Circular Welded Carbon Quality Steel Line Pipe from the People's Republic of China: Notice of Amended Final Affirmative Countervailing Duty Determination and Notice of Countervailing Duty Order

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

Based on affirmative final determinations by the Department of Commerce (the Department) and the International Trade Commission (ITC), the Department is issuing a countervailing duty order on certain circular welded carbon quality steel line pipe (line pipe) from the People's Republic of China (PRC). On January 7, 2009, the ITC notified the Department of its affirmative determination of material injury to a U.S. industry. See Circular Welded Carbon Quality Steel Line Pipe from China, USITC Pub. 4055, Inv. Nos. 701-TA-455 (Final) (January 2009).

EFFECTIVE DATE:

January 23, 2009.

FOR FURTHER INFORMATION CONTACT:

John Conniff, AD/CVD Operations, Office 3, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-1009.

SUPPLEMENTARY INFORMATION:

Case History

On November 24, 2008, the Department published its final determination in the countervailing duty investigation of line pipe from the PRC. See Circular Welded Carbon Quality Steel Line Pipe from the People's Republic of China: Final Affirmative Countervailing Duty Determination, 73 FR 70961 (November 24, 2008) (Final Determination).

On January 7, 2009, the ITC notified the Department of its final determination pursuant to sections 705(b) (1) (A) (i) and 735(b) (1) (A) (i) of the Tariff Act of 1930, as amended (the Act), that an industry in the United States is materially injured by reason of subsidized imports of subject merchandise from the PRC. See Circular Welded Carbon Quality Steel Line Pipe from China, USITC Pub. 4055, Inv. Nos. 701-TA-455 (Final) (January 2009).

Scope of Order

The merchandise covered by this order is circular welded carbon quality steel pipe of a kind used for oil and gas pipelines (welded line pipe), not more than 406.4 mm (16 inches) in outside diameter, regardless of wall thickness, length, surface finish, end finish or stenciling.

The term “carbon quality steel” includes both carbon steel and carbon steel mixed with small amounts of alloying elements that may exceed the individual weight limits for non alloy steels imposed in the Harmonized Tariff Schedule of the United States (HTSUS). Specifically, the term “carbon quality” includes products in which (1) iron predominates by weight over each of the other contained elements, (2) the carbon content is 2 percent or less by weight and (3) none of the elements listed below exceeds the quantity by weight respectively indicated:

(i) 2.00 percent of manganese,

(ii) 2.25 percent of silicon,

(iii) 1.00 percent of copper,

(iv) 0.50 percent of aluminum,

(v) 1.25 percent of chromium,

(vi) 0.30 percent of cobalt,

(vii) 0.40 percent of lead,

(viii) 1.25 percent of nickel,

(ix) 0.30 percent of tungsten,

(x) 0.012 percent of boron,

(xi) 0.50 percent of molybdenum,

(xii) 0.15 percent of niobium,

(xiii) 0.41 percent of titanium,

(xiv) 0.15 percent of vanadium, or

(xv) 0.15 percent of zirconium.

Welded line pipe is normally produced to specifications published by the American Petroleum Institute (API) (or comparable foreign specifications) including API A-25, 5LA, 5LB, and X grades from 42 and above, and/or any other proprietary grades or non-graded material. Nevertheless, all pipe meeting the physical description set forth above that is of a kind used in oil and gas pipelines, including all multiple-stenciled pipe with an API welded line pipe stencil is covered by the scope of this order.

Excluded from this scope are pipes of a kind used for oil and gas pipelines that are multiple-stenciled to a standard and/or structural specification and have one or more of the following characteristics: is 32 feet in length or less; is less than 2.0 inches (50 mm) in outside diameter; has a galvanized and/or painted surface finish; or has a threaded and/or coupled end finish. (The term “painted” does not include coatings to inhibit rust in transit, such as varnish, but includes coatings such as polyester.)

The welded line pipe products that are the subject of this order are currently classifiable in the HTSUS under subheadings 7306.19.10.10, 7306.19.10.50, 7306.19.51.10, and 7306.19.51.50. While HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of this order is dispositive.

Amendment to the Final Determination

In accordance with sections 705(d) and 777(i) (1) of the Act, on November 24, 2008, the Department published its notice of final affirmative countervailing duty determination in the countervailing duty investigation of line pipe from the PRC. See Final Determination. On December 1, 2008, Maverick Tube Corporation (Maverick), one of the two petitioners in the investigation, and (Huludao Seven Star Group), Huludao Steel Pipe Industrial Co. Ltd. (Huludao Steel Pipe), and Huludao Bohai Oil Pipe Industrial Co. Ltd. (Huludao Bohai), the respondent, (collectively, Huludao) submitted timely ministerial error allegations with respect to the Final Determination. On December 5, 2008, Maverick submitted rebuttal comments to the respondent's ministerial error allegation and on December 8, 2008, United States Steel Corporation, the other petitioner in the investigation (collectively petitioners), also submitted comments regarding respondent's ministerial error allegations.

In accordance with 19 CFR 351.224(e), on January 12, 2009, the Department issued its Ministerial Error Correction Memo addressing the parties' ministerial error allegations. As discussed in the memorandum, the Department accepted some of the allegations as ministerial errors and stated that it would make those corrections by amending the Final Determination. See Memorandum to Stephen J. Claeys, Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations, from Melissa G. Skinner, Director, Office 3 Operations, regarding “Final Determination Ministerial Error Allegations” (January 12, 2009) (Ministerial Error Memorandum).

After analyzing all interested party comments and rebuttals, we have determined, in accordance with 19 CFR 351.224 (e), that we made ministerial errors in our calculations performed for the final determination. As a result of correcting for these errors, the countervailing duty calculated for the Huludao Companies has changed from 35.63 percent to 31.29 percent. There was no change to the countervailing duty calculated for Liaoning Northern Steel Pipe Co., Ltd.

Section 705(c)(5)(A) of the Act states that for companies not investigated, we will determine an all-others rate by weighting the individual company subsidy rate of each of the companies investigated by each company's exports of the subject merchandise to the United States. The all-others rate may not include zero and de minimis net subsidy rates, or any rates based solely on the facts available. Notwithstanding the language of section 705(c)(1)(B)(i)(I) of the Act, we have not calculated the all-others rate by weight averaging the rates of the Huludao Companies and Northern Steel because doing so risks disclosure of proprietary information. Therefore, for the all-others rate, we have calculated a simple average of the two responding firms' rates. In accordance with 19 CFR 351.224 (e), we are amending the subsidy rates of line pipe from the PRC. The revised subsidy rates are listed in the chart below.

Countervailing Duty Order

On January 7, 2009, in accordance with section 705(d) of the Act, the ITC notified the Department of its final determination that the industry in the United States producing line pipe is materially injured within the meaning of section 705(b) (1)(A)(i) of the Act by reason of subsidized imports of line pipe from the PRC. Therefore, countervailing duties will be assessed on all unliquidated entries of line pipe from the PRC entered or withdrawn from warehouse, for consumption, on or after September 9, 2008, the date on which the Department published its preliminary affirmative countervailing duty determination in the Federal Register. See Circular Welded Line Pipe from the People's Republic of China: Preliminary Affirmative Countervailing Duty Determination, 73 FR 52297 (September 9, 2008).

In accordance with section 706 of the Act, the Department will direct CBP to continue to suspend liquidation, effective the date of publication of this order in the Federal Register and to assess, upon further advice by the Department pursuant to section 706(a)(1) of the Act, countervailing duties for each entry of the subject merchandise in an amount based on the amended net countervailable subsidy rates for the subject merchandise as noted above. Further, with respect to Huludao, we are directing CBP to require a cash deposit for such entries of subject merchandise in the amount indicated above that are entered, or withdrawn from warehouse, for consumption on or after the publication date of this amended final determination in the Federal Register. We are further directing CBP to grant a refund for any over collection on entries entered, or withdrawn from warehouse, for consumption on or after the publication date of the Final Determination and on or before the publication date of the amended final determination and order in the Federal Register, provided the importer makes such a request pursuant to 19 USC § 1520(a)(4).

Regarding the rate applied to all other companies not individually investigated for the amended final, we are directing CBP to require a cash deposit for such entries of subject merchandise in the amount indicated above that are entered, or withdrawn from warehouse, for consumption on or after the publication date of the amended final determination in the Federal Register. We are further directing CBP to grant a refund for any over collection on entries entered, or withdrawn from warehouse, for consumption on or after the publication date of the Final Determination and on or before the publication date of the amended final determination in the Federal Register, provided the importer makes such a request pursuant to 19 USC § 1520(a)(4).

This notice constitutes the countervailing duty order with respect to line pipe from the PRC, pursuant to section 706(a) of the Act. Interested parties may contact the Department's Central Records Unit, Room 1117 of the Main Commerce Building, for copies of an updated list of countervailing duty orders currently in effect.

This order is issued and published in accordance with section 736(a) of the Act, 19 CFR 351.211(b) and 19 CFR 351.224(e).