[Federal Register Volume 74, Number 60 (Tuesday, March 31, 2009)]
[Notices]
[Pages 14514-14518]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-7093]


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DEPARTMENT OF COMMERCE

International Trade Administration

A-570-935


Certain Circular Welded Carbon Quality Steel Line Pipe from the 
People's Republic of China: Final Determination of Sales at Less Than 
Fair Value

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

EFFECTIVE DATE: March 31, 2009.
SUMMARY: The Department of Commerce (Department) has determined that 
circular welded carbon quality steel line pipe (welded line pipe) from 
the People's Republic of China (PRC) is being, or is likely to be, sold 
in the United States at less than fair value (LTFV) as provided in 
section 735 of the Tariff Act of 1930, as amended (the Act). The final 
dumping margins for this investigation are listed in the ``Final 
Determination Margins'' section below. The period covered by the 
investigation is October 1, 2007, through March 31, 2008.

FOR FURTHER INFORMATION CONTACT: Jeff Pedersen or Rebecca Pandolph, 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-
2769 and 482-3627, respectively.

SUPPLEMENTARY INFORMATION:

Background

    The Department published its preliminary determination of sales at 
LTFV on November 6, 2008. See Certain Circular Welded Carbon Quality 
Steel Line Pipe from the People's Republic of China: Preliminary 
Determination of Sales at Less Than Fair Value and Postponement of 
Final Determination, 73 FR 66012 (November 6, 2008) (Preliminary 
Determination). On November 5, 2008, Shanghai Metals & Minerals Import 
& Export Corp. d/b/a Shanghai Minmetals Materials & Products Corp. 
(Shanghai Metals) informed the Department that it would not participate 
in the verification of its information and withdrew from the 
investigation. See Letter to Secretary of Commerce, Shanghai Metals' 
Notice of Withdrawal from Investigation and Certification of APO 
Compliance and Destruction of APO Materials at 1 (November 5, 2008). On 
November 6, 2008, Benxi Northern Steel Pipes Co., Ltd. (Benxi) also 
informed the Department that it would not participate in the 
verification of its information and withdrew from the investigation. 
See Letter to Secretary of Commerce, Benxi's Notice of Withdrawal from 
Investigation (November 6, 2008). From November 13, 2008, through 
November 21, 2008, the Department conducted a verification of 
information submitted by Huludao Steel Pipe Industrial Co., Ltd. 
(Huludao Pipe). See the ``Verification'' section below for additional 
information. On December 16, 2008, Huludao Pipe and United States Steel 
Corporation (U.S. Steel), one of the petitioning companies, submitted 
comments on, and calculations of, various surrogate values. In response 
to the Department's invitation to comment on the Preliminary 
Determination, on January 5, 2009, U.S. Steel, Maverick Tube 
Corporation (Maverick), a petitioner, Huludao Pipe, and the Bureau of 
Fair Trade, Imports and Exports, Ministry of Commerce of the PRC filed 
case briefs.

[[Page 14515]]

Maverick, U.S. Steel and Huludao Pipe filed rebuttal briefs on January 
12, 2009.

Analysis of Comments Received

    All of the issues that were raised in the case and rebuttal briefs 
that were submitted in this investigation, and to which we have 
responded, are addressed in the ``Issues and Decision Memorandum for 
the Final Determination in the Antidumping Duty Investigation of 
Certain Circular Welded Carbon Quality Steel Line Pipe from the 
People's Republic of China,'' dated March 23, 2009, which is hereby 
adopted by this notice (Issues and Decision Memorandum). Appendix I to 
this notice contains a list of the issues that are addressed in the 
Issues and Decision Memorandum. The Issues and Decision Memorandum, 
which is a public document, is on file in the Central Records Unit, at 
the main Commerce Building, Room 1117, and is accessible on the Web at 
http://ia.ita.doc.gov/frn. The paper copy and electronic version of the 
memorandum are identical in content.

Changes Since the Preliminary Determination

    We have made the following changes to our calculations in the 
Preliminary Determination:
     1. We based our determination with respect to Shanghai Metals and 
Benxi on total adverse facts available (AFA) because these companies 
refused to allow the Department to verify the information submitted in 
the investigation and failed to cooperate to the best of their 
abilities. As total AFA, we found Shanghai Metals and Benxi to be part 
of the PRC-wide entity.
     2. We have reduced the grace period used in calculating warehouse 
expenses to seven days.
     3. We have applied new surrogate values for ocean freight based on 
corrections to the departure and destination ports made at 
verification.
     4. We have recalculated the reported per-unit volume of subject 
merchandise warehoused based on verification findings.
     5. We have recalculated the cost of paint and thinner based on 
corrections to consumption reported by Huludao Pipe at verification.
     6. We have recalculated labor costs based on corrections to 
consumption reported by Huludao Pipe at verification.
     7. We have recalculated transportation costs for material inputs 
based on corrections to the distance from the supplier to the factory 
reported by Huludao Pipe at verification.
     8. We have used new surrogate financial statements to calculate 
financial ratios.

Scope of the Investigation

    The merchandise covered by this investigation is circular welded 
carbon quality steel pipe of a kind used for oil and gas pipelines 
(welded line pipe), not more than 406.4 mm (16 inches) in outside 
diameter, regardless of wall thickness, length, surface finish, end 
finish or stenciling.
    The term ``carbon quality steel'' includes both carbon steel and 
carbon steel mixed with small amounts of alloying elements that may 
exceed the individual weight limits for nonalloy steels imposed in the 
Harmonized Tariff Schedule of the United States (HTSUS). Specifically, 
the term ``carbon quality'' includes products in which (1) iron 
predominates by weight over each of the other contained elements, (2) 
the carbon content is 2 percent or less by weight and (3) none of the 
elements listed below exceeds the quantity by weight respectively 
indicated:
(i) 2.00 percent of manganese,
(ii) 2.25 percent of silicon,
(iii) 1.00 percent of copper,
(iv) 0.50 percent of aluminum,
(v) 1.25 percent of chromium,
(vi) 0.30 percent of cobalt,
(vii) 0.40 percent of lead,
(viii) 1.25 percent of nickel,
(ix) 0.30 percent of tungsten,
(x) 0.012 percent of boron,
(xi) 0.50 percent of molybdenum,
(xii) 0.15 percent of niobium,
(xiii) 0.41 percent of titanium,
(xiv) 0.15 percent of vanadium, or
(xv) 0.15 percent of zirconium.
    Welded line pipe is normally produced to specifications published 
by the American Petroleum Institute (API) (or comparable foreign 
specifications) including API A-25, 5LA, 5LB, and X grades from 42 and 
above, and/or any other proprietary grades or non-graded material. 
Nevertheless, all pipe meeting the physical description set forth above 
that is of a kind used in oil and gas pipelines, including all 
multiple-stenciled pipe with an API welded line pipe stencil is covered 
by the scope of this investigation.
    Excluded from this scope are pipes of a kind used for oil and gas 
pipelines that are multiple-stenciled to a standard and/or structural 
specification and have one or more of the following characteristics: is 
32 feet in length or less; is less than 2.0 inches (50 mm) in outside 
diameter; has a galvanized and/or painted surface finish; or has a 
threaded and/or coupled end finish. (The term ``painted'' does not 
include coatings to inhibit rust in transit, such as varnish, but 
includes coatings such as polyester.)
    The welded line pipe products that are the subject of this 
investigation are currently classifiable in the HTSUS under subheadings 
7306.19.10.10, 7306.19.10.50, 7306.19.51.10, and 7306.19.51.50. While 
HTSUS subheadings are provided for convenience and customs purposes, 
the written description of the scope of this investigation is 
dispositive.

Scope Comments

    Since the Preliminary Determination no one has submitted comments 
on the scope of this investigation.

Adverse Facts Available

    As noted in the ``Background'' section above, Shanghai Metals and 
Benxi withdrew from the investigation and refused to allow the 
Department to verify the information they had submitted in this 
proceeding.
    Section 776(a)(2) of the Act provides that, if an interested party 
(C) significantly impedes a proceeding, or (D) provides information 
that cannot be verified, the Department shall use facts otherwise 
available in reaching the applicable determination.
    Section 776(b) of the Act authorizes the Department to use an 
adverse inference with respect to an interested party if the Department 
finds that the party failed to cooperate by not acting to the best of 
its ability to comply with a request for information.
    Therefore, pursuant to sections 776(a)(2)(C) and (D) and 776(b) of 
the Act, we have, decided to base Shanghai Metals and Benxi's dumping 
margins on AFA. As AFA, we have treated Shanghai Metals and Benxi as 
part of the PRC-wide entity and assigned Shanghai Metals and Benxi the 
PRC-wide rate of 101.10 percent. See Issues and Decision Memorandum at 
Comment 12.

Verification

    As provided in section 782(i) of the Act, we conducted verification 
in the PRC of the information submitted by Huludao Pipe for use in our 
final determination. See the Memorandum from Jeff Pedersen and Rebecca 
Pandolph, through Howard Smith, to the file regarding Verification of 
the Questionnaire Responses of Huludao Pipe Steel Pipe Industrial Co., 
Ltd. (December 11, 2008). In conducting the

[[Page 14516]]

verification, we used standard verification procedures, including 
examination of relevant accounting, sales, and production records, as 
well as original source documents provided by Huludao Pipe.

Surrogate Country

    In the Preliminary Determination, we selected India as the 
appropriate surrogate country noting that India was on the Department's 
list of countries that are at a level of economic development 
comparable to the PRC and that: (1) India is a significant producer of 
merchandise comparable to the subject merchandise; and, (2) reliable 
Indian data for valuing factors of production are readily available. 
See Preliminary Determination, 73 FR at 66014. No party has commented 
on our selection of India as the appropriate surrogate country. For the 
final determination, we continue to find India to be the appropriate 
surrogate country in this investigation.

Separate Rates

    In proceedings involving non-market-economy (NME) countries, the 
Department begins with a rebuttable presumption that all companies 
within the country are subject to government control and, thus, should 
be assigned a single antidumping duty deposit rate. It is the 
Department's policy to assign all exporters of merchandise subject to 
an investigation in an NME country this single rate unless an exporter 
can demonstrate that it is sufficiently independent so as to be 
entitled to a separate rate. See Final Determination of Sales at Less 
Than Fair Value: Sparklers From the People's Republic of China, 56 FR 
20588 (May 6, 1991), as amplified by Notice of Final Determination of 
Sales at Less Than Fair Value: Silicon Carbide From the People's 
Republic of China, 59 FR 22585 (May 2, 1994); see also 19 CFR 
351.107(d).
    In the Preliminary Determination, the Department granted separate-
rate status to Benxi; Huludao Pipe; Pangang Group Beihai Pipe 
Corporation (Pangang Beihai); Shanghai Metals; Tianjin Xingyuda Import 
and Export Company (Tianjin); and Jiangsu Yulong Steel Pipe Co., Ltd. 
(Jiangsu Yulong). As discussed above, the Department has decided, as 
AFA, to treat Shanghai Metals and Benxi as part of the PRC-wide entity. 
Moreover, we note that the information that Shanghai Metals and Benxi 
provided to the Department to demonstrate the absence of de facto and 
de jure control could not be verified due to their failure to 
cooperate. Consequently we have not granted Shanghai Metals and Benxi 
separate rates.
    While U.S. Steel argued in its case brief that Pangang Beihai 
should not be granted a separate rate, we continue to find that Pangang 
Beihai qualifies for a separate rate. See Issues and Decision 
Memorandum at Comment 11. No other parties commented on the separate-
rate status granted to companies in the Preliminary Determination. For 
this final determination we have continued to grant the following 
companies separate-rate status: Huludao Pipe, Pangang Beihai, Tianjin, 
and Jiangsu Yulong. We have assigned the separate-rate companies the 
dumping margin that we calculated for Huludao Pipe.

The PRC-Wide Rate

    In the Preliminary Determination, the Department found that certain 
companies did not respond to our requests for information. See 
Preliminary Determination, 73 FR at 66016. We treated these PRC 
producers/exporters as part of the PRC-wide entity because they did not 
demonstrate that they operate free of government control over their 
export activities. Id. No additional information was placed on the 
record with respect to any of these companies after the Preliminary 
Determination. Moreover, for the reasons noted above, we also consider 
Shanghai Metals and Benxi to be part of the PRC-wide entity.
    As noted above, section 776(a)(2) of the Act provides that, if an 
interested party or any other person withholds information that has 
been requested by the administering authority, significantly impedes a 
proceeding under this title, or provides such information but the 
information cannot be verified as provided in section 782(i) of the 
Act, the administering authority shall, subject to section 782(d) of 
the Act, use facts otherwise available in reaching the applicable 
determination. Because the PRC-wide entity did not respond to our 
requests for information and because companies within the PRC-wide 
entity withheld information requested by the Department, and Shanghai 
Metals and Benxi, which are part of the PRC-wide entity, did not allow 
their information to be verified, pursuant to sections 776(a)(2)(A), 
(C), and (D) of the Act, we determine, as in the Preliminary 
Determination, that the use of facts otherwise available is appropriate 
to determine the PRC-wide rate.
    As stated above, section 776(b) of the Act provides that, in 
selecting from among the facts otherwise available, the Department may 
employ an adverse inference if an interested party fails to cooperate 
by not acting to the best of its ability to comply with requests for 
information. See Notice of Final Determination of Sales at Less Than 
Fair Value: Certain Cold-Rolled Flat-Rolled Carbon-Quality Steel 
Products From the Russian Federation, 65 FR 5510, 5518 (February 4, 
2000). See also Statement of Administrative Action accompanying the 
Uruguay Round Agreements Act, H.R. Doc. No. 103-316, Vol. 1 (1994), at 
870. We determine that, because the PRC-wide entity did not respond to 
our requests for information, and Shanghai Metals and Benxi prevented 
the Department from verifying its information, the PRC-wide entity has 
failed to cooperate to the best of its ability. Therefore, the 
Department finds that, in selecting a dumping margin from among the 
facts otherwise available, an adverse inference is appropriate for the 
PRC-wide entity.
    In this final determination, we have assigned the PRC-wide entity 
the highest CONNUM-specific dumping margin, i.e., 101.10 percent, 
calculated for Shanghai Metals. See Issues and Decision Memorandum at 
Comment 10. No corroboration of this rate is necessary because we are 
relying on information obtained in the course of this investigation, 
rather than secondary information.
    Since we begin with the presumption that all companies within an 
NME country are subject to government control, and only the exporters 
listed under the ``Final Determination Margins'' section below have 
overcome that presumption, we are applying a single antidumping rate 
(i.e., the PRC-wide rate) to all exporters of subject merchandise from 
the PRC, other than the exporters listed in the ``Final Determination 
Margins'' sections. See, e.g., Synthetic Indigo From the People's 
Republic of China; Notice of Final Determination of Sales at Less Than 
Fair Value, 65 FR 25706 (May 3, 2000).

Combination Rates

    In the Initiation Notice, the Department stated that it would 
calculate combination rates for certain respondents that are eligible 
for a separate rate in this investigation. See Certain Circular Welded 
Carbon Quality Steel Line Pipe From the Republic of Korea and the 
People's Republic of China: Initiation of Antidumping Duty 
Investigations, 73 FR 23188 (April 29, 2008) (Initiation Notice). This 
change in practice is described in Policy Bulletin 05.1:
    Sec. wSec. hile continuing the practice of assigning separate rates 
only to exporters, all separate rates that the Department will now 
assign in its

[[Page 14517]]

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.''
    See Policy Bulletin 05.1, ``Separate Rates Practice and Application 
of Combination Rates in Antidumping Investigations Involving Non-Market 
Economy Countries'' available on the Import Administration's website at 
http://ia.ita.doc.gov/policy/index.html.

Final Determination Margins

    We determine that the following weighted-average dumping margins 
exist for the period October 1, 2007, through March 31, 2008:

------------------------------------------------------------------------
            Exporter & Producer                Weighted-Average Margin
------------------------------------------------------------------------
Huludao Steel Pipe Industrial Co., Ltd....
Huludao City Steel Pipe Industrial Co.,                           73.87%
 Ltd......................................
        Produced by: Huludao Steel Pipe
         Industrial Co., Ltd..............
        Huludao City Steel Pipe Industrial
         Co., Ltd.........................
Pangang Group Beihai Steel Pipe                                   73.87%
 Corporation..............................
        Produced by: Pangang Group Beihai
         Steel Pipe Corporation...........
Jiangsu Yulong Steel Pipe Co., Ltd........                        73.87%
        Produced by: Jiangsu Yulong Steel
         Pipe Co., Ltd....................
Tianjin Xingyuda Import and Export Co.,                           73.87%
 Ltd......................................
        Produced by: Tianjin Lifengyuanda
         Steel Pipe Group Co., Ltd........
PRC-Wide Rate.............................                       101.10%
------------------------------------------------------------------------

Disclosure

    We will disclose to parties the calculations performed within five 
days of the date of public announcement of this determination in 
accordance with 19 CFR 351.224(b). The Department has determined in 
Circular Welded Carbon Quality Steel Line Pipe from the People's 
Republic of China: Notice of Amended Final Affirmative Countervailing 
Duty Determination and Notice of Countervailing Duty Order, 74 FR 4136 
(January 23, 2009) (Line Pipe CVD Final) that the product under 
investigation, exported and produced by Huludao Pipe, benefitted from 
export subsidies. Normally, where the product under investigation is 
also subject to a concurrent countervailing duty investigation, we 
instruct U.S. Customs and Border Protection (CBP) to require an 
antidumping cash deposit or posting of a bond equal to the weighted-
average amount by which the normal value (NV) exceeds the export price, 
as indicated above, minus the amount determined to constitute an export 
subsidy. See, e.g., Notice of Final Determination of Sales at Less Than 
Fair Value: Carbazole Violet Pigment 23 From India, 69 FR 67306, 67307 
(November 17, 2004). Therefore, for merchandise under consideration, 
exported and produced by Huludao Pipe, and entered, or withdrawn from 
warehouse, for consumption on or after the publication date of this 
final determination, we will instruct CBP to require an antidumping 
cash deposit or the posting of a bond for each entry equal to the 
weighted-average margin indicated above, reduced by the export subsidy 
rate determined in the Line Pipe CVD Final for Huludao Pipe. For 
merchandise under consideration from the other exporter producer 
combinations, listed in the table above, that have been granted 
separate rates, we have assigned the rate calculated for Huludao Pipe 
in this antidumping investigation. Additionally, this merchandise is 
subject to countervailing duties to offset export subsidies equal to or 
greater than the export subsidy rate determined for Huludao Pipe. 
Therefore, for merchandise under consideration from these exporter 
producer combinations, entered, or withdrawn from warehouse, for 
consumption on or after the publication date of this final 
determination, we will instruct CBP to require an antidumping cash 
deposit or the posting of a bond for each entry equal to the weighted-
average margin indicated above, reduced by the export subsidy rate 
determined for Huludao Pipe in the Line Pipe CVD Final. The adjusted 
cash deposit rate for Huludao Pipe and the other exporter-producer 
combinations listed above is 73.44 percent.

Continuation of Suspension of Liquidation

    In accordance with section 735(c)(1)(B) of the Act, we are 
directing CBP to continue to suspend liquidation of all imports of 
subject merchandise as described in the ``Scope of the Investigation'' 
section, that are entered or withdrawn from warehouse, for consumption 
on or after November 6, 2008, which is the date of publication of the 
Preliminary Determination in the Federal Register. We will instruct CBP 
to require a cash deposit or the posting of a bond equal to the 
weighted-average dumping margin amount by which the NV exceeds U.S. 
price, as follows: (1) the rate for the exporter/producer combination 
listed in the chart above will be the rate we have determined in this 
final determination; (2) for all PRC exporters of subject merchandise 
which have not received their own rate, the cash-deposit rate will be 
the PRC-wide entity rate; and (3) for all non-PRC exporters of subject 
merchandise which have not received their own rate, the cash-deposit 
rate will be the rate applicable to the PRC exporter/producer 
combination that supplied that non-PRC exporter. These suspension-of-
liquidation instructions will remain in effect until further notice.

International Trade Commission Notification

    In accordance with section 735(d) of the Act, we have notified the 
International Trade Commission (ITC) of our final determination of 
sales at LTFV. As our final determination is affirmative, in accordance 
with section 735(b)(2) of the Act, the ITC will determine whether the 
domestic industry in the United States is

[[Page 14518]]

materially injured, or threatened with material injury, by reason of 
imports or sales (or the likelihood of sales) for importation of the 
subject merchandise within 45 days of this final determination. If the 
ITC determines that material injury or threat of material injury does 
not exist, the proceeding will be terminated and all securities posted 
will be refunded or canceled. If the ITC determines that such injury 
does exist, the Department will issue an antidumping duty order 
directing CBP to assess upon further instruction by the Department 
antidumping duties on all imports of the subject merchandise entered, 
or withdrawn from warehouse, for consumption on or after the effective 
date of the suspension of liquidation.

Notification Regarding APO

    This notice also serves as a reminder to the parties subject to 
administrative protective order (APO) of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with 19 CFR 351.305. Timely notification of return or 
destruction of APO materials or conversion to judicial protective order 
is hereby requested. Failure to comply with the regulations and the 
terms of an APO is a sanctionable violation. This determination and 
notice are issued and published in accordance with sections 735(d) and 
777(i)(1) of the Act.

    Dated: March 23, 2009.
Ronald K. Lorentzen,
Acting Assistant Secretary for Import Administration.

Appendix I

Parties' Comments

Comment 1: Whether Huludao Pipe Could Have Reported Steel Consumption 
on a More Product-Specific Basis
Comment 2: Whether Huludao Pipe Could Have Reported the Consumption of 
Paint, Thinner, and Packing Labor on a More Product-Specific Basis
Comment 3: The Department's Valuation of Huludao Pipe's Water 
Consumption
Comment 4: Huludao Pipe's Reported Steel By-Product Quantity
Comment 5: Whether Huludao Pipe's Reported Scrap Steel Offset Should be 
Reduced by Transportation Costs
Comment 6: Application of Warehousing Grace Period
Comment 7: Reported Days in Warehouse
Comment 8: Calculation of Warehousing Volume
Comment 9: Whether the Date of the Commercial Invoice Is the Proper 
Date of Sale
Comment 10: Scrap Surrogate Value
Comment 11: Eligibility of Pangang Group Beihai Steel Pipe Corporation 
for a Separate Rate
Comment 12: Applying Adverse Facts Available to Non-Responsive 
Companies
Comment 13: Selection of Surrogate Financial Statements
Comment 14: Whether the Imposition of Both Countervailing and 
Antidumping Duties Constitutes the Double Counting of Duties
[FR Doc. E9-7093 Filed 3-30-09; 8:45 am]
BILLING CODE 3510-DS-S