[Federal Register Volume 72, Number 141 (Tuesday, July 24, 2007)]
[Notices]
[Pages 40274-40280]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-14284]


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DEPARTMENT OF COMMERCE

International Trade Administration

(A-580-859, A-201-835, A-489-815, A-570-914)


Initiation of Antidumping Duty Investigations: Light-Walled 
Rectangular Pipe and Tube from Republic of Korea, Mexico, Turkey, and 
the People's Republic of China.

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

EFFECTIVE DATE: July 24, 2007.

FOR FURTHER INFORMATION CONTACT: David Cordell (Republic of Korea), 
John Drury (Mexico), Fred Baker (Turkey), or Jeffrey Pedersen (People's 
Republic of China), AD/CVD Operations, Office 7 and Office 4, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 
20230; telephone: (202) 482-0408, (202) 482-0195, (202) 482-2924, or 
(202) 482-2769, respectively.

SUPPLEMENTARY INFORMATION:

The Petition

    On June 27, 2007, the Department of Commerce (the Department) 
received a petition on imports of light-walled rectangular pipe and 
tube (LWR) from the Republic of Korea (Korea), Mexico, Turkey, and the 
People's Republic of China (PRC), filed in proper form by Allied Tube 
and Conduit, Atlas Tube, California Steel and Tube, EXLTUBE, Hannibal 
Industries, Leavitt Tube Company, Maruichi American Corporation, 
Searing Industries, Southland Tube, Vest Inc., Welded Tube, and Western 
Tube and Conduit

[[Page 40275]]

(the petitioners). See Antidumping Duty Petition on Light-Walled 
Rectangular Pipe and Tube from Korea, Mexico, the People's Republic of 
China, and Turkey and Countervailing Duty Petition on Light-Walled 
Rectangular Pipe and Tube from the People's Republic of China (June 27, 
2007) (petition). Bull Moose Tube Company later joined the petitioning 
firms. See petitioners' letter dated July 9, 2007, at 7. On June 29, 
2007, and July 3, 2007, the Department issued requests for additional 
information and clarification of certain areas of the petition. 
Petitioners filed their response to our request for information on July 
6, 2007. On July 10, 2007, the Department issued another request for 
information and clarification of certain areas of the petition. We 
received petitioners' response to our request for information on July 
12, 2007.
    In accordance with section 732(b) of the Tariff Act of 1930, as 
amended (the Act), the petitioners allege that imports of light-walled 
rectangular pipe and tube from Korea, Mexico, Turkey, and the PRC, are 
being, or are likely to be, sold in the United States at less than fair 
value, within the meaning of section 731 of the Act, and that such 
imports are materially injuring, or threatening material injury to, an 
industry in the United States.
    The Department finds the petitioners filed this petition on behalf 
of the domestic industry because the petitioners are interested parties 
as defined in section 771(9)(C) of the Act, and the petitioners have 
demonstrated sufficient industry support with respect to the 
investigations the petitioners are requesting the Department to 
initiate. (See ``Determination of Industry Support for the Petition'' 
below.)

Scope of Investigations

    The merchandise that is the subject of these investigations is 
certain welded carbon-quality light-walled steel pipe and tube, of 
rectangular (including square) cross section (LWR), having a wall 
thickness of less than 4 mm.
    The term carbon-quality steel includes both carbon steel and alloy 
steel which contains only small amounts of alloying elements. 
Specifically, the term carbon-quality includes products in which none 
of the elements listed below exceeds the quantity by weight 
respectively indicated: 1.80 percent of manganese, or 2.25 percent of 
silicon, or 1.00 percent of copper, or 0.50 percent of aluminum, or 
1.25 percent of chromium, or 0.30 percent of cobalt, or 0.40 percent of 
lead, or 1.25 percent of nickel, or 0.30 percent of tungsten, or 0.10 
percent of molybdenum, or 0.10 percent of niobium, or 0.15 percent 
vanadium, or 0.15 percent of zirconium. The description of carbon-
quality is intended to identify carbon-quality products within the 
scope. The welded carbon-quality rectangular pipe and tube subject to 
these investigations is currently classified under the Harmonized 
Tariff Schedule of the United States (``HTSUS'') subheadings 
7306.61.50.00 and 7306.61.70.60. While HTSUS subheadings are provided 
for convenience and Customs purposes, our written description of the 
scope of these investigations is dispositive.

Comments on the Scope of the Investigations

    During our review of the petition, we discussed the scope with the 
petitioners to ensure that it is an accurate reflection of the products 
for which the domestic industry is seeking relief. Moreover, as 
discussed in the preamble to the regulations (Antidumping Duties; 
Countervailing Duties; Final Rule, 62 FR 27296, 27323 (May 19, 1997)), 
we are setting aside a period for interested parties to raise issues 
regarding product coverage. The Department encourages all interested 
parties to submit such comments within 20 calendar days of the 
publication of this notice. Comments should be addressed to Import 
Administration's Central Records Unit (CRU), Room 1870, U.S. Department 
of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 
20230. The period of scope consultations is intended to provide the 
Department with ample opportunity to consider all comments and to 
consult with parties prior to the issuance of the preliminary 
determinations.

Determination of Industry Support for the Petition

    Section 732(b)(1) of the Act requires that a petition be filed by 
an interested party described in subparagraph (C), (D), (E), (F) or (G) 
of section 771(9) of the Act, or on behalf of the domestic industry. In 
order to determine whether a petition has been filed by or on behalf of 
the industry, the Department, pursuant to section 732(c)(4)(A) of the 
Act, determines whether a minimum percentage of the relevant industry 
supports the petition. A petition meets this requirement if the 
domestic producers or workers who support the petition account for: (i) 
at least 25 percent of the total production of the domestic like 
product; and (ii) more than 50 percent of the production of the 
domestic like product produced by that portion of the industry 
expressing support for, or opposition to, the petition. Moreover, 
section 732(c)(4)(D) of the Act provides that, if the petition does not 
establish support of domestic producers or workers accounting for more 
than 50 percent of the total production of the domestic like product, 
the Department shall: (i) poll the industry or rely on other 
information in order to determine if there is support for the petition, 
as required by subparagraph (A), or (ii) determine industry support 
using a statistically valid sampling method.
    Section 771(4)(A) of the Act defines the ``industry'' as the 
producers as a whole of a domestic like product. Thus, to determine 
whether a petition has the requisite industry support, the statute 
directs the Department to look to producers and workers who produce the 
domestic like product. The International Trade Commission (ITC), which 
is responsible for determining whether ``the domestic industry'' has 
been injured, must also determine what constitutes a domestic like 
product in order to define the industry. While both the Department and 
the ITC must apply the same statutory definition regarding the domestic 
like product (section 771(10) of the Act), they do so for different 
purposes and pursuant to separate and distinct authority. In addition, 
the Department's determination is subject to limitations of time and 
information. Although this may result in different definitions of the 
like product, such differences do not render the decision of either 
agency contrary to law. See USEC, Inc. v. United States, 132 F. Supp. 
2d 1, 8 (CIT 2001) (citing Algoma Steel Corp. Ltd. v. United States, 
688 F. Supp. 639, 644 (1988), aff'd 865 F.2d 240 (Fed. Cir. 1989), 
cert. denied 492 U.S. 919 (1989)).
    Section 771(10) of the Act defines the domestic like product as ``a 
product which is like, or in the absence of like, most similar in 
characteristics and uses with, the article subject to an investigation 
under this title.'' Thus, the reference point from which the domestic 
like product analysis begins is ``the article subject to an 
investigation,'' (i.e., the class or kind of merchandise to be 
investigated, which normally will be the scope as defined in the 
petition).
    With regard to the domestic like product, petitioners do not offer 
a definition of domestic like product distinct from the scope of the 
investigation. Based on our analysis of the information submitted on 
the record, we have determined that light-walled rectangular pipe and 
tube constitutes a single domestic like product and we have analyzed 
industry support in terms of that domestic like product. For a 
discussion of the

[[Page 40276]]

domestic like product analysis in this case, see ``Antidumping 
Investigation Initiation Checklist: Light-Walled Rectangular Pipe and 
Tube from the Republic of Korea'' (Korea Initiation Checklist) at 
Attachment II (Industry Support), ``Antidumping Investigation 
Initiation Checklist: Light-Walled Rectangular Pipe and Tube from 
Mexico'' (Mexico Initiation Checklist) at Attachment II (Industry 
Support), and ``Antidumping Investigation Initiation Checklist: Light-
Walled Rectangular Pipe and Tube from Turkey'' (Turkey Initiation 
Checklist) at Attachment II (Industry Support), ``Antidumping 
Investigation Initiation Checklist: Light-Walled Rectangular Pipe and 
Tube from the People's Republic of China'' (PRC Initiation Checklist) 
at Attachment II (Industry Support), on file in the Central Records 
Unit, Room B-099 of the main Department of Commerce building.
    In determining whether petitioners have standing (i.e., those 
domestic workers and producers supporting the petitions account for: 
(1) at least 25 percent of the total production of the domestic like 
product; and (2) more than 50 percent of the production of the domestic 
like product produced by that portion of the industry expressing 
support for, or opposition to, the petitions), we considered the 
industry support data contained in the petition with reference to the 
domestic like product as defined in Attachment I (Scope of the 
Petitions) to the Korea Initiation Checklist, Mexico Initiation 
Checklist, Turkey Initiation Checklist, and PRC Initiation Checklist. 
To establish industry support, petitioners provided their production of 
the domestic like product for the year 2006, and compared that to 
production of the domestic like product for the industry. For further 
discussion see the Korea Initiation Checklist, Mexico Initiation 
Checklist, and Turkey Initiation Checklist, and PRC Initiation 
Checklist at Attachment II (Industry Support).
    Our review of the data provided in the petitions, supplemental 
submissions, and other information readily available to the Department 
indicates petitioners have established industry support. First, the 
domestic producers have met the statutory criteria for industry support 
under 732(c)(4)(A)(i) of the Act because the domestic producers (or 
workers) who support the petition account for at least 25 percent of 
the total production of the domestic like product. Second, the domestic 
producers have met the statutory criteria for industry support under 
732(c)(4)(A)(ii) of the Act because the domestic producers (or workers) 
who support the petitions account for more than 50 percent of the 
production of the domestic like product produced by that portion of the 
industry expressing support for, or opposition to, the petitions. 
Because the petitions established support from domestic producers (or 
workers) accounting for more than 50 percent of the total production of 
the domestic like product and, as such, the Department is not required 
to take further action in order to evaluate industry support (e.g., 
polling). See section 732(c)(4)(D) of the Act. Accordingly, the 
Department determines that the petitions were filed on behalf of the 
domestic industry within the meaning of section 732(b)(1) of the Act. 
See Korea Initiation Checklist, Mexico Initiation Checklist, Turkey 
Initiation Checklist, and the PRC Initiation Checklist, at Attachment 
II (Industry Support).
    The Department finds petitioners filed the petitions on behalf of 
the domestic industry because they are an interested party as defined 
in section 771(9)(C) of the Act and they have demonstrated sufficient 
industry support with respect to the antidumping investigation they are 
requesting the Department initiate. See Korea Initiation Checklist, 
Mexico Initiation Checklist, Turkey Initiation Checklist, and PRC 
Initiation Checklist at Attachment II (Industry Support).

Allegations and Evidence of Material Injury and Causation

    Petitioners allege that the U.S. industry producing the domestic 
like product is being materially injured, or is threatened with 
material injury, by reason of the imports of the subject merchandise 
sold at less than normal value (NV). Petitioners contend the industry's 
injured condition is illustrated by reduced market share, lost sales, 
reduced production, reduced capacity, and reduced capacity utilization 
rate, reduced shipments and increased inventories, underselling and 
price depression or suppression, lost revenue, reduced employment, 
decline in financial performance and increase in import penetration. In 
addition, petitioners allege that imports of the subject merchandise 
exceed the negligibility threshold provided for under section 
771(24)(A) of the Act. We have assessed the allegations and supporting 
evidence regarding material injury and causation, and we have 
determined that these allegations are properly supported by adequate 
evidence and meet the statutory requirements for initiation. See the 
Korea Initiation Checklist, Mexico Initiation Checklist, Turkey 
Initiation Checklist, and PRC Initiation Checklist at Attachment III 
(Injury).

Periods of Investigation

    In accordance with section 19 C.F.R. 351.204(b) of the Department's 
regulations, because the petition was filed on June 27, 2007, the 
period of investigation (POI) for Korea, Mexico, and Turkey, is April 
1, 2006, through March 31, 2007, and the POI for the PRC is October 1, 
2006, through March 31, 2007.

Allegations of Sales at Less Than Fair Value

    The following is a description of the allegations of sales at less 
than fair value upon which the Department has based its decision to 
initiate investigations with respect to Korea, Mexico, Turkey, and the 
PRC. The sources of data for the deductions and adjustments relating to 
U.S. price and NV are discussed in greater detail in the Korea 
Initiation Checklist, Mexico Initiation Checklist, the Turkey 
Initiation Checklist, and the PRC Initiation Checklist. Should the need 
arise to use any of this information as facts available under section 
776 of the Act, we may reexamine the information and revise the margin 
calculation, if appropriate.

Korea

Export Price

    Petitioners calculated EP using prices at which the subject 
merchandise was offered for sale in the United States, and also on the 
AUVs for import data for the POI obtained from the U.S. Census Bureau 
IM-145 data for Korea. Petitioners based one EP on the FAS (Free 
Alongside Ship) AUV of the appropriate HTSUS numbers under which LWR is 
imported into the United States and that fall within the scope of the 
investigations for the period of investigation. These HTSUS numbers 
contain imports of products which were most similar to the product on 
which the Petitioners based normal value (NV) in the petition. HTSUS 
number 7306.60.50.00 was the appropriate number for all of 2006. In 
2007, merchandise that previously entered under 7306.60.50.00 in 2006 
was divided between two new HTSUS numbers. The appropriate HTSUS for 
LWR is 7306.61.50.00 in 2007. From both the price quotes and the AUVs 
petitioners deducted an amount for international freight from the EP 
for the margin calculation to reflect the proposed delivery terms of 
sale. International freight was calculated as the difference between 
the IM-45 FAS and the IM-45 CIF values derived from U.S. Census data. 
Petitioners also deducted a three percent dealer mark up from the price 
quotes to reflect the

[[Page 40277]]

estimated expenses the U.S. trader/importer incurred in selling the 
merchandise. See Korea Initiation Checklist.

Normal Value

    Petitioners stated they were unable to obtain reliable pricing data 
directly from home market producers or trading companies. Therefore, 
petitioners based home market prices on a January 2007 edition of the 
Korean Metal Journal. The publication listed the prices at which 
various metal products, including light-walled rectangular pipe and 
tube, are sold in Korea. The Korean Metal Journal listed a single 
wholesale price and various consumer prices based on location in South 
Korea. Petitioners used the lower ``wholesale price'' as a conservative 
measure. Petitioners converted prices from Korean won to U.S. dollars 
and from a per-meter to a per-hundred-weight (cwt) basis because 
subject merchandise is typically sold on a per-cwt basis in the United 
States. Petitioners claim the prices in the Korean Metal Journal are an 
actual offering of the subject merchandise for sale in Korea. 
Petitioners made no deduction for freight in calculating NV, claiming 
the terms of sale for the wholesale prices were ex-factory.

Mexico

Export Price

    The petitioners calculated a single EP using the AUVs for import 
data collected by the U.S. Census Bureau for Mexico. The petitioners 
used the FAS AUV of the appropriate HTSUS numbers under which light-
walled rectangular pipe and tube is imported into the United States and 
that fall within the scope of the investigations. These HTSUS numbers 
contain imports of products which were most similar to the product on 
which the petitioner based NV in Mexico. 7306.60.50.00 was the 
appropriate HTSUS number for subject merchandise during 2006. In 2007 
the HTSUS number was changed, and now subject merchandise is imported 
under HTSUS 7306.61.50.00. These HTSUS numbers account for 100 percent 
of the volume of imports from Mexico. See Mexico Initiation Checklist.
    Petitioners made an adjustment to U.S. price for inland freight 
from the plant to the port of importation, specifically Laredo, Texas. 
Petitioners based the inland freight charge on a comparison market 
price quote for inland freight within Mexico, adjusted for differences 
in distance between Laredo and the quoted destination of the comparison 
market quote. See Mexico Initiation Checklist.

Normal Value

    Petitioners stated that, since it does not sell light-walled 
rectangular pipe and tube in the Mexican market, it does not have 
specific knowledge of how the subject product is sold, marketed, or 
packaged in that domestic market. Petitioners were able to determine 
domestic Mexican prices for light-walled rectangular pipe and tube by 
obtaining a price quotation, through an economic consultant, from a 
Mexican manufacturer of the subject product. See memorandum ``Light-
walled Rectangular Pipe and Tube: Telephone Call to Market Research 
Firm `` dated July 16, 2007. The price quotation identified specific 
terms of sale and payment terms. Petitioner did not make any 
adjustments to the quoted prices, as the terms of delivery were FOB 
(``Free on Board'') at the manufacturing facility. See Mexico 
Initiation Checklist.

Turkey

Export Price

    Petitioners calculated EP based on a price quote from a U.S. seller 
of subject pipe and tube (U.S. dealer), and also on AUVs obtained from 
U.S. Census Bureau IM 145 import statistics. For the price quotes, 
petitioners deducted an amount for international freight. Petitioners 
also deducted a value of three percent of the U.S. price to cover 
inland freight from the U.S. port to the U. S. dealer, as well as the 
U.S. dealer's expenses and profit. See Turkey Initiation Checklist.
    Petitioners also calculated EP based on AUVs. Petitioners based one 
EP on the FAS AUV of the appropriate HTSUS numbers under which LWR is 
imported into the United States and that fall within the scope of the 
investigations for the period of investigation. These HTSUS numbers 
contain imports of products which were most similar to the product on 
which the Petitioners based NV in the petition. HTSUS number 
7306.60.50.00 was the appropriate number for all of 2006. In 2007, 
merchandise that previously entered under 7306.60.50.00 in 2006 was 
divided between two new HTSUS numbers. The appropriate HTSUS for LWR is 
7306.61.50.00 in 2007. Petitioners did not make an adjustment for 
international freight because they calculated the AUV prices on the FAS 
value of the merchandise. See Turkey Initiation Checklist.

Normal Value

    Petitioners based NV on two price quotes from each of two Turkish 
producers of light-walled rectangular pipe and tube. Petitioners 
obtained these prices by engaging a consultant, who hired a research 
firm with an agent in Turkey. See memorandum ``Light-walled Rectangular 
Pipe and Tube: Telephone Call to Market Research Firm,'' dated July 16, 
2007. Except where terms of sale were ex-works, petitioners made a 
deduction for a three-percent markup representing the distributor's 
freight, selling expenses, and profit. For one of the producers, 
petitioners also made a deduction for a discount the producer offered. 
See Turkey Initiation Checklist.

People's Republic of China

Export Price

    The dumping margins in the petition are based on 10 different EPs 
for LWR. Petitioners based one EP on the FAS AUV of the appropriate 
HTSUS numbers under which LWR is imported into the United States and 
that fall within the scope of the investigations for the period of 
investigation. These HTSUS numbers contain imports of products which 
were most similar to the product on which the Petitioners based NV in 
the petition. HTSUS number 7306.60.50.00 was the appropriate number for 
all of 2006. In 2007, merchandise that previously entered under 
7306.60.50.00 in 2006 was divided between two new HTSUS numbers. The 
appropriate HTSUS for LWR is 7306.61.50.00 in 2007. Petitioners made no 
adjustments to the AUVs in calculating EPs (foreign inland freight 
charges were not deducted from the AUVs as the distances between the 
Chinese producers and the nearest ports are not known). See PRC 
Initiation Checklist.
    Petitioners calculated nine EPs using price quotes from 
distributors of subject pipe manufactured in the PRC. Petitioners 
calculated EPs from the price quotes by deducting foreign brokerage 
charges, international freight charges, and commission expenses from 
the prices. See Exhibit II-1 of the petition and the PRC Initiation 
Checklist. Each price quote was for a specific grade and quality of 
light-walled rectangular pipe and tube that is within the scope of this 
petition and that was to be delivered to the U.S. customer within the 
POI.

Normal Value

    Petitioners stated that the PRC was a non-market economy (NME) and 
no determination to the contrary has been made by the Department. In 
previous investigations, the Department has determined that the PRC is 
an NME. See Notice of Final Determination of Sales at Less Than Fair 
Value: Chlorinated Isocyanurates From the People's

[[Page 40278]]

Republic of China, 70 FR 24502 (May 10, 2005), Notice of Final 
Determination of Sales at Less Than Fair Value and Affirmative Critical 
Circumstances: Magnesium Metal from the People's Republic of China, 70 
FR 9037 (Feb. 24, 2005) and Notice of Final Determination of Sales at 
Less Than Fair Value: Certain Tissue Paper Products from the People's 
Republic of China, 70 FR 7475 (Feb. 14, 2005). In accordance with 
section 771(18)(C)(i) of the Act, the presumption of NME status remains 
in effect until revoked by the Department. The presumption of NME 
status for the PRC has not been revoked by the Department and remains 
in effect for purposes of the initiation of this investigation. 
Accordingly, because available information does not permit the NV of 
the merchandise to be determined under section 773(a) of the Act, the 
NV of the product is appropriately based on factors of production 
valued in a surrogate market economy country in accordance with section 
773(c) of the Act. In the course of this investigation, all parties 
will have the opportunity to provide relevant information related to 
the issues of the PRC's NME status and the granting of separate rates 
to individual exporters.
    Petitioners identified India as the surrogate country, arguing that 
India is an appropriate surrogate, pursuant to section 773(c)(4) of the 
Act, because it is a market economy country that is at a level of 
economic development comparable to that of the PRC and is a significant 
producer and exporter of subject pipe and tube. See Volume II of the 
petition at pages II-1 and II-2. Based on the information provided by 
petitioners, we believe their use of India as a surrogate country is 
appropriate for purposes of initiating this investigation. After the 
initiation of the investigation, the Department will solicit comments 
regarding surrogate country selection. Also, pursuant to 19 CFR 
351.301(c)(3)(i) of the agency's regulations, interested parties will 
be provided an opportunity to submit publicly available information to 
value factors of production within 40 days after the date of 
publication of the preliminary determination.
    Petitioners provided information to calculate NV as required by 19 
CFR 351.202(b)(7)(i)(C). See Volume II of the petition at Exhibits II-I 
and 6, as revised in Exhibit 2 of the July 12, 2007 supplement to the 
petition. Specifically, petitioners provided surrogate values and 
factors of production information on which they based NV. Petitioners 
based the amounts and types of inputs used to produce light-walled 
rectangular pipe and tube on their own production experience because 
they claimed that they are not aware of any generally available 
information regarding the factors of production used, and the factor 
consumption rates experienced, by PRC producers of subject pipe and 
tube.
    According to petitioners, the cost model provided in Exhibit II-6 
of the petition, as revised in Exhibit 2 of the July 12, 2007, 
supplement to the petition, reflects the cost of producing LWR with the 
following dimensions: 1x1x.063 and 
2x2x.063. These are the sizes of LWR 
for which petitioners provided price quotes. Petitioners also claim 
that these are the sizes of commonly sold LWR models on which the ITC 
based its determination in a prior LWR antidumping investigation. Thus, 
petitioners claim that these sizes of LWR will result in representative 
dumping margins. See pages II-2 and II-3 of the petition and PRC 
Initiation Checklist.
    In accordance with section 773(c)(4) of the Act, petitioners valued 
factors of production, where possible, using reasonably available, 
public surrogate country data. Specifically, petitioners valued input 
materials by multiplying the quantity of the input used to produce a 
metric ton of LWR by a surrogate value. See Exhibit II-6 of the 
petition. Petitioners valued the hot-rolled steel coil input using 
prices published online by ``Steel Rx Corporation.'' However, 
petitioners' steel coil prices are available in only four Indian 
cities. The Department prefers to use broad market average prices in 
valuing factors of production. See Fresh Garlic from the People's 
Republic of China: Final Results and Partial Rescission of the Eleventh 
Administrative Review and New Shipper Reviews, 72 FR 34438 (June 22, 
2007). Thus, we recalculated the surrogate value for steel coils using 
data from the Monthly Statistics of the Foreign Trade of India, as 
compiled by World Trade Data Atlas (WTA). WTA data are readily 
available and represent broad market averages. We used WTA prices for 
coils of a thickness that would be used to produce the LWR for which 
petitioners provided U.S. prices. See PRC Initiation Checklist. Since 
the Indian WTA import values are expressed in a foreign currency, 
petitioners converted these values into U.S. dollars using the exchange 
rates on Import Administration's website, ia.ita.doc.gov/exchange/india.txt, for the period during which the imports were made. See 
Exhibit II-6 of the petition.
    Petitioners valued labor using the Department's regression-based 
wage rate for the PRC ($0.83 per hour) in accordance with 19 CFR 
351.408(c)(3). See the PRC Initiation Checklist.
    Petitioners valued the various forms of energy used to produce LWR 
using the following surrogates: (1) the Indian electricity rate as 
reported by the International Energy Agency for the year 2000, inflated 
to a POI value using the Wholesale Price Index (WPI) published by the 
International Monetary Fund (IMF) (see Volume II of the petition at 
page 9 and Exhibit II-9); and (2) Indian natural gas prices charged to 
industrial users during a period overlapping the POI, as reported by 
CRISIL Research India. See Volume II of the petition at Exhibit II-10. 
We revalued natural gas using February 2005 Indian natural gas rates 
published by GAIL. These rates were recently used in the initiation of 
the antidumping duty investigation of circular pipe from the PRC. See 
Initiation of Antidumping Duty Investigation: Circular Welded Carbon-
Quality Steel Pipe from the People's Republic of China, 72 FR 36663, 
36666 (July 5, 2007). We inflated the natural gas price to a POI value 
using the WPI published by the IMF.
    Petitioners calculated surrogate financial ratios (i.e., the 
overhead, selling, general, and administrative (SG&A), and profit 
ratios) using the 2005-2006 Annual Report of the Indian LWR producer 
Zenith Birla (India) Limited. See Volume II of the petition at page II-
4 and Exhibit II-4. We revised petitioners' financial ratios by 
including in the denominator of the overhead and SG&A ratios certain 
financial statement line items that were omitted from those 
denominators. We also revised the denominator of the profit ratio. See 
PRC Initiation Checklist.

Fair Value Comparisons

    Based on a comparison of EP to NV, we find that a dumping margin of 
11.50 percent exists for Mexico, that dumping margins exist for Korea 
ranging from 11.74 percent to 30.66 percent; for Turkey ranging from 
15.28 percent to 41.71 percent; and for the PRC ranging from 6.30 
percent to 40.52 percent. Therefore, in accordance with section 773(a) 
of the Act, there is reason to believe that imports of light-walled 
rectangular pipe and tube from Mexico, Korea, Turkey, and the PRC, are 
being, or are likely to be, sold in the United States at less than fair 
value.

Initiation of Antidumping Investigations

    Based upon the examination of the petition on light-walled 
rectangular pipe and tube from Korea, Mexico, Turkey, and the PRC, and 
other

[[Page 40279]]

information reasonably available to the Department, the Department 
finds that the petition meets the requirements of section 732 of the 
Act. Therefore, we are initiating antidumping duty investigations to 
determine whether imports of light-walled rectangular pipe and tube 
from Korea, Mexico, Turkey, and the PRC are being, or are likely to be, 
sold in the United States at less than fair value. In accordance with 
section 733(b)(1)(A) of the Act, unless postponed, we will make our 
preliminary determinations no later than 140 days after the date of 
this initiation.

Separate Rates and Quantity and Value Questionnaire

    The Department recently modified the process by which exporters and 
producers may obtain separate-rate status in NME investigations. See 
Policy Bulletin 05.1: Separate-Rates Practice and Application of 
Combination Rates in Antidumping Investigations involving Non-Market 
Economy Countries (Separate Rates and Combination Rates Bulletin), 
(April 5, 2005), available on the Department's website at http://ia.ita.doc.gov/policy/bull05-1.pdf. The process requires the submission 
of a separate-rate status application. Based on our experience in 
processing the separate-rate applications in the following antidumping 
duty investigations, we have modified the application for this 
investigation to make it more administrable and easier for applicants 
to complete: Initiation of Antidumping Duty Investigations: Certain 
Lined Paper Products from India, Indonesia, and the People's Republic 
of China, 70 FR 58374, 58379 (October 6, 2005), Initiation of 
Antidumping Duty Investigation: Certain Artist Canvas From the People's 
Republic of China, 70 FR 21996, 21999 (April 28, 2005) (Artist Canvas 
from the PRC) and Initiation of Antidumping Duty Investigations: 
Diamond Sawblades and Parts Thereof from the People's Republic of China 
and the Republic of Korea, 70 FR 35625, 35629 (June 21, 2005) 
(Sawblades from the PRC and Korea). The specific requirements for 
submitting the separate- rate application in this investigation are 
outlined in detail in the application itself, which will be available 
on the Department's website at http://ia.ita.doc.gov/ia-highlights-and-news.html on the date of publication of this initiation notice in the 
Federal Register. The separate-rate application is due no later than 
September 21, 2007.

NME Respondent Selection and Quantity and Value Questionnaire

    For NME investigations, it is the Department's practice to request 
quantity and value information from all known exporters identified in 
the petition. In addition, the Department typically requests the 
assistance of the NME government in transmitting the Department's 
quantity and value questionnaire to all companies that manufacture and 
export subject merchandise to the United States, as well as to 
manufacturers that produce the subject merchandise for companies that 
were engaged in exporting subject merchandise to the United States 
during the POI. The quantity and value data received from NME exporters 
are used as the basis to select the mandatory respondents. Although 
many NME exporters respond to the quantity and value information 
request, at times some exporters may not have received the quantity and 
value questionnaire or may not have received it in time to respond by 
the specified deadline.
    The Department requires that the respondents submit a response to 
both the quantity and value questionnaire and the separate-rate 
application by the respective deadlines in order to receive 
consideration for separate-rate status. This procedure will be applied 
to this and all future NME investigations. See Artist Canvas from the 
PRC, 70 FR at 21999, Sawblades from the PRC and Korea, 70 FR at 35629, 
and Initiation of Antidumping Duty Investigation: Certain Activated 
Carbon from the People's Republic of China, 71 FR 16757, 16760 (April 
4, 2006). Appendix I of this notice contains the quantity and value 
questionnaire that must be submitted by all NME exporters no later than 
August 7, 2007. In addition, the Department will post the quantity and 
value questionnaire along with the filing instructions on the IA 
website: http://ia.ita.doc.gov/ia-highlights-and-news.html. The 
Department will send the quantity and value questionnaire to those PRC 
companies identified in Exhibit I-10 of Volume I of the petition, and 
to the NME government.

Use of Combination Rates in an NME Investigation

    The Department will calculate combination rates for certain 
respondents that are eligible for a separate rate in this 
investigation. The Separate Rates and Combination Rates Bulletin, 
states:
    [lsqb]w[rsqb]hile continuing the practice of assigning separate 
rates only to exporters, all separate rates that the Department will 
now assign in its NME investigations will be specific to those 
producers that supplied the exporter during the period of 
investigation. Note, however, that one rate is calculated for the 
exporter and all of the producers which supplied subject merchandise to 
it during the period of investigation. This practice applies both to 
mandatory respondents receiving an individually calculated separate 
rate as well as the pool of non-investigated firms receiving the 
weighted-average of the individually calculated rates. This practice is 
referred to as the application of ``combination rates'' because such 
rates apply to specific combinations of exporters and one or more 
producers. The cash-deposit rate assigned to an exporter will apply 
only to merchandise both exported by the firm in question and produced 
by a firm that supplied the exporter during the period of 
investigation.
Separate Rates and Combination Rates Bulletin, at page 6.

Distribution of Copies of the Petition

    In accordance with section 732(b)(3)(A) of the Act, a copy of the 
public version of the petition has been provided to the representatives 
of the Governments of Korea, Mexico, Turkey, and the PRC. We will 
attempt to provide a copy of the public version of the petition to the 
foreign producers/exporters named in the petition.

International Trade Commission Notification

    We have notified the ITC of our initiation, as required by section 
732(d) of the Act.

Preliminary Determination by the International Trade Commission

    The ITC will preliminarily determine, no later than August 13, 
2007, whether there is a reasonable indication that imports of light-
walled rectangular pipe and tube from Korea, Mexico, Turkey, and the 
PRC, are materially injuring, or threatening material injury to a U.S. 
industry. A negative ITC determination will result in the 
investigations being terminated; otherwise, these investigations will 
proceed according to statutory and regulatory time limits.
    This notice is issued and published pursuant to section 777(i) of 
the Act.


[[Page 40280]]


    Dated: July 17, 2007.
Joseph A. Spetrini,
Deputy Assistant Secretary for Import Administration.

Appendix I

    Where it is not practicable to examine all known producers/
exporters of subject merchandise, section 777A(c)(2) of the Tariff Act 
of 1930 (as amended) permits us to investigate 1) a sample of 
exporters, producers, or types of products that is statistically valid 
based on the information available at the time of selection, or 2) 
exporters and producers accounting for the largest volume and value of 
the subject merchandise that can reasonably be examined.
    In the chart below, please provide the total quantity and total 
value of all your sales of merchandise covered by the scope of this 
investigation (see scope section of this notice), produced in the PRC, 
and exported/shipped to the United States during the period October 1, 
2006, through March 31, 2007.

----------------------------------------------------------------------------------------------------------------
                       Market                           Total Quantity       Terms of Sale        Total Value
----------------------------------------------------------------------------------------------------------------
United States.......................................  ..................  ..................  ..................
1. Export Price Sales...............................  ..................  ..................  ..................
2...................................................  ..................  ..................  ..................
 a. Exporter name...................................  ..................  ..................  ..................
 b. Address.........................................  ..................  ..................  ..................
 c. Contact.........................................  ..................  ..................  ..................
 d. Phone No........................................  ..................  ..................  ..................
 e. Fax No..........................................  ..................  ..................  ..................
3. Constructed Export Price Sales...................  ..................  ..................  ..................
4. Further Manufactured.............................  ..................  ..................  ..................
Total Sales.........................................  ..................  ..................  ..................
----------------------------------------------------------------------------------------------------------------

Total Quantity:

     Please report quantity on a metric ton basis. If any 
conversions were used, please provide the conversion formula and 
source.

Terms of Sales:

     Please report all sales on the same terms (e.g., free on 
board).

Total Value:

     All sales values should be reported in U.S. dollars. 
Please indicate any exchange rates used and their respective dates and 
sources.

Export Price Sales:

     Generally, a U.S. sale is classified as an export price 
sale when the first sale to an unaffiliated person occurs before 
importation into the United States.
     Please include any sales exported by your company directly 
to the United States;
     Please include any sales exported by your company to a 
third-country market economy reseller where you had knowledge that the 
merchandise was destined to be resold to the United States.
     If you are a producer of subject merchandise, please 
include any sales manufactured by your company that were subsequently 
exported by an affiliated exporter to the United States.
     Please do not include any sales of merchandise 
manufactured in Hong Kong in your figures.

Constructed Export Price Sales:

     Generally, a U.S. sale is classified as a constructed 
export price sale when the first sale to an unaffiliated person occurs 
after importation. However, if the first sale to the unaffiliated 
person is made by a person in the United States affiliated with the 
foreign exporter, constructed export price applies even if the sale 
occurs prior to importation.
     Please include any sales exported by your company directly 
to the United States;
     Please include any sales exported by your company to a 
third-country market economy reseller where you had knowledge that the 
merchandise was destined to be resold to the United States.
     If you are a producer of subject merchandise, please 
include any sales manufactured by your company that were subsequently 
exported by an affiliated exporter to the United States.
     Please do not include any sales of merchandise 
manufactured in Hong Kong in your figures.

Further Manufactured:

     Further manufacture or assembly costs include amounts 
incurred for direct materials, labor and overhead, plus amounts for 
general and administrative expense, interest expense, and additional 
packing expense incurred in the country of further manufacture, as well 
as all costs involved in moving the product from the U.S. port of entry 
to the further manufacturer.
[FR Doc. E7-14284 Filed 7-19-07; 8:45 am]
BILLING CODE 3510-DS-S