have been due. Consequently, 

we do not plan to investigation the 

exemption of LWR pipe and tube 

producers from export taxes. 

4. 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 World 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. 

5. 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. 

6. Loan guarantees from government–

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40284 Federal Register / Vol. 72, No. 141 / Tuesday, July 24, 2007 / Notices 

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. 

7. Program to rebate antidumping 

legal fees in Shenzhen province 

Petitioners allege that the GOC is 

reimbursing legal fees to local 

companies located in the Shenzhen 

province that are facing antidumping 

duty investigations abroad. However, 

petitioners did not demonstrate that 

producers of LWR pipe and tube are 

located in the Shenzhen Province or 

explain why such information is 

unavailable. Therefore, we do not 

recommend investigating the program to 

rebate antidumping legal fees in the 

Shenzhen province. 

8. Export interest subsidy funds for 

enterprises located in Shenzhen 

province 

Petitioners allege that producers of 

LWR pipe and tube with specific export 

volumes are eligible for export interest 

subsidies for merchandise produced in 

the Shenzhen province. However, 

petitioners did not demonstrate that 

producers of LWR pipe and tube are 

located in the Shenzhen province, or 

explain why such information is 

unavailable. Therefore, we do not 

recommend investigating the program 

for export interest subsidy funds for 

enterprises located in Shenzhen 

province. 

9. Funds for ‘‘outward expansion’’ of 

industries in Guangdong province 

Petitioners allege that eligible LWR 

pipe and tube producers in the 

Guangdong province may apply for 

special funding for the development of 

export activities. However, Petitioners 

did not demonstrate that producers of 

LWR pipe and tube are located in the 

Guangdong province or explain why 

such information is unavailable. 

Therefore, we do not recommend 

investigating the program of the funds 

for outward expansion of industries in 

Guangdong province. 

10. Domestic VAT refunds for 

companies located in the Hainan 

economic development zone 

This program was found to be 

preliminarily countervailable in CFS 

Investigation. See Coated Free Sheet 

Paper from the People’s Republic of 

China; Amended Preliminary 

Affirmative Countervailing Duty 

Determination, 72 FR 17484, 17496 

(April 9, 2007) (‘‘CFS Investigation’’). 

However, petitioners did not 

demonstrate that producers of LWR pipe 

and tube are located in the Hainan 

economic development zone or explain 

why such information is unavailable. 

Therefore, we do not recommend 

investigating the program on domestic 

VAT refunds for companies located in 

the Hainan economic development 

zone. 

For further information explaining 

why the Department is not initiating an 

investigation of these programs, see 

China Initiation Checklist. 

Application of the Countervailing Duty 

Law to the PRC 

Petitioners argue that the Department 

recently concluded that CVD law may 

be applied to the present–day Chinese 

economy and, thus, the Department 

should continue to find that the 

countervailing duty law applies to the 

PRC in this investigation. See Petition, 

Volume III, at page 2 (citing CFS 

Investigation, 72 FR 17484, 17486; 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 Present–Day 

Economy,’’ (March 29, 2007) (citing 

Georgetown Steel Corp. v. United States, 

801 F.2d 1308 (Fed. Cir. 1986) 

(‘‘Georgetown Steel’’) (‘‘Georgetown 

Steel Memorandum’’)). 

The Department has treated the PRC 

as a non–market economy (‘‘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 for their 

allegations to meet the statutory criteria 

for initiating a countervailing duty 

investigation of LWR pipe and tube 

from the PRC, we continue to find that 

Georgetown Steel does not preclude us 

from initiating this investigation. For 

further information, see China 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 LWR pipe 

and tube 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: July 17, 2007. 

Joseph A. Spetrini, 

Deputy Assistant Secretary for Import 

Administration. 

[FR Doc. E7–14277 Filed 7–19–07; 8:45 am] 

BILLING CODE 3510–DS–S 

DEPARTMENT OF COMMERCE 

National Institute of Standards and 

Technology 

Visiting Committee on Advanced 

Technology 

AGENCY: National Institute of Standards 

and Technology, Department of 

Commerce. 

mstockstill on PROD1PC66 with NOTICES

Federal Register / Vol. 72, No. 157 / Wednesday, August 15, 2007 / Notices 45733 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[A–549–813] 

Canned Pineapple Fruit from Thailand: 

Extension of Time Limit for Preliminary 

Results of Antidumping Duty New 

Shipper Review 

AGENCY: Import Administration, 

International Trade Administration, 

U.S. Department of Commerce. 

EFFECTIVE DATE: August 15, 2007. 

FOR FURTHER INFORMATION CONTACT: 

Myrna Lobo, Office of AD/CVD 

Operations 6, Import Administration, 

International Trade Administration, 

U.S. Department of Commerce, 14th 

Street and Constitution Avenue, NW, 

Washington, DC 20230; telephone: (202) 

482–2371. 

SUPPLEMENTARY INFORMATION: 

Background 

On March 1, 2007, the Department of 

Commerce (the Department) published 

in the Federal Register the notice of 

initiation of a new shipper review of the 

antidumping duty order on canned 

pineapple fruit from Thailand for C&A 

Products Co., Ltd. (C&A). See Canned 

Pineapple Fruit from Thailand: 

Initiation of New Shipper Antidumping 

Duty Review, 72 FR 9305 (March 1, 

2007). The period of review is July 1, 

2006 through December 31, 2006. 

Extension of Time Limit for Preliminary 

Results 

Section 751(a)(2)(B)(iv) of the Tariff 

Act of 1930, as amended (the Act), and 

19 CFR 351.214(i)(1) of the 

Department’s regulations normally 

require the Department to issue the 

preliminary results of a new shipper 

review within 180 days after the date on 

which the new shipper review was 

initiated and final results within 90 

days after the date on which the 

preliminary results were issued. The 

Department may, however, extend the 

time period for completion of the 

preliminary results of a new shipper 

review to 300 days if it determines that 

the case is extraordinarily complicated. 

See section 751(a)(2)(B)(iv) of the Act 

and 19 CFR 351.214(i)(2). 

The Department has determined that 

this review is extraordinarily 

complicated, as the Department requires 

additional time to evaluate petitioner’s 

(Maui Pineapple Company Ltd.) cost 

allegation and to review responses. 

Based on the further analysis required, 

the preliminary results of this new 

shipper review cannot be completed 

within the statutory time limit of 180 

days. Accordingly, the Department is 

extending the time limit for the 

completion of the preliminary results of 

the new shipper review of C&A to 300 

days. See section 751(a)(2)(B)(iv) of the 

Act and 19 CFR 351.214(i)(2). The 

preliminary results will now be due no 

later than December 19, 2007. The final 

results will be due 90 days after the date 

of issuance of the preliminary results, 

unless extended. 

This notice is issued and published 

pursuant to sections 751(a)(2)(B)(iv) and 

777(i)(1) of the Act. 

Dated: August 9, 2007. 

Stephen J. Claeys, 

Deputy Assistant Secretary for Import 

Administration. 

[FR Doc. E7–16007 Filed 8–14–07; 8:45 am] 

BILLING CODE 3510–DS–S 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[A–201–836] 

Notice of Correction to Initiation of 

Antidumping Duty Investigation: 

Light–Walled Rectangular Pipe and 

Tube from Mexico 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

EFFECTIVE DATE: August 15, 2007. 

FOR FURTHER INFORMATION CONTACT: John 

Drury or Angelica Mendoza, AD/CVD 

Operations, Office 7, Import 

Administration, International Trade 

Administration, U.S. Department of 

Commerce, 14th Street and Constitution 

Avenue, NW, Washington, DC 20230; 

telephone: (202) 482–0195 or (202) 482–

3019, respectively. 

SUPPLEMENTARY INFORMATION: 

CORRECTION: 

On July 24, 2007, the Department of 

Commerce (‘‘the Department’’) 

published its initiation of investigations 

on light–walled rectangular pipe and 

tube (‘‘LWR’’) for a number of countries. 

See Initiation of Antidumping Duty 

Investigations: Light–Walled 

Rectangular Pipe and Tube from 

Republic of Korea, Mexico, Turkey, and 

the People’s Republic of China, 72 FR 

40274 (July 24, 2007). Subsequent to the 

publication of the initiation of 

investigations, we identified an 

inadvertent error in the Federal 

Register. The case number associated 

with the LWR investigation for Mexico 

is incorrect. The correct case number is 

A–201–836. This notice is to serve as a 

correction to the case number. The 

initiation of the investigation of LWR 

from Mexico is correct and remains 

unchanged. 

This correction is issued and 

published in accordance with section 

777(i) of the Tariff Act of 1930, as 

amended. 

Dated: August 8, 2007. 

Stephen J. Claeys, 

Deputy Assistant Secretary for Import 

Administration. 

[FR Doc. E7–16019 Filed 8–14–07; 8:45 am] 

BILLING CODE 3510–DS–S 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[A–583–833] 

Certain Polyester Staple Fiber from 

Taiwan: Notice of 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: August 15, 2007. 

FOR FURTHER INFORMATION CONTACT: 

Devta Ohri, 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) 482–3853. 

SUPPLEMENTARY INFORMATION: 

Background 

On May 25, 2000, the Department of 

Commerce (‘‘Department’’) published an 

antidumping duty order on certain 

polyester staple fiber (‘‘PSF’’) from 

Taiwan. See Notice of Amended Final 

Determination of Sales at Less Than 

Fair Value: Certain Polyester Staple 

Fiber From the Republic of Korea and 

Antidumping Duty Orders: Certain 

Polyester Staple Fiber From the 

Republic of Korea and Taiwan, 65 FR 

33807 (May 25, 2000). On May 1, 2006, 

the Department published a notice of 

‘‘Opportunity to Request Administrative 

Review’’ of this order. See Antidumping 

or Countervailing Duty Order, Finding, 

or Suspended Investigation; 

Opportunity to Request Administrative 

Review, 71 FR 25565 (May 1, 2006). On 

May 31, 2006, Far Eastern Textile 

Limited (‘‘FET’’) requested an 

administrative review. On July 3, 2006, 

the Department published a notice 

initiating an administrative review for 

PSF from Taiwan. See Initiation of 

Antidumping and Countervailing Duty 

Administrative Reviews, 71 FR 37892 

(July 3, 2006). The period of review


ebenthall on PROD1PC69 with NOTICES
B-1

APPENDIX B

CONFERENCE CALENDAR

 1

 Allied Tube and Conduit, Atlas Tube, Bull Moose Tube Company, California Steel and Tube, Ex-L-Tube,

Hannibal Industries, Leavitt Tube Corporation, Maruichi American Corporation, Searing Industries, Southland Tube, 

Vest Inc., Welded Tube, and Western Tube and Conduit.

B-3

CALENDAR OF THE PUBLIC CONFERENCE

Those listed below appeared as witnesses at the United States International Trade Commission’s

conference held in connection with the following investigations:

Subject: Light-Walled Rectangular (“LWR”) Pipe and Tube from China,

Korea, Mexico, and Turkey

Inv. Nos.: 701-TA-449 and 731-TA-1118-1121 (Preliminary)

Date and Time: July 18, 2007 - 9:30 a.m.

Sessions took place in the Commission’s Main Hearing (Room 101), 500 E Street, SW,

Washington, D.C.

Opening Remarks:

Petitioners (Roger Schagrin, Schagrin Associates)

Respondents (Yohai Baisburd, White & Case, LLP) 

In Support of the Imposition of Antidumping and Countervailing Duties:

Schagrin Associates

Washington, DC

on behalf of

thirteen U.S. producers1

 of LWR pipe and tube

David Klima, Vice President of Finance, Leavitt Tube Company

Glenn Baker, Vice President of Sales & Marketing, Searing Industries

Ed Kurasz, Vice President & General Manager of the Mechanical Tube Divison, Allied

Tube & Conduit

Roger Schagrin ) – OF COUNSEL
 2

 Hylsa (now Ternium), Maquilacero, Nacional de Acero, Perfiles y Herrajes, Productos Laminados de

Monterrey (and it U.S. affiliate Prolamsa (USA), Inc.), and Regiomontana de Perfiles y Tubos.

B-4

In Opposition to the Imposition of Antidumping and Countervailing Duties:

White & Case, LLP 

Washington, DC

on behalf of

six Mexican producers or exporters2 of LWR pipe and tube

Jean-Marie Diederichs, President, Prolamsa, Inc.

Laura M. Baughman, President, The Trade Partnership

Salvador Behar, Legal Counsel for International Trade, Secretaria de Economia, Trade and

NAFTA Office, Embassy of Mexico

Yohai Baisburd ) – OF COUNSEL

Closing Remarks:

Petitioners (Roger Schagrin, Schagrin Associates)

Respondents (Yohai Baisburd, White & Case, LLP) 
Contains Confidential Business Information

C-1

APPENDIX C

SUMMARY DATA

Table C-1

LWR pipe and tube: 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 . . . . . . . . . . . . . . . . . . . . 945,340 997,872 1,069,326 253,094 241,268 13.1 5.6 7.2 -4.7

 Producers' share (1) . . . . . . . . . 70.7 66.2 62.2 70.7 66.7 -8.5 -4.5 -4.0 -4.0

 Importers' share (1):

 China . . . . . . . . . . . . . . . . . . . . 0.9 4.1 7.8 2.9 10.3 6.8 3.2 3.7 7.3

 Korea . . . . . . . . . . . . . . . . . . . . 2.9 2.3 2.9 3.8 2.0 0.0 -0.6 0.6 -1.8

 Mexico . . . . . . . . . . . . . . . . . . . 14.0 15.7 13.6 12.1 12.7 -0.4 1.7 -2.1 0.6

 Turkey . . . . . . . . . . . . . . . . . . . 1.3 3.1 5.2 1.7 2.4 4.0 1.8 2.2 0.7

 Subtotal . . . . . . . . . . . . . . . . . 19.1 25.1 29.5 20.5 27.3 10.4 6.0 4.4 6.8

 All other sources . . . . . . . . . . . 10.2 8.7 8.3 8.8 6.0 -1.9 -1.4 -0.4 -2.8

 Total imports . . . . . . . . . . . . . 29.3 33.8 37.8 29.3 33.3 8.5 4.5 4.0 4.0

U.S. consumption value:

 Amount . . . . . . . . . . . . . . . . . . . . 803,478 864,490 911,691 216,679 196,427 13.5 7.6 5.5 -9.3

 Producers' share (1) . . . . . . . . . 73.8 69.1 67.3 73.8 71.3 -6.5 -4.7 -1.8 -2.5

 Importers' share (1):

 China . . . . . . . . . . . . . . . . . . . . 0.7 3.3 5.5 2.2 7.3 4.8 2.5 2.2 5.1

 Korea . . . . . . . . . . . . . . . . . . . . 2.1 1.8 2.3 2.9 1.7 0.2 -0.2 0.4 -1.2

 Mexico . . . . . . . . . . . . . . . . . . . 12.2 14.1 12.5 10.3 10.9 0.3 1.9 -1.7 0.6

 Turkey . . . . . . . . . . . . . . . . . . . 1.2 2.7 3.9 1.8 1.9 2.7 1.5 1.2 0.1

 Subtotal . . . . . . . . . . . . . . . . . 16.2 21.9 24.1 17.2 21.9 8.0 5.8 2.2 4.7

 All other sources . . . . . . . . . . . 10.1 9.0 8.6 9.0 6.8 -1.5 -1.1 -0.4 -2.1

 Total imports . . . . . . . . . . . . . 26.2 30.9 32.7 26.2 28.7 6.5 4.7 1.8 2.5

U.S. imports from:

 China:

 Quantity . . . . . . . . . . . . . . . . . . 8,859 40,801 83,259 7,446 24,745 839.8 360.5 104.1 232.3

 Value . . . . . . . . . . . . . . . . . . . . 5,849 28,293 50,182 4,775 14,389 758.0 383.8 77.4 201.4

 Unit value . . . . . . . . . . . . . . . . . $660 $693 $603 $641 $582 -8.7 5.0 -13.1 -9.3

 Ending inventory quantity . . . . . *** *** *** *** *** *** *** *** ***

 Korea:

 Quantity . . . . . . . . . . . . . . . . . . 27,389 22,733 31,167 9,542 4,817 13.8 -17.0 37.1 -49.5

 Value . . . . . . . . . . . . . . . . . . . . 16,478 15,738 20,541 6,338 3,434 24.7 -4.5 30.5 -45.8

 Unit value . . . . . . . . . . . . . . . . . $602 $692 $659 $664 $713 9.5 15.1 -4.8 7.3

 Ending inventory quantity . . . . . *** *** *** *** *** *** *** *** ***

 Mexico:

 Quantity . . . . . . . . . . . . . . . . . . 132,369 156,262 144,924 30,682 30,588 9.5 18.1 -7.3 -0.3

 Value . . . . . . . . . . . . . . . . . . . . 98,041 122,203 113,714 22,377 21,494 16.0 24.6 -6.9 -3.9

 Unit value . . . . . . . . . . . . . . . . . $741 $782 $785 $729 $703 5.9 5.6 0.3 -3.7

 Ending inventory quantity . . . . . *** *** *** *** *** *** *** *** ***

 Turkey:

 Quantity . . . . . . . . . . . . . . . . . . 12,102 30,517 55,952 4,289 5,787 362.3 152.2 83.3 34.9

 Value . . . . . . . . . . . . . . . . . . . . 9,479 23,264 35,584 3,815 3,670 275.4 145.4 53.0 -3.8

 Unit value . . . . . . . . . . . . . . . . . $783 $762 $636 $890 $634 -18.8 -2.7 -16.6 -28.7

 Ending inventory quantity . . . . . *** *** *** *** *** *** *** *** ***

 Subtotal:

 Quantity . . . . . . . . . . . . . . . . . . 180,719 250,312 315,302 51,959 65,937 74.5 38.5 26.0 26.9

 Value . . . . . . . . . . . . . . . . . . . . 129,846 189,498 220,021 37,306 42,988 69.4 45.9 16.1 15.2

 Unit value . . . . . . . . . . . . . . . . . $718 $757 $698 $718 $652 -2.9 5.4 -7.8 -9.2

 Ending inventory quantity . . . . . 4,441 2,774 6,896 1,758 4,557 55.3 -37.5 148.6 159.2

 All other sources:

 Quantity . . . . . . . . . . . . . . . . . . 96,388 87,288 89,175 22,280 14,506 -7.5 -9.4 2.2 -34.9

 Value . . . . . . . . . . . . . . . . . . . . 80,952 77,598 78,437 19,427 13,396 -3.1 -4.1 1.1 -31.0

 Unit value . . . . . . . . . . . . . . . . . $840 $889 $880 $872 $923 4.7 5.9 -1.1 5.9

 Ending inventory quantity . . . . . *** *** *** *** *** *** *** *** ***

 All sources:

 Quantity . . . . . . . . . . . . . . . . . . 277,108 337,600 404,477 74,239 80,444 46.0 21.8 19.8 8.4

 Value . . . . . . . . . . . . . . . . . . . . 210,798 267,095 298,458 56,733 56,384 41.6 26.7 11.7 -0.6

 Unit value . . . . . . . . . . . . . . . . . $761 $791 $738 $764 $701 -3.0 4.0 -6.7 -8.3

 Ending inventory quantity . . . . . *** *** *** *** *** *** *** *** ***

Table continued on next page.

C-3
Table C-1--Continued

LWR pipe and tube: Summary data concerning the U.S. market, 2004-06, January-March 2006, and January-March 2007

(Quantity=short tons, value=1,000 dollars, unit values, unit labor costs, and unit expenses are per short ton; period changes=percent, except where noted)

Reported data Period changes

January-March Jan.-Mar.

Item 2004 2005 2006 2006 2007 2004-06 2004-05 2005-06 2006-07

U.S. producers':

 Average capacity quantity . . . . . 1,157,452 1,157,204 1,159,650 292,117 316,012 0.2 -0.0 0.2 8.2

 Production quantity . . . . . . . . . . 675,178 660,754 672,016 176,915 167,537 -0.5 -2.1 1.7 -5.3

 Capacity utilization (1) . . . . . . . . 58.3 57.1 57.9 60.6 53.0 -0.4 -1.2 0.9 -7.5

 U.S. shipments:

 Quantity . . . . . . . . . . . . . . . . . . 668,232 660,272 664,849 178,855 160,824 -0.5 -1.2 0.7 -10.1

 Value . . . . . . . . . . . . . . . . . . . . 592,681 597,395 613,234 159,946 140,043 3.5 0.8 2.7 -12.4

 Unit value . . . . . . . . . . . . . . . . . $887 $905 $922 $894 $871 4.0 2.0 1.9 -2.6

 Export shipments:

 Quantity . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Ending inventory quantity . . . . . . 75,343 71,536 71,781 67,272 76,582 -4.7 -5.1 0.3 13.8

 Inventories/total shipments (1) . . *** *** *** *** *** *** *** *** ***

 Production workers . . . . . . . . . . 676 662 651 630 627 -3.7 -2.1 -1.7 -0.5

 Hours worked (1,000s) . . . . . . . . 1,581 1,544 1,521 397 387 -3.8 -2.4 -1.5 -2.5

 Wages paid ($1,000s) . . . . . . . . 27,682 27,511 28,513 6,998 6,913 3.0 -0.6 3.6 -1.2

 Hourly wages . . . . . . . . . . . . . . . $17.51 $17.82 $18.75 $17.61 $17.85 7.1 1.8 5.2 1.4

 Productivity (tons/1,000 hours) . 397.2 402.0 418.0 420.7 406.1 5.2 1.2 4.0 -3.5

 Unit labor costs . . . . . . . . . . . . . $44.08 $44.33 $44.85 $41.86 $43.96 1.8 0.6 1.2 5.0

 Net sales:

 Quantity . . . . . . . . . . . . . . . . . . 642,103 618,469 621,612 169,013 149,701 -3.2 -3.7 0.5 -11.4

 Value . . . . . . . . . . . . . . . . . . . . 579,981 571,975 586,997 153,595 133,660 1.2 -1.4 2.6 -13.0

 Unit value . . . . . . . . . . . . . . . . . $903 $925 $944 $909 $893 4.5 2.4 2.1 -1.8

 Cost of goods sold (COGS) . . . . 445,462 475,751 474,502 124,494 115,773 6.5 6.8 -0.3 -7.0

 Gross profit or (loss) . . . . . . . . . 134,519 96,224 112,495 29,101 17,887 -16.4 -28.5 16.9 -38.5

 SG&A expenses . . . . . . . . . . . . . 41,129 35,351 40,846 11,840 9,985 -0.7 -14.0 15.5 -15.7

 Operating income or (loss) . . . . . 93,390 60,873 71,649 17,261 7,902 -23.3 -34.8 17.7 -54.2

 Capital expenditures . . . . . . . . . 9,817 10,923 24,005 3,114 10,650 144.5 11.3 119.8 242.0

 Unit COGS . . . . . . . . . . . . . . . . . $694 $769 $763 $737 $773 10.0 10.9 -0.8 5.0

 Unit SG&A expenses . . . . . . . . . $64 $57 $66 $70 $67 2.6 -10.8 15.0 -4.8

 Unit operating income or (loss) . $145 $98 $115 $102 $53 -20.8 -32.3 17.1 -48.3

 COGS/sales (1) . . . . . . . . . . . . . 76.8 83.2 80.8 81.1 86.6 4.0 6.4 -2.3 5.6

 Operating income or (loss)/

 sales (1) . . . . . . . . . . . . . . . . . . 16.1 10.6 12.2 11.2 5.9 -3.9 -5.5 1.6 -5.3

 (1) "Reported data" are in percent and "period changes" are in percentage points.

 (2) Not applicable.

Note.--Financial data are reported on a fiscal year basis and may not necessarily be comparable to data reported on a calendar year basis. Because of rounding,

figures may not add to the totals shown. Unit values and shares are calculated from the unrounded figures.

Source: Compiled from data submitted in response to Commission questionnaires.

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APPENDIX D

ALLEGED EFFECTS OF SUBJECT IMPORTS ON U.S. PRODUCERS’

EXISTING DEVELOPMENT AND PRODUCTION EFFORTS,

 GROWTH, INVESTMENT, AND ABILITY TO RAISE CAPITAL
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D-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, Korea, Mexico, or Turkey?

* * * * * * *

2. Does your firm anticipate any negative impact of imports of circular welded pipe from China, Korea,

Mexico, or Turkey?

* * * * * * *