Oil Country Tubular Goods From the People's Republic of China: Initiation of Antidumping Duty Investigation, 20671-20678 [E9-10346]

Download as PDF 20671 Notices Federal Register Vol. 74, No. 85 Tuesday, May 5, 2009 This section of the FEDERAL REGISTER contains documents other than rules or proposed rules that are applicable to the public. Notices of hearings and investigations, committee meetings, agency decisions and rulings, delegations of authority, filing of petitions and applications and agency statements of organization and functions are examples of documents appearing in this section. DEPARTMENT OF COMMERCE Submission for OMB Review; Comment Request The Department of Commerce will submit to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act (44 U.S.C. chapter 35). Agency: U.S. Census Bureau. Title: Quarterly Financial Report. Form Number(s): QFR–200(MT), QFR–300(S), QFR–201(MG). OMB Control Number: 0607–0432. Type of Request: Revision of a currently approved collection. Burden Hours: 92,268. Number of Respondents: 10,707. Average Hours per Response: 2 hours and 9 minutes. Needs and Uses: The QFR program has published up-to-date aggregate statistics on the financial results and position of U.S. corporations since 1947. The program currently collects and publishes financial data for manufacturing, mining, wholesale and retail trade corporations. The survey is a principal economic indicator that provides financial data essential to calculation of key U.S. government measures of national economic performance. The importance of this data collection is reflected by the granting of specific authority to conduct the program in Title 13 of the United States Code, section 91, which requires that financial statistics of business operations be collected and published quarterly. Public Law 109–79, section 91 extended the authority of the Secretary of Commerce to conduct the QFR program through September 30, 2015. This request is for a revision of the currently approved collection. The change from the previous QFR authorization is to collect data for selected services industries beginning VerDate Nov<24>2008 23:12 May 04, 2009 Jkt 217001 with data for the third quarter of 2009. The proposed expansion includes all 3digit industries in the Information sector, and all 4-digit industries, with the exception of legal services, in the Professional, Scientific, and Technical Services sector. The services sector is the largest sector in the Gross Domestic Product (GDP), representing about 55 percent of the economy. By expanding to selected service industries, the QFR program can begin providing statistics on the financial results and position for important parts of the services sector for which no data are currently available. The survey forms used to conduct the QFR are: QFR–200 (MT) Long Form (manufacturing, mining, wholesale trade, and retail trade); QFR–201 (MG) Short Form (manufacturing); and a new form, QFR–300 (S) Long Form (services). The QFR–200 (MT) and QFR– 201 (MG) have been updated to improve usability for respondents. The primary purpose of the QFR is to provide timely, accurate data on business financial conditions for use by Government and private-sector organizations and individuals. Affected Public: Business or other forprofit. Frequency: Quarterly. Respondent’s Obligation: Mandatory. Legal Authority: Title 13 U.S.C., section 91; Public Law 109–79, section 91. OMB Desk Officer: Brian HarrisKojetin, (202) 395–7314. Copies of the above information collection proposal can be obtained by calling or writing Diana Hynek, Departmental Paperwork Clearance Officer, (202) 482–0266, Department of Commerce, Room 7845, 14th and Constitution Avenue, NW., Washington, DC 20230 (or via the Internet at dhynek@doc.gov). Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to Brian Harris-Kojetin, OMB Desk Officer either by fax (202–395– 7245) or e-mail (bharrisk@omb.eop.gov). Dated: April 29, 2009. Glenna Mickelson, Management Analyst, Office of the Chief Information Officer. [FR Doc. E9–10249 Filed 5–4–09; 8:45 am] BILLING CODE 3510–07–P PO 00000 Frm 00001 Fmt 4703 Sfmt 4703 DEPARTMENT OF COMMERCE International Trade Administration [A–570–943] Oil Country Tubular Goods From the People’s Republic of China: Initiation of Antidumping Duty Investigation AGENCY: Import Administration, International Trade Administration, Department of Commerce. DATES: Effective Date: May 5, 2009. FOR FURTHER INFORMATION CONTACT: Eugene Degnan or Paul Stolz, AD/CVD Operations, Office 8, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482–0414 and (202) 482–4474, respectively. SUPPLEMENTARY INFORMATION: The Petition On April 8, 2009, the Department of Commerce (‘‘the Department’’) received an antidumping duty (‘‘AD’’) petition concerning imports of certain oil country tubular goods (‘‘OCTG’’) from the People’s Republic of China (‘‘PRC’’) filed in proper form by Maverick Tube Corporation, United States Steel Corporation, TMK IPSCO, V&M Star L.P., V&M Tubular Corporation of America, Wheatland Tube Corp., Evraz Rocky Mountain Steel, and United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL–CIO–CLC, (collectively, ‘‘Petitioners’’).1 On April 17, 2009, the Department issued a request for additional information and clarification of certain areas of the Petition. Based on the Department’s request, Petitioners filed supplements to the Petition on April 22, 2009 (‘‘Supplement to the Petition’’). The Department requested further clarifications from Petitioners by phone on April 23, 2009, regarding scope, industry support and U.S. price.2 On 1 See the Petition for the Imposition of Antidumping and Countervailing Duties Pursuant to Sections 701 and 731 of the Tariff Act of 1930, As Amended (‘‘Petition’’), filed on April 8, 2009. 2 See Memorandum to the File from Matthew Glass, ‘‘Petition for the Imposition of Antidumping and Countervailing Duties on Certain Oil Country Tubular Goods From the People’s Republic of China (A–570–943) (C–357–819): Conference Call with Petitioners.’’ E:\FR\FM\05MYN1.SGM 05MYN1 20672 Federal Register / Vol. 74, No. 85 / Tuesday, May 5, 2009 / Notices April 24, 2009, Petitioners filed the requested information, including a revised scope.3 In accordance with section 732(b) of the Tariff Act of 1930, as amended (‘‘the Act’’), Petitioners allege that imports of OCTG from 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 materially injure, or threaten material injury to, an industry in the United States. The Department finds that Petitioners filed this Petition on behalf of the domestic industry because Petitioners are interested parties as defined in section 771(9)(C) of the Act, and they have demonstrated sufficient industry support with respect to the investigation that they are requesting the Department to initiate (see ‘‘Determination of Industry Support for the Petition’’ below). Scope of Investigation The products covered by this investigation are certain OCTG from the PRC. For a full description of the scope of the investigation, please see the ‘‘Scope of the Investigation’’ in Appendix I of this notice. Comments on Scope of Investigation 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. 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 18, 2009, twenty calendar days from the signature date 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 intended to provide the Department with ample opportunity to consider all comments and to consult with parties prior to the issuance of the preliminary determinations. 3 See Letter from Petitioners, ‘‘Certain Oil Country Tubular Goods from the People’s Republic of China; Response to Department of Commerce Questions Regarding Volume I and II of the Petitions for Imposition of Antidumping and Countervailing Duties,’’ dated April 24, 2009. VerDate Nov<24>2008 23:12 May 04, 2009 Jkt 217001 Comments on Product Characteristics for Antidumping Duty Questionnaires We are requesting comments from interested parties regarding the appropriate physical characteristics of OCTG to be reported in response to the Department’s antidumping 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 OCTG, 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 18, 2009. Additionally, rebuttal comments must be received by May 25, 2009. 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 PO 00000 Frm 00002 Fmt 4703 Sfmt 4703 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 to poll the industry. 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 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.4 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 the investigation. Based on our analysis of the information submitted on the record, we have determined that OCTG constitute a single domestic like product 4 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). E:\FR\FM\05MYN1.SGM 05MYN1 Federal Register / Vol. 74, No. 85 / Tuesday, May 5, 2009 / Notices and we have analyzed industry support in terms of that domestic like product.5 With regard to section 732(c)(4)(A), 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 Investigation’’ section above. To establish industry support, Petitioners provided their production of the domestic like product for the year 2008, and compared this to an estimate of production of the domestic like product for the entire domestic industry.6 To estimate 2008 production of the domestic like product, the Petitioners used an industry publication which reports data in shipments. Petitioners approximated domestic production of OCTG by inflating the volume of domestic shipments reported by the ratio of the difference between Petitioners’ production and shipments in the applicable calendar year.7 Our 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 established 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).8 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 Petitions account for at least 25 percent of the total production of the domestic like product.9 Finally, the 5 For a discussion of the domestic like product analysis in this case, see Antidumping Duty Investigation Initiation Checklist: OCTG from the PRC (‘‘Initiation Checklist’’) at Attachment II (‘‘Industry Support’’), dated concurrently with this notice and on file in the Central Records Unit (‘‘CRU’’), Room 1117 of the main Department of Commerce building. 6 See Volume I of the Petition at, pages 3–4 and Exhibit I–3a. 7 See Volume I of the Petition, at page 3 and Exhibits I–3b and I–3c, and Supplement to the Petition, at pages 10–11 and Exhibit Supp. I–6. For further discussion, see Initiation Checklist at Attachment II. 8 See section 732(c)(4)(D) of the Act. 9 See Initiation Checklist at Attachment II. VerDate Nov<24>2008 23:12 May 04, 2009 Jkt 217001 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.10 The Department finds that Petitioners filed the Petition on behalf of the domestic industry because they are interested parties as defined in section 771(9)(C) of the Act and they have demonstrated sufficient industry support with respect to the antidumping investigation that they are requesting the Department initiate.11 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’’). In addition, Petitioners allege that subject imports exceed the negligibility threshold provided for under section 771(24)(A) of the Act. Petitioners contend that the industry’s injured condition is illustrated by reduced market share, increased import penetration, underselling and price depressing and suppressing effects, lost sales and revenue, reduced production and capacity utilization, reduced shipments and increased inventories, reduced employment, and an overall decline in financial performance. 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.12 Critical Circumstances Petitioners have alleged that critical circumstances exist with regard to imports of OCTG from the PRC, and have supported their allegations with the following information. Section 733(e)(1) of the Act states that, if a Petitioner alleges critical circumstances, the Department will find that such circumstances exist, at any 10 See Id. Id. 12 See Initiation Checklist at Attachment III (Analysis of Allegations and Evidence of Material Injury and Causation for the Petition). 11 See PO 00000 Frm 00003 Fmt 4703 Sfmt 4703 20673 time after the date of initiation, when there is a reasonable basis to believe or suspect that, under subparagraph (A)(i), there is a history of dumping and material injury by reason of dumped imports in the United States or elsewhere of the subject merchandise, or (ii) the person by whom, or for whose account, the merchandise was imported knew or should have known that the exporter was selling the subject merchandise at less than its fair value and that there was likely to be material injury by reason of such sales, and, under subparagraph (B), there have been massive imports of the subject merchandise over a relatively short period. Section 351.206(h) of the Department’s regulations defines ‘‘massive imports’’ as imports that have increased by at least 15 percent over the imports during an immediately preceding period of comparable duration. Section 351.206(i) of the regulations states that ‘‘relatively short period’’ will normally be defined as the period beginning on the date the proceeding begins and ending at least three months later. Petitioners allege that there is a history of dumping and material injury by reason of dumped imports as there is currently an order in place in Canada against imports of seamless OCTG from China. Petitioners cite to Canada’s SemiAnnual report to the World Trade Organization’s Committee on Antidumping Practices, which demonstrates that as of March 10, 2008, Canada imposed definitive duties on the PRC against imports of seamless carbon or alloy steel oil and gas well casings. Further, Petitioners allege that importers knew, or should have known, that OCTG was being sold at less than its fair value. Specifically, Petitioners allege margins, as adjusted by the Department, of between 36.94 and 99.14 percent, a level high enough to impute importer knowledge that merchandise was being sold at less than its fair value. Petitioners also have alleged that imports from the PRC have been massive over a relatively short period. Alleging that there was sufficient prefiling notice of these countervailing duty Petitions, Petitioners contend that the Department should compare imports during January through June 2008 to imports during July through December 2008 for purposes of this determination. Specifically, Petitioners supported this allegation with copies of news articles discussing the likelihood of filing unfair trade complaints against producers of OCTG. For example, Petitioners cite to an international news article in July 2008 discussing the likelihood that U.S. steel producers would file unfair trade E:\FR\FM\05MYN1.SGM 05MYN1 20674 Federal Register / Vol. 74, No. 85 / Tuesday, May 5, 2009 / Notices cases related to seamless pipe, and explaining that OCTG makes up approximately half of total exports of Chinese seamless pipe. In addition, Petitioners cite to a number of other news articles, ITC decisions on other pipe and tube products and recent cases on the same or similar product in other countries. Petitioners argue that the most definitive example of prior knowledge was contained within the July 2008 article and used this as the basis for their comparison periods. Their comparison of the six month period prior to that article (January–June 2008) with the six month period immediately following (July–December 2008) showed that the U.S. imports of OCTG from China increased 165 percent. Although the ITC has not yet made a preliminary decision with respect to injury, Petitioners note that in the past the Department has also considered the extent of the increase in the volume of imports of the subject merchandise as one indicator of whether a reasonable basis exists to impute knowledge that material injury was likely. In this case involving the PRC, Petitioners note that the increase in imports far exceeds the amount considered ‘‘massive.’’ Taking into consideration the foregoing, we find that Petitioners have alleged the elements of critical circumstances and supported them with information reasonably available for purposes of initiating a critical circumstances inquiry. For these reasons, we will investigate this matter further and will make a preliminary determination at the appropriate time, in accordance with section 735(e)(1) of the Act and Department practice.13 Period of Investigation In accordance with 19 CFR 351.204(b), because this Petition was filed on April 8, 2009, the anticipated period of investigation (‘‘POI’’) is October 1, 2008, through March 31, 2009, the two most recently completed fiscal quarters, as of the month preceding the month in which the petition was filed. Allegations of Sales at Less Than Fair Value The following is a description of the allegations of sales at less than fair value upon which the Department has based its decision to initiate an investigation with respect to the PRC. The sources of data for the deductions and adjustments relating to U.S. price and NV are discussed in the Initiation Checklist. 13 See Policy Bulletin 98/4 (63 FR 55364, October 15, 1998). VerDate Nov<24>2008 23:12 May 04, 2009 Jkt 217001 Should the need arise to use any of this information as facts available under section 776 of the Act, we may reexamine the information and revise the margin calculations, if appropriate. Export Price Petitioners calculated export prices (‘‘EPs’’) for both welded and seamless OCTG based on an offer for sale (for four welded OCTG products) and two invoices and corresponding purchase orders, and an offer for sale (for seamless OCTG). Petitioner presented affidavits for the offers for sale attesting that the offers were made during the POI.14 To calculate the net U.S. EP, Petitioners deducted from the U.S. prices a trader markup, the costs associated with exporting and delivering the product, which included foreign inland freight, ocean freight, insurance expenses, foreign port charges (stevedoring, wharfage and handling charges), foreign brokerage and handling, and U.S. port expenses (security fee, unloading fee, and wharfage). We have not made separate adjustments to U.S. price for foreign port charges (stevedoring, wharfage and handling charges) or the U.S. port expenses of unloading fee and wharfage because evidence on the record indicates these expenses are already included in ocean freight or insurance expenses. Petitioners calculate per-unit ocean freight and insurance using U.S. Census Bureau data, by deducting the reported customs value of OCTG landed in a certain U.S. port from the reported CIF value and dividing it by the total import quantity.15 The U.S. Census defines CIF data as the sum of import charges and customs value.16 Accordingly, when customs value is deducted from the CIF value, what is left is import charges. The U.S. Census Bureau defines import charges as ‘‘the aggregate cost of all freight, insurance, and other charges (excluding U.S. import duties) incurred in bringing the merchandise from alongside the carrier at the port of exportation in the country of exportation and placing it alongside the carrier at the first port of entry in the United States.’’17 Thus it is clear that import charges, the basis for ocean freight and insurance, include the expenses associated with loading the merchandise from the wharf to the 14 See Initiation Checklist for further discussion. Volume II–A of the Petition at pages 11– 12 and Exhibit II–7; Supplement to the PRC AD Petition, dated April 22, 2009, at pages 4–7. 16 See http://www.census.gov/foreigntrade/www/ sec2.html#valcusimports. 17 Id. 15 See PO 00000 Frm 00004 Fmt 4703 Sfmt 4703 carrier, and those expenses associated with unloading the merchandise from the vessel to wharf, i.e., stevedoring, wharfage and handling. Normal Value Petitioners state that in every previous less-than-fair value investigation involving merchandise from the PRC, the Department has concluded that the PRC is a non-market economy country (‘‘NME’’) and, as the Department has not revoked this determination, its NME status remains in effect today.18 The Department has previously examined the PRC’s market status and determined that NME status should continue for the PRC.19 In addition, in recent investigations, the Department has continued to determine that the PRC is an NME country.20 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 this 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 tubular steel products.21 Petitioners state that the Department has determined in previous investigations and administrative reviews that India is at a level of development comparable to the PRC.22 18 See Volume II–A of the Petition, at page 2. 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. This document is available online at http://ia.ita.doc.gov/download/prc-nme-status/prcnme-status-memo.pdf. 20 See Certain Circular Welded Carbon Quality Steel Line Pipe from the People’s Republic of China: Final Determination of Sales at Less Than Fair Value, 74 FR 14514 (March 31, 2009); Frontseating Service Valves from the People’s Republic of China: Final Determination of Sales at Less Than Fair Value and Final Negative Determination of Critical Circumstances, 74 FR 10886 (March 13, 2009); 1-Hydroxyethylidene-1, 1-Diphosphonic Acid From the People’s Republic of China: Final Determination of Sales at Less Than Fair Value, 74 FR 10545 (March 11, 2009). 21 See Volume II–A of the Petition, at page 4. 22 See id. 19 See E:\FR\FM\05MYN1.SGM 05MYN1 Federal Register / Vol. 74, No. 85 / Tuesday, May 5, 2009 / Notices Petitioners also assert that in 2006 India produced 1,027,000 metric tons of tubular steel products, indicating it is a significant producer of tubular steel products.23 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 provided dumping margin calculations using the Department’s NME methodology as required by 19 CFR 351.202(b)(7)(i)(C) and 19 CFR 351.408. Petitioners calculated four NVs for welded OCTG and three NVs for seamless OCTG. Petitioners valued the factors of production using reasonably available, public surrogate country data, including India import data from the Monthly Statistics of the Foreign Trade of India from the period May 2008 through October 2008, the most current WTA data available.24 Petitioners state that they valued hotrolled steel coil and steel scrap using Indian import data from the Monthly Statistics of the Foreign Trade of India, under Indian HTS numbers 7208.36, 7208.37, and 7208.38 for hot-rolled steel coil and Indian HTS number 7204.49.00 for steel scrap.25 Petitioners valued electricity using Indian electricity rates disseminated by the Central Electricity Authority in India.26 Petitioners valued labor using the wage rate data published on the Department’s Web site, at http:// ia.ita.doc.gov/wages/04wages/04wages010907.html.27 Petitioners included a value for ‘‘production equipment tires’’ in its NV calculation for seamless OCTG. Consistent with Department practice we did not include a value for ‘‘production equipment tires’’ in the calculation of 23 See id. Supplement to the PRC AD Petition, dated April 22, 2009, at page 1. 25 See Volume II–A of the Petition, at page 20– 21, and Exhibit 20. See also Supplement to the PRC AD Petition, dated April 22, 2009, at Exhibit II–7. 26 See Volume II–A of the Petition, at page 21, and Exhibit 21. See also Supplement to the PRC AD Petition, dated April 22, 2009, at Exhibit II–41. 27 See Volume II–A of the Petition, at page 21, and Exhibit II–22. 24 See VerDate Nov<24>2008 23:12 May 04, 2009 Jkt 217001 NV. The Department has, in previous proceedings, found that materials consumed for the purpose of manufacturing subject merchandise, are properly considered factors of production. However, in the instant investigation, there is no evidence on the record indicating what ‘‘production equipment tires’’ are, or how they are consumed in the production of OCTG. Therefore, for purposes of initiation, we are not including production equipment tires in the calculation of normal value.28 Where Petitioners were unable to find input prices contemporaneous with the POI, Petitioners adjusted for inflation using the wholesale price index for India, as published in ‘‘International Financial Statistics’’ by the International Monetary Fund.29 Petitioners used exchange rates, as provided on the Department’s Web site, to convert Indian Rupees to U.S. Dollars.30 Petitioners based factory overhead, selling, general and administrative expenses (‘‘SG&A’’), and profit, on the financial ratios of Maharashtra Seamless Ltd. (‘‘MSL’’), Ratnamani Metals & Tubes Ltd. (‘‘Ratnamani’’), Steel Authority of India, Ltd. (‘‘SAIL’’), Tata Steel Limited (‘‘Tata’’), and Welspun Gujarat Stahl Rohen Ltd. (‘‘Welspun’’), Indian producers of pipe and tube, with adjustments as requested by the Department.31 However, MSL’S financial statements demonstrated that the company received subsidies that the Department had previously determined to be countervailable,32 and Petitioners removed MSL from the pool of companies used as the source of surrogate financial ratio calculations.33 Thus, Petitioners based their 28 See, e.g., Certain Steel Nails from the People’s Republic of China: Final Determination of Sales at Less Than Fair Value and Partial Affirmative Determination of Critical Circumstances, 73 FR 33977 (June 16, 2008); Final Determination of Sales at Less Than Fair Value and Final Partial Affirmative Determination of Critical Circumstances: Diamond Sawblades and Parts Thereof from the People’s Republic of China, 71 FR 29303 (May 22, 2006). 29 See Volume II–A of the Petition, at pages 18– 19, and Exhibit 8. 30 See Supplement to the PRC AD Petition, dated April 22, 2009, at page 15 and Exhibits II–33 and II–34. 31 See Volume II–A of the Petition, at pages 22– 23 and Exhibit 23, and Volume II–B of the Petition, at pages 3, 13–15 and Exhibits 32–LL, –MM, –NN, –OO, –PP and –QQ(1) and –QQ(2); see also Supplement to the PRC AD Petition, dated April 22, 2009, at pages 16–19 and Exhibits Supp. II–50 and Supp. II–51. 32 See letter to Petitioners, ‘‘Re: Petitions for the Imposition of Antidumping and Countervailing Duties on Oil Country Tubular Goods Imported from the People’s Republic of China,’’ dated April 17, 2009. 33 See Supplement to the PRC AD Petition, dated April 22, 2009, at page 16. PO 00000 Frm 00005 Fmt 4703 Sfmt 4703 20675 calculations on the annual reports as of March 31, 2008, of Ratnamani, SAIL, Tata and Welspun. Although these financial statements do not overlap the POI, they represent the most current information reasonably available to Petitioners at the time they filed the Petition. Petitioners calculated separate financial ratios for seamless and welded OCTG. Petitioners based the ratios for seamless OCTG on the simple average of SAIL’s and Tata’s overhead, SG&A, and profit ratios, asserting that SAIL and Tata are large integrated steel producers like Baosteel Group Shanghai Steel Tube (‘‘Baosteel’’) and Baotou Iron & Steel (‘‘Baotou’’), and produce comparable merchandise.34 Petitioners based ratios for welded OCTG on the simple average of Ratnamani’s and Welspun’s overhead, SG&A, and profit ratios, asserting that Ratnamani and Welspun produce a range of pipe products which match the production experience of Huludao City Steel Pipe Industrial Co. (‘‘Huludao’’).35 We made no changes to Petitioners’ calculations for Tata. We made changes to Petitioners’ calculations for Ratnamani, Welspun and SAIL as follows.36 Ratnamani • We excluded the value of opening and closing stock of finished goods from our calculations. Welspun • We excluded the increase (or decrease) on excise on finished goods from our calculations. • We reclassified coating and other job charges from materials to manufacturing overhead. • We reclassified repairs—other from SG&A to manufacturing overhead. • We excluded interest received gross from our calculations. • We applied the value of depreciation as recorded on the income statement in our calculations (the value used by Petitioners did not reflect the value in the income statement). SAIL • We reclassified grants in aid received from the government of Kamataka and travel concession from 34 See Volume II–B of the Petition, at page 3, Exhibits 32–LL, –MM, –NN, –OO, –PP and –QQ(1) and –QQ(2); see also Supplement to the PRC AD Petition, dated April 22, 2009, at Exhibit Supp. II– 50. 35 See Volume II–A of the Petition, at page 22, Exhibit 23; see also Supplement to the PRC AD Petition, dated April 22, 2009, at Exhibit Supp. II– 51. 36 See Attachment V to the Initiation Checklist for all calculations. E:\FR\FM\05MYN1.SGM 05MYN1 20676 Federal Register / Vol. 74, No. 85 / Tuesday, May 5, 2009 / Notices SG&A to labor, to correspond with their treatment in the financial statements. • We reclassified handling expenses for raw materials and scrap from SG&A to raw materials. • We reclassified conversion charges, water charges & cess on water pollution and provisions: stores, spares and sundries from SG&A to manufacturing overhead. • We excluded handling expenses for finished goods from our calculations. • We reclassified power and fuel expense from raw materials to energy. • We excluded adjustments pertaining to earlier years and fringe benefits tax from our calculations. Fair-Value Comparisons Based on the data provided by Petitioners, there is reason to believe that imports of OCTG from the PRC are being, or are likely to be, sold in the United States at less than fair value. Based on comparisons of EP to NV as revised above, the estimated dumping margins for the PRC range from 36.94 percent to 99.14 percent. Initiation of Antidumping Investigation Based upon the examination of the Petition concerning OCTG from the PRC and other information reasonably available to the Department, the Department finds that this Petition meets the requirements of section 732 of the Act. Therefore, we are initiating an antidumping duty investigation to determine whether imports of OCTG from 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 will make our preliminary determinations no later than 140 days after the date of this initiation. Targeted-Dumping Allegations On December 10, 2008, the Department issued an interim final rule for the purpose of withdrawing 19 CFR 351.414(f) and (g), the regulatory provisions governing the targeteddumping analysis in antidumping duty investigations, and the corresponding regulation governing the deadline for targeted-dumping allegations, 19 CFR 351.301(d)(5).37 The Department stated that ‘‘{w}ithdrawal will allow the Department to exercise the discretion intended by the statute and, thereby, develop a practice that will allow interested parties to pursue all statutory avenues of relief in this area.’’ 38 37 See Withdrawal of the Regulatory Provisions Governing Targeted Dumping in Antidumping Duty Investigations, 73 FR 74930 (December 10, 2008). 38 Id. at 74931. VerDate Nov<24>2008 23:12 May 04, 2009 Jkt 217001 In order to accomplish this objective, if any interested party wishes to make a targeted-dumping allegation in any of these investigations pursuant to section 777A(d)(1)(B) of the Act, such allegations are due no later than 45 days before the scheduled date of the preliminary determination. Respondent Selection For the PRC, 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 NME exporters/producers will be used as the basis to select the mandatory respondents. The 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.39 Appendix II of this notice contains the quantity and value questionnaire that must be submitted by all NME exporters/producers no later than May 19, 2009. In addition, the Department will post the quantity and value questionnaire along with the filing instructions on the Import Administration Web site, at http:// ia.ita.doc.gov/ia-highlights-andnews.html. The Department will send the quantity and value questionnaire to those PRC companies identified in the Petition, Volume I, at Exhibit I–6. Separate Rates In order to obtain separate-rate status in an NME investigation, exporters and producers must submit a separate-rate status application.40 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 http:// ia.ita.doc.gov/ia-highlights-andnews.html on the date of publication of this initiation notice in the Federal Register. The separate-rate application will be due sixty (60) days from the date 39 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). 40 See Certain Circular Welded Carbon Quality Steel Line Pipe from the Republic of Korea and the People’s Republic of China: Initiation of Antidumping Duty Investigations, 73 FR 23188, 23193 (April 29, 2008) (‘‘Certain Circular Welded Carbon Quality Steel Line Pipe from the PRC’’). PO 00000 Frm 00006 Fmt 4703 Sfmt 4703 of publication of this initiation notice in the Federal Register. 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 41 states: {w}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.42 Distribution of Copies of the Petition In accordance with section 732(b)(3)(A) of the Act and 19 CFR 351.202(f), a copy of the public version of the Petition has been provided to the representatives of the Government of 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 Government of the PRC, consistent with 19 CFR 351.203(c)(2). International Trade Commission (‘‘ITC’’) Notification We have notified the ITC of our initiation, as required by section 732(d) of the Act. 41 See Import Administration Policy Bulletin, Number: 05.1, ‘‘Separate-Rates Practice and Application of Combination Rates in Antidumping Investigations Involving Non-Market Economy Countries,’’ dated April 5, 2005, available on the Department’s Web site at http://ia.ita.doc.gov/ policy/bull05-1.pdf. 42 See also Certain Circular Welded Carbon Quality Steel Line Pipe from the PRC, 73 FR 23188, 23193. E:\FR\FM\05MYN1.SGM 05MYN1 Federal Register / Vol. 74, No. 85 / Tuesday, May 5, 2009 / Notices Preliminary Determination by the International Trade Commission The ITC will preliminarily determine, no later than May 26, 2009,43 whether there is a reasonable indication that imports of OCTG from the PRC materially injure, or threaten material injury to, a U.S. industry. A negative ITC determination covering all classes or kinds of merchandise covered by the Petition would result in the investigation being terminated. Otherwise, this investigation 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 28, 2009. Ronald K. Lorentzen, Acting Assistant Secretary for Import Administration. Appendix I Scope of the Investigation The merchandise covered by the investigation consists of certain oil country tubular goods (‘‘OCTG’’), which are hollow steel products of circular cross-section, including oil well casing and tubing, of iron (other than cast iron) or steel (both carbon and alloy), whether seamless or welded, regardless of end finish (e.g., whether or not plain end, threaded, or threaded and coupled) whether or not conforming to American Petroleum Institute (‘‘API’’) or nonAPI specifications, whether finished (including limited service OCTG products) or unfinished (including green tubes and limited service OCTG products), whether or not thread protectors are attached. The scope of the investigation also covers OCTG coupling stock. Excluded from the scope of the investigation are casing or tubing containing 10.5 percent or more by weight of chromium; drill pipe; unattached couplings; and unattached thread protectors. The merchandise covered by the investigation is currently classified in the Harmonized Tariff Schedule of the United States (‘‘HTSUS’’) under item numbers: 7304.29.10.10, 7304.29.10.20, 7304.29.10.30, 7304.29.10.40, 7304.29.10.50, 7304.29.10.60, 7304.29.10.80, 7304.29.20.10, 7304.29.20.20, 7304.29.20.30, 7304.29.20.40, 7304.29.20.50, 7304.29.20.60, 7304.29.20.80, 7304.29.31.10, 7304.29.31.20, 7304.29.31.30, 7304.29.31.40, 7304.29.31.50, 7304.29.31.60, 7304.29.31.80, 7304.29.41.10, 7304.29.41.20, 7304.29.41.30, 7304.29.41.40, 7304.29.41.50, 7304.29.41.60, 7304.29.41.80, 7304.29.50.15, 7304.29.50.30, 7304.29.50.45, 7304.29.50.60, 7304.29.50.75, 7304.29.61.15, 7304.29.61.30, 7304.29.61.45, 7304.29.61.60, 7304.29.61.75, 7305.20.20.00, 7305.20.40.00, 7305.20.60.00, 7305.20.80.00, 7306.29.10.30, 7306.29.10.90, 7306.29.20.00, 7306.29.31.00, 7306.29.41.00, 7306.29.60.10, 7306.29.60.50, 7306.29.81.10, and 7306.29.81.50. The OCTG coupling stock covered by the investigation may also enter under the following HTSUS item numbers: 7304.39.00.24, 7304.39.00.28, 7304.39.00.32, 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, 7304.39.00.76, 7304.39.00.80, 7304.59.60.00, 7304.59.80.15, 7304.59.80.20, 7304.59.80.25, 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, 7304.59.80.70, and 7304.59.80.80. The HTSUS subheadings are provided for convenience and customs purposes only; the written description of the scope of the investigation is dispositive. Appendix II Where it is not practicable to examine all known exporters/producers 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 of the subject merchandise that can reasonably be examined. In the chart below, please provide the total quantity and total value of all your sales of merchandise covered by the scope of this investigation (see ‘‘Scope of Investigation’’ section of this notice), produced in the PRC, and exported/shipped to the United States during the period October 1, 2007, through March 31, 2007. Total quantity in metric tons Market 20677 Terms of 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 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 at 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 customer 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 subject 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 customer occurs after importation. However, if the first sale to the unaffiliated customer 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 43 Where the deadline falls on a weekend/ holiday, the appropriate date is the next business day VerDate Nov<24>2008 23:12 May 04, 2009 Jkt 217001 PO 00000 Frm 00007 Fmt 4703 Sfmt 4703 E:\FR\FM\05MYN1.SGM 05MYN1 20678 Federal Register / Vol. 74, No. 85 / Tuesday, May 5, 2009 / Notices manufactured by your company that were subsequently exported by an affiliated exporter to the United States. • Please do not include any sales of subject merchandise manufactured in Hong Kong in your figures. Further Manufactured • Sales of further manufactured or assembled (including re-packaged) merchandise is 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. E9–10346 Filed 5–4–09; 8:45 am] BILLING CODE 3510–DS–P Period of Investigation The period of investigation is January 1, 2008, through December 31, 2008. DEPARTMENT OF COMMERCE Scope of Investigation The products covered by this investigation are certain OCTG from the PRC. For a full description of the scope of the investigation, please see the ‘‘Scope of the Investigation’’ in Appendix I of this notice. International Trade Administration [C–570–944] Certain Oil Country Tubular Goods from the People’s Republic of China: Initiation of Countervailing Duty Investigation AGENCY: Import Administration, International Trade Administration, Department of Commerce. EFFECTIVE DATE: May 5, 2009. FOR FURTHER INFORMATION CONTACT: Yasmin Nair and Joseph Shuler, AD/ CVD Operations, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482–3813 and (202) 482–1293, respectively. SUPPLEMENTARY INFORMATION: The Petition On April 8, 2009, the Department of Commerce (‘‘Department’’) received a petition filed in proper form by Maverick Tube Corporation; United States Steel Corporation; TMK IPSCO; V&M Star L.P.; Wheatland Tube Corporation; Evraz Rocky Mountain Steel; and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL–CIOCLC (collectively, ‘‘petitioners’’), domestic producers of certain oil country tubular goods (‘‘OCTG’’). In response to the Department’s requests, the petitioners provided timely information supplementing the petition on April 20, 22, and 24, 2009. VerDate Nov<24>2008 23:12 May 04, 2009 Jkt 217001 In accordance with section 702(b)(1) of the Tariff Act of 1930, as amended (‘‘the Act’’), the petitioners allege that manufacturers, producers, or exporters of OCTG in the People’s Republic of China (‘‘PRC’’) receive countervailable subsidies within the meaning of section 701 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 the petitioners filed the petition on behalf of the domestic industry because they are interested parties as defined in section 771(9)(C) and (D) of the Act, and the petitioners have demonstrated sufficient industry support with respect to the countervailing duty (‘‘CVD’’) investigation (see ‘‘Determination of Industry Support for the Petition’’ section below). Comments on Scope of Investigation During our review of the petition, we discussed the scope with the petitioners to ensure that it is an accurate reflection of the products for which the domestic industry is seeking relief. Moreover, as discussed in the preamble to the Department’s 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 18, 2009, twenty calendar days from the signature date of this notice. Comments should be addressed to Import Administration’s APO/Dockets Unit, Room 1870, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230. The period of scope consultations is intended to provide the Department with ample opportunity to consider all comments and to consult with parties prior to the issuance of the preliminary determinations. Consultations Pursuant to section 702(b)(4)(A)(ii) of the Act, the Department invited representatives of the Government of the PRC for consultations with respect to PO 00000 Frm 00008 Fmt 4703 Sfmt 4703 the CVD petition. The Department held these consultations in Washington, DC, on April 21, 2009. See the Memorandum from Yasmin Nair and Joseph Shuler to the File, entitled, ‘‘Consultations with Officials from the Government of the People’s Republic of China on the Countervailing Duty Petition regarding Certain Oil Country Tubular Goods,’’ (April 23, 2009), which is on file in the Central Records Unit (‘‘CRU’’) of the main Department of Commerce building, Room 1117. Determination of Industry Support for the Petition Section 702(b)(1) of the Act requires that a petition be filed on behalf of the domestic industry. Section 702(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 702(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 E:\FR\FM\05MYN1.SGM 05MYN1

Agencies

[Federal Register Volume 74, Number 85 (Tuesday, May 5, 2009)]
[Notices]
[Pages 20671-20678]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-10346]


-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-943]


Oil Country Tubular Goods From the People's Republic of China: 
Initiation of Antidumping Duty Investigation

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

DATES: Effective Date: May 5, 2009.

FOR FURTHER INFORMATION CONTACT: Eugene Degnan or Paul Stolz, AD/CVD 
Operations, Office 8, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230; telephone: (202) 482-0414 and (202) 482-4474, 
respectively.

SUPPLEMENTARY INFORMATION: 

The Petition

    On April 8, 2009, the Department of Commerce (``the Department'') 
received an antidumping duty (``AD'') petition concerning imports of 
certain oil country tubular goods (``OCTG'') from the People's Republic 
of China (``PRC'') filed in proper form by Maverick Tube Corporation, 
United States Steel Corporation, TMK IPSCO, V&M Star L.P., V&M Tubular 
Corporation of America, Wheatland Tube Corp., Evraz Rocky Mountain 
Steel, and United Steel, Paper and Forestry, Rubber, Manufacturing, 
Energy, Allied Industrial and Service Workers International Union, AFL-
CIO-CLC, (collectively, ``Petitioners'').\1\ On April 17, 2009, the 
Department issued a request for additional information and 
clarification of certain areas of the Petition. Based on the 
Department's request, Petitioners filed supplements to the Petition on 
April 22, 2009 (``Supplement to the Petition''). The Department 
requested further clarifications from Petitioners by phone on April 23, 
2009, regarding scope, industry support and U.S. price.\2\ On

[[Page 20672]]

April 24, 2009, Petitioners filed the requested information, including 
a revised scope.\3\
---------------------------------------------------------------------------

    \1\ See the Petition for the Imposition of Antidumping and 
Countervailing Duties Pursuant to Sections 701 and 731 of the Tariff 
Act of 1930, As Amended (``Petition''), filed on April 8, 2009.
    \2\ See Memorandum to the File from Matthew Glass, ``Petition 
for the Imposition of Antidumping and Countervailing Duties on 
Certain Oil Country Tubular Goods From the People's Republic of 
China (A-570-943) (C-357-819): Conference Call with Petitioners.''
    \3\ See Letter from Petitioners, ``Certain Oil Country Tubular 
Goods from the People's Republic of China; Response to Department of 
Commerce Questions Regarding Volume I and II of the Petitions for 
Imposition of Antidumping and Countervailing Duties,'' dated April 
24, 2009.
---------------------------------------------------------------------------

    In accordance with section 732(b) of the Tariff Act of 1930, as 
amended (``the Act''), Petitioners allege that imports of OCTG from 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 materially injure, or threaten material injury to, an 
industry in the United States.
    The Department finds that Petitioners filed this Petition on behalf 
of the domestic industry because Petitioners are interested parties as 
defined in section 771(9)(C) of the Act, and they have demonstrated 
sufficient industry support with respect to the investigation that they 
are requesting the Department to initiate (see ``Determination of 
Industry Support for the Petition'' below).

Scope of Investigation

    The products covered by this investigation are certain OCTG from 
the PRC. For a full description of the scope of the investigation, 
please see the ``Scope of the Investigation'' in Appendix I of this 
notice.

Comments on Scope of Investigation

    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. 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 18, 2009, twenty calendar days 
from the signature date 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 intended 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 OCTG to be reported in response 
to the Department's antidumping 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 OCTG, 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 18, 2009. 
Additionally, rebuttal comments must be received by May 25, 2009.

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 to poll the industry.
    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 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.\4\
---------------------------------------------------------------------------

    \4\ 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 the 
investigation. Based on our analysis of the information submitted on 
the record, we have determined that OCTG constitute a single domestic 
like product

[[Page 20673]]

and we have analyzed industry support in terms of that domestic like 
product.\5\
---------------------------------------------------------------------------

    \5\ For a discussion of the domestic like product analysis in 
this case, see Antidumping Duty Investigation Initiation Checklist: 
OCTG from the PRC (``Initiation Checklist'') at Attachment II 
(``Industry Support''), dated concurrently with this notice and 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), 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 Investigation'' section above. To establish industry 
support, Petitioners provided their production of the domestic like 
product for the year 2008, and compared this to an estimate of 
production of the domestic like product for the entire domestic 
industry.\6\ To estimate 2008 production of the domestic like product, 
the Petitioners used an industry publication which reports data in 
shipments. Petitioners approximated domestic production of OCTG by 
inflating the volume of domestic shipments reported by the ratio of the 
difference between Petitioners' production and shipments in the 
applicable calendar year.\7\
---------------------------------------------------------------------------

    \6\ See Volume I of the Petition at, pages 3-4 and Exhibit I-3a.
    \7\ See Volume I of the Petition, at page 3 and Exhibits I-3b 
and I-3c, and Supplement to the Petition, at pages 10-11 and Exhibit 
Supp. I-6. For further discussion, see Initiation Checklist at 
Attachment II.
---------------------------------------------------------------------------

    Our 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 established 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).\8\ 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 
Petitions account for at least 25 percent of the total production of 
the domestic like product.\9\ 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.\10\
---------------------------------------------------------------------------

    \8\ See section 732(c)(4)(D) of the Act.
    \9\ See Initiation Checklist at Attachment II.
    \10\ See Id.
---------------------------------------------------------------------------

    The Department finds that Petitioners filed the Petition on behalf 
of the domestic industry because they are interested parties as defined 
in section 771(9)(C) of the Act and they have demonstrated sufficient 
industry support with respect to the antidumping investigation that 
they are requesting the Department initiate.\11\
---------------------------------------------------------------------------

    \11\ See Id.
---------------------------------------------------------------------------

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''). In addition, Petitioners 
allege that subject imports exceed the negligibility threshold provided 
for under section 771(24)(A) of the Act.
    Petitioners contend that the industry's injured condition is 
illustrated by reduced market share, increased import penetration, 
underselling and price depressing and suppressing effects, lost sales 
and revenue, reduced production and capacity utilization, reduced 
shipments and increased inventories, reduced employment, and an overall 
decline in financial performance. 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.\12\
---------------------------------------------------------------------------

    \12\ See Initiation Checklist at Attachment III (Analysis of 
Allegations and Evidence of Material Injury and Causation for the 
Petition).
---------------------------------------------------------------------------

Critical Circumstances

    Petitioners have alleged that critical circumstances exist with 
regard to imports of OCTG from the PRC, and have supported their 
allegations with the following information.
    Section 733(e)(1) of the Act states that, if a Petitioner alleges 
critical circumstances, the Department will find that such 
circumstances exist, at any time after the date of initiation, when 
there is a reasonable basis to believe or suspect that, under 
subparagraph (A)(i), there is a history of dumping and material injury 
by reason of dumped imports in the United States or elsewhere of the 
subject merchandise, or (ii) the person by whom, or for whose account, 
the merchandise was imported knew or should have known that the 
exporter was selling the subject merchandise at less than its fair 
value and that there was likely to be material injury by reason of such 
sales, and, under subparagraph (B), there have been massive imports of 
the subject merchandise over a relatively short period. Section 
351.206(h) of the Department's regulations defines ``massive imports'' 
as imports that have increased by at least 15 percent over the imports 
during an immediately preceding period of comparable duration. Section 
351.206(i) of the regulations states that ``relatively short period'' 
will normally be defined as the period beginning on the date the 
proceeding begins and ending at least three months later.
    Petitioners allege that there is a history of dumping and material 
injury by reason of dumped imports as there is currently an order in 
place in Canada against imports of seamless OCTG from China. 
Petitioners cite to Canada's Semi-Annual report to the World Trade 
Organization's Committee on Anti-dumping Practices, which demonstrates 
that as of March 10, 2008, Canada imposed definitive duties on the PRC 
against imports of seamless carbon or alloy steel oil and gas well 
casings. Further, Petitioners allege that importers knew, or should 
have known, that OCTG was being sold at less than its fair value. 
Specifically, Petitioners allege margins, as adjusted by the 
Department, of between 36.94 and 99.14 percent, a level high enough to 
impute importer knowledge that merchandise was being sold at less than 
its fair value.
    Petitioners also have alleged that imports from the PRC have been 
massive over a relatively short period. Alleging that there was 
sufficient pre-filing notice of these countervailing duty Petitions, 
Petitioners contend that the Department should compare imports during 
January through June 2008 to imports during July through December 2008 
for purposes of this determination. Specifically, Petitioners supported 
this allegation with copies of news articles discussing the likelihood 
of filing unfair trade complaints against producers of OCTG. For 
example, Petitioners cite to an international news article in July 2008 
discussing the likelihood that U.S. steel producers would file unfair 
trade

[[Page 20674]]

cases related to seamless pipe, and explaining that OCTG makes up 
approximately half of total exports of Chinese seamless pipe. In 
addition, Petitioners cite to a number of other news articles, ITC 
decisions on other pipe and tube products and recent cases on the same 
or similar product in other countries. Petitioners argue that the most 
definitive example of prior knowledge was contained within the July 
2008 article and used this as the basis for their comparison periods. 
Their comparison of the six month period prior to that article 
(January-June 2008) with the six month period immediately following 
(July-December 2008) showed that the U.S. imports of OCTG from China 
increased 165 percent.
    Although the ITC has not yet made a preliminary decision with 
respect to injury, Petitioners note that in the past the Department has 
also considered the extent of the increase in the volume of imports of 
the subject merchandise as one indicator of whether a reasonable basis 
exists to impute knowledge that material injury was likely. In this 
case involving the PRC, Petitioners note that the increase in imports 
far exceeds the amount considered ``massive.''
    Taking into consideration the foregoing, we find that Petitioners 
have alleged the elements of critical circumstances and supported them 
with information reasonably available for purposes of initiating a 
critical circumstances inquiry. For these reasons, we will investigate 
this matter further and will make a preliminary determination at the 
appropriate time, in accordance with section 735(e)(1) of the Act and 
Department practice.\13\
---------------------------------------------------------------------------

    \13\ See Policy Bulletin 98/4 (63 FR 55364, October 15, 1998).
---------------------------------------------------------------------------

Period of Investigation

    In accordance with 19 CFR 351.204(b), because this Petition was 
filed on April 8, 2009, the anticipated period of investigation 
(``POI'') is October 1, 2008, through March 31, 2009, the two most 
recently completed fiscal quarters, as of the month preceding the month 
in which the petition was filed.

Allegations of Sales at Less Than Fair Value

    The following is a description of the allegations of sales at less 
than fair value upon which the Department has based its decision to 
initiate an investigation with respect to the PRC. The sources of data 
for the deductions and adjustments relating to U.S. price and NV are 
discussed in the Initiation Checklist. Should the need arise to use any 
of this information as facts available under section 776 of the Act, we 
may reexamine the information and revise the margin calculations, if 
appropriate.

Export Price

    Petitioners calculated export prices (``EPs'') for both welded and 
seamless OCTG based on an offer for sale (for four welded OCTG 
products) and two invoices and corresponding purchase orders, and an 
offer for sale (for seamless OCTG). Petitioner presented affidavits for 
the offers for sale attesting that the offers were made during the 
POI.\14\
---------------------------------------------------------------------------

    \14\ See Initiation Checklist for further discussion.
---------------------------------------------------------------------------

    To calculate the net U.S. EP, Petitioners deducted from the U.S. 
prices a trader markup, the costs associated with exporting and 
delivering the product, which included foreign inland freight, ocean 
freight, insurance expenses, foreign port charges (stevedoring, 
wharfage and handling charges), foreign brokerage and handling, and 
U.S. port expenses (security fee, unloading fee, and wharfage).
    We have not made separate adjustments to U.S. price for foreign 
port charges (stevedoring, wharfage and handling charges) or the U.S. 
port expenses of unloading fee and wharfage because evidence on the 
record indicates these expenses are already included in ocean freight 
or insurance expenses. Petitioners calculate per-unit ocean freight and 
insurance using U.S. Census Bureau data, by deducting the reported 
customs value of OCTG landed in a certain U.S. port from the reported 
CIF value and dividing it by the total import quantity.\15\ The U.S. 
Census defines CIF data as the sum of import charges and customs 
value.\16\ Accordingly, when customs value is deducted from the CIF 
value, what is left is import charges. The U.S. Census Bureau defines 
import charges as ``the aggregate cost of all freight, insurance, and 
other charges (excluding U.S. import duties) incurred in bringing the 
merchandise from alongside the carrier at the port of exportation in 
the country of exportation and placing it alongside the carrier at the 
first port of entry in the United States.''\17\ Thus it is clear that 
import charges, the basis for ocean freight and insurance, include the 
expenses associated with loading the merchandise from the wharf to the 
carrier, and those expenses associated with unloading the merchandise 
from the vessel to wharf, i.e., stevedoring, wharfage and handling.
---------------------------------------------------------------------------

    \15\ See Volume II-A of the Petition at pages 11-12 and Exhibit 
II-7; Supplement to the PRC AD Petition, dated April 22, 2009, at 
pages 4-7.
    \16\ See http://www.census.gov/foreigntrade/www/sec2.html#valcusimports.
    \17\ Id.
---------------------------------------------------------------------------

Normal Value

    Petitioners state that in every previous less-than-fair value 
investigation involving merchandise from the PRC, the Department has 
concluded that the PRC is a non-market economy country (``NME'') and, 
as the Department has not revoked this determination, its NME status 
remains in effect today.\18\ The Department has previously examined the 
PRC's market status and determined that NME status should continue for 
the PRC.\19\ In addition, in recent investigations, the Department has 
continued to determine that the PRC is an NME country.\20\
---------------------------------------------------------------------------

    \18\ See Volume II-A of the Petition, at page 2.
    \19\ 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. This document is available online at http://ia.ita.doc.gov/download/prc-nme-status/prc-nme-status-memo.pdf.
    \20\ See Certain Circular Welded Carbon Quality Steel Line Pipe 
from the People's Republic of China: Final Determination of Sales at 
Less Than Fair Value, 74 FR 14514 (March 31, 2009); Frontseating 
Service Valves from the People's Republic of China: Final 
Determination of Sales at Less Than Fair Value and Final Negative 
Determination of Critical Circumstances, 74 FR 10886 (March 13, 
2009); 1-Hydroxyethylidene-1, 1-Diphosphonic Acid From the People's 
Republic of China: Final Determination of Sales at Less Than Fair 
Value, 74 FR 10545 (March 11, 2009).
---------------------------------------------------------------------------

    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 this 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 tubular steel products.\21\ 
Petitioners state that the Department has determined in previous 
investigations and administrative reviews that India is at a level of 
development comparable to the PRC.\22\

[[Page 20675]]

Petitioners also assert that in 2006 India produced 1,027,000 metric 
tons of tubular steel products, indicating it is a significant producer 
of tubular steel products.\23\
---------------------------------------------------------------------------

    \21\ See Volume II-A of the Petition, at page 4.
    \22\ See id.
    \23\ See id.
---------------------------------------------------------------------------

    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 provided dumping margin calculations using the 
Department's NME methodology as required by 19 CFR 351.202(b)(7)(i)(C) 
and 19 CFR 351.408. Petitioners calculated four NVs for welded OCTG and 
three NVs for seamless OCTG.
    Petitioners valued the factors of production using reasonably 
available, public surrogate country data, including India import data 
from the Monthly Statistics of the Foreign Trade of India from the 
period May 2008 through October 2008, the most current WTA data 
available.\24\
---------------------------------------------------------------------------

    \24\ See Supplement to the PRC AD Petition, dated April 22, 
2009, at page 1.
---------------------------------------------------------------------------

    Petitioners state that they valued hot-rolled steel coil and steel 
scrap using Indian import data from the Monthly Statistics of the 
Foreign Trade of India, under Indian HTS numbers 7208.36, 7208.37, and 
7208.38 for hot-rolled steel coil and Indian HTS number 7204.49.00 for 
steel scrap.\25\
---------------------------------------------------------------------------

    \25\ See Volume II-A of the Petition, at page 20-21, and Exhibit 
20. See also Supplement to the PRC AD Petition, dated April 22, 
2009, at Exhibit II-7.
---------------------------------------------------------------------------

    Petitioners valued electricity using Indian electricity rates 
disseminated by the Central Electricity Authority in India.\26\
---------------------------------------------------------------------------

    \26\ See Volume II-A of the Petition, at page 21, and Exhibit 
21. See also Supplement to the PRC AD Petition, dated April 22, 
2009, at Exhibit II-41.
---------------------------------------------------------------------------

    Petitioners valued labor using the wage rate data published on the 
Department's Web site, at http://ia.ita.doc.gov/wages/04wages/04wages-010907.html.\27\
---------------------------------------------------------------------------

    \27\ See Volume II-A of the Petition, at page 21, and Exhibit 
II-22.
---------------------------------------------------------------------------

    Petitioners included a value for ``production equipment tires'' in 
its NV calculation for seamless OCTG. Consistent with Department 
practice we did not include a value for ``production equipment tires'' 
in the calculation of NV. The Department has, in previous proceedings, 
found that materials consumed for the purpose of manufacturing subject 
merchandise, are properly considered factors of production. However, in 
the instant investigation, there is no evidence on the record 
indicating what ``production equipment tires'' are, or how they are 
consumed in the production of OCTG. Therefore, for purposes of 
initiation, we are not including production equipment tires in the 
calculation of normal value.\28\
---------------------------------------------------------------------------

    \28\ See, e.g., Certain Steel Nails from the People's Republic 
of China: Final Determination of Sales at Less Than Fair Value and 
Partial Affirmative Determination of Critical Circumstances, 73 FR 
33977 (June 16, 2008); Final Determination of Sales at Less Than 
Fair Value and Final Partial Affirmative Determination of Critical 
Circumstances: Diamond Sawblades and Parts Thereof from the People's 
Republic of China, 71 FR 29303 (May 22, 2006).
---------------------------------------------------------------------------

    Where Petitioners were unable to find input prices contemporaneous 
with the POI, Petitioners adjusted for inflation using the wholesale 
price index for India, as published in ``International Financial 
Statistics'' by the International Monetary Fund.\29\ Petitioners used 
exchange rates, as provided on the Department's Web site, to convert 
Indian Rupees to U.S. Dollars.\30\
---------------------------------------------------------------------------

    \29\ See Volume II-A of the Petition, at pages 18-19, and 
Exhibit 8.
    \30\ See Supplement to the PRC AD Petition, dated April 22, 
2009, at page 15 and Exhibits II-33 and II-34.
---------------------------------------------------------------------------

    Petitioners based factory overhead, selling, general and 
administrative expenses (``SG&A''), and profit, on the financial ratios 
of Maharashtra Seamless Ltd. (``MSL''), Ratnamani Metals & Tubes Ltd. 
(``Ratnamani''), Steel Authority of India, Ltd. (``SAIL''), Tata Steel 
Limited (``Tata''), and Welspun Gujarat Stahl Rohen Ltd. (``Welspun''), 
Indian producers of pipe and tube, with adjustments as requested by the 
Department.\31\ However, MSL'S financial statements demonstrated that 
the company received subsidies that the Department had previously 
determined to be countervailable,\32\ and Petitioners removed MSL from 
the pool of companies used as the source of surrogate financial ratio 
calculations.\33\ Thus, Petitioners based their calculations on the 
annual reports as of March 31, 2008, of Ratnamani, SAIL, Tata and 
Welspun. Although these financial statements do not overlap the POI, 
they represent the most current information reasonably available to 
Petitioners at the time they filed the Petition.
---------------------------------------------------------------------------

    \31\ See Volume II-A of the Petition, at pages 22-23 and Exhibit 
23, and Volume II-B of the Petition, at pages 3, 13-15 and Exhibits 
32-LL, -MM, -NN, -OO, -PP and -QQ(1) and -QQ(2); see also Supplement 
to the PRC AD Petition, dated April 22, 2009, at pages 16-19 and 
Exhibits Supp. II-50 and Supp. II-51.
    \32\ See letter to Petitioners, ``Re: Petitions for the 
Imposition of Antidumping and Countervailing Duties on Oil Country 
Tubular Goods Imported from the People's Republic of China,'' dated 
April 17, 2009.
    \33\ See Supplement to the PRC AD Petition, dated April 22, 
2009, at page 16.
---------------------------------------------------------------------------

    Petitioners calculated separate financial ratios for seamless and 
welded OCTG. Petitioners based the ratios for seamless OCTG on the 
simple average of SAIL's and Tata's overhead, SG&A, and profit ratios, 
asserting that SAIL and Tata are large integrated steel producers like 
Baosteel Group Shanghai Steel Tube (``Baosteel'') and Baotou Iron & 
Steel (``Baotou''), and produce comparable merchandise.\34\ Petitioners 
based ratios for welded OCTG on the simple average of Ratnamani's and 
Welspun's overhead, SG&A, and profit ratios, asserting that Ratnamani 
and Welspun produce a range of pipe products which match the production 
experience of Huludao City Steel Pipe Industrial Co. (``Huludao'').\35\
---------------------------------------------------------------------------

    \34\ See Volume II-B of the Petition, at page 3, Exhibits 32-LL, 
-MM, -NN, -OO, -PP and -QQ(1) and -QQ(2); see also Supplement to the 
PRC AD Petition, dated April 22, 2009, at Exhibit Supp. II-50.
    \35\ See Volume II-A of the Petition, at page 22, Exhibit 23; 
see also Supplement to the PRC AD Petition, dated April 22, 2009, at 
Exhibit Supp. II-51.
---------------------------------------------------------------------------

    We made no changes to Petitioners' calculations for Tata. We made 
changes to Petitioners' calculations for Ratnamani, Welspun and SAIL as 
follows.\36\
---------------------------------------------------------------------------

    \36\ See Attachment V to the Initiation Checklist for all 
calculations.
---------------------------------------------------------------------------

Ratnamani

     We excluded the value of opening and closing stock of 
finished goods from our calculations.

Welspun

     We excluded the increase (or decrease) on excise on 
finished goods from our calculations.
     We reclassified coating and other job charges from 
materials to manufacturing overhead.
     We reclassified repairs--other from SG&A to manufacturing 
overhead.
     We excluded interest received gross from our calculations.
     We applied the value of depreciation as recorded on the 
income statement in our calculations (the value used by Petitioners did 
not reflect the value in the income statement).

SAIL

     We reclassified grants in aid received from the government 
of Kamataka and travel concession from

[[Page 20676]]

SG&A to labor, to correspond with their treatment in the financial 
statements.
     We reclassified handling expenses for raw materials and 
scrap from SG&A to raw materials.
     We reclassified conversion charges, water charges & cess 
on water pollution and provisions: stores, spares and sundries from 
SG&A to manufacturing overhead.
     We excluded handling expenses for finished goods from our 
calculations.
     We reclassified power and fuel expense from raw materials 
to energy.
     We excluded adjustments pertaining to earlier years and 
fringe benefits tax from our calculations.

Fair-Value Comparisons

    Based on the data provided by Petitioners, there is reason to 
believe that imports of OCTG from the PRC are being, or are likely to 
be, sold in the United States at less than fair value. Based on 
comparisons of EP to NV as revised above, the estimated dumping margins 
for the PRC range from 36.94 percent to 99.14 percent.

Initiation of Antidumping Investigation

    Based upon the examination of the Petition concerning OCTG from the 
PRC and other information reasonably available to the Department, the 
Department finds that this Petition meets the requirements of section 
732 of the Act. Therefore, we are initiating an antidumping duty 
investigation to determine whether imports of OCTG from 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 will make our preliminary determinations no later than 
140 days after the date of this initiation.

Targeted-Dumping Allegations

    On December 10, 2008, the Department issued an interim final rule 
for the purpose of withdrawing 19 CFR 351.414(f) and (g), the 
regulatory provisions governing the targeted- dumping analysis in 
antidumping duty investigations, and the corresponding regulation 
governing the deadline for targeted-dumping allegations, 19 CFR 
351.301(d)(5).\37\ The Department stated that ``{w{time} ithdrawal will 
allow the Department to exercise the discretion intended by the statute 
and, thereby, develop a practice that will allow interested parties to 
pursue all statutory avenues of relief in this area.'' \38\
---------------------------------------------------------------------------

    \37\ See Withdrawal of the Regulatory Provisions Governing 
Targeted Dumping in Antidumping Duty Investigations, 73 FR 74930 
(December 10, 2008).
    \38\ Id. at 74931.
---------------------------------------------------------------------------

    In order to accomplish this objective, if any interested party 
wishes to make a targeted-dumping allegation in any of these 
investigations pursuant to section 777A(d)(1)(B) of the Act, such 
allegations are due no later than 45 days before the scheduled date of 
the preliminary determination.

Respondent Selection

    For the PRC, 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 NME exporters/producers will be used as the basis to 
select the mandatory respondents.
    The 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.\39\ Appendix II of this notice 
contains the quantity and value questionnaire that must be submitted by 
all NME exporters/producers no later than May 19, 2009. In addition, 
the Department will post the quantity and value questionnaire along 
with the filing instructions on the Import Administration Web site, at 
http://ia.ita.doc.gov/ia-highlights-and-news.html. The Department will 
send the quantity and value questionnaire to those PRC companies 
identified in the Petition, Volume I, at Exhibit I-6.
---------------------------------------------------------------------------

    \39\ 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).
---------------------------------------------------------------------------

Separate Rates

    In order to obtain separate-rate status in an NME investigation, 
exporters and producers must submit a separate-rate status 
application.\40\ 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 http://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 sixty (60) days from the date of publication of 
this initiation notice in the Federal Register.
---------------------------------------------------------------------------

    \40\ See Certain Circular Welded Carbon Quality Steel Line Pipe 
from the Republic of Korea and the People's Republic of China: 
Initiation of Antidumping Duty Investigations, 73 FR 23188, 23193 
(April 29, 2008) (``Certain Circular Welded Carbon Quality Steel 
Line Pipe from the PRC'').
---------------------------------------------------------------------------

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 \41\ 
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.\42\
---------------------------------------------------------------------------

    \41\ See Import Administration Policy Bulletin, Number: 05.1, 
``Separate-Rates Practice and Application of Combination Rates in 
Antidumping Investigations Involving Non-Market Economy Countries,'' 
dated April 5, 2005, available on the Department's Web site at 
http://ia.ita.doc.gov/policy/bull05-1.pdf.
    \42\ See also Certain Circular Welded Carbon Quality Steel Line 
Pipe from the PRC, 73 FR 23188, 23193.
---------------------------------------------------------------------------

Distribution of Copies of the Petition

    In accordance with section 732(b)(3)(A) of the Act and 19 CFR 
351.202(f), a copy of the public version of the Petition has been 
provided to the representatives of the Government of 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 Government of the PRC, 
consistent with 19 CFR 351.203(c)(2).

International Trade Commission (``ITC'') Notification

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

[[Page 20677]]

Preliminary Determination by the International Trade Commission

    The ITC will preliminarily determine, no later than May 26, 
2009,\43\ whether there is a reasonable indication that imports of OCTG 
from the PRC materially injure, or threaten material injury to, a U.S. 
industry. A negative ITC determination covering all classes or kinds of 
merchandise covered by the Petition would result in the investigation 
being terminated. Otherwise, this investigation will proceed according 
to statutory and regulatory time limits.
---------------------------------------------------------------------------

    \43\ Where the deadline falls on a weekend/holiday, the 
appropriate date is the next business day
---------------------------------------------------------------------------

    This notice is issued and published pursuant to section 777(i) of 
the Act.

    Dated: April 28, 2009.
Ronald K. Lorentzen,
Acting Assistant Secretary for Import Administration.

Appendix I

Scope of the Investigation

    The merchandise covered by the investigation consists of certain 
oil country tubular goods (``OCTG''), which are hollow steel 
products of circular cross-section, including oil well casing and 
tubing, of iron (other than cast iron) or steel (both carbon and 
alloy), whether seamless or welded, regardless of end finish (e.g., 
whether or not plain end, threaded, or threaded and coupled) whether 
or not conforming to American Petroleum Institute (``API'') or non-
API specifications, whether finished (including limited service OCTG 
products) or unfinished (including green tubes and limited service 
OCTG products), whether or not thread protectors are attached. The 
scope of the investigation also covers OCTG coupling stock. Excluded 
from the scope of the investigation are casing or tubing containing 
10.5 percent or more by weight of chromium; drill pipe; unattached 
couplings; and unattached thread protectors.
    The merchandise covered by the investigation is currently 
classified in the Harmonized Tariff Schedule of the United States 
(``HTSUS'') under item numbers: 7304.29.10.10, 7304.29.10.20, 
7304.29.10.30, 7304.29.10.40, 7304.29.10.50, 7304.29.10.60, 
7304.29.10.80, 7304.29.20.10, 7304.29.20.20, 7304.29.20.30, 
7304.29.20.40, 7304.29.20.50, 7304.29.20.60, 7304.29.20.80, 
7304.29.31.10, 7304.29.31.20, 7304.29.31.30, 7304.29.31.40, 
7304.29.31.50, 7304.29.31.60, 7304.29.31.80, 7304.29.41.10, 
7304.29.41.20, 7304.29.41.30, 7304.29.41.40, 7304.29.41.50, 
7304.29.41.60, 7304.29.41.80, 7304.29.50.15, 7304.29.50.30, 
7304.29.50.45, 7304.29.50.60, 7304.29.50.75, 7304.29.61.15, 
7304.29.61.30, 7304.29.61.45, 7304.29.61.60, 7304.29.61.75, 
7305.20.20.00, 7305.20.40.00, 7305.20.60.00, 7305.20.80.00, 
7306.29.10.30, 7306.29.10.90, 7306.29.20.00, 7306.29.31.00, 
7306.29.41.00, 7306.29.60.10, 7306.29.60.50, 7306.29.81.10, and 
7306.29.81.50.
    The OCTG coupling stock covered by the investigation may also 
enter under the following HTSUS item numbers: 7304.39.00.24, 
7304.39.00.28, 7304.39.00.32, 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, 7304.39.00.76, 
7304.39.00.80, 7304.59.60.00, 7304.59.80.15, 7304.59.80.20, 
7304.59.80.25, 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, 7304.59.80.70, and 7304.59.80.80.
    The HTSUS subheadings are provided for convenience and customs 
purposes only; the written description of the scope of the 
investigation is dispositive.

Appendix II

    Where it is not practicable to examine all known exporters/
producers 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 of 
the subject merchandise that can reasonably be examined.
    In the chart below, please provide the total quantity and total 
value of all your sales of merchandise covered by the scope of this 
investigation (see ``Scope of Investigation'' section of this 
notice), produced in the PRC, and exported/shipped to the United 
States during the period October 1, 2007, through March 31, 2007.

------------------------------------------------------------------------
                                       Total
                                      quantity   Terms
               Market                in metric    of       Total value
                                        tons     sale
------------------------------------------------------------------------
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              .........  ......  ................
    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 at 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 customer 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 subject 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 customer 
occurs after importation. However, if the first sale to the 
unaffiliated customer 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

[[Page 20678]]

manufactured by your company that were subsequently exported by an 
affiliated exporter to the United States.
     Please do not include any sales of subject merchandise 
manufactured in Hong Kong in your figures.

Further Manufactured

     Sales of further manufactured or assembled (including 
re-packaged) merchandise is 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. E9-10346 Filed 5-4-09; 8:45 am]
BILLING CODE 3510-DS-P