U.S. International Trade Commission

Publication 4066 March 2009

Washington, DC 20436

Ni-Resist Piston Inserts from 

Argentina and Korea

Investigation Nos. 701-TA-460-461 (Preliminary)
U.S. International Trade Commission

COMMISSIONERS 

 

Shara L. Aranoff, Chairman 

Daniel R. Pearson, Vice Chairman 

Deanna Tanner Okun 

Charlotte R. Lane 

Irving A. Williamson 

Dean A. Pinkert

Staff assigned

Address all communications to 

Secretary to the Commission 

United States International Trade Commission 

Washington, DC 20436

Robert A. Rogowsky

Director of Operations

Joshua Kaplan, Investigator 

Deborah McNay, Industry Analyst 

Ioana Mic, Economist 

David Boyland, Accountant 

Marc Bernstein, Attorney 

Lita David-Harris, Statistician 

George Deyman, Supervisory Investigator
U.S. International Trade Commission

Washington, DC 20436 

www.usitc.gov

Publication 4066 March 2009

Ni-Resist Piston Inserts from 

Argentina and Korea

Investigation Nos. 701-TA-460-461 (Preliminary)

i

CONTENTS

Page

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

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

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

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

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

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

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

U.S. Ni-resist piston insert market summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-2

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

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

Nature of alleged countervailable subsidies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-3

The subject merchandise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-3

Commerce’s scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-3

U.S. tariff treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-4

The product . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-5

Description and applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-5

Manufacturing process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7

Domestic like product issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-9

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

Market characteristics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1

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

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

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

U.S. demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-2

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

Factors affecting purchasing decisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-4

Comparisons of domestic products and subject imports ............................. II-4

Comparisons of subject imports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-5

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

U.S. producer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-1

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

U.S. producer’s U.S. shipments and export shipments ................................. III-2

U.S. producer’s imports and purchases of imports .................................... III-2

U.S. producer’s inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-2

U.S. employment, wages, and productivity ......................................... III-2

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

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

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

Negligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-2

Apparent U.S. consumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-2

U.S. market shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-2

Ratios of imports to U.S. production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-2
ii

CONTENTS

Page

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

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

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

Transportation costs to the U.S. market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1

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

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

Pricing practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-3

Price data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-3

Price trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-4

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

Lost sales and lost revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-5

Part VI: Financial experience and condition of the U.S. producer . . . . . . . . . . . . . . . . . . . . . . VI-1

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

Operations on Ni-resist piston inserts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-2

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

Capital and investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-4

Part VII: Threat considerations and information on nonsubject countries ............... VII-1

The industry in Argentina ....................................................... VII-1

The industry in Korea .......................................................... VII-1

The industries in Argentina and Korea combined .................................... VII-2

U.S. importers’ inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-2

U.S. importers’ current orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-2

Antidumping and countervailing duty investigations in third-country markets .............. VII-2

Information on nonsubject countries .............................................. VII-3

Appendixes

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

B. Calendar of the Commission’s February 17, 2009 conference . . . . . . . . . . . . . . . . . . . . . . . . . B-1

C. Summary data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-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)).

UNITED STATES INTERNATIONAL TRADE COMMISSION

Investigation Nos. 701-TA-460-461 (Preliminary)

NI-RESIST PISTON INSERTS FROM ARGENTINA AND KOREA

DETERMINATIONS

On the basis of the record1

 developed in the subject investigations, the United States International

Trade Commission (Commission) determines, pursuant to section 703(a) of the Tariff Act of 1930 (19

U.S.C. § 1671b(a)) (the Act), that there is a reasonable indication that an industry in the United States is

materially injured by reason of imports from Argentina and Korea of Ni-resist piston inserts, provided for

in subheading 8409.99.91 of the Harmonized Tariff Schedule of the United States, that are alleged to be

subsidized by the Governments of Argentina and Korea.

COMMENCEMENT OF FINAL PHASE INVESTIGATIONS

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

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

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

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

preliminary determinations in the investigations under section 703(b) of the Act, or, if the preliminary

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

section 705(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 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 January 26, 2009, a petition was filed with the Commission and Commerce by Korff Holdings

LLC dba Quaker City Castings, Salem, Ohio, alleging that an industry in the United States is materially

injured by reason of subsidized imports of Ni-resist piston inserts from Argentina and Korea. 

Accordingly, effective January 26, 2009, the Commission instituted countervailing duty investigations

Nos. 701-TA-460-461 (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 February 3, 2009 (74 FR 5946). The conference was held in Washington, DC, on February 17, 2009,

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

1

 19 U.S.C. §§ 1671b(a), 1673b(a) (2000); see also American Lamb Co. v. United States, 785

F.2d 994, 1001-04 (Fed. Cir. 1986); Aristech Chem. Corp. v. United States, 20 CIT 353, 354-55 (1996). 

No party argued that the establishment of an industry is materially retarded by reason of the allegedly

unfairly traded imports.

2

 American Lamb Co., 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(4)(A).

3

VIEWS OF THE COMMISSION

Based on the record in the preliminary phase of these investigations, we unanimously find that

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

imports of Ni-resist piston inserts (“Ni rings”) allegedly subsidized by the governments of Argentina and

Korea.

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 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. BACKGROUND

Korff Holdings, LLC, doing business as Quaker City Castings (“QCC”), filed the petition in these

investigations on January 26, 2009. QCC, the only known domestic producer of Ni rings, appeared at the

conference and submitted a postconference brief. Three respondents have entered appearances as parties

to these investigations. Federal-Mogul Corp. (“Federal-Mogul”) is an importer of subject merchandise

from Korea and a purchaser of domestically produced Ni rings. Karl Schmidt Unisia, Inc. (“Karl

Schmidt”) is an importer of subject merchandise from Argentina and a purchaser of domestically

produced Ni rings. Federal-Mogul and Karl Schmidt each appeared at the conference, represented by

separate counsel, and submitted postconference briefs. Clorindo Appo SRL (“Clorindo”) is a producer

and exporter of subject merchandise from Argentina. It submitted a postconference statement.

III. DOMESTIC LIKE PRODUCT AND INDUSTRY

A. In General

In determining whether 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.”3

 Section 771(4)(A) of the Tariff Act of 1930, as amended

(“the Tariff 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
4

 19 U.S.C. § 1677(4)(A).

5

 19 U.S.C. § 1677(10).

6

 See, e.g., Cleo, Inc. v. United States, 501 F.3d 1291, 1299 (Fed. Cir. 2007); 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 the following: (1) physical characteristics and uses; (2) interchangeability;

(3) channels of distribution; (4) customer and producer perceptions of the products; (5) common

manufacturing facilities, production processes, and production employees; and, where appropriate, (6)

price. See Nippon, 19 CIT at 455 n.4; Timken Co. v. United States, 913 F. Supp. 580, 584 (Ct. Int’l

Trade 1996).

7

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

8

 Nippon, 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.”).

9

 See, e.g., USEC, Inc. v. United States, 34 Fed. Appx. 725, 730 (Fed. Cir. 2002) (“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).

10 Hosiden Corp. v. Advanced Display Mfrs., 85 F.3d 1561, 1568 (Fed. Cir. 1996) (the

Commission may find a single like product corresponding to several different classes or kinds defined by

Commerce); Cleo, 501 F.3d at 1298 n.1 (“Commerce’s {scope} finding does not control the

Commission’s {like product} determination.”); Torrington, 747 F. Supp. at 748-52 (affirming the

Commission’s determination defining six like products in investigations where Commerce found five

classes or kinds).

4

proportion of the total domestic production of the product.”4

 In turn, the Tariff 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 ... .”5

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.6

 No single factor is dispositive, and the Commission

may consider other factors it deems relevant based on the facts of a particular investigation.7

 The

Commission looks for clear dividing lines among possible like products and disregards minor variations.8

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

merchandise that is subsidized or sold at less than fair value,9

 the Commission determines what domestic

product is like the imported articles Commerce has identified.10

B. Scope Definition
11 74 Fed. Reg. 8054, 8055 (Feb. 23, 2009).

12 Petition at 34; Tr. at 31 (J. Korff), 89-90 (Lowe), 100 (Turcott).

13 Petition at 32-33; see Tr. at 60-61 (J. Korff).

14 Petition at 32-33.

15 Tr. at 119 (Lowe, Kane). No party addressed domestic like product issues in its

postconference brief.

16 Petition at 6.

17 Confidential Report (CR) at I-7-9, Public Report (PR) at I-5; Petition at 7. The piston ring, by

(continued...)

5

The Department of Commerce has defined the scope of the imported merchandise under

investigation as follows:

all Ni-resist piston inserts regardless of size, thickness, weight, or outside diameter. Niresist piston inserts may also be called other names including, but not limited to, “Ring

Carriers,” or “Alfin Inserts.” Ni-resist piston inserts are alloyed cast iron rings, with or

without a sheet metal cooling channel pressed and welded into the interior of the insert.

Ni-resist piston inserts are composed of the material known as Ni-resist, of the chemical

composition: 13.5% – 17.5% Ni (nickel), 5.5% – 8.0% Cu (copper), 0.8% – 2.5% Cr

(chromium), 0.5% – 1.5% Mn (manganese), 1.0% – 3.0% Si (silicon), 2.4% – 3.0% C

(carbon). The cast iron composition is produced primarily to the material specifications

of the American Society for Testing and Materials (ASTM), ASTM A-436 grade 1. The

scope of these investigations does not include piston rings nor any other product

manufactured using the Ni-resist material.11

Ni rings are normally used as a component of aluminum pistons found in diesel engines. All diesel

engines that contain aluminum pistons use Ni rings; diesel engines using non-aluminum pistons do not

use Ni rings.12 The Ni ring is an insert to the piston; the elevated nickel content in the ring allows for the

expansion and contraction of the ring at the same rate as the piston, which serves to lengthen the piston’s

working life.13 

C. Domestic Like Product Analysis

QCC argues that the Commission should find a single domestic like product coextensive with the

scope definition.14 At the conference, counsel for respondents Federal-Mogul and Karl Schmidt stated

that they agreed with QCC’s proposed definition of the domestic like product.15 We examine below the

information in the record concerning the factors the Commission typically examines in defining the

domestic like product.

Physical Characteristics and Uses. Ni rings are alloyed cast iron rings. The nominal chemistry

of the alloy material consists of 15 percent nickel, 6.5 percent copper, 2 percent chrome, 1 percent

manganese, 2 percent silicon, and 2.5 percent carbon. Ni rings typically have an outer diameter ranging

from 2 to 12 inches, and a thickness from 0.180 inches to approximately 1.5 inches.16 As previously

stated, the Ni ring protects the aluminum piston during combustion inside the diesel engine cylinder. The

Ni ring is typically found near the top of the piston where the piston rings are located. The Ni ring

absorbs impact from the piston ring and prevents wear to the piston.17
17 (...continued)

contrast, exists to seal the combustion chamber, support heat transfer from the piston to the cylinder wall,

and regulate oil consumption. Petition at 37.

18 Petition at 32.

19 CR at II-5, PR at II-3.

20 Petition at 7, 33.

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

22 During the melting process, type I molten scrap Ni-resist machining chips are added to molten

alloy cast iron. CR at I-10, PR at I-8. 

23 This results in more uniform, cleaner metal than other forms of casting would yield. CR at I11, PR at I-8.

24 CR at I-11, PR at I-8.

25 Tr. at 47, 52-53 (J. Korff); http://www.qccast.com/centrifugal.html (visited and printed Feb.

24, 2009).

26 See CR at VI-5-7, PR at VI-3.

27 Cylinder liners are produced for gasoline engines used in automobiles and small trucks and do

not contain Ni-resist material. Tr. at 52-53 (J. Korff); http://www.ez-slider.com/ (visited and printed Feb.

24, 2009). Lapping pots are used in the production of piston rings. Tr. at 59 (J. Korff). 

28 http://www.qccast.com/ (visited and printed Feb. 24, 2009). QCC’s other product lines

include cylinder liners and several different types of iron and steel castings.

29 Tr. at 136 (Turcott), 142-43 (Czerwinski).

6

Interchangeability. QCC contends that no other product performs a similar function in diesel

engines to Ni rings.18 The record does not indicate that there are any substitute products performing the

same function as Ni rings in diesel engines.19 The petition further contends – and no party disputed at the

conference – that Ni rings are used almost exclusively in diesel engines.20

Channels of Distribution. *** domestically produced Ni rings are sold to end users, which are

typically manufacturers of aluminum pistons for diesel engines that incorporate the Ni rings as a

component in their production of the finished piston.21

Manufacturing Facilities, Production Processes, and Production Employees. The process for

producing Ni rings includes three steps. First, melting takes place in an electric induction furnace.22 The

molten metal is poured into a mold and rotated during solidification, in a process called centrifugal

casting.23 Finally, the centrifugally cast tube is machined to the desired specifications to become a set of

finished Ni rings.24

QCC produces several other products at its Salem, OH manufacturing facility using centrifugal

casting. These include cylinder liners, lapping pots, bushings, and heat-shaped tubes.25 While the same

QCC employees produce other centrifugally cast items that the company manufactures,26 these other

products tend to have different characteristics than do Ni rings.27

Producer and Customer Perceptions. QCC’s website lists Ni rings as one of seven major product

lines offered by the company.28 Purchasers specify Ni ring suppliers, and seek quotations specifically for

Ni rings.29
30 CR/PR, Tables V-1-4.

31 19 U.S.C. § 1677(4)(A).

32 CR at III-1, PR at III-1.

33 No party has asserted, and we cannot identify, any domestic industry or related party issues in

these preliminary phase investigations.

34 Negligibility under 19 U.S.C. § 1677(24) is not an issue in these investigations. During the

most recent 12-month period prior to filing of the petition, subject imports from Argentina accounted for

*** percent of total imports of Ni rings and subject imports from Korea accounted for *** percent of total

imports. CR/PR, Table IV-2. Consequently, imports from each subject country exceed the 3 percent

statutory negligibility threshold. 

35 19 U.S.C. § 1677(7)(G)(i).

7

Price. The pricing data in the record indicate that, at any particular time, domestically produced

Ni rings of heavier weight will be priced higher than domestically produced Ni rings of lighter weight.30

Heavier rings will contain more metal, and thus reflect higher raw material costs.

Analysis. The information in the record indicates that all Ni rings, despite variations in size and

weight, have the same metal composition, perform the same function in aluminum pistons, are produced

in the same manner at the same facilities, and are sold through the same channels of distribution. The

parties have agreed that the Commission should define the domestic like product to be Ni rings, and there

is no indication in the record that such a definition would be either too broad or too narrow. 

Consequently, we define a single domestic like product encompassing all domestically produced Ni rings

with the specifications provided in the scope definition.

D. Domestic Industry

The domestic industry is defined as the domestic “producers as a whole 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.”31 In defining the domestic industry, the

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

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

Consistent with our definition of the domestic like product, we define the domestic industry to

encompass all domestic producers of Ni rings. QCC is the only known domestic producer of Ni rings.32

Accordingly, for purposes of these preliminary determinations, the domestic industry consists of QCC’s

Ni ring production operations.33

IV. CUMULATION34

A. Background

For purposes of evaluating the volume and price effects for a determination of reasonable

indication of material injury by reason of the subject imports, section 771(7)(G)(i) of the Tariff 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.35 In assessing whether subject imports compete

with each other and with the domestic like product, the Commission has generally considered four

factors:
36 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).

37 Commissioner Lane notes with respect to the first factor that her analysis does not require such

similarity of products that a perfectly symmetrical fungibility is required. See Separate Views of

Commissioner Charlotte R. Lane, Certain Lightweight Thermal Paper from China, Germany, and Korea,

Inv. Nos. 701-TA-451 and 731-TA-1126-1128 (Preliminary), USITC Pub. 3964 (Nov. 2007).

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

39 The Uruguay Round Agreements Act, Statement of Administrative Action, H.R. Doc. No.

103-316, Vol. 1 at 848 (1994) (“SAA”) expressly states that “the new section will not affect current

Commission practice under which the statutory requirement is satisfied if there is a reasonable overlap of

competition.” SAA at 848 (citing Fundicao Tupy, S.A. v. United States, 678 F. Supp. 898, 902 (Ct. Int'l

Trade 1988)), aff’d, 859 F.2d 915 (Fed. Cir. 1988). See Goss Graphic Sys., Inc. v. United States, 33 F.

Supp. 2d 1082,1087 (Ct. Int’l Trade 1998) (“cumulation does not require two products to be highly

fungible”); Wieland Werke, AG, 718 F. Supp. at 52 (“Completely overlapping markets are not

required.”).

40 CR at I-1, PR at I-1; 74 Fed. Reg. 8054 (Feb. 23, 2009).

41 Petition at 50.

42 Tr. at 121 (Lowe), 154 (Kane); Federal-Mogul Postconference Brief at 3.

8

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

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

customer requirements and other quality related questions;

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

imports from different countries and the domestic like product;

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

from different countries and the domestic like product; and

(4) whether the subject imports are simultaneously present in the market.36 37

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.38 Only a “reasonable overlap” of

competition is required.39

The statutory threshold for cumulation is satisfied in these investigations, because the petition

encompassing both subject countries was filed on the same day (January 26, 2009).40 None of the

statutory exceptions to cumulation is applicable.

QCC argues that the Commission should cumulate subject imports from Argentina and Korea.41

Respondents have not asserted any contrary arguments.42

B. Analysis

The Commission generally has considered whether subject imports 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 presence. 

We examine these considerations below.
43 Tr. at 19 (J. Korff).

44 Federal-Mogul Postconference Brief at 27.

45 Tr. at 99 (Czerwinski).

46 QCC Producer’s Questionnaire Response, response to question III-16.

47 Importers’ Questionnaire Responses, response to question IV-16. Karl Schmidt and FederalMogul were *** – to provide information about interchangeability of Ni rings from various sources.

48 During the period of investigation, Karl Schmidt purchased *** and Federal-Mogul purchased

***. Importers’ Questionnaire Responses, response to question IV-1.

49 Karl Schmidt is located in Wisconsin. Tr. at 83 (Kane). Federal-Mogul produces pistons in

Minnesota. Tr. at 90 (Lowe).

50 CR/PR, Table IV-3.

9

Fungibility. QCC takes the position that Ni rings from different sources are essentially

indistinguishable.43 Federal-Mogul agrees that QCC’s Ni rings are interchangeable with the subject

imports from Argentina and Korea.44 Its witness testified that he has not seen any differences in quality

between the Ni rings Federal-Mogul imported from Korea and the Ni rings that QCC produced.45

The questionnaire responses also indicate that market participants perceive Ni rings from various

sources to be interchangeable. QCC reported that domestically produced Ni rings were ***

interchangeable with imports from Argentina or Korea.46 Federal-Mogul reported that domestically

produced Ni rings were *** interchangeable with the subject imports from Korea, and Karl Schmidt

reported that domestically produced Ni rings were *** interchangeable with the subject imports from

Argentina.47

Channels of Distribution. During the period of investigation, the domestic like product and the

imports from each subject country were purchased by the same type of entities: aluminum piston

producers.48

Geographic Overlap. As previously discussed, both the domestic like product and the subject

imports were sold to the same firms that produce aluminum pistons. Both purchasers are located in the

upper Midwest.49 Consequently, there was geographic overlap of the domestic like product and the

subject imports. 

Simultaneous Presence in Market. The domestic like product and subject imports from Argentina

and Korea have been present in the U.S. market during each year of the period of investigation.50

Analysis. As previously stated, no party has argued that the Commission should not cumulate

subject imports from Argentina and Korea. The record indicates that the domestic like product and

imports from each subject source are at least moderately interchangeable, are purchased by the same

piston producers, and have been in the U.S. market throughout the period of investigation. The record

consequently indicates that there is a reasonable overlap of competition between the domestic like

products and imports from each subject country and between subject imports from Argentina and Korea. 

We therefore cumulate subject imports from Argentina and Korea for our analysis of reasonable

indication of material injury by reason of subject imports.

V. REASONABLE INDICATION OF MATERIAL INJURY 

BY REASON OF SUBJECT IMPORTS

A. Legal Standards
51 19 U.S.C. §§ 1671b(a), 1673b(a).

52 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).

53 19 U.S.C. § 1677(7)(A).

54 19 U.S.C. § 1677(7)(C)(iii).

55 19 U.S.C. § 1677(7)(C)(iii).

56 19 U.S.C. §§ 1671b(a), 1673b(a).

57 Angus Chemical Co. v. United States, 140 F.3d 1478, 1484-85 (Fed. Cir. 1998) (“{T}he

statute does not ‘compel the commissioners’ to employ {a particular methodology}.”), aff’g 944 F. Supp.

943, 951 (Ct. Int’l Trade 1996).

58 The Federal Circuit, in addressing the causation standard of the statute, observed that “{a}s

long as its effects are not merely incidental, tangential, or trivial, the foreign product sold at less than fair

value meets the causation requirement.” Nippon Steel Corp. v. USITC, 345 F.3d 1379, 1384 (Fed. Cir.

2003). This was further ratified in Mittal Steel Point Lisas Ltd. v. United States, 542 F.3d 867, 873 (Fed.

Cir. 2008), where the Federal Circuit, quoting Gerald Metals, Inc. v. United States, 132 F.3d 716, 722

(Fed. Cir. 1997), stated that “this court requires evidence in the record ‘to show that the harm occurred

“by reason of” the LTFV imports, not by reason of a minimal or tangential contribution to material harm

caused by LTFV goods.’” See also Nippon Steel Corp. v. United States, 458 F.3d 1345, 1357 (Fed. Cir.

2006); Taiwan Semiconductor Industry Ass’n v. USITC, 266 F.3d 1339, 1345 (Fed. Cir. 2001).

10

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 or threatened with material injury by reason of the imports under investigation.51 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.52 The statute defines “material injury” as “harm which is not

inconsequential, immaterial, or unimportant.”53 In assessing whether there is a reasonable indication that

the domestic industry is materially injured by reason of subject imports, we consider all relevant

economic factors that bear on the state of the industry in the United States.54 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.”55

Although the statute requires the Commission to determine whether there is a reasonable

indication that the domestic industry is “materially injured by reason of” unfairly traded imports,56 it does

not define the phrase “by reason of,” indicating that this aspect of the injury analysis is left to the

Commission’s reasonable exercise of its discretion.57 In identifying a causal link, if any, between subject

imports and material injury to the domestic industry, the Commission examines the facts of record that

relate to the significance of the volume and price effects of the subject imports and any impact of those

imports on the condition of the domestic industry. This evaluation under the “by reason of” standard

must ensure that subject imports are more than a minimal or tangential cause of injury and that there is a

sufficient causal, not merely a temporal, nexus between subject imports and material injury.58

In many investigations, there are other economic factors at work, some or all of which may also

be having adverse effects on the domestic industry. Such economic factors might include non-subject

imports; changes in technology, demand, or consumer tastes; competition among domestic producers; or

management decisions by domestic producers. The legislative history explains that the Commission must
59 Statement of Administrative Action (“SAA”) on Uruguay Round Agreements Act (“URAA”),

H.R. Rep. 103-316, Vol. I at 851-52 (1994) (“{T}he Commission must examine other factors to ensure

that it is not attributing injury from other sources to the subject imports.”); S. Rep. 96-249 at 75 (1979)

(the Commission “will consider information which indicates that harm is caused by factors other than

less-than-fair-value imports.”); H.R. Rep. 96-317 at 47 (1979) (“in examining the overall injury being

experienced by a domestic industry, the ITC will take into account evidence presented to it which

demonstrates that the harm attributed by the petitioner to the subsidized or dumped imports is attributable

to such other factors;” those factors include “the volume and prices of nonsubsidized imports or imports

sold at fair value, contraction in demand or changes in patterns of consumption, trade restrictive practices

of and competition between the foreign and domestic producers, developments in technology and the

export performance and productivity of the domestic industry”); accord Mittal Steel, 542 F.3d at 877.

60 SAA at 851-52 (“{T}he Commission need not isolate the injury caused by other factors from

injury caused by unfair imports.”); Taiwan Semiconductor Industry Ass’n v. USITC, 266 F.3d 1339,

1345 (Fed. Cir. 2001) (“{T}he Commission need not isolate the injury caused by other factors from injury

caused by unfair imports ... . Rather, the Commission must examine other factors to ensure that it is not

attributing injury from other sources to the subject imports.” (emphasis in original)); Asociacion de

Productores de Salmon y Trucha de Chile AG v. United States, 180 F. Supp. 2d 1360, 1375 (Ct. Int’l

Trade 2002) (“{t}he Commission is not required to isolate the effects of subject imports from other

factors contributing to injury” or make “bright-line distinctions” between the effects of subject imports

and other causes.); see also Softwood Lumber from Canada, Inv. Nos. 701-TA-414 and 731-TA-928

(Remand), USITC Pub. 3658 at 100-01 (Dec. 2003) (Commission recognized that “{i}f an alleged other

factor is found not to have or threaten to have injurious effects to the domestic industry, i.e., it is not an

‘other causal factor,’ then there is nothing to further examine regarding attribution to injury”), citing

Gerald Metals, Inc. v. United States, 132 F.3d 716, 722 (Fed. Cir. 1997) (the statute “does not suggest

that an importer of LTFV goods can escape countervailing duties by finding some tangential or minor

cause unrelated to the LTFV goods that contributed to the harmful effects on domestic market prices.”). 

61 S. Rep. 96-249 at 74-75; H.R. Rep. 96-317 at 47.

62 See Nippon Steel Corp., 345 F.3d at 1381 (“an affirmative material-injury determination under

the statute requires no more than a substantial-factor showing. That is, the ‘dumping’ need not be the sole

or principal cause of injury.”).

63 Mittal Steel, 542 F.3d at 877-78; see also id. at 873 (“While the Commission may not enter an

affirmative determination unless it finds that a domestic industry is materially injured ‘by reason of’

(continued...)

11

examine factors other than subject imports to ensure that it is not attributing injury from other factors to

the subject imports, thereby inflating an otherwise tangential cause of injury into one that satisfies the

statutory material injury threshold.59 In performing its examination, however, the Commission need not

isolate the injury caused by other factors from injury caused by unfairly traded imports.60 Nor does the

“by reason of” standard require that unfairly traded imports be the “principal” cause of injury or

contemplate that injury from unfairly traded imports be weighed against other factors, such as non-subject

imports, which may be contributing to overall injury to an industry.61 It is clear that the existence of

injury caused by other factors does not compel a negative determination.62

Assessment of whether material injury to the domestic industry is “by reason of” subject imports

“does not require the Commission to address the causation issue in any particular way” as long as “the

injury to the domestic industry can reasonably be attributed to the subject imports” and the Commission

“ensure{s} that it is not attributing injury from other sources to the subject imports.”63 64 Indeed, the
63 (...continued)

subject imports, the Commission is not required to follow a single methodology for making that

determination ... . {and has} broad discretion with respect to its choice of methodology.”) citing United

States Steel Group v. United States, 96 F.3d 1352, 1362 (Fed. Cir. 1996) and S. Rep. 96-249 at 75.

64 Commissioner Pinkert does not join this paragraph or the following four paragraphs. He

points out that the Federal Circuit, in Bratsk, 444 F.3d 1369, and Mittal, held that the Commission is

required, in certain circumstances, to undertake a particular kind of analysis of non-subject imports. 

Mittal explains as follows:

What Bratsk held is that “where commodity products are at issue and fairly traded, pricecompetitive, non-subject imports are in the market,” the Commission would not fulfill its

obligation to consider an important aspect of the problem if it failed to consider whether nonsubject or non-LTFV imports would have replaced LTFV subject imports during the period of

investigation without a continuing benefit to the domestic industry. 444 F.3d at 1369. Under

those circumstances, Bratsk requires the Commission to consider whether replacement of the

LTFV subject imports might have occurred during the period of investigation, and it requires the

Commission to provide an explanation of its conclusion with respect to that factor.

542 F.3d at 878.

65 Nucor Corp. v. United States, 414 F.3d 1331, 1336, 1341 (Fed. Cir. 2005); see also Mittal

Steel, 542 F.3d at 879 (“Bratsk did not read into the antidumping statute a Procrustean formula for

determining whether a domestic injury was ‘by reason’ of subject imports.”).

66 Mittal Steel, 542 F.3d at 875-79.

67 Mittal Steel, 542 F.3d at 873 (quoting from Gerald Metals, 132 F.3d at 722), 875-79 & n.2

(recognizing the Commission’s alternative interpretation of Bratsk as a reminder to conduct a nonattribution analysis).

12

Federal Circuit has examined and affirmed various Commission methodologies and has disavowed “rigid

adherence to a specific formula.”65

The Federal Circuit’s decisions in Gerald Metals, Bratsk, and Mittal Steel all involved cases

where the relevant “other factor” was the presence in the market of significant volumes of pricecompetitive non-subject imports. The Commission interpreted the Federal Circuit’s guidance in Bratsk as

requiring it to apply a particular additional methodology following its finding of material injury in cases

involving commodity products and a significant market presence of price-competitive non-subject

imports.66 The additional “replacement/benefit” test looked at whether non-subject imports might have

replaced subject imports without any benefit to the U.S. industry. The Commission applied that specific

additional test in subsequent cases, including the Carbon and Certain Alloy Steel Wire Rod from Trinidad

and Tobago determination that underlies the Mittal Steel litigation.

Mittal Steel clarifies that the Commission’s interpretation of Bratsk was too rigid and makes clear

that the Federal Circuit does not require the Commission to apply an additional test nor any one specific

methodology; instead, the court requires the Commission to have “evidence in the record ‘to show that

the harm occurred ‘by reason of’ the LTFV imports,’” and requires that the Commission not attribute

injury from non-subject imports or other factors to subject imports.67 Accordingly, we do not consider

ourselves required to apply the replacement/benefit test that was included in Commission opinions

subsequent to Bratsk.

The progression of Gerald Metals, Bratsk, and Mittal Steel clarifies that, in cases involving

commodity products where price-competitive non-subject imports are a significant factor in the U.S.
68 Commissioner Lane also refers to her dissenting views in Polyethylene Terephthalate Film,

Sheet, and Strip from Brazil, China, Thailand, and the United Arab Emirates, Inv. Nos. 731-TA-1131-

1134 (Final), USITC Pub. 4040 (Oct. 2008), for further discussion of Mittal Steel.

69 To that end, after the Federal Circuit issued its decision in Bratsk, the Commission began to

present published information or send out information requests in final phase investigations to producers

in non-subject countries that accounted for substantial shares of U.S. imports of subject merchandise (if,

in fact, there were large non-subject import suppliers). In order to provide a more complete record for the

Commission’s causation analysis, these requests typically seek information on capacity, production, and

shipments of the product under investigation in the major source countries that export to the United

States. The Commission plans to continue utilizing published or requested information in final phase

investigations in which there are substantial levels of non-subject imports.

70 Mittal Steel, 542 F.3d at 873; Nippon Steel Corp., 458 F.3d at 1350, citing U.S. Steel Group,

96 F.3d at 1357; S. Rep. 96-249 at 75 (“The determination of the ITC with respect to causation

is ... complex and difficult, and is a matter for the judgment of the ITC.”).

71 We provide in the discussion of impact in section V.E. below a full analysis of other factors

alleged to have caused any material injury experienced by the domestic industry. 

72 CR/PR, Table IV-3.

73 CR at II-3, PR at II-2.

74 CR at I-9, PR at I-7.

75 Petition at 48; Tr. at 84 (Kane); Federal-Mogul Postconference Brief at 6-8.

13

market, the Court will require the Commission to give full consideration, with adequate explanation, to

non-attribution issues when it performs its causation analysis.68 69

The question of whether the material injury threshold for subject imports is satisfied

notwithstanding any injury from other factors is factual, subject to review under the substantial evidence

standard. Congress has delegated this factual finding to the Commission because of the agency’s

institutional expertise in resolving injury issues.70 71

B. Conditions of Competition and the Business Cycle

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

indication of material injury or threat of material injury by reason of subject imports from Argentina and

Korea.

Demand Conditions. Apparent U.S. consumption of Ni rings declined during the period of

investigation, which encompasses calendar years 2006 through 2008. Apparent U.S. consumption of Ni

rings declined from *** pounds in 2006 to *** pounds in 2007. Apparent U.S. consumption then

increased *** to *** pounds in 2008, which was still *** below the 2006 level.72

Demand for Ni rings is directly linked to the demand for diesel engines that incorporate

aluminum pistons.73 These engines are used to power motor vehicles (which, in the United States, are

largely certain light trucks and medium- to heavy-duty trucks), farm and other off-road equipment, marine

transports, and large compressors.74 The parties agree that, at least to some extent, the decline in Ni ring

apparent consumption during the period of investigation reflects a decline in demand for the motor

vehicles containing diesel engines incorporating aluminum pistons.75 The record in these preliminary

investigations, however, does not indicate to what extent various factors identified by the parties may
76 In addition to declines in overall motor vehicle demand, these include: (1) the increased

preferences of diesel engine manufacturers for articulated and steel pistons – neither of which uses Ni

rings – over aluminum pistons; and (2) demand fluctuations for motor vehicles attributable to changes in

U.S. Environmental Protection Agency emissions standards. 

77 Tr. at 12 (J. Korff), 114 (Turcott), 115 (Lowe). Mahle’s status as a U.S. producer of aluminum

pistons is unclear.

78 CR/PR, Table IV-4. Clorindo has served as Karl Schmidt’s principal source of Ni rings for

over a decade. Tr. at 85 (Kane).

79 CR at IV-1, PR at IV-1.

80 See CR at IV-2, PR at IV-1. At the time the postconference briefs were filed, ***. See

Federal-Mogul Postconference Brief at 16-17. Subsequently, ***. CR at IV-1, PR at IV-1. As a result, it

is unnecessary for us to address the arguments respondents submitted in their postconference briefs

concerning nonsubject imports.

81 Petition at 3-4.

82 Tr. at 11 (J. Korff).

83 Tr. at 11 (J. Korff).

84 Tr. at 12, 57 (J. Korff). Sand castings remain QCC’s principal business. CR at III-2, PR at

III-1.

85 Tr. at 12 (J. Korff).

86 Compare CR/PR, Table III-1 (QCC Ni ring capacity *** pounds throughout period of

(continued...)

14

have contributed to the decline in apparent consumption which occurred in 2007.76 We intend to explore

further in any final phase investigations the factors contributing to the observed decline in apparent U.S.

consumption of Ni rings.

There are at most three known U.S. producers of aluminum pistons for diesel engines that would

purchase or use Ni rings in their operations. These are Federal-Mogul, Karl Schmidt, and Mahle.77

Supply Conditions. Most Ni rings present in the U.S. market during the period of investigation

were imported from the subject countries. The cumulated subject imports’ share of the quantity of

apparent U.S. consumption increased from *** percent in 2006 to *** percent in 2007 and then increased

further to *** percent in 2008.78 Karl Schmidt was the sole importer of subject merchandise from

Argentina during the period of investigation, and Federal-Mogul was the sole importer of subject

merchandise from Korea.79

QCC supplied *** apparent U.S. consumption during the period of investigation, as there were

*** imports from nonsubject sources and QCC is the only known domestic producer of Ni rings.80 QCC

states that it believes it has been the only domestic Ni ring producer since 1995.81 QCC declared

bankruptcy in 2003; QCC’s current president, Joseph Korff, attributes the bankruptcy at least in part to

the prior bankruptcy of Federal-Mogul, which resulted in QCC being unable to recover a large value of

accounts receivable.82 QCC was acquired by the Korff family at a bankruptcy sale in 2004.83 At that

time, QCC’s principal business was sand castings; QCC’s management perceived its centrifugally cast

products such as Ni rings to be an addition to its sand casting business.84 As previously stated, QCC

produces several centrifugally cast products in addition to Ni rings and is trying to develop sales of these

products.85 QCC’s available capacity for production of Ni rings *** apparent U.S. consumption of the

product throughout the period of investigation.86
86 (...continued)

investigation) with id., Table IV-3 (peak apparent U.S. consumption during period of investigation ***

pounds).

87 CR at I-6, V-1, PR at I-5, V-1.

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

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

90 CR/PR, Table II-3.

91 19 U.S.C. § 1677(7)(C)(i).

92 CR/PR, Table IV-2.

93 CR/PR, Tables IV-2-3.

94 CR/PR, Table IV-4. Additionally, the ratio of subject imports to production increased from

*** percent in 2006 to *** percent in 2007 and then to *** percent in 2008. CR/PR, Table IV-5.

15

Other Conditions. Nickel is among the principal raw materials used to make Ni rings.87 Nickel

prices were volatile during the period of investigation, rising sharply in 2006, peaking during the second

quarter of 2007, and declining irregularly thereafter.88 Because of the volatility of nickel prices, nickel

surcharges are common among Ni ring producers worldwide.89

As discussed above, market participants perceive the subject imports and the domestic like

product to be sometimes or always interchangeable.90 The record does not contain any reports of

significant distinctions in quality or product range between the subject imports and the domestic like

product.

C. Volume of Subject Imports

In evaluating the volume of subject imports, section 771(7)(C)(i) of the Tariff 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.”91

The quantity of cumulated subject imports declined overall from 2006 to 2008. Subject imports

declined from *** pounds in 2006 to *** pounds in 2007 and then increased to *** pounds in 2008.92

The 2008 subject import volume increase of *** pounds exceeded the ***-pound increase in apparent

U.S. consumption that year.93

Although their volume declined from 2006 to 2008, the market penetration of the cumulated

subject imports increased during this period. This is because cumulated subject imports declined at a

lower rate than U.S. shipments of the domestic like product. The market penetration of the cumulated

subject imports increased from *** percent in 2006 to *** percent in 2007 and then increased further to

*** percent in 2008.94

For purposes of these preliminary phase investigations, we find that the volume of subject

imports is significant both in absolute terms and relative to consumption and production in the United

States, and that the increase in subject import volume relative to consumption is significant.

D. Price Effects of Subject Imports

In evaluating the price effects of the subject imports, section 771(7)(C)(ii) of the Tariff Act

provides that the Commission shall consider whether –
95 19 U.S.C. § 1677(7)(C)(ii).

96 CR/PR, Tables II-1, II-2, II-4.

97 Tr. at 101-02 (Turcott), Karl Schmidt Postconference Brief at 12.

98 Federal-Mogul Postconference Brief at 9.

99 CR at V-5, PR at V-3.

100 CR/PR, Tables V-1-4.

101 In any final phase investigations, we intend to collect from the aluminum piston producers

their delivered purchase prices for both the domestically produced product and the subject imports.

102 CR/PR, Tables V-1-4.

16

 (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.95

*** domestic purchasers of Ni rings that responded to the Commission questionnaires reported

that price was a “very important” factor in purchasing decisions, yet *** indicated that it was not the

“number one” factor and *** indicated that differences other than price always were a significant factor in

whether to purchase the domestic like product or the subject imports.96 Karl Schmidt claims that in

making purchasing decisions, it seeks to minimize “risk” and chooses suppliers that will not raise

problems concerning reliability, quality, or on-time delivery.97 Federal-Mogul similarly asserts that it

requires a reliable and stable source of components for the parts it produces.98

The Commission collected data concerning four pricing products during the period of

investigation. QCC reported its prices f.o.b. its point of shipment. Because the importers use the Ni rings

they purchase in the production of aluminum pistons and do not resell the imported product, they reported

purchase prices direct from the foreign exporter.99 There were 23 reported quarterly observations for

imports from Argentina, 17 reported observations for imports from Korea, and 17 reported quarterly

observations for domestically produced products. However, there were only 11 quarterly observations

(out of the 46 quarterly observations for which some pricing data were provided) in which reported data

for domestically produced products and the subject imports could be compared.100 Moreover, because

aluminum piston producers directly import Ni rings and do not resell them, we are unable to conduct our

usual comparison of domestic producers’ first sales prices with importers’ first sales prices. Additionally,

because the pricing data QCC reported do not reflect domestic transportation costs, they do not fully

reflect the delivered purchase prices paid by aluminum piston producers.101 In light of these limitations,

the reported data are less useful than those we typically compile in our investigations. Nevertheless, they

provide the most probative information currently available concerning the prices aluminum piston

producers paid for the Ni rings they acquired from various sources. The reported data indicate that the

importers’ purchase prices were lower than the domestic producers’ sales prices in 10 of 11 quarterly

observations.102

Anecdotal information in the record similarly supports a finding that the subject imports sell for

lower prices than does the domestic like product. The president of QCC, Joseph Korff, testified that a

buyer at Karl Schmidt told him that QCC’s prices were significantly higher than those offered by Karl
103 Tr. at 36, 77-78 (J. Korff).

104 Tr. at 103, 105 (Turcott).

105 CR at V-13, PR at V-5.

106 CR/PR, Tables V-1-4.

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

108 CR/PR, Tables V-1-4.

109 CR/PR, Table V-5.

110 CR/PR, Table VI-1.

111 CR/PR, Table VI-1.

112 CR/PR, Table VI-1.

113 CR/PR, Table VI-1.

114 QCC Postconference Brief at 4.

17

Schmidt’s Argentine supplier.103 Karl Schmidt’s witness (who was not the buyer Mr. Korff referenced in

his testimony) tended to reinforce Mr. Korff’s assertions by repeatedly referring to QCC’s prices as

“high” in his conference testimony.104 Federal-Mogul complained that ***.105

In light of the lack of any information suggesting that there are meaningful differences in quality

or product range between the subject imports and the domestic like product, the current record indicates

that lower prices provided a reason why piston producers purchased the subject imports rather than

domestically produced Ni rings. We conclude for purposes of the preliminary phase of these

investigations that the limited data available provide an indication that the subject imports significantly

undersold the domestic like product.

The reported purchase prices for the subject imports rose during 2006, peaked during the second

and third quarters of 2007, and then declined irregularly during the remainder of the period of

investigation.106 This appears to reflect the trends in nickel prices observed during the period of

investigation.107 Ascertaining price trends for the domestic like product is difficult because of the lack of

any extended time series of data for any of the individual pricing products. To the extent an analysis is

possible, it indicates that price movements for the domestically produced product also appear to be largely

coincident with price fluctuations for nickel.108

For three of the four domestically produced pricing products, the latest available pricing

observation was higher than the earliest available observation.109 In light of this, we do not find

significant price depression.

QCC’s ratio of cost of goods sold (COGS) to net sales rose *** during the period of

investigation, from *** percent in 2006 to *** percent in 2008.110 Although one reason for an increase of

this magnitude was the *** decline in both total sales quantities and revenues from 2006 to 2008, on a

unit basis, the *** increase in unit COGS *** exceeded the *** increase in average unit sales values

during this period.111 More particularly, it appears that QCC could not fully recover its increased raw

materials costs. Its ratio of raw material costs to net sales increased by *** percentage points between

2006 and 2008.112 Further, with lower sales volume, other factory costs increased on a unit basis.113 QCC

attempted to recover its costs through use of a surcharge formula that takes into account all the metallic

elements – not merely nickel – that are used in the manufacture of Ni rings.114 QCC’s customers,
115 See Federal-Mogul Postconference Brief at 13; Karl Schmidt Postconference Brief at 14. We

discuss in section V.E. below respondents’ argument that QCC’s surcharge formula is an example of a

business practice that has led to “self-inflicted” injury.

116 19 U.S.C. § 1677(7)(C)(iii); see also SAA at 851 and 885 (“In material injury determinations,

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

While these factors, in some cases, may account for the injury to the domestic industry, they also may

demonstrate that an industry is facing difficulties from a variety of sources and is vulnerable to dumped or

subsidized imports.”).

117 19 U.S.C. § 1677(7)(C)(iii); see also SAA at 851, 885; Live Cattle from Canada and Mexico,

Inv. Nos. 701-TA-386, 731-TA-812-813 (Preliminary), USITC Pub. 3155 at 25 n.148 (Feb. 1999).

118 The domestic industry’s production declined from *** pounds in 2006 to *** pounds in

2007, and then declined further to *** pounds in 2008. CR/PR, Table III-1. U.S. shipments declined

from *** pounds in 2006 to *** pounds in 2007, and then declined further to *** pounds in 2008. 

Export shipments also declined from 2006 to 2008, albeit at a *** rate than domestic shipments. CR/PR,

Table III-2.

119 The ratio of inventories to total shipments increased from *** percent in 2006 to *** percent

in 2007 and then to *** percent in 2008. Inventories declined each year from 2006 to 2008 on an

absolute basis. CR/PR, Table III-3.

120 Capacity was at *** pounds throughout the period of investigation. Reported capacity

utilization declined from *** percent in 2006 to *** percent in 2007 and then to *** percent in 2008. 

CR/PR, Table III-1.

121 The domestic industry’s share of the quantity of apparent U.S. consumption declined from

(continued...)

18

however, refused to accept this surcharge formula;115 thus, QCC’s inability to receive surcharges for all its

metal purchases corroborates the available data suggesting that it has not been successful in recovering

increased raw materials costs.

The available data indicate that QCC was unable to charge prices sufficient to recover increased

costs. We find that this provides some indication of price suppression. We will examine further in any

final phase investigations the causal connection between the subject imports and QCC’s increasing ratios

of costs to sales revenues.

E. Impact of Subject Imports

In examining the impact of subject imports, section 771(7)(C)(iii) of the Tariff Act provides that

the Commission “shall evaluate all relevant economic factors which have a bearing on the state of the

industry.”116 These factors include output, sales, inventories, ability to raise capital, research and

development, and factors affecting domestic prices. No single factor is dispositive and all relevant factors

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

to the affected industry.”117

Output-related indicators of domestic industry performance generally declined during the period

of investigation. Production and shipments fell.118 Inventories increased as a ratio to shipments.119

Because capacity remained constant, the reduced output caused reported capacity utilization to decline to

*** levels.120 The domestic industry’s share of apparent U.S. consumption declined throughout the

period.121
121 (...continued)

*** percent in 2006 to *** percent in 2007 and then to *** percent in 2008. CR/PR, Table IV-4.

122 The number of production and related workers was *** in 2006, was unchanged in 2007, and

increased to *** in 2008. Hourly wages increased from *** in 2006 to *** in 2007 and then to *** in

2008. CR/PR, Table III-4.

123 Productivity, in pounds per hour, declined from *** in 2006 to *** in 2007 and then to *** in

2008. Unit labor costs per pound rose from *** in 2006 to *** in 2007 and then to *** in 2008. CR/PR,

Table III-4.

124 Tr. at 58 (J. Korff).

125 Total net sales by quantity fell from *** pounds in 2006 to *** pounds in 2007 and then to

*** pounds in 2008. CR/PR, Table VI-1.

126 Operating *** were *** in 2006, *** in 2007, and *** in 2008. The operating ratio declined

from *** percent in 2006 to *** percent in 2007, and then declined further to *** percent in 2008. 

CR/PR, Table VI-1.

There were *** capital or research and development expenditures reported *** during the period. 

CR/PR, Table VI-2.

127 CR/PR, Table C-1. 

19

Employment levels showed only minor fluctuations, and hourly wages were higher in 2008 than

in 2006.122 Because roughly the same number of employees were producing *** less output in 2008 than

in 2006, there were *** declines in productivity and increases in unit labor costs.123

At the conference, QCC characterized its Ni ring business as unprofitable during the bulk of the

period of investigation.124 The questionnaire data corroborate this characterization, as QCC’s – and hence

the industry’s – operating performance declined during each year of the period of investigation. Sales fell

***,125 and the firm showed operating *** each year.126

For purposes of these preliminary phase investigations, we find that there is an apparent causal

nexus between the subject imports and the difficulties QCC, the domestic producer, experienced during

the period of investigation. The significant volumes of subject imports were priced lower than the

domestic like product. The current record supports a finding that the lower pricing caused purchasers to

reduce their purchases of the domestic like product in favor of the subject imports. As a result, the

domestic industry’s output, market share, and financial performance declined. There is also some

indication that competition from the subject imports prevented QCC from fully recovering increased

costs. Any inability to recover increased costs would have further impaired operating performance. By

the conclusion of the period of investigation, indicators pertaining to production, shipments, market share,

and financial performance were at *** levels.

Respondents do not dispute that the domestic industry is currently in a poor condition, but argue

that the industry’s difficulties are not a function of the subject imports. Instead, respondents suggest two

alternative causes for the industry’s difficulties.

Respondents first contend that declines in demand for diesel engines incorporating aluminum

pistons have reduced demand for Ni rings, and that this reduced demand is a cause of QCC’s difficulties. 

Based on information in the preliminary record, we do not agree. The decline in the domestic industry’s

U.S. shipments from 2006 to 2008 was *** sharper than the decline in apparent U.S. consumption. While

the quantity of apparent U.S. consumption declined by *** percent from 2006 to 2008, the quantity of the

domestic industry’s U.S. shipments declined by *** percent over the same period.127 Consequently, the

declines in apparent U.S. consumption cannot explain the magnitude of the domestic industry’s declines
128 Federal-Mogul Postconference Brief, ex. 1. Similar letters were sent to diesel engine

manufacturers (which purchase aluminum pistons from Federal-Mogul and Karl Schmidt). QCC

Postconference Brief, ex. 7.

129 Federal-Mogul Postconference Brief at 9-11, 24-25. 

130 Karl Schmidt Postconference Brief at 3. 

131 QCC Postconference Brief at 7.

132 Topics that the Commission may explore include the following: (1) whether there are any

contemporaneous records that corroborate the parties’ current assertions concerning how the letters were

perceived at the time they were received; (2) whether Federal-Mogul and QCC conducted any

negotiations concerning possible supply arrangements between the time the letters were circulated and the

time Federal-Mogul made a decision to source most of its requirements from Korea, and, if so, the nature

of these negotiations; (3) the extent to which Federal-Mogul’s decision to source most of its requirements

from Korea was based on “reliability and security” considerations rather than pricing; and (4) whether

and how these letters influenced Karl Schmidt’s decision in 2007 to attempt to qualify QCC as an

“active” Ni ring supplier. 

20

in shipments, production, or market share during the period of investigation. Moreover, as discussed

above, while apparent U.S. consumption declined overall from 2006 to 2008, there is no evidence of a

steady decline in demand; to the contrary, apparent U.S. consumption actually increased in 2008 as

compared to 2007. 

Respondents further contend that any injury QCC has incurred is self-inflicted. They specify

several QCC business practices which they contend have deterred them from purchasing greater

quantities of the firm’s Ni rings. As we explain below, the record of these preliminary phase

investigations contains insufficient information to enable us to make findings on these arguments, which

we will explore further during any final phase investigations.

Both Federal-Mogul and Karl Schmidt cite a letter QCC sent to the three U.S. producers of

aluminum pistons in July 2004, just after the Korff family purchased QCC at a bankruptcy sale. The

letter states that “Korff Holdings will make a decision soon whether to continue to support Quaker’s

insert business, or to use the resources elsewhere.” It further states that “[t]o continue the business, we

need sales value of at least $500,000 per month at base prices which allow us to generate sufficient profits

to maintain and reinvest in the business as a stand alone [operation].”128 Federal-Mogul states that it

perceived the letter to be a threat by QCC to cease Ni ring production unless its customers could commit

to purchases far in excess of historical norms. It maintains that the letter led it to question the “reliability

and security” of its Ni ring supplies. As a result, Federal-Mogul contends, it began to search for other Ni

ring suppliers, notwithstanding that QCC was at that time Federal-Mogul’s exclusive Ni ring supplier for

its U.S. aluminum piston production operations.129 Similarly, Karl Schmidt contends that it perceived the

letter as an “ultimatum” which indicated QCC’s “unreliability as a primary long-term volume supplier.” 

Karl Schmidt maintains that since 2004 it has been unable to rely on QCC to be anything more than a

secondary source of supply.130 QCC counters that the letter was not intended to be a threat, but “simply

apprised several engine manufacturers of the fact that QCC was the only remaining producer of Ni-resist

inserts in the U.S., and that if any of the companies addressed wished to maintain a domestic source for

this product, that QCC would need more purchases.”131 The limited record in these preliminary phase

investigations does not permit us to reach firm conclusions regarding the intent and effects of these letters

and we intend to explore these issues closely in any final phase investigations.132

Federal-Mogul and Karl Schmidt additionally cite QCC’s metal surcharge policy as a reason they

did not purchase greater quantities of Ni rings from that firm. They contend that QCC’s surcharge
133 See Federal-Mogul Postconference Brief at 12-13; Karl Schmidt Postconference Brief at 14. 

134 QCC Postconference Brief at 6.

135 Similarly, we are uncertain how one can ascertain what constitutes a standard business

practice in the U.S. Ni ring merchant market, which consists of only three suppliers.

136 Tr. at 97 (Lowe); Federal-Mogul Postconference Brief at 14.

21

deviates from industry standards because the surcharge encompasses not only nickel, but other metal

inputs as well.133 In response, QCC contends that its surcharge formula “is necessary given the

enormously volatile state of the metals market.”134 We do not have sufficient information to make a

finding whether respondents’ contentions implicate QCC’s “reliability” or business practices, or merely

convey dissatisfaction with its price levels.135 We will explore these questions further in any final phase

investigations.

Finally, Federal-Mogul contends that it does not use QCC as its principal supplier because the

firm imposes unreasonable minimum quantity requirements and insists that any contract include dozens

of models or parts, which has the effect of ***.136 In any final phase investigations, we will explore the

extent to which this reason was a motivating factor in Federal-Mogul’s most recent selection of a

principal supplier and the extent to which this reason is independent of pricing considerations.

Consequently, the record in these preliminary phase investigations indicates an apparent causal

nexus between the subject imports and the difficulties experienced by QCC and thus demonstrates a

reasonable indication of material injury by reason of subject imports. The record does not provide

sufficient information to permit us to evaluate fully respondents’ argument that QCC’s business practices

and not the subject imports are the cause of its difficulties. We therefore conclude that, for purposes of

the preliminary phase of these investigations, the subject imports have had a significant adverse impact on

the domestic industry.

CONCLUSION

For the foregoing reasons, we conclude that there is a reasonable indication that the domestic Ni

ring industry is materially injured by reason of allegedly subsidized imports from Argentina and Korea.

 1

 See the section entitled “The Subject Merchandise” in Part I of this report for a complete description of the

merchandise subject to these investigations.

 2 Federal Register notices cited in the tabulation are presented in app. A.

I-1

PART I: INTRODUCTION

BACKGROUND

These investigations result from a petition filed on January 26, 2009 by Korff Holdings LLC dba

Quaker City Castings (“QCC”), Salem, OH, alleging that an industry in the United States is materially

injured by reason of subsidized imports of Ni-resist piston inserts1

 from Argentina and Korea. 

Information relating to the background of the investigations is provided below.2

Effective date Action

January 26, 2009 Petition filed with Commerce and the Commission; Commission institutes

investigations (74 FR 5946, February 3, 2009)

February 17, 2009 Commission’s conference (a list of witnesses that appeared at the conference

is presented in appendix B)

February 23, 2009 Commerce’s notice of initiation (74 FR 8054)

March 11, 2009 Date of the Commission’s vote

March 12, 2009 Commission’s determination transmitted to Commerce

March 19, 2009 Commission’s views transmitted to Commerce

STATUTORY CRITERIA AND ORGANIZATION OF THE REPORT

Statutory Criteria

Section 771(7)(B) of the Tariff Act of 1930 (the “Act”) (19 U.S.C. § 1677(7)(B)) provides that in

making its determinations of injury to an industry in the United States, the Commission–

shall consider (I) the volume of imports of the subject merchandise, (II)

the effect of imports of that merchandise on prices in the United States

for domestic like products, and (III) the impact of imports of such

merchandise on domestic producers of domestic like products, but only

in the context of production operations within the United States; and . . .

may consider such other economic factors as are relevant to the

determination regarding whether there is material injury by reason of

imports.

Section 771(7)(C) of the Act (19 U.S.C. § 1677(7)(C)) further provides that--

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.

. . .
I-2

In evaluating the effect of imports of such merchandise on prices, the

Commission shall consider whether . . . (I) there has been significant

price underselling by the imported merchandise as compared with the

price of domestic like products of the United States, and (II) the effect of

imports of such merchandise otherwise depresses prices to a significant

degree or prevents price increases, which otherwise would have

occurred, to a significant degree.

. . .

In examining the impact required to be considered under subparagraph

(B)(i)(III), the Commission shall evaluate (within the context of the

business cycle and conditions of competition that are distinctive to the

affected industry) all relevant economic factors which have a bearing on

the state of the industry in the United States, including, but not limited to

. . . 

(I) actual and potential declines in output, sales, market share, profits,

productivity, return on investments, and utilization of capacity, (II)

factors affecting domestic prices, (III) actual and potential negative

effects on cash flow, inventories, employment, wages, growth, ability to

raise capital, and investment, (IV) actual and potential negative effects

on the existing development and production efforts of the domestic

industry, including efforts to develop a derivative or more advanced

version of the domestic like product, and (V) in {an antidumping

investigation}, the magnitude of the margin of dumping.

Organization of the Report

Part I of this report presents information on the subject merchandise, alleged subsidy margins,

and the domestic like product. Part II of this report presents information on conditions of competition

and other relevant economic factors. Part III presents information on the condition of the U.S. industry,

including data on capacity, production, shipments, inventories, and employment. Parts IV and V present

the volume and pricing of imports of the subject merchandise, respectively. Part VI presents information

on the financial experience of the U.S. producer. Part VII presents the statutory requirements and

information obtained for use in the Commission’s consideration of the question of threat of material

injury as well as information regarding nonsubject countries.

U.S. NI-RESIST PISTON INSERT MARKET SUMMARY

Ni-resist piston inserts are used to prolong the life of aluminum pistons used in diesel engines. 

The only U.S. producer of Ni-resist piston inserts is QCC, while producers of Ni-resist piston inserts

outside the United States include Clorindo Appo SRL of Argentina and Incheon Metal Co., Ltd. of Korea. 

The U.S. importer of Ni-resist piston inserts from Argentina is Karl Schmidt Unisia, Inc., while the

importer of Ni-resist piston inserts from Korea is Federal-Mogul Corp. *** of Ni-resist piston inserts into

the United States from nonsubject countries.

Apparent U.S. consumption of Ni-resist piston inserts totaled *** pounds ($***) in 2008. 

Currently, only one firm, QCC, is known to produce Ni-resist piston inserts in the United States. QCC’s

U.S. shipments of Ni-resist piston inserts totaled *** pounds ($***) in 2008, and accounted for ***

percent of apparent U.S. consumption by quantity and *** percent by value. U.S. shipments of imports

from subject sources totaled *** pounds ($***) in 2008 and accounted for *** percent of apparent U.S.

consumption by quantity and *** percent by value. 
 3 Ni-Resist Piston Inserts from Argentina and the Republic of Korea: Initiation of Countervailing Duty

Investigations, 74 FR 8054, February 23, 2009.

I-3

SUMMARY DATA AND DATA SOURCES

A summary of data collected in the investigations is presented in appendix C, table C-1. U.S.

industry data are based on the questionnaire response of QCC, which accounted for all U.S. production of

Ni-resist piston inserts during the period for which data were collected in the investigations (2006-2008). 

U.S. imports are based on questionnaire responses because the Harmonized Tariff Schedule of the United

States (“HTS”) category that includes Ni-resist piston inserts also includes other products that are not the

subject of these investigations.

PREVIOUS AND RELATED INVESTIGATIONS

Ni-resist piston inserts have not been the subject of prior countervailing or antidumping duty

investigations in the United States. 

NATURE OF ALLEGED COUNTERVAILABLE SUBSIDIES

On February 23, 2009, Commerce published a notice in the Federal Register of the initiation of

its countervailing duty investigations on Ni-resist piston inserts from Argentina and Korea.3

 Commerce

listed the following program alleged in the petition to have provided countervailable subsidies to

producers and exporters of Ni-resist piston inserts in Argentina:

1. Tax Relief Under the Reintegro

The following programs in Korea are involved:

1. Energy Rate Reductions Under the Request Load Adjustment Program

2. Short-Term Export Financing

3. Loans under the Industrial Base Fund 

4. Export Loans by Commercial Banks Under the Export-Import Bank of Korea Trade Bill

Rediscounting Program

5. Reserve for Research and Manpower Development Fund Under Article 9 of the Restriction of 

Special Taxation Act

6. Reserve for Investment Funds

THE SUBJECT MERCHANDISE

Commerce’s Scope

Commerce has defined the scope of these investigations as follows:

“The scope of these investigations includes all Ni-resist piston inserts regardless of size,

thickness, weight, or outside diameter. Ni-resist piston inserts may also be called other names including,

but not limited to, “Ring Carriers,” or “Alfin Inserts.” Ni-resist piston inserts are alloyed cast iron rings,

with or without a sheet metal cooling channel pressed and welded into the interior of the insert. Ni-resist

piston inserts are composed of the material known as Ni-resist, of the chemical composition: 

13.5%–17.5% Ni (nickel), 5.5%–8.0% Cu (copper), 0.8%–2.5% Cr (chromium), 0.5%–1.5% Mn
 4 Ni-Resist Piston Inserts from Argentina and the Republic of Korea: Initiation of Countervailing Duty

Investigations, 74 FR 8054, February 23, 2009.

 5

 Petition, p. 9.

 6

 According to U.S. Customs and Border Protection (“Customs”) ***. E-mail from ***, March 3, 2009. 

I-4

(manganese), 1.0%–3.0% Si (silicon), 2.4%–3.0% C (carbon). The cast iron composition is produced

primarily to the material specifications of the American Society for Testing and Materials (ASTM),

ASTM A–436 grade 1.”

“The scope of these investigations does not include piston rings nor any other product

manufactured using the Ni-resist material. The subject imports are properly classified under subheading

8409.99.91.90 of the Harmonized Tariff Schedule of the United States (HTSUS), but have been imported

under HTSUS 7326.90. The HTSUS subheadings are provided for convenience and customs purposes.

The written description is dispositive of the scope of these investigations.”4

U.S. Tariff Treatment

Ni-resist piston inserts are classifiable in the HTS under subheading 8409.99.91 and reported for

statistical purposes under statistical reporting number 8409.99.9190. Ni-resist piston inserts are believed

by QCC to also have entered the United States under subheading 7326.90.00 (non-enumerated articles of

iron and steel).5 6

 Table I-1 presents current tariff rates for Ni-resist piston inserts.

Table I-1

Ni-resist piston inserts: Tariff rates, 2009

HTS provision Article description

General1 Special2

Column

23

Rates (percent ad valorem)

8409.99

8409.99.91

8409.99.9190

Parts suitable for use solely or principally with the engines of

heading 8407 or 8408:

 Other:

 For vehicles of subheading 8701.20, or heading 8702, 

 8703, or 8704 ..............................................................

 

Other............................................................................

 

2.5% Free (A*,

AU, B,

BH, CA,

CL, E, IL,

J, JO,

MA, MX,

OM, P,

PE, SG) 

(

4

)

35%

 1 Normal trade relations, formerly known as the most-favored-nation duty rate. 

 2

 Special rates not applicable when General rate is free.

 3

 Applies to imports from a small number of countries that do not enjoy normal trade relations duty status.

 4

 General note 3(c)(i) defines the special duty program symbols enumerated for this provision. Argentina and Brazil are

excluded from preferential duty treatment normally accorded under the GSP program (see General note 4(d)). 

Source: Harmonized Tariff Schedule of the United States (2009, revision 1).
 7

 Petition, p. 6.

 8

 Request for Submissions made to Department of Commerce, p. 1 - received February 24, 2009.

 9

 Ibid.

 10 Ibid.

 11 This gray iron alloy is used to produce ring carriers for use with aluminum pistons designed for diesel engines. 

Type (also referred to as class or grade) 1 Ni-resist iron alloys are designed for heat-, corrosion-, and wear-resistant

applications, and are alloyed with 13.5 percent to 17.5 percent nickel and 5.5 percent to 7.5 percent copper. Iron

Castings Handbook, Iron Castings Society, Inc., 1981, p. 402.

 12 Petition, pp. 32-33.

 13 Petition, p. 7.

 14 Petition, p. 8.

 15 “Piston ring tribology: A literature survey,” Peter Anderson, Jaana Tamminen, and Carl-Erik Sandström, VTT

Research Notes 2178, 2002, found at http://www.vtt.fi/inf/pdf/tiedotteet/2002/T2178.pdf (accessed February 25,

2009). QCC manufactures a double piston insert that is connected with three pins. Conference transcript, p. 66 (J.

Korff).

 16 Petition, p. 6.

 17 Conference transcript, pp. 133-134 (Turcott).

I-5

THE PRODUCT

Description and Applications

The product scope consists of all nickel-resist (Ni-resist) piston inserts, regardless of size,

thickness, weight, or outside diameter. Ni-resist piston inserts are also referred to as “ring carriers” or

“Alfin inserts,” and these terms are used interchangeably within the industry.7

 The product scope

includes cooled ring carriers, a modification of Ni-resist piston inserts, which incorporate a sheet metal

channel pressed and welded into the interior of the Ni-resist piston insert.8

 Typical Ni-resist piston inserts

range from 2 to 12 inches in outside diameter, and from 0.180 to 1.5 inches in thickness.9

 Ni-resist piston

inserts are alloyed cast iron rings composed of the material known as Ni-resist, and are designed for use

in aluminum pistons for diesel (compression-ignition) engines. The nominal chemistry for Ni-resist is 15

percent nickel, 6.5 percent copper, 2 percent chrome, 1 percent manganese, 2 percent silicon, and 2.5

percent carbon;10 the cast iron component is produced primarily to ASTM A-436 grade 1.11 The addition

of nickel and other elements into this alloy replicates the thermal expansiveness of the aluminum piston,

permitting the piston insert to expand and contract at the same rate as the piston, thus improving the wear

resistance and working life of the piston.12

Piston inserts are circular rings that are fused into the top portion of aluminum pistons used in

diesel engines.13 Aluminum is used in piston production because of its relatively light weight, which

reduces overall engine and vehicle weight.14 Engine pistons, for both spark-ignition and diesel engines,

generally are of similar design and comprise many of the same types of components, allowing for

differences in engine size and weight, for example (figure 1). Ni-resist piston inserts are found near the

top of a piston, where piston rings (compression rings and oil control rings) are located. This section of

the piston is grooved for the insertion of these rings. The Ni-resist piston insert is generally cast into the

piston to protect the first ring groove, but a second Ni-resist piston insert may also be cast in after the

second ring groove15 (figure 2). This process is undertaken by the piston producers that purchase the Niresist piston inserts. They place the inserts into piston molds and pour molten aluminum into the molds. 

The piston inserts bond with the aluminum, and become one with the solidified diesel engine piston.16

After solidification, a groove is cut into the Ni-resist piston insert to accommodate a piston ring.17
I-6

Figure 1

Piston diagram

Source: “Piston ring tribology: A literature survey,” Peter Anderson, Jaana Tamminen, and Carl-Erik Sandström,

VTT Research Notes 2178, 2002, found at http://www.vtt.fi/inf/pdf/tiedotteet/2002/T2178.pdf (accessed February 25,

2009).

Figure 2

Piston with Ni-resist piston insert

 

Piston insert 

Source: Mahle, “Aluminum - the material of the future,” found at

http://www.mahle.com/C125705E004FDAF9/CurrentBaseLink/W276RJX2513MARSEN (accessed February 12,

2009).
 18 Petition, p. 7.

 19 “Piston ring tribology: A literature survey,” Peter Anderson, Jaana Tamminen, and Carl-Erik Sandström, VTT

Research Notes 2178, 2002, found at http://www.vtt.fi/inf/pdf/tiedotteet/2002/T2178.pdf (accessed February 25,

2009).

 20 Conference transcript, p. 65 (J. Korff).

 21 Petition, p. 7 and p. 36. Steel pistons predominate in other diesel and non-diesel engines. Steel is a stronger

material and does not wear as fast as aluminum, which eliminates the need for Ni-resist piston inserts. Petition, p.

36.

 22 Compression ratios for spark-ignition engines generally do not exceed 10:1, whereas ratios for diesel engines

generally exceed 14:1. Compression ratios measure the ratio between the volume of the cylinder and combustion

chamber when the piston is at the bottom of its stroke, and the volume of the combustion chamber when the piston is

at the top of its stroke. Wikipedia, found at http://en.wikipedia.org/wiki/Compression_ratio (accessed February 20,

2009).

 23 Petition, p. 7.

 24 “How Diesel Engines Work,” http://auto.howstuffworks.com/diesel1.htm (accessed February 20, 2009). 

 25 Petition, p. 7.

 26 Request for Submissions made to Department of Commerce, p. 1 - received February 24, 2009.

 27 Petition, pp. 7-8.

 28 Conference transcript, p. 90 (Lowe).

 29 Petition, p. 6.

I-7

As an integral part of the piston, the insert absorbs the impact from the piston ring and prevents

wear to the piston itself.18 The inserts prevent ring groove wear in aluminum pistons,19 which is the

gradual erosion of the ring groove as a result of the piston movement. As the ring groove wears, the

compression rings are less effective at sealing the combustion/exhaust chamber in the piston and at 

supporting heat transfer from the piston to the cylinder wall. Piston inserts are produced to the

specifications of piston producers, and are unique to individual piston design.20

Because of the nature of the compression-ignition engine operation, Ni-resist piston inserts used

in engines are only found in diesel engines that incorporate aluminum pistons.21 These engines are used

to power motor vehicles (in the United States, largely certain light trucks and medium- and heavy-duty

trucks), farm and other off-road equipment, marine transport, and large compressors. Diesel engines

operate at very high compression relative to spark-ignition engines22 and create a greater compressive

force.23 Unlike spark-ignition engines, which employ an ignition system (spark plugs) to fire the air/fuel

mixture in the piston, diesel engines compress air to very high temperatures. When the fuel is injected

into the piston with the heated air, the fuel ignites.24 This greater concussive force affects all of the parts

inside the engine, including the piston. Because aluminum is a relatively weak metal, the concussive

force would cause rapid wear. By adding a Ni-resist piston insert, the compression impact is transferred

from the compression ring(s) through the insert(s) and then to the piston, thus absorbing some of the

shock and increasing piston life.25 With cooled ring carriers, the added sheet metal channel reduces heat

transfer from the piston during combustion, thus extending the life of the piston.26 Spark-ignition engines

operate with a more uniform, controlled burn, and lower compression ratios, which lessen that impact on

engine pistons and obviate the use of these inserts.27

Manufacturing Process

The production process for Ni-resist piston inserts includes three basic steps: melting, centrifugal

casting, and machining.28 The process is capital-intensive, with extensive use of melting furnaces, casting

machines, and automated machining equipment. The subject product is produced by pouring molten

alloy cast iron in the shape of tubes by a centrifugal casting process, followed by machining the tubes into

circular slices, or rings.29 Melting of the Ni-resist alloy usually occurs in electric induction furnaces,
 30 Conference transcript, pp. 90-91 (Lowe).

 31 Conference transcript, p. 47 (J. Korff).

 32 ***’s producer questionnaire response, comments to section II-3.

 33 Conference transcript, p. 25 (J. Korff).

 34 Conference transcript, p. 48 (J. Korff).

 35 Conference transcript, p. 43 (J. Korff).

 36 Monel is a product of the Special Metals Corporation. Special Metals Corp. website, found at

http://www.specialmetals.com/general.php (accessed February 20, 2009).

 37 Conference transcript, p. 48 (J. Korff).

 38 Conference transcript, p. 44 (J. Korff).

 39 Efunda Engineering Fundamentals, Centrifugal Casting, found at

http://www.efunda.com/processes/metal_processing/centri_casting.cfm (accessed February 20, 2009).

 40 Conference transcript, p. 63 (J. Korff).

 41 Conference transcript, p. 64 (J. Korff).

 42 Conference transcript, p. 19 (J. Korff).

 43 Request for Submissions made to Department of Commerce, p. 3 - received February 24, 2009.

 44 Conference transcript, p. 18 (J. Korff).

I-8

according to Federal-Mogul.30 QCC employs electric channel furnaces, a type of induction furnace, to

provide a continuous flow of Ni-resist metal for its production of piston inserts. These channel furnaces

are unique to its centrifugal casting operation.31 ***, the ***, reported that it *** operates *** in the

production of its Ni-resist piston inserts.32

To attain the desired Ni-resist metal chemistry, type I molten scrap Ni-resist machining chips are

added to the molten iron.33 These chips are purchased as scrap on the open market and/or are generated

internally as the result of the production process.34 The molten chips must also be of the specified Niresist chemistry, which may require the producer to adjust the metal composition by adding certain metals

or diluting the molten metal “to make the chemistry fall within specification.”35 In lieu of adding Niresist scrap metal, producers may dilute Monel,36 a nickel/copper alloy, with pig iron and then add certain

ferroalloys to yield the Ni-resist metal.37 Additionally, producers can also purchase the necessary metallic

components (e.g., copper, chrome, manganese, nickel) to develop the molten Ni-resist alloy.38

 In centrifugal casting, the molten metal is poured into a permanent mold that rotates at high

speeds (300 to 3000 rpm). During rotation, centrifugal force throws the molten metal towards the inside

mold wall, where it solidifies after cooling,39 and pushes any slag towards the inside diameter. The

resulting metal is more uniform and cleaner than that which would result from other forms of casting.40

The centrifugal casting equipment can be semi-automatic, with one worker tapping the metal, pouring the

tube, and extracting the tube from the mold, as a series of molds process through the equipment in a

continuous cycle. Other centrifugal casting equipment is limited to a single mold per unit, with one

casting poured at a time.41

Machining is conducted on computer numerical controlled (“CNC”) turning and boring machines

that cut the rings from the cast tube and bore out the interior to the selected diameter for the rings. 

According to QCC, piston producers prefer dry machining rather than lubricated, wet machining of the

inserts because of the need to bond the Ni-resist piston insert with aluminum in the production of a

piston.42 Cooled ring carriers include a piece of sheet metal that is pressed into the Ni-resist piston insert

and then welded or blasted together.43

QCC identified shell molding as another production process for piston inserts.44 In this method, a 

metal pattern is covered with a mixture of sand and thermoset plastic and heated. This causes a thin skin

of the sand/plastic mixture to stick to the pattern. This skin is removed from the pattern to form the shell

mold. The two halves of the mold are fastened together and the metal is poured in the mold to form the
 45 Efunda Engineering Fundamentals, Shell Mold Casting, found at

http://www.efunda.com/processes/metal_processing/shell_mold.cfm (accessed February 20, 2009).

 46 Conference transcript, p. 18 (J. Korff).

 47 Conference transcript, pp. 48-49 (J. Korff).

 48 ***’s producer questionnaire response, section II-3.

 49 ***’s producer questionnaire response, section II-3.

 50 ***’s producer questionnaire response, section II-7.

 51 ISO 9001:2000 is an international standard that includes requirements for an organization’s Quality

Management System (QMS), and is the only standard in the ISO 9000 family that can be used for the purpose of

conformity assessment. “The requirements cover a wide range of topics, including {a} supplier’s top management

commitment to quality, its customer focus, adequacy of its resources, employee competence, process management

(for production, service delivery and relevant administrative and support processes), quality planning, product

design, review of incoming orders, purchasing, monitoring and measurement of its processes and products,

calibration of measuring equipment, processes to resolve customer complaints, corrective/preventive actions and a

requirement to drive continual improvement of the QMS.” International Standards Organization, found at

http://www.iso.org/iso/iso_catalogue/management_standards/iso_9000_iso_14000/more_resources_9000/9001supch

ain.htm (accessed March 4, 2009).

 52 Conference transcript, pp. 138-139 (Czerwinski).

 53 Conference transcript, p. 64 (J. Korff).

I-9

part. Once the metal solidifies, the shell is broken.45 However, QCC considered this process to be costly

and uncompetitive. QCC also noted that piston inserts have been produced by static (nonspinning)

casting using sand molds, but the bulk of current known production of Ni-resist piston inserts is believed

to be manufactured by centrifugal casting.46

Following production, the Ni-resist piston inserts are subject to a variety of tests to ensure their

conformance with customer specifications. These tests include spectrographic chemical analysis,

microstructure examination, tensile testing, and carbon analysis, for example.47 In addition, the inserts

must meet the dimensional and weight requirements specified by customers.

*** reported producing other cast products, such as ***, on these production lines.48 ***

indicated that its production line is totally dedicated to the manufacture of Ni-resist piston inserts;49

however, it is ***.50

Manufacturers of Ni-resist piston inserts, as well as other original-equipment motor vehicle

components, are subject to independent inspections or first-party audits to verify compliance with

customer and product standards requirements, such as ISO standards.51 Federal-Mogul, for example,

indicated that following an initial assessment of a new supplier, it conducts “. . . a full-blown quality

audit where we send a supplier quality engineer to the supplier’s facility to conduct an audit of their

quality systems to ensure . . . that they have the controls in place to ensure consistent, high quality

product, and the result of that audit is a score, and if the supplier meets a certain score, then they are

approved for pursuing them further as a production source. In terms of evaluating the product, from that

point, then we ask the supplier to submit samples off of their production process and then we evaluate

those samples based on dimensional checks, metallurgical checks, grain structure analysis, et cetera, and

assuming all of our specifications are met, then they are approved as a production source of that

material.”52 QCC, the only known U.S. producer of Ni-resist piston inserts, is certified to the ISO

9001:2000 standard.53

Domestic Like Product Issues

The Commission’s decision regarding the appropriate domestic product(s) 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
 54 Petition, p. 10.

 55 Conference transcript, p. 42 (J. Korff).

 56 Conference transcript, p. 119 (Lowe and Kane).

 57 Conference transcript, p. 19 (J. Korff).

 58 QCC notes that compressor pistons used to compress gas for industrial purposes may also use piston inserts,

but that the two orders filled by QCC are considered to be negligible and virtually all Ni-resist piston inserts are

believed to be for use in diesel engine aluminum pistons. Petition, pp. 33-34.

 59 Conference transcript, p. 94 (Lowe).

 60 Conference transcript, p. 99 (Czerwinski).

 61 Request for Submissions made to Department of Commerce, pp. 2-4 - received February 24, 2009.

I-10

producer perceptions; (5) channels of distribution; and (6) price. Information regarding these factors is

discussed below.

QCC contends that the Commission should find that there is a single class or kind of subject

merchandise coextensive with the scope definition.54 It indicates that all piston inserts have the same

characteristics (subject to customer-specified variations), and that there are no comparable products on the

market that perform the same or similar tasks for aluminum pistons used in diesel engines. QCC did note

that there had been experimentation with ceramic piston inserts, but was unaware of any production of

ceramic piston inserts.55 The respondents concur with the definition of the domestic like product offered

by QCC.56

QCC also claims that the domestically made product is like the imported subject merchandise,

and that the products are indistinguishable.57 It considers all Ni-resist piston inserts to be interchangeable

in terms of production process and application, with no appreciable deviation in chemical properties

among U.S. and foreign manufacturers. These inserts are manufactured using the same types of facilities,

production lines, equipment, and skilled employees, since the casting and machining processes are

essentially the same for all producers of these piston inserts. These inserts are sold in bulk to

manufacturers of aluminum pistons used in diesel engines.58 QCC also contends that customers and

producers perceive all Ni-resist piston inserts to be the same product.

Federal-Mogul, one of the respondents, noted its agreement with QCC regarding the

interchangeability of the domestic and imported products. Federal-Mogul considers Ni-resist piston

inserts to be “ . . . a commodity product, meaning they are generally interchangeable, regardless of the

source.”59 Furthermore, Federal-Mogul noted that the imported and domestic product were of equivalent

quality.60

In the case of cooled ring carriers, QCC considers these products to be “. . . the same product {as

Ni-resist piston inserts}, produced in the same manner, but with a slight modification through the addition

of the cooling channel.” As a result of this modification, cooled ring carriers and regular Ni-resist piston

inserts are not completely interchangeable, since the piston using a cooled ring carrier must be engineered

to be fused with the cooled ring carrier rather than a regular Ni-resist piston insert. QCC indicates that the

channels of distribution for Ni-resist piston inserts and cooled ring carriers are the same, being sold in

bulk directly from the manufacturer to the aluminum diesel engine piston producers. Moreover, QCC

claims that customers expect both products to “. . . significantly increase the working life of diesel

engines which use aluminum pistons . . .” and that they are sold to perform essentially the same task. 

With respect to price, QCC acknowledges that since it has not produced a cooled ring carrier, it is unable

to “reproduce a pricing breakdown parallel to that which is provided for its own Ni-resist inserts. 

However, QCC does not believe there to be significant additional expense related to the production of the

Cooled Ring Carrier. . . ” beyond the cost of the sheet metal and labor required to press the sheet metal

into the insert and weld or blast them together.61

With respect to piston rings, QCC contends that piston inserts and piston rings are distinct and

separate classes of products and are not substitutable for each other. Unlike piston inserts, which are

fused into the aluminum piston to improve piston life and wear, piston rings are open-ended rings that fit
 62 Petition, pp. 36-38.

I-11

into a groove on a piston, and serve to seal the combustion chamber, support heat transfer, and regulate

oil consumption. Pistons generally require three rings for compression sealing and oil control, whereas

most aluminum pistons require only one insert, although a small share of diesel engine production does

require two inserts per piston. Although both products are cast, piston rings are manufactured in a static

casting process rather than with a centrifugal method. QCC also claims that the distribution channels for

piston inserts and piston rings are entirely different, with piston inserts ordered directly by manufacturers,

whereas piston rings are sold through distributors and retailers and over the Internet. Moreover, QCC 

contends that customers and producers of both products consider them distinct and separate from each

other. Pricing for the two products is also different, as piston inserts are priced per piece, whereas piston

rings are generally priced and sold as a set of three rings.62

 1

 Petition, pp. 6-7.

 2

 ***, and petition, p 33. 

 3

 QCC also reported that it exports *** of the production of Ni-resist piston inserts.

 4

 ***.

 5

 ***.

II-1

PART II: CONDITIONS OF COMPETITION IN THE U.S. MARKET

MARKET CHARACTERISTICS

Ni-resist piston inserts for diesel engines are “alloyed cast iron rings . . . placed into molds used

by piston producers; then aluminum is poured into the molds.” The Ni-resist piston inserts are “essential

for commercial diesel truck engines and other heavy-duty diesel engines that use aluminum pistons.”1

 Niresist piston inserts are also used in production of compressor pistons.2

The petitioner, QCC, sells the product ***.3 U.S. importers internally consume all imported Niresist piston inserts in the production of aluminum pistons for diesel engines.

U.S. inland shipping distances for U.S.-produced Ni-resist piston inserts were reported by the

petitioner. QCC reported that *** of its Ni-resist piston inserts were sold within distances of *** miles

from its facility.4

 QCC reported delivery lead times for produced-to-order Ni-resist piston inserts of ***

and that *** of its products were produced to order. 

CHANNELS OF DISTRIBUTION

The Commission’s questionnaire asked QCC to report the quantity of U.S. shipments sold to

distributors and end users. *** of QCC’s U.S. shipments went to ***.5

SUPPLY AND DEMAND CONSIDERATIONS

U.S. Supply

Domestic Production

The sensitivity of the domestic supply of Ni-resist piston inserts to changes in price depends on

several factors including the level of excess capacity, the availability of alternate markets for U.S.-

produced Ni-resist piston inserts, inventory levels, and the ability to shift to the manufacture of other

products. The record in the preliminary phase of these investigations suggests that QCC has a *** degree

of flexibility in expanding output and U.S. shipments in response to an increase in price, primarily due to

the *** industry capacity utilization rates. QCC’s capacity utilization declined from *** percent in 2006

to *** percent in 2007 and to *** percent in 2008. Exports, as a share of total shipments, were ***

percent in 2006, increased to *** in 2007, and were *** percent in 2008. The ratio of QCC’s end-ofperiod inventories to its total shipments increased from *** percent in 2006 to *** percent in 2007 and

*** percent in 2008.
 6

 Clorindo’s foreign producer questionnaire response, section II-7.

 7

 Incheon’s foreign producer questionnaire response, section II-7.

 8

 Petition, p. 45.

 9

 See table C-1.

II-2

Supply of Subject Imports to the U.S. Market

The responsiveness of the supply of imports from Argentina and Korea to changes in price in the

U.S. market is affected by factors such as capacity utilization rates, the availability of home markets and

other export markets, and inventories. Based on available information, suppliers of subject imports have

the ability to respond in changes in demand with *** changes in the quantity of shipments of Ni-resist

piston inserts to the U.S. market mainly due to the existence of *** capacity and *** shipments to nonU.S. export markets.

Subject imports from Argentina

The capacity utilization rate for the sole known producer of Ni-resist piston inserts in Argentina,

Clorindo APPO SRL (“Clorindo”), was *** percent in 2006, decreased to *** percent in 2007, then

increased to *** percent in 2008; capacity utilization is projected to *** percent in 2009 and then ***

percent in 2010. Clorindo’s inventories, as a ratio to total shipments, decreased from *** percent in 2006

to *** percent in 2008; the ratio is projected to *** in 2009 and 2010. Clorindo’s shipments to the

Argentine home market were *** percent in 2006 and increased to *** percent in 2008; home market

shipments are projected to be *** in 2009 and 2010. Exports to non-U.S. markets, as a share of its

shipments, ranged from *** percent in 2006 to *** percent in 2008;6

 they are projected to *** in 2009

and then *** to *** percent in 2010.

Subject imports from Korea

The capacity utilization rate for the sole known producer of Ni-resist piston inserts in Korea,

Incheon Metal Co., Ltd. (“Incheon”), was *** percent in 2006; it increased to *** percent in 2007 and

then decreased to *** percent in 2008. Capacity utilization is projected to *** percent in 2009. 

Incheon’s inventories, as a ratio to its total shipments, increased from *** percent in 2006 to *** percent

in 2008; the ratio is projected to *** in 2009. Incheon’s share of its shipments to the Korean home

market was *** percent in 2006 but it decreased to *** percent in 2008. Exports to non-U.S. markets, as

a share of its shipments, increased from *** percent in 2006 to *** percent in 2008;7

 they are projected to

*** in 2009.

U.S. Demand

Since Ni-resist piston inserts are used in aluminum pistons for diesel engines, the overall demand

for Ni-resist piston inserts is directly linked to the demand for diesel engines that incorporate aluminum

pistons. The price elasticity of demand for Ni-resist piston inserts is likely to be low since Ni-resist piston

inserts have few, if any, substitutes and they account for a relatively small share of the total cost of the

products in which they are used.

QCC reported that U.S. demand for Ni-resist piston inserts decreased over the period of

investigation as demand for diesel engines decreased.8

 Data on apparent U.S. consumption of Ni-resist

piston inserts indicate a decline from *** pounds in 2006 to *** pounds in 2007. Despite a *** increase

to *** pounds in 2008, U.S. apparent consumption was *** percent lower in 2008 compared with 2006.9
 10 Conference transcript, pp. 37-38 (J. Korff).

 11 Federal-Mogul’s postconference brief, p. 7.

 12 KUS’s postconference brief, pp. 10, 16.

 13 Conference transcript, p. 84 (Kane).

 14 Another factor that could affect the demand for Ni-resist piston inserts is the technological advances prompted

by mandates imposed by the Environmental Protection Agency (EPA) which reportedly have caused a significant

increase in the production of all-steel pistons, a product which does not incorporate Ni-resist piston inserts.

Conference transcript, pp. 84-85 (Kane).

 15 Conference transcript, p. 42 (J. Korff).

 16 ***.

II-3

When asked how the U.S. demand for Ni-resist piston inserts had changed since January 1, 2006,

QCC and the responding importers all reported that demand had decreased. *** attributed the decrease to

a decline in sales of heavy duty trucks. According to QCC, demand for Ni-resist piston inserts is cyclical

due to emission requirements imposed by the EPA: every few years, the EPA has mandated new

emission standards, “everybody wants to buy a truck with the old emissions standard to avoid the new

one because they’re usually . . . higher priced, lower mileage.” QCC added that the new emission

regulations standards will be announced in 2010, but with the current economic slowdown, the demand

for trucks is low.10 Federal-Mogul attributed the decrease in demand for Ni-resist piston inserts to several

factors, including ***.11 ***, KUS attributed the decline in demand to the general decline in motor

vehicle production, the shift from aluminum pistons to all-steel pistons, and ***.12 KUS also noted that

“the general downturn in the demand for motor vehicles manufactured in the United States, technological

advances, changes in customer requirements, and changes in non-highway uses for engines with Ni-resist

piston inserts are the primary causes of decreased demand for Ni-resist piston inserts in the United

States.”13 14

Substitute Products

U.S. producers and importers were asked to discuss the existence of any substitute products for

Ni-resist piston inserts. *** reported that there are no products that can be substituted for Ni-resist piston

inserts. QCC stated that there are experiments using ceramics, but it is not aware of an actual ceramic

piston.15 *** reported that steel pistons compete with aluminum pistons for diesel engine applications,

especially in the OE market where steel pistons are dominant.16 *** reported that there are no substitute

products for Ni-resist piston inserts.

Cost Share

Based on available information, Ni-resist piston inserts account for a relatively small share of the

total cost of the final products in which they are used as an input. *** reported that it did not know the

cost share of the Ni-resist piston insert relative to the end product. *** reported that the cost of the Niresist piston insert accounted for approximately *** percent of the total cost of pistons for diesel engines. 

*** provided cost share estimates for Ni-resist pistons inserts for four different diesel piston products;

these estimates ranged from *** percent.
II-4

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 QCC and

importers.

Factors Affecting Purchasing Decisions

Table II-1 summarizes the importers’ responses on the top three major factors that they consider 

in their purchasing decisions. As indicated in the table, quality was cited as the number one factor in

buying decisions by ***. Price and availability were cited as the second most important factor, and price

and delivery were cited as the third factor.

Table II-1

Ni-resist piston inserts: Ranking factors used in purchasing decisions by U.S. importers

* * * * * * *

Importers were asked to rate the importance of 15 factors in their purchasing decisions (table II2). *** rated availability, delivery terms and time, discounts offered, extension of credit, minimum

quantity requirements, packaging, price, product consistency, quality meets industry standards, reliability

of supply, and U.S. transportation costs as very important.

Table II-2

Ni-resist piston inserts: Importance of purchase factors, as reported by U.S. importers

* * * * * * *

Comparisons of Domestic Products and Subject Imports

In order to determine whether U.S.-produced Ni-resist piston inserts can generally be used in the

same applications as imports from Argentina and Korea, QCC and importers were asked whether the

products can “always,” “frequently,” “sometimes,” or “never” be used interchangeably (table II-3). 

Table II-3

Ni-resist piston inserts: Interchangeability of product from different sources

* * * * * * *

QCC reported that U.S. products and those from Argentina and Korea can *** be used

interchangeably. ***, Federal-Mogul reported that the products from the United States and Korea can

*** be used interchangeably. KUS reported that the products from the United States and Argentina can

*** be used interchangeably. KUS noted that “***.”

QCC and importers were also asked to compare U.S.-produced products with imports from

Argentina and Korea 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-4). 
II-5

Table II-4

Ni-resist piston inserts: Differences other than price between products from different sources

* * * * * * *

When QCC compared the U.S. product with product from subject and nonsubject countries, it

reported that differences other than price are *** significant. When Federal-Mogul compared the U.S.

product with that from Korea, it reported that differences other than price are *** significant. FederalMogul added that ***. ***, when KUS compared the U.S. product with that from Argentina, it reported

that differences other than price are *** significant. KUS added that it has had a ***. 

Comparisons of Subject Imports

When QCC compared the Argentine product with the Korean product, it reported that the

products can *** be used interchangeably and differences other than price are *** significant (tables II-3

and II-4). 

 1

 Petition, p. 2.

 2

 Petition, p. 3.

 3

 Dana provided a ***. Also see e-mail from ***, February 3, 2009. 

 4

 Conference transcript, p. 11 (J. Korff)

 5

 Although Korff Holdings, LLC is the owner of QCC, Joseph Korff has ultimate responsibility for decisions

pertaining to the management of QCC. Conference transcript, pp. 31-32 (J. Korff). 

 6

 Petition, p. 3.

 7 http://www.qccast.com/index.html, retrieved February 6, 2009.

 8

 July 2, 2004 letter from Joseph Korff to Federal-Mogul, Karl Schmidt Unisia, and MAHLE. Federal-Mogul’s

postconference brief, exh. 1.

III-1

PART III: U.S. PRODUCER’S PRODUCTION, SHIPMENTS, AND

EMPLOYMENT

Information presented in this section of the report is based on the questionnaire response of Korff

Holdings, LLC dba Quaker City Castings (“QCC”). This firm is believed to account for all U.S.

production of Ni-resist piston inserts during the period for which data were collected (January

2006-December 2008).

U.S. PRODUCER

The Commission sent a producers’ questionnaire to QCC, the only U.S. producer identified in the

petition as having produced Ni-resist piston inserts during the period for which data were collected.1

 A

producers’ questionnaire was also sent to Dana Holding Corporation (“Dana”), which was identified in

the petition as being the only other U.S. producer of the subject merchandise in recent years that was not

acquired by QCC.2

 Dana has certified that to the best of the firm’s knowledge it has not produced Niresist piston inserts since ***.3

 

The petitioner, QCC, is a family business that was acquired at a bankruptcy auction in 2004,4

 is

owned by Jason Korff, and run by his father, Joseph Korff.5

 The firm operates an iron and steel foundry

in Salem, Ohio6

 and uses two types of casting methods, static (various metal castings created using sand

molds) and centrifugal (Ni-resist inserts, as well as other products such as ***). The firm sells products

to the automotive, marine, and agricultural industries, among others.7

 During the period from ***,

proceeds from QCC’s centrifugal casting operations supported the firm’s static casting operations, but in

more recent years the trend has been reversed and static castings make up the large majority of QCC’s

business.8

 

U.S. CAPACITY, PRODUCTION, AND CAPACITY UTILIZATION

In response to a question about changes to plant operations since January 1, 2006, QCC stated

***. Data on QCC’s capacity, production, and capacity utilization are presented in table III-1. QCC’s

reported capacity was *** the level of apparent U.S. consumption of Ni-resist piston inserts in ***.

Table III-1

Ni-resist piston inserts: QCC’s capacity, production, and capacity utilization, 2006-2008

* * * * * * *
 9

 According to QCC, unit values increased in recent years due to falling shipments of common size Ni-resist

piston inserts coinciding with increased shipments of more expensive double-inserts to QCC’s customer in Brazil. 

QCC’s postconference brief, p. 8.

III-2

QCC’s capacity remained steady through the period for which data were collected, while capacity

utilization decreased throughout the same period. In response to a question requesting firms to describe

the constraints and limits experienced on their production capacity, QCC reported ***. QCC also stated

that its plant is operating at less than *** percent capacity and has ***.

U.S. PRODUCER’S U.S. SHIPMENTS AND EXPORT SHIPMENTS

QCC’s total shipments are presented in table III-2. The volume of total shipments decreased by

*** percent from 2006 to 2008, while the value of total shipments decreased by approximately ***

percent during the same period. ***. On both a quantity and value basis, export shipments decreased

from 2006 to 2007 and increased from 2007 to 2008. Unit values of total shipments increased from 2006

to 2007 and decreased *** from 2007 to 2008.9

 

Table III-2

Ni-resist piston inserts: QCC’s shipments, by type, 2006-2008

* * * * * * *

U.S. PRODUCER’S IMPORTS AND PURCHASES OF IMPORTS

QCC did not report any imports of subject merchandise during the period for which data were

collected, nor is the firm related to subject producers in Argentina or Korea.

U.S. PRODUCER’S INVENTORIES

Data on end-of-period inventories of Ni-resist piston inserts during the period for which data

were collected are presented in table III-3.

Table III-3

Ni-resist piston inserts: QCC’s end-of-period inventories, 2006-2008

* * * * * * *

U.S. EMPLOYMENT, WAGES, AND PRODUCTIVITY

Data provided by QCC on the number of production and related workers ("PRWs") engaged in

the production of Ni-resist piston inserts, the total hours worked by such workers, and wages paid to such

workers during the period for which data were collected in these investigations, are presented in table

III-4. QCC’s employment *** from 2006 to 2008, with a *** increase in PRWs in 2008, while hours

worked decreased during the period for which data were collected. Wages paid increased from 2006 to

2007 but then decreased from 2007 to 2008 to a level below that of 2006. Hourly wages increased each

year during the period for which data were collected, while unit labor costs also increased during this

period. Productivity decreased *** from 2006 to 2008. 
III-3

Table III-4

Ni-resist piston inserts: Average number of production and related workers producing Ni-resist

piston inserts, hours worked, wages paid to such employees, and hourly wages, productivity, and

unit labor costs, 2006-2008

* * * * * * *

 1

 The Commission sent questionnaires to firms identified in the petition and to firms that, based on a review of

data provided by U.S. Customs and Border Protection (“Customs”), may have imported Ni-resist piston inserts in

2008. Questionnaires were sent to all substantial importers which imported products under HTS statistical reporting

number 8409.99.9190.

 2

 Negative responses were received from *** firms that certified that they did not import Ni-resist piston inserts. 

 3

 E-mail from ***, February 26, 2009. 

 4

 Conference transcript, p. 84 (Kane) and pp. 131-132 (Lowe). 

IV-1

PART IV: U.S. IMPORTS, APPARENT U.S. CONSUMPTION, AND

MARKET SHARES

U.S. IMPORTERS

The Commission sent importer questionnaires to 14 firms believed to be importers of Ni-resist

piston inserts from any country, as well as to 2 U.S. producers.1

 Questionnaire responses were received

from 16 firms (with usable data from 2 firms that are believed to account for *** U.S. imports of Ni-resist

piston inserts).2

 There were no imports by QCC, the sole U.S. producer. 

Karl Schmidt Unisia, Inc. (“KUS”) was the sole importer of Ni-resist piston inserts into the

United States from Argentina during the period for which data were collected. Federal-Mogul was the

sole importer of Ni-resist piston inserts into the United States from Korea during the same period. 

MAHLE, Inc. ***.3

Table IV-1 lists all responding U.S. importers of Ni-resist piston inserts from Argentina, Korea,

and all other sources, their U.S. locations, and their quantities of imports, by source, in 2008.

Table IV-1

Ni-resist piston inserts: Reported U.S. imports, by importers and by sources of imports, 2008

* * * * * * *

U.S. IMPORTS

The quantity of subject imports decreased from 2006 to 2007 and increased *** from 2007 to

2008. *** nonsubject imports ***. U.S. importers attribute the decreased imports of Ni-resist piston

inserts in recent years in part to a decreased demand for the aluminum pistons requiring inserts. 

Respondents contend this decline is attributable to declining demand for vehicles using diesel engines and

a shift in demand from aluminum pistons to steel pistons resulting from more stringent emissions

standards.4

 

The average unit value of subject imports increased from 2006 to 2007 and then decreased ***

from 2007 to 2008. Table IV-2 shows quantity, value, average unit value, and share data on U.S. imports

of Ni-resist piston inserts.

Table IV-2

Ni-resist piston inserts: U.S. imports, by sources, 2006-2008

* * * * * * *
 5

 19 U.S.C. § 1677(24)(A)(ii).

IV-2

NEGLIGIBILITY

The Tariff Act of 1930 provides for the termination of a countervailing duty 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.5

 As the data in

table IV-2 indicate, the shares (in percent) of the total quantity of U.S. imports from Argentina and Korea

for the 2008 calendar year using U.S. import data compiled from the Commission’s questionnaire

responses were well above the negligibility threshold ***.

APPARENT U.S. CONSUMPTION

Data on apparent U.S. consumption of Ni-resist piston inserts are presented in table IV-3. In

calculating apparent U.S. consumption, U.S. shipments of import data were used, based on questionnaire

responses.

The quantity of apparent U.S. consumption decreased by *** percent in 2007 and then increased

by *** percent in 2008. The value of apparent U.S. consumption increased by *** percent in 2007 and

then decreased by *** percent in 2008.

Table IV-3

Ni-resist piston inserts: U.S. shipments of domestic product, U.S. shipments of imports by source,

and apparent U.S. consumption, 2006-2008

* * * * * * *

U.S. MARKET SHARES

Data on market shares in the U.S. market for Ni-resist piston inserts are presented in table IV-4. 

On both a quantity and a value basis, QCC’s market share has decreased in the period during which data

were collected. This decrease in market share coincided with an increase in the market share of imports

from Korea and a decrease in the market share of imports from Argentina. 

Table IV-4

Ni-resist piston inserts: Apparent U.S. consumption and market shares, 2006-2008

* * * * * * *

RATIOS OF IMPORTS TO U.S. PRODUCTION

Data on the ratio of imports to U.S. production of Ni-resist piston inserts are presented in table

IV-5.

Table IV-5

Ni-resist piston inserts: U.S. production, U.S. imports, and ratios of imports to production,

2006-2008

* * * * * * *
 1

 See Part VI.

 2

 Ibid.

 3

 QCC reported that nickel tends to be a “volatile priced material in certain times.” QCC stated that while prices

for nickel stabilized for a while in the 1990s, they were very high in 2006 and 2007. According to QCC, nickel

prices are now coming down. Conference transcript, p. 23 (J. Korff).

 4

 Conference transcript, p. 104 (Turcott).

 5

 The estimated transportation costs were obtained by subtracting the customs value from the c.i.f. value of the

imports for 2008 and then dividing by the customs value (based on import entries under HTS statistical reporting

number 8409.99.9190). While possibly over-inclusive, these data are believed to provide a reasonable basis for

estimating transportation costs. 

V-1

PART V: PRICING AND RELATED INFORMATION

FACTORS AFFECTING PRICES

Raw Material Costs

The major costs to manufacture Ni-resist piston inserts are raw materials, other factory costs, and

labor. During the period examined, *** represented the largest share of the cost of goods sold (***

percent), followed by *** (*** percent) and *** (*** percent).1

There are *** main raw materials used in manufacturing Ni-resist piston inserts: ***. Other raw

materials include ***.2

 Raw material prices were volatile during the period of investigation and increased

overall.3

 Nickel surcharges are common in the Ni-resist inserts industry because of the particular

volatility of Nickel prices.4

Source: American Metal Market, online www.amm.com, revised March 3, 2009.

Transportation Costs to the U.S. Market

Transportation costs for Ni-resist piston inserts shipped from Argentina and Korea to the United

States were 4.7 and 2.2 percent respectively. These estimates are derived from official import data and

represent the transportation and other charges on imports.5
 6

 QCC reported that it sells on an f.o.b. basis and the purchaser arranges for transportation.

V-2

U.S. Inland Transportation Costs

QCC, reported that transportation costs accounted for *** percent of the delivered price.6

 For

importers, ***. 

Exchange Rates

Nominal and real exchange rate data for Argentina and Korea are presented on a quarterly basis

in figure V-1.

Figure V-1

Exchange rates: Indexes of nominal and real values of the Argentine and Korean currency relative

to the U.S. dollar, by quarters, January 2006-December 2008

Source: International Monetary Fund, International Financial Statistics, online http://imfstatistics.org/imf, revised

February, 23, 2009.
 7

 F.o.b. Salem, OH.

 8

 Conference transcript, p. 23 (J. Korff).

 9

 The surcharge is ***. 

 10 The surcharge for ***.

 11 Importers were requested to provide purchase prices on a landed, duty-paid basis (excluding U.S. inland

transportation costs). If, however, importers were not able to provide landed, duty-paid prices, they were instructed

to provide delivered prices (i.e., including costs for delivery to the firm's facility). ***.

V-3

PRICING PRACTICES

QCC reported that it uses *** in order to arrive at prices for Ni-resist piston inserts and it ***

discount policies. QCC quotes prices on an f.o.b. basis7

 and sells Ni-resist piston inserts *** basis. ***

reported that it purchases Ni-resist piston inserts ***. 

In addition, QCC reported that prices for Ni-resist piston inserts are made up of two components: 

a base price and a surcharge.8

 QCC provided information on its surcharge formulas for ***. For sales to

***, QCC reported that the surcharge formula calculation ***. According to QCC, the formula ***.9

 For

its sales to ***, QCC reported that the surcharge is ***.10

PRICE DATA

The petitioner and importers of Ni-resist piston inserts 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 2006-December 2008.11 As the importers internally

consume all the Ni-resist piston inserts that they import, they reported purchase prices (direct from the

foreign supplier) for the selected products. The products for which pricing data were requested were as

follows:

Product 1. — Ni-resist piston inserts with a per-unit weight of 0.409 lbs. and an outer 

diameter of 4.602 inches (part number 61256 or 6056).

Product 2. — Ni-resist piston inserts with a per-unit weight of 0.772 lbs. and an outer 

diameter of 5.220 inches (part number N-4590-6).

Product 3. — Ni-resist piston inserts with a per-unit weight of 0.782 lbs. and an outer 

diameter of 5.859 inches (part number Ni-550-104PP).

Product 4. — Ni-resist piston inserts with a per-unit weight of 1.874 lbs. and an outer 

diameter of 5.857 inches (part number Ni-550-233PP1).

QCC, Federal-Mogul, and KUS provided price data. Pricing data accounted for *** percent of

the dollar value of QCC’s U.S. shipments during January 2006-December 2008, *** percent of the dollar

value of U.S. imports from Argentina, and *** percent of the dollar value of U.S. imports from Korea. 

Quarterly weighted-average sales prices for QCC and purchase prices for Federal-Mogul and KUS for the

above products are shown in tables V-1 through V-4 and figures V-2 and V-3. 
V-4

Table V-1

Ni-resist piston inserts: Weighted-average f.o.b. selling prices (except as noted) and quantities for

product 1, January 2006-December 2008

* * * * * * *

Table V-2

Ni-resist piston inserts: Weighted-average f.o.b. selling prices (except as noted) and quantities for

product 2, January 2006-December 2008

* * * * * * *

Table V-3

Ni-resist piston inserts: Weighted-average f.o.b. selling prices (except as noted) and quantities for

product 3, January 2006-December 2008

* * * * * * *

Table V-4

Ni-resist piston inserts: Weighted-average f.o.b. selling prices (except as noted) and quantities for

product 4, January 2006-December 2008

* * * * * * *

Figure V-2

Ni-resist piston inserts: Weighted-average f.o.b. selling and delivered purchase prices for

products 1 and 2, January 2006-December 2008

* * * * * * *

Figure V-3

Ni-resist piston inserts: Weighted-average f.o.b. selling and landed, duty-paid purchase prices for

products 3 and 4, January 2006-December 2008

* * * * * * *

Price Trends

Prices for U.S.-produced Ni-resist piston inserts generally fluctuated during 

January 2006-December 2008. Prices for domestically produced product 1 decreased, and prices for

products 2 through 4 generally increased throughout the period. Prices for imports from Argentina and

Korea fluctuated, although they were higher at the end of the period than they were at the beginning. 

A summary of price trends is shown in table V-5.

Table V-5

Ni-resist piston inserts: Summary of weighted-average prices for product 1-4 from the United

States, Argentina, and Korea

* * * * * * *
 12 It is important to note that the prices reported by QCC are f.o.b. selling prices while the prices reported by

Federal-Mogul and KUS are purchase prices paid directly to the foreign producer. Thus, U.S. prices and prices for

imported product are for transactions at different levels of trade and are not directly comparable. In addition,

purchase prices reported by ***; KUS estimated their transportation costs at about *** percent of the total delivered

price.

 13 QCC reported that it ***. ***.

 14 QCC also testified that it does have a minimum quantity requirement of 500 pieces that is necessary to cover all

its costs; however, it would accept an order of about 200 pieces, even for a new piece, but it would have to price it

accordingly. Conference transcript, p. 81 (J. Korff).

 15 QCC reported that the in-house surcharge it usually uses is more accurate than the standard surcharge that

applies only to the nickel price changes. The in-house surcharge “incorporates all metallic materials, not just nickel,

and it’s more truly representative of costs.” Conference transcript, p. 24 (J. Korff).

 16 Federal-Mogul’s importer-purchaser questionnaire response, supplement to section IV-1.

 17 KUS’s importer-purchaser questionnaire response, section IV-11.

 18 Correspondence from***, February 13, 2009.

 19 ***. Ibid. QCC reported that it “took corrective actions on all five findings and KUS began ordering parts

from QCC after the corrective actions were taken. QCC subsequently shipped tens of thousands of parts to KUS

with zero rejected parts.” QCC’s postconference brief, p. 3.

V-5

Price Comparisons

Purchase prices for imported Ni-resist piston inserts from Argentina and Korea were generally

*** than sales prices for U.S.-produced Ni-resist piston inserts in *** of the quarters where both prices

were reported.12 

LOST SALES AND LOST REVENUES

The Commission requested QCC to report any instances of lost sales or revenues it experienced

due to competition from imports from Argentina and Korea from January 2006 to December 2008. QCC

did not provide any lost sales or lost revenue allegations.13 However, the staff requested the two U.S.

importer-purchasers, Federal-Mogul and KUS, to provide any information on switching from purchasing

U.S.-made product to subject imports. 

Federal-Mogul reported that ***14 ***.15 ***.16 

 

KUS reported that it used QCC as a ***17 and ***.18 19

 

 1

 As noted at the staff conference, QCC’s exports were only to Brazil and represented a single type of Ni-resist

piston insert (“double ring with pins”). Conference transcript, pp. 12, 39 (J. Korff). 

 2

 While the decline in Ni-resist piston inserts revenue likely contributed to QCC’s financial weakness prior to the

period examined, a major factor related to its bankruptcy in 2003 was reportedly the 2001 bankruptcy of 

Federal-Mogul, a major customer. Conference transcript, p. 11 (J. Korff). Federal-Mogul entered and subsequently

exited Chapter 11 bankruptcy on October 1, 2001 and December 27, 2007, respectively. Litigation forces FederalMogul to file Ch. 11, Rubber & Plastics News, December 10, 2001, p. 18. Federal-Mogul makes smooth exit from

Chapter 11, Motor Age, April 2008, p. 62. 

 3

 QCC petition, exh. 5. Conference transcript, p. 10 (J. Korff). At their peak prior to the period examined, sales

of Ni-resist piston inserts represented about 50 percent of the company’s total sales revenue. Conference transcript

p. 51 (J. Korff). In contrast, Ni-resist piston inserts represented *** percent of QCC’s total sales by the end of the

period examined. E-mail with attachment from ***, QCC, February 16, 2009. 

 4

 Conference transcript, p. 50 (J. Korff). The description of Ni-resist piston insert profitability prior to the period

examined was what the QCC company official believed likely, based on the product’s sales volume at that time; i.e.,

the description was not based on a formal review of the predecessor company’s financial results. 

 5

 According to QCC, ***. E-mail with attachment from ***, February 20, 2009. 

 6

 Conference transcript, pp. 46-47 (J. Korff). QCC’s sand foundry department and centrifugal department are

separate in terms of their manufacturing operations including the melt phase. The centrifugal department uses

continuous furnaces which are in operation for 9-month periods, 24 hours a day, while the sand foundry department

uses coreless induction furnaces on a batch basis. Conference transcript, p. 48 (J. Korff). 

 7

 Conference transcript, p. 57 (J. Korff). As a percentage of total sales, sand castings (the sand foundry

department’s output) represented *** percent of QCC’s overall sales revenue at the end of the period examined. Email with attachment from ***, February 16, 2009. 

VI-1

PART VI: FINANCIAL EXPERIENCE AND CONDITION OF THE

U.S. PRODUCER

BACKGROUND

QCC, the only U.S. producer of Ni-resist piston inserts during the period examined, reported its

financial results on the basis of U.S. generally accepted accounting principles (“GAAP”) and for

calendar-year periods. *** of QCC’s sales represent U.S. commercial shipments with a *** share of

export sales (see table III-2).1

 No internal consumption or transfers were reported. 

As described in Part III of this report, the current owner of QCC purchased the predecessor

company’s assets in 2004, the predecessor company having filed bankruptcy in 2003.2

 Information in

the petition, as well as statements at the staff conference, indicate that sales of Ni-resist piston inserts by

the predecessor company reached their highest level during the mid-1990s after which they declined.3

 At

their peak prior to the period examined, Ni-resist piston inserts were characterized as generally being a

“substantial profit contributor” to the predecessor company’s overall business.4

As noted during the staff conference and as discussed in Part III of this report, QCC’s Ni-resist

piston insert operations take place within its centrifugal castings department where *** are also

manufactured.5

 The company’s other major operations take place within its sand foundry department.6

With respect to the current owner’s purchase of QCC’s assets in 2004, the Ni-resist piston insert part of

the business was not characterized as the primary focus of the purchase. Instead, operations related to Niresist piston inserts were characterized as a complement (“adder”) to the company’s sand foundry

operations.7
 8

 QCC’s *** commercial shipments represent a broader range of Ni-resist piston inserts, while *** exports are

concentrated in a single configuration. Conference transcript, pp. 12, 52, 67 (J. Korff). In 2006, commercial

shipments and exports represented *** percent and *** percent, respectively, of QCC’s total Ni-resist piston insert

sales value. In 2008, these relative shares had changed to *** percent and *** percent. 

 9

 Conference transcript, p. 50 (J. Korff) and QCC’s petition, exh. 5. ***.

 10 ***. Auditor preliminary phase notes. 

 As opposed to the per-pound values presented in table VI-1, QCC’s average sales value on a per-insert basis

would be $*** in 2006, $*** in 2007, and $*** in 2008, based on QCC’s questionnaire response and the petition,

exh. 5. 

 11 Staff notes that “metal margin,” as referenced by the steel industry generally, is a benchmark and not an

accounting term. Typically it refers to the difference between current sales prices and current average raw material

prices. Because it is based on revenue and cost information recognized by QCC for accounting purposes, the metal

margin calculated by staff does not generally correspond to the standard industry definition. Auditor preliminary

notes. 

 12 The metal margin value per pound was $*** (*** percent of sales value) in 2006, $*** (*** percent of sales

value) in 2007, and $*** (*** percent of sales value) in 2008.

 13 QCC stated that ***. E-mail with attachment from ***, February 16, 2009.

 14 E-mail with attachment from ***, February 16, 2009.

VI-2

OPERATIONS ON NI-RESIST PISTON INSERTS

Income-and-loss data for U.S. producers of Ni-resist piston inserts are presented in table VI-1. 

Due to a change in product mix during the period examined, a variance analysis is not presented.8

 

Table VI-1

Ni-resist piston inserts: Results of operations of the U.S. producer, 2006-2008

* * * * * * *

A notable feature of the period examined was the *** decline in Ni-resist piston insert sales

volume and corresponding revenue. As noted above, this decline was part of a longer-term pattern which

began in the mid-1990s.9

 

As shown in table VI-1, changes in average sales value corresponded in part with changes in

average raw material costs. In general, this pattern reflects the use of surcharges in determining the sales

amount charged to customers. Notwithstanding changes in the surcharge amount, differences in periodto-period average sales value also reflect changes in product mix and underlying base prices.10

Supplemental information in footnote 12 compares average sales value to average raw material

costs (referred to here as “metal margin”).11 While increasing from $*** per pound in 2006 to $*** per

pound in 2007 and then declining in 2008 to $*** per pound, the metal margin as a percent of the average

sales price declined throughout the period, from *** percent in 2006 to *** percent in 2007 and then to

*** percent in 2008.12 The somewhat contradictory pattern of higher average raw material costs and

lower average sales value at the end of the period exacerbated the decline in the metal margin. With

regard to this pattern specifically, the company stated that ***.13

With respect to cost of goods sold (“COGS”), raw material is the only item which is specific to

Ni-resist piston inserts; i.e., direct labor and other factory costs required allocation in order to develop the

information reported to the Commission.14 The primary components of Ni-resist piston insert raw

material costs reflect the following items: ***. With the exception of ***, which declined marginally in
 15 E-mail with attachment from ***, February 20, 2009. ***. Auditor preliminary notes. Type I Ni-resist scrap

is reportedly obtained from a variety of mostly domestic sources on a spot basis. Conference transcript, p. 49 (J.

Korff). 

 16 According to QCC, ***. E-mail with attachment from ***, February 16, 2009. ***. 

 As opposed to the per-pound values presented in table VI-1, QCC’s average raw material cost on a per-insert

basis would be $*** in 2006, $*** in 2007, and $*** in 2008, based on QCC’s questionnaire response and the

petition, exh. 5. 

 17 E-mail with attachment from ***, February 20, 2009. ***. Ibid. 

 18 Ibid.

 19 Conference transcript, pp. 12, 13 (J. Korff).

 20 In order to reduce costs as production declined in the centrifugal department, QCC has redeployed some

resources to the sand foundry department. QCC petition, p. 2. 

 21 With regard to higher average Ni-resist piston insert COGS due to lower volume, a company official stated

“{w}hat we did is price the product as though it were a standalone product that covered fixed cost. We didn’t try to

say because our volume declined we need to raise prices on it.” Conference transcript, pp. 54, 55 (J. Korff).

 22 Conference transcript, p. 58 (J. Korff).

VI-3

2007, the average prices paid by QCC for these inputs increased *** in 2007 and then declined in 2008.15

While weight per insert varies, average per-pound raw material costs are reportedly not affected by

changes in product mix.16

While metal margin as a percentage of sales deteriorated during the period examined, as noted

above, QCC’s higher gross losses in 2007 and 2008 were primarily the result of ***. As shown in table

VI-1, during the period examined both of these items increased notably on an average per-pound basis. 

According to the company, other factory costs reflect a number of items, as follows: ***. About

*** percent of these expenses are reportedly fixed. Supplemental information provided by QCC showed

that, consistent with its declining relative share of sales, the amount of overall other factory costs

allocated to Ni-resist piston inserts declined on an absolute basis throughout the period.17

Direct labor cost, as described by QCC, also reflects multiple items/activities identified as

follows: ***.18 

As noted above, QCC’s Ni-resist piston insert operations historically represented *** of the

centrifugal department’s output. In contrast, the period examined is transitional inasmuch as Ni-resist

piston insert sales volume has declined *** while the company attempts to shift the centrifugal

department’s focus to alternative production. At the staff conference, a company official stated that “. . .

we’re trying to develop other centrifugal products . . . {w}e’re trying to retail a cylinder {liner} line of

products. We’ve trade named it EZ Slider and we’re selling it on the retail market. We’re spending lots

of money trying to develop it to maintain our use for our centrifugal capacity . . . but it is not at this point

a business that will utilize effectively the centrifugal capacity.”19 In this context, it appears that QCC’s

***.20 As shown in table III-1, Ni-resist piston insert production and capacity utilization went from ***

percent in 2006 to *** percent in 2008. 

At the staff conference a QCC company official stated that, while Ni-resist piston insert prices

were not modified specifically to cover higher average COGS due to reduced production, prices are

adjusted incrementally depending on order size with exceptionally large volume part orders being

considered outside of the company’s price list.21 In general, QCC also indicated that Ni-resist piston

insert selling prices are not recovering overall variable costs.22 

QCC’s selling, general and administrative (“SG&A”) expenses reflect the following items: ***. 

Consistent with the overall decline in sales volume, there was a *** decline in the absolute level of

SG&A expenses allocated to Ni-resist piston inserts in 2007 (see table VI-1). This was followed by a ***
 23 ***. E-mail with attachment from ***, February 20, 2009. 

 24 ***. QCC questionnaire response, section III-12. 

 25 ***. E-mail with attachment from ***, February 16, 2009. 

VI-4

decline in 2008.23 In contrast, as a percentage of sales, SG&A expenses increased *** throughout the

period as corresponding revenue declined. Combined with increasing gross loss margins (gross losses as

a percent of sales), Ni-resist piston insert operations generated larger operating loss margins throughout

the period, while the absolute level of operating losses increased at a *** rate as sales volume declined. 

CAPITAL EXPENDITURES AND RESEARCH AND DEVELOPMENT EXPENSES

Capital expenditures, research and development (“R&D”) expenses, total assets, and return on

investment (“ROI”) are shown in table VI-2. 

Table VI-2

Ni-resist piston inserts: Capital expenditures, research and development expenses, assets, and

return on investment of the U.S. producer, 2006-2008

* * * * * * *

As shown in table VI-2, the company *** incur capital expenditures related to Ni-resist piston

inserts during the period examined. With respect to the property, plant, and equipment component of

total assets, QCC stated that ***.24

CAPITAL AND INVESTMENT

The Commission requested QCC, the sole U.S. producer of Ni-resist piston inserts, to describe

any actual or potential negative effects of imports from Argentina and Korea on its growth, investment,

ability to raise capital, development and production efforts, or the scale of capital investments. QCC’s

responses are shown below.

Actual negative effects

QCC: ***.25 

Anticipated negative effects

QCC ***.
 1

 Foreign producer questionnaires were sent to the following firms in Argentina identified using proprietary

Customs data and internet research: ***.

 2

 ***’s producer questionnaire response, sections II-1, II-2 and II-7.

 3

 Clorindo’s postconference brief, p. 2.

 4

 Foreign producer questionnaires were sent to the following firms in Korea identified using proprietary Customs

data and internet research: ***.

VII-1

PART VII: THREAT CONSIDERATIONS AND INFORMATION ON

NONSUBJECT COUNTRIES

The Commission analyzes a number of factors in making threat determinations (see 19 U.S.C. §

1677(7)(F)(i)). Information on the nature of the alleged subsidies was presented earlier in this report;

information on the volume and pricing of imports of the subject merchandise is presented in Parts IV and

V; and information on the effects of imports of the subject merchandise on the U.S. producer’s 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 subsidization in third-country markets, follows. Also presented in

this section of the report is information obtained for consideration by the Commission on nonsubject

countries. 

THE INDUSTRY IN ARGENTINA

The Commission requested data from four firms1

 in Argentina believed to be possible producers

of Ni-resist piston inserts. Clorindo Appo SRL (“Clorindo”), which was listed in the petition as the sole

Argentinian producer, provided a questionnaire response which accounted for all known Ni-resist piston

insert production in Argentina during the period for which data were collected. ***. Clorindo stated that

the firm has ***. Ni-resist piston inserts were *** produced and sold by Clorindo during the period for

which data were collected; ***.2

 

Capacity remained steady during the period for which data were collected and is projected to ***

in the next two years. Production decreased from 2006 to 2007 but increased from 2007 to 2008. 

Clorindo’s projections call for *** production from 2008 to 2009 followed by *** production in 2010. 

Capacity utilization was between *** and *** percent during 2006-2008, with projections showing ***

percent utilization in 2009 followed by *** in 2010 corresponding with the *** production level

predicted for that year. 

Clorindo’s exports to the United States as a share of the firm’s total exports decreased during the

period for which data were collected, from *** percent in 2006 to *** percent in 2008. Clorindo also

exported some of its 2007-2008 production to ***.3

 Table VII-1 presents data for reported production

and shipments of Ni-resist piston inserts in Argentina by Clorindo. 

Table VII-1

Ni-resist piston inserts: Clorindo’s reported production capacity, production, shipments, and

inventories, 2006-2008, and projections for 2009 and 2010

* * * * * * *

THE INDUSTRY IN KOREA

The Commission requested data from three firms4

 in Korea believed to be possible producers of 

Ni-resist piston inserts. Incheon Metal Co., Ltd. (“Incheon”), which was listed in the petition as the sole
 5

 ***’s producer questionnaire response, sections II-2-3. 

 6

 Incheon was ***.

 7

 Incheon expects ***. Incheon is ***. Incheon’s producer questionnaire response, section II-1. 

VII-2

Korean producer, provided a questionnaire response which accounted for all known Ni-resist piston insert

production in Korea during the period for which data were collected. ***. Ni-resist piston inserts

represented *** percent of the firm’s production in 2008, and other products produced on the same

equipment were ***.5

 

Incheon’s capacity increased from 2006 to 2007 and is projected to *** 2009.6

 Production and

capacity utilization both increased from 2006 to 2007, decreased *** from 2007 to 2008, and are

projected to *** in 2009.7

 ***. Table VII-2 presents data for reported production and shipments of

Ni-resist piston inserts in Korea by Incheon. 

Table VII-2

Ni-resist piston inserts: Incheon’s reported production capacity, production, shipments, and

inventories, 2006-2008, and projections for 2009 and 2010

* * * * * * *

THE INDUSTRIES IN ARGENTINA AND KOREA COMBINED

Table VII-3 presents data for combined reported production and shipments of Ni-resist piston

inserts in Argentina and Korea by Clorindo and Incheon, respectively. 

Table VII-3

Ni-resist piston inserts: Clorindo and Incheon’s combined reported production capacity,

production, shipments, and inventories, 2006-2008, and projections for 2009 and 2010

* * * * * * *

U.S. IMPORTERS’ INVENTORIES

Reported inventories held by U.S. importers of subject merchandise from Argentina and Korea

are shown in table VII-4.

Table VII-4

Ni-resist piston inserts: U.S. importers’ end-of-period inventories of all imports, by source, 2006-

2008

* * * * * * *

U.S. IMPORTERS’ CURRENT ORDERS

The Commission requested importers to indicate whether they imported or arranged for the

importation of Ni-resist piston inserts from Argentina and/or Korea after December 31, 2008. ***. ***.

ANTIDUMPING AND COUNTERVAILING DUTY INVESTIGATIONS 

IN THIRD-COUNTRY MARKETS

There are no known antidumping or countervailing duty investigations on Ni-resist piston inserts

reported in third-country markets.
 8

 Mittal Steel Point Lisas Ltd. v. United States, Slip Op. 2007-1552 at 17 (Fed. Cir., Sept. 18, 2008), quoting from

Statement of Administrative Action on Uruguay Round Agreements Act, H.R. Rep. 103-316, Vol. I at 851-52; see

also Bratsk Aluminum Smelter v. United States, 444 F.3d 1369 (Fed. Cir. 2006).

 9

 Clorindo’s postconference brief, p. 1, and conference transcript, pp. 40 (J. Korff) and 97 (Lowe).

 10 ***’s and ***’s importer questionnaire responses, section I-5. ***’s postconference brief, ***.

VII-3

INFORMATION ON NONSUBJECT COUNTRIES

In assessing whether the domestic industry is materially injured or threatened with material injury

“by reason of subject imports,” the legislative history states “that the Commission must examine all

relevant evidence, including any known factors, other than the dumped or subsidized imports, that may be

injuring the domestic industry, and that the Commission must examine those other factors (including nonsubject imports) ‘to ensure that it is not attributing injury from other sources to the subject imports.’”8

 

There is no publicly available information regarding international production or exports of Niresist piston inserts during the period for which data were collected. Countries other than Argentina and

Korea believed to produce Ni-resist piston inserts are Brazil, China, Germany, India, Poland, Taiwan and

Turkey.9

 The known producers in *** are affiliated with *** and the known producers in *** are

affiliated with ***.10 

A-1

APPENDIX A

FEDERAL REGISTER NOTICES

5946 Federal Register / Vol. 74, No. 21 / Tuesday, February 3, 2009 / Notices 

SUMMARY: Under the provisions of the 

Paperwork Reduction Act of 1995 (Pub. 

L. 104–13, 44 U.S.C., Chapter 3507) and 

5 CFR Part 1320, Reporting and Record 

keeping Requirements, the National 

Park Service (NPS) invites public 

comments on an extension of a 

currently approved collection of 

information (OMB #1024–0018). 

DATES: Public comments on this 

information Collection Request (ICR) 

will be accepted on or before March 5, 

2009. 

ADDRESSES: You may submit comments 

directly to the Desk Officer for the 

Department of the Interior (OMB #1024– 

0018), Office of Information and 

Regulatory Affairs, OMB, by fax at 202/ 

395–6566, or by electronic mail at 

oira_docket@omb.eop.gov. Please also 

mail or hand carry a copy of your 

comments to Lisa Deline, Managing 

Editor, National Register of Historic 

Places, National Park Service, 1201 Eye 

Street NW., 8th Floor, Washington, DC 

20005 or via fax at 202/371–2229. 

FOR FURTHER INFORMATION CONTACT: Paul 

Loether, Chief, National Register of 

Historic Places and National Historic 

Landmark Program, 1201 Eye Street, 

NW. 8TH Floor, Washington, DC 20005 

or via fax at 202/371–2229. You are 

entitled to a copy of the entire ICR 

package free-of-charge. You may access 

this ICR at http://www.reginfo.gov/ 

public/. 

Comments Received on the 60-Day 

Federal Register Notice: The NPS 

published a 60-day Notice to solicit 

public comments on this ICR in the 

Federal Register on July 11, 2008 (Vol. 

73, No. 134, Page 39984–39985). The 

comment period closed on September 9, 

2008. No public comments were 

received on this Notice. 

SUPPLEMENTARY INFORMATION: 

Title: 36 CFR 60 and 63, National 

Register of Historic Places Registration 

Form, Continuation Sheet, Multiple 

Property Documentation Form (aka 

MPS). 

Form(s): NPS 10–900 (Registration 

Form), 10–900–a (Continuation Sheet), 

10–900–b (Multiple Property 

Documentation Form). 

OMB Control Number: 1024–0018. 

Type of Request: Extension of a 

currently approved collection of 

information. 

Expiration Date: 01/31/2009. 

Description of Need: The National 

Historic Preservation Act of 1966 

requires the Secretary of the Interior to 

maintain and expand the National 

Register of Historic Places, and to 

establish criteria and guidelines for 

including properties in the National 

Register. The National Register of 

Historic Places Registration Form 

documents properties nominated for 

listing in the National Register and 

demonstrates that they meet the criteria 

established for inclusion. The 

documentation is used to assist in 

preserving and protecting the properties 

and for heritage education and 

interpretation. 

National Register properties must be 

considered in the planning for Federal 

or federally assisted projects. National 

Register listing is required for eligibility 

for the federal rehabilitation tax 

incentives. The primary purpose of the 

ICR is to nominate properties for listing 

in the National Register of Historic 

Places, the official list of the Nation’s 

cultural resources worthy of 

preservation, which Public Law requires 

that the Secretary of the Interior 

maintain and expand. Properties are 

listed in the National Register upon 

nomination by State, Federal and Tribal 

Historic Preservation Officers. The 

National Register of Historic Places 

Registration Form documents properties 

nominated for listing in the National

Register and demonstrates that they 

meet the criteria established for 

inclusion. The documentation is used to 

assist in preserving and protecting the 

properties and for heritage education 

interpretation. National Register 

properties and those eligible for listing 

may be eligible for Federal 

Rehabilitation tax incentives. The forms 

provide the historic documentation on 

which decisions for listing and 

eligibility are based. The obligation to 

respond is required to obtain and retain 

benefits. 

Description of Respondents: The 

affected public are State, tribal, and 

local governments, businesses, nonprofit organizations, and individuals. 

Nominations to the National Register of 

Historic Places are voluntary. 

Estimated Annual Reporting Burden: 

55,560 hours, broken down as follows: 

1,262 newly proposed individual and 

district nominations @36 hrs. each = 

45,432; 196 nominations submitted 

under existing MPS @ 18 hrs. each 

3,528; 55 newly proposed MPS @ 120 

hrs. each = 6,600. 

Estimated Average Burden Hours per 

Response: Depending on which form is 

used, the average burden hours per 

response may vary considerably because 

of many complex factors. In general, to 

fulfill minimum program requirements 

describing the nominated property and 

demonstrating its eligibility under the 

criteria, the average burden hours is 36 

hours for a newly proposed individual 

nomination: 18 hours for a nomination 

proposed under an existing Multiple 

Property Submission (MPS); and 120 

hours for a newly proposed MPS cover 

document. 

Continuation sheets (10–900–a) are 

used for additional information for both 

the individual nomination form and the 

multiple property form, as needed. As 

such, the calculation of average burden 

hours per response for the continuation 

sheets has been included in the average 

calculations above for the nomination 

form (10–900) and the multiple property 

form (10–900–b). 

Estimated Average Number of 

Respondents: 1,513. 

Estimated Frequency of Response: 

1,513 annually. 

Comments are invited on: (1) The 

practical utility of the information being 

gathered; (2) the accuracy of the burden 

hour estimate; (3) ways to enhance the 

quality, utility, and clarity of the 

information to be collected; and (4) 

ways to minimize the burden to 

respondents, including use of 

automated information collection 

techniques or other forms of information 

technology. Before including your 

address, phone number, e-mail address, 

or other personal identifying 

information in your comment, you 

should be aware that your entire 

comment—including your personal 

identifying information—may be made 

publicly available at any time. While 

you can ask us in your comment to 

withhold your personal identifying 

information from public review, we 

cannot guarantee that OMB will be able 

to do so. 

Dated: January 27, 2009. 

Leonard E. Stowe, 

NPS Information Collection Clearance 

Officer. 

[FR Doc. E9–2053 Filed 2–2–09; 8:45 am] 

BILLING CODE 4312–52–M 

INTERNATIONAL TRADE 

COMMISSION 

[Investigation Nos. 701–TA–460–461 

(Preliminary)] 

Ni-Resist Piston Inserts From 

Argentina and Korea 

AGENCY: United States International 

Trade Commission. 

ACTION: Institution of countervailing 

duty investigations and scheduling of 

preliminary phase investigations. 

SUMMARY: The Commission hereby gives 

notice of the institution of investigations 

and commencement of preliminary 

phase countervailing duty investigation 

Nos. 701–TA–460–461 (Preliminary) 

under section 703(a) of the Tariff Act of 

1930 (19 U.S.C. 1671b(a)) (the Act) to 


yshivers on PROD1PC62 with NOTICES
Federal Register / Vol. 74, No. 21 / Tuesday, February 3, 2009 / Notices 5947 

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 Argentina and 

Korea of Ni-resist piston inserts, 

provided for in subheading 8409.99.91 

of the Harmonized Tariff Schedule of 

the United States, that are alleged to be 

subsidized by the Governments of 

Argentina and Korea. 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 a preliminary determination in 

countervailing duty investigations in 45 

days, or in this case by March 12, 2009. 

The Commission’s views are due at 

Commerce within five business days 

thereafter, or by March 19, 2009. 

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: January 26, 2009. 

FOR FURTHER INFORMATION CONTACT: 

Joshua Kaplan (202–205–3184), 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 January 26, 2009, by 

Korff Holdings, LLC dba Quaker City 

Castings, Salem, OH. 

Participation in the investigations and 

public service list.—Persons (other than 

petitioners) wishing to participate in 

these investigations as parties must file 

an entry of appearance with the 

Secretary to the Commission, as 

provided in sections 201.11 and 207.10 

of the Commission’s rules, not later than 

seven days after publication of this 

notice in the Federal Register. 

Industrial users and (if the merchandise 

under investigation is sold at the retail 

level) representative consumer 

organizations have the right to appear as 

parties in Commission countervailing 

duty 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 these investigations under the 

APO issued in these investigations, 

provided that the application is made 

not later than seven days after the 

publication of this notice in the Federal 

Register. A separate service list will be 

maintained by the Secretary for those 

parties authorized to receive BPI under 

the APO. 

Conference.—The Commission’s 

Director of Operations has scheduled a 

conference in connection with these 

investigations for 9:30 a.m. on February 

17, 2009, at the U.S. International Trade 

Commission Building, 500 E Street, 

SW., Washington, DC. Parties wishing to 

participate in the conference should 

contact Joshua Kaplan (202–205–3184) 

not later than February 12, 2009, to 

arrange for their appearance. Parties in 

support of the imposition of 

countervailing duties in these 

investigations and parties in opposition 

to the imposition of such duties will 

each be collectively allocated one hour 

within which to make an oral 

presentation at the conference. A 

nonparty who has testimony that may 

aid the Commission’s deliberations may 

request permission to present a short 

statement at the conference. 

Written submissions.—As provided in 

sections 201.8 and 207.15 of the 

Commission’s rules, any person may 

submit to the Commission on or before 

February 23, 2009, a written brief 

containing information and arguments 

pertinent to the subject matter of these 

investigations. Parties may file written 

testimony in connection with their 

presentation at the conference no later 

than three days before the conference. If 

briefs or written testimony contain BPI, 

they must conform with the 

requirements of sections 201.6, 207.3, 

and 207.7 of the Commission’s rules. 

The Commission’s rules do not 

authorize filing of submissions with the 

Secretary by facsimile or electronic 

means, except to the extent permitted by 

section 201.8 of the Commission’s rules, 

as amended, 67 FR 68036 (November 8, 

2002). Even where electronic filing of a 

document is permitted, certain 

documents must also be filed in paper 

form, as specified in II (C) of the 

Commission’s Handbook on Electronic 

Filing Procedures, 67 FR 68168, 68173 

(November 8, 2002). 

In accordance with sections 201.16(c) 

and 207.3 of the rules, each document 

filed by a party to these investigations 

must be served on all other parties to 

these investigations (as identified by 

either the public or BPI service list), and 

a certificate of service must be timely 

filed. The Secretary will not accept a 

document for filing without a certificate 

of service. 

Authority: These investigations are being 

conducted under authority of title VII of the 

Tariff Act of 1930; this notice is published 

pursuant to section 207.12 of the 

Commission’s rules. 

By order of the Commission. 

Issued: January 29, 2009. 

Marilyn R. Abbott, 

Secretary to the Commission. 

[FR Doc. E9–2241 Filed 2–2–09; 8:45 am] 

BILLING CODE 7020–02–P 

DEPARTMENT OF JUSTICE 

Notice of Lodging of Consent Decree; 

Pursuant to the Comprehensive 

Environmental Response, 

Compensation, and Liability Act 

In accordance with Departmental 

policy, 28 CFR 50.7, notice is hereby 

given that a proposed consent decree in 

United States v. F.O.F. Inc., Civil Action 

No. 3:09–cv–5015, was lodged January 

15, 2009, with the United States District 

Court for the Western District of 

Washington. Under this Consent Decree, 

the Settling Defendant is required by 

pay $250,000.00 in payment for 

Response Costs at or in connection with 

the Commencement Bay Nearshore/ 

Tideflats Superfund Site in the City of 

Tacoma, Pierce County, Washington. 

The Department of Justice will 

receive, for a period of thirty (30) days 

from the date of this publication, 

comments relating to the proposed 

consent decree. Comments should be 

addressed to the Assistant Attorney 

General, Environmental and Natural 

Resources Division, and either e-mailed 

to pubcomment-ees.enrd@usdoj.gov or 

mailed to P.O. Box 7611, U.S. 

Department of Justice, Washington, DC 

20044–7611, and should refer to United


yshivers on PROD1PC62 with NOTICES
8054 Federal Register / Vol. 74, No. 34 / Monday, February 23, 2009 / Notices 

date of publication of the notice of 

initiation of the requested review. 

Ajubesteel withdrew its request for a 

review on January 13, 2009, which is 

within the 60–day deadline. Therefore, 

the Department is rescinding this new 

shipper review of Ajubesteel. 

Notification 

As the Department is rescinding this 

antidumping duty new shipper review, 

normally, the all–others rate in effect at 

the time of entry, 4.8 percent ad 

valorem, would be assessed on all 

exports of circular welded non–alloy 

steel pipe from the Republic of Korea by 

Ajubesteel entered, or withdrawn, from 

warehouse for consumption during the 

period of review (November 1, 2007, 

through October 31, 2008). However, 

Ajubesteel’s shipments are subject to an 

administrative review of the order on 

circular welded non–alloy steel pipe 

from the Republic of Korea, covering the 

same period. See Initiation of 

Antidumping and Countervailing Duty 

Administrative Reviews and Request for 

Revocation in Part, 73 FR 79055 

(December 24, 2008). Because the sale(s) 

from this new shipper review also fall 

within the period of review of the 

administrative review, the Department 

will not issue assessment instructions to 

U.S. Customs and Border Protection 

(CBP) at this time. Upon the completion 

of the November 1, 2007, through 

October 31, 2008, administrative review, 

the Department will issue assessment 

instructions to CBP as appropriate. 

This notice also serves as the only 

reminder to parties subject to 

administrative protective orders 

(‘‘APO’’) of their responsibility 

concerning the disposition of 

proprietary information disclosed under 

APO in accordance with 19 CFR 

351.305(a)(3). Timely written 

notification of the return/destruction of 

APO material or conversion to judicial 

protective order is hereby requested. 

Failure to comply with the regulations 

and terms of an APO is a violation 

which is subject to sanctions. 

This new shipper rescission and 

notice are published in accordance with 

sections 751(a)(2)(B) and 777(i)(1) of the 

Act. 

Dated: February 12, 2009. 

John M. Andersen, 

Acting Deputy Assistant Secretaryfor 

Antidumping and Countervailing Operations. 

[FR Doc. E9–3656 Filed 2–20–09; 8:45 am] 

BILLING CODE 3510–DS–S 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[A–580–807] 

Polyethylene Terephthalate Film, 

Sheet, and Strip from the Republic of 

Korea: Extension of the Time Limit for 

the Preliminary Results of the 2007/ 

2008 Administrative Review 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce 

EFFECTIVE DATE: February 23, 2009. 

FOR FURTHER INFORMATION CONTACT: 

Michael J. Heaney or Robert James, AD/ 

CVD Operations, Office 7, Import 

Administration, International Trade 

Administration, U.S. Department of 

Commerce, 14th Street and Constitution 

Avenue, N.W., Washington, DC 20230; 

telephone: (202) 482–4475 or (202) 482– 

0649, respectively. 

SUPPLEMENTARY INFORMATION: 

Background 

On June 5, 1991, the Department of 

Commerce (Department) published in 

the Federal Register an antidumping 

duty order on polyethylene 

terephthalate film, sheet, and strip (PET 

film) from the Republic of Korea 

(‘‘Korea’’). See Antidumping Duty Order 

and Amendment to Final Determination 

of Sales at Less Than Fair Value: 

Polyethylene Terephthalate Film, Sheet, 

and Strip from the Republic of Korea, 56 

FR 25669 (June 5, 1991). The 

Department received timely requests 

from Kolon Industries Inc. (Kolon) and 

from DuPont Teijin Films, Mitsubishi 

Polyester Film, Inc., and Toray Plastics 

America Inc. (collectively, the 

petitioners), in accordance with 19 CFR 

351.213(b)(2), for an administrative 

review of the antidumping duty order 

on PET film from Korea covering 

Kolon’s sales for the period October 2, 

2007, through May 31, 2008. On July 30, 

2008, the Department initiated an 

administrative review with respect to 

Kolon. See Initiation of Antidumping 

and Countervailing Duty Administrative 

Reviews, Request for Revocation in Part, 

and Deferral of Administrative Review, 

73 FR 44220 (July 30, 2008). 

The deadline for completion of the 

preliminary results in this 

administrative review is currently 

March 2, 2009. 

Extension of Time Limits for 

Preliminary Results 

Section 751(a)(3)(A) of the Tariff Act 

of 1930, as amended (the Act), and 19 

CFR 351.213(h)(1) require the 

Department to issue the preliminary 

results of an administrative review 

within 245 days after the last day of the 

anniversary month of the order or 

suspension agreement for which the 

administrative review was requested, 

and the final results of the review 

within 120 days after the date on which 

the notice of the preliminary results was 

published in the Federal Register. 

However, if the Department determines 

that it is not practicable to complete the 

review within this time period, section 

751(a)(3)(A) of the Act and 19 CFR 

351.213(h)(2) allow the Department to 

extend the 245-day period to 365 days 

and the 120-day period to 180 days. 

Pursuant to section 751(a)(3)(A) of the 

Act and 19 CFR 351.213(h), we 

determine that it is not practicable to 

complete this administrative review 

within the statutory time limit of 245 

days. The Department requires 

additional time to analyze Kolon’s 

questionnaire responses, and issue 

supplemental questionnaires. In 

particular, there are complex issues 

concerning Kolon’s reported cost of 

production and U.S. sales that the 

Department requires additional time to 

analyze. Therefore, in accordance with 

section 751(a)(3)(A) of the Act and 19 

CFR 351.213(h)(2), the Department is 

extending the time limit for the 

completion of these preliminary results 

by 120 days. Therefore, the new 

deadline for completion of this review 

is June 30, 2009. The final results, in 

turn, will be due 120 days after the date 

of issuance of the preliminary results, 

unless extended. 

This notice is published in 

accordance with sections 751(a)(3)(A) 

and 777(i) of the Act. 

Dated: February 17, 2009. 

John M. Andersen, 

Acting Deputy Assistant Secretaryfor 

Antidumping and Countervailing Duty 

Operations. 

[FR Doc. E9–3791 Filed 2–20–09; 8:45 am] 

BILLING CODE 3510–DS–S

DEPARTMENT OF COMMERCE 

International Trade Administration 

[C–357–819, C–580–862] 

Ni-Resist Piston Inserts From 

Argentina and the Republic of Korea: 

Initiation of Countervailing Duty 

Investigations 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

DATES: Effective Date: February 23, 

2009. 


jlentini on PROD1PC65 with NOTICES
Federal Register / Vol. 74, No. 34 / Monday, February 23, 2009 / Notices 8055 

FOR FURTHER INFORMATION CONTACT: 

Kristen Johnson (Argentina) or John 

Conniff (Republic of Korea), AD/CVD 

Operations, Office 3, Import 

Administration, International Trade 

Administration, U.S. Department of 

Commerce, 14th Street and Constitution 

Avenue, NW., Washington, DC 20230; 

telephone: (202) 482–4793 and (202) 

482–1009, respectively. 

SUPPLEMENTARY INFORMATION: 

The Petitions 

On January 26, 2009, the Department 

of Commerce (the Department) received 

countervailing duty (CVD) petitions 

concerning Ni-resist piston inserts from 

Argentina and the Republic of Korea 

(Korea) filed in proper form by Korff 

Holdings, LLC doing business as Quaker 

City Castings (Petitioner). See 

Imposition of Countervailing Duties on 

Ni-Resist Piston Inserts from Argentina 

and the Republic of Korea, dated 

January 26, 2009 (the petitions). 

On January 29, 2009, and February 6, 

9, and 10, 2009, the Department issued 

requests for additional information and 

clarification of certain areas of the 

petitions. Based on the Department’s 

requests, Petitioner filed additional 

information supplementing the petitions 

on February 5, 10, 11, and 12, 2009. 

In accordance with section 702(b)(1) 

of the Tariff Act of 1930, as amended 

(the Act), Petitioner alleges that 

manufacturers, producers, or exporters 

of Ni-resist piston inserts in Argentina 

and Korea 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 Petitioner 

filed the petitions on behalf of the 

domestic industry because it is an 

interested party as defined in section 

771(9)(C) of the Act and Petitioner has 

demonstrated sufficient industry 

support with respect to the CVD 

investigations that it requests the 

Department to initiate (see 

‘‘Determination of Industry Support for 

the Petitions’’ section below). 

Period of Investigations 

The anticipated period of the 

investigations (POI) is January 1, 2008, 

through December 31, 2008. See 19 CFR 

351.204(b)(2). 

Scope of Investigations 

The scope of these investigations 

includes all Ni-resist piston inserts 

regardless of size, thickness, weight, or 

outside diameter. Ni-resist piston inserts 

may also be called other names 

including, but not limited to, ‘‘Ring 

Carriers,’’ or ‘‘Alfin Inserts.’’ Ni-resist 

piston inserts are alloyed cast iron rings, 

with or without a sheet metal cooling 

channel pressed and welded into the 

interior of the insert. Ni-resist piston 

inserts are composed of the material 

known as Ni-resist, of the chemical 

composition: 13.5%–17.5% Ni (nickel), 

5.5%–8.0% Cu (copper), 0.8%–2.5% Cr 

(chromium), 0.5%–1.5% Mn 

(manganese), 1.0%–3.0% Si (silicon), 

2.4%–3.0% C (carbon). The cast iron 

composition is produced primarily to 

the material specifications of the 

American Society for Testing and 

Materials (ASTM), ASTM A–436 grade 

1. 

The scope of these investigations does 

not include piston rings nor any other 

product manufactured using the Niresist material. The subject imports are 

properly classified under subheading 

8409.99.91.90 of the Harmonized Tariff 

Schedule of the United States (HTSUS), 

but have been imported under HTSUS 

7326.90. The HTSUS subheadings are 

provided for convenience and customs 

purposes. The written description is 

dispositive of the scope of these 

investigations. 

Comments on Scope of Investigations 

During our review of the petitions, we 

discussed the scope with Petitioner 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 APO/Dockets 

Unit, Room 1870, U.S. Department of 

Commerce, 14th Street and Constitution 

Avenue, NW., Washington, DC 20230. 

The period of scope consultations is 

intended to provide the Department 

with ample opportunity to consider all 

comments and to consult with parties 

prior to the issuance of the preliminary 

determinations. 

Consultations 

Pursuant to section 702(b)(4)(A)(ii) of 

the Act, the Department invited 

representatives of the Governments of 

Argentina and Korea (GOA and GOK, 

respectively) for consultations with 

regard to the petitions. The Department 

held these consultations in Washington, 

DC, with representatives of the GOK on 

February 10, 2009, and with 

representatives of the GOA on February 

13, 2009. See Memorandum to the File 

regarding ‘‘Consultations with Officials 

from the Government of the Republic of 

Korea on the Countervailing Duty 

Petition regarding Ni-Resist Piston 

Inserts,’’ (dated February 12, 2009), and 

Memorandum to the File regarding 

‘‘Consultations with Officials from the 

Government of Argentina on the 

Countervailing Duty Petition regarding 

Ni-Resist Piston Inserts,’’ (dated 

February 13, 2009); these memoranda 

are on file in the Department’s Central 

Records Unit (CRU), Room 1117 of the 

main Department of Commerce 

building. 

Determination of Industry Support for 

the Petitions 

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 U.S. 

International Trade Commission (ITC), 

which is responsible for determining 

whether ‘‘the domestic industry’’ has 

been injured, must also determine what 

constitutes a domestic like product in 

order to define the industry. While both 

the Department and the ITC must apply 

the same statutory definition regarding 

the domestic like product (section 

771(10) of the Act), they do so for 

different purposes and pursuant to a 

separate and distinct authority. In 

addition, the Department’s 

determination is subject to limitations of 

time and information. Although this 


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8056 Federal Register / Vol. 74, No. 34 / Monday, February 23, 2009 / Notices 

may result in different definitions of the 

like product, such differences do not 

render the decision of either agency 

contrary to law. See USEC, Inc. v. 

United States, 132 F. Supp. 2d 1, 8 (CIT 

2001), citing Algoma Steel Corp. Ltd. v. 

United States, 688 F. Supp. 639, 644 

(CIT 1988), aff’d 865 F.2d 240 (Fed. Cir. 

1989), cert. denied, 492 U.S. 919 (1989). 

Section 771(10) of the Act defines the 

domestic like product as ‘‘a product 

which is like, or in the absence of like, 

most similar in characteristics and uses 

with, the article subject to an 

investigation under this 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, Petitioner does not offer a 

definition of domestic like product 

distinct from the scope of these 

investigations. Based on our analysis of 

the information submitted on the 

record, we have determined that Niresist piston inserts as defined by 

Petitioner constitute 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: NiResist Piston Inserts from Argentina’’ 

(Argentina Checklist), at Attachment II 

(Industry Support), and ‘‘Countervailing 

Duty Investigation Initiation Checklist: 

Ni-Resist Piston Inserts from the 

Republic of Korea’’ (Korea Checklist), at 

Attachment II (Industry Support) (dated 

February 17, 2009), on file in the CRU. 

With regard to section 702(c)(4)(A) of 

the Act, in determining whether 

Petitioner has standing (i.e., the 

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 

petitions with reference to the domestic 

like product as defined in the ‘‘Scope of 

Investigations’’ section above. To 

establish industry support, Petitioner 

indicated that it was the sole producer 

of the domestic like product and 

provided its production statistics for the 

domestic like product for the year 2008. 

We have relied upon data Petitioner 

provided for purposes of measuring 

industry support. No comments were 

submitted challenging Petitioner’s 

industry support claims. For further 

discussion, see Argentina Checklist and 

Korea Checklist at Attachment II 

(Industry Support). 

The Department’s review of the data 

provided in the petitions, supplemental 

submissions, and other information 

readily available to the Department 

indicates that Petitioner has established 

industry support. First, the petitions 

establish support from the domestic 

producer accounting for more than 50 

percent of the total production of the 

domestic like products and, as such, the 

Department is not required to take 

further action in order to evaluate 

industry support (i.e., polling). See 

section 702(c)(4)(D) of the Act and 

Argentina Checklist and Korea Checklist 

at Attachment II (Industry Support). 

Second, the domestic producer has met 

the statutory criteria for industry 

support under section 702(c)(4)(A)(i) of 

the Act because the domestic producer 

who supports the petitions accounts for 

at least 25 percent of the total 

production of the domestic like 

products. See Argentina Checklist and 

Korea Checklist at Attachment II 

(Industry Support). Finally, the 

domestic producer has met the statutory 

criteria for industry support under 

section 702(c)(4)(A)(ii) of the Act 

because the domestic producer 

supporting the petitions accounts 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. Accordingly, the 

Department determines that the 

petitions were filed on behalf of the 

domestic industry within the meaning 

of section 702(b)(1) of the Act. See 

Argentina Checklist and Korea Checklist 

at Attachment II (Industry Support). 

The Department finds that Petitioner 

filed the petitions on behalf of the 

domestic industry because Petitioner is 

an interested party as defined in section 

771(9)(C) of the Act and has 

demonstrated sufficient industry 

support with respect to the CVD 

investigations that it is requesting the 

Department initiate. See Argentina 

Checklist and Korea Checklist at 

Attachment II (Industry Support). 

Injury Test 

Because Argentina and Korea are each 

a ‘‘Subsidies Agreement Country’’ 

within the meaning of section 701(b) of 

the Act, section 701(a)(2) of the Act 

applies to these investigations. 

Accordingly, the ITC must determine 

whether imports of the subject 

merchandise from Argentina and Korea 

materially injure, or threaten material 

injury to, a U.S. industry. 

Allegations and Evidence of Material 

Injury and Causation 

Petitioner alleges that imports of Niresist piston inserts from Argentina and 

Korea are benefitting from 

countervailable subsidies and that such 

imports are causing, or threaten to 

cause, material injury to the domestic 

industries producing Ni-resist piston 

inserts. In addition, Petitioner alleges 

that subsidized imports exceed the 

negligibility threshold provided for 

under section 771(24)(A) of the Act. 

Petitioner contends that the industry’s 

injured condition is illustrated by 

reduced market share, underselling and 

price depressing and suppressing 

effects, lost sales and revenue, reduced 

production, reduced shipments, 

reduced employment, and an overall 

decline in financial performance. We 

have assessed the allegations and 

supporting evidence regarding material 

injury, threat of material injury, and 

causation, and we have determined that 

these allegations are properly supported 

by adequate evidence and meet the 

statutory requirements for initiation. See 

Argentina Checklist and Korea Checklist 

at Attachment III (Injury). 

Subsidy Allegations 

Section 702(b) of the Act requires the 

Department to initiate a CVD proceeding 

whenever an interested party files a 

petition on behalf of an industry that: 

(1) Alleges the elements necessary for an 

imposition of a duty under section 

701(a) of the Act; and (2) is 

accompanied by information reasonably 

available to the petitioner supporting 

the allegations. The Department has 

examined the CVD petitions on Ni-resist 

piston inserts from Argentina and Korea 

finds that the petitions comply with the 

requirements of section 702(b) of the 

Act. Therefore, in accordance with 

section 702(b) of the Act, we are 

initiating CVD investigations to 

determine whether manufacturers, 

producers, or exporters of Ni-resist 

piston inserts from Argentina and Korea 

receive countervailable subsidies. For a 

discussion of evidence supporting our 

initiation determination, see Argentina 

Checklist and Korea Checklist at 

‘‘Countervailing Duty Investigation 

Initiation Standard’’ section. 

I. Argentina 

We are including in our investigation 

the following program alleged in the 

Argentina petition to have provided 

countervailable subsidies to producers 

and exporters of the subject 

merchandise in Argentina: 


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Federal Register / Vol. 74, No. 34 / Monday, February 23, 2009 / Notices 8057 

1 In the Argentina petition, Petitioner submitted 

a subsidy allegation for the program ‘‘Tax Relief 

under the Reembolso’’ (see petition at page 19). 

‘‘Reembolso,’’ however, is the former name of the 

tax relief program. In a prior Argentina CVD 

proceeding, the Department learned that the 

successor program is named ‘‘Reintegro.’’ See 

Notice of Preliminary Negative Countervailing Duty 

Determination and Alignment of Final 

Countervailing Duty Determination With Final 

Antidumping Duty Determinations: Certain ColdRolled Carbon Steel Flat Products From Argentina, 

67 FR 9670, 9673 (March 4, 2002). Therefore, we 

are initiating on the program as ‘‘Tax Relief under 

the Reintegro.’’ 

A. Tax Relief Under the Reintegro 1

For further information explaining 

why the Department is investigating this 

program, see Argentina Checklist. 

We are not including in our 

investigation the following programs 

alleged to benefit producers and 

exporters of the subject merchandise in 

Argentina: 

A. Pre-Export Preferred Financing 

Petitioner alleges that pre-export 

loans are widely available to specific 

industries in Argentina. Petitioner states 

that the pre-export program makes 

available to exporters pre-export funds 

for individual sales at an interest rate of 

one percent up to 180 days, to be repaid 

no later than 60 days after the effective 

export date. Petitioner also states that 

the funds are provided by the Central 

Bank of Argentina and disbursed 

through private commercial banks. 

In Cold-Rolled Carbon Steel, the 

Department found that the pre-export 

financing provided by the Argentine 

Central Bank was terminated. See Final 

Negative Countervailing Duty 

Determination: Certain Cold-Rolled 

Carbon Steel Flat Products From 

Argentina, 67 FR 62106 (October 3, 

2002) (Cold-Rolled Carbon Steel), and 

accompanying issues and decision 

memorandum at ‘‘Program Determined 

To Be Terminated’’ (Cold-Rolled 

Memorandum). Petitioner has provided 

no evidence that the Central Bank may 

have resumed its pre-export financing 

program. Therefore, we do not plan to 

investigate this program. 

B. Post-Export Preferred Financing 

Petitioner alleges that the postshipment financing program (aka, 

Circular OPRAC 1–9 Post-Shipment 

Financing) provides shipment-specific, 

short-term preferential loans to 

exporters after a product has been 

exported. Petitioner states that, similar 

to the pre-export financing, the length of 

the loan is limited to 180 days and 

interest is paid quarterly. Petitioner 

adds that the loans are granted for up to 

30 percent of the peso equivalent of the 

foreign currency in which the export 

transaction was paid and that the 

interest rate on the loans is the indexed 

market rate used by the commercial 

banks as required under Central Bank 

regulations. 

In Cold-Rolled Carbon Steel, the 

Department found the post-export 

financing provided by the Argentine 

Central Bank was terminated. See ColdRolled Memorandum at ‘‘Program 

Determined To Be Terminated.’’ 

Further, Petitioner has provided no 

evidence that the Central Bank may 

have resumed its post-export financing 

program. Therefore, we do not plan to 

investigate this program. 

C. Tax Relief Under the Zero Tariff 

Turnkey Bill 

Petitioner states that the purpose of 

this program is to provide an incentive 

to import goods and equipment that will 

be used to modernize productive 

processes in Argentina. Petitioner 

claims that the program achieves its 

objective by allowing the importation of 

new merchandise and equipment 

without the payment of import duties. 

Petitioner states that the GOA, through 

the state-owned Investment and Foreign 

Trade Bank, provides the duty 

exemption/reductions, which are 

contingent on export performance. 

In Cold-Rolled Carbon Steel, the 

Department found that the Zero Tariff 

Turnkey Bill to be not countervailable. 

See Cold-Rolled Memorandum at 

‘‘Program Determined To Be Not 

Countervailable.’’ Specifically, the 

Department found that this program is 

neither de jure nor de facto specific as 

described in section 771(5A)(D) of the 

Act. Petitioner has not provided any 

evidence that the Zero Tariff Turnkey 

Bill may now be specific either in law 

or in fact. Therefore, we do not plan to 

investigate this program. 

D. Tax Relief Under Decrees Nos. 379/ 

2001 and 502/2001 

Petitioner states that the objective of 

this program is to create an incentives 

regime for Argentine manufacturers of 

capital goods. Under the program, 

Petitioner alleges there is a tax bond, 

which is applied to the payment of 

national taxes, equivalent to 10 percent 

of the amount resulting from the 

deduction from the sales price of the 

value of imported manufacturing inputs, 

parts or components, incorporated into 

the final product and cleared through 

customs at an import duty of zero 

percent. Petitioner claims that Ni-resist 

piston insert producers can use this 

program because the term ‘‘capital 

goods’’ can be used to refer to anything 

that is not an end-product. Petitioner 

claims that a Ni-resist piston insert is 

not an end-product as its only purpose 

is to assist in the proper functioning of 

diesel pistons within diesel engines. 

We do not plan to investigate this 

program, which provides a tax incentive 

to manufacturers of capital goods. Niresist piston inserts are not capital 

goods and, therefore, producers of the 

subject merchandise could not use this 

program. 

II. Korea 

We are including in our investigation 

the following programs alleged in the 

Korea petition to have provided 

countervailable subsidies to producers 

and exporters of the subject 

merchandise in Korea: 

A. Energy Rate Reductions Under the 

Request Load Adjustment Program. 

B. Short-Term Export Financing. 

C. Loans under the Industrial Base 

Fund (IBF). 

D. Export Loans by Commercial Banks 

Under the Export-Import Bank of Korea 

(KEXIM) Trade Bill Rediscounting 

Program. 

E. Reserve for Research and 

Manpower Development Fund Under 

Article 9 of the Restriction of Special 

Taxation Act (RSTA) (Formerly Article 

8 of Tax Exemption and Reduction 

Control Act). 

F. Reserve for Investment Funds. 

For further information explaining 

why the Department is investigating 

these programs, see Korea Checklist. 

Respondent Selection 

Normally for an investigation, the 

Department selects respondents based 

on U.S. Customs and Border Protection 

(CBP) data for U.S. imports during the 

POI. In this case, the HTSUS category 

that includes subject merchandise is 

broad and includes products other than 

products subject to these investigations. 

Therefore, such CBP data would not be 

informative to our selection of 

respondents for these investigations. In 

the petitions, Petitioner identified the 

following producers/exporters of Niresist piston inserts from Argentina and 

Korea as having exported the subject 

merchandise to the United States during 

the POI: Clorindo Appo SRL and 

Incheon Metal Co., Ltd., respectively. 

We are setting aside a period for 

interested parties to submit comments 

on the selection of Clorindo Appo SRL 

and Incheon Metal Co., Ltd. as 

respondents in these investigations. The 

Department requests interested parties 

to submit such comments within five 

calendar days after the publication of 

this notice in the Federal Register. 

Comments should be addressed to 

Import Administration’s APO/Dockets 

Unit, Room 1870, U.S. Department of 


jlentini on PROD1PC65 with NOTICES
8058 Federal Register / Vol. 74, No. 34 / Monday, February 23, 2009 / Notices 

1The Commission voted unanimously (2–0) to 

publish the Federal Register Notice without 

change. 

2This report was prepared by the CPSC staff; it 

has not been reviewed or approved, by, and may 

not necessarily reflect the views of, the 

Commission. 

3Public Law 110–314. 

4 Di-(2-ethylhexyl)phthalate (DEHP), dibutyl 

phthalate (DBP), and benzyl butyl phthalate (BBP). 

5 Diisononyl phthalate (DINP), diisodecyl 

phthalate (DIDP), and di-n-octyl phthalate (DnOP). 

6 15 U.S.C. 1261(f)(2), 1960; it should be noted, 

however, while certain products are carved out of 

the definition of consumer product, they may be 

regulated by the Commission under the Federal 

Hazardous Substances Act (FHSA), should they 

pose a health hazard within the meaning of that 

Act. 

Commerce, 14th Street and Constitution 

Avenue, NW., Washington, DC 20230. 

Distribution of Copies of the Petitions 

In accordance with section 

702(b)(4)(A)(i) of the Act, a copy of the 

public version of the petitions has been 

provided to the GOA and GOK. As soon 

as possible and to the extent practicable, 

we will attempt to provide a copy of the 

public version of the petitions to each 

company named in the petitions, 

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 this initiation, 

whether there is a reasonable indication 

that imports of subsidized Ni-resist 

piston inserts from Argentina and Korea 

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 investigations being 

terminated; otherwise, the 

investigations will proceed according to 

statutory and regulatory time limits. 

This notice is issued and published 

pursuant to section 777(i) of the Act. 

Dated: February 17, 2009. 

John M. Andersen, 

Acting Deputy Assistant Secretary for 

Antidumping and Countervailing Duty 

Operations. 

[FR Doc. E9–3795 Filed 2–20–09; 8:45 am] 

BILLING CODE 3510–DS–P 

CONSUMER PRODUCT SAFETY 

COMMISSION 

Notice of Availability of Draft Guidance 

Regarding Which Children’s Products 

are Subject to the Requirements of 

CPSIA Section 108; Request for 

Comments and Information 

AGENCY: Consumer Product Safety 

Commission. 

ACTION: Notice. 

SUMMARY: The Consumer Product Safety 

Improvement Act of 2008 (CPSIA) 

section 108 permanently prohibits the 

sale of any ‘‘children’s toy or child care 

article’’ containing more than 0.1 

percent of three specified phthalates. 

Section 108 of the CPSIA also prohibits 

on an interim basis ‘‘toys that can be 

placed in a child’s mouth’’ or ‘‘child 

care articles’’ containing more than 0.1 

percent of three additional phthalates. 

These prohibitions became effective on 

February 10, 2009. The purpose of this 

notice is to seek public comment on the 

draft approach prepared by CPSC staff 

for determining which products 

constitute a ‘‘children’s toy or child care 

article’’ and therefore are subject to the 

requirements of section 108 of the 

CPSIA.1

DATES: Comments and submissions in 

response to this notice must be received 

by March 25, 2009. 

ADDRESSES: Comments should be filed 

by e-mail to 

section108definitions@cpsc.gov. 

Comments also may be filed by 

telefacsimile to (301) 504–0127 or 

mailed, preferably in five copies, to the 

Office of the Secretary, Consumer 

Product Safety Commission, 4330 East 

West Highway, Bethesda, Maryland 

20814; telephone (301) 504–7530. 

Comments should be captioned ‘‘Notice 

of Availability of Draft Guidance 

Regarding Which Children’s Products 

are Subject to the Requirements of 

CPSIA Section 108.’’ Depending upon 

comments received in response to this 

notice, the Commission will consider 

issuing a notice of proposed rulemaking 

addressing these issues. 

FOR FURTHER INFORMATION CONTACT: 

Michael A. Babich, PhD, Directorate for 

Health Sciences, U.S. Consumer Product 

Safety Commission, 4330 East-West 

Highway, Suite 600, Bethesda, MD 

20814; telephone (301) 504–7253; e-mail 

mbabich@cpsc.gov. 

SUPPLEMENTARY INFORMATION: 

Introduction 2

Section 108 of the Consumer Product 

Safety Improvement Act of 2008 

(CPSIA) 3 permanently prohibits the sale 

of any ‘‘children’s toy or child care 

article’’ containing more than 0.1 

percent of three specified phthalates.4

Section 108 also prohibits on an interim 

basis ‘‘toys that can be placed in a 

child’s mouth’’ or ‘‘child care articles’’ 

containing more than 0.1 percent of 

three additional phthalates.5 These 

prohibitions became effective on 

February 10, 2009. 

The terms ‘‘children’s toy,’’ ‘‘toy that 

can be placed in a child’s mouth,’’ and 

‘‘child care article’’ are defined in 

section 108, and the definitions apply 

only to this section of the Act. The staff 

of the U.S. Consumer Product Safety 

Commission (CPSC) has received many 

inquiries from manufacturers seeking 

clarification on which products are 

subject to the requirements of section 

108 and, in response, has developed a 

possible approach to guide 

manufacturers in determining which 

products might be subject to the 

requirements. 

The purpose of this notice is to seek 

public comment on the CPSC staff’s 

draft approach for determining which 

products are subject to the requirements 

of section 108 of the CPSIA, and to seek 

additional information on how the 

approach could be applied to particular 

product classes. The examples 

discussed below are not comprehensive. 

Rather, they are intended to illustrate 

the staff’s approach. Additionally, 

conclusions that are generally true for a 

class of products may not necessarily 

apply to each specific product in that 

class, for example, due to the way the 

product is advertised. 

The requirements of section 108 apply 

to subsets of ‘‘consumer products’’ as 

defined by the Consumer Product Safety 

Act (CPSA).6 Products such as food, 

cosmetics, and medical devices that are 

regulated by other federal agencies are 

generally not considered ‘‘consumer 

products.’’ However, some products 

may fall under the jurisdiction of more 

than one agency. For example, articles 

such as infant bottles and cups are 

under the jurisdiction of both CPSC and 

the U.S. Food and Drug Administration 

(FDA). FDA has jurisdiction over 

indirect food additives, that is, when 

there is a possibility that a chemical 

may migrate from the article into a food 

or beverage. CPSC generally has 

jurisdiction over the outer portion of the 

product, which directly contacts the 

consumer. However, section 108 is 

based on phthalate concentration within 

the product and does not distinguish 

between exposure pathways. Therefore, 

for the purpose of CPSIA section 108, 

articles such as infant bottles and cups 

are regarded as consumer products. 

Children’s Toys 

Section 108 of the CPSIA defines a 

‘‘children’s toy’’ as a ‘‘consumer product 

designed or intended by the 

manufacturer for a child 12 years of age 

or younger for use by the child when the 


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B-1

APPENDIX B

CALENDAR OF THE COMMISSION’S FEBRUARY 17, 2009 CONFERENCE

B-3

CALENDAR OF THE PUBLIC CONFERENCE

Those listed below appeared as witnesses at the United States International Trade

Commission’s conference:

Subject: Ni-resist piston inserts from Argentina and Korea

Inv. Nos.: 701-TA-460-461 (Preliminary)

Date and Time: February 17, 2009 - 9:30 a.m.

The conference in connection with these investigations was held in Courtroom B, 500 E

Street, SW, Washington, DC.

OPENING REMARKS:

Petitioners

Geoffrey D. Korff

Respondents

Christopher M. Kane, Simon Gluck & Kane LLP

Jeffery C. Lowe, Mayer Brown LLP 

In Support of the Imposition of 

Countervailing Duties:

Geoffrey D. Korff

Liverpool, NY

on behalf of

Quaker City Castings

Joseph J. Korff, President, 

Quaker City Castings

Geoffrey D. Korff, Esq. ) – OF COUNSEL
B-4

In Opposition to the Imposition of 

Countervailing Duties:

Simon Gluck & Kane LLP

New York, NY

on behalf of

Karl Schmidt Unisia, Inc.

Robert G. Turcott, Vice President and General Counsel, 

Karl Schmidt Unisia, Inc.

Joel K. Simon, Esq. ) – OF COUNSEL

Christopher M. Kane, Esq. )

Mayer Brown LLP

Washington, DC

on behalf of

Federal-Mogul Corporation

James A. Czerwinski, Purchasing Manager - Global Purchasing, 

Federal-Mogul Corporation

Sydney H. Mintzer, Esq. )

Jeffery C. Lowe, Esq. ) – OF COUNSEL

Duane W. Layton, Esq. )

REBUTTAL/CLOSING REMARKS:

Petitioners

Geoffrey D. Korff

Respondents

Christopher M. Kane, Simon Gluck & Kane LLP

Jeffery C. Lowe, Mayer Brown LLP 
 1

 The contents of Appendix C are being withheld from the public version of the report, as the information in this

appendix in its current form could reveal business proprietary information.

C-1

APPENDIX C

SUMMARY DATA1