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