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, 23188-23194 [E8-9361]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 73, Number 83 (Tuesday, April 29, 2008)]
[Notices]
[Pages 23188-23194]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-9361]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-580-861, A-570-935]


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

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

DATES: Effective Date: April 29, 2008.

FOR FURTHER INFORMATION CONTACT: Dena Crossland (Republic of Korea), 
Jeffrey Pederson, or Rebecca Pandolph (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: 
202-482-3362, 202-482-2769, or 202-482-3627, respectively.

SUPPLEMENTARY INFORMATION: 

The Petition

    On April 3, 2008, the Department of Commerce (``Department'') 
received the petition concerning imports of certain circular welded 
carbon quality steel line pipe (``welded line pipe'') from the Republic 
of Korea (``Korea'') and the People's Republic of China (``PRC'') filed 
in proper form by United States Steel Corporation (``U.S. Steel''), 
Maverick Tube Corporation (``Maverick''), Tex-Tube Company (``Tex-
Tube''), and the United Steel, Paper and Forestry, Rubber, 
Manufacturing, Energy, Allied Industrial and Service Workers 
International Union, and AFL-CIO-CLC (``United Steelworkers'') 
(collectively, ``Petitioners''). See Imposition of Antidumping and 
Countervailing Duties: Certain Circular Welded Carbon Quality Steel 
Line Pipe from the People's Republic of China and the Republic of 
Korea, dated April 3, 2008 (in four volumes) (``Petition'').
    On April 9, 2008, the Department issued requests for additional 
information and clarification of certain areas of the Petition. Based 
on the Department's requests, Petitioners filed additional information 
supplementing the Petition on April 14, 2008, including one submission 
on general issues (Response to the Department Questionnaire Concerning 
Volume I of the Petition, dated April 14, 2008 (``Supp. Response'')), 
one distinct submission on Korea-only material (Response to the 
Department Questionnaire Concerning the Republic of Korea, dated April 
14, 2008 (``Supp. Korea Response'')), and one distinct submission on 
PRC-only material (Response to the Department Questionnaire Concerning 
the People's Republic of China, dated April 14, 2008 (``Supp. PRC AD 
Response'')). On April 16 and April 17, 2008, the Department called 
Petitioners to request certain information relating to the Petition, 
the Supp. Korea Response, and the Supp. PRC AD Response. See Memorandum 
to the File from Meredith A.W. Rutherford,

[[Page 23189]]

Import Policy Analyst, regarding Petitions for the Imposition of 
Antidumping and Countervailing Duties--Certain Circular Welded Carbon 
Quality Steel Line Pipe from the People's Republic of China and the 
Republic of Korea: Phone Call with Petitioner Regarding Industry 
Support, dated April 16, 2008; Memorandum to the File from Juanita H. 
Chen, Special Assistant to the SEC Office, through Edward C. Yang, 
Director, SEC Office, AD/CVD Operations, China/NME Group, regarding 
Circular Welded Carbon Quality Steel Line Pipe from the People's 
Republic of China: Request for Information, dated April 17, 2008; and 
Memorandum to the File from Dena Crossland, Analyst, through Patrick 
Edwards, Acting Program Manager, AD/CVD Operations, Office 7, regarding 
Circular Welded Carbon Quality Steel Line Pipe from the Republic of 
Korea: Request for Information, dated April 17, 2008. On April 18, 
2008, Wheatland Tube Company, a U.S. manufacturer of welded line pipe, 
filed a letter in support of the Petition. On April 21, 2008, 
Petitioners filed additional information in response to the 
Department's April 16, 2008, and April 17, 2008, request for 
information. See Response to the Department's Second Request for 
Additional Information Concerning the People's Republic of China and 
the Republic of Korea, dated April 21, 2008 (``Second Supp. 
Response''); Response to the Department's Second Request for Additional 
Information Concerning the People's Republic of China, dated April 21, 
2008 (``Second Supp. PRC AD Response''); and Response to the 
Department's Second Request for Additional Information Concerning the 
Republic of Korea, dated April 21, 2008 (``Second Supp. Korea 
Response''). On April 21, 2008, The Department called Petitioners 
regarding the scope language. See Memorandum to the File from Norbert 
Gannon, Supervisory Import Policy Analyst, regarding Petitions for the 
Imposition of Antidumping and Countervailing Duties--Certain Circular 
Welded Carbon Quality Steel Line Pipe from the People's Republic of 
China and the Republic of Korea: Phone Call with Petitioner Regarding 
Scope, dated April 21, 2008. Additionally, on April 21, 2008, Stupp 
Corporation, a domestic producer of subject merchandise, filed a letter 
in support of the Petition.
    In accordance with section 732(b) of the Tariff Act of 1930, as 
amended (``Act''), Petitioners allege that imports of welded line pipe 
from Korea 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 that Petitioners filed the Petition on behalf 
of the domestic industry because Petitioners are interested parties as 
defined in sections 771(9)(C) and 771(9)(D) of the Act, and have 
demonstrated sufficient industry support with respect to the 
antidumping duty investigations that Petitioners are requesting that 
the Department initiate. See ``Determination of Industry Support for 
the Petition'' section below.

Periods of Investigation

    The period of investigation (``POI'') for Korea is April 1, 2007, 
through March 31, 2008. The POI for the PRC is October 1, 2007, through 
March 31, 2008. See 19 CFR 351.204(b)(1).

Scope of Investigations

    The merchandise covered by each of these investigations is circular 
welded carbon quality steel pipe of a kind used for oil and gas 
pipelines (``welded line pipe''), not more that 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 line pipe stencil is covered by the 
scope of these investigations.
    The line pipe products that are the subject of these investigations 
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 these investigations is 
dispositive.

Comments on Scope of Investigations

    During our review of the Petition, we discussed the scope with 
Petitioners to ensure that it is an accurate reflection of the products 
for which the domestic industry is seeking relief. The scope of these 
investigations covers line pipe which, we recognize, may include 
certain merchandise potentially subject to the on-going antidumping 
(``AD'') and countervailing duty (``CVD'') investigations of circular 
welded pipe (``CWP''). See Circular Welded Carbon Quality Steel Pipe 
from the People's Republic of China: Notice of Preliminary 
Determination of Sales at Less than Fair Value and Postponement of 
Final Determination, 73 FR 2445 (January 15, 2008); see also Circular 
Welded Carbon Quality Steel Pipe from the People's Republic of China: 
Preliminary Affirmative Countervailing Duty Determination; Preliminary 
Affirmative Determination of Critical Circumstances; and Alignment of 
Final Countervailing Duty Determination with Final Antidumping Duty 
Determination, 72 FR 63875 ( November 13, 2007). Given that the scope 
issue has not been finally resolved in the CWP investigations, for 
purposes of these initiations, we have defined the scope to include the 
potential overlap. However, we intend to resolve the issue to ensure 
that there will be no overlap between the scopes in the CWP and welded 
line pipe cases. 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 by 
May 13, 2008, which is 20 calendar days

[[Page 23190]]

from the date of signature of this notice. Comments should be addressed 
to Import Administration's APO/Dockets Unit, Room 1117, U.S. Department 
of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 
20230. The period of scope consultations is to provide the Department 
with ample opportunity to consider all comments and to consult with 
parties prior to the issuance of the preliminary determinations.

Comments on Product Characteristics for Antidumping Duty Questionnaires

    We are requesting comments from interested parties regarding the 
appropriate physical characteristics of welded line pipe to be reported 
in response to the Department's antidumping duty questionnaires. This 
information will be used to identify the key physical characteristics 
of the subject merchandise in order to more accurately report the 
relevant factors and costs of production, as well as to develop 
appropriate product comparison criteria.
    Interested parties may provide any information or comments that 
they feel are relevant to the development of an accurate listing of 
physical characteristics. Specifically, they may provide comments as to 
which characteristics are appropriate to use as (1) general product 
characteristics and (2) the product comparison criteria. We note that 
it is not always appropriate to use all product characteristics as 
product comparison criteria. We base product comparison criteria on 
meaningful commercial differences among products. In other words, while 
there may be some physical product characteristics utilized by 
manufacturers to describe welded line pipe, it may be that only a 
select few product characteristics take into account commercially 
meaningful physical characteristics. In addition, interested parties 
may comment on the order in which the physical characteristics should 
be used in product matching. Generally, the Department attempts to list 
the most important physical characteristics first and the least 
important characteristics last.
    In order to consider the suggestions of interested parties in 
developing and issuing the antidumping duty questionnaires, we must 
receive comments at the above-referenced address by May 13, 2008. 
Additionally, rebuttal comments addressing only those issues raised in 
the comments must be received by May 20, 2008.

Determination of Industry Support for the Petition

    Section 732(b)(1) of the Act requires that a petition be filed on 
behalf of the domestic industry. Section 732(c)(4)(A) of the Act 
provides that 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 U.S. 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 a 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 (CIT 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 subtitle.'' 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 these 
investigations. Based on our analysis of the information submitted on 
the record, we have determined that welded line pipe constitutes a 
single domestic like product and we have analyzed industry support in 
terms of that domestic like product. For a discussion of the domestic 
like product analysis in this case, see ``Antidumping Duty 
Investigation Initiation Checklist: Certain Circular Welded Carbon 
Quality Steel Line Pipe from the Republic of Korea (Korea)'' (``Korea 
Initiation Checklist''), Industry Support at Attachment II, and 
``Antidumping Duty Investigation Initiation Checklist: Certain Circular 
Welded Carbon Quality Steel Line Pipe from the People's Republic of 
China'' (``PRC Initiation Checklist''), Industry Support at Attachment 
II, on file in the Central Records Unit (``CRU''), Room 1117 of the 
main Department of Commerce building.
    With regard to section 732(c)(4)(A) of the Act, in determining 
whether Petitioners have standing (i.e., those domestic workers and 
producers supporting the Petition 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 Petition), we considered the industry support data contained in the 
Petition with reference to the domestic like product as defined in the 
``Scope of Investigations'' section, above. To establish industry 
support, Petitioners provided their shipments for the domestic like 
product for the year 2007, and compared them to shipments of the 
domestic like product for the industry. In the Petition, Petitioners 
demonstrated the correlation between shipments and production and 
argued that shipments are a good proxy for production. See Petition, 
Volume I, at 3, and Exhibit 3b. Based on the fact that total industry 
production data for the domestic like product for 2007 is not 
reasonably available, and that Petitioners have established that 
shipments are a reasonable proxy for production data, we have relied 
upon shipment data for purposes of measuring industry support. For 
further discussion, see Korea Initiation Checklist and PRC Initiation

[[Page 23191]]

Checklist at Attachment II (Industry Support).
    The Department's review of the data provided in the Petition, 
supplemental submissions, and other information readily available to 
the Department indicates that Petitioners have established industry 
support. First, the Petition establishes 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 and Korea 
Initiation Checklist and PRC Initiation Checklist at Attachment II 
(Industry Support). Second, the domestic producers (or workers) have 
met the statutory criteria for industry support under section 
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. See Korea Initiation Checklist 
and PRC Initiation Checklist at Attachment II (Industry Support). 
Finally, the domestic producers (or workers) have met the statutory 
criteria for industry support under section 732(c)(4)(A)(ii) of the Act 
because the domestic producers (or workers) who support the Petition 
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 Petition. Accordingly, the Department 
determines that the Petition was filed on behalf of the domestic 
industry within the meaning of section 732(b)(1) of the Act. See Korea 
Initiation Checklist and PRC Initiation Checklist at Attachment II 
(Industry Support).
    The Department finds that Petitioners filed the Petition on behalf 
of the domestic industry because they are interested parties as defined 
in sections 771(9)(C) and 771(9)(D) of the Act and have demonstrated 
sufficient industry support with respect to the antidumping 
investigation that they are requesting the Department initiate. See 
Korea 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 that the 
industry's injured condition is illustrated by reduced market share, 
underselling and price depressing and suppressing effects, lost sales 
and revenues, a decline in financial performance, and an increase in 
import penetration. We have assessed the allegations and supporting 
evidence regarding material injury, threat of 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 Korea Initiation Checklist and PRC Initiation Checklist 
at Attachment III.

Allegations of Sales at Less Than Fair Value

    The following is a description of the allegations of sales at less 
than fair value (``LTFV'') upon which the Department based its decision 
to initiate these investigations of imports of welded line pipe from 
Korea and the PRC. The sources of data for the deductions and 
adjustments relating to the U.S. price, NV (for Korea), and the factors 
of production (for the PRC) are also discussed in the country-specific 
initiation checklists. See Korea Initiation Checklist and PRC 
Initiation Checklist. Should the need arise to use any of this 
information as facts available under section 776 of the Act in our 
preliminary or final determinations, we will reexamine the information 
and revise the margin calculations, if appropriate.

Korea

Constructed Export Price (``CEP'')

    Petitioners calculated two CEPs based on price quotes for Korean-
produced welded line pipe that was sold or offered for sale in the 
United States during the POI. Petitioners claimed that CEP was 
appropriate for Korea because the major Korean producers of welded line 
pipe typically sell through affiliated offices in the United States 
which, in turn, resell the welded line pipe to distributors in the 
United States. See Petition, Volume IV, at Exhibit IV-1. Petitioners 
made adjustments to the starting price for foreign inland freight, 
ocean freight, marine insurance expenses, foreign and U.S. port 
expenses, and estimated expenses that the affiliated distributor would 
incur in selling merchandise on behalf of the Korean producer in the 
United States. Foreign inland freight, ocean freight and insurance were 
calculated as the difference between the value of welded line pipe 
imports from Korea on a ``cost-insurance-freight'' (``CIF'') basis, and 
the value of welded line pipe imports from Korea on a custom's value 
basis as reported on the ITC's ``DataWeb'' at https://usitc.gov/tata/
hts/other/dataweb. Petitioners calculated foreign and U.S. port 
expenses based on U.S. and Korean tariff schedule data. See Petition, 
Volume IV, at Exhibits 7, 7a, and 7b. See Korea Initiation Checklist 
for further discussion.

NV

    Petitioners calculated NV based on home market prices for welded 
line pipe produced in Korea and sold or offered for sale to customers 
in Korea. Petitioners calculated the ex-factory NV for the home market 
sales by converting the reported offer prices to a per-ton basis. See 
Petition, Volume IV, at 9-12, and Korea Initiation Checklist for 
further discussion.

PRC

EP

    Petitioners calculated two EPs based on two price quotes for welded 
line pipe from the PRC, offered for sale during the POI. Petitioners 
made adjustments to the starting prices by deducting the costs 
associated with exporting and delivering the product, including foreign 
inland freight and ocean freight, insurance expenses, foreign and U.S. 
port expenses and wharfage fees, and brokerage and handling expenses. 
See PRC Initiation Checklist for further discussion.

NV

    Petitioners note that the PRC is a non-market economy country 
(``NME'') and, as the Department has not revoked this determination, 
such status remains in effect today. See Petition, Volume II, at 11. 
The Department has previously examined the PRC's market status and 
determined that NME status should continue for the PRC. See Memorandum 
from the Office of Policy to David M. Spooner, Assistant Secretary for 
Import Administration, regarding The People's Republic of China Status 
as a Non-Market Economy, dated May 15, 2006 (available online at http:/
/ia.ita.doc.gov/download/prc-nme-status/prc-nme-status-memo.pdf). In 
addition, in recent investigations, the Department has continued to 
determine that the PRC is an NME country. See Final Determination of 
Sales at Less Than Fair Value: Sodium Hexametaphosphate from The 
People's Republic of China, 73 FR 6479 (February 4, 2008); Final 
Determination of Sales at Less Than Fair Value and Partial Affirmative 
Determination of Critical Circumstances: Certain Polyester Staple Fiber 
from the People's Republic of China, 72 FR 19690 (April

[[Page 23192]]

19, 2007); Final Determination of Sales at Less Than Fair Value: 
Certain Activated Carbon from the People's Republic of China, 72 FR 
9508 (March 2, 2007).
    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, therefore, remains in effect for 
purposes of the initiation of this investigation. Accordingly, 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 the PRC 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 argue that India is the appropriate surrogate country 
for the PRC because it is at a comparable level of economic development 
and it is a significant producer of welded line pipe. See Petition, 
Volume II, at 12. Based on the information provided by Petitioners, the 
Department believes that the use of India as a surrogate country is 
appropriate for purposes of initiation. However, after initiation of 
the investigation, interested parties will have the opportunity to 
submit comments regarding surrogate country selection and, pursuant to 
19 CFR 351.301(c)(3)(i), 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 calculated NV and dumping margins for the two U.S. 
prices, discussed above, using the Department's NME methodology as 
required by 19 CFR 351.202(b)(7)(i)(C) and 19 CFR 351.408. Petitioners 
calculated NV based on Company A's consumption rates for producing 
welded line pipe, arguing that it is the best information reasonably 
available to Petitioners.\1\ See PRC Initiation Checklist.
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    \1\ The identity of Company A is proprietary information; 
further discussion of Company A is available in the initiation 
checklist. See PRC Initiation Checklist.
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    Petitioners valued the factors of production to produce welded line 
pipe based on reasonably available, public surrogate country data, 
including India import data from the Monthly Statistics of the Foreign 
Trade of India, and prices from Energy Prices & Taxes: Second Quarter 
2003, published by the International Energy Agency. Petitioners 
calculated labor cost using rates posted on the Department's Web site. 
Where Petitioners were unable to find input prices from a period 
contemporaneous with the POI, Petitioners adjusted for inflation using 
the wholesale price index for India, as published in the International 
Monetary Fund Publication ``International Financial Statistics.'' See 
Petition, Volume II, at 19 and Exhibit II-8. Petitioners made currency 
conversions, where necessary, using a simple average of the rupee/U.S. 
dollar exchange rate for the POI, as reported on the Department's Web 
site. See Petition, Volume II, at 19; Supp. PRC AD Response, at Exhibit 
Supp-9. While Petitioners calculated movement expenses using 
information from the Department of Commerce and the ITC, Petitioners 
did not include freight expenses in their calculation of surrogate 
values for the PRC because they could not determine the correct 
distance necessary for the calculations. See Petition, Volume II, at 
19-20; Supp. PRC AD Response, at Exhibit Supp-9. For purposes of 
initiation, the Department determines that the surrogate values used by 
Petitioners are reasonably available and, thus, acceptable. However, 
the Department modified the surrogate value that Petitioners calculated 
for hot-rolled steel coil. See PRC Initiation Checklist.
    Petitioners based factory overhead expenses, selling, general and 
administrative (``SG&A'') expenses, and profit, on financial data from 
the 2006-2007 annual reports of Tata Steel Limited, Jindal SAW Ltd. 
(``Jindal''), and Ratnamani Metals & Tubes Ltd., Indian producers of 
welded steel pipe using steel sheet in coils. See Petition, Volume II, 
at 22-25; Supp. PRC AD Response at Exhibit Supp-9. We recalculated 
factory overhead expenses, SG&A expenses, and profit using only 
Jindal's data because of the three potential surrogate companies, only 
Jindal's financial data were from a period that overlapped with the 
POI. In addition, we revised the financial ratios that Petitioners 
calculated from Jindal's data to account for expenses that were omitted 
from Petitioner's calculation. See PRC Initiation Checklist.

Fair Value Comparisons

    Based on the data provided by Petitioners, with adjustments as 
requested by the Department, there is reason to believe that imports of 
welded line pipe from Korea and the PRC are being, or are likely to be, 
sold in the United States at less than fair value. Based on a 
comparison of CEP and NV, calculated in accordance with sections 772(b) 
and 773(a)(1) of the Act, respectively, estimated dumping margins for 
welded line pipe from Korea range from 41.69 percent to 42.75 percent. 
See Korea Initiation Checklist. Based on a comparison of EP and NV, 
calculated in accordance with sections 772(a) and 773(c) of the Act, 
respectively, the revised estimated dumping margins for welded line 
pipe from the PRC range from 57.45 percent to 58.96 percent. See PRC 
Initiation Checklist.

Initiation of Antidumping Investigations

    Based upon the examination of the Petition on welded line pipe from 
Korea and the PRC, 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 welded 
line pipe from Korea 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 intend to make 
our preliminary determinations no later than 140 days after the date of 
this initiation.

Respondent Selection for Korea

    For the Korean investigation, the Department intends to select 
respondents based on U.S. Customs and Border Protection (``CBP'') data 
for U.S. imports during the POI. We intend to release the CBP data 
under Administrative Protective Order (``APO'') to all parties with 
access to information protected by APO within five days of publication 
of this Federal Register notice, and make our decision regarding 
respondent selection within 20 days of publication of this notice. The 
Department invites comments regarding the CBP data and respondent 
selection within 10 days of publication of this Federal Register 
notice.
    Interested parties must submit applications for disclosure under 
APO in accordance with 19 CFR 351.305. Instructions for filing such 
applications may be found on the Department's Web site at https://
ia.ita.doc.gov/apo.

Respondent Selection for the PRC

    In the PRC investigation, the Department will request quantity and 
value information from all known exporters and producers identified, 
with complete contact information, in the Petition. The quantity and 
value data received from these exporters/producers will be used as the 
basis to select the mandatory respondents. The

[[Page 23193]]

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. See Circular Welded Austenitic Stainless Pressure 
Pipe from the People's Republic of China: Initiation of Antidumping 
Duty Investigation, 73 FR 10221, 10225 (February 26, 2008); and 
Initiation of Antidumping Duty Investigation: Certain Artist Canvas 
From the People's Republic of China, 70 FR 21996, 21999 (April 28, 
2005). Attachment I of this notice contains the quantity and value 
questionnaire that must be submitted by all NME exporters/producers no 
later than May 14, 2008. In addition, the Department will post the 
quantity and value questionnaire along with the filing instructions on 
the Import Administration Web site, at https://ia.ita.doc.gov/ia-
highlights-and-news.html. The Department will send the quantity and 
value questionnaire to those PRC companies identified, with complete 
contact information, in the Petition, Volume I, at Exhibit 6a, and in 
the Supp. PRC AD Response, at Supp-1.

Separate Rates

    In order to obtain separate-rate status in NME investigations, 
exporters and producers must submit a separate-rate status application. 
See Policy Bulletin 05.1: Separate-Rates Practice and Application of 
Combination Rates in Antidumping Investigations involving Non-Market 
Economy Countries (April 5, 2005) (``Separate Rates/Combination Rates 
Bulletin''), available on the Department's Web site at https://
ia.ita.doc.gov/policy/bull05-1.pdf. The specific requirements for 
submitting the separate-rate application in this investigation are 
outlined in detail in the application itself, available on the 
Department's Web site at https://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 will be due 60 days 
from publication of this notice.

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/Combination Rates Bulletin states:

    {w{time} 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.

See Separate Rates/Combination Rates Bulletin, at 6.

Distribution of Copies of the Petition

    In accordance with section 732(b)(3)(A) of the Act and 19 CFR 
351.202(f), copies of the public version of the Petition have been 
provided to the representatives of the Governments of Korea and the 
PRC. Because of the particularly large number of producers/exporters 
identified in the Petition, the Department considers the service of the 
public version of the Petition to the foreign producers/exporters 
satisfied by the delivery of the public version to the Governments of 
Korea and the PRC, consistent with 19 CFR 351.203(c)(2).

International Trade Commission Notification

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

Preliminary Determinations by the International Trade Commission

    The ITC will preliminarily determine, no later than May 19, 2008, 
whether there is a reasonable indication that imports of welded line 
pipe from Korea and the PRC are materially injuring, or threatening 
material injury to, a U.S. industry. A negative ITC determination with 
respect to either of the investigations will result in that 
investigation 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.

    Dated: April 23, 2008.
David M. Spooner,
Assistant Secretary for Import Administration.

Attachment 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 of your sales of merchandise covered by the scope of this 
investigation (see attachment II of this document), produced in the 
PRC, and exported/shipped to the United States during the period 
October 1, 2007 through March 31, 2008.

------------------------------------------------------------------------
                                      Total       Terms of
              Market                 quantity       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

[[Page 23194]]

 
4. Further Manufactured Sales....
------------------------------------------------------------------------
        Total Sales..............
------------------------------------------------------------------------

    Because the scope of this investigation may include certain 
merchandise potentially subject to the on-going antidumping and 
countervailing duty investigations of circular welded pipe, we also 
request that you identify, in the chart below, the total quantity and 
total value that was reported in the above chart for sales of the 
following merchandise:
    Pipe multiple-stenciled to a standard and/or structural 
specification and to any other specification, such as the American 
Petroleum Institute (``API'') API-5L specification, when it meets the 
physical description set forth in the scope description in the circular 
welded pipe cases (see Circular Welded Carbon Quality Steel Pipe from 
the People's Republic of China: Notice of Preliminary Determination of 
Sales at Less than Fair Value and Postponement of Final Determination, 
73 FR 2445 (January 15, 2008)) and also has 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.

------------------------------------------------------------------------
                                      Total       Terms of
              Market                 quantity       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 Sales....
------------------------------------------------------------------------
        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--port of export).

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 Sales:

     Sales of further manufactured or assembled (including re-
packaged) merchandise are sales of merchandise that undergoes further 
manufacture or assembly in the United States before being sold to the 
first unaffiliated customer.
     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. E8-9361 Filed 4-28-08; 8:45 am]
BILLING CODE 3510-DS-P