Seamless Refined Copper Pipe and Tube from the People's Republic of China and Mexico: Initiation of Antidumping Duty Investigations, 55194-55199 [E9-25855]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 74, Number 206 (Tuesday, October 27, 2009)]
[Notices]
[Pages 55194-55199]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-25855]


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DEPARTMENT OF COMMERCE

International Trade Administration

(A-570-964, A-201-838)


Seamless Refined Copper Pipe and Tube from the People's Republic 
of China and Mexico: Initiation of Antidumping Duty Investigations

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

EFFECTIVE DATE: October 27, 2009.

FOR FURTHER INFORMATION CONTACT: Maisha Cryor at (202) 482-5831 or 
Zhulieta Willbrand at (202) 482-3147 (the People's Republic of China 
(the ``PRC'')), AD/CVD Operations, Office 4; George McMahon at (202) 
482-1167 or James Terpstra at (202) 482-3965 (Mexico), AD/CVD 
Operations, Office 3, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

The Petitions

    On September 30, 2009, the Department of Commerce (the 
``Department'') received petitions concerning imports of seamless 
refined copper pipe and tube (``copper pipe and tube'') from the PRC 
and Mexico filed in proper form by Cerro Flow Products, Inc., 
KobeWieland Copper Products, LLC, Mueller Copper Tube Products, Inc., 
and Mueller Copper Tube Company, Inc. (collectively, ``Petitioners''). 
See Petitions for the Imposition of Antidumping Duties on Seamless 
Refined Copper Pipe and Tube from the People's Republic of China and 
Mexico, dated September 30, 2009 (the ``Petitions''). On October 5, 
2009, October 8, 2009, October 14, 2009, and October 16, 2009, the 
Department issued a request for additional information and 
clarification of certain areas of the Petitions. On October 14, 2009, 
the Department contacted Petitioners by telephone seeking additional 
information and clarification regarding the PRC portion of the 
Petition. See Memo to the File from Maisha Cryor, ``Seamless Refined 
Copper Pipe and Tube from the People's Republic of China and Mexico: 
Margin Calculation,'' dated October 15, 2009. On October 16, 2009, the 
Department contacted Petitioners by telephone seeking additional 
information and clarification regarding the scope of the Petition. See 
Memo to the File from Dana M. Griffies, Import Policy Analyst, `` 
Petition for the Imposition of Antidumping Duties Seamless Refined 
Copper Pipe and Tube from the People's Republic of China and Mexico: 
Suggested Scope Changes,'' dated October 16, 2009.
    On October 19, 2009, the Department contacted Petitioners by 
telephone seeking additional information and clarification regarding 
industry support. See Memo to the File from Dana M. Griffies, Import 
Policy Analyst, `` Petition for the Imposition of Antidumping Duties 
Seamless Refined Copper Pipe and Tube from the People's Republic of 
China and Mexico: Industry Support,'' dated October 19, 2009. Based on 
the Department's requests, Petitioners filed additional information on 
October 13, 2009 (hereinafter, ``Supplement to the Petitions, dated 
October 13, 2009''), October 15, 2009 (hereinafter, ``Supplement to the 
PRC Petition, dated October 15, 2009''), October 16, 2009 (hereinafter, 
``Second Supplement to the Petitions, dated October 16, 2009''), 
October 19, 2009 (hereinafter, ``Third Supplement to the 
Petitions\1\,''), and October 20, 2009 (hereinafter, ``Fourth 
Supplement to the Petitions''). The period of investigation (``POI'') 
for the PRC is January 1, 2009, through June 30, 2009. The POI for 
Mexico is July 1, 2008, through June 30, 2009. See 19 CFR 
351.204(b)(1).
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    \1\ Final amendments regarding the Petition for the Imposition 
of Antidumping Duties: Seamless Refined Copper Pipe and Tube from 
the People's Republic of China, and the Petition for the Imposition 
of Antidumping Duties: Seamless Refined Copper Pipe and Tube from 
Mexico, were filed on October 19, 2009 (collectively, ``Third 
Supplement to the Petitions, dated October 19, 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 copper pipe 
and tube from the PRC and Mexico are being, or are likely to be, sold 
in the United States at less than fair value, within the meaning of 
section 731 of the Act, and that such imports are materially injuring, 
or threatening material injury to, an industry in the United States.
    The Department finds that Petitioners filed the Petitions on behalf 
of the domestic industry because Petitioners are interested parties as 
defined in section 771(9)(C) of the Act and have demonstrated 
sufficient industry support with respect to the antidumping duty 
investigations that Petitioners are requesting that the Department 
initiate (see ``Determination of Industry Support for the Petitions'' 
section below).

Scope of Investigations

    The products covered by these investigations are copper pipe and 
tube from the PRC and Mexico. For a full description of the scope of 
the investigations, please see the ``Scope of the Investigations,'' in 
Appendix I of this notice.

Comments on Scope of Investigations

    During our review of the Petitions, 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 November 9, 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.

Comments on Product Characteristics for Antidumping Duty Questionnaires

    We are requesting comments from interested parties regarding the 
appropriate physical characteristics of copper pipe and tube 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

[[Page 55195]]

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 copper pipe and 
tube, 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 November 9, 2009. 
Additionally, rebuttal comments must be received by November 16, 2009.

Determination of Industry Support for the Petitions

    Section 732(b)(1) of the Act requires that a petition be filed on 
behalf of the domestic industry. Section 732(c)(4)(A) of the Act 
provides that a petition meets this requirement if the domestic 
producers or workers who support the petition account for: (i) at least 
25 percent of the total production of the domestic like product; and 
(ii) more than 50 percent of the production of the domestic like 
product produced by that portion of the industry expressing support 
for, or opposition to, the petition. Moreover, section 732(c)(4)(D) of 
the Act provides that, if the petition does not establish support of 
domestic producers or workers accounting for more than 50 percent of 
the total production of the domestic like product, the Department 
shall: (i) poll the industry or rely on other information in order to 
determine if there is support for the petition, as required by 
subparagraph (A); or (ii) determine industry support using a 
statistically valid sampling method.
    Section 771(4)(A) of the Act defines the ``industry'' as the 
producers as a whole of a domestic like product. Thus, to determine 
whether a petition has the requisite industry support, the statute 
directs the Department to look to producers and workers who produce the 
domestic like product. The 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 (see section 771(10) of the Act), they do so for different 
purposes and pursuant to a separate and distinct authority. In 
addition, the Department's determination is subject to limitations of 
time and information. Although this may result in different definitions 
of the like product, such differences do not render the decision of 
either agency contrary to law. See USEC, Inc. v. United States, 132 F. 
Supp. 2d 1, 8 (Ct. Int'l Trade 2001), citing Algoma Steel Corp., Ltd. 
v. United States, 688 F. Supp. 639, 644 (Ct. Int'l Trade 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 title.'' 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 
investigations. Based on our analysis of the information submitted on 
the record, we have determined that copper pipe and tube constitutes a 
single domestic like product and we have analyzed industry support in 
terms of that domestic like product. For a discussion of the domestic 
like product analysis in this case, see Antidumping Duty Investigation 
Initiation Checklist: Copper Pipe and Tube from the PRC (``PRC 
Initiation Checklist'') at Attachment II, and Antidumping Duty 
Investigation Initiation Checklist: Copper Pipe and Tube from Mexico 
(``Mexico Initiation Checklist'') at Attachment II, dated concurrently 
with this notice and on file in the Central Records Unit (``CRU''), 
Room 1117 of the main Department of Commerce building.
    In determining whether Petitioners have standing under section 
732(c)(4)(A) of the Act, we considered the industry support data 
contained in the Petitions with reference to the domestic like product 
as defined in the ``Scope of the Investigations,'' in Appendix I of 
this notice. To establish industry support, Petitioners provided their 
own 2008 shipments of the domestic like product, and compared this to 
the estimated total shipments of the domestic like product for the 
entire domestic industry. See Petitions, at 2-9, and Exhibits 1-7, 
Supplement to the Petitions, dated October 13, 2009, at 8-10, and 
Exhibit G, Second Supplement to the Petitions, dated October 16, 2009, 
at 2-3, and Exhibit 54, and Fourth Supplement to the Petitions, dated 
October 20, 2009, at 7-8 and Exhibit 59. Petitioners argue that 
shipments are a reasonable proxy for production because most domestic 
production is sold on the merchant market. See Petitions, at 8 and 
Exhibits 4-7. Petitioners estimated total 2008 shipments of the 
domestic like product based on two industry-specific reports that 
publish shipment and production information, as well as two individuals 
who are knowledgeable of the U.S. industry. See Petitions, at 8 and 
Exhibits 2-3, Supplement to the Petitions, dated October 13, 2009, at 
8-10 and Exhibit G, and Second Supplement to the Petitions, dated 
October 16, 2009, at 2-3 and Exhibit 54, and Fourth Supplement to the 
Petitions, dated October 20, 2009, at 7-8 and Exhibit 59; see also PRC 
Initiation Checklist at Attachment II, and Mexico Initiation Checklist 
at Attachment II.
    Our review of the data provided in the Petitions, supplemental 
submissions, and other information readily available to the Department 
indicates that Petitioners have established industry support. First, 
the Petitions 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). See section 732(c)(4)(D) of the Act; see also PRC Initiation 
Checklist at Attachment II, and Mexico Initiation Checklist at 
Attachment II. 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. See PRC Initiation Checklist at Attachment 
II, and Mexico Initiation Checklist at Attachment II. 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 Petitions 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 Petitions. Accordingly, the Department determines 
that the Petitions were filed on behalf of the

[[Page 55196]]

domestic industry within the meaning of section 732(b)(1) of the Act. 
See id.
    The Department finds that Petitioners filed the Petitions 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 duty investigations 
that they are requesting the Department initiate. 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, lost sales and revenues, reduced 
production, reduced capacity utilization rate, underselling and price 
depression and suppression, reduced workforce, decline in financial 
performance, and an increase in import penetration. We have assessed 
the allegations and supporting evidence regarding material injury, 
threat of material injury, and causation, and we have determined that 
these allegations are properly supported by adequate evidence and meet 
the statutory requirements for initiation. See PRC Initiation Checklist 
at Attachment III and Mexico Initiation Checklist at Attachment III.

Allegations of Sales at Less Than Fair Value

    The following is a description of the allegations of sales at less 
than fair value upon which the Department based its decision to 
initiate these investigations of imports of copper pipe and tube from 
the PRC and Mexico. The sources of data for the deductions and 
adjustments relating to the U.S. price, the factors of production (for 
the PRC) and cost of production (``COP'') (for Mexico) are also 
discussed in the country-specific initiation checklists. See PRC 
Initiation Checklist at 6-10 and Mexico Initiation Checklist at 6-10.

Export Price

The PRC

    For the PRC, Petitioners calculated export price (``EP'') based on 
a price quote made during the POI for a copper pipe and tube product by 
a Chinese producer, sale term delivered. See PRC Initiation Checklist 
at 6; see also Petitions, at 28-29, and Exhibit 20, and Supplement to 
the Petitions, dated October 13, 2009, at 12, and Exhibit G. 
Petitioners substantiated the U.S. price quote with an affidavit. See 
Petitions, at Exhibit 20. Petitioners made adjustments to EP for ocean 
freight, foreign inland freight, and a distributor commission. See PRC 
Initiation Checklist at 6-7; see also Petitions, at Exhibits 21 and 23, 
and Supplement to the Petitions, dated October 13, 2009, at 18-20, and 
Exhibit L. Petitioners made no other adjustments. See PRC Initiation 
Checklist for additional details.

Mexico

    For Mexico, Petitioners based U.S. price on the invoice from an 
actual sale of Type K and Type L copper pipe and tube, produced by a 
Mexican manufacturer and sold to a U.S. customer in January 2009. See 
Mexico Initiation Checklist; see also Petitions, at 31 and Exhibit 20, 
and Supplement to the Petitions, dated October 13, 2009, at 21 and 
Exhibit N. Petitioners substantiated the U.S. prices used with an 
affidavit and a declaration from persons who obtained the information. 
See Supplement to the Petitions, at 21 and Exhibit N. Petitioners 
conservatively assumed the selling expenses to be zero in their 
calculation of the net U.S. price. Petitioners deducted ocean freight 
and foreign inland freight expenses but made no other adjustments. See 
Mexico Initiation Checklist at 7; see also Petition, at 32 and Exhibit 
35, and Supplement to the Petitions, dated October 13, 2009, at 22, and 
Exhibit P. See the Mexico Initiation Checklist for additional details.

Normal Value

The PRC

    Petitioners state that the PRC is a non-market economy (``NME'') 
country and no determination to the contrary has been made by the 
Department. See Petitions, at 29; see also Certain Kitchen Appliance 
Shelving and Racks from the People's Republic of China: Amended Final 
Determination of Sales at Less Than Fair Value and Notice of 
Antidumping Duty Order, 74 FR 46971 (September 14, 2009); see also 
Certain Tow Behind Lawn Groomers and Certain Parts Thereof from the 
People's Republic of China: Antidumping Duty Order, 74 FR 38395 (August 
3, 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 the PRC investigation. Accordingly, the 
NV of the product for the PRC investigation is appropriately based on 
factors of production valued in a surrogate market-economy country in 
accordance with section 773(c) of the Act. In the course of the PRC 
investigation, all parties, including the public, will have the 
opportunity to provide relevant information related to the issue of the 
PRC's NME status and the granting of separate rates to individual 
exporters.
    Citing section 773(c)(4) of the Act, Petitioners contend that India 
is the appropriate surrogate country for the PRC because: 1) it is at a 
level of economic development comparable to that of the PRC; and 2) it 
is a significant producer of copper pipe and tube. See Petitions, at 
29-30, and Exhibits 26 and 27. Based on the information provided by 
Petitioners, we believe that it is appropriate to use India as a 
surrogate country for initiation purposes. After initiation of the 
investigation, interested parties will have the opportunity to submit 
comments regarding surrogate-country selection and, pursuant to 19 CFR 
351.301(c)(3)(i), will be provided an opportunity to submit publicly 
available information to value factors of production within 40 days 
after the date of publication of the preliminary determination.
    Petitioners calculated the NV and dumping margins for the U.S. 
price, discussed above, using the Department's NME methodology as 
required by 19 CFR 351.202(b)(7)(i)(C) and 19 CFR 351.408. Petitioners 
calculated NV based on their own consumption rates for producing copper 
pipe and tube in 2009. See Petitions at 30, and Exhibits 28 and 34. In 
calculating NV, Petitioners based the quantity of each of the inputs 
used to manufacture and pack copper pipe and tube in the PRC based on 
their own production experience during the POI because they stated that 
the actual usage rates of the foreign manufacturers of copper pipe and 
tube were not reasonably available. See Petitions, at 30. However, 
Petitioners also stated that their production process and cost 
structure is representative of the PRC copper pipe and tube producers 
because the act of converting copper raw material into copper pipe and 
tube is ``fundamentally the same for all producers.'' See Supplement to 
the Petitions, dated October 13, 2009, at 18. Petitioners note that 
several methods to perform such a conversion exist in the marketplace 
indicating that no one method is superior to another for the production 
of copper pipe and tube. Id.

[[Page 55197]]

Given these facts, Petitioners assert that their experience ``should be 
representative of other Chinese producers when allowance is made for 
different wage rates and energy costs.'' Id.
    Petitioners valued the factors of production based on reasonably 
available, public surrogate-country data, including Indian import 
statistics from the World Trade Atlas. See Petitions, at 30, and 
Exhibit 29. Petitioners excluded from these import statistics imports 
from countries previously determined by the Department to be NME 
countries, imports from Indonesia, the Republic of Korea, and Thailand 
as the Department has previously excluded prices from these countries 
because they maintain broadly available, non-industry-specific export 
subsidies, and imports labeled as being from ``unspecified countries.'' 
See Petitions, at Exhibit 29. In addition, Petitioners made currency 
conversions, where necessary, based on the POI-average rupee/U.S. 
dollar exchange rate, as reported on the Department's website. See 
Petitions, at 31, and Exhibit 25. Petitioners determined labor costs 
using the labor consumption, in hours, derived from their own 
experience. See Petitions, at Exhibits 28 and 34. Petitioners valued 
labor costs using the Department's NME Wage Rate for the PRC at https://ia.ita.doc.gov/wages/05wages/05wages-051608.html. See Petitions, at 
Exhibits 28 and 30. For purposes of initiation, the Department 
determines that the surrogate values used by Petitioners are reasonably 
available and, thus, acceptable for purposes of initiation.
    Petitioners determined electricity costs using the electricity 
consumption, in kilowatt hours, derived from their own experience. See 
Petitions, at Exhibits 28 and 34. Petitioners valued electricity using 
the Indian electricity rate reported by the Central Electric Authority 
of the Government of India. See Petitions, at Exhibit 24 and, 
Supplement to the Petitions, dated October 13, 2009, at 17, and 
Exhibits I and J.
    Petitioners determined natural gas costs using the natural gas 
consumption derived from their own experience. See Petitions, at 
Exhibits 28 and 34, and Supplement to the Petitions, dated October 13, 
2009, at 17. Petitioners valued natural gas using the Indian rate 
reported by the Gas Authority of India, Ltd. See Petitions, at Exhibit 
31.
    Petitioners determined water costs using the water consumption 
derived from their own experience. See Petitions, at Exhibits 28 and 
34. Petitioners valued water based on information from the Maharastra 
Industrial Development Corporation, which is contemporaneous with the 
POI. See Petitions, at Exhibit 24.
    Petitioners based factory overhead, selling, general and 
administrative (``SG&A''), and profit on data from Multimetals Limited 
(``Multimetals''), a copper pipe and tube producer, for the fiscal year 
April 2008 through March 2009. See Petitions, at 31, and Exhibits 32 
and 33, and Supplement to the Petitions, dated October 13, 2009, at 17, 
and Exhibit K. Petitioners state that Multimetals was an Indian 
producer of copper pipe and tube products during the fiscal year 2008-
2009. See Petitions, at 31, and Exhibits 32 and 33, and Supplement to 
the Petition, dated October 13, 2009, at 17 and Exhibit K. Therefore, 
for purposes of the initiation, the Department finds Petitioners' use 
of Multimetals' financial ratios appropriate.

Mexico

    Petitioners calculated NV for copper pipe and tube based on a price 
quote for a Type L copper tube offer from March 2009. See Petitions, at 
32, and Supplement to the Petitions, dated October 13, 2009, at 24; see 
also Mexico Initiation Checklist. Petitioners substantiated the home 
market price quote with an affidavit and a declaration from persons who 
obtained the information. See Petitions, at 32, and Exhibit 20, and 
Supplement to the Petitions, dated October 13, 2009, at Exhibit N; see 
also Mexico Initiation Checklist.

Sales-Below-Cost Allegation

    Petitioners have provided information demonstrating reasonable 
grounds to believe or suspect that sales of copper pipe and tube in the 
Mexican market were made at prices below the fully absorbed COP, within 
the meaning of section 773(b) of the Act, and requested that the 
Department conduct a country-wide sales-below-cost investigation. The 
Statement of Administrative Action (``SAA''), submitted to Congress in 
connection with the interpretation and application of the URAA, states 
that an allegation of sales below COP need not be specific to 
individual exporters or producers. See SAA, H.R. Doc. No. 103-316 at 
833 (1994). The SAA, at 833, states that ``Commerce will consider 
allegations of below-cost sales in the aggregate for a foreign country, 
just as Commerce currently considers allegations of sales at less than 
fair value on a country-wide basis for purposes of initiating an 
antidumping investigation.''
    Further, the SAA provides that section 773(b)(2)(A) of the Act 
retains the requirement that the Department have ``reasonable grounds 
to believe or suspect'' that below-cost sales have occurred before 
initiating such an investigation. Reasonable grounds exist when an 
interested party provides specific factual information on costs and 
prices, observed or constructed, indicating that sales in the foreign 
market in question are at below-cost prices. Id.

Cost of Production

    Pursuant to section 773(b)(3) of the Act, COP consists of the cost 
of manufacturing (``COM''); SG&A expenses; financial expenses; and 
packing expenses. Petitioners calculated the quantity of each of the 
material inputs into COM based on the production experience of a U.S. 
producer of copper pipe and tube during the POI, multiplied by the 
value of inputs used to manufacture copper pipe and tube in Mexico 
using publicly available data. See Mexico Initiation Checklist at 8-9; 
see also Second Supplement to the Petitions, dated October 16, 2009, at 
3-4 and Exhibits 55 and 56.\2\ Petitioners calculated labor, energy, 
overhead and packing costs based on their own experience adjusted for 
known differences between costs in the United States and costs in 
Mexico. Id. To calculate the SG&A and financial expense rates, 
Petitioners relied on the fiscal year 2008 financial statements of a 
Mexican producer of welded steel pipe, products in the same general 
category of merchandise as copper pipe and tube. Id. at 8. Petitioners 
indicated that they calculated surrogate financial ratios using the 
financial statements of the most comparable company in Mexico during 
the most recent period for which data were available. See Petitions at 
33, footnote 35. Specifically, Petitioners stated that the data sourced 
from this Mexican producer's financial statements was the best 
available surrogate for estimating the SG&A and financial expense rates 
because, in addition to producing and selling circular welded non-alloy 
pipe, this Mexican producer was also involved in the sale and 
distribution of seamless refined copper tube in the Mexican market. See 
Petitions at 33, footnote 35;

[[Page 55198]]

see also Supplement to the Petitions, dated October 13, 2009, at 29.
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    \2\ Petitioners excluded from these import statistics imports 
from countries previously determined by the Department to be NME 
countries, imports from Indonesia, the Republic of Korea, and 
Thailand as the Department has previously excluded prices from these 
countries because they maintain broadly available, non-industry-
specific export subsidies, and imports labeled as being from 
``unspecified countries.''
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    Based upon a comparison of the prices of the foreign like product 
in the home market to the calculated COP of the product, we find 
reasonable grounds to believe or suspect that sales of the foreign like 
product were made below the COP, within the meaning of section 
773(b)(2)(A)(i) of the Act. Accordingly, the Department is initiating a 
country-wide cost investigation.

Normal Value Based on Constructed Value

    Because it alleged sales below cost, pursuant to sections 
773(a)(4), 773(b) and 773(e) of the Act, Petitioners calculated NV 
based on constructed value (``CV''). Petitioners calculated CV using 
the same COM, SG&A, financial expense and packing figures used to 
compute the COP. Petitioners then added a profit rate based on the 
fiscal year 2008 financial statements of a Mexican producer of welded 
steel pipe. Id.

Fair-Value Comparisons

    Based on the data provided by Petitioners, there is reason to 
believe that imports of copper pipe and tube from the PRC and Mexico 
are being, or are likely to be, sold in the United States at less than 
fair value. Based on a comparison of EPs and NV calculated in 
accordance with section 773(c) of the Act, the estimated dumping margin 
for copper pipe and tube from the PRC is 60.5 percent. See PRC 
Initiation Checklist at 10; see also Supplement to the PRC Petition, 
dated October 15, 2009, at Exhibit W. Based on a comparison of EPs and 
CV calculated in accordance with section 773(a)(4) of the Act, the 
estimated dumping margins for copper pipe and tube from Mexico range 
from 76.5 percent to 85.7 percent. See Mexico Initiation Checklist at 
10, Supplement to the Petitions, dated October 13, 2009, at 31 and 
Supplement to the Petitions, dated October 16, 2009 at 3-4, and 
Exhibits 55 and 56.

Initiation of Antidumping Investigations

    Based upon the examination of the Petitions on copper pipe and tube 
from the PRC and Mexico, the Department finds that the Petitions meet 
the requirements of section 732 of the Act. Therefore, we are 
initiating antidumping duty investigations to determine whether imports 
of copper pipe and tube from the PRC and Mexico 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 and 19 CFR 
351.205(b)(1), unless postponed, we will make our preliminary 
determinations no later than 140 days after the date of these 
initiations.

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). See Withdrawal of the Regulatory Provisions Governing 
Targeted Dumping in Antidumping Duty Investigations, 73 FR 74930 
(December 10, 2008). 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.'' See 
id. at 74931.
    In order to accomplish this objective, if any interested party 
wishes to make a targeted- dumping allegation in either 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 country-specific preliminary determination.

Respondent Selection

The PRC

    For this investigation, the Department will request quantity and 
value information from all known exporters and producers identified 
with complete contact information in the Petitions, and Supplement to 
the Petitions, dated October 13, 2009, at 13-15. 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. 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); Initiation of Antidumping Duty Investigation: Certain Artist 
Canvas From the People's Republic of China, 70 FR 21996, 21999 (April 
28, 2005). The Department will post the quantity and value 
questionnaire along with the filing instructions on the Import 
Administration website at https://ia.ita.doc.gov/ia-highlights-and-news.html and a response to the quantity and value questionnaire is due 
no later than November 10, 2009.

Mexico

    For this investigation, the Department intends to select 
respondents based on U.S. Customs and Border Protection (``CBP'') data 
for U.S. imports under the Harmonized Tariff Schedule of the United 
States (``HTSUS'') numbers 7411.10.1030 and 7411.10.1090, the two HTSUS 
categories most specific to the subject merchandise, during the POI. We 
intend to release the CBP data under Administrative Protective Order 
(``APO'') to all parties with access to information protected by APO 
within five days of publication of this Federal Register notice and 
make our decision regarding respondent selection within 20 days of 
publication of this notice. The Department invites comments regarding 
the CBP data and respondent selection within ten days of publication of 
this Federal Register notice.
    Interested parties must submit applications for disclosure under 
APO in accordance with 19 CFR 351.305. Instructions for filing such 
applications may be found on the Department's website at https://ia.ita.doc.gov/apo.

Separate Rates

    In order to obtain separate-rate status in NME investigations, 
exporters and producers must submit a separate-rate status application. 
See Policy Bulletin 05.1: Separate-Rates Practice and Application of 
Combination Rates in Antidumping Investigations involving Non-Market 
Economy Countries (April 5, 2005) (``Separate Rates and Combination 
Rates Bulletin''), available on the Department's website at https://ia.ita.doc.gov/policy/bull05-1.pdf. Based on our experience in 
processing the separate-rate applications in previous antidumping duty 
investigations, we have modified the application for this investigation 
to make it more administrable and easier for applicants to complete. 
See, e.g., Initiation of Antidumping Duty Investigation: Certain New 
Pneumatic Off-the-Road Tires From the People's Republic of China, 72 FR 
43591, 43594-95 (August 6, 2007). The specific requirements for 
submitting the separate-rate application in this investigation are 
outlined in detail in the application itself, which will be available 
on the Department's website 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

[[Page 55199]]

will be due 60 days after publication of this initiation notice. For 
exporters and producers who submit a separate-rate status application 
and subsequently are selected as mandatory respondents, these exporters 
and producers will no longer be eligible for consideration for separate 
rate status unless they respond to all parts of the questionnaire as 
mandatory respondents. As noted in the ``Respondent Selection'' section 
above, the Department requires that 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. The quantity and value 
questionnaire will be available on the Department's website at https://ia.ita.doc.gov/ia-highlights-and-news.html on the date of the 
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 and Combination Rates Bulletin 
states:
    {w{time} hile continuing the practice of assigning separate rates 
only to exporters, all separate rates that the Department will now 
assign in its NME investigations will be specific to those producers 
that supplied the exporter during the period of investigation. Note, 
however, that one rate is calculated for the exporter and all of the 
producers which supplied subject merchandise to it during the period of 
investigation. This practice applies both to mandatory respondents 
receiving an individually calculated separate rate as well as the pool 
of non-investigated firms receiving the weighted-average of the 
individually calculated rates. This practice is referred to as the 
application of ``combination rates'' because such rates apply to 
specific combinations of exporters and one or more producers. The cash-
deposit rate assigned to an exporter will apply only to merchandise 
both exported by the firm in question and produced by a firm that 
supplied the exporter during the period of investigation. See Separate 
Rates and Combination Rates Bulletin, at 6 (emphasis added).

Distribution of Copies of the Petitions

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

ITC Notification

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

Preliminary Determinations by the ITC

    The ITC will preliminarily determine, no later than November 16, 
2009, whether there is a reasonable indication that imports of copper 
pipe and tube from the PRC and Mexico are materially injuring, or 
threatening material injury to a U.S. industry. A negative ITC 
determination with respect to any country will result in the 
investigation being terminated for that country; otherwise, these 
investigations will proceed according to statutory and regulatory time 
limits.
    This notice is issued and published pursuant to section 777(i) of 
the Act.

    Dated: October 20, 2009.
Ronad K. Lorentzen,
Acting Assistant Secretary for Import Administration.

Appendix I

Scope of the Investigations

    For the purpose of these investigations, the products covered are 
all seamless circular refined copper pipes and tubes, including redraw 
hollows, greater than or equal to 6 inches (152.4 mm) in length and 
measuring less than 12.130 inches (308.102 mm) (actual) in outside 
diameter (``OD''), regardless of wall thickness, bore (e.g., smooth, 
enhanced with inner grooves or ridges), manufacturing process (e.g., 
hot finished, cold-drawn, annealed), outer surface (e.g., plain or 
enhanced with grooves, ridges, fins, or gills), end finish (e.g., plain 
end, swaged end, flared end, expanded end, crimped end, threaded), 
coating (e.g., plastic, paint), insulation, attachments (e.g., plain, 
capped, plugged, with compression or other fitting), or physical 
configuration (e.g., straight, coiled, bent, wound on spools).
    The scope of these investigations covers, but is not limited to, 
seamless refined copper pipe and tube produced or comparable to the 
American Society for Testing and Materials (``ASTM'') ASTM-B42, ASTM-
B68, ASTM-B75, ASTM-B88, ASTM-B88M, ASTM-B188, ASTM-B251, ASTM-B251M, 
ASTM-B280, ASTM-B302, ASTM-B306, ASTM-359, ASTM-B743, ASTM-B819, and 
ASTM-B903 specifications and meeting the physical parameters described 
therein. Also included within the scope of these investigations are all 
sets of covered products, including ``line sets'' of seamless refined 
copper tubes (with or without fittings or insulation) suitable for 
connecting an outdoor air conditioner or heat pump to an indoor 
evaporator unit. The phrase ``all sets of covered products'' denotes 
any combination of items put up for sale that is comprised of 
merchandise subject to the scope.
    ``Refined copper'' is defined as: (1) metal containing at least 
99.85 percent by weight of copper; or (2) metal containing at least 
97.5 percent by weight of copper, provided that the content by weight 
of any other element does not exceed the following limits:

------------------------------------------------------------------------
                                                       LIMITING CONTENT
                       ELEMENT                         PERCENT BY WEIGHT
------------------------------------------------------------------------
Ag - Silver.........................................                0.25
As - Arsenic........................................                 0.5
Cd - Cadmium........................................                 1.3
Cr - Chromium.......................................                 1.4
Mg - Magnesium......................................                 0.8
Pb - Lead...........................................                 1.5
S - Sulfur..........................................                 0.7
Sn - Tin............................................                 0.8
Te - Tellurium......................................                 0.8
Zn - Zinc...........................................                 1.0
Zr - Zirconium......................................                 0.3
Other elements (each)...............................                 0.3
------------------------------------------------------------------------

    Excluded from the scope of these investigations are all seamless 
circular hollows of refined copper less than 12 inches in length whose 
OD (actual) exceeds its length.
    The products subject to these investigations are currently 
classifiable under subheadings 7411.10.1030 and 7411.10.1090 of the 
Harmonized Tariff Schedule of the United States (``HTSUS''). Products 
subject to these investigations may also enter under HTSUS subheadings 
7407.10.1500, 7419.99.5050, 8415.90.8065, and 8415.90.8085. Although 
the HTSUS subheadings are provided for convenience and customs 
purposes, the written description of the scope of these investigations 
is dispositive.
[FR Doc. E9-25855 Filed 10-26-09; 8:45 am]
BILLING CODE 3510-DS-S