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

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[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]


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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\
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    \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.
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    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\
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    \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).
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    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\
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    \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.
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    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\
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    \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.
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    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\
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    \8\ See section 732(c)(4)(D) of the Act.
    \9\ See Initiation Checklist at Attachment II.
    \10\ See Id.
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    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\
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    \11\ See Id.
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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\
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    \12\ See Initiation Checklist at Attachment III (Analysis of 
Allegations and Evidence of Material Injury and Causation for the 
Petition).
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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\
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    \13\ See Policy Bulletin 98/4 (63 FR 55364, October 15, 1998).
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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\
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    \14\ See Initiation Checklist for further discussion.
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    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.
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    \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 https://www.census.gov/foreigntrade/www/sec2.html#valcusimports.
    \17\ Id.
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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\
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    \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 https://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).
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    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\
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    \21\ See Volume II-A of the Petition, at page 4.
    \22\ See id.
    \23\ See id.
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    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\
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    \24\ See Supplement to the PRC AD Petition, dated April 22, 
2009, at page 1.
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    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\
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    \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.
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    Petitioners valued electricity using Indian electricity rates 
disseminated by the Central Electricity Authority in India.\26\
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    \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.
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    Petitioners valued labor using the wage rate data published on the 
Department's Web site, at https://ia.ita.doc.gov/wages/04wages/04wages-010907.html.\27\
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    \27\ See Volume II-A of the Petition, at page 21, and Exhibit 
II-22.
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    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\
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    \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).
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    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\
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    \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.
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    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.
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    \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.
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    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\
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    \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.
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    We made no changes to Petitioners' calculations for Tata. We made 
changes to Petitioners' calculations for Ratnamani, Welspun and SAIL as 
follows.\36\
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    \36\ See Attachment V to the Initiation Checklist for all 
calculations.
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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\
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    \37\ See Withdrawal of the Regulatory Provisions Governing 
Targeted Dumping in Antidumping Duty Investigations, 73 FR 74930 
(December 10, 2008).
    \38\ Id. at 74931.
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    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 
https://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).
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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 https://ia.ita.doc.gov/ia-highlights-and-news.html on the date of publication 
of this initiation notice in the Federal Register. The separate-rate 
application will be due sixty (60) days from the date of publication of 
this initiation notice in the Federal Register.
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    \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'').
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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\
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    \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 
https://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.
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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.
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    \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