03-17217. Notice of Final Results and Rescission of Antidumping Duty Administrative Review: Certain Large Diameter Carbon and Alloy Seamless Standard, Line and Pressure Pipe From Mexico

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of Final Results and Rescission of Antidumping Duty Administrative Review.

SUMMARY:

We have determined that the second antidumping duty administrative review of Tubos de Acero de Mexico, S.A. (“TAMSA”) should be rescinded.

EFFECTIVE DATE:

July 8, 2003.

FOR FURTHER INFORMATION CONTACT:

Mark Young, or George McMahon, AD/CVD Enforcement, Office 6, Group II, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone: [phone], or [phone], respectively.

SUPPLEMENTARY INFORMATION

Background

On August 6, 2002, the Department of Commerce (“the Department”) published in the Federal Register the notice of “Opportunity to Request Administrative Review” of the antidumping duty order on certain large diameter carbon and alloy seamless standard, line, and pressure pipe (“SLP”) from Mexico, for the period August 1, 2001 through July 31, 2002 (67 FR 50856). On August 30, 2002, we received a request from the petitioner ^[1] to review TAMSA. On September 25, 2002, we published the notice of initiation of this antidumping duty administrative review with respect to TAMSA. See Initiation of Antidumping and Countervailing Duty Administrative Reviews, Requests for Revocation in Part and Deferral of Administrative Reviews, 67 FR 60210 (September 25, 2002). On October 25, 2002, we received a request from the petitioner to determine whether antidumping duties have been absorbed during the period of review by respondent TAMSA. TAMSA submitted a November 1, 2002 letter certifying that neither TAMSA, nor its U.S. affiliate, Siderca Corporation, directly or indirectly, exported or sold for consumption in the United States any subject merchandise during the period of review (“POR”). On April 30, 2003, the Department issued a memorandum to the file concerning its intent to rescind the administrative review and invited parties to comment. See Memorandum from Eric Greynolds through Melissa Skinner, “Second Administrative Review of the Antidumping Duty Order on Certain Large Diameter Carbon and Alloy Seamless Standard, Line and Pressure Pipe from Mexico: Intent to Rescind Administrative Review,” (April 30, 2003), located in the case file in the Central Records Unit (“CRU”), main Commerce Building, room B-099. Although we invited parties to comment on our memorandum which outlined our intent to rescind this administrative review, no interested party submitted comments, a case brief, or requested a hearing. In summary, there have been no changes since the Department issued its intent to rescind this administrative review.

Scope of the Review

The products covered are large diameter seamless carbon and alloy (other than stainless) steel standard, line, and pressure pipes produced, or equivalent, to the American Society for Testing and Materials (“ASTM”) A-53, ASTM A-106, ASTM A-333, ASTM A-334, ASTM A-589, ASTM A-795, and the American Petroleum Institute (“API”) 5L specifications and meeting the physical parameters described below, regardless of application, with the exception of the exclusions discussed below. The scope of this review also includes all other products used in standard, line, or pressure pipe applications and meeting the physical parameters described below, regardless of specification, with the exception of the exclusions discussed below. Specifically included within the scope of this review are seamless pipes greater than 4.5 inches (114.3 mm) up to and including 16 inches (406.4 mm) in outside diameter, regardless of wall-thickness, manufacturing process (hot finished or cold-drawn), end finish (plain end, beveled end, upset end, threaded, or threaded and coupled), or surface finish.

The seamless pipes subject to this review are currently classifiable under the subheadings 7304.10.10.30, 7304.10.10.45, 7304.10.10.60, 7304.10.50.50, 7304.31.60.50, 7304.39.00.36 7304.39.00.40, 7304.39.00.44, 7304.39.00.48, 7304.39.00.52, 7304.39.00.56, 7304.39.00.62, 7304.39.00.68, 7304.39.00.72, 7304.51.50.60, 7304.59.60.00, 7304.59.80.30, 7304.59.80.35, 7304.59.80.40, 7304.59.80.45, 7304.59.80.50, 7304.59.80.55, 7304.59.80.60, 7304.59.80.65, and 7304.59.80.70 of the Harmonized Tariff Schedule of the United States (“HTSUS”).

Specifications, Characteristics, and Uses: Large diameter seamless pipe is used primarily for line applications such as oil, gas, or water pipeline, or utility distribution systems. 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 ASTM A-106 standard 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 A-335 standard must be used if temperatures and stress levels exceed those allowed for ASTM A-106. 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. If exceptionally low temperature uses or conditions are anticipated, standard pipe may be manufactured to ASTM A-333 or ASTM A-334 specifications.

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 water well pipe (ASTM A-589) and seamless galvanized pipe for fire protection uses (ASTM A-795) are used for the conveyance of water.

Seamless pipes are commonly produced and certified to meet ASTM A-106, ASTM A-53, API 5L-B, and API 5L-X42 specifications. To avoid maintaining separate production runs and separate inventories, manufacturers typically triple or quadruple certify the pipes by meeting the metallurgical requirements and performing the required tests pursuant to the respective specifications. 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 or quadruple certified pipes in large diameters is for use as oil and gas distribution lines for commercial applications. A more minor application for large diameter seamless pipes is for use in pressure piping systems by refineries, petrochemical plants, and chemical plants, as well as in power generation plants and in some oil field uses (on shore and off shore) such as for separator lines, gathering lines and metering runs. These applications constitute the majority of the market for the subject seamless pipes. However, ASTM A-106 pipes may be used in some boiler applications.

The scope of this review includes all seamless pipe meeting the physical parameters described above and produced to one of the specifications listed above, regardless of application, with the exception of the exclusions discussed below, whether or not also certified to a non-covered specification. Standard, line, and pressure applications and the above-listed specifications are defining characteristics of the scope of this review. Therefore, seamless pipes meeting the physical description above, but not produced to the ASTM A-53, ASTM A-106, ASTM A-333, ASTM A-334, ASTM A-589, ASTM A-795, and API 5L specifications shall be covered if used in a standard, line, or pressure application, with the exception of the specific exclusions discussed below.

For example, there are certain other ASTM specifications of pipe which, because of overlapping characteristics, could potentially be used in ASTM A-106 applications. These specifications generally include ASTM A-161, ASTM A-192, ASTM A-210, ASTM A-252, ASTM A-501, ASTM A-523, ASTM A-524, and ASTM A-618. When such pipes are used in a standard, line, or pressure pipe application, such products are covered by the scope of this review.

Specifically excluded from the scope of this review are:

A. Boiler tubing and mechanical tubing, if such products are not produced to ASTM A-53, ASTM A-106, ASTM A-333, ASTM A-334, ASTM A-589, ASTM A-795, and API 5L specifications and are not used in standard, line, or pressure pipe applications.

B. Finished and unfinished oil country tubular goods (“OCTG”), if covered by the scope of another antidumping duty order from the same country. If not covered by such an OCTG order, finished and unfinished OCTG are included in this scope when used in standard, line or pressure applications.

C. Products produced to the A-335 specification unless they are used in an application that would normally utilize ASTM A-53, ASTM A-106, ASTM A-333, ASTM A-334, ASTM A-589, ASTM A-795, and API 5L specifications.

D. Line and riser pipe for deepwater application, i.e., line and riser pipe that is (1) used in a deepwater application, which means for use in water depths of 1,500 feet or more; (2) intended for use in and is actually used for a specific deepwater project; (3) rated for a specified minimum yield strength of not less than 60,000 psi; and (4) not identified or certified through the use of a monogram, stencil, or otherwise marked with an API specification (e.g., “API 5L”).

With regard to the excluded products listed above, the Department will not instruct the U.S. Bureau of Customs and Border Protection (BCBP) to require end-use certification until such time as petitioner or other interested parties provide to the Department a reasonable basis to believe or suspect that the products are being utilized in a covered application. If such information is provided, the Department will require end-use certification only for the product(s) (or specification(s)) for which evidence is provided that such products are being used in a covered application as described above. For example, if, based on evidence provided by petitioner, the Department finds a reasonable basis to believe or suspect that seamless pipe produced to the A-335 specification is being used in an A-106 application, it will require end-use certifications for imports of that specification. Normally the Department will require only the importer of record to certify to the end-use of the imported merchandise. If it later proves necessary for adequate implementation, the Department may also require producers who export such products to the United States to provide such certification on invoices accompanying shipments to the United States.

Although the HTSUS subheadings are provided for convenience and BCBP's purposes, the written description of the merchandise subject to this scope is dispositive.

Rescission of Second Administrative Review

On November 1, 2002, TAMSA submitted a letter certifying that neither TAMSA, nor its U.S. affiliate, Siderca Corporation, directly or indirectly, exported or sold for consumption in the United States any subject merchandise during the POR. See Memorandum from Eric Greynolds through Melissa Skinner, “Second Administrative Review of the Antidumping Duty Order on Certain Large Diameter Carbon and Alloy Seamless Standard, Line and Pressure Pipe from Mexico: Intent to Rescind Administrative Review,” (April 30, 2003). The Department conducted a shipment data query on SLP produced by TAMSA during the POR. Our analysis of the query results showed that none the relevant shipments were subject to antidumping duties. To further confirm TAMSA's claim that it did not export subject merchandise to the United States during the POR, on March 19, 2003 we subsequently requested an additional data query of the internal BCBP data. See Memorandum to file from Mark Young through Eric Greynolds, “Second Administrative Review of the Antidumping Duty Order on Certain Large Diameter Carbon and Alloy Seamless Standard, Line and Pressure Pipe from Mexico: Internal Customs Data Query” (March 31, 2003). Pursuant to this request, we discovered what appeared to be several shipments of subject merchandise from TAMSA to the United States during the POR. Consequently, on March 31, 2003, the Department requested that TAMSA explain the discrepancy between TAMSA's statement that it had no sales of subject merchandise during the POR and the results of our data query which contradicted TAMSA's statement, or respond to the antidumping questionnaire that was sent on October 11, 2002. See letter to respondent, dated March 31, 2003, in the case file in the CRU.

Subsequent to the issuance of the Department's March 31, 2003 letter to TAMSA, we discovered an inadvertent error regarding the internal BCBP data query on shipments of subject merchandise from TAMSA. Specifically, the results of the query included extraneous data concerning merchandise that is not covered by the scope of the order. Therefore, on April 30, 2003, we stated that based on our shipment data query and examination of entry documents, we should treat TAMSA as a non-shipper and, in accordance with section 351.213(d)(3) of the Department's regulations, rescind this review. See Memorandum from Eric Greynolds through Melissa Skinner to the File, “Certain Large Diameter Carbon and Alloy Seamless Standard, Line, and Pressure Pipe from Mexico: Rescission of First Administrative Review,” dated April 30, 2003. We invited interested parties to comment on our intent to rescind the administrative review.

With respect to petitioner's October 25, 2002 request that the Department determine whether antidumping duties have been absorbed during the period of review by respondent TAMSA, we find their request to be irrelevant to the instant case. The Department's query results show that TAMSA had no entries of subject merchandise during the POR, therefore, no duty absorption can exist (see e.g., Certain Fresh Cut Flowers from Mexico, Final Results of Antidumping Duty Administrative Review, 62 FR 27219 (May 19, 1997)).

Based on our BCBP data query and examination of entry documentation, the Department will treat TAMSA as a non-shipper for the purpose of this review. Therefore, in accordance with § 351.213(d)(3) of the Department's regulations, and consistent with our practice, we will rescind this review because TAMSA is the sole respondent and a non-shipper (see e.g., Polychloroprene Rubber from Japan: Notice of Recission of Antidumping Duty Administrative Review, 66 FR 45005 (August 27, 2001)).

This notice is in accordance with section 751(a)(1) of the Act and section 351.213(d) of the Department's regulations.

Dated: July 1, 2003.

Gary Taverman,

Acting Deputy Assistant Secretary for Import Administration.

Footnotes

1.  The petitioner is United States Steel Corporation.