Import Administration, International Trade Administration, Department of Commerce.
Effective Date: June 12, 2013.
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FOR FURTHER INFORMATION CONTACT:
Edythe Artman (Malaysia), Victoria Cho (Thailand), or Fred Baker (Vietnam), at (202) 482-3931, (202) 482-5075, or at (202) 482-2924, respectively, AD/CVD Operations, Office 7, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230.
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On May 16, 2013, the Department of Commerce (the Department) received antidumping duty (AD) Petitions concerning imports of welded stainless pressure pipe (welded stainless pipe) from Malaysia, Thailand, and the Socialist Republic of Vietnam (Vietnam) filed in proper form on behalf of Bristol Metals, LLC, Felker Brothers Corp., and Outokumpu Stainless Pipe, Inc., (collectively, Petitioners).
Petitioners are domestic producers of welded stainless pipe. On May 21, 2013, the Department requested additional information and clarification of certain areas of the Petitions. Petitioners filed responses to these requests on May 24, 2013.
On May 29, 2013, the Department requested additional information and clarification of certain Start Printed Page 35254areas of the Petitions. Petitioners filed responses to these requests on May 30, 2013.
In accordance with section 732(b) of the Tariff Act of 1930, as amended (the Act), Petitioners allege that imports of welded stainless pipe from Malaysia, Thailand, and Vietnam 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. Also, consistent with section 732(b)(1) of the Act, the Petitions are accompanied by information reasonably available to Petitioners supporting their allegations.
The Department finds that Petitioners filed these Petitions on behalf of the domestic industry because Petitioners are interested parties as defined in section 771(9)(C) of the Act. The Department also finds that Petitioners have demonstrated sufficient industry support with respect to the initiation of the AD investigations that Petitioners are requesting. See the “Determination of Industry Support for the Petitions” section below.
Periods of Investigation
Because the Petitions were filed on May 16, 2013, the period of investigation (POI) for the Vietnam investigation is October 1, 2012, through March 31, 2013. The POI for the Malaysia and Thailand investigations is April 1, 2012, through March 31, 2013.
Scope of the Investigations
The product covered by these investigations is welded stainless pipe from Malaysia, Thailand, and Vietnam. For a full description of the scope of the investigations, 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 product 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 June 25, 2013, 5:00 p.m. Eastern Daylight Time, 20 calendar days from the signature date of this notice. All comments must be filed on the records of the Malaysia, Thailand, and Vietnam AD investigations. All comments and submissions to the Department must be filed electronically using Import Administration's Antidumping Countervailing Duty Centralized Electronic Service System (IA ACCESS).
An electronically filed document must be received successfully in its entirety by the Department's electronic records system, IA ACCESS, by the time and date noted above. Documents excepted from the electronic submission requirements must be filed manually (i.e., in paper form) with Import Administration's APO/Dockets Unit, Room 1870, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230, and stamped with the date and time of receipt by the deadline noted above.
The period of scope comments 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 Questionnaires
The Department requests comments from interested parties regarding the appropriate physical characteristics of welded stainless pipe to be reported in response to the Department's AD questionnaires. This information will be used to identify the key physical characteristics of the subject merchandise in order to report the relevant factors and costs of production accurately 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 list of physical characteristics. Specifically, they may provide comments as to which characteristics are appropriate to use as: (1) General product characteristics and (2) product-comparison criteria. We note that it is not always appropriate to use all product characteristics as product-comparison criteria. We base product-comparison criteria on meaningful commercial differences among products. In other words, while there may be some physical product characteristics utilized by manufacturers to describe welded stainless pipe, it may be that only a select few product characteristics take into account commercially meaningful physical characteristics. In addition, interested parties may comment on the order in which the physical characteristics should be used in matching products. 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 AD questionnaires, we must receive comments on product characteristics by June 25, 2013.
Rebuttal comments must be received by July 2, 2013. All comments and submissions to the Department must be filed electronically using IA ACCESS, as referenced above.
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 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 Start Printed Page 35255the same statutory definition regarding the domestic like product,
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.
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 welded stainless pipe constitutes a single domestic like product and we have analyzed industry support in terms of that domestic like product.
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 Investigations,” in Appendix I of this notice. To establish industry support, Petitioners provided their shipments of the domestic like product in 2012, and compared their shipments to the estimated total shipments of the domestic like product for the entire domestic industry.
Because total industry production data for the domestic like product for 2012 is not reasonably available and Petitioners have established that shipments are a reasonable proxy for production data,
we have relied upon the shipment data provided by Petitioners for purposes of measuring industry support.
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 accounting for more than 50 percent of the total shipments 
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).
Second, the domestic producers have met the statutory criteria for industry support under section 732(c)(4)(A)(i) of the Act because the domestic producers who support the Petitions account for at least 25 percent of the total shipments of the domestic like product.
Finally, the domestic producers have met the statutory criteria for industry support under section 732(c)(4)(A)(ii) of the Act because the domestic producers who support the Petitions account for more than 50 percent of the shipments 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 domestic industry within the meaning of section 732(b)(1) of the Act.
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 they are requesting the Department initiate.
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 market penetration; underselling and price depression or suppression; lost sales and revenues; declining production and shipments and reduced capacity utilization; increased inventories; and 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.
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 investigations of imports of welded stainless pipe from Malaysia, Thailand, and Vietnam. The sources of data for the deductions and adjustments relating to U.S. price and NV are discussed in greater detail in the Malaysia Initiation Checklist, Thailand Initiation Checklist, and Vietnam Initiation Checklist.
Petitioners calculated U.S. price based on an average unit value (AUV) compiled from U.S. Department of Commerce import statistics, obtained through ITC's Dataweb, for the POI. Start Printed Page 35256Petitioners used imports from Malaysia under Harmonized Tariff Schedule of the United States (HTSUS) subheading 7306.40.5064 to calculate an AUV because this subheading most closely corresponds to the products for which Petitioners obtained home market prices. Petitioners made no deductions to the AUV they calculated.
Petitioners calculated U.S. price based on an AUV compiled from U.S. Department of Commerce import statistics, obtained through ITC's Dataweb, for the POI. Petitioners used imports from Thailand under HTSUS subheading 7306.40.5064 to calculate an AUV because this subheading most closely corresponds to the products for which Petitioners obtained home market prices. Petitioners made no deductions to the AUV they calculated. Because the NV for Thailand was calculated on the basis of net tons, Petitioners converted the AUV to an AUV per net ton.
Petitioners calculated U.S. price based on an AUV compiled from U.S. Department of Commerce import statistics, obtained through ITC's Dataweb, for the POI. Petitioners used imports from Vietnam under HTSUS subheading 7306.40.5064 to calculate an AUV because this subheading most closely corresponds to the products for which Petitioners calculated a normal value.
Petitioners based NV on reasonably available home market prices of the foreign like product produced and offered for sale in Malaysia by a Malaysia producer of welded stainless pipe.
According to Petitioners, packing charges were included in the prices in both the home market and in the United States, but because home market packing is not significantly different than packing for export to the U.S. market, no adjustment was made for market differences in packing.
Petitioners based NV on home market prices of the foreign like product produced and offered for sale in Thailand by a Thai producer of welded stainless pipe.
According to Petitioners, packing charges were included in the prices in both the home market and in the United States, but because home market packing is not significantly different than packing for export to the U.S. market, no adjustment was made for market differences in packing. Petitioners made no other adjustments to NV.
Petitioners state that the Department has long treated Vietnam as a non-market economy (NME) country.
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 Vietnam 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 (FOPs) valued in a surrogate market-economy country in accordance with section 773(c) of the Act. In the course of this investigation, all parties, including the public, will have the opportunity to provide relevant information related to the issues of Vietnam's NME status and the granting of separate rates to individual exporters.
Petitioners claim that India is an appropriate surrogate country because it is a market economy that is at a comparable level of economic development to Vietnam. Petitioners also believe that India is a significant producer of merchandise under consideration.
Based on the information provided by Petitioners, we believe it is appropriate to use India as a surrogate country for initiation purposes. Interested parties will have the opportunity to submit comments regarding surrogate country selection and will be provided an opportunity to submit publicly available information to value FOPs within 40 days before the scheduled date of the preliminary determination.
Factors of Production
Petitioners based factors of production usage on the consumption rates of Bristol Metals, LLC. Petitioners assert that the experience of Bristol Metals is appropriate for comparison to producers in Vietnam because the production process is the same all over the world. It consists of slowly and carefully forming and welding high-end stainless steel strip into a pipe of the appropriate size.
Valuation of Raw Materials and By-Product
Petitioners valued steel coils and the by-product offset based on reasonably available, public surrogate country data, specifically, Indian import statistics from the Global Trade Atlas (GTA).
Petitioners excluded from these import statistics values from countries previously determined by the Department to be NME countries. Petitioners also excluded imports from Indonesia, the Republic of Korea and Thailand, as the Department has previously excluded imports from these countries because they maintain broadly available, non-industry-specific export subsidies. In addition, Petitioners also excluded certain imports that were labeled as originating from an unspecified country because it is the Department's normal practice to exclude certain imports that were labeled as originating from an “unspecified” country from the surrogate values because the Department cannot be certain that they were not from either an NME country or a country with generally available export subsidies.
Valuation of Direct and Indirect Labor
Petitioners determined labor costs using the labor consumption rates derived from one U.S. producer.
Petitioners valued labor using a 2005 India wage rate from LABORSTA, a labor database compiled by the International Labor Organization (ILO) and disseminated in Chapter 6A of the ILO Yearbook of Labor Statistics. Petitioners adjusted this rate for inflation.
Valuation of Energy
Petitioners determined electricity costs using the electricity consumption rates, in kilowatt hours, derived from one U.S. producer's experience. Petitioners assigned a value to those consumption rates using the Indian electricity rate reported by the Central Electric Authority of the Government of India.
In addition to electricity, Petitioners also included costs for the energy inputs hydrogen, helium, and argon. They valued these factors using data from the Start Printed Page 35257GTA for the period September 2012 through February 2013, the most recent six-month period for which data were available.
Petitioners made no adjustment for packing because they believed packing costs do not differ significantly between the two markets, and it would thus have no effect on the margin.
Valuation of Factory Overhead, Selling, General and Administrative Expenses, and Profit
Petitioners calculated financial ratios (i.e., manufacturing overhead, SG&A, and profit) using the financial statement of Ratnamani Metals & Tube, an Indian producer of comparable merchandise for the year ending March 31, 2012.
Fair Value Comparisons
Based on the data provided by Petitioners, there is reason to believe that imports of welded stainless pipe from Malaysia, Thailand, and Vietnam are being, or are likely to be, sold in the United States at less than fair value. Based on comparisons of EP to NV in accordance with section 773(a)(1) of the Act, the estimated dumping margins for welded stainless pipe from Malaysia range from 22.67 percent to 22.73 percent.
Based on comparisons of EP to NV in accordance with section 773(a)(1) of the Act, the estimated dumping margins for welded stainless pipe from Thailand range from 23.77 percent to 24.01 percent.
Based on comparisons of EP to NV in accordance with section 773(c) of the Act, the estimated dumping margins for welded stainless pipe from Vietnam range from 89.4 percent to 90.8 percent.
Initiation of Antidumping Duty Investigations
Based upon the examination of the Petitions on welded stainless pipe from Malaysia, Thailand and Vietnam, we find that the Petitions meet the requirements of section 732 of the Act. Therefore, we are initiating AD investigations to determine whether imports of welded stainless pipe from Malaysia, Thailand, and Vietnam 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 this initiation.
With respect to Malaysia, Petitioners name seven companies as producers/exporters of welded stainless pipe from Malaysia: Amalgamated Industrial Steel Berbad; Kanzen Tetsu Sdn. Bhd.; Tan Timur Stainless Steel Dan Copper Sdn. Bhd.; Prestar Precision Tube Sdn. Bhd.; Pantech Stainless & Alloy Industries Sdn. Bhd.; K. Seng Seng Corporation Berhad; and Superinox Pipe Industry Sdn. Bhd.
Following standard practice in AD investigations involving market economy countries, in the event the Department determines that the number of known exporters or producers for this investigation is large, the Department may select respondents based on U.S. Customs and Border Protection (CBP) data for U.S. imports of welded stainless pipe from Malaysia. 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.
We intend to 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 seven days of publication of this Federal Register notice for Malaysia, Thailand, and Vietnam.
As to Thailand and Vietnam, although the Department normally relies on import data from CBP to select a limited number of exporters/producers for individual examination in AD investigations, these Petitions name only one company as a producer and/or exporter of welded stainless pipe from Vietnam (Sonha) and two companies as producers and/or exporters of welded stainless pipe from Thailand (Thai-German Products Public Co., Ltd. and Toyo Millennium). We currently know of no additional exporters or producers of subject merchandise from these countries. Accordingly, the Department intends to examine all known exporters of welded stainless steel pipe from Thailand and Vietnam.
In order to obtain separate-rate status in an NME investigation, exporters and producers must submit a separate-rate status application.
The specific requirements for submitting the separate-rate application in the Vietnam investigation are outlined in detail in the application itself, which will be available on the Department's Web site at http://trade.gov/ia/ia-highlights-and-news.html on the date of publication of this initiation notice in the Federal Register. The separate-rate application will be due 60 days after publication of this initiation notice. For exporters and producers who submit a separate-rate status application and have been 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. The Department requires that Vietnam respondents submit a response to the separate-rate application by the deadline in order to receive consideration for separate-rate status.
Use of Combination Rates
The Department will calculate combination rates for certain respondents that are eligible for a separate rate in an NME investigation. The Separate Rates and Combination Rates Bulletin states:
[w]hile continuing the practice of assigning separate rates only to exporters, all separate rates that the Department will now assign in its NME Investigation 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.
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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 version of the Petitions have been provided to the Governments of Malaysia, Thailand, and Vietnam via IA ACCESS. To the extent practicable, we will attempt to provide a copy of the public version of the Petitions to each exporter named in the Petitions, as provided under 19 CFR 351.203(c)(2).
We have notified the ITC of our initiation, as required by section 732(d) of the Act.
Preliminary Determinations by the ITC
The ITC will preliminarily determine no later than July 1, 2013, whether there is a reasonable indication that imports of welded stainless pipe from Malaysia, Thailand, and Vietnam are materially injuring or threatening material injury to a U.S. industry. A negative ITC determination for any country will result in the investigation being terminated with respect to that country; otherwise, these investigations will proceed according to statutory and regulatory time limits.
Submission of Factual Information
On April 10, 2013, the Department published Definition of Factual Information and Time Limits for Submission of Factual Information: Final Rule, 78 FR 21246 (April 10, 2013), which modified two regulations related to AD and countervailing duty (CVD) proceedings: the definition of factual information (19 CFR 351.102(b)(21)), and the time limits for the submission of factual information (19 CFR 351.301). The final rule identifies five categories of factual information in 19 CFR 351.102(b)(21), which are summarized as follows: (i) Evidence submitted in response to questionnaires; (ii) evidence submitted in support of allegations; (iii) publicly available information to value factors under 19 CFR 351.408(c) or to measure the adequacy of remuneration under 19 CFR 351.511(a)(2); (iv) evidence placed on the record by the Department; and (v) evidence other than factual information described in (i)-(iv). The final rule requires any party, when submitting factual information, to specify under which subsection of 19 CFR 351.102(b)(21) the information is being submitted and, if the information is submitted to rebut, clarify, or correct factual information already on the record, to provide an explanation identifying the information already on the record that the factual information seeks to rebut, clarify, or correct. The final rule also modified 19 CFR 351.301 so that, rather than providing general time limits, there are specific time limits based on the type of factual information being submitted. These modifications are effective for all proceeding segments initiated on or after May 10, 2013, and thus are applicable to these investigations. Please review the final rule, available at http://ia.ita.doc.gov/frn/2013/1304frn/2013-08227.txt, prior to submitting factual information in these investigations.
Notification to Interested Parties
Interested parties must submit applications for disclosure under administrative protective order in accordance with 19 CFR 351.305. On January 22, 2008, the Department published Antidumping and Countervailing Duty Proceedings: Documents Submission Procedures; APO Procedures, 73 FR 3634 (Jan. 22, 2008). Parties wishing to participate in these investigations should ensure that they meet the requirements of these procedures (e.g., the filing of letters of appearance as discussed at 19 CFR 351.103(d)).
Any party submitting factual information in an AD/CVD proceeding must certify to the accuracy and completeness of that information.
Parties are hereby reminded that revised certification requirements are in effect for company/government officials as well as their representatives in all segments of any AD/CVD proceedings initiated on or after March 14, 2011.
The formats for the revised certifications are provided at the end of the Interim Final Rule. The Department intends to reject factual submissions in any proceeding segments if the submitting party does not comply with the revised certification requirements.
This notice is issued and published pursuant to section 777(i) of the Act.
Dated: June 5, 2013.
for Import Administration.
Scope of the Investigations
The merchandise covered by these investigations is circular welded austenitic stainless pressure pipe not greater than 14 inches in outside diameter. For purposes of these investigations, references to size are in nominal inches and include all products within tolerances allowed by pipe specifications. This merchandise includes, but is not limited to, the American Society for Testing and Materials (ASTM) A-312 or ASTM A-778 specifications, or comparable domestic or foreign specifications. ASTM A-358 products are only included when they are produced to meet ASTM A-312 or ASTM A-778 specifications, or comparable domestic or foreign specifications.
Excluded from the scope are: (1) Welded stainless mechanical tubing, meeting ASTM A-554 or comparable domestic or foreign specifications; (2) boiler, heat exchanger, superheater, refining furnace, feedwater heater, and condenser tubing, meeting ASTM A-249, ASTM A-688 or comparable domestic or foreign specifications; and (3) specialized tubing, meeting ASTM A269, ASTM A-270 or comparable domestic or foreign specifications.
The subject imports are normally classified in subheadings 7306.40.5005, 7306.40.5040, 7306.40.5062, 7306.40.5064, and 7306.40.5085 of the Harmonized Tariff Schedule of the United States (HTSUS). They may also enter under HTSUS subheadings 7306.40.1010, 7306.40.1015, 7306.40.5042, 7306.40.5044, 7306.40.5080, and 7306.40.5090. The HTSUS subheadings are provided for convenience and customs purposes only; the written description of the scope of these investigations is dispositive.
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[FR Doc. 2013-13963 Filed 6-11-13; 8:45 am]
BILLING CODE 3510-DS-P