[Federal Register Volume 60, Number 18 (Friday, January 27, 1995)]
[Notices]
[Pages 5348-5351]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-2107]



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DEPARTMENT OF COMMERCE

International Trade Administration
[A-357-809]


Notice of Preliminary Determination of Sales at Less Than Fair 
Value: Small Diameter Circular Seamless Carbon and Alloy Steel 
Standard, Line, and Pressure Pipe From Argentina

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

EFFECTIVE DATE: January 27, 1995.

FOR FURTHER INFORMATION CONTACT: Irene Darzenta or Kate Johnson, Office 
of Antidumping Investigations, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, N.W., Washington, D.C. 20230; telephone (202) 482-
6320 or (202) 482-4929.

Preliminary Determination

    The Department of Commerce (the Department) preliminarily 
determines that small diameter circular seamless carbon and alloy steel 
standard, line, and pressure pipe (seamless pipe) from Argentina is 
being, or is likely to be, sold in the United States at less than fair 
value, as provided in section 733 of the Tariff Act of 1930, as amended 
(the Act). The estimated margins are shown in the ``Suspension of 
Liquidation'' section of this notice.

Case History

    Since the notice of initiation on July 13, 1994 (59 FR 37025, July 
20, 1994), the following events have occurred.
    On July 18, 1994, Siderca Corporation of Houston, Texas, an 
importer of the subject merchandise from Argentina, challenged the 
standing of petitioner for a considerable portion of the subject 
merchandise on the ground that petitioner is not an ``interested 
party.'' On September 1, 1994, Siderca submitted a letter clarifying 
its July 18, 1994, submission.
    On August 8, 1994, the U.S. International Trade Commission (ITC) 
issued an affirmative preliminary injury determination (USITC 
Publication 2734, August 1994).
    On August 19, 1994, we sent a questionnaire to Siderca S.A.I.C. 
(Siderca), the only named respondent in this investigation. On 
September 12, 1994, Siderca informed the Department that it would not 
be responding to the questionnaire.
    On October 21 and 31, 1994, (respectively) both petitioner and 
respondent provided comment and rebuttal on the issue of class or kind 
of merchandise1 in response to the Department's request for 
comments in the notice of initiation. Petitioner submitted additional 
comments on November 17, 1994.

    \1\In its October 21, 1994, submission, respondent argued that 
the subject merchandise constitutes two classes or kind of 
merchandise--less than or equal to 2 inches and greater than 2 
inches. Based on this allegation, it contended that the petitioner 
lacked standing to initiate an investigation with regard to seamless 
pipe and tube between 2\3/8\ and 4.5 inches in outside diameter 
because it does not produce such merchandise. (See ``Standing'' 
section of this notice.)
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    On October 27, 1994, the Department received a request from 
petitioner to postpone the preliminary determination until January 19, 
1995. On November 18, 1994, we published in the Federal Register (59 FR 
59748), a notice announcing the postponement of the preliminary 
determination until not later than January 19, 1995, pursuant to 
petitioner's request, in accordance with 19 C.F.R. 353.15 (c) and (d).

Scope of Investigation

    For purposes of this investigation, seamless pipes are seamless 
carbon and alloy (other than stainless) steel pipes, of circular cross-
section, not more than 114.3mm (4.5 inches) in outside diameter, 
regardless of wall thickness, manufacturing process (hot-finished or 
cold-drawn), end finish (plain end, bevelled end, upset end, threaded, 
or threaded and coupled), or surface finish. These pipes are commonly 
known as standard pipe, line pipe or pressure pipe, depending upon the 
application. They may also be used in structural applications.
    The seamless pipes subject to these investigations are currently 
classifiable under subheadings 7304.10.10.20, 7304.10.50.20, 
7304.31.60.50, 7304.39.00.16, 7304.39.00.20, 7304.39.00.24, 
7304.39.00.28, 7304.39.00.32, 7304.51.50.05, 7304.51.50.60, 
7304.59.60.00, 7304.59.80.10, 7304.59.80.15, 7304.59.80.20, and 
7304.59.80.25 of the Harmonized Tariff Schedule of the United States 
(HTSUS).
    The following information further defines the scope of this 
investigation, which covers pipes meeting the physical parameters 
described above:
    Specifications, Characteristics and Uses: Seamless pressure pipes 
are intended for the conveyance of water, steam, petrochemicals, 
chemicals, oil products, natural gas and other liquids and gasses in 
industrial piping systems. They may carry these substances at elevated 
pressures and temperatures and may be subject to the application of 
external heat. Seamless carbon steel pressure pipe meeting the American 
[[Page 5349]] Society for Testing and Materials (ASTM) standard A-106 
may be used in temperatures of up to 1000 degrees Fahrenheit, at 
various American Society of Mechanical Engineers (ASME) code stress 
levels. Alloy pipes made to ASTM standard A-335 must be used if 
temperatures and stress levels exceed those allowed for A-106 and the 
ASME codes. Seamless pressure pipes sold in the United States are 
commonly produced to the ASTM A-106 standard.
    Seamless standard pipes are most commonly produced to the ASTM A-53 
specification and generally are not intended for high temperature 
service. They are intended for the low temperature and pressure 
conveyance of water, steam, natural gas, air and other liquids and 
gasses in plumbing and heating systems, air conditioning units, 
automatic sprinkler systems, and other related uses. Standard pipes 
(depending on type and code) may carry liquids at elevated temperatures 
but must not exceed relevant ASME code requirements.
    Seamless line pipes are intended for the conveyance of oil and 
natural gas or other fluids in pipe lines. Seamless line pipes are 
produced to the API 5L specification.
    Seamless pipes are commonly produced and certified to meet ASTM A-
106, ASTM A-53 and API 5L specifications. Such triple certification of 
pipes is common because all pipes meeting the stringent A-106 
specification necessarily meet the API 5L and ASTM A-53 specifications. 
Pipes meeting the API 5L specification necessarily meet the ASTM A-53 
specification. However, pipes meeting the A-53 or API 5L specifications 
do not necessarily meet the A-106 specification. To avoid maintaining 
separate production runs and separate inventories, manufacturers triple 
certify the pipes. Since distributors sell the vast majority of this 
product, they can thereby maintain a single inventory to service all 
customers.
    The primary application of ASTM A-106 pressure pipes and triple 
certified pipes is in pressure piping systems by refineries, 
petrochemical plants and chemical plants. Other applications are in 
power generation plants (electrical-fossil fuel or nuclear), and in 
some oil field uses (on shore and off shore) such as for separator 
lines, gathering lines and metering runs. A minor application of this 
product is for use as oil and gas distribution lines for commercial 
applications. These applications constitute the majority of the market 
for the subject seamless pipes. However, A-106 pipes may be used in 
some boiler applications.
    The scope of this investigation includes all multiple-stenciled 
seamless pipe meeting the physical parameters described above and 
produced to one of the specifications listed above, whether or not also 
certified to a non-covered specification. Standard, line and pressure 
applications are defining characteristics of the scope of this 
investigation. Therefore, seamless pipes meeting the physical 
description above, but not produced to the A-106, A-53, or API 5L 
standards shall be covered if used in an A-106, A-335, A-53, or API 5L 
application.
    For example, there are certain other ASTM specifications of pipe 
which, because of overlapping characteristics, could potentially be 
used in A-106 applications. These specifications include A-162, A-192, 
A-210, A-333, and A-524. When such pipes are used in a standard, line 
or pressure pipe application, such products are covered by the scope of 
this investigation.
    Specifically excluded from this investigation are boiler tubing, 
mechanical tubing and oil country tubular goods except when used in a 
standard, line or pressure pipe application. Also excluded from this 
investigation are redraw hollows for cold-drawing when used in the 
production of cold-drawn pipe or tube.
    Although the HTSUS subheadings are provided for convenience and 
customs purposes, our written description of the scope of this 
investigation is dispositive.

Scope Issues

    In our notice of initiation we identified two issues which we 
intended to consider further. The first issue was whether to consider 
end-use a factor in defining the scope of these investigations.\2\ The 
second issue was whether the seamless pipe subject to this 
investigation constitutes more than one class or kind of merchandise. 
In addition to these two issues, interested parties have raised a 
number of other issues regarding whether certain products should be 
excluded from the scope of this investigation. These issues are 
discussed below.

    \2\Various parties in this investigation, as well as in the 
concurrent investigations involving the same product from Argentina, 
Italy, and Germany have raised issues and made arguments. For 
purposes of simplicity and consistency across investigations, we 
will discuss all of these issues in this notice.
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    Regarding the end-use issue, interested parties have submitted 
arguments about whether end-use should be maintained as a scope 
criterion in this investigation. After carefully considering these 
arguments, we have determined that, for purposes of this preliminary 
determination, we will continue to include end-use as a scope 
criterion. We agree with petitioner that pipe products identified as 
potential substitutes used in the same applications as products meeting 
the requisite ASTM specifications may fall within the same class or 
kind, and within the scope of any order issued in this investigation. 
However, we are well aware of the difficulties involved with requiring 
end-use certifications, particularly the burdens placed on the 
Department, the U.S. Customs Service, and the parties. We will strive 
to simplify any procedures used in this regard. We will, therefore, 
carefully consider any comment on this issue for purposes of our final 
determination.
    Regarding the class or kind issue, although respondents propose 
dividing the scope of this investigation into two classes or kinds of 
merchandise, they do not agree on the merchandise characteristics that 
will define the two classes. The respondent in this investigation 
argues that the scope should be divided into two classes or kinds of 
merchandise based on size. The respondents in the Brazilian and German 
investigations argue that the scope should be divided into two classes 
or kinds based on the material composition of the pipe--carbon versus 
alloy. Petitioner maintains that the subject merchandise constitutes a 
single class or kind.
    We have considered the class or kind comments of the interested 
parties and have analyzed this issue based on the criteria set forth by 
the Court of International Trade in Diversified Products v. United 
States, 6 CIT 155, 572 F. Supp. 883 (1983). These criteria are as 
follows: (1) The general physical characteristics of the merchandise; 
(2) the ultimate use of the merchandise; (3) the expectations of the 
ultimate purchasers; (4) the channels of trade; and (5) cost.
    We note that certain differences exist between the physical 
characteristics of the various products (e.g., size, composition). In 
addition, there appear to be cost differences between the various 
products. However, the information on record is not sufficient to 
justify dividing the class or kind of merchandise. The record on 
ultimate use of the merchandise and the expectations of the ultimate 
purchasers indicates that there is a strong possibility that there may 
be overlapping uses because any one of the various products in question 
may be used in different applications (e.g., line and pressure pipe). 
Also, based upon the evidence currently on the record, we determine 
that the similarities in the distribution channels used for each of 
[[Page 5350]] the proposed classes of merchandise outweigh any 
differences in the distribution channels.
    In conclusion, while we recognize that certain differences exist 
between the products in the proposed class or kind of merchandise, we 
find that the similarities are more significant. Therefore, for 
purposes of this preliminary determination, we will continue to 
consider the scope as covering one class or kind of merchandise. This 
preliminary decision is consistent with past cases concerning steel 
pipe products. (See e.g., Final Determination of Sales at Less Than 
Fair Value: Circular Welded Non-Alloy Steel Pipe From Brazil et. al., 
57 FR 42940, September 17, 1992). However, a number of issues with 
respect to class or kind remain to be clarified. We will provide the 
parties with another opportunity to submit additional information and 
argument for the final determination. For a complete discussion of the 
parties' comments, as well as the Department's analysis, see memorandum 
from Gary Taverman, Acting Director, Office of Antidumping 
Investigations to Barbara Stafford, Deputy Assistant Secretary for 
Investigations, dated January 19, 1995.
    Regarding the additional issues concerning exclusion of certain 
products, one party requests that the Department specify that multiple-
stencilled seamless pipe stencilled to non-subject standards is not 
covered. Furthermore, this party argues that the scope language should 
be clarified so that it specifically states that only standard, line, 
and pressure pipe stencilled to the ASTM A-106, ASTM A-53 or API-5L 
standards are included, and that we clarify the meaning of ``mechanical 
tubing.'' In addition, this party requests that the Department exclude 
unfinished oil country tubular goods, ASTM A-519 pipe (a type of 
mechanical tubing) and mechanical tube made to customer specifications 
from the scope of this investigation.
    Another party requests that the Department specifically exclude 
hollow seamless steel products produced in non-pipe sizes (known in the 
steel industry as tubes), from the scope of this investigation.
    Because we currently have insufficient evidence to make a 
determination regarding these requests, we are not yet in a position to 
address these concerns. Therefore, for purposes of this preliminary 
determination, we will not exclude these products from the scope of 
this investigation. Once again, we will collect additional information 
and consider additional argument before the final determination.

Period of Investigation

    The period of investigation is January 1, 1994 through June 30, 
1994.

Standing

    Siderca has challenged petitioner's standing with respect to 
seamless pipe and tube between 2\3/8\ and 4.5 inches in outside 
diameter. An interested party as defined, inter alia, in 353.2(k)(3) 
has standing to file a petition. (See 19 C.F.R. 353.12(a).) Further, 
section 353.2(k)(3) defines an interested party as a producer of the 
like product. In this investigation, the ITC has determined that there 
is a single like product. (See USITC Publication 2734, August 1994.) 
For purposes of determining standing, we have preliminarily accepted 
the ITC's determination that the merchandise subject to this 
investigation constitutes a single like product consisting of circular 
seamless carbon and alloy steel standard, line and pressure pipe, and 
tubes not more than 4.5 inches in outside diameter, and including 
redraw hollows (See USITC Publication 2734 at 18.) Therefore, because 
petitioner is a producer of the like product, we preliminarily 
determine that the petitioner has standing.

Best Information Available

    In accordance with section 776(c) of the Act, we have determined 
that the use of best information available (BIA) is appropriate for 
Siderca, the only named respondent in this investigation. On September 
12, 1994, as stated above, Siderca notified the Department that it 
would not participate in this investigation. Because Siderca refused to 
answer the Department's questionnaire, we find it has not cooperated in 
this investigation.
    The Department's BIA methodology for uncooperative respondents is 
to assign the higher of the highest margin alleged in the petition or 
the highest rate calculated for another respondent. Accordingly, 
because there are no other respondents in this investigation, as BIA, 
we are assigning the highest margin among the margins alleged in the 
petition. See Antifriction Bearings (Other Than Tapered Roller 
Bearings) and Parts Thereof From the Federal Republic of Germany; Final 
Results of Antidumping Duty Administrative Review (56 FR 31692, 31704, 
July 11, 1991). The Department's methodology for assigning BIA has been 
upheld by the U.S. Court of Appeals of the Federal Circuit. See Allied 
Signal Aerospace Co. v. United States, 996 F.2d 1185 (Fed. Cir. 1993); 
see also Krupp Stahl, AG et al. v. United States, 822 F. Supp. 789 (CIT 
1993).

Suspension of Liquidation

    In accordance with section 733(d)(1) (19 U.S.C. 1673b(d)(1)) of the 
Act, we are directing the U.S. Customs Service to suspend liquidation 
of all entries of seamless pipe from Argentina, as defined in the 
``Scope of Investigation'' section of this notice, that are entered, or 
withdrawn from warehouse, for consumption on or after the date of 
publication of this notice in the Federal Register. The Customs Service 
shall require a cash deposit or posting of a bond equal to the 
estimated margin amount by which the foreign market value of the 
subject merchandise exceeds the United States price as shown below. The 
suspension of liquidation will remain in effect until further notice.

------------------------------------------------------------------------
                                                               Weighted 
                                                                average 
               Manufacturer/producer/exporter                   margin  
                                                                percent 
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Siderca S.A.I.C.............................................      108.13
All Others..................................................      108.13
------------------------------------------------------------------------

ITC Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of our determination. If our final determination is affirmative, 
the ITC will determine whether imports of the subject merchandise are 
materially injuring, or threaten material injury to, the U.S. industry, 
before the later of 120 days after the date of the preliminary 
determination or 45 days after our final determination.

Public Comment

    In accordance with 19 CFR 353.38, case briefs or other written 
comments must be submitted, in at least ten copies, to the Assistant 
Secretary for Import Administration no later than March 10, 1995, and 
rebuttal briefs no later than March 15, 1995. In addition, a public 
version and five copies should be submitted by the appropriate date if 
the submission contains business proprietary information. In accordance 
with 19 CFR 353.38(b), we will hold a public hearing, if requested, to 
afford interested parties an opportunity to comment on arguments raised 
in case or rebuttal briefs. Tentatively, the hearing will be held, if 
requested, at 9:00 a.m. on March 17, 1995, at the U.S. Department of 
Commerce, Room 1414, 14th Street and Constitution Avenue NW., 
Washington DC 20230. Parties should confirm by telephone the time, 
date, and place of the hearing 48 hours before the scheduled time.
    Interested parties who wish to request a hearing must submit a 
written request [[Page 5351]] to the Assistant Secretary for Import 
Administration, U.S. Department of Commerce, Room B-099 within ten days 
of the date of publication of this notice. Requests should contain: (1) 
The party's name, address and telephone number; (2) the number of 
participants; and (3) a list of issues to be discussed. In accordance 
with 19 CFR 353.38(b), oral presentation will be limited to arguments 
raised in the briefs.
    This determination is published pursuant to section 733(f) of the 
Act (19 U.S.C. 1673b(f)) and 19 CFR 353.15(a)(4).

    Dated: January 19, 1995.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 95-2107 Filed 1-26-95; 8:45 am]
BILLING CODE 3510-DS-P