[Federal Register Volume 59, Number 138 (Wednesday, July 20, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-17680]
[[Page Unknown]]
[Federal Register: July 20, 1994]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
International Trade Administration
[A-357-809; A-351-826; A-428-820; and A-475-814]
Initiation of Antidumping Duty Investigations: Small Diameter
Circular Seamless Carbon and Alloy Steel Standard, Line and Pressure
Pipe From Argentina, Brazil, Germany and Italy
AGENCY: Import Administration, International Trade Administration,
Commerce.
EFFECTIVE DATE: July 20, 1994.
FOR FURTHER INFORMATION CONTACT: Kimberly Hardin, 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-
0371.
INITIATION OF INVESTIGATIONS:
The Petition
On June 23, 1994, we received four petitions filed in proper form
by Gulf States Tube Division of Quanex Corporation (petitioner). In
accordance with section 732(b) of the Tariff Act of 1930, as amended
(the Act) and 19 CFR 353.12 (1994), the petitioner alleges that small
diameter circular seamless carbon and alloy steel standard, line and
pressure pipe (seamless pipe) from Argentina, Brazil, Germany and Italy
is being, or is likely to be, sold in the United States at less than
fair value within the meaning of section 731 of the Act, and that these
imports are materially injuring, or threaten material injury to, a U.S.
industry.
Petitioner has stated that it has standing to file the petitions
because it is an interested party, as defined under section 771(9)(C)
of the Act, and because the petitions were filed on behalf of the U.S.
industry producing the product subject to these investigations. If any
interested party, as described under paragraphs (C), (D), (E), or (F)
of section 771(9) of the Act, wishes to register support for, or
opposition to, these petitions, it should file a written notification
with the Assistant Secretary for Import Administration.
Scope of Investigations
For purposes of these investigations, 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 these
investigations, 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
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 these investigations 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 these
investigations. 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
these investigations.
Specifically excluded from these investigations are boiler tubing,
mechanical tubing and oil country tubular goods except when used in a
standard, line or pressure pipe application. Also excluded from these
investigations are redraw hollows for cold-drawing when used in the
production of cold-drawn pipe or tube.
Although the HTS subheadings are provided for convenience and
customs purposes, our written description of the scope of these
investigations is dispositive.
Request for Comments From Interested Parties
The scope contained in the petitions, which has been slightly
clarified in the above ``Scope of Investigations'' section, contains
the clause that products used in standard, line or pressure pipe
applications be included in the scope, regardless of whether they meet
A-106, A-335, A-53 or API 5L standards. Implementing this clause would
require some type of end-use certification. Given the burden on Customs
and the difficulty involved in administering end-use certifications,
the Department generally avoids end-use as a scope criterion. See Final
Determination of Sales at Less Than Fair Value: Certain Alloy and
Carbon Hot-Rolled Bars, Rods, and Semifinished Products of Special Bar
Quality Engineered Steel from Brazil, 58 FR 31496 (June 3, 1993).
However, because petitioner has alleged that circumvention may occur if
end-use is not part of any order resulting from these investigations,
we are requesting comments regarding end-use as a criterion for the
scope of these investigations. Petitioner has based its allegation on
circumstances that occurred in the investigations of Preliminary
Affirmative Determination of Scope Inquiry on Antidumping Duty Orders
on Certain Circular Welded Non-Alloy Steel Pipe from Brazil, the
Republic of Korea, and Mexico, 59 FR 1929 (January 13, 1994).
Petitioner has identified specific possible substitution products for
the scope merchandise. Petitioner has also indicated that, while it is
not aware at this time of substitution occurring, it may occur in the
future should antidumping duties be assessed on seamless standard, line
and pressure pipe. Therefore, we are including end-use in the scope for
purposes of initiation; however, we intend to consider its
appropriateness further and we invite comments from interested parties
regarding the scope information presented above under the ``Scope of
Investigations'' section of this notice. Specifically, we will examine
comments that address ``end-use'' as a scope criterion. Interested
parties are invited to comment on the following: (1) Whether or not
end-use is an appropriate criterion for the merchandise described in
the ``Scope of Investigations'' section of this notice; (2) how the
Department would be informed when substitution is occurring, i.e., a
trigger mechanism; (3) at what point the Department should implement
suspension of liquidation and use of end-use certificates for products
meeting the physical parameters described in the scope other than those
stenciled A-106, A-335, A-53 and/or API 5L; (4) what specific
characteristics or factors the Department should evaluate regarding
end-use as a scope criterion; (5) what information should be provided
on an end-use certificate; (6) precise details as to how the Department
and Customs should administer any antidumping duty orders that result
from these investigations given end-use as a scope criterion; and (7)
the universe of products that could possibly be substituted for the
subject merchandise.
Finally, we invite comments from parties on whether the products
within the scope of these investigations constitute more than one class
or kind of merchandise. Parties should include an analysis using the
following factors: (1) The physical characteristics of the merchandise;
(2) the expectations of the ultimate purchaser; (3) the channels of
trade; (4) the ultimate use of the product; and (5) the cost.
Parties interested in commenting on the items mentioned above
should submit their comments no later than close of business October
21, 1994. Rebuttal comments will be accepted no later than close of
business October 31, 1994.
United States Price and Foreign Market Value
For purposes of these initiations, no adjustments were made to
petitioner's calculations. If it becomes necessary at a later date to
consider these petitions as a source of best information available
(BIA), we may review all of the bases for the petitioner's estimated
dumping margins in determining BIA.
Argentina
For Argentina, petitioner based United States price (USP) on U.S.
price quotes to an end-user. Petitioner made adjustments for
transportation and insurance charges, port and handling charges, and
U.S. duties paid. Petitioner adjusted USP to account for the tax levied
on seamless pipe in the home market. Petitioner also calculated the
amount of the tax adjustment that was due solely to the inclusion of
price deductions in the original tax base.
Petitioner based foreign market value (FMV) on home market prices
to end-users. Petitioner made adjustments for distributor mark-up,
transportation, home market taxes, and a tax offset to account for the
amount of tax that was due solely to the inclusion of price deductions
in the original tax base.
The range of dumping margins of seamless pipe from Argentina based
on a comparison of USP to FMV alleged by petitioner is 66.57 percent to
108.13 percent.
Brazil
For Brazil, petitioner based USP on U.S. price quotes to a
distributor. Petitioner made adjustments for freight and insurance,
port and handling charges and U.S. duties paid. Petitioner adjusted USP
to account for the tax levied on seamless pipe in the home market.
Petitioner also calculated the amount of the tax adjustment that was
due solely to the inclusion of price deductions in the original tax
base. Finally, petitioner adjusted USP to account for the difference in
level of trade between the home market and U.S. market.
Petitioner based FMV on home market price quotes to an end-user.
Petitioner adjusted the prices for home market taxes not included in
the prices. Petitioner made a tax offset for the amount of tax that was
due solely to the inclusion of price deductions in the original tax
base.
The range of dumping margins of seamless pipe from Brazil based on
a comparison of USP to FMV alleged by petitioner is 79.83 percent to
130.08 percent.
Germany
For Germany, petitioner based USP on U.S. price quotes to an end-
user. Petitioner made adjustments for distributor mark-up, freight and
insurance, port and handling charges and U.S. duties paid.
Petitioner was unable to obtain home market prices. Moreover,
petitioner was unable to develop a meaningful constructed value as
petitioner claims it operates a substantially different production
process than the German manufacturer of the subject merchandise.
Therefore, petitioner based FMV on third country prices in Britain,
which was the only information reasonably available to it. Petitioner
obtained ex-warehouse and delivered prices from three British
distributors of subject merchandise from Germany. Petitioner made
adjustments for the distributor mark-up, delivery charges, where
appropriate, and transportation charges.
The range of dumping margins of seamless pipe from Germany based on
a comparison of USP to FMV alleged by petitioner is 11.67 percent to
57.72 percent.
Italy
For Italy, petitioner based USP on U.S. price quotes to an end-
user. Petitioner made adjustments for distributor mark-up,
transportation and insurance charges, port and handling charges, and
U.S. duties paid. Petitioner adjusted the prices for home market taxes.
Petitioner made a tax offset for the amount of tax that was due solely
to the inclusion of price deductions in the original tax base.
Petitioner based FMV on home market price quotes to an end-user.
Petitioner made adjustments for discounts on cash sales, distributor
mark-up and freight charges. Petitioner adjusted the prices for home
market taxes and made a tax offset for the amount of tax that was due
solely to the inclusion of price deductions in the original tax base.
The range of dumping margins of seamless pipe from Italy based on a
comparison of USP to FMV alleged by petitioner is 4.57 percent to 11.26
percent.
Initiation of Investigations
We have examined the petitions on seamless pipe from Argentina,
Brazil, Germany and Italy, and have found that these petitions meet the
requirements of section 732(b) of the Act and 19 C.F.R. 353.12.
Therefore, we are initiating antidumping duty investigations to
determine whether imports of seamless pipe from Argentina, Brazil,
Germany and Italy are being, or are likely to be, sold in the United
States at less than fair value.
Preliminary Determination by the International Trade Commission
The International Trade Commission (ITC) will determine by August
8, 1994, whether there is a reasonable indication that imports of
seamless pipe from Argentina, Brazil, Germany and Italy are materially
injuring, or threaten material injury to, a U.S. industry. A negative
ITC determination will result in the investigations being terminated;
otherwise, the investigations will proceed according to statutory and
regulatory time limits.
This notice is published pursuant to section 732(c)(2) of the Act
and 19 CFR 353.13(b).
Dated: July 13, 1994.
Barbara R. Stafford,
Deputy Assistant Secretary for Investigations.
[FR Doc. 94-17680 Filed 7-19-94; 8:45 am]
BILLING CODE 3510-DS-P
