U.S. International Trade Commission

Publication 4256 September 2011

Washington, DC 20436

Large Power Transformers from Korea

Investigation No. 731-TA-1189 (Preliminary)
U.S. International Trade Commission

COMMISSIONERS 

 

Deanna Tanner Okun, Chairman 

Irving A. Williamson, Vice Chairman 

Charlotte R. Lane 

Daniel R. Pearson 

Shara L. Aranoff 

Dean A. Pinkert

Robert B. Koopman

Staff assigned

Address all communications to 

Secretary to the Commission 

United States International Trade Commission 

Washington, DC 20436

Acting Director of Operations

Edward Petronzio, Investigator 

 Dennis Fravel, Industry Analyst 

Andrew David, Industry Analyst 

 Clark Workman, Economist 

 Charles Yost, Accountant 

 Lemuel Shields, Statistician 

 Peter Sultan, Attorney 

 James McClure, Supervisory Investigator 
U.S. International Trade Commission

Washington, DC 20436 

www.usitc.gov

Publication 4256 September 2011

Large Power Transformers from Korea

Investigation No. 731-TA-1189 (Preliminary)
 
TABLE OF CONTENTS

Page

Determination .................................................................. 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

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

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

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

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

Alleged sales at LTFV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-3

The subject merchandise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-4

Commerce’s scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-4

Tariff treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-4

The product . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-4

Physical characteristics and uses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-4

Manufacturing process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-9

Domestic like product issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-11

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

Introduction .................................................................. II-1

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

Geographic distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-2

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

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

U.S. demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-4

Substitutability issues .......................................................... II-7

Lead times . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-7

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

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

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

U.S. capacity, production, and capacity utilization ................................... III-2

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

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

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

U.S. employment, wages, and productivity ......................................... III-5

i
TABLE OF CONTENTS

Page

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

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

U.S. importers U.S. shipments of imports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1

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

Apparent U.S. consumption and U.S. market shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-2

Ratio of U.S. shipments imports to U.S. production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-3

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

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

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

U.S. inland transportation costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1

Pricing practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1

Pricing methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1

Sales terms and discounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-2

Price data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-2

Questionnaire bid data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-2

Bid data requested with lost sales information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-2

Lost sales and lost revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-3

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

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

Operations on LPTs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-1

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

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

Capital and Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-6

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

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

U.S. inventories of imported merchandise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-5

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

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

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

Appendixes

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

B. Calendar of public 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 replaced with asterisks in this report.

ii
1 

UNITED STATES INTERNATIONAL TRADE COMMISSION 

 Investigation No. 731-TA-1189 (Preliminary) 

 LARGE POWER TRANSFORMERS FROM KOREA 

DETERMINATION 

On the basis of the record1

 developed in the subject investigation, the United States International 

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

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

materially injured by reason of imports from Korea of large power transformers, provided for in 

subheadings 8504.23.00 and 8504.90.95 of the Harmonized Tariff Schedule of the United States, that are 

alleged to be sold in the United States at less than fair value (LTFV).2

COMMENCEMENT OF FINAL PHASE INVESTIGATION 

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

commencement of the final phase of its investigation. 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 an affirmative 

preliminary determination in the investigation under section 733(b) of the Act, or, if the preliminary 

determination is negative, upon notice of an affirmative final determination in that investigation under 

section 735(a) of the Act. Parties that filed entries of appearance in the preliminary phase of the 

investigation need not enter a separate appearance for the final phase of the investigation. Industrial users, 

and, if the merchandise under investigation is sold at the retail level, representative consumer organizations 

have the right to appear as parties in Commission antidumping and countervailing duty investigations. 

The Secretary will prepare a public service list containing the names and addresses of all persons, or their 

representatives, who are parties to the investigation. 

BACKGROUND 

On July 14, 2011, a petition was filed with the Commission and Commerce by ABB Inc., Cary, 

NC; Delta Star Inc., Lynchburg, VA; and Pennsylvania Transformer Technology Inc., 

Canonsburg, PA, alleging that an industry in the United States is materially injured or threatened with 

material injury by reason of LTFV imports of large power transformers from Korea. Accordingly, 

effective July 14, 2011, the Commission instituted antidumping duty investigation No. 731-TA-1189 

(Preliminary). 

Notice of the institution of the Commission=s investigation and of a public conference to be held in 

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

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

July 20, 2011 (76 FR 43343). The conference was held in Washington, DC, on August 4, 2011, and all 

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

 

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

 2

 Commissioner Daniel R. Pearson did not participate in this investigation. 
 
VIEWS OF THE COMMISSION

Based on the record in the preliminary phase of this investigation, we find that there is a

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

large power transformers (“LPTs”) from Korea that are allegedly sold in the United States at less than fair

value (“LTFV”).1

I. THE LEGAL STANDARD FOR PRELIMINARY DETERMINATIONS

The legal standard for preliminary antidumping duty determinations requires the Commission to

determine, based upon the information available at the time of the preliminary determinations, whether

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

injury, or that the establishment of an industry is materially retarded, by reason of the allegedly unfairly

traded imports.2

 In applying this standard, the Commission weighs the evidence before it and determines

whether “(1) the record as a whole contains clear and convincing evidence that there is no material injury

or threat of such injury; and (2) no likelihood exists that contrary evidence will arise in a final

investigation.”3

II. BACKGROUND

The petition in these investigation was filed on July 14, 2011, by ABB Inc., Delta Star, Inc., and

Pennsylvania Transformer Technology, Inc. (collectively “Petitioners”). Petitioners participated in the

staff conference and filed a postconference brief. Hyosung Corporation and HICO America Inc.

(collectively “HICO”), a producer/exporter in Korea of LPTs and its affiliated U.S. importer, and

Hyundai Heavy Industries Co., Ltd. and Hyundai Corporation, USA (collectively “HHI”), also a

producer/exporter in Korea of LPTs and its affiliated U.S. importer, participated in the staff conference

and submitted postconference briefs (HICO and HHI are referred to collectively as “Respondents”).

U.S. industry data are based on the questionnaire responses of six U.S. producers that accounted

for all U.S. production of LPTs during 2010.4

 U.S. import data are based on questionnaire responses from 

 1 Commissioner Pearson did not participate in this investigation.

 2

 19 U.S.C. § 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.

 3

 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).

 4

 Confidential Staff Report (“CR”) and Public Staff Report (“PR”) at III-1 and Table III-1. In addition

to the responses from these six producers, the Commission received a partial questionnaire response from

Hyundai Power Transformers USA, Inc. (“Hyundai Power USA”), an affiliate of Hyundai Heavy

Industries Co., Ltd., which is building a new production facility in the United States that it expects to

complete in November 2011. CR/PR at III-1 n. 2. Hyundai Power USA reported *** in this

questionnaire response.

3
three importers whose imports are believed to account for all subject imports over the period of

investigation.5

The Commission received questionnaire responses from two Korean producers of the subject

product, Hyosung Corporation and Hyundai Heavy Industries Co., Ltd., which are believed to account for

virtually all, if not all, subject imports in 2010.6

III. DOMESTIC LIKE PRODUCT

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.”7

 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 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.”8

 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 ... .”9

A. Scope Definition

In its notice of initiation, the U.S. Department of Commerce (“Commerce”) defined the imported

merchandise within the scope of this investigation as follows:

large liquid dielectric power transformers (LPTs) having a top power handling capacity

greater than or equal to 60,000 kilovolt amperes (60 megavolt amperes), whether

assembled or unassembled, complete or incomplete. 

Incomplete LPTs are subassemblies consisting of the active part and any other parts

attached to, imported with or invoiced with the active parts of LPTs. The “active part” of

the transformer consists of one or more of the following when attached to or otherwise

assembled with one another: the steel core or shell, the windings, electrical insulation

between the windings, the mechanical frame for an LPT. 

The product definition encompasses all such LPTs regardless of name designation,

including but not limited to step-up transformers, step-down transformers,

autotransformers, interconnection transformers, voltage regulator transformers, rectifier

transformers, and power rectifier transformers.10

 5 CR/PR at IV-1. LPTs are imported under three tariff statistical reporting numbers. Because one of

these includes nonsubject merchandise, the use of questionnaire responses is deemed to be more accurate. 

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

 6

 CR at VII-2, PR at VII-2.

 7

 19 U.S.C. § 1677(4)(A).

 8

 19 U.S.C. § 1677(4)(A).

 9

 19 U.S.C. § 1677(10).

 10 Large Power Transformers from the Republic of Korea: Initiation of Antidumping Duty

continue...

4
LPTs are used to increase, maintain, or decrease electric power in high voltage transmission and

distribution systems and are principally employed by electric power utility companies. LPTs are large,

heavy pieces of capital equipment, and their life spans range from 15 to 40 years, with a targeted span of

around 30 years.11 

No party has advocated that the Commission adopt any domestic like product definition other than

the one proposed by Petitioners, who argue that the Commission should define a single domestic like

product consisting of all LPTs described in the scope definition.12 As discussed below, the record of this

preliminary phase investigation supports finding a single domestic like product that is coterminous with

the scope of the investigation.

B. Analysis

Physical Characteristics and End Uses. Although LPTs are custom-built pieces of equipment and

come in a wide variety of sizes and configurations,13 they all share a number of basic physical

characteristics. All LPTs have an “active part” where the electromagnetic induction occurs. This consists

of the core, the windings, electrical insulation between the windings, and a mechanical frame and

enclosure called the “tank.” The core is made of high permeability, grain-oriented, silicon electrical steel

(GOES), which is layered in pieces. Windings are the copper conductors that are wound around the core,

providing both electrical power input and output. The copper conductors are wrapped in several layers of

insulation paper or another, similar coating and then wound around forms that are fitted on the limbs of the

core. There are two typical configurations of the core and windings, the core form and the shell form.14

The core form has windings in cylindrical shapes that are then set over the legs of the magnetic core. In

the shell form, the windings of the primary and secondary inputs are wrapped around the center leg of the

magnetic core, so that more of the windings enclose the core. LPTs are produced as “single phase” or

“three phase” models. A single phase LPT has one primary and secondary set of windings, while a three

phase LPT has three primary and secondary windings around three core limbs.15

The tank of an LPT is the mechanical frame and enclosure, typically in a rectangular, box-like

shape that houses the core and windings. The tank is filled with special transformer oil that dissipates the

heat generated by the transformer. As the oil expands, it may travel to a separate tank attached to a frame 

 10...continue

Investigation, 76 FR 49439 (August 10, 2011). Commerce’s notice explains that the products subject to

this investigation are classified in the Harmonized Tariff Schedule of the United States (‘‘HTSUS’’)

under subheadings 8504.23.0040, 8504.23.0080 and 8504.90.9540. Commerce notes that, although the

HTSUS subheadings are provided for convenience and Customs purposes, the written description of the

merchandise is dispositive. Id.

 11 Conference Transcript at 63 (Cusak) and 91 (Stiegemeier).

 12 Petition at 16-19. Although HICO and HHI both questioned whether the dividing line between large

power transformers and small transformers should be set at 60 megavolt amperes (“MVA”) (as proposed

by Petitioners) or at 10 MVA, they both stated that they accept Petitioners’ definition of the domestic like

product for purposes of the preliminary phase of this investigation. They both, however, reserved the

right to propose a different like product definition in any final phase of this investigation. HHI

Postconference Brief at 2-3 and HICO Postconference Brief at 2-3. 

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

 14 All U.S. producers ***. CR at I-11, PR at I-9.

 15 CR at I-5-7, PR at I-4-5.

5
called an oil conservator. Heat exchangers or radiators, frequently cooled by fans, are also mounted to the

frame.16

Other parts of an LPT include the bushings (used to connect transmission lines to the LPT), tap

changers, power cable connectors, gas-operated relays, thermometers, relief devices to “release excess

pressure in the tank, dehydrating breathers (to dry air in contact with the oil expansion system), oil level

indicators, and other controls.”17

All LPTs use electromagnetic induction between circuits of the same current to increase, decrease,

or regulate power.18 They are used to step up (increase) voltage from electric power generation plants to

high voltages in order to achieve an efficient transmission that reduces electricity losses across long

distances and are also used at transmission substations to step down (decrease) voltages prior to

distribution to consumers such as businesses and residences. In addition, LPTs are used by manufacturers

that require high voltages in their production processes, such as in the metals and chemicals industries.19

They are typically used to move power through the electrical grid, whereas smaller transformers are

typically used to distribute power.20

Interchangeability. Because LPTs are custom built to customers’ specifications, they are typically

not interchangeable with each other.21

Channels of Distribution. Most LPTs are sold directly to electric utilities. 

Manufacturing Facilities, Production Processes, and Employees. All LPTs are made in similar

manufacturing facilities, using similar production processes and employees. Some U.S. producers make

LPTs in separate plants from those used to make smaller transformers, but other firms make both products

in the same plants.22 LPT production requires large crane capacities, ample floor space, and suitable

testing and drying equipment, which are not required for the production of smaller transformers.23

Producer and Customer Perceptions. Petitioners contend that there is a consensus among

producers and customers that transformers above 60 MVA are LPTs.24 There is, however, little

information on the record on this point. Petitioners’ counsel argued at the conference that, although there

is no standard establishing 60 MVA as the dividing line between large and small transformers, “there is

consensus that from {60} up, you're starting to work in the complexity, the size range, performance

characteristics, and the physical characteristics that allow those performance characteristics that are

generally considered large.”25

Price. The prices of LPTs vary depending on a number of factors, such as MVA rating, primary

line voltage, number of tappings, winding specification, auxiliary equipment, and testing requirements.26

Conclusion. Based on the evidence of record, we find that LPTs constitute a continuum of

products, with certain common physical characteristics and uses, channels of distribution, manufacturing

 16 CR at I-8, PR at I-6.

 17 CR at I-8, PR at I-6.

 18 CR at I-5, PR at I-4.

 19 CR at I-9-10, PR at I-7.

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

 21 Petition at 18.

 22 Petitioners’ Postconference Brief at 7.

 23 Petitioners’ Postconference Brief at 7.

 24 Petitioners’ Postconference Brief at 7.

 25 Id.

 26 Petition at 8.

6
facilities, production processes, employees, and – perhaps – producer and customer perceptions. 

Although producers can manufacture smaller transformers on equipment designed to produce LPTs and all

transformers share certain basic physical characteristics, the limited evidence of record suggests

differences between LPTs and smaller transformers. In light of this and the fact that all parties agree with

the proposed definition of the like product for purposes of the preliminary phase of this investigation, we

define a single domestic like product that is coextensive with the scope of the investigation.27

IV. 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.”28 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. We define the

domestic industry to include all U.S. producers of LPTs. There are no related party issues in this

preliminary phase investigation.29

VI. REASONABLE INDICATION OF MATERIAL INJURY BY REASON OF SUBJECT

MERCHANDISE FROM KOREA

A. Legal Standard

In the preliminary phase of antidumping duty 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.30 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.31 The statute defines “material injury” as “harm

which is not inconsequential, immaterial, or unimportant.”32 In assessing whether there is a reasonable

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

 27 Should any party wish to advocate a different definition of the domestic like product in a final phase

of this investigation, it should do so when we give parties the opportunity to comment on drafts of

questionnaires. This would allow the Commission to collect the appropriate information in any such final

phase investigation. See 19 C.F.R. §207.20(b).

 28 19 U.S.C. § 1677(4)(A).

 29 As noted above, an affiliate of HHI, Hyundai Power USA, is building a new production facility in

the United States, which it expects to complete in November 2011. Because this plant is not yet

operational, Hyundai Power USA was not a domestic producer during the period of investigation, and it is

unnecessary to consider whether it should be excluded from the domestic industry as a related party.

 30 19 U.S.C. §§ 1671b(a), 1673b(a).

 31 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).

 32 19 U.S.C. § 1677(7)(A).

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relevant economic factors that bear on the state of the industry in the United States.33 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.”34

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,35 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.36 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.37

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 nonsubject 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

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.38 In performing its examination, however, the Commission need not

 33 19 U.S.C. § 1677(7)(C)(iii).

 34 19 U.S.C. § 1677(7)(C)(iii).

 35 19 U.S.C. §§ 1671b(a), 1673b(a).

 36 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).

 37 The Federal Circuit, in addressing the causation standard of the statute, has 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 re-affirmed in Mittal Steel Point Lisas Ltd. v. United States, 542 F.3d 867, 873 (Fed. Cir. 2008),

in which 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).

 38 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 lessthan-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

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isolate the injury caused by other factors from injury caused by unfairly traded imports.39 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 nonsubject imports,

which may be contributing to overall injury to an industry.40 It is clear that the existence of injury caused

by other factors does not compel a negative determination.41

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.”42 43 Indeed, the

 38...continue

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

 39 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.”). 

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

 41 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.”).

 42 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’

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.

 43 Commissioner Pinkert does not join this paragraph or the following three 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 when considering present material injury, to undertake a particular kind of analysis

of nonsubject imports, albeit without reliance on presumptions or rigid formulas. Mittal explains as

follows:

What Bratsk held is that “where commodity products are at issue and fairly traded, pricecompetitive, nonsubject 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

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

adherence to a specific formula.”44

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

which the relevant “other factor” was the presence in the market of significant volumes of pricecompetitive nonsubject 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 nonsubject

imports.45 The additional “replacement/benefit” test looked at whether nonsubject 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 nonsubject imports or other factors to subject imports.46 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 nonsubject imports are a significant factor in the U.S.

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

non-attribution issues when it performs its causation analysis.47 48

 43...continue

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.

 44 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.”).

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

 46 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).

 47 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.

 48 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

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

fact, there were large nonsubject 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

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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.49

B. Data Issues

A threshold question in this investigation is what measure of industry data and trends is the most

reliable: units (individual transformers), MVAs,50 or value. We decline to rely upon units for this purpose

because they are a relatively inaccurate form of measurement given the wide range of sizes of LPTs in this

investigation.51 Petitioners note that producers of LPTs track shipments on the basis of total MVAs, and

they argue that total MVAs would be a more accurate measure of industry trends than units. Because

official import statistics do not track MVAs, however, Petitioners argue that the use of the value of

shipments would be the most meaningful indicator of industry trends and market share.52 For purposes of

this preliminary phase investigation, we use both MVAs and value to assess industry trends. We invite the

parties to address the appropriate unit of measurement in any final phase investigation.53

C. Conditions of Competition and the Business Cycle

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

indication of material injury by reason of subject imports.

(1) Demand Conditions

U.S. demand for LPTs is affected by the demand for electric power and by other variables,

including industrial construction and housing starts. There was no clear trend in the demand for electric

power during the period of investigation; total electricity generation from all sources fluctuated from

month to month due to seasonal factors.54 U.S. demand for LPTs also is affected by the replacement

market, specifically by the age of the installed base of transformers. The parties agree that the installed

base of transformers in the United States is aging, but there is disagreement over how soon the need to

 48...continue

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

investigations in which there are substantial levels of nonsubject imports.

 49 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.”).

 50 MVAs are a measure of a transformer’s size. CR at I-3 n.4, PR at I-3 n.4.

 51 CR at I-3 n.4, PR at I-3 n.4. The parties appear to agree with this assessment. Petition at 21, HICO

Postconference Brief at 28, Hearing Transcript at 136 (Lee).

 52 Petition at 20-21.

 53 The parties should do so when we give them the opportunity to comment on drafts of questionnaires,

as this would allow the Commission to collect the appropriate information in any such final phase

investigation.

 54 CR at II-5-6, PR at II-4.

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replace aging transformers will translate into increased demand.55 New sources of renewable energy also

are a source of potential demand for LPTs.56

The purchasers of LPTs are investor-owned and publicly-owned electric utilities, electric

cooperatives, and large industrial users, such as steel mills.57 Most electric utilities in the United States are

investor owned.58

Demand for LPTs, as measured by the value of apparent U.S. consumption, decreased by ***

percent from 2008 to 2010 and also was lower by *** percent in January-June 2011 (“interim 2011”) than

in January-June 2010 (“interim 2010”).59 As measured by quantity in MVA, apparent U.S. consumption

decreased by *** percent from 2008 to 2010 and was lower by *** percent in interim 2011 than in interim

2010.60

(2) Supply Conditions

Six firms accounted for all of the domestic production of LPTs in 2010.61 Of these six, two firms,

ABB and Waukesha, accounted for *** percent of domestic production in that year.62 One firm, Efacec, a

subsidiary of a manufacturer of transformers in Portugal, is a new entrant in the U.S. market; it opened its

U.S. plant in November 2009 and delivered its first U.S.-produced LPT in December 2010.63 Two other

foreign transformer producers, Hyundai Heavy Industries Co., Ltd. and Mitsubushi Electric Power

Products, are building transformer production plants in the United States, and one existing U.S. producer,

Waukesha, has announced plans to expand its plant.64 Another existing U.S. producer, Delta Star, also

announced expansion plans, ***.65

The domestic industry’s market share, by value, *** percent in 2008 to *** percent in 2009 and

then *** percent in 2010. It was *** percent in interim 2010 and *** percent in interim 2011. The market

share of subject imports *** percent in 2008 to *** percent in 2009 and *** percent in 2010. It was ***

percent in interim 2010 and *** percent in interim 2011. The market share of nonsubject imports *** 

 55 Compare Conference Transcript at 42 (Kerwin) (general belief that demand will increase over the

long term as aging elements of the power grid are replaced) and 92 (Stiegemeier) (large scale replacement

of installed base not imminent) with Conference Transcript at 147-148 (Maloney) (United States power

grid is aging). 

 56 Conference Transcript at 42 (Kerwin) and 145-146 (Lee).

 57 CR/PR at II-1.

 58 See HHI Postconference Brief at 9.

 59 CR/PR at Table C-1.

 60 CR/PR at Table C-1.

 61 CR/PR at Table III-1.

 62 CR/PR at Table III-1.

 63 CR/PR at III-3.

 64 CR/PR at III-3. Hyundai reportedly expects to focus on producing nonsubject transformers initially. 

CR/PR at VI-1 n.1.

 65 CR at III-4, PR at III-3.

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percent in 2008 to *** percent in 2009 and *** percent in 2010. It was *** percent in interim 2010 and

*** percent in interim 2011.66 

Measured by quantity in MVA, the domestic industry’s market share *** percent in 2008 to ***

percent in 2009 and then *** percent in 2010. It was *** percent in interim 2010 and *** percent in

interim 2011. The market share of subject imports *** percent in 2008 to *** percent in 2009 and ***

percent in 2010. It was *** percent in interim 2010 and *** percent in interim 2011. The market share of

nonsubject imports *** percent in 2008 to *** percent in 2009 and *** percent in 2010. It was ***

percent in interim 2010 and *** percent in interim 2011.67

(3) Other Conditions

LPTs are large, made-to-order pieces of capital equipment that are produced in a wide variety of

sizes and configurations as specified by purchasers.68 LPTs are not produced for inventory.69 

LPTs are purchased by utilities through a bid process. Generally, purchasers require producers to

be pre-qualified to be eligible to bid. The qualification process can be rigorous, especially when

purchasers require higher voltage transformers, and can be costly for purchasers.70 It is not uncommon for

certain domestic and foreign LPT producers to be excluded from bidding on contracts because they have

not been approved as suppliers by the purchaser.71

 Typically, a purchaser sends commercial specifications to LPT producers, who design an LPT to

meet the specifications, estimate the cost, and submit a bid to the purchaser. Bids generally cover not only

the transformer, but also services such as transportation and installation, as well as warranties. Purchasers

typically conduct only one round of bidding. In most cases, purchasers do not discuss the bids of

competing firms with producers. As discussed below, purchasers typically evaluate competing bids on the

basis of their “total ownership cost” or “evaluation cost.” LPT producers report that it is difficult to obtain

direct information about the outcome of particular bids; producers generally will only be told whether they

have won the bid and must rely on market intelligence for further information.72

Some large investor-owned utilities enter into “blanket agreements,” which are long-term alliances

with specific LPT producers. These alliances are typically for a period of two to five years and lock in one

producer for the period of the agreement. Both U.S. and Korean producers participate in such agreements. 

These alliances reportedly account for a significant percentage of sales of LPTs in the domestic market.73

The degree of substitutability between domestic and imported LPTs depends on factors such as

relative prices, quality (e.g., grade standards, reliability of supply, and defect rates), and conditions of sale

(e.g., discounts and rebates, lead times, payment terms, warranty, and product services).74 The evidence on

the record regarding the degree of substitutability between LPTs produced domestically and those

 66 CR/PR at Table IV-2.

 67 CR/PR at Table IV-2.

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

 69 CR at III-5, PR at III-4.

 70 Conference Transcript at 65-66 (Newman) and 103-104 (Stiegemeier).

 71 CR at V-2, PR at V-1.

 72 CR at V-1-V-2, PR at V-1, Hearing Transcript at 135-136 (Lee) and 140 (Morgan), HHI

Postconference Brief at 6-7, and HICO Postconference Brief at 5-12 and 20.

 73 CR at II-1-II-2, PR at II-1.

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

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imported from Korea is mixed. Five of the six domestic producers reported that domestically produced

LPTs and imports from Korea were “always” interchangeable, and one producer reported that they were

“sometimes” interchangeable.75 Among importers, one reported that they were “always” interchangeable,

four reported that they were “sometimes” interchangeable, and two reported that they were “never”

interchangeable.76 

As noted above, there is a wide range of sizes of transformers within the scope of this

investigation. The extent to which domestic and Korean producers compete for bids across this range of

sizes is unclear on the record of this preliminary phase investigation. The Korean producers reported that a

large share of their exports to the United States consist of LPTs with an MVA rating of 300 or more.77 The

Korean producers contend that U.S. producers are either incapable of making transformers in that larger

size range or produce only small quantities of them.78 Petitioners, however, maintain that four of the six

U.S. producers have the ability to make LPTs above 300 MVA.79 HICO maintains that the substitutability

of domestically produced and imported LPTs is further attenuated by the inability of U.S. producers to

make shell form transformers.80 Petitioners argue, however, that U.S. producer Efacec makes shell form

LPTs and that purchaser requests for shell form transformers are very rare.81 Finally, according to HHI,

there is little competition between domestically produced LPTs and subject imports in the public utility

part of the U.S. market (which accounted for about 20 percent of electricity generated in the United States,

according to HHI), because Korean producers do not participate in this part of the market to any significant

degree.82 We intend to seek further information in any final phase of this investigation on the extent of

competition between domestic producers and the subject imports for transformers with ratings above and

below 300 MVA, for shell type transformers, and for sales to public utilities. 

Although price is a significant factor,83 utilities’ LPT purchasing decisions may also be affected by

a number of other considerations, such as efficiency rating, load loss, no load loss, fan loss, the

manufacturer’s failure rate, its on-time delivery rate, other aspects of its past performance, lead time,

freight costs, and warranty. Utilities will often evaluate these factors in the aggregate, along with price, to

 75 CR at II-10 and Table II-1, PR at II-7 and Table II-1.

 76 CR at II-10 and Table II-1, PR at II-7 and Table II-1.

 77 HICO reported that such transformers accounted for *** percent of its total U.S. sales in 2010, and

HHI reported that they accounted for *** percent of its exports to the United States in that year. CR at II10, PR at II-7.

 78 HICO Postconference Brief at 12-14, HHI Postconference Brief at 8-9.

 79 Petitioners’ Postconference Brief at 15-16. The record shows that ***, produced LPTs of over 300

MVA in 2010. They accounted for *** production and *** production in 2010. *** accounted for ***,

in 2010. CR/PR at Table III-1. ***. CR at II-10, PR at II-7.

 80 HICO Postconference Brief at 21. The shell form is used for industrial transformers in steel mills

and in some very large transformers. CR at II-10, PR at II-7. Among U.S. producers, only Efacec makes

shell form LPTs. Id.

 81 Conference Transcript at 102 (Cusack) and Petitioners’ Postconference Brief at 16.

 82 HHI Postconference Brief at 8-9.

 83 Most producers reported that differences among bids other than price are “never” a factor in LPT

sales, but most importers reported that they are “always” a factor. CR at II-11 and Table II-2, PR at II-8

and Table II-2.

14
arrive at a “total ownership cost” or “total evaluated cost” for each bid.84 In any final phase investigation,

we will examine further the roles that price and non-price factors play in purchasers’ buying decisions in

the U.S. LPT market, including the extent to which factors identified as non-price by the parties can be

monetized by purchasers and included in the calculation of total cost.

D. Volume of Subject Imports from Korea

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

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

production or consumption in the United States, is significant.”85

Subject imports were already present in substantial volumes and market share at the beginning of

the period and maintained a significant presence in the U.S. market throughout the period. The value of

subject imports *** in 2008 to $*** in 2010. The value of subject imports was $*** million in interim

2010 and $*** in interim 2011.86 The market share of subject imports measured by value *** percent in

2008 to 42.1 percent in 2010. It was *** percent in interim 2010 and *** percent in interim 2011.87

Measured by quantity in MVA, the volume of subject imports *** MVA in 2008 to *** MVA in

2009 and *** MVA in 2010. The volume of subject imports was *** MVA in interim 2010 and *** MVA

in interim 2011.88 The market share of subject imports on an MVA basis *** percent in 2008 to ***

percent in 2010. It was *** percent in interim 2010 and *** percent in interim 2011.89

We recognize that much of the increase in market penetration by subject imports from 2008 to

2010 came at the expense of nonsubject imports, but we note as well that the domestic industry lost some

market share to subject imports on a value basis. During that period, while the subject import share of

apparent U.S. consumption increased overall by *** percentage points on a value basis and *** percent on

an MVA basis, the domestic industry’s market share *** percentage points on a value basis and ***

percent on an MVA basis. The nonsubject import share of U.S. consumption *** percentage points on a

value basis and *** percentage points on an MVA basis.90 Moreover, regardless of the extent to which the

increases in subject imports took additional market share from the domestic industry, subject import

volume was significant in absolute terms throughout the period.

The ratio of subject imports to domestic production on an MVA basis *** percent in 2008 to ***

percent in 2009 but then *** percent in 2010. This ratio was *** percent in interim 2010 and *** percent

in interim 2011.91

Based on the data collected in this preliminary phase investigation, we conclude that the volume of

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

United States.

 84 Conference Transcript at 133-134 (Lee); HHI Postconference Brief at 7-12.

 85 19 U.S.C. § 1677(7)(C)(i).

 86 CR/PR at Table IV-1.

 87 Id.

 88 CR/PR at Table IV-1.

 89 Id.

 90 CR/PR at Table IV-3.

 91 CR/PR at Table IV-3.

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E. Price Effects of the Subject Imports from Korea

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

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

by the imported merchandise as compared with the price of domestic like products of the

United States, and (II) the effect of imports of such merchandise otherwise depresses

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

occurred, to a significant degree.92

As addressed above in the discussion of the conditions of competition, the evidence on the record

regarding the degree of substitutability between LPTs produced domestically and those imported from

Korea is mixed. Price is a significant factor in purchasing decisions, but a number of other considerations

may also play a role. Purchasers will often evaluate these factors in the aggregate, along with price, to

arrive at a “total ownership cost” or “evaluation cost” for each bid.93

Raw materials account for a substantial share of the cost of LPTs.94 Petitioners maintain that

blanket agreements in long-term alliances have typically contained escalation clauses to accommodate

fluctuations in raw material costs, but the parties disagree about whether this remains the standard

practice.95 In any final phase investigation, we will seek additional information from the parties and from

purchasers, about the use of escalation clauses.

Because of the customized nature of each LPT and the nature of the process by which LPTs are

sold, the LPTs offered in different bids to different customers may not be comparable to one another. 

Accordingly, the Commission’s conventional approach to pricing analysis, which compares average

quarterly prices for comparable periods, is not useful in this investigation. For this reason, the

Commission sought to collect pricing information relating to the bidding process, as it has done in other

investigations involving “big ticket,” customized items.96

The Commission asked U.S. producers and importers to submit data on their 25 largest bids on

LPTs since 2008. Six producers and seven importers submitted such data. Although these data show that

U.S. producers and importers from Korea and other sources often submitted bids to the same customers,

the information provided by the questionnaire responses was not sufficient to allow identification of

instances where U.S.-produced LPTs competed with subject imports for the same sales.97 

The Commission also sought bid data from the LPT purchasers identified by Petitioners in their

lost sales allegations. These purchasers were asked to provide information on their two largest bids since

 92 19 U.S.C. § 1677(7)(C)(ii).

 93 See, e.g., HHI Postconference Brief at 6, HICO Postconference Brief at 5-12. As noted previously,

in any final phase investigation we will further explore substitutability issues, including the role of nonprice factors in purchasing decisions.

 94 CR/PR at V-1. The share of the cost of goods sold accounted for by raw material costs ranged from

66.9 percent in 2009 to 57.6 percent in 2010. Id.

 95 Conference Transcript at 92-93 (Cusack). Petitioners contend that Korean producers have been

willing to enter into blanket agreements without such escalation clauses. Id. HHI states that it is

“unaware of ***.” HHI Postconference Brief at 16.

 96 See, e.g., Large Newspaper Printing Presses and Components Thereof, Whether Assembled or

Unassembled, from Germany and Italy, Inv. Nos. 731-TA-736 and 737 (Final), USITC Pub. 2988 (Aug.

1996) at 29-33.

 97 CR at V-3, PR at V-2.

16
2008. Eight purchasers provided bid data covering a total of 15 bids and 43 LPTs. U.S. and Korean

producers competed in 12 of these 15 bids. Korean producers won or partially won 10 of these 12 bids,

involving a total of 28 LPTs.98 In seven bids, Korean producers underbid the domestic bidder(s). Record

information suggests that in these seven bids where competition can be seen, the bid price for the Korean

product was below that for the domestic product. We note, however, that this limited information does not

allow us to compare bids on an evaluated, or total cost basis. Bid price information was not provided to

the Commission for two of the 11 bids for which U.S. and Korean producers competed.99

These data, although limited, suggest that the subject imports were bid at prices lower than the

domestic LPTs during the period. We intend to seek further information regarding prices and to examine

this issue further in any final phase of the investigation.100

The ratio of the domestic industry’s aggregate cost of goods sold (“COGS”) to net sales increased

sharply between 2008 and 2010 and over the interim periods, showing a cost-price squeeze.101 The record

of this preliminary investigation is unclear as to whether or to what extent the inability of the domestic

industry to raise prices to recoup rising costs may have been due to the price effects of subject imports. 

We intend to examine this issue further in any final phase of this investigation.

U.S. producers reported 55 instances of lost sales due to competition from Korean imports and one

instance of lost revenues associated with such imports.102 The lost sales allegations totaled $140.9 million

involving 91 LPTs. Staff received responses for 12 lost sales allegations.103 Responding purchasers

agreed with two lost sales allegations involving three LPTs, and disagreed with eight of the allegations,

which involved 20 LPTs.104 The allegations confirmed by purchasers in the preliminary phase of this

investigation totaled ***. 

In sum, the data in this record on price effects are mixed, but show some evidence of underselling

by subject imports.105 We will seek further information on price effects of the subject imports in any final

phase investigation.

 98 In two instances, the bids were divided among Korean producers and producers from nonsubject

countries. CR at V-7, PR at V-3.

 99 CR/PR at Table V-1, CR at V-7, PR at V-3, and email from *** to Commission Staff dated August

8, 2011.

 100 If the parties wish to suggest other approaches to gathering pricing information in any final phase

investigation, they should do so when we give them the opportunity to comment on drafts of

questionnaires.

 101 The ratio of COGS to net sales was *** percent in 2008, *** percent in 2009, and *** percent in

2010. It was *** percent in interim 2010 and *** percent in interim 2011. CR/PR at Table VI-1.

 102 CR at V-7, PR at V-3.

 103 There was no response confirming or denying the lost revenue allegation.

 104 Of the remaining two responses, in one instance the purchaser ***, and in the other the purchaser

***. CR at V-12, PR at V-3.

 105 Commissioner Aranoff is unable to conclude, based on the current record, that there is clear and

convincing evidence of the absence of adverse price effects due to subject imports. American Lamb,785

F.2d at 1001.

17
F. Impact of the Subject Imports from Korea106

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

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

bearing on the state of the industry.”107 These factors include output, sales, inventories, capacity

utilization, market share, employment, wages, productivity, profits, cash flow, return on investment, ability

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

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

of competition that are distinctive to the affected industry.”108

Domestic industry performance indicators were mixed over the period of investigation. 

Production rose overall, increasing from 18,219 MVA in 2008 to 20,972 MVA in 2009, then falling to

19,807 MVA in 2010. Production was 9,981 MVA in interim 2010 and 10,318 MVA in interim 2011.109

Production capacity rose overall, increasing from 46,805 MVA in 2008 to 51,346 MVA in 2009, then

falling to 49,685 MVA in 2010. Production capacity was 24,696 MVA in interim 2010 and 27,150 MVA

in interim 2011.110

Capacity utilization improved slightly but remained at very low levels. It increased from 38.9

percent in 2008 to 40.8 percent in 2009 and then declined to 39.9 percent in 2010. Capacity utilization

was 40.1 percent in interim 2010 and 38.0 percent in interim 2011.111 

Domestic producers’ U.S. shipments rose overall, increasing from 17,969 MVA in 2008 to 20,258

MVA in 2009, then falling to 19,279 MVA in 2010. U.S. shipments were 9,831 MVA in interim 2010 and

9,418 MVA in interim 2011.112 The domestic industry’s share of apparent U.S. consumption, on a value

basis, rose from 20.1 percent in 2008 to 22.5 percent in 2009 and then fell to 18.9 percent in 2010. It was

19.2 percent in interim 2010 and 18.7 percent in interim 2011. Measured by quantity in MVA, the

domestic industry’s share of apparent U.S. consumption increased from 13.9 percent in 2008 to 17.2

percent in 2009 and then declined to 15.1 percent in 2010. It was 13.7 percent in interim 2010 and 18.1

percent in interim 2011.113

 106 In its notice initiating an antidumping duty investigation on LPTs from Korea, Commerce reported

estimated dumping margins ranging from 43.01 to 60.81. 76 Fed. Reg. 49439 (August 10, 2011).

 107 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.”).

 108 19 U.S.C. § 1677(7)(C)(iii); see also SAA at 851, 885; Live Cattle from Canada and Mexico, Invs.

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

 109 CR/PR at Table III-2.

 110 CR/PR at Table III-2.

 111 CR/PR at Table III-2.

 112 CR/PR at Table III-3.

 113 CR/PR at Table IV-2.

18
The number of production workers increased from *** in 2008 to *** in 2009 and *** in 2010. 

The number of production workers was *** in interim 2010 and *** in interim 2011.114 Hours worked

increased from *** million in 2008 to *** million in 2009 and *** million in 2010. Hours worked were

*** million in interim 2010 and *** million in interim 2011.115 Hourly wages also increased, rising from

$*** to *** in 2010. Hourly wages were $*** in interim 2010 and $*** in interim 2011.116 Productivity

rose from *** MVA per hour in 2008 to *** MVA per hour in 2009 but then fell to *** MVA per hour in

2010. Productivity was *** MVA per hour in interim 2010 and *** MVA per hour in interim 2011.117

The quantity and value of the industry’s total net sales increased overall, rising from *** MVA

and $*** million in 2008 to *** MVA and $*** million in 2009 but then declined to *** MVA and $***

million in 2010. The quantity and value of the industry’s total net sales were *** MVA and $*** million

in interim 2010 and *** MVA and $*** million in interim 2011.118 The industry went from recording

operating income of $*** million in 2008 and $*** million in 2009 to a loss of $*** million in 2010. It

had operating income of $*** million in interim 2010 and an operating loss of $*** million in interim

2011.119 The domestic industry’s operating margins were *** percent in 2008, *** percent in 2009 and

*** percent in 2010. They were *** percent in interim 2010 and *** percent in interim 2011. The

number of firms reporting operating losses increased from 2009 to 2010 (from *** firms to *** firms), and

was higher in interim 2011 (*** firms) than in interim 2010 (*** firms).120

Finally, capital expenditures were $8.2 million in 2008, $*** in 2009 and $34.7 million in 2010,121

while return on investment was *** percent in 2008, *** percent in 2009, and *** percent in 2010.122

Accordingly, although many of the industry’s performance indicators improved over the period of

investigation, its financial performance deteriorated sharply in 2010 as subject imports reached their

highest levels for the period. For purposes of this preliminary determination, we find that the substantial

presence of subject imports in the U.S. market, along with at least some evidence that the Korean LPT

producers were awarded projects at bid prices lower than those of domestic producers, negatively affected

the domestic industry’s performance. 

In considering whether a causal nexus exists between subject imports and material injury to the

domestic industry, we recognize that issues have been presented calling into question whether there is

sufficient head-to-head competition between subject imports and the domestic like product for such a

 114 CR/PR at Table III-5.

 115 CR/PR at Table III-5.

 116 CR/PR at Table III-5.

 117 CR/PR at Table III-5.

 118 CR/PR at Table VI-1.

 119 CR/PR at Table VI-1.

 120 CR/PR at Tables VI-1 and VI-2.

 121 In addition, two foreign-based producers have reported building U.S. plants to produce LPTs. 

Hyundai reported capital expenditures of *** in 2009, *** in 2010, and *** in interim 2011 related to

building a new production facility in Montgomery, AL. Reportedly, Mitsubishi Electric Power Products,

Inc. announced that it will construct a transformer plant near Memphis, TN at a cost of approximately

$200 million. CR at VI-15-16, PR at VI-6. We intend to gather additional information on recent

investments in new domestic productive capacity and to examine this issue more closely in any final

phase investigation.

 122 CR/PR at Tables VI-4 & VI-5. The ***.

19
causal nexus to exist.123 We intend to gather additional information and to examine these issues more

closely in any final phase investigation.

We have considered the role of the following other factors – declining demand, nonsubject

imports, and the start-up of Efacec’s new plant in 2009 – to ensure that we are not attributing injury from

such other factors to the subject imports. We find that demand trends are unlikely to explain the

deterioration of the domestic industry’s financial condition in 2010. Measured on a value basis, demand

declined by *** percent from 2009 to 2010.124 On an MVA basis, demand increased by *** percent.125

Nevertheless, the domestic industry went from an operating income margin of *** percent in 2009 to a

loss of *** percent in 2010.

We have also considered the role of nonsubject imports.126 Although nonsubject imports held the

largest share of the U.S. market during the period of investigation, their volume and market share declined

throughout the period.127 Thus, nonsubject imports do not appear to have played a role in the sharp

deterioration of the domestic industry’s condition in 2010.

In addition, we have considered the effect of the start-up of Efacec’s new plant in 2009 on the

domestic industry’s overall condition. Efacec started producing in November 2009. ***.128 Thus,

although Efacec’s start-up posture adversely affected the industry’s overall performance in 2010 and

interim 2011, it does not fully explain the sharp drop in the domestic industry’s financial performance in

those periods.

Consequently, the record in this preliminary phase investigation indicates a causal nexus between

the subject imports and the declines in the condition of the domestic industry’s performance and thus

demonstrates a reasonable indication of material injury by reason of subject imports.129 We therefore

conclude, for purposes of this preliminary phase investigation, that subject imports have had an adverse

impact on the domestic industry. 

 123 E.g., HHI Postconference Brief at 8-9, HICO Postconference Brief at 12-18. 

 124 CR/PR at Table IV-2.

 125 Id.

 126 Commissioner Pinkert notes that the Federal Circuit in Bratsk and Mittal established that a

replacement/benefit analysis is required only when, inter alia, “commodity products” are at issue. Based

on the evidence of record in this investigation (as well as the arguments made by respondents), however,

he finds it clear that LPTs are not commodity products. Consequently, he does not undertake a

replacement/benefit analysis.

 127 On a value basis, nonsubject imports declined from $*** million in 2008 to $*** million in 2009,

to $*** million in 2010. They were $*** million in interim 2010 and $*** million in interim 2011. On

an MVA basis, nonsubject imports declined from *** MVA in 2008 to *** MVA in 2009 and *** MVA

in 2010. They were *** MVA in interim 2010 and *** MVA in interim 2011. The market share of

nonsubject imports on a value basis *** percent in 2008 to *** percent in 2009 and *** percent in 2010. 

It was *** percent in interim 2010 and *** percent in interim 2011. On an MVA basis, the market share

of nonsubject imports *** percent in 2008 to *** percent in 2009 and *** percent in 2010. It was ***

percent in interim 2010 and *** percent in interim 2011. CR/PR at Table IV-2.

 128 CR/PR at Table VI-1 Note.

 129 Commissioner Aranoff determines that the record as a whole does not contain clear and convincing

evidence that there is no material injury or threat of such injury. American Lamb,785 F.2d at 1001.

20
CONCLUSION

For the above-stated reasons, and based on the record in the preliminary phase of this

investigation, we find that there is a reasonable indication that an industry in the United States is materially

injured by reason of allegedly dumped imports of LPTs from Korea.

21
 
I-1 

PART I: INTRODUCTION 

BACKGROUND 

This investigation results from a petition filed on June 14, 2011, by ABB Inc., (“ABB”), Cary, 

NC; Delta Star Inc., (“Delta Star”), Lynchburg, VA; and Pennsylvania Transformer Technology Inc., 

(“PTTI”), Canonsburg, PA (collectively “petitioners”) alleging that an industry in the United States is 

materially injured and threatened with material injury by reason of less-than-fair-value (“LTFV”) imports 

of large power transformers (“LPTs”) from Korea. The following tabulation provides information 

relating to the background of this investigation:1

Effective date Action 

July 14, 2011 Petition filed with Commerce and the Commission; institution of Commission 

investigation (76 FR 43343, July 20, 2011). 

August 4, 2011 Commission’s conference.1

August 10, 2011 Commerce’s notice of initiation (76 FR 49439). 

August 26, 2011 Commission’s vote. 

August 29, 2011 Commission’s determination to Commerce. 

September 6, 2011 Commission’s views to Commerce. 1

 A list of witnesses that appeared at the conference is presented in app. B. 

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. 

. . . 

 1 Federal Register notices cited in this tabulation are presented in app. A of this report. 
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 decline in output, sales, market share, profits, 

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

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

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

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

on the existing development and production efforts of the domestic 

industry, including efforts to develop a derivative or more advanced 

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

investigation}, the magnitude of the margin of dumping. 

Organization of Report 

Information on the subject merchandise, alleged margins of dumping, and domestic like product 

is presented in Part I. Information on conditions of competition and other relevant economic factors is 

presented in Part II. Part III presents information on the condition of the U.S. industry, including data on 

capacity, production, shipments, inventories, and employment. The volume and pricing of imports of the 

subject merchandise are presented in Part IV and Part V, respectively. Part VI presents information on 

the financial experience of U.S. producers. The statutory requirements and information obtained for use 

in the Commission’s consideration of the question of threat of material injury are presented in Part VII. 

MARKET SUMMARY 

LPTs are used in high voltage electrical power transmission systems to transfer power by 

electromagnetic induction between circuits at the same frequency, usually with changed values voltage 

and current.2

 Over the period examined, six firms accounted for all of the LPTs manufactured in the 

United States, while leading producers of LPTs outside the United States include Hyosung Corporation 

(“Hyosung”) and Hyundai Heavy Industries (“HHI”) of Korea. The leading U.S. importers of LPTs from 

Korea include HICO America Sales & Technology, Inc. (“HICO”) and Hyundai Corporation, USA 

(“Hyundai Corp.”).3

 

Apparent U.S. consumption of LPTs totaled $1.1 billion in 2010, of which 18.9 percent was sales 

of U.S.-produced LPTs. U.S. shipments of imports from subject sources accounted for *** percent of the 

 2

 Conference transcript, p. 22 (Stiegemeier). 

3

 U.S. importer HICO is a wholly-owned subsidiary of Hyosung Corporation, a foreign producer/exporter of 

LPTs in Korea. U.S. importer Hyundai Corp. is a wholly-owned subsidiary of HHI, a foreign producer/exporter of 

LPTs in Korea. 
I-3 

U.S. market by value in 2010, while U.S. shipments of imports from nonsubject sources accounted for 

*** percent of the U.S. market by value. 

SUMMARY DATA 

Appendix C presents a summary of data collected in this investigation.4

 U.S. industry data are 

based on questionnaire responses from six U.S. producers (see Part III of this report).5

 U.S. import data 

are based on questionnaire responses from 11 U.S. importers (see Part IV of this report).6

 Information on 

the industries that produce LPTs in Korea is based on questionnaire responses from two foreign producers 

and exporters and publicly available data (see Part VII of this report). Data from other sources are 

referenced and footnoted where appropriate. 

PREVIOUS INVESTIGATIONS 

On June 14, 1972, the U.S. Department of Treasury issued antidumping duty findings on large 

power transformers from France, Italy, and Japan.7

 These findings were revoked by Commerce as of 

January 1, 2000.8

 

NATURE AND EXTENT OF ALLEGED SALES AT LTFV 

Alleged Sales at LTFV 

On August 10, 2011, Commerce initiated its antidumping investigation concerning LPTs from 

Korea. The estimated dumping margins for Korea firms selling LPTs in the U.S. market range from 

43.01 to 60.81 percent. 9 

 4

 Transformer size is determined on the basis of megavolts amperes (MVA) ratings. Conference transcript, p. 28 

(Stiegemeier). Therefore, data presented in the body of this report as well as table C-1 in appendix C present 

quantities in terms of top rated MVA. The Commission also collected data in units of LPTs, which are presented in 

table C-2. Units in table C-2 may be understated because ***. LPTs are highly customized and encompass a 

diverse product mix due to differences in capacity and voltage; therefore, average unit values, whether measured in 

terms of dollar per top rated MVA or dollar per unit, may not be meaningful. Petition, p. 21. Conference transcript, 

p. 131 (Connelly) and p. 136 (H. Lee). Respondent Hyosung’s postconference brief, p. 28. 5

 The Commission received useable data from six firms: ABB, Delta Star, Efacec USA Inc. (“Efacec”), PTTI, 

Virginia Transformer Corp. (“VTC”), and Waukesha Electric Systems, Inc. (“Waukesha”). 6

 Official Commerce statistics for a portion of HTS statistical reporting number 8504.23.0040 include nonsubject merchandise (transformers ranging between 10 MVA and 60 MVA); therefore, questionnaire data was 

deemed to be more appropriate. Petitioners’ postconference brief, p. 23. Respondent HHI’s postconference brief, p. 

12. Respondent Hyosung’s postconference brief, p. 18. 7

 37 FR 11772 (June 14, 1972). The scope of the 1972 findings included “all transformers rated 10 MVA or 

above, by whatever name designated, used in the generation, transmission, distribution, and utilization of electrical 

power, including but not limited to shunt reactors, autotransformers, rectifier transformers, and power rectifier 

transformers.” Large Power Transformers from France, Italy, Japan, Switzerland, and the United Kingdom, United 

States Tariff Commission Publication 476, April 1972. 8 Final Results of Sunset Review and Revocation of Antidumping Findings: Large Power Transformers from 

Italy, et al., 63 FR 54441 (January 1, 2000). 9 Large Power Transformers From the Republic of Korea: Initiation of Antidumping Duty Investigation, 76 FR 

49439 (August 10, 2011). 
I-4 

THE SUBJECT MERCHANDISE 

Commerce’s Scope 

 Commerce has defined the scope of this investigation as follows: 

The scope of this investigation covers large liquid dielectric power transformers (LPTs) having a 

top power handling capacity greater than or equal to 60,000 kilovolt amperes (60 megavolt 

amperes), whether assembled or unassembled, complete or incomplete. 

Incomplete LPTs are subassemblies consisting of the active part and any other parts attached to, 

imported with or invoiced with the active parts of LPTs. The “active part” of the transformer 

consists of one or more of the following when attached to or otherwise assembled with one 

another: the steel core or shell, the windings, electrical insulation between the windings, the 

mechanical frame for an LPT. 

The product definition encompasses all such LPTs regardless of name designation, including but 

not limited to step-up transformers, step-down transformers, autotransformers, interconnection 

transformers, voltage regulator transformers, rectifier transformers, and power rectifier 

transformers. 

The LPTs subject to this investigation are currently classifiable under subheadings 8504.23.0040, 

8504.23.0080 and 8504.90.9540 of the Harmonized Tariff Schedule of the United States 

(HTSUS). Although the HTSUS subheadings are provided for convenience and customs 

purposes, the written description of the scope of this investigation is dispositive. 10

Tariff Treatment 

LPTs (including goods treated by the tariff schedule as parts and covered by Commerce’s scope) 

are classifiable in the Harmonized Tariff Schedule of the United States (“HTS”) under subheadings 

8504.23.00 and 8504.90.95 and imported under statistical reporting numbers 8504.23.0040, 

8504.23.0080, and 8504.90.9540. 

THE PRODUCT 

Physical Characteristics and Uses11

LPTs are used to increase, maintain, or decrease electric power in high voltage transmission and 

distribution systems and are principally employed by electric power utility companies. LPTs are large, 

heavy pieces of capital equipment, and their life spans range from 15 to 40 years, with a targeted span of 

around 30 years.12 LPTs use electromagnetic induction between circuits of the same current to increase, 

decrease, or regulate power.13 Electromagnetic induction takes advantage of the fact that electricity 

moving through a conductor creates a magnetic field. Induction occurs when that electromagnetic field 

crosses a second electrical conductor and thereby generates a voltage in the second conductor although 

 10 Large Power Transformers From the Republic of Korea: Initiation of Antidumping Duty Investigation, 76 FR 

49439 (August 10, 2011). 11 Conference transcript, pp. 22-30 (Stiegemeier). 

12 Conference transcript, p. 63 (Cusak) and p. 91 (Stiegemeier). 

13 Petition, p. 17. 
I-5 

the two conductors are not directly connected. This requires a fluctuating magnetic field typically 

generated by alternating current (AC) entering into an input conductor. 

LPTs have an “active part” where the electromagnetic induction occurs that consists of the core, 

the windings, electrical insulation between the windings, and a mechanical frame and enclosure called the 

tank. The core is made of high permeability, grain-oriented, silicon electrical steel (GOES) around which 

are wound with the primary (electrical power input) and secondary (output) conductors.14 The core is 

made of very thin GOES that is laser scribed, and coated with a glass film known as carlite. GOES is cut 

to shapes for the vertical sections of the core called limbs or legs, and the horizontal sections called the 

yoke. These sections of the core are made by layering the cut GOES pieces to format a lamination of 

either a limb or yoke. Later, the limbs are set vertically on top of the bottom yoke and another yoke is 

laid across the top of the limbs. The core contains the magnetic flux generated by the AC moving through 

the primary conductor. The size of the core is minimized to reduce electrical losses and to reduce the size 

of the LPT for transport through tunnels and under bridges. 

Windings are the primary and secondary conductors that are wound around the core. Copper 

conductor is wrapped in several layers of insulation paper or other similar coating and then wound around 

forms that are fitted on the limbs. Conductors of various types, such as copper wire with a rectangular 

cross section, multiple conductor, or transposed conductor (several individually covered conductors 

twisted) are used depending upon the specifications for the transformer (voltage and capacity). The ratio 

of the number of turns of conductor in the primary conductor can be varied and thus the secondary 

conductor output voltage will either be increased or decreased. The ratio can also be changed by inserting 

transformer taps which are connection points in the primary winding. These taps can be changed either 

manually or by motor depending if the transformer is energized. 

LPTs are produced as “single phase” or “three phase” models. A single phase LPT has one 

primary and secondary set of windings, while a three phase LPT has three primary and secondary 

windings around three core limbs. The three phase transformer manipulates the timing of voltage and 

current stoppages that occur in AC electricity multiple times per second to allow transmission lines to be 

more completely utilized. Most commercial electric power transmission uses three phase LPTs, while 

lower voltages and distribution typically use transformers with one phase.15

There are two typical configurations of the core and windings, the core form and the shell form 

(see figure I-1). The core form has windings in cylindrical shapes that are then set over the legs of the 

magnetic core. In the shell form, the windings are of the primary and secondary inputs are wrapped 

around center leg of the magnetic core, thus more of the windings are enclosed the core. Shell form LPTs 

use more GOES than core types.16 In performance, shell form LPTs are more resilient to short circuits in 

the transmission system and are frequently used in industrial applications, such as steel mills where short 

circuits frequently occur.17

 14 Commerce issued antidumping duty orders on GOES imported from Italy and Japan in June and August 1994 

and a countervailing duty order on imports from Italy in June 1994. Sunset reviews of these orders were completed 

in 2000 and Commerce revoked the orders in March 2006 because of no domestic party participation in the initiated 

second Sunset reviews. 71 FR 15376, March 28, 2006. The Commission’s last report on GOES was GrainOriented Silicon Electrical Steel from Italy and Japan: Investigations Nos. 701-TA-355 (Review) (Third Remand) 

and 731-TA-659-660 (Review) (Third Remand), USITC Publication 3798, September 2005. 15 Petition, p. 12. 

16 Conference transcript, p. 58 (Stiegemeier). 

17 Conference transcript, pp. 58-59 (Stiegemeier); Respondent Hyosung’s postconference brief , p. 22. 
I-6 

Figure I-1 

LPTs: Core type (top) and shell form (bottom) configurations of core and windings 

Source: Conference transcript, Petitioners’ exhibit 1, slide 6. 

The tank is the mechanical frame and enclosure, typically in a rectangular, box like shape that 

houses the core and windings. The tank is filled with special transformer oil which dissipates heat 

generated by the transformer. As the oil expands it may travel to a separate tank attached to a frame 

called an oil conservator. Heat exchangers or radiators, frequently cooled by fans, are also mounted to the 

frame. 

 Bushings, which are devices that allow a conductor to pass through the tank and insulate the 

conductor from the tank, are used to connect transmission lines to the LPT. Other parts include tap 

changers, power cable connectors, gas-operated relays (to detect certain types of problems and minimize 

subsequent damage within the transformers), thermometers, relief devices to “release excess pressure in 

the tank, dehydrating breathers (to dry air in contact with the oil expansion system), oil level indicators, 

and other controls.”18 A partial cut-away diagram of an LPT is shown in figure I-2. 

 18 Petition, p. 11. 

Core type—circular shaped windings 

(cylinders) 

 

 

 

Shell type—rectangular shaped windings

(pancakes)

 

Core 

Windings 
I-7 

Figure I-2 

Large power transformer showing major internal components 

Source: ABB, “Liquid-Filled Power Transformers,”p. 6 

http://www05.abb.com/global/scot/scot252.nsf/veritydisplay/299a52373c3fd0e6c12578be003a476f/$file/p

ptr_mpt_brochure_2406pl170-w1-en.pdf (accessed August 16, 2011).

Uses 

 LPTs are typically used to move power through the electrical grid, as opposed to distributing 

electric power.19 Electricity is typically generated at 5 to 34.5 kV and distributed at 15 to 34.5 kV, but 

transmitted at 115 to 765 kV (figure I-3).20 LPTs are used to step up (increase) voltage from electric 

power generation plants to high voltages in order to have efficient transmission that reduces electricity 

losses across long distances. LPTs are used at transmission substations to then step down (decrease) 

voltages prior to distribution to consumers such as businesses and residences. LPTs are also used by 

manufacturers that require high voltages in their production processes, such as in metals and chemicals 

industries. 

 19 Respondent HHI’s postconference brief, p. 3. 

20 Petition, pp. 5 and 8; petitioners’ postconference brief, pp. 4-5. 

Tank

Windings and 

core

Radiator and 

fan

Oil 

conservator

Bushings
I-8 

Figure I-3 

Electric power transmission and distribution voltages 

Transformer

345 kV

Transmission

substation

115 kV

Main substation

34.5-69 kV

Secondary

substation

15 kV Distribution

substation

400 V

Meter cubicle

Service cable

Feeder cable

Source: Conference transcript, Petitioners’ exhibit 1, slide 1. 

Ratings 

The size of an LPT is determined by the load measured by megavolt-amperes (MVA), the 

secondary output voltage, and the primary input voltage.21 However, for this investigation, the MVA 

capacity is used in defining LPTs. The MVA rating system is based on the cooling system and is an 

industry standard.22 Typically, customer requests for bids will specify the MVA for the transformer at 55 

degrees Celsius and then one or two stages of forced cooling. These ratings are displayed as three 

numbers, for example, 115/153/192 MVA.23 A higher MVA capacity may be obtained with the addition 

of cooling systems to dissipate heat. Some LPT manufacturers in the United States market their products 

based on the top rated MVA, but others use the bottom (or base) MVA.24 For example, HHI likely will 

produce LPTs up to 300 base rated MVA after it begins production at its new plant in the United States, 

but that is the equivalent of 500 to 550 MVA top rated.25 *** .26

 21 Conference transcript, p. 28 (Stiegemeier). 

22 See ANSI/IEEE Standard C57.12.00 that defines the cooling attributes of the transformer. 

23 Conference transcript, p. 57 (Luberda). 

24 ***. Petition, p. 11. ***. Email from ***, August 10, 201. Email from ***, August 9, 2011. 

25 Conference transcript, pp. 155-156 (G. Lee). 

26 Email from ***, August 9, 2011. 
I-9 

Manufacturing Processes27

LPTs are “large, made-to-order, pieces of capital equipment” and are produced to the individual 

specifications of the customer.28 The major steps in the production of LPTs are: (1) engineering and 

design; (2) core building; (3) windings production and assembly of core and windings; (4) drying 

operations; (5) tank production; (6) final assembly of the LPT; and (7) testing. Respondents noted that 

virtually all U.S. production is of core type LPTs.29 ***.30 Therefore, the manufacturing processes listed 

below are for core type LPTs. 

Engineering and design 

The design of LPTs is complex, with optimum transformer design balancing the costs of 

materials (e.g., steel, copper, and cooling oil), electrical losses, manufacturing labor hours, plant 

capability constraints, and shipping constraints, such as tunnel and bridge dimensions.31 Design 

capability may be enhanced by a large record of prior LPT installations which allows for access to design 

data. Both electrical and mechanical engineering software is utilized in the design stage. 

Core building 

The core is made of laminations of GOES shaped into the legs and yokes of the core. GOES 

parts are cut to shape by computerized shearing machines and these thin strips are called laminations. 

These laminations are carefully stacked either by hand or machine so as to not damage the electrical 

properties of the laminations. Bundles of like shaped laminations are then bound together with epoxy 

polyester shrink tape to form either legs and yokes. The legs are then attached to the bottom yoke. 

Windings production and core and windings assembly 

The windings are formed by winding conductor of insulated copper wire over a cylindrical 

framework, typically by hand.32 The conductor is typically purchased already wrapped. Spacers between 

various turns of conductors and tap changers are inserted. Depending on the type of LPT being produced, 

different types of conductor and patterns of winding will be used. The windings are set over the legs with 

clamping machines used to put pressure onto the windings. The top yoke is affixed, and then the core and 

windings are tightened together and further insulation and cleat and conductor lead structures added. 

Drying operations 

The windings or the core and the windings then undergo drying operations in a vapor phase 

drying chamber to remove excess moisture that degrades the dielectric strength of the insulation. In the 

chamber, solvent vapors condense on the windings and core, resulting in heating the article, and thus 

evaporating moisture out of the insulation. The vapor chamber is then flooded with transformer oil to 

impregnate the insulation materials; once this is complete, the chamber is drained of oil and the assembly 

is removed. 

 27 Waukesha Electric, “Manufacturing,” undated. 

http://www.waukeshaelectric.com/transformers/manufacturing.html (accessed July 18, 2011). 28 Conference transcript, pp. 36 and 79-80 (Stiegemeier). 

29 Conference transcript, p. 115 (Neal). 

30 Email from ***, July 29, 2011. 

31 Waukesha Electric, “Engineering: Design,” undated. 

http://www.waukeshaelectric.com/transformers/engineering.html (accessed August 12, 2011). 32 Conference transcript, p. 26 (Steigemeier) and Conference exhibit 1, slide 4. 
I-10 

Tank production 

The tank is a rectangular box shaped fabrication made from hot-rolled, low carbon steel plates 

that are typically arc welded together. The tank has wall stiffeners, jack pads and lifting hooks, guides to 

fit the windings and core assembly inside, and a variety of access openings for maintenance. The interior 

is usually coated with epoxy and the exterior is painted. Construction of the tank must be completed 

before the windings and core assembly finish the drying phase so that the core and windings do not start 

to reabsorb moisture. The core and windings are lowered into the tank and the tank top is welded on. 

Openings are closed off, the tank is filled with oil, a high vacuum is applied to remove surface moisture, 

and then the tank is refilled with hot processed transformer oil for the final impregnation of the insulation. 

Final assembly of the LPT 

Final assembly of the active part and other components is performed in a clean environment. 

Components such as bushings, cooling systems (e.g., radiators and fans), tap changers, controls, and 

indicators are added. 

Testing 

Testing is performed to ensure the accuracy of voltage ratios, verify power ratings, and determine 

electrical impedances.33 Testing is also performed to simulate certain events that may affect the LPT, 

including lightning strikes, short circuits, overvoltages (voltages in the circuit that are above the design 

limits), and accessories such as the cooling systems, indicators, and tap changers. 

Manufacturing environment and production processes 

The manufacturing environment and capability may significantly affect the LPT manufacturer’s 

product reliability. LPT plants, particularly for the high voltage products, necessitate almost clean room 

environments, especially in both windings and assembly areas; for example, dust particles will ruin an 

800 kV LPT.34

The operation and physical characteristics of an LPT manufacturing plant can result in the LPT 

manufacturer being either not qualified by the customer to bid on a proposal or being not recommended 

during the bid process. As part of process of qualifying potential bidders, customers will visit LPT 

manufacturers, audit their production and quality processes, and verify their certifications and adherence 

to International Standards Organization standard 9001.35 Reportedly, having an advanced facility that 

shows well to potential customers or their consultants reflecting efficient production, shorter lead times, 

and better delivery to customers may allow a company to be better evaluated in a competitive bid.36 

***.37 ***.38

 33 Conference transcript, p. 28 (Stiegemeier) and p. 133 (H. Lee). 34 Conference transcript, p. 104 (Stiegemeier). 

35 Conference transcript, pp. 103-104 (Stiegemeier). 

36 Conference transcript, pp. 122-123 (Neal). 

37 Facsimile from ***, July 26, 2011. 

38 *** U.S. Producers’ Questionnaire, question IV-4. 
I-11 

DOMESTIC LIKE PRODUCT 

Petitioners argue that the domestic like product mirrors the scope of the petition and consists of 

all large liquid dielectric power transformers with a top rated capacity of 60 MVA or more.39 For the 

purposes of the preliminary phase of this investigation, respondents Hyosung and HHI accept the 

petitioners’ like product definition; however, Hyosung and HHI question whether there is a clear dividing 

line between power transformers below and above 60 MVA, and reserve the right to request the 

Commission to collect information for power transformers below 60 MVA in any final phase 

investigation.40

 39 Petitioners’ postconference brief, p. 4. 

40 Respondent Hyosung’s postconference brief, pp. 2-3. Respondent HHI’s postconference brief, pp. 2-3. 
 
PART II: CONDITIONS OF COMPETITION IN THE U.S. MARKET

INTRODUCTION

The LPTs subject to this investigation are components used in high voltage electrical power

transmission system. LPTs transfer power by electromagnetic induction between circuits at the same

frequency usually by changing values of voltage and current. They are used to increase, transfer, or

decrease the output voltages being transmitted. LPTs are expensive pieces of capital equipment that are

expected to last 20 to 30 years.1

All LPTs are built to order with physical characteristics, power ratings, line voltages, and other

characteristics specified by the purchasers, which include investor owned utilities, public utilities,

electrical cooperative power plants, and industrial users.2

 Each LPT is designed for the specific

application and situation dictated by the purchasers. These purchasers request quotes from suppliers with 

precise specifications. These are highly detailed documents, and LPT producers invest significant time in

reviewing the specifications, costing out the elements of design and putting together a formal bid.3

 All

producers and responding importers reported that bids for LPTs also include other services such as

warranties, and transportation and installation. In most cases, suppliers only have one opportunity to bid

on a particular contract.4

Some of the large investor-owned utilities set up what are called blanket agreements with longterm alliances for specific suppliers. These alliances are typically for periods of two to five years and

lock in one supplier of LPTs for the investor-owned utility over that period of time. Both U.S. producers

and suppliers of LPTs from Korea participate in such agreements. The benefit for the utility is that once

they buy one transformer from a supplier, with a specific design, additional LPTs can be produced and

shipped more rapidly. Sales under these alliances account for a significant percentage of sales of LPTs.5

 

CHANNELS OF DISTRIBUTION

During January 2008 through June 2011 practically all sales by U.S. producers, and *** sales by

importers from Korea went to end users (table II-1). The *** went to end users, although the share going

to distributors *** than for U.S. producers, imports from Korea, and nonsubject sources other than

Mexico. 

 1 Conference transcript, p. 91 (Stiegemeier).

 2

 Petitioner’s postconference brief, p. 5 and conference transcript, p. 40 (Kerwin) .

 3

 Open bids are more common with public utilities while closed bidding is more common with private utilities,

conference transcript, (Neal), p. 118.

 4

 Responses to producer and importer questionnaires (see Part V).

 5

 Conference transcript (Newman) p. 34, (Blake) p.85, (Neal) p. 118. Actual estimates of the percentages of sales

under these agreements are not available.

II-1
Table II-1

LPTs: U.S. producers’ and importers’ shares of reported U.S. shipments, by source and channel

of distribution, 2008-10, January-June 2010, and January-June 2011

Item

Calendar year January-June

2008 2009 2010 2010 2011

 Share of reported shipments (percent)

Domestic producers’ U.S. shipments of LPTs: 

Distributors 0.4 1.2 1.0 0.0 1.3

End users 99.6 98.8 99.0 100.0 98.7

U.S. importers’ U.S. shipments of LPTs from Korea to:

Distributors *** *** *** *** ***

End users *** *** *** *** ***

U.S. importers’ U.S. shipments of LPTs from Mexico to:

Distributors *** *** *** *** ***

End users *** *** *** *** ***

U.S. importers’ U.S. shipments of LPTs from all other sources:

Distributors *** *** *** *** ***

End users *** *** *** *** ***

Source: Complied from data submitted in response to Commission questionnaires.

GEOGRAPHIC DISTRIBUTION

U.S.-produced and imported LPTs from Korea and nonsubject sources are sold throughout the

United States. Four of the six U.S. producers sell throughout the continental United States and in Alaska,

Hawaii, Puerto Rico, and the U.S. Virgin Islands and the remaining two sell only in the continental

United States. Both of the largest importers from Korea and two importers from nonsubject sources also

***. Of the other three responding importers, one importer from nonsubject sources sells throughout the

continental United States, another importer from nonsubject sources sells only in the Midwest and on the

Pacific Coast, and one smaller importer from ***. 

SUPPLY AND DEMAND CONSIDERATIONS

U.S. Supply

Domestic Production

Based on available information, the U.S. LPT industry has the ability to respond to changes in

demand with large changes in the quantity of shipments LPT s to the U.S. market. The main contributing

factors to this degree of responsiveness of supply is substantial excess capacity.

II-2
Industry capacity

During 2008-10, the industry’s capacity ranged from a low of 46,805 MVA in 2008 to a high of

51,346 MVA in 2009. Its capacity utilization rate increased from 38.9 percent in 2008, to 40.8 percent in

2009 and then decreased to 39.9 percent in 2010. The rate was 38.0 percent in interim 2011 as compared

with 40.1 percent in interim 2010.

Alternative markets

During 2008-10, exports as a share of total shipments ranged from a low of *** percent in 2008

to a high of *** percent in 2009. During January-June 2011 they accounted for *** percent of total

shipments as compared to *** percent in January-June 2010. 

When U.S. producers were asked how easy it would be to shift their sales to alternative country

markets, all firms indicated that it would be difficult due to such factors as the lack of a sales

organization, formal and informal trade barriers, transportation issues, and different technical standards. 

Inventory levels

U.S. producers do not maintain inventories of LPTs.6

Production alternatives

*** of the U.S. producers reported that ***. 

Subject Imports

Based on available information, the Korean LPT industry has the ability to respond to changes in

demand with *** changes in the quantity of shipments of LPTs to the U.S. market. The main

contributing factors to this degree of responsiveness of supply are ***. 

Industry capacity

During 2008-10, annual Korean capacity ranged from a low of *** MVA in 2008 to a high of

*** MVA in 2010. Capacity is projected to reach *** MVA for 2011 and *** MVA for 2012. During

2008-10, capacity utilization rates ranged from a low of *** percent in 2008 to a high of *** percent in

2010. During January-June 2011, capacity utilization was *** percent as compared with *** percent in

January-June 2010. Capacity utilization is projected to reach *** percent in 2011 and *** percent in

2012.

 6 Conference transcript, p. 80 (Kerwin).

II-3
Alternative markets

During 2008-10 Korea’s combined home market shipments and exports to markets other than the

United States consistently accounted for between *** and *** percent of its total shipments. During

January-June 2011 these combined shipments accounted for *** percent of the total as compared with

*** percent in interim 2010. These combined shipments are projected to reach *** percent of total

shipments in 2009 and *** percent in 2012. 

When importers were asked how easily they could shift sales of LPTs between the United States

and alternative country markets, ***. 

Inventory levels

During 2008-10, the ratio of inventories to shipments ranged from a high of *** percent in 2008

to a low of *** percent in 2009. During January-June 2011 the ratio was *** percent as compared with

*** percent in January-June 2010. The ratio is projected to be *** percent in 2011 and *** percent in

2012. 

Production alternatives

***, reported making power transformers of less than 60 MVA on the equipment and machinery

used to produce LPTs. 

U.S. Demand

Demand Characteristics

The overall U.S. demand for LPTs depends on the demand for electric power and other variables

including industrial construction and housing starts.7

 Monthly levels of total electricity generation from

all sources for the period January 2008 through April 2011 are shown in figure II-1. Despite frequent

fluctuations from month to month due to seasonal factors, no clear trend is evident. Data from the Energy

Information Administration indicate that for the period January-April 2011, total U.S. energy

consumption in billions of kilowatts was 1,295,702 as compared with 1,256,020 during January-April 

2010, an increase of approximately three percent. However, monthly new housing starts declined sharply

during 2008 and then fluctuated within a narrow range during January 2009-June 2011 (figure II-2).

 7 Conference transcripts, p. 88 (Mucha)

II-4
Figure II-1

Electric power generation in the United States: Monthly, January 2008-April 2011

Source: Energy Information Administration

Figure II-2

Housing starts: Annualized rate of monthly housing starts, seasonally adjusted, January 2008-

June 2011

Source: U.S. Census Bureau, www.census.gov/const/starts

II-5
When asked whether the LPT market is subject to business cycles or conditions of competition

(including seasonal business) distinctive to LPTs, three of six producers answered “yes” and three

answered “no.” Among the eight responding importers, six answered “yes” and two answered “no.”

When asked to explain the nature and duration of business cycles and conditions of competition,

responses were varied. One producer reported that the replacement market is influenced by the aging

installed base of transformers. One importer reported that the market is subject to the construction cycle

in the spring and summer. 

When asked whether the business cycle or conditions of competition in the LPT industry have

changed since 2008, the majority of both producers and importers answered “yes.” Changes frequently

cited were the expansion of imports from Korea and China into the U.S. market and the construction of

new facilities by U.S. producers and foreign firms in the United States.

Apparent Consumption

Apparent U.S. consumption of LPTs decreased from *** MVA in 2008 to *** MVA in 2009 and

then recovered to *** MVA in 2010. During January-June 2011, apparent consumption was *** MVA as

compared with *** MVA in January-June 2010.

Demand Perceptions

When producers and importers were asked how U.S. demand within the United States for LPTs 

had changed since January 2008, responses were varied. Among the six producers, three reported that

demand had fluctuated, two reported that it had decreased, and one reported that it was unchanged. 

Among eight importers, two reported that demand had increased, three reported that it had fluctuated, and

three reported that it had decreased. Trends in the U.S. economy, the residential and nonresidential

construction industry, and the replacement market for transformer were all cited as factors affecting

demand for LPTs.

Substitute Products

When asked whether other products can be substituted for LPTs, all U.S. producers and importers

answered no. 

Cost Share

LPTs account for a substantial share of the final cost of the end-use products in which they are

used, though estimates ranged widely. This wide variability in estimates may be due to the fact that each

LPT is unique and costs from project to project and from supplier to suppliers depend upon product 

specifications and many other factors. Two U.S. producers, Efacec and Waukesha provided separate

estimates for the cost share of LPTs used in distributor substations, generator substations and transmission

line substations. Efacec estimated that LPTs typically account for ***. Waukesha estimated that LPTs

account for ***

II-6
***. None of the other producers or importers provided detailed estimates.

SUBSTITUTABILITY ISSUES

The degree of substitution between domestic and imported LPTs depends upon such factors as

relative prices, quality (e.g., grade standards, reliability of supply, defect rates, etc.), and conditions of

sale (e.g., price discounts/rebates, lead times between order and delivery dates, payment terms, product

services, etc.). 

Lead Times

The average lead time between a customer’s order and the date of delivery on sales of LPTs

ranges from 5 to 12 months for producers, and 6 to 16 months for importers.

Comparisons of Domestic Products, Subject Imports, and Nonsubject Imports

The respondents have argued that there is a very limited degree of competition between U.S.-

produced LPTs and imports from Korea. Hyosung and HHI both reported that a large share of their

exports to the United States consist of LPTs with an MVA rating of 300 or more and that U.S. producers

are either incapable of making transformers in that size range or only produce very small quantities.8

 The

petitioners argue that four of six U.S. producers do have the ability to manufacture LPTs above 300 MVA

and that attenuated competition in the 300 MVA size range is not supported by the record. They

reported that ***.9

 

Hyosung reported that LPTs with MVA ratings of 300 or above accounted for *** percent

of its total U.S. sales in 2010, and HHI reported that they accounted for *** percent of its U.S. exports in

2010.10 Two U.S. producers, ***. 11

Hyosung also stated that U.S. producers are unable to compete in some bids because they are

unable to produce shell transformers, a higher-priced product than the more standard core transformers. 

Among U.S. producers, only Efacec produces shell transformers.12 The shell form is used in industrial

transformer in steel mills and in very large transformers.13 The petitioners have argued that specific

requests for shell transformers are very rare.14

 Five of six producers reported that U.S.-produced products and imports from Korea are 

“always” interchangeable and one reported that they are “frequently” interchangeable. Among importers,

one reported that they are “always” interchangeable, four reported that they are “sometimes”

interchangeable, and two reported that they are “never” interchangeable (table II-1). In discussing factors

that may limit interchangeability, one importer, ***, reported that some bids require designs that suppliers

within a certain 15 country may not be able to produce. *** cited shell transformers, and

 8 Respondent Hyosung’s postconference brief, p. 4, and Respondent HHI’s postconference brief, Appendix 1.

 9

 Petitioners’ postconference brief, pp. 15-16. 

 10 Hyosung postconference brief, exhibit 17 and HHI postconference brief, exhibit 1. 

 11 Emails to Commission staff. For the petitioner, the email was from ***, August 9, 2011; for Efacec, from ***,

July 29, 2011; for Waukesha ***; for V.C. from ***, August 2, 2011. 

 12 Hyosung and HICO America’s postconference brief, p. 21. 

 13 Conference transcript. pp. 58-59 (Steigemeier).

 14 Conference transcript, p. 102 (Cusack).

 15 *** did not name the countries. However, *** and the majority of the other importers reported that imports

from the United States, Korea, Mexico and other nonsubject countries are only sometimes substitutable with each

other. 

II-7
large capacity units that exceed the capacity of suppliers in certain countries, and certain requirements

including special sound levels, loss evaluation, and basic impulse voltages. 

Table II-1

LPTs: Perceived degree of interchangeability of product produced in the United States and in

other countries, by country pairs

Country pair

U.S. producers U.S. importers

AFSNAFSN

U.S. vs. Korea 5 1 0 0 1 0 4 2

U.S. vs. Mexico 6 0 0 0 1 0 3 2

U.S. vs. nonsubject 41101040

Korea vs. Mexico 5 1 0 0 1 0 4 1

Korea vs. nonsubject 41101040

Mexico vs. nonsubject 41101040

Note: “A” = Always, “F” = Frequently, “S” = Sometimes, and “N” = Never.

Source: Compiled from data submitted in response to Commission questionnaires.

A majority of producers reported that the differences in factors other than price are “never” a

factor in sales of LPTs, and a majority of importers reported that they are “always”a factor (table II-2). 

One producer *** reported that the U.S. market for LPTs is much more open to free trade than many

foreign markets. It said that in many foreign markets there are significant formal and informal barriers

that can include language requirements, plant qualification requirements and differences in understanding

or explaining technical requirements. One importer, ***, reported that technical support is a large

contributing factor that differentiates manufacturers. 

Table II-2

LPTs: Perceived importance of factors other than price between products produced in the United

States and in other countries, by country pairs

Country pair

U.S. producers U.S. importers

AFSNAFSN

U.S. vs. Korea 1 1 0 4 4 1 1 0

U.S. vs. Mexico 1 1 0 4 2 1 1 1

U.S. vs. nonsubject 1113 3100

Korea vs. Mexico 0 2 0 4 3 1 1 0

Korea vs. nonsubject 0203 3100

Mexico vs. nonsubject 0203 3100

Note: “A” = Always, “F” = Frequently, “S” = Sometimes, and “N” = Never.

Source: Compiled from data submitted in response to Commission questionnaires.

II-8
III-1 

PART III: U.S. PRODUCERS’ PRODUCTION, SHIPMENTS, AND 

EMPLOYMENT 

The Commission analyzes a number of factors in making injury determinations (see 19 U.S.C. §§ 

1677(7)(B) and 1677(7)(C)). Information on the alleged margin of dumping was presented in Part I of 

this report and information on the volume and pricing of imports of the subject merchandise is presented 

in Part IV and Part V. Information on the other factors specified is presented in this section and/or Part 

VI and (except as noted) is based on the questionnaire responses of six firms that accounted for all of U.S. 

production of LPTs over the period examined.1

 

U.S. PRODUCERS 

Of the six firms that responded to the Commission’s questionnaires, *** opposed the petition; 

*** supported the petition and *** took no position on the petition.2

 Table III-1 lists U.S. producers of 

LPTs, their production locations, positions on the petition, production, and shares of reported production 

in 2010. 3 

 1

 Conference transcript, p. 51 (Luberda). As noted earlier, transformer size is determined on the basis of 

megavolts amperes (MVA) ratings. Conference transcript, p. 28 (Stiegemeier). Therefore, quantities are presented 

in terms of top rated MVA, rather than units. LPTs are highly customized and encompass a diverse product mix due 

to differences in capacity and voltage; therefore, average unit values, whether measured in terms of dollar per top 

rated MVA or dollar per unit, may not be meaningful. Petition, p. 21. Conference transcript, p. 131 (Connelly) and 

p. 136 (H. Lee). Respondent Hyosung’s postconference brief, p. 28. 2

 The Commission received useable data from six firms: ABB, Delta Star, Efacec, PTTI, VTC, and Waukesha. 

***. Additionally, Hyundai Power Transformers USA, Inc. (“Hyundai Power USA”) submitted a partial 

questionnaire response on behalf of its Montgomery, AL facility, which it expects to be completed in November 

2011. Conference transcript, p. 145 (G. Lee). Hyundai Power USA is a subsidiary of HHI, a foreign 

producer/exporter of LPTs in Korea. 3

 *** of the responding producing firms are related to producers of LPTs in Korea. 
III-2 

Table III-1 

LPTs: U.S. producers of LPTs, their positions on the petition, production locations, production, 

and shares of reported production, 2010 

Firm Position on petition

Production 

location(s) 

Total 

production 

(MVA) 

Share of 

production 

(percent) 

ABB1 Support, petitioner South Boston, VA 

St. Louis, MO 

*** ***

Delta Star Support, petitioner Lynchburg, VA 

San Carlos, CA 

*** ***

Efacec2 *** South Rincon, GA *** ***

PTTI Support, petitioner Canonsburg, PA *** ***

VTC3 *** Roanoke, VA 

Pocatello, ID 

*** ***

Waukesha4 *** Goldsboro, NC 

Waukesha, WI 

*** ***

Total 19,807 100.0

 1 ABB is related to firms producing LPTs in Brazil, Canada, China, Germany, India, Poland, Spain, Sweden, 

Thailand, and Turkey. 

 2 Efacec is wholly owned by Efacec Energia, Maquinas e Equipamentos Electricos, SA, a manufacturer of 

transformers and other electrical equipment in Portugal. 

 3

 VTC is related to a subsidiary VTCU Corp., which produces LPTs in Pocatello, ID. 

 4

 Waukesha is wholly owned by SPX Corporation. 

 

Source: Compiled from data submitted in response to Commission questionnaires. 

U.S. PRODUCTION, CAPACITY, AND CAPACITY UTILIZATION 

Table III-2 presents U.S. producers’ production, capacity, and capacity utilization. 

 

Table III-2 

LPTs: U.S. producers’ production, capacity, and capacity utilization, 2008-10, January-June 2010, 

and January-June 2011 

Item 

Calendar year January-June 

2008 2009 2010 2010 2011 

Quantity (MVA) 

Capacity 46,805 51,346 49,685 24,696 27,150

Production 18,219 20,972 19,807 9,891 10,318

Capacity utilization (percent) 

Capacity utilization 38.9 40.8 39.9 40.1 38.0

Source: Compiled from data submitted in response to Commission questionnaires. 

In their questionnaire responses, several U.S. producers indicated changes in relation to the 

production of LPTs since January 1, 2008. ***.4 ***. ***.5 ***. 

Additionally, several firms announced plans to either commence production of LPTs or expand 

existing production of LPTs in the United States. Hyundai is currently investing $130 million to 

 4

 ***. Email from ***, August 9, 2011. 

5

 Email from ***, August 15, 2011. 
III-3 

construct a 220,000 square foot facility in Montgomery, AL, which is scheduled to be completed in 

November 2011, with production beginning in early 2012.6

 In February 2011, Mitsubishi Electric Power 

Products announced it would build a $200 million, 350,000 square foot facility in Memphis, TN. 

Production at the Memphis facility is scheduled to begin in 2013.7

 In May 2010, Waukesha announced 

plans for a $70 million, 140,000 square foot expansion at its Waukesha, WI facility. This expansion, 

which will increase the facility’s size by 50 percent, is expected to be completed by the end of 2011.8 In 

March 2011, Delta Star announced a $10 million, 30,000 square foot expansion of its Lynchburg, VA 

facility; however, Delta Star has not gone forward with those plans.9

 

Over the period examined, *** firms reported constraints in equipment (cranes, ovens, testing, 

winding and vapor phase systems) and the availability of trained personnel that set limits on their 

production capacity.10 *** firms reported manufacturing products other than LPTs on the same 

equipment and machinery used in the production of LPTs and/or using the same production and related 

workers employed to produce LPTs.11 

 

U.S. PRODUCERS’ U.S. SHIPMENTS AND EXPORTS 

Over the period examined, U.S. commercial shipments accounted for the vast majority of U.S. 

producers’ revenue in this industry, with *** reporting exports.12 *** reported internal consumption or 

transfers to related firms. Table III-3 presents U.S. producers’ U.S. shipments, export shipments, and 

total shipments. 

 6

 “Hyundai Heavy Industries Puts Plant in Alabama,” http://www.businessfacilities.com/news/hyundai-heavyindustries-puts-plant-in-alabama.php, retrieved August 11, 2011. Conference transcript, p. 145 (G. Lee). 

Respondent HHI’s postconference brief, p. 1. 7

 “Mitsubishi Electric Power Products to Build Transformer Factory in Memphis,” 

http://www.businesswire.com/news/home/20110214005520/en/Mitsubishi-Electric-Power-Products-BuildTransformer-Factory, retrieved August, 1, 2011. Conference transcript, p. 114 (Neal). Respondent HHI’s 

postconference brief, p. 32. 8

 “SPX Announces a 50 Percent Expansion of Waukesha Electric Systems’ Manufacturing Facility,” 

http://www.prnewswire.com/news-releases/spx-announces-a-50-percent-expansion-of-waukesha-electric-systemsmanufacturing-facility-93920014.html, retrieved August, 1, 2011. Conference transcript, p. 114 (Neal) and p. 147 

(Maloney). Respondent HHI’s postconference brief, p. 32. Respondent Hyosung’s postconference brief, p. 40. 9

 Conference transcript, pp. 53-54 (Newman). ***. Petitioners’ postconference brief, pp. 12-13. 10 Other constraints involved in the production of LPTs include dryer equipment and a given facility’s layout and 

size. Conference transcript, p. 138 (Morgan). 11 ***. 

12 ***. 
III-4 

Table III-3 

LPTs: U.S. producers’ U.S. commercial shipments, export shipments, and total shipments, 2008-

10, January-June 2010, and January-June 2011 

Item 

Calendar year January-June 

2008 2009 2010 2010 2011 

Quantity (MVA) 

U.S. commercial shipments 17,969 20,258 19,279 9,831 9,418

Export shipments *** *** *** *** ***

Total shipments *** *** *** *** ***

Value (1,000 dollars) 

U.S. commercial shipments 263,505 280,185 213,070 117,990 89,226

Export shipments *** *** *** *** ***

Total shipments *** *** *** *** ***

Unit value (per MVA) 

U.S. commercial shipments $14,664 $13,831 $11,052 $12,002 $9,474

Export shipments *** *** *** *** ***

Total shipments *** *** *** *** ***

Share of quantity (percent) 

U.S. commercial shipments *** *** *** *** ***

Export shipments *** *** *** *** ***

Total shipments *** *** *** *** ***

Share of value (percent)

U.S. commercial shipments *** *** *** *** ***

Export shipments *** *** *** *** ***

Total shipments *** *** *** *** ***

Source: Compiled from data submitted in response to Commission questionnaires. 

U.S. PRODUCERS’ INVENTORIES 

No U.S. producer maintains inventories of LPTs largely because these products are made to order 

and have particular applications as specified by the customer.13 

U.S. PRODUCERS’ IMPORTS 

*** U.S. producers of LPTs reported imports of LPTs during the period.14 These data are 

presented in table III-4. 

 13 Conference transcript, p. 80 (Kerwin). 

14 ***. ***. 
III-5 

Table III-4 

LPTs: Select producers’ U.S. production, imports, and imports as a ratio to production, 2008-10, 

January-June 2010, and January-June 2011 

* * * * * * * 

U.S. EMPLOYMENT, WAGES, AND PRODUCTIVITY 

Table III-5 shows U.S. producers’ employment-related data during the period examined. ***.15

Table III-5 

LPTs: Average number of production and related workers, hours worked, wages paid to such 

employees, hourly wages, productivity, and unit labor costs, 2008-10, January-June 2010, and 

January-June 2011 

* * * * * * * 

 15 Petitioners’ postconference brief, p. 37. 
 
IV-1 

PART IV: U.S. IMPORTS, APPARENT U.S. CONSUMPTION, AND 

MARKET SHARES 

Part IV of this report presents information on imports of subject merchandise and overall U.S. 

market composition. Reported shipments of imports are based on the questionnaire responses of 11 U.S. 

importers.1

 The Commission received questionnaire responses from three firms that reported imports of 

LPTs from Korea which are believed to account for all subject imports over the period examined.2

 The 

Commission received questionnaire responses from eight firms that reported importing LPTs from 

nonsubject sources, which are believed to account for a substantial proportion of nonsubject imports over 

the period examined.3

 

U.S. IMPORTERS 

Of the three U.S. importers that reported imports of LPTs from Korea over the period, Hyundai 

Corp. and HICO accounted for all of the total reported U.S. imports from Korea in 2010.4

 As noted 

earlier, Hyundai Corp. is a wholly-owned subsidiary of HHI, which is engaged in exporting LPTs from 

Korea to the United States. HICO is a wholly-owned subsidiary of Hyosung, which is engaged in 

exporting LPTs from Korea to the United States.5

 Leading nonsubject sources of LPTs include Canada 

and Mexico. 6 

*** firms reported being related to firms, either foreign or domestic, that are engaged in the 

production of LPTs.7

 No importers reported entering or withdrawing LPTs from foreign trade zones or 

bonded warehouses. In addition, no importers reported imports of LPTs under the temporary importation 

under bond program. 

U.S. IMPORTERS’ U.S. SHIPMENTS OF IMPORTS 

Table IV-1 presents information on U.S. shipments of imports of LPTs over the period examined. 

U.S. shipments of imports of LPTs from Korea increased by 46.4 percent, by value, between 2008 and 

2010 and U.S. imports of LPTs from nonsubject sources decreased by 32.8 percent over the same period.8

 1

 The Commission sent questionnaires to those firms identified in the petition, along with firms identified by data 

provided by U.S. Customs and Border Protection (“Customs”) as potential importers of LPTs. Official Commerce 

statistics for a portion of HTS statistical reporting number 8504.23.0040 include non-subject products (transformers 

of top rated MVA between 10 MVA and 60 MVA); therefore, questionnaire data was deemed to be more 

appropriate. The following firms certified that they had not imported LPTs from any country since 2008: ***. 2

 Conference transcript, p. 52 (Luberda) and p. 154 (Connelly). 

3

 Respondent Hyosung’s postconference brief, p. 24. 

4

 Conference transcript, p. 52 (Luberda) and p. 154 (Connelly). ***. 

5

 HICO began operations in 2001 and employs 50 workers in its Pittsburgh, PA, Greensburgh, PA, and Los 

Angeles, CA offices. Respondent Hyosung’s postconference brief, p. 4. 6

 U.S. importers of subject merchandise from Canada include: ***. U.S. importers of subject merchandise from 

Mexico include: ***. 7

 ***. 

8

 As noted earlier, transformer size is determined on the basis of megavolts amperes (MVA) ratings. Conference 

transcript, p. 28 (Stiegemeier). Therefore, quantities are presented in terms of top rated MVA, rather than units. 

LPTs are highly customized and encompass a diverse product mix due to differences in capacity and voltage; 

therefore, average unit values, whether measured in terms of dollar per top rated MVA or dollar per unit, may not be 

meaningful. Petition, p. 21. Conference transcript, p. 131 (Connelly) and p. 136 (H. Lee). Respondent Hyosung’s 

postconference brief, p. 28. 
IV-2 

NEGLIGIBILITY 

The statute requires that an investigation be terminated without an injury determination if imports 

of the subject merchandise are found to be negligible. Negligible imports are generally defined in the 

Tariff Act of 1930, as amended, as imports from a country of merchandise corresponding to a domestic 

like product where such imports account for less than 3 percent of the volume of all such merchandise 

imported into the United States in the most recent 12-month period for which data are available that 

precedes the filing of the petition or the initiation of the investigation. In this investigation, imports of 

LPTs from Korea are not negligible. In the most recent 12-month period for which data are available 

(July 2010 through June 2011), U.S. imports of LPTs from Korea accounted for *** percent, by value, of 

total imports.9

Table IV-1 

LPTs: U.S. shipments of imports by source, 2008-10, January-June 2010, and January-June 2011 

* * * * * * * 

APPARENT U.S. CONSUMPTION AND U.S. MARKET SHARES 

Table IV-2 presents data on apparent U.S. consumption and U.S. market shares over the period 

examined. 

 9

 Market share data for July 2010-June 2011 is based on official Commerce statistics for HTS 8504.23.0040 and 

8504.23.0080. 
IV-3 

Table IV-2 

LPTs: Apparent U.S. consumption and U.S. market shares, 2008-10, January-June 2010, and 

January-June 2011 

Source 

Calendar year January-June 

2008 2009 2010 2010 2011 

Quantity (MVA) 

U.S. producers’ U.S. shipments 17,969 20,258 19,279 9,831 9,418

U.S. shipments of imports from-- 

Korea *** *** *** *** ***

Nonsubject sources *** *** *** *** ***

All import sources 110,977 97,596 108,030 61,834 42,652

Apparent U.S. consumption 128,946 117,854 127,309 71,665 52,070

Value (1,000 dollars) 

U.S. producers’ U.S. shipments 263,505 280,185 213,070 117,990 89,226

U.S. shipments of imports from-- 

Korea *** *** *** *** ***

Nonsubject sources *** *** *** *** ***

All import sources 1,048,263 965,981 911,863 495,492 388,864

Apparent U.S. consumption 1,311,768 1,246,166 1,124,933 613,482 478,090

Market share by quantity (percent) 

U.S. producers’ U.S. shipments 13.9 17.2 15.1 13.7 18.1

U.S. shipments of imports from-- 

Korea *** *** *** *** ***

Nonsubject sources *** *** *** *** ***

All import sources 86.1 82.8 84.9 86.3 81.9

Market share by value (percent) 

U.S. producers’ U.S. shipments 20.1 22.5 18.9 19.2 18.7

U.S. shipments of imports from-- 

Korea *** *** *** *** ***

Nonsubject sources *** *** *** *** ***

All import sources 79.9 77.5 81.1 80.8 81.3

Source: Tables III-3 and IV-1. 

RATIO OF U.S. SHIPMENTS OF IMPORTS TO U.S. PRODUCTION 

Table IV-3 presents data on the ratio of U.S. shipments of imports to U.S. production. 

Table IV-3 

LPTs: Ratio of U.S. shipments of imports to U.S. production, 2008-10, January-June 2010 and 

January-June 2011 

* * * * * * * 
 
PART V: PRICING AND RELATED INFORMATION

FACTORS AFFECTING PRICES

Raw Material Costs

Raw materials account for a substantial share of the cost of LPTs. During 2008-10 their share of

the cost of goods sold ranged from a high of 66.9 percent in 2009 to a low of 57.6 percent in 2010. 

During January-June 2011 they accounted for 64.3 percent of the cost of goods sold. The main raw

material used to produce LPTs include windings, GOES, and other inputs.

U.S. Inland Transportation Costs

Estimates by producers and importers of the cost of U.S. inland transportation as a percentage of

the total delivered cost of LPTs varied. For producers, the estimates ranged from less than 3.0 percent to

10 percent, and for importers, they ranged from 3.0 to 10 percent. 

Questionnaire respondents were also asked to estimate the share of their sales that were delivered

within 100 miles, 101 to 1,000 miles, and over 1,000 miles from their production or storage facilities. For

all six producers, 90 percent or more of their shipments were for distances of 101 miles or more. The

share of producer shipments between 101 and 1,000 miles ranged between 40 and 90 percent for the six

producers and the share of producer shipments of distances over 1,000 miles ranged from 4 to 50 percent. 

Among six responding importers, three reported that all of their shipments were for distances of over

1,000 miles, one reported that 95 percent of its shipments exceeded 101 miles, one reported that 80 to 85

percent of its shipments exceeded 1,000 miles, and one reported that 72 percent of its shipments exceeded

1,000 miles. 

PRICING PRACTICES

Pricing Methods

Transaction prices for LPTs are determined through bid competition. Bid prices are determined on

the basis of current market prices as well as the costs of labor, materials, and installation. All producers

and responding importers reported that bids for LPTs also include other services such as warranties,

transportation, and installation. In most cases, suppliers only have one opportunity to bid on a particular

contract.1

 Additional bids may be allowed when there are changes to specifications or location. In most

cases, purchasers do not discuss bids among competing suppliers. 

When questionnaire respondents were asked whether they have ever been excluded from bidding

on sales of LPTs at any time since January 1, 2008, five of six producers and five of seven responding

importers answered “yes.” Reasons cited included lack of approval as a supplier,2

 and requirements to

purchase products manufactured in the United States, or North America. One firm also reported that in

cases where its bids have been too high, the purchaser did not always solicit future bids from the supplier. 

 1 When asked how often there is more than one chance to bid on a sales agreement, five of six producers

answered “rarely” and one answered “sometimes.” When the same question was asked of seven responding

importers, one answered “always,” two answered “never,” three answered “rarely,” and one answered “sometimes.”

 2

 One U.S. producer *** reported that in some cases customers lacked knowledge of its ability to produce large

power capability. Another producer *** reported that it has sometimes been excluded as a bidder because of the age

of its plant ***. One importer *** reported that quality issues or a lack of experience have been a factor. 

V-1
Contracts for multiple shipments to purchasers account for a relatively small share of total sales. 

Among producers, three firms reported that 1 to 20 percent of their sales involved contracts for multiple

shipments, and three reported that such contracts accounted for 20 to 40 percent of their sales.3

 Among six

responding importers, one reported that none of its sales involved contracts for multiple shipments, four

reported that 1 to 20 percent involved such contracts, and one reported that such contracts involved 60 to

80 percent of its sales. When asked to report the average number of transformers in multiple shipment

contracts, estimates by producers ranged from two to seven units and estimates by importers ranged from

two to four units. When asked whether prices can be renegotiated during contract periods, three producers

answered “yes,” and three answered “no.” Among five responding importers, two answered “yes” and

three answered “no.” 

Sales Terms and Discounts

Prices are quoted on both an f.o.b. and delivered basis by producers and importers. Four

producers reported that they quote prices on a delivered basis and two quote prices on an f.o.b. basis. 

Among six responding importers, four quote prices on a delivered basis, and two quote prices on an f.o.b.

basis. 

Discount policies on sales of LPTs are varied. Among producers, three firms reported that they do

not provide discounts and three reported that they do offer discounts in certain cases. Three firms reported

that they sometimes offer discounts based on early payment or on transaction volumes. Among seven

responding importers, two reported that they do not offer discounts, and four reported that they do offer

discounts in some instances based upon such factors as early payment of accounts and the transaction

volume. 

PRICE DATA

Questionnaire Bid Data

In order to obtain bid data for comparisons, U.S. producers and importers were asked to submit

data on their 25 largest bids on LPTs since January 2008 in chronological order. In their bid data, the

questionnaire respondents were asked to include the costs of any services, such as installation or training.

The information requested was the customer name, the project location, the number of units involved, the

total project size in MVA, the initial bid, the final bid, the final bid date, the contract date if won, the

delivery date if won, and the winning bidder if known. While U.S. producers and importers from Korea

and other sources often submitted bids to the same customers, efforts to find direct competition between

suppliers on particular bids from the data collected were not successful. In many cases, firms that

competed on bids did not know the names of the winning bidders. 

Bid Data Requested With Lost Sales Information

Along with requests to provide information on lost sales allegations, purchasers who were asked to

respond to the allegations were also asked to provide information on their two largest bids since

January 2008. The information requested for the bids included a product description, the quantity

involved, the bid date, and the bidder’s name and country source, the bid amount in dollars, and the name

 3 Some of the large investor-owned utilities set up what are called blanket agreements with long-term alliances for

specific suppliers. These alliances are typically for periods of two to five years and lock in one supplier of LPTs for

the investor-owned utility over that period of time. Both U.S. producers and suppliers of LPTs from Korea

participate in such agreements (see Part II).

V-2
of the winning bidder and bid. Eight purchasers provided information. Data from six of the purchasers,

*** who provided the information in the form requested are presented in table V-1. Data from two other

purchasers, *** and ***, on their largest purchases was also provided but in a form that was not suitable

for the table. All 11 of the bids shown in the table included one or more Korean suppliers. Seven of the

bids included one or more U.S. producers. In five of the 11 bids, the low bid won, while in five other

cases, the low bidder was not selected. In one case, the business was divided among three suppliers. 

Korean producers won *** of the *** bid competitions, with HHI winning *** and HICO winning ***. 

*** of the Hyundai winning bids, and *** of the HICO winning bids were ***. A nonsubject producer

*** and a U.S. producer *** each won one bid. In the bid that was divided among three suppliers,

business was awarded to ***, ***, and ***. 

***. 

***. 

***. 

Table V-1 

LPTs: Bid data for certain purchasers: two largest bids since January 2008 for firms that responded to lost

sales allegations

* * * * * * *

***. 

***. 

***.

 ***.

***. 

 LOST SALES AND LOST REVENUES

U.S. producers reported 55 instances of lost sales due to competition from Korean imports and

one instance of lost revenues where it was necessary to reduce or roll back prices of LPTs. The 55 lost

sales allegations involved 91 units valued at $140.9 million and the 1 lost revenue allegation involved 1

unit with lost revenue on the sale valued at $64,000. Staff contacted or attempted to contact all 29

purchasers named in the allegations. Eight purchasers provided responses to the allegations. A summary

of the lost sales allegations and responses is presented in table V-2.4

Table V-2

LPTs: U.S. producers’ lost sales allegations

* * * * * * *

***.

***. 

***.

 4 The lost revenue customer *** did not provide a response to the allegation. 

V-3
***. 

***. 

 ***. 

***. 

***.

V-4
PART VI: FINANCIAL EXPERIENCE OF U.S. FIRMS

BACKGROUND

Six firms provided usable financial data on their operations producing LPTs.1

 These reported

data are believed to represent all production of LPTs in the United States in 2010.2

OPERATIONS ON LPTs

Income-and-loss data for the reporting U.S. firms’ LPT operations are presented in table VI-1,

and are briefly summarized here. 

• Sales quantity in MVA rose irregularly from 2008 to 2010 (by *** percent) and was higher in

January-June 2011 than in January-June 2010 (by *** percent). Sales quantity in units of LPTs

declined irregularly from 2008 to 2010 and was the same in the interim periods. Sales value fell

irregularly between 2008 and 2010 (down by *** percent) and was lower in January-June 2011

than in the year-earlier period (down *** percent). Differences in the relative changes of quantity

and value implies that average unit value of sales whether measured on a per-MVA or per-LPT

basis, declined between 2008 and 2010 and was lower in January-June 2011 than in the same

period in 2010.3

 

• The absolute value of cost of goods sold (“COGS”) rose from 2008 to 2010 (up by *** percent in

contrast to sales value) and was higher in January-June 2011 than in January-June 2010 (up by

*** percent in contrast to sales). Each of the components of COGS was greater in value in 2010

than in 2008. In percentage terms, raw materials rose by *** percent, direct labor rose by ***

percent, and other factory costs rose by *** percent. Both raw materials and direct labor were

greater in value in January-June 2011 than in the same period in 2010. Increased raw material

costs and direct labor were higher by *** and *** percent, respectively and compensated for the

lower value of other factory costs (which were lower by *** percent) in January-June 2011

compared with January-June 2010. These costs also rose as a ratio to sales and on a per-unit

basis between those periods as well. 

 1 The firms are ABB, Delta Star, PTTI, Efacec, VTC, and Waukesha. Each has a fiscal year that ends on ***. 

No firm reported internal consumption or transfers to related firms of LPTs. A seventh firm, Hyundai Power USA

submitted a partial questionnaire response, ***, on behalf of its Montgomery, AL facility, which it expects to be

completed in November 2011. Conference transcript, p. 145 (G. Lee). It appears that this facility will initially

produce power transformers with a capacity below 60 MVA. 

 2

 Each firm manufactures and sells an LPT on a project-by-project basis, i.e., to a customer’s order and to a

specific design. Such projects may require months to complete. Under U.S. GAAP, revenue usually is recognized

as it becomes measurable, realized or realizable, and earned (which is typically as a product or service is delivered);

additional considerations are that there are no continuing obligations by the seller and risk of ownership has passed

to the buyer. In certain circumstances, like those involving long-term construction projects, revenue may be

recognized during production even though the revenue has not been realized. This method uses percentage-ofcompletion to allocate revenues and costs to specific accounting periods. The Commission asked responding U.S.

firms whether they recognized revenue by completed contract (as delivered) or percentage-of-completion (during

production). ***.

 3

 Per-unit values should be used with caution because of the nature of the product and because of changes in

product mix. See petition, pp. 20-21; conference transcript, p. 136 (Lee); postconference brief of Hyosung and

HICO America, p. 28.

VI-1
• Selling, general, and administrative (“SG&A”) expenses rose in dollar terms as well as on a

percentage-of-sales basis from 2008 to 2010. These expenses were lower in January-June 2011

compared with the same period in the previous year.

• Operating income rose *** from 2008 to 2009 and then fell *** to an operating loss in 2010 as

*** of the six firms reported an operating loss. In January-June 2010 *** and, overall, the

operating profit was *** percent of sales. In January-June 2011 *** firms reported losses and the

average was a negative *** percent of sales. 

• Except for 2010 and the January-June 2011 interim period, net income before taxes and cash flow

(calculated as net income plus depreciation charges) were positive. 

Table VI-1

LPTs: Results of total operations of U.S. firms, fiscal years 2008-10, January-June 2010, and

January-June 2011 

* * * * * * *

Salient operating data on a firm-by-firm basis are shown in table VI-2.

Table VI-2

LPTs: Results of operations of U.S. firms, by firm, fiscal years 2008-10, January-June 2010, and

January-June 2011

* * * * * * *

ABB has production facilities for LPTs in St. Louis, MO and South Boston, VA.4

 It was the

***.5

 4 ABB is a large multinational producer of a wide range of products. ABB’s annual report discusses LPTs and

other products within the context of that firm’s Power Products Division (PPD), which produces and sells products

world-wide. In part, it stated that ABB’s total orders in 2010 increased by 6 percent (4 percent in local currencies)

compared to 2009 as the global economy began to recover, as reflected in increased spending by industrial 

customers in energy-efficient automation and power solutions to increase productivity and quality. However,

investments by utilities in large power transmission projects remained “cautious.” In 2010, orders in the PPD

decreased by 11 percent (13 percent in local currencies) as transmission spending remained low, resulting in

lower order volumes, especially in large power transformers and high voltage equipment. The economic recovery

however did lead to an increase in the power distribution segments with higher orders in the medium voltage

product lines (which does not include LPTs). This contrasts unfavorably with orders in other divisions, such as

ABB’s Power Systems, Process Automation, and Low Voltage Products divisions, which increased. ABB further

stated that as base orders began recovering on the upturn in the global economy, it continued to see for the first half

of 2010 that large scale investments in both industry and utilities were delayed as customers assessed the stability

of the recovery; later in 2010 customers became more optimistic, which materialized into a number of large order 

awards in the fourth quarter of 2010. However, this attitude shift was not enough to compensate for the low levels

of large orders in the first half of 2010. Consequently, large orders were down 17 percent (20 percent in local

currencies). Total orders in 2009 decreased 19 percent (13 percent in local currencies) compared to 2008 due to

(a) the economic downturn, which had significantly weakened demand particularly in the industrial and

construction related markets; and (b) price erosion in both utilities and industrial sectors in many geographical 

markets. Excerpted from ABB’s 2010 Annual Report on Form 20-F, pp. 47-48. EDIS document 456862.

 5

 Also e-mail from *** to Commission Staff, August 9, 2011. EDIS document 456822. Some of “all other

additional expenses”, which are ***. 

VI-2
Delta Star has production facilities for LPTs in Lynchburg, VA and San Carlos, CA. Delta Star is

owned primarily by its employees under an Employee Stock Ownership Plan (ESOP).6

 The firm was

***.7

Efacec is the U.S. subsidiary of a Portuguese multinational that began operations in the United

States in 1998; its U.S. plant, located at Rincon, GA, ***.8

 Efacec’s value of sales in 2010 ***.9 10

PTTI, ***, reported data for its production facility at Canonsburg, PA. Its sales of LPTs declined

***.

VTC operates production facilities at Pocatello, ID and Roanoke, VA.11 VTC is the ***.

Waukesha produces LPTs at Waukesha, WI and Goldsboro, NC.12 By sales, it was ***.13

Total raw material costs of the six reporting U.S. firms increased irregularly from $*** in 2008 to

$*** in 2010, and were higher in January-June 2011 ($***) than in the same period in 2010 ($***). 

Total raw material costs increased from *** percent of sales to *** percent of sales between 2008 and

2010 and were *** higher in January-June 2011 at *** percent than in the same period in 2010 when they

accounted for *** percent. Raw material costs declined as a share of total COGS during 2008-10, from

*** percent to *** percent because of relative increases in labor and other factory costs, but the ratio was

higher in January-June 2011 at *** percent than in January-June 2010 when they accounted for ***

percent. The Commission’s questionnaire requested U.S. firms to breakout their raw material costs

 6 An ESOP is a “kind of employee benefit plan, similar to a profit-sharing plan.” In an ESOP, a company sets up

a trust fund into which it contributes new shares of its own stock or cash to buy existing shares (the ESOP may

borrow money to buy new or existing shares with the firm making cash contributions to the plan to enable it to repay

borrowing). Company contributions to the trust of stock or cash are tax-deductible, as are dividends, within certain

limits. Shares in the trust are allocated to individual employee accounts. See, “How an Employee Stock Ownership

Plan (ESOP) Works,” The National Center for Employee Ownership, found at Internet site http://www.nceo.org,

retrieved on July 18, 2011. EDIS document 456851.

 7

 E-mail from *** to Commission staff, August 9, 2011. EDIS document 456822.

 8

 ***.

 9

 E-mail from *** to Commission staff, August 1, 2011. EDIS document 456821.

 10 Respondents HHI and Hyundai USA request the Commission to exclude Efacec. Postconference brief of HHI

and Hyundai USA, p. 4. 

 11 VTC produces nonsubject transformers at Roanoke, VA and Chihuahua, Mexico.

 12 Waukesha is part of the Industrial Products and Services Segment of SPX Corporation. The following

comment was made in the firm’s annual report for 2010, “We achieved total annual revenues of $4.9 billion in 2010,

about flat to 2009. Improvement in many of our early-cycle businesses, growth in emerging markets and the

contributions from recent acquisitions were offset by a decline in revenue from our late-cycle power and energy

businesses, most notably power transformers.” 2010 Annual Report of SPX Corp, p. 3. EDIS document 456864.

The corporation’s management further stated, “In North America, we are a leading provider of medium power

transformers. Last year, we announced plans to invest approximately $70 million to expand the size of our

Waukesha Electric Systems facility in Wisconsin by approximately 50 percent and extend our ability to produce

large, high-voltage power transformers for the North American power market.” Ibid, pp. 7 and 16. SPX further

stated that the decline in revenues in its Industrial Products and Services segment in 2010 from 2009 was attributable

to transformers (the majority of which are below 60 MVA) and that gross profit was unfavorably impacted by lower

pricing on power transformers. SPX Corp., 2010 Annual Report on Form 10-K, p. 25. Power transformer sales

revenue and gross profit were lower in 2009 from 2008 due to reduced demand, lower prices, and lower overhead

absorption rates (due to lower sales). Ibid., p. 31.

 13 E-mail from *** to Commission staff, August 5, 2011. EDIS document 456853.

VI-3
between grain-oriented silicon electrical steel, windings, and all other.14 These data are shown in table

VI-3.

Table VI-3

LPTs: Breakdown of raw material costs, fiscal years 2008-10, January-June 2010, and JanuaryJune 2011

Item

Fiscal year January-June

2008 2009 2010 2010 2011

Value ($1,000)

GOES *** *** *** *** ***

Windings *** *** *** *** ***

All other *** *** *** *** ***

 Total *** *** *** *** ***

Ratio to reported total (percent)

GOES 24.3 21.9 22.0 22.5 17.3

Windings 27.1 17.7 24.6 25.5 31.8

All other 48.7 60.4 53.4 52.0 50.9

 Total 100.0 100.0 100.0 100.0 100.0

Note: The reported data reconciles to total raw materials reported in table VI-1, ***.

Source: Compiled from data submitted in response to Commission questionnaires.

It should be noted that the “all other” category of costs changes more with changes in product

mix than does the category of GOES or windings. Differences in the tank or mechanical frame,

additional cooling, the addition of other parts, and changes in insulation within the core or windings affect

the category (see Part I of this report for a description of the product).

A variance analysis for the reporting U.S. firms is not presented here. A variance analysis

provides an assessment of changes in profitability as related to changes in pricing, cost, and volume. This

analysis is more effective when the product involved is a homogeneous product with no variation in

product mix (i.e., consistent cost structure), which is not the case here where each sale is a product

designed to a specific design for a specific customer. Also, as noted earlier, there are concerns about the

usefulness of unit values, which are used to construct the variance calculation. 

 14 Windings are predominantly copper. The all other category includes bushings, insulators, steel, etc. Price

escalation clauses in contracts have allowed U.S. firms to recover increasing raw material costs (or, conversely, to

give up some price declines in raw material costs). Petitioners allege that the U.S. firms have been forced to accept

the risk of raw material cost increases in a period of volatile commodity prices by contract practices of Korean

producers in the U.S. market. Petitioners’ postconference brief, pp. 40-41. Respondents dispute this. 

Postconference brief of HHI and Hyundai USA, p. 16. Postconference brief of Hyosung and HICO America, p. 4,

note 5.

VI-4
CAPITAL EXPENDITURES AND RESEARCH AND DEVELOPMENT EXPENSES

Data on capital expenditures and research and development (“R&D”) expenses related to the

production of LPTs are shown in table VI-4. 

Table VI-4

LPTs: Capital expenditures and R&D expenses, by firms, fiscal years 2008-10, January-June 2010,

and January-June 2011

Item

Fiscal year January-June

2008 2009 2010 2010 2011

Value ($1,000)

Capital expenditures:1

ABB *** *** *** *** ***

Delta Star *** *** *** *** ***

Efacec *** *** *** *** ***

PTTI *** *** *** *** ***

VTC *** *** *** *** ***

Waukesha *** *** *** *** ***

Total 8,155 *** 34,744 8,208 ***

R&D expenses:

ABB *** *** *** *** ***

Delta Star *** *** *** *** ***

Efacec *** *** *** *** ***

PTTI *** *** *** *** ***

VTC *** *** *** *** ***

Waukesha *** *** *** *** ***

Total *** *** *** *** ***

1

 Numerous announcements have been made regarding facility expansion of U.S. firms and the construction of

U.S. facilities by foreign multinationals. For example, see page III-3 in this report; petitioners’s postconference

brief, pp. 11-13; postconference brief of Hyosung and HICO America, pp. 40-42; and postconference brief of HHI

and Hyundai USA, pp. 32-33. These announcements often include the intended production of transformers that

are not LPTs and the announcement may precede the start of production or product acceptance by months or

years.

Source: Compiled from data submitted in response to Commission questionnaires.

Delta Star reported that its capital expenditures focus on improvements ***.15

Efacec’s reported capital expenditures ***.16

VTC reported it installed ***.17

 15 Attachment to e-mail from *** to Commission staff, August 9, 2011. EDIS document 456822.

 16 Efacec’s U.S. producers’ questionnaire, sections II-2 and III-12.

 17 E-mails from *** to Commission staff, August 9, 2011. EDIS document 456823.

VI-5
Waukesha reported ***.18

Two foreign-based producers have reported building U.S. plants to produce LPTs. Hyundai

reported capital expenditures related to building a new production facility in Montgomery, AL with an

expected completion date of November 2011. It reported capital expenditures of $*** in 2009, $*** in

2010, and $*** in interim 2011.19 According to testimony at the staff conference, Hyundai expects to

focus on initially producing non-subject transformers, those with a capacity of between 6 and 60 MVA.20

Reportedly, Mitsubishi Electric Power Products, Inc. announced that it will construct a transformer plant

near Memphis, TN. The plant is estimated to cost approximately $200 million and is to begin production

after employee training in 2012.21

ASSETS AND RETURN ON INVESTMENT

The Commission’s questionnaire requested data on assets used in the production, warehousing, and

sale of LPTs to compute return on investment (“ROI”) for 2008 to 2010. The data for operating income

are from table VI-1. Operating income was divided by total assets, resulting in ROI, shown in table VI-5.

Table VI-5

LPTs: Value of assets used in the production, warehousing, and sale, and return on investment,

fiscal years 2008-10

* * * * * * *

Changes in the values of current assets shown in table VI-5 are due to increased values of the

category of all other current assets. Changes in property, plant, and equipment reflect the ***. 

CAPITAL AND INVESTMENT

The Commission requested U.S. firms to describe any actual or potential negative effects of

imports of LPTs from Korea on the firms’ growth, investment, and ability to raise capital or development

and production efforts (including efforts to develop a derivative or more advanced version of the

product). Their responses are shown below.

Actual Negative Effects

ABB

***.

Delta Star

***.

 18 Waukesha’s U.S. producers’ questionnaire, section II-2.

 19 Conference transcript, p. 145 (G. Lee) regarding month of start-up. Hyundai’s U.S. producers’ questionnaire

response, section III-12.

 20 Conference transcript, p. 154 (Lee). This statement was amended later in the proceeding to be an average of 60

MVA. Purchaser approval will undoubtedly require additional time before the plant may be able to produce LPTs to

customer order. See conference transcript, p. 18 (Cusack).

 21 Announcement dated February 14, 2011, reprinted in the postconference brief of HHI and Hyundai USA, exh.

11.

VI-6
PTTI

***.

Efacec

***.

VTC

***.

Waukesha:

***. 

Anticipated Negative Effects

ABB

***.

Delta Star

***.

PTTI

***.

Efacec

***.

VTC

***.

Waukesha

***.

VI-7
 
VII-1 

PART VII: THREAT CONSIDERATIONS AND INFORMATION ON 

NONSUBJECT COUNTRIES 

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

In determining whether an industry in the United States is threatened with 

material injury by reason of imports (or sales for importation) of the 

subject merchandise, the Commission shall consider, among other relevant 

economic factors1

-- 

(I) if a countervailable subsidy is involved, such information as may be 

presented to it by the administering authority as to the nature of the subsidy 

(particularly as to whether the countervailable subsidy is a subsidy 

described in Article 3 or 6.1 of the Subsidies Agreement), and whether 

imports of the subject merchandise are likely to increase, 

(II) any existing unused production capacity or imminent, substantial 

increase in production capacity in the exporting country indicating the 

likelihood of substantially increased imports of the subject merchandise 

into the United States, taking into account the availability of other export 

markets to absorb any additional exports, 

(III) a significant rate of increase of the volume or market penetration of 

imports of the subject merchandise indicating the likelihood of 

substantially increased imports, 

(IV) whether imports of the subject merchandise are entering at prices that 

are likely to have a significant depressing or suppressing effect on 

domestic prices, and are likely to increase demand for further imports, 

(V) inventories of the subject merchandise, 

(VI) the potential for product-shifting if production facilities in the foreign 

country, which can be used to produce the subject merchandise, are 

currently being used to produce other products, 

(VII) in any investigation under this title which involves imports of both a 

raw agricultural product (within the meaning of paragraph (4)(E)(iv)) and 

any product processed from such raw agricultural product, the likelihood 

that there will be increased imports, by reason of product shifting, if there 

is an affirmative determination by the Commission under section 705(b)(1) 

or 735(b)(1) with respect to either the raw agricultural product or the 

processed agricultural product (but not both), 

 1

 Section 771(7)(F)(ii) of the Act (19 U.S.C. § 1677(7)(F)(ii)) provides that “The Commission shall consider 

{these factors} . . . as a whole in making a determination of whether further dumped or subsidized imports are 

imminent and whether material injury by reason of imports would occur unless an order is issued or a suspension 

agreement is accepted under this title. The presence or absence of any factor which the Commission is required to 

consider . . . shall not necessarily give decisive guidance with respect to the determination. Such a determination 

may not be made on the basis of mere conjecture or supposition.” 
VII-2 

(VIII) the actual and potential negative effects on the existing development 

and production efforts of the domestic industry, including efforts to 

develop a derivative or more advanced version of the domestic like 

product, and 

(IX) any other demonstrable adverse trends that indicate the probability 

that there is likely to be material injury by reason of imports (or sale for 

importation) of the subject merchandise (whether or not it is actually being 

imported at the time).2

Information on the volume and pricing of imports of the subject merchandise is presented in Parts 

IV and V; and information on the effects of imports of the subject merchandise on U.S. producers’ 

existing development and production efforts is presented in Part VI. Information on inventories of the 

subject merchandise; foreign producers’ operations, including the potential for “product-shifting;” any 

other threat indicators, if applicable; and any dumping in third-country markets, follows. Also presented 

in this section of the report is information obtained for consideration by the Commission on nonsubject 

countries and the global market. 

THE INDUSTRY IN KOREA 

The petition identified two potential producers of LPTs in Korea, Hyosung and HHI.3

 Hyosung 

produces LPTs at its Changwon, Korea plant, which produces transformers from 10 MVA to 2000 MVA 

and with voltage ratings up to 765 kV.4

 The Commission received questionnaire responses from two 

producers or exporters of LPTs in Korea, which are believed to account for virtually all, if not all, of U.S. 

imports in 2010.5

 These data are presented in table VII-1. 

As detailed in table VII-1, Korean LPT capacity increased by *** percent between 2008 and 

2010. Hyosung reportedly increased its production capacity in February 2010 by building a new facility 

adjacent to its existing facility in Changwon, Korea, which is primarily dedicated to the production of 

LPTs of up to 2,000 MVA and 765 kV. Hyosung reportedly invested in this increased capacity to satisfy 

growing demand in non-U.S. markets.6

 HHI’s *** in production capacity from *** were reportedly due 

to ***. ***.7

 

 2

 Section 771(7)(F)(iii) of the Act (19 U.S.C. § 1677(7)(F)(iii)) further provides that, in antidumping 

investigations, “. . . the Commission shall consider whether dumping in the markets of foreign countries (as 

evidenced by dumping findings or antidumping remedies in other WTO member markets against the same class or 

kind of merchandise manufactured or exported by the same party as under investigation) suggests a threat of 

material injury to the domestic industry.” 3

 HHI and Hyosung were the only two exporters of LPTs from Korea of any significance during the period 

examined. HHI began selling LPTs in the United States in approximately 1982 and Hyosung began in 

approximately 1994. Respondent HHI’s postconference brief, p. 1. Respondent Hyosung notes that it is aware of 

two smaller Korean transformer producers, Iljin and LSIS; however, these firms exported “few, if any ‘LPTs’ to the 

United States” during the period examined. Respondent Hysosung’s postconference brief, p. 5. 4

 Respondent Hyosung’s postconference brief, p. 3. 

5

 Conference transcript, p. 154 (Connelly) and p. 154 (H. Lee). Respondent Hyosong’s postconference brief, 

Response to Staff Questions, p. 3. ***. 6

 Hyosung projects its exports to non-U.S. markets to grow for the foreseeable future. Conference transcript, p. 

124 (Neal). Respondent Hyosong’s postconference brief, Response to Staff Questions, p. 5. 7

 HHI’s ***. Respondent HHI’s postconference brief, exh. 1, pp. 2-3. 
VII-3 

Exports accounted for the largest share of total shipments, ranging from *** percent and *** 

percent of total shipments during the period. Exports to the United States accounted for between *** 

percent and *** percent of total shipments, while home market shipments accounted for between *** 

percent and *** percent of total shipments over the period examined. 8 

Table VII-1 

LPTs: Data for capacity, production, shipments, and inventories of producers in Korea, 2008-10, 

January-June 2010, January-June 2011, and projected 2011-12 

 

* * * * * * * 

Both Korean producers are related to firms that produce, have the capability to produce, or have 

plans to produce LPTs in the United States or other countries.9

 ***.10

U.S. INVENTORIES OF IMPORTED MERCHANDISE 

Table VII-2 presents data on U.S. importers’ reported inventories of LPTs. Inventories of LPTs 

are not typically maintained because these products are made to order and have particular applications as 

specified by the customer.11 

Table VII-2 

LPTs: U.S. importers’ inventories, 2008-10, January-June 2010, and January-June 2011 

* * * * * * * 

U.S. IMPORTERS’ OUTSTANDING ORDERS 

U.S. importers reported approximately $*** million of outstanding orders from Korea since June 

30, 2011.12 

ANTIDUMPING DUTY ORDERS IN THIRD-COUNTRY MARKETS 

No producer, importer, or foreign producer reported any antidumping duty orders on LPTs from 

Korea in third-country markets. 

 

 8

 Other export markets cited by Korean producers of LPTs include: ***. 

9

 Nantong Hyosung Transformer Co., Ltd. produces LPTs in Nantong, China and is a subsidiary of Hyosung. 

Hyundai Heavy Industries Bulgaria produces LPTs in Sofia, Bulgaria and is a subsidiary of HHI. As noted earlier, 

HHI’s U.S. subsidiary, Hyundai Power Transformers USA, is currently building a facility in Montgomery, AL, 

which is expected to be completed by November 2011. 10 ***. ***. ***. 

11 Conference transcript, pp. 80 (Kerwin). ***. Email from ***, August 16, 2011. ***. Email from ***, August 

17, 2011. 12 ***. ***. ***. 
VII-4 

INFORMATION ON NONSUBJECT SOURCES 

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.’”13 

Part IV presents information on U.S. imports of LPTs, including major nonsubject sources of imports. 

Mexico, Canada, and Austria were the leading nonsubject suppliers of LPTs to the United States 

during 2008–10.14 China is also emerging as a supplier of LPTs to the U.S. market and is the largest 

global nonsubject exporter of transformers greater than 10 MVA (HS 8504.23, which includes nonsubject 

products), though U.S. imports from China were less than two percent of imports of transformers greater 

than 10 MVA during 2008–10.15

 13 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). 14 LPTs (not including parts) are in HTS subheading 8504.23.00, liquid dielectric transformers having a power 

handling capacity exceeding 10,000 kVA (10 MVA). This subheading includes both subject and nonsubject 

products, since subject products are those with a power handling capacity of 60,000 kVA (60 MVA) or more. The 

HTS includes provisions for transformers having a power handling capacity exceeding 10,000 kVA but not 

exceeding 100,000 kVA (100 MVA) (HTS 8504.23.0040) and having a power handling capacity exceeding 100,000 

kVA (HTS 8504.23.0080). Imports from Austria, Canada, and Mexico in HTS 8504.23.0080, which includes only 

subject products, were each higher than combined imports from all other nonsubject suppliers of transformers in 

HTS 8504.23.0040, which includes nonsubject and subject products, and HTS 8504.23.0080 during 2008–10. 

Therefore, these three countries were the largest nonsubject suppliers. Using the same approach, Mexico was the 

largest nonsubject supplier during 2008–10. It is not possible to determine the precise order for Canada and Austria, 

though Canada accounts for more imports of all transformers exceeding 10 MVA. USITC Dataweb/USDOC 

(accessed August 12, 2011). 15 GTIS, Global Trade Atlas Database (accessed July 25, 2011); USITC Dataweb/USDOC (accessed August 12, 

2011); JSHP Web site, http://www.jshp.com/news.html (accessed August 1, 2011); BTW Transformer Web site, 

http://www.btw-usa.com/PST_reference.html (accessed August 1, 2011); TBEA Web site, 

http://en.tbea.com.cn/Modules/Other/Filiale/ShowFiliale.aspx?ID=3 (accessed August 10, 2011). 
VII-5 

Table VII-3 

LPTs: U.S. imports of liquid dielectric transformers having a power handling capacity exceeding 

10,000 kVA (10 MVA), by source, 2008-10, January-June 2010, and January-June 2011 

Item 

Calendar year January-June 

2008 2009 2010 2010 2011 

HTS 8504.23.0040: Liquid dielectric transformers having a power handling capacity exceeding 

10,000 kVA but not exceeding 100,000 kVA 

 Value ($1,000) 

Korea 24,418 37,887 88,710 39,920 25,244

Mexico 129,016 94,810 70,294 33,896 29,757

Canada 12,877 16,042 10,939 8,043 4,173

Austria 0 0 3,068 3,068 1,525

Other 132,855 92,483 87,390 45,498 40,187

 Subtotal 299,165 241,221 260,401 130,426 100,886

HTS 8504.23.0080: Liquid dielectric transformers having a power handling capacity exceeding 

100,000 kVA 

 Value ($1,000) 

Korea 268,947 311,937 350,926 165,085 155,478

Mexico 158,556 164,947 90,634 58,019 21,931

Canada 88,378 131,767 133,048 75,972 35,065

Austria 107,639 137,082 109,492 60,774 73,706

Other 258,454 356,150 234,688 144,669 141,164

 Subtotal 881,973 1,101,883 918,788 504,519 427,344

 Total 1,181,138 1,343,104 1,179,189 634,945 528,230

Note.--HTS 8504.23.0040 includes nonsubject products. 

Source: USITC DataWeb/USDOC (accessed August 12, 2011). 

Mexico 

Mexico was the largest nonsubject supplier of LPTs to the United States during 2008–10. U.S. 

imports of transformers from Mexico exceeding 100 MVA totaled $158.6 million in 2008, $164.9 million 

in 2009, and $90.6 million in 2010, while imports of transformers from 10 to 100 MVA totaled $129.0 

million in 2008, $94.8 million in 2009, and $70.3 million in 2010.16 There are at least four producers of 

LPTs in Mexico, Industrias IEM (up to 200 MVA core type, up to 650 MVA shell type), Prolec GE (up to 

1,000 MVA), Siemens, and WEG (up to 350 MVA), all of which supply the U.S. market from these 

plants.17 ***.18

Canada 

Canada was one of the three largest nonsubject suppliers of LPTs to the United States during 

2008–10. Imports from Canada of transformers greater than 100 MVA totaled $88.4 million in 2008, 

 16 USITC Dataweb/USDOC (accessed August 12, 2011). 

17 Information on the maximum size produced by Siemens in Mexico was not readily available. An example of 

an LPT produced in Mexico in a Siemens brochure was 420 MVA. Petitioners Response to Commerce Department 

Questions, p. 12, exhibit 3; Grupo Condumex, “Power Transformers,” p. 3, 5; Prolec GE, “Generation Power 

Transformers,” p. 1; WEG, “Energy Power Transformers,” p. 3. 18 ***.
VII-6 

$131.8 million in 2009, and $133.0 million in 2010, while imports of transformers from 10 to 100 MVA 

totaled $12.9 million in 2008, $16.0 million in 2009, and $10.9 million in 2010.19 Producers of LPTs in 

Canada include ABB (up to 1,200 MVA) and CG Power Systems (up to 1,000 MVA).20 

Austria 

Austria was also among the three largest nonsubject suppliers of LPTs to the United States during 

2008–10. U.S. imports of LPTs from Austria exceeded $100 million annually, with transformers more 

than 100 MVA accounting for the most U.S. imports from Austria. U.S. imports of transformers greater 

than 100 MVA totaled $107.6 million in 2008, $137.1 million in 2009, and $109.5 million in 2010, while 

there were no imports of transformers from 10 MVA to 100 MVA in 2008 and 2009 and $3.1 million in 

imports during 2010.21 Siemens has historically been a significant supplier of LPTs to the U.S. market 

from its plant in Austria.22

China 

China was the largest global nonsubject exporter of transformers greater than 10 MVA (HS 

8504.23, which includes nonsubject products) in 2010, though less than 10 percent of China’s exports 

during 2008–10 were to the United States.23 U.S. imports of transformers greater than 10 MVA from 

China totaled $9.6 million in 2008, $23.5 million in 2009, and $11.4 million in 2010.24 ***.25 ***.26

 19 USITC Dataweb/USDOC (accessed August 12, 2011). 

20 Respondent Hyosung’s postconference brief, exhibit 1; CG Power Systems Web site, 

http://www.cgglobal.com/frontend/ProductDetail.aspx?id=TFw8WXHLcaY= (accessed August 10, 2011) and 

http://www.cgglobal.com/frontend/ProductDetail.aspx?id=vOMoSlKUXes= (accessed August 10, 2011). 21 USITC Dataweb/USDOC (accessed August 12, 2011). 

22 Siemens, “Siemens PTD takes over VA Tech’s Transmission and Distribution Division (T&D),” News 

release, July 13, 2005. 23 GTIS, Global Trade Atlas Database (accessed July 25, 2011). 

24 Petitioners’ postconference brief, exhibit 15. 

25 Global producers such as *** also have production in China, but based on the low value of imports overall 

from China do not appear to have supplied the U.S. market, at least in any significant quantity, from their plants in 

China during the POI. ***; JSHP Web site, http://www.jshp.com/news.html (accessed August 1, 2011); BTW 

Transformer Web site, http://www.btw-usa.com/PST_reference.html (accessed August 1, 2011); TBEA Web site, 

http://en.tbea.com.cn/Modules/Other/Filiale/ShowFiliale.aspx?ID=3 (accessed August 10, 2011); ***; Petitioners’ 

response to Commerce Department questions, p. 12, exhibit 3. 26 ***. 
APPENDIX A

FEDERAL REGISTER NOTICES

A-1
 
Federal Register / Vol. 76, No. 139 / Wednesday, July 20, 2011 / Notices 43343 

WISCONSIN 

Racine County 

Yorkville #4 School, 17640 Old Yorkville 

Rd., Yorkville, 11000518. 

[FR Doc. 2011–18228 Filed 7–19–11; 8:45 am] 

BILLING CODE 4312–51–P

INTERNATIONAL TRADE 

COMMISSION 

[Investigation No. 731–TA–1189 

(Preliminary)] 

Large Power Transformers From 

Korea; Institution of Antidumping Duty 

Investigation and Scheduling of a 

Preliminary Phase Investigation 

AGENCY: United States International 

Trade Commission. 

ACTION: Notice. 

SUMMARY: The Commission hereby gives 

notice of the institution of an 

investigation and commencement of 

preliminary phase antidumping 

investigation No. 731–TA–1189 

(Preliminary) under section 733(a) of the 

Tariff Act of 1930 (19 U.S.C. 1673b(a)) 

(the Act) to determine whether there is 

a reasonable indication that an industry 

in the United States is materially 

injured or threatened with material 

injury, or the establishment of an 

industry in the United States is 

materially retarded, by reason of 

imports from Korea of large power 

transformers, provided for in 

subheading 8504.23.00 of the 

Harmonized Tariff Schedule of the 

United States, that are alleged to be sold 

in the United States at less than fair 

value. Unless the Department of 

Commerce extends the time for 

initiation pursuant to section 

732(c)(1)(B) of the Act (19 U.S.C. 

1673a(c)(1)(B)), the Commission must 

reach a preliminary determination in 

antidumping investigations in 45 days, 

or in this case by August 29, 2011. The 

Commission’s views are due at 

Commerce within five business days 

thereafter, or by September 6, 2011. 

For further information concerning 

the conduct of this investigation 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: July 14, 2011. 

FOR FURTHER INFORMATION CONTACT: 

Edward Petronzio (202–205–3176), 

Office of Investigations, U.S. 

International Trade Commission, 500 E 

Street, SW., Washington, DC 20436. 

Hearing-impaired persons can obtain 

information on this matter by contacting 

the Commission’s TDD terminal on 202– 

205–1810. Persons with mobility 

impairments who will need special 

assistance in gaining access to the 

Commission should contact the Office 

of the Secretary at 202–205–2000. 

General information concerning the 

Commission may also be obtained by 

accessing its Internet server (http:// 

www.usitc.gov). The public record for 

this investigation may be viewed on the 

Commission’s electronic docket (EDIS) 

at http://edis.usitc.gov. 

SUPPLEMENTARY INFORMATION:

Background.—This investigation is 

being instituted in response to a petition 

filed on July 14, 2011 by ABB Inc., Cary, 

NC; Delta Star Inc., Lynchburg, VA; and 

Pennsylvania Transformer Technology 

Inc., Cannonsburg, PA. 

Participation in the investigation and 

public service list.—Persons (other than 

petitioners) wishing to participate in the 

investigation as parties must file an 

entry of appearance with the Secretary 

to the Commission, as provided in 

sections 201.11 and 207.10 of the 

Commission’s rules, not later than seven 

days after publication of this notice in 

the Federal Register. Industrial users 

and (if the merchandise under 

investigation is sold at the retail level) 

representative consumer organizations 

have the right to appear as parties in 

Commission antidumping 

investigations. The Secretary will 

prepare a public service list containing 

the names and addresses of all persons, 

or their representatives, who are parties 

to this investigation upon the expiration 

of the period for filing entries of 

appearance. 

Limited disclosure of business 

proprietary information (BPI) under an 

administrative protective order (APO) 

and BPI service list.—Pursuant to 

section 207.7(a) of the Commission’s 

rules, the Secretary will make BPI 

gathered in this investigation available 

to authorized applicants representing 

interested parties (as defined in 19 

U.S.C. 1677(9)) who are parties to the 

investigation under the APO issued in 

the investigation, provided that the 

application is made not later than seven 

days after the publication of this notice 

in the Federal Register. A separate 

service list will be maintained by the 

Secretary for those parties authorized to 

receive BPI under the APO. 

Conference.—The Commission’s 

Director of Investigations has scheduled 

a conference in connection with this 

investigation for 9:30 a.m. on August 4, 

2011, at the U.S. International Trade 

Commission Building, 500 E Street, 

SW., Washington, DC. Requests to 

appear at the conference should be filed 

with the Office of the Secretary 

(William.bishop@usitc.gov and 

Sharon.bellamy@usitc.gov) on or before 

August 2, 2011. Parties in support of the 

imposition of antidumping duties in 

this investigation 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 

August 9, 2011, a written brief 

containing information and arguments 

pertinent to the subject matter of the 

investigation. Parties may file written 

testimony in connection with their 

presentation at the conference no later 

than three days before the conference. If 

briefs or written testimony contain BPI, 

they must conform with the 

requirements of sections 201.6, 207.3, 

and 207.7 of the Commission’s rules. 

The Commission’s rules do not 

authorize filing of submissions with the 

Secretary by facsimile or electronic 

means, except to the extent permitted by 

section 201.8 of the Commission’s rules, 

as amended, 67 FR 68036 (November 8, 

2002). Even where electronic filing of a 

document is permitted, certain 

documents must also be filed in paper 

form, as specified in II (C) of the 

Commission’s Handbook on Electronic 

Filing Procedures, 67 FR 68168, 68173 

(November 8, 2002). 

In accordance with sections 201.16(c) 

and 207.3 of the rules, each document 

filed by a party to the investigation must 

be served on all other parties to the 

investigation (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: This investigation is 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: July 14, 2011. 

James R. Holbein, 

Secretary to the Commission. 

[FR Doc. 2011–18157 Filed 7–19–11; 8:45 am] 

BILLING CODE 7020–02–P 


sroberts on DSK5SPTVN1PROD with NOTICES
Federal Register / Vol. 76, No. 154 / Wednesday, August 10, 2011 / Notices 49439 

deposit rate in effect on the date of 

entry. 

In our May 6, 2003, ‘‘automatic 

assessment’’ clarification, we explained 

that, where respondents in an 

administrative review demonstrate that 

they had no knowledge of sales through 

resellers to the United States, we would 

instruct CBP to liquidate such entries at 

the all-others rate applicable to the 

proceeding. See Antidumping and 

Countervailing Duty Proceedings: 

Assessment of Antidumping Duties, 68 

FR 23954 (May 6, 2003) (Assessment 

Policy Notice). 

Because ‘‘as entered’’ liquidation 

instructions do not alleviate the 

concerns which the May 2003 

clarification was intended to address, 

we find it appropriate in this case to 

instruct CBP to liquidate any existing 

entries of merchandise produced by the 

respondents, and exported by other 

parties at the all-others rate, should we 

continue to find that the respondents 

had no shipments of subject 

merchandise in the POR in our final 

results. See, e.g., Magnesium Metal 

From the Russian Federation: 

Preliminary Results of Antidumping 

Duty Administrative Review, 75 FR 

26922, 26923 (May 13, 2010), 

unchanged in Magnesium Metal From 

the Russian Federation: Final Results of 

Antidumping Duty Administrative 

Review, 75 FR 56989, 56990 (September 

17, 2010). In addition, the Department 

finds that it is more consistent with the 

May 2003 clarification not to rescind the 

review in its entirety but, rather, to 

complete the review with respect to the 

respondents, issuing appropriate 

instructions to CBP based on the final 

results of the review. See the 

‘‘Assessment Rates’’ section of this 

notice below. 

B. Duty Absorption 

On January 25, 2011, Wheatland 

requested that the Department conduct 

a duty absorption inquiry with regard to 

Mueller, Lamina, and Ternium 

Nacional, S.A. de C.V. (Ternium). 

Mueller responded to this request on 

February 22, 2011. Section 751(a)(4) of 

the Tariff Act of 1930, as amended (the 

Act), provides for the Department, if 

requested, to determine during an 

administrative review initiated two or 

four years after publication of the order 

whether antidumping duties have been 

absorbed by the foreign producer or 

exporter if the subject merchandise is 

sold in the United States through an 

affiliated importer. See also 19 CFR 

351.213(j). First, Ternium is not a 

respondent in this administrative 

review. Notwithstanding, because this 

review was not initiated at the two-year 

or four-year interval from publication of 

the antidumping duty order, a duty 

absorption inquiry is not authorized. 

See Antidumping Duty Order. 

Assessment Rates 

Upon completion of the 

administrative review, the Department 

shall determine, and CBP shall assess, 

antidumping duties on all appropriate 

entries, in accordance with 19 CFR 

351.212. The Department intends to 

issue appraisement instructions directly 

to CBP 15 days after the date of 

publication of the final results of this 

review. 

As noted above, the Department 

clarified its ‘‘automatic assessment’’ 

regulation on May 6, 2003. See 

Assessment Policy Notice. This 

clarification will apply to POR entries 

by each respondent company if we 

continue to make a final determination 

of no shipments based upon their 

certifications that they made no POR 

shipments of subject merchandise for 

which they had knowledge of U.S. 

destination. We will instruct CBP to 

liquidate these entries at the all-others 

rate established in the less-than-fairvalue investigation (32.62 percent) if 

there is no rate for the intermediary 

involved in the transaction. See 

Assessment Policy Notice for a full 

discussion of this clarification. 

The preliminary results of 

administrative review and this notice 

are issued and published in accordance 

with sections 751(a)(1) and 777(i)(1) of 

the Act. 

Dated: August 2, 2011. 

Ronald K. Lorentzen, 

Deputy Assistant Secretary for Import 

Administration. 

[FR Doc. 2011–20331 Filed 8–9–11; 8:45 am] 

BILLING CODE 3510–DS–P 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[A–580–867] 

Large Power Transformers From the 

Republic of Korea: Initiation of 

Antidumping Duty Investigation 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

DATES: Effective Date: August 10, 2011. 

FOR FURTHER INFORMATION CONTACT: 

Angelica Mendoza at (202) 482–3019 or 

David Cordell at 202–482–0408, AD/ 

CVD Operations, Office 7, Import 

Administration, International Trade 

Administration, U.S. Department of 

Commerce, 14th Street and Constitution 

Avenue, NW., Washington, DC 20230. 

SUPPLEMENTARY INFORMATION: 

The Petition 

On July 14, 2011, the Department of 

Commerce (‘‘the Department’’) received 

a petition concerning imports of large 

liquid dielectric power transformers 

(‘‘large power transformers’’) from the 

Republic of Korea (‘‘Korea’’), filed in 

proper form on behalf of ABB Inc., Delta 

Star, Inc. and Pennsylvania Transformer 

Technology, Inc., (collectively, ‘‘the 

Petitioners’’). See the Petition for the 

Imposition of Antidumping Duties on 

Large Power Transformers from the 

Republic of Korea, filed on July 14, 2011 

(‘‘the Petition’’). On July 20, 2011, the 

Department issued a request for 

additional information and clarification 

of certain areas of the Petition. The 

Petitioners filed a response to this 

request on July 26, 2011 (hereinafter, 

‘‘Supplement to the Petition’’). In 

accordance with section 732(b) of the 

Tariff Act of 1930, as amended (‘‘the 

Act’’), the Petitioners allege that imports 

of large power transformers from Korea 

are being, or are likely to be, sold in the 

United States at less than fair value, 

within the meaning of section 731 of the 

Act, and that such imports are 

materially injuring, or threatening 

material injury to, an industry in the 

United States. On July 28, 2011, the 

Petitioners filed an amendment to the 

Petition in which they revised the scope 

language, amended the lost sales listing 

and provided the Harmonized Tariff 

Schedule of the United States 

(‘‘HTSUS’’) page for HTSUS number 

8504.90.9540, (hereinafter, ‘‘Second 

Supplement to the Petition’’). On 

August 1, 2011, the Petitioners filed an 

additional amendment to the Petition 

with respect to industry support for the 

Petition (hereinafter, ‘‘Third 

Supplement to the Petition’’). 

On July 28, 2011, the Department 

received a standing challenge to the 

Petition by Hyosung Corporation, a 

Korean producer and exporter of the 

subject merchandise, and its U.S. 

affiliate HICO America Inc. 

(collectively, ‘‘Hyosung’’). On July 29, 

2011, the Department received a 

standing challenge to the petition by 

Hyundai Corporation, a Korean 

producer and exporter of the subject 

merchandise, and its U.S. affiliate 

Hyundai Corporation, USA 

(collectively, ‘‘Hyundai’’). The 

Petitioners responded to HICO’s and 

Hyundai’s submission on August 1, 

2011 (hereinafter, ‘‘Fourth Supplement 

to the Petition’’). 

The Department finds that the 

Petitioners filed the Petition on behalf of 


emcdonald on DSK2BSOYB1PROD with NOTICES
49440 Federal Register / Vol. 76, No. 154 / Wednesday, August 10, 2011 / Notices 

1See http://www.gpo.gov/fdsys/pkg/FR–2011–07– 

06/pdf/2011–16352.pdf for details of the 

Department’s Electronic Filing Requirements, 

which go into effect on August 5, 2011. Information 

on help using IAACCESS can be found at https:// 

iaaccess.trade.gov/help.aspx and a handbook can 

be found at https://iaaccess.trade.gov/help/

Handbook%20on%20Electronic%20Filling%20

Procedures.pdf. 

the domestic industry because the 

Petitioners are interested parties as 

defined in section 771(9)(C) of the Act 

and have demonstrated sufficient 

industry support with respect to the 

antidumping duty investigation which 

the Petitioners are requesting that the 

Department initiate (see ‘‘Determination 

of Industry Support for the Petition’’ 

section below). 

Period of Investigation 

The period of investigation (‘‘POI’’) is 

July 1, 2010, through June 30, 2011. See 

19 CFR 351.204(b)(1). 

Scope of Investigation 

The products covered by this 

investigation are large power 

transformers from Korea. For a full 

description of the scope of the 

investigation, please see the ‘‘Scope of 

Investigation,’’ in Appendix I of this 

notice. 

Comments on Scope of Investigation 

During our review of the Petition, we 

discussed the scope with the Petitioners 

to ensure that it is an accurate reflection 

of the products for which the domestic 

industry is seeking relief. Moreover, as 

discussed in the preamble to the 

Department’s 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 invites all interested parties 

to submit such comments by August 23, 

2011, 20 calendar days from the 

signature date of this notice. 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 

determination. 

All comments must be filed on the 

record of the investigation. If filed after 

August 5, 2011, all comments and 

submissions to the Department must be 

filed electronically using Import 

Administration’s Antidumping 

Countervailing Duty Centralized 

Electronic Service System (‘‘IA 

ACCESS’’).1

Comments on Product Characteristics 

for Antidumping Duty Questionnaire 

We are requesting comments from 

interested parties regarding the 

appropriate physical characteristics of 

large power transformers to be reported 

in response to the Department’s 

antidumping questionnaire. This 

information will be used to identify the 

key physical characteristics of the 

subject merchandise in order to more 

accurately report the relevant factors 

and costs of production, as well as to 

develop appropriate product 

comparison criteria. 

Interested parties may provide any 

information or comments that they feel 

are relevant to the development of an 

accurate listing of physical 

characteristics. Specifically, they may 

provide comments as to which 

characteristics are appropriate to use as 

(1) general product characteristics and 

(2) the product comparison criteria. We 

note that it is not always appropriate to 

use all product characteristics as 

product comparison criteria. We base 

product comparison criteria on 

meaningful commercial differences 

among products. In other words, while 

there may be some physical product 

characteristics utilized by 

manufacturers to describe large power 

transformers, it may be that only a select 

few product characteristics take into 

account commercially meaningful 

physical characteristics. In addition, 

interested parties may comment on the 

hierarchy under which the physical 

characteristics should be considered in 

product matching. 

In order to consider the suggestions of 

interested parties in developing and 

issuing the antidumping duty 

questionnaire, we must receive 

comments by August 23, 2011. 

Additionally, rebuttal comments must 

be received by August 30, 2011. 

Determination of Industry Support for 

the Petition 

Section 732(b)(1) of the Act requires 

that a petition be filed on behalf of the 

domestic industry. Section 732(c)(4)(A) 

of the Act provides that a petition meets 

this requirement if the domestic 

producers or workers who support the 

petition account for: (i) At least 25 

percent of the total production of the 

domestic like product; and (ii) more 

than 50 percent of the production of the 

domestic like product produced by that 

portion of the industry expressing 

support for, or opposition to, the 

petition. Moreover, section 732(c)(4)(D) 

of the Act provides that, if the petition 

does not establish support of domestic 

producers or workers accounting for 

more than 50 percent of the total 

production of the domestic like product, 

the Department shall: (i) Poll the 

industry or rely on other information in 

order to determine if there is support for 

the petition, as required by 

subparagraph (A); or (ii) determine 

industry support using a statistically 

valid sampling method to poll the 

industry. 

Section 771(4)(A) of the Act defines 

the ‘‘industry’’ as the producers as a 

whole of a domestic like product. Thus, 

to determine whether a petition has the 

requisite industry support, the statute 

directs the Department to look to 

producers and workers who produce the 

domestic like product. The International 

Trade Commission (‘‘ITC’’), which is 

responsible for determining whether 

‘‘the domestic industry’’ has been 

injured, must also determine what 

constitutes a domestic like product in 

order to define the industry. Although 

both the Department and the ITC must 

apply the same statutory definition 

regarding the domestic like product (see 

section 771(10) of the Act), they do so 

for different purposes and pursuant to a 

separate and distinct authority. In 

addition, the Department’s 

determination is subject to limitations of 

time and information. Although this 

may result in different definitions of the 

like product, such differences do not 

render the decision of either agency 

contrary to law. See USEC, Inc. v. 

United States, 132 F. Supp. 2d 1, 8 (CIT 

2001), citing Algoma Steel Corp., Ltd. v. 

United States, 688 F. Supp. 639, 644 

(CIT 1988), aff’d 865 F.2d 240 (Fed. Cir. 

1989), cert. denied 492 U.S. 919 (1989). 

Section 771(10) of the Act defines the 

domestic like product as ‘‘a product 

which is like, or in the absence of like, 

most similar in characteristics and uses 

with, the article subject to an 

investigation under this 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, the Petitioners do not offer a 

definition of domestic like product 

distinct from the scope of the 

investigation. Based on our analysis of 

the information submitted on the 

record, we have determined that large 

power transformers 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 Antidumping 

Duty Investigation Initiation Checklist: 

Large Power Transformers from the 


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Federal Register / Vol. 76, No. 154 / Wednesday, August 10, 2011 / Notices 49441 

Republic of Korea (‘‘Checklist’’), at 

Attachment II, Analysis of Industry 

Support for the Petition Covering Large 

Power Transformers from Korea, on file 

in the Central Records Unit, Room 7046 

of the main Department of Commerce 

building. 

In determining whether the 

Petitioners have standing under section 

732(c)(4)(A) of the Act, we considered 

the industry support data contained in 

the Petition with reference to the 

domestic like product as defined in the 

‘‘Scope of Investigation’’ section above. 

To establish industry support, the 

Petitioners provided their production of 

the domestic like product in 2010 and 

compared this to the estimated total 

production of the domestic like product 

for the entire domestic industry. See 

Volume I of the Petition at Exhibit 2 and 

Supplement to the Petition, at Exhibit 9. 

To estimate total 2010 production of the 

domestic like product, the Petitioners 

used their own data and industry 

specific knowledge. See Volume I of the 

Petition, at Exhibit 2 and Supplement to 

the Petition, at Exhibit 9; see also 

Checklist at Attachment II. We have 

relied upon data the Petitioners 

provided for purposes of measuring 

industry support. For further 

discussion, see Checklist at Attachment 

II. 

As noted above, on July 28, 2011, and 

July 29, 2011, we received submissions 

on behalf of Hyosung and Hyundai, 

respectively, Korean producers and 

exporters of the subject merchandise, 

questioning the domestic like product 

definition and the industry support 

calculation in the Petition. On August 1, 

2011, the Petitioners filed a reply. For 

further discussion of these submissions, 

see Checklist at Attachment II. 

Based on information provided in the 

Petition, supplemental submissions, and 

other information obtained by the 

Department, we determine that the 

domestic producers and workers have 

met the statutory criteria for industry 

support under section 732(c)(4)(A) of 

the Act because the domestic producers 

(or workers) who support the Petition 

account for at least 25 percent of the 

total production of the domestic like 

product and more than 50 percent of the 

production of the domestic like product 

produced by that portion of the industry 

expressing support for, or opposition to, 

the Petition. See Checklist at 

Attachment II for further details on the 

Department’s evaluation of industry 

support for the Petition. Accordingly, 

the Department determines that the 

Petition was filed on behalf of the 

domestic industry within the meaning 

of section 732(b)(1) of the Act. 

The Department finds that the 

Petitioners filed the Petition on behalf of 

the domestic industry because they are 

interested parties as defined in section 

771(9)(C) of the Act and they have 

demonstrated sufficient industry 

support with respect to the antidumping 

duty investigation that they are 

requesting the Department initiate, in 

accordance with section 732(c)(4)(A) of 

the Act. 

Allegations and Evidence of Material 

Injury and Causation 

The Petitioners allege that the U.S. 

industry producing the domestic like 

product is being materially injured, or is 

threatened with material injury, by 

reason of the imports of the subject 

merchandise sold at less than normal 

value (‘‘NV’’). In addition, the 

Petitioners allege that subject imports 

exceed the negligibility threshold 

provided for under section 771(24)(A) of 

the Act. 

The Petitioners contend that the 

industry’s injured condition is 

illustrated by reduced market share, 

reduced shipments, reduced capacity 

utilization, underselling and price 

depression or suppression, a decline in 

financial performance, lost sales and 

revenue, an increase in import 

penetration, and threat of future injury. 

See Volume I of the Petition, at 21–22, 

24–33, and Exhibits 5, 7–9, and 10–11, 

and Second Supplement to the Petition 

at 3 and at Attachment 1. 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 

Checklist at Attachment III, Analysis of 

Allegations and Evidence of Material 

Injury and Causation for the Petition 

Covering Large Power Transformers 

from the Republic of Korea. 

Allegations of Sales at Less Than Fair 

Value 

The following is a description of the 

allegations of sales at less than fair value 

upon which the Department based its 

decision to initiate this investigation of 

imports of large power transformers 

from Korea. The sources of data for the 

deductions and adjustments relating to 

the U.S. price, and cost of production 

(‘‘COP’’) are also discussed in the 

initiation checklist. See Checklist at 

6–9. 

Export Price 

The Petitioners based U.S. export 

price (‘‘EP’’) on the prices of four large 

power transformers manufactured in 

Korea and offered for sale in the United 

States by two Korean producers/ 

exporters. See Checklist at 7; see also 

Volume II of the Petition at II–2 and 

Exhibit AD–2 and Supplement to the 

Petition at 29, 30 and Exhibits 18 and 

21. Based on the stated sales and 

delivery terms, the Petitioners then 

adjusted the U.S. prices to account for 

certain expenses associated with 

exporting and delivering the product to 

the U.S. customers (i.e., U.S. inland rail 

freight, ocean freight and U.S. port fees). 

While the Department will normally 

make additional downward adjustments 

to U.S. price for U.S. brokerage and 

handling, foreign brokerage and 

handling, direct selling and credit 

expenses, the Petitioners took a 

conservative approach and did not 

include any such adjustments in their 

calculation of U.S. price. See Checklist 

at 7; see also Volume II of the Petition 

at page II–3, 5, 7, and 10 and Exhibits 

AD–2–3, and Supplement to the 

Petition, at 29–31 and Exhibits 18–21. 

Normal Value 

According to the Petitioners, large 

power transformers are highly complex 

and specialized products that are 

manufactured to a customer’s unique 

specifications. As such, identifying sales 

of identical or similar large power 

transformers in the U.S. and Korean 

markets that could be compared on a 

price-to-price basis is virtually 

impossible because they differ 

substantially. Accordingly, the 

Petitioners based normal value on 

constructed value (‘‘CV’’) in accordance 

with section 773(a)(4) of the Act. 

Constructed value consists of the cost 

of manufacturing, selling, general and 

administrative (‘‘SG&A’’) expenses, 

financial expenses and profit. See 

section 773(a)(4) of the Act. The 

Petitioners calculated constructed value 

based on the U.S. producer’s bid 

proposal cost of production model for 

the U.S. sales of large power 

transformers used in the Petition. The 

U.S. producer develops the cost of 

production for each transformer when 

bidding on large power transformers 

contracts in the United States, and thus 

the costs were developed based on the 

specific transformer for each U.S. sale 

identified in the Petition. 

In calculating constructed value, the 

Petitioners adjusted the U.S. producer’s 

cost of manufacturing for known 

differences, where available, between 

the U.S. and Korean markets. 

Specifically, the Petitioners based the 

cost of labor on the Korean 

manufacturing wage from the 

International Labor Statistics as 

published on the Department’s Web site. 


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2The scope also covers HTSUS number 

8504.90.9540 of all transformer parts. However, we 

will not use this number in our respondent 

selection analysis as it is a basket category and 

would not allow for a meaningful analysis. 

See Supplement to the Petition at 

Exhibit 13. The Petitioners also adjusted 

the U.S. producer’s energy costs based 

on publicly available Korean electricity 

and natural gas costs. See Supplement 

to the Petition at Exhibits 14 and 15. 

The Petitioners did not adjust the U.S. 

producer’s cost of materials for the 

differences between the U.S. and Korean 

markets. According to the Petitioners 

such an adjustment is not practical 

because the materials used in the 

production of large power transformers 

are specialized inputs, the costs of 

which are not reflected accurately in 

published data. The Petitioners also 

state that the U.S. material costs are 

comparable to the costs in the Korean 

market because most of the inputs are 

commodity-type products that are 

widely traded on world markets. To 

calculate the variable and fixed 

overhead costs, the Petitioners relied 

upon the variable and fixed overhead 

rates of the U.S. producer calculated as 

a percentage of the labor costs adjusted 

for known differences between the U.S. 

and Korean markets. See Supplement to 

the Petition at Exhibit 16. 

To determine constructed value, the 

Petitioners added to the cost of 

manufacturing amounts for SG&A 

expenses, financial expenses and profit 

based on financial statements of the 

Korean producers that manufactured the 

specific transformers sold to the United 

States pursuant to each U.S. sale 

identified in the Petition. See 

Supplement to the Petition at Exhibits 

16 and 17; see also Checklist, at 8 and 

9. 

Fair Value Comparisons 

Based on the data provided by 

Petitioners, there is reason to believe 

that imports of large power transformers 

from Korea are being, or are likely to be, 

sold in the United States at less than fair 

value. Based on a comparison of EPs 

and CV calculated in accordance with 

section 773(a)(4) of the Act, the 

estimated dumping margins for large 

power transformers range from 43.01 

percent to 60.81 percent. See Checklist 

at 9. 

Initiation of Antidumping Investigation 

Based upon the examination of the 

Petition on large power transformers 

from Korea, the Department finds that 

the Petition meets the requirements of 

section 732 of the Act. Therefore, we are 

initiating an antidumping duty 

investigation to determine whether 

imports of large power transformers are 

being, or are likely to be, sold in the 

United States at less than fair value. In 

accordance with section 733(b)(1)(A) of 

the Act and 19 CFR 351.205(b)(1), 

unless postponed, we will make our 

preliminary determination no later than 

140 days after the date of this initiation. 

Targeted Dumping Allegations 

On December 10, 2008, the 

Department issued an interim final rule 

for the purpose of withdrawing 19 CFR 

351.414(f) and (g), the regulatory 

provisions governing the targeted 

dumping analysis in antidumping duty 

investigations, and the corresponding 

regulation governing the deadline for 

targeted dumping allegations, 19 CFR 

351.301(d)(5). See Withdrawal of the 

Regulatory Provisions Governing 

Targeted Dumping in Antidumping 

Duty Investigations, 73 FR 74930 

(December 10, 2008). The Department 

stated that ‘‘{w}ithdrawal will allow the 

Department to exercise the discretion 

intended by the statute and, thereby, 

develop a practice that will allow 

interested parties to pursue all statutory 

avenues of relief in this area.’’ Id. at 

74931. 

In order to accomplish this objective, 

if any interested party wishes to make 

a targeted dumping allegation in this 

investigation pursuant to section 

777A(d)(1)(B) of the Act, such 

allegations are due no later than 45 days 

before the scheduled date of the 

preliminary determination. 

Respondent Selection 

Following standard practice in AD 

investigations involving market 

economy countries, in the event the 

Department determines that the number 

of known exporters or producers for this 

investigation is large, the Department 

intends to select respondents based on 

U.S. Customs and Border Protection 

(‘‘CBP’’) data for U.S. imports under the 

HTSUS numbers 8504.23.0040 and 

8504.23.0080 for the large power 

transformers.2 We intend to release the 

CBP data under Administrative 

Protective Order (‘‘APO’’) to all parties 

with access to information protected by 

APO within five days of publication of 

this Federal Register notice and make 

our decision regarding respondent 

selection within 20 days of publication 

of this notice. The Department invites 

comments regarding the CBP data and 

respondent selection within seven days 

of publication of this Federal Register 

notice. 

Interested parties must submit 

applications for disclosure under APO 

in accordance with 19 CFR 351.305. 

Instructions for filing such applications 

may be found on the Department’s Web 

site at http://ia.ita.doc.gov/apo. 

Distribution of Copy of the Petition 

In accordance with section 

732(b)(3)(A) of the Act and 19 CFR 

351.202(f), a copy of the public version 

of the Petition has been provided to the 

representatives of the Government of 

Korea. The Department considers the 

service of the public version of the 

Petition to the foreign producers/ 

exporters satisfied by the delivery of the 

public version of the Petition to the 

Government of Korea, consistent with 

19 CFR 351.203(c)(2). 

ITC Notification 

We have notified the ITC of our 

initiation, as required by section 732(d) 

of the Act. 

Preliminary Determination by the ITC 

The ITC will preliminarily determine, 

no later than August 29, 2011, whether 

there is a reasonable indication that 

imports of large power transformers 

from Korea are materially injuring, or 

threatening material injury to a U.S. 

industry. A negative ITC determination 

will result in the investigation being 

terminated; otherwise, this investigation 

will proceed according to statutory and 

regulatory time limits. 

Notification to Interested Parties 

Interested parties must submit 

applications for disclosure under APO 

in accordance with 19 CFR 351.305. On 

January 22, 2008, the Department 

published Antidumping and 

Countervailing Duty Proceedings: 

Documents Submission Procedures; 

APO Procedures, 73 FR 3634 (January 

22, 2008). Parties wishing to participate 

in this investigation should ensure that 

they meet the requirements of these 

procedures (e.g., the filing of letters of 

appearance as discussed at 19 CFR 

351.103(d)). 

Any party submitting factual 

information in an AD/CVD proceeding 

must certify to the accuracy and 

completeness of that information. See 

section 782(b) of the Act. Parties are 

hereby reminded that revised 

certification requirements are in effect 

for company/government officials as 

well as their representatives in all 

segments of any AD/CVD proceedings 

initiated on or after March 14, 2011. See 

Certification of Factual Information to 

Import Administration During 

Antidumping and Countervailing Duty 

Proceedings: Interim Final Rule, 76 FR 

7491 (February 10, 2011) (‘‘Interim Final 

Rule’’) amending 19 CFR 351.303(g)(1) 

and (2). The formats for the revised 

certifications are provided at the end of 


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1See Wooden Bedroom Furniture From the 

People’s Republic of China: Initiation of 

Antidumping Duty New Shipper Review, 76 FR 

10557 (February 25, 2011) (‘‘Initiation Notice’’). 

2See Notice of Amended Final Determination of 

Sales at Less Than Fair Value and Antidumping 

Duty Order: Wooden Bedroom Furniture From the 

People’s Republic of China, 70 FR 329 (January 4, 

2005). 

the Interim Final Rule. The Department 

intends to reject factual submissions in 

any proceeding segments initiated on or 

after March 14, 2011, if the submitting 

party does not comply with the revised 

certification requirements. 

This notice is issued and published 

pursuant to section 777(i) of the Act. 

Dated: August 3, 2011. 

Ronald K. Lorentzen 

Deputy Assistant Secretary for Import 

Administration. 

Appendix I 

Scope of Investigation 

The scope of this investigation covers large 

liquid dielectric power transformers (LPTs) 

having a top power handling capacity greater 

than or equal to 60,000 kilovolt amperes (60 

megavolt amperes), whether assembled or 

unassembled, complete or incomplete. 

Incomplete LPTs are subassemblies 

consisting of the active part and any other 

parts attached to, imported with or invoiced 

with the active parts of LPTs. The ‘‘active 

part’’ of the transformer consists of one or 

more of the following when attached to or 

otherwise assembled with one another: the 

steel core or shell, the windings, electrical 

insulation between the windings, the 

mechanical frame for an LPT. 

The product definition encompasses all 

such LPTs regardless of name designation, 

including but not limited to step-up 

transformers, step-down transformers, 

autotransformers, interconnection 

transformers, voltage regulator transformers, 

rectifier transformers, and power rectifier 

transformers. 

The LPTs subject to this investigation are 

currently classifiable under subheadings 

8504.23.0040, 8504.23.0080 and 

8504.90.9540 of the Harmonized Tariff 

Schedule of the United States (HTSUS). 

Although the HTSUS subheadings are 

provided for convenience and customs 

purposes, the written description of the 

scope of this investigation is dispositive. 

[FR Doc. 2011–20336 Filed 8–9–11; 8:45 am] 

BILLING CODE 3510–DS–P 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[A–570–972, A–583–848] 

Certain Stilbenic Optical Brightening 

Agents From the People’s Republic of 

China, and Taiwan: Postponement of 

Preliminary Determinations of 

Antidumping Duty Investigations 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

DATES: Effective Date: August 10, 2011. 

FOR FURTHER INFORMATION CONTACT: 

Sandra Stewart at (202) 482–0768 or 

Hermes Pinilla at (202) 482–3477 

(Taiwan), AD/CVD Operations, Office 5; 

Maisha Cryor at (202) 482–5831 or 

Shaun Higgins at (202) 482–0679 

(People’s Republic of China), AD/CVD 

Operations, Office 4, Import 

Administration, International Trade 

Administration, U.S. Department of 

Commerce, 14th Street and Constitution 

Avenue, NW., Washington, DC 20230. 

SUPPLEMENTARY INFORMATION: 

Postponement of Preliminary 

Determinations 

On April 20, 2011, the Department of 

Commerce (the Department) initiated 

the antidumping duty investigations on 

certain stilbenic optical brightening 

agents from the People’s Republic of 

China and Taiwan. See Certain Stilbenic 

Optical Brightening Agents From the 

People’s Republic of China and Taiwan: 

Initiation of Antidumping Duty 

Investigations, 76 FR 23554 (April 27, 

2011). The notice of initiation stated 

that the Department would issue its 

preliminary determinations for these 

investigations no later than 140 days 

after the issuance of the initiation in 

accordance with section 733(b)(1)(A) of 

the Tariff Act of 1930, as amended (the 

Act), and 19 CFR 351.205(b)(1) unless 

postponed. 

On July 29, 2011, Clariant Corporation 

(the petitioner) made a timely request 

pursuant to 19 CFR 351.205(b)(2) and (e) 

for postponement of the preliminary 

determinations in these investigations. 

The petitioner requested a 50-day 

postponement of the preliminary 

determinations in order to allow the 

Department additional time to resolve a 

number of complex issues in these 

investigations. 

The petitioner submitted a request for 

postponement of the preliminary 

determinations more than 25 days 

before the scheduled date of the 

preliminary determinations. Therefore, 

because the petitioner provided reasons 

for its request and the Department finds 

no compelling reasons to deny the 

request, the Department is postponing 

the deadline for the preliminary 

determinations in accordance with 

section 733(c)(1)(A) of the Act and 19 

CFR 351.205(b)(2) and (e) by 50 days to 

October 27, 2011. The deadline for the 

final determinations will continue to be 

75 days after the date of the preliminary 

determinations unless extended. 

This notice is issued and published 

pursuant to section 733(c)(2) of the Act 

and 19 CFR 351.205(f)(1). 

Dated: August 4, 2011. 

Christian Marsh, 

Acting Deputy Assistant Secretary for Import 

Administration. 

[FR Doc. 2011–20306 Filed 8–9–11; 8:45 am] 

BILLING CODE 3510–DS–M 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[A–570–890] 

Wooden Bedroom Furniture From the 

People’s Republic of China: 

Preliminary Results of Antidumping 

Duty New Shipper Review 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

DATES: Effective Date: August 10, 2011. 

SUMMARY: On February 18, 2011, the 

Department of Commerce (the 

‘‘Department’’) initiated a new shipper 

review of the antidumping duty order 

on wooden bedroom furniture from the 

People’s Republic of China (‘‘PRC’’) 

covering sale(s) of subject merchandise 

made by Dongguan Yujia Furniture Co., 

Ltd. (‘‘Yujia’’).1

The Department preliminarily 

determines that Yujia has not made 

sales at less than normal value (‘‘NV’’). 

Upon completion of the final results of 

review, the Department will instruct 

U.S. Customs and Border Protection 

(‘‘CBP’’) to assess antidumping duties 

on entries of subject merchandise 

during the period January 1, 2010 

through December 31, 2010 (the period 

of review or ‘‘POR’’), for which the 

importer-specific assessment rates are 

above de minimis. 

FOR FURTHER INFORMATION CONTACT: 

Patrick O’Connor or Jeff Pedersen, AD/ 

CVD Operations, Office 4, Import 

Administration, International Trade 

Administration, U.S. Department of 

Commerce, 14th Street and Constitution 

Avenue, NW., Washington, DC 20230; 

telephone: (202) 482–0989 or (202) 482– 

2769, respectively. 

SUPPLEMENTARY INFORMATION: The 

antidumping duty order on wooden 

bedroom furniture from the PRC was 

published on January 4, 2005.2 On 

January 28, 2011, the Department 

received a timely request for a new 

shipper review from Yujia. On February 

18, 2011, the Department initiated this 

new shipper review. See Initiation 

Notice. On February 24, 2011, the 

Department issued an antidumping duty 

questionnaire. From March 2011 

through July 2011, the Department 


emcdonald on DSK2BSOYB1PROD with NOTICES
APPENDIX B

CALENDAR OF PUBLIC CONFERENCE

B-1

CALENDAR OF PUBLIC CONFERENCE

Those listed below appeared as witnesses at the United States International Trade Commission’s

conference:

Subject: Large Power Transformers from Korea

Inv. No.: 731-TA-1189 (Preliminary)

Date and Time: August 4, 2011 - 9:30 a.m.

Sessions were held in connection with this preliminary investigation in Room 220, 500 E Street,

S.W., Washington, D.C.

In Support of the Imposition of

 Antidumping Order:

Kelley Drye & Warren LLP

Washington, D.C.

on behalf of

ABB Inc.

Delta Star, Inc.

Pennsylvania Transformer Technology, Inc.

Deidre Cusack, Senior Vice President & General Manager, Local Business Unit

Manufacturing for Power Transformers North America, ABB Inc.

Craig Stiegemeier, Business Development and Technology Director, ABB

Transformers Remanufacturing & Engineering Services, ABB Inc.

Richard Mucha, Maketing Manager, NAM, ABB Inc.

David Onuscheck, Senior Vice President, General Counsel, Secretary, ABB Inc.

Steve Newman, Vice President, Delta Star, Inc.

Robert Radcliff, Director of Sales & Marketing, Delta Star, Inc.

Tracie Crist, Corporate Controller, Delta Star, Inc.

Dennis Blake, General Manager, Pennsylvania Transformers Technology, Inc.

Michael Kerwin, Director, Georgetown Economic Services

Gina Beck, Economist, Georgetown Economic Services

R. Alan Luberda )

) – OF COUNSEL

Kathleen W. Cannon )

B-3
In Opposition to the Imposition of

 Antidumping Order:

Akin Gump Strauss Hauer & Feld LLP

Washinngton, D.C.

on behalf of

Hyosung Corporation

HICO America Inc.

Henry Paik, President, HICO America Inc.

Jason E. Neal, Vice President, Sales & Marketing, HICO America Inc.

Warren E. Connelly )

J. David Park ) – OF COUNSEL

Jarrod M. Goldfeder )

White & Case LLP

Washington, D.C.

on behalf of

Hyundai Heavy Industries Co., Ltd.

Hyundai Corporation, USA

Hyundai Power Transformers USA, Inc.

Gyou-Chul Lee, President, Hyundai Power Transformers USA, Inc.

Hwan-Soo Lee, General Manager, Hyundai Heavy Industries Co., Ltd.

Gregory Northrup, In-House Counsel, International Legal Team, Hyundai Heavy

Industries Co., Ltd.

Deirdre Maloney, Senior International Trade Advisor, White & Case LLP

David Bond )

Frank Morgan ) – OF COUNSEL

Christine Chang )

B-4
APPENDIX C

SUMMARY DATA

C-1
 
Contains Business Proprietary Information

Table C-1

LPTs: Summary data (QUANTITY IN MVA) concerning the U.S. market, 2008-10, January-June 2010, and January-June 2011

(Quantity=MVA, value=1,000 dollars, unit values, unit labor costs, and unit expenses are per MVA; period changes=percent, except where noted)

Reported data Period changes

January-June Jan.-June

Item 2008 2009 2010 2010 2011 2008-10 2008-09 2009-10 2010-11

U.S. consumption quantity:

 Amount . . . . . . . . . . . . . . . . . . . 128,946 117,854 127,309 71,665 52,070 -1.3 -8.6 8.0 -27.3

 Producers' share (1) . . . . . . . . . 13.9 17.2 15.1 13.7 18.1 1.2 3.3 -2.0 4.4

 Importers' share (1):

 Korea . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 All other sources . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Total imports . . . . . . . . . . . . . 86.1 82.8 84.9 86.3 81.9 -1.2 -3.3 2.0 -4.4

U.S. consumption value:

 Amount . . . . . . . . . . . . . . . . . . . 1,311,768 1,246,166 1,124,933 613,482 478,090 -14.2 -5.0 -9.7 -22.1

 Producers' share (1) . . . . . . . . . 20.1 22.5 18.9 19.2 18.7 -1.1 2.4 -3.5 -0.6

 Importers' share (1):

 Korea . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 All other sources . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Total imports . . . . . . . . . . . . . 79.9 77.5 81.1 80.8 81.3 1.1 -2.4 3.5 0.6

U.S. shipments of imports from:

 Korea:

 Quantity . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Ending inventory quantity . . . . *** *** *** *** *** *** *** *** ***

 All other sources:

 Quantity . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Ending inventory quantity . . . . *** *** *** *** *** *** *** *** ***

 All sources:

 Quantity . . . . . . . . . . . . . . . . . . 110,977 97,596 108,030 61,834 42,652 -2.7 -12.1 10.7 -31.0

 Value . . . . . . . . . . . . . . . . . . . . 1,048,263 965,981 911,863 495,492 388,864 -13.0 -7.8 -5.6 -21.5

 Unit value . . . . . . . . . . . . . . . . . $9,446 $9,898 $8,441 $8,013 $9,117 -10.6 4.8 -14.7 13.8

 Ending inventory quantity . . . . *** *** *** *** *** *** *** *** ***

U.S. producers':

 Average capacity quantity . . . . . 46,805 51,346 49,685 24,696 27,150 6.2 9.7 -3.2 9.9

 Production quantity . . . . . . . . . . 18,219 20,972 19,807 9,891 10,318 8.7 15.1 -5.6 4.3

 Capacity utilization (1) . . . . . . . . 38.9 40.8 39.9 40.1 38.0 0.9 1.9 -1.0 -2.0

 U.S. shipments:

 Quantity . . . . . . . . . . . . . . . . . . 17,969 20,258 19,279 9,831 9,418 7.3 12.7 -4.8 -4.2

 Value . . . . . . . . . . . . . . . . . . . . 263,505 280,185 213,070 117,990 89,226 -19.1 6.3 -24.0 -24.4

 Unit value . . . . . . . . . . . . . . . . . $14,664 $13,831 $11,052 $12,002 $9,474 -24.6 -5.7 -20.1 -21.1

 Export shipments:

 Quantity . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Ending inventory quantity . . . . . *** *** *** *** *** *** *** *** ***

 Inventories/total shipments (1) . *** *** *** *** *** *** *** *** ***

 Production workers . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Hours worked (1,000s) . . . . . . . *** *** *** *** *** *** *** *** ***

 Wages paid ($1,000s) . . . . . . . . *** *** *** *** *** *** *** *** ***

 Hourly wages . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Productivity (MVA/1,000 hours) . *** *** *** *** *** *** *** *** ***

 Unit labor costs . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Net sales:

 Quantity . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Cost of goods sold (COGS) . . . . *** *** *** *** *** *** *** *** ***

 Gross profit or (loss) . . . . . . . . . *** *** *** *** *** *** *** *** ***

 SG&A expenses . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Operating income or (loss) . . . . *** *** *** *** *** *** *** *** ***

 Capital expenditures . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit COGS . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit SG&A expenses . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit operating income or (loss) . *** *** *** *** *** *** *** *** ***

 COGS/sales (1) . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Operating income or (loss)/

 sales (1) . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 (1) "Reported data" are in percent and "period changes" are in percentage points.

 (2) Not applicable.

Note.--Financial data are reported on a fiscal year basis and may not necessarily be comparable to data reported on a calendar year basis. Because of rounding,

figures may not add to the totals shown. Unit values and shares are calculated from the unrounded figures.

Source: Compiled from data submitted in response to Commission questionnaires.
Contains Business Proprietary Information

Table C-2

LPTs: Summary data (QUANTITY IN UNITS) concerning the U.S. market, 2008-10, January-June 2010, and January-June 2011

(Quantity=units, value=1,000 dollars, unit values, unit labor costs, and unit expenses are per unit; period changes=percent, except where noted)

Reported data Period changes

January-June Jan.-June

Item 2008 2009 2010 2010 2011 2008-10 2008-09 2009-10 2010-11

U.S. consumption quantity:

 Amount . . . . . . . . . . . . . . . . . . . 550 484 479 272 191 -12.9 -12.0 -1.0 -29.8

 Producers' share (1) . . . . . . . . . 28.5 36.2 30.3 27.6 35.1 1.7 7.6 -5.9 7.5

 Importers' share (1):

 Korea . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 All other sources . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Total imports . . . . . . . . . . . . . 71.5 63.8 69.7 72.4 64.9 -1.7 -7.6 5.9 -7.5

U.S. consumption value:

 Amount . . . . . . . . . . . . . . . . . . . 1,311,768 1,246,166 1,124,933 613,482 478,090 -14.2 -5.0 -9.7 -22.1

 Producers' share (1) . . . . . . . . . 20.1 22.5 18.9 19.2 18.7 -1.1 2.4 -3.5 -0.6

 Importers' share (1):

 Korea . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 All other sources . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Total imports . . . . . . . . . . . . . 79.9 77.5 81.1 80.8 81.3 1.1 -2.4 3.5 0.6

U.S. shipments of imports from:

 Korea:

 Quantity . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Ending inventory quantity . . . . *** *** *** *** *** *** *** *** ***

 All other sources:

 Quantity . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Ending inventory quantity . . . . *** *** *** *** *** *** *** *** ***

 All sources:

 Quantity . . . . . . . . . . . . . . . . . . 393 309 334 197 124 -15.0 -21.4 8.1 -37.1

 Value . . . . . . . . . . . . . . . . . . . . 1,048,263 965,981 911,863 495,492 388,864 -13.0 -7.8 -5.6 -21.5

 Unit value . . . . . . . . . . . . . . . . . $1,693,039 $2,250,369 $2,026,697 $1,918,329 $2,171,538 19.7 32.9 -9.9 13.2

 Ending inventory quantity . . . . *** *** *** *** *** *** *** ***

U.S. producers':

 Average capacity quantity . . . . . 1,028 1,098 1,065 530 536 3.6 6.8 -3.0 1.1

 Production quantity . . . . . . . . . . 159 181 150 76 75 -5.7 13.8 -17.1 -1.3

 Capacity utilization (1) . . . . . . . . 15.5 16.5 14.1 14.3 14.0 -1.4 1.0 -2.4 -0.3

 U.S. shipments:

 Quantity . . . . . . . . . . . . . . . . . . 157 175 145 75 67 -7.6 11.5 -17.1 -10.7

 Value . . . . . . . . . . . . . . . . . . . . 263,505 280,185 213,070 117,990 89,226 -19.1 6.3 -24.0 -24.4

 Unit value . . . . . . . . . . . . . . . . . $1,678,376 $1,601,057 $1,469,448 $1,594,459 $1,331,731 -12.4 -4.6 -8.2 -16.5

 Export shipments:

 Quantity . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Ending inventory quantity . . . . . *** *** *** *** *** *** *** *** ***

 Inventories/total shipments (1) . *** *** *** *** *** *** *** *** ***

 Production workers . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Hours worked (1,000s) . . . . . . . *** *** *** *** *** *** *** *** ***

 Wages paid ($1,000s) . . . . . . . . *** *** *** *** *** *** *** *** ***

 Hourly wages . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Productivity (units/1,000 hours) . *** *** *** *** *** *** *** *** ***

 Unit labor costs . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Net sales:

 Quantity . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Cost of goods sold (COGS) . . . . *** *** *** *** *** *** *** *** ***

 Gross profit or (loss) . . . . . . . . . *** *** *** *** *** *** *** *** ***

 SG&A expenses . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Operating income or (loss) . . . . *** *** *** *** *** *** *** *** ***

 Capital expenditures . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit COGS . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit SG&A expenses . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit operating income or (loss) . *** *** *** *** *** *** *** *** ***

 COGS/sales (1) . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Operating income or (loss)/

 sales (1) . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 (1) "Reported data" are in percent and "period changes" are in percentage points.

 (2) Not applicable.

Note.--Financial data are reported on a fiscal year basis and may not necessarily be comparable to data reported on a calendar year basis. Because of rounding,

figures may not add to the totals shown. Unit values and shares are calculated from the unrounded figures.

Source: Compiled from data submitted in response to Commission questionnaires.

C-4