Initiation of Antidumping Duty Investigation: Carbon Steel Pipe Nipples from Mexico

DEPARTMENT OF COMMERCE

International Trade Administration

[A-201-818]

Initiation of Antidumping Duty Investigation: Carbon Steel Pipe

Nipples from Mexico

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: September 26, 1994.

FOR FURTHER INFORMATION CONTACT: Michelle Frederick or John Brinkmann,

Office of Antidumping Investigations, Import Administration,

International Trade Administration, U.S. Department of Commerce, 14th

Street and Constitution Avenue NW., Washington, D.C. 20230; telephone:

(202) 482-0186 or (202) 482-5288, respectively.

INITIATION OF INVESTIGATION:

The Petition

On August 31, 1994, we received a petition filed in proper form by

the U.S. Pipe Nipples Group (petitioner). At the request of the

Department of Commerce (the Department), petitioner filed a supplement

to support and clarify the petition's data on September 16, 1994. In

accordance with 19 CFR 353.12 (1994), petitioner alleges that carbon

steel pipe nipples (pipe nipples) from 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 Tariff Act of 1930, as amended (the Act),

and that these imports are materially injuring, or threaten material

injury to, a U.S. industry.

Petitioner states that it has standing to file the petition because

it is an interested party, as defined under section 771(9)(C) of the

Act, and because the petition is filed on behalf of the U.S. industry

producing the product subject to this investigation. If any interested

party, as described under paragraphs (C), (D), (E), or (F) of section

771(9) of the Act, wishes to register support for, or opposition to,

this petition, such party should file a written notification with the

Assistant Secretary for Import Administration. Under the Department's

regulations, any producer or reseller seeking exclusion from a

potential antidumping duty order must submit its request for exclusion

within 30 days of the date of publication of this notice. The

procedures and requirements regarding the filing of such requests are

contained in 19 CFR 353.14.

Scope of Investigation

The products covered by this investigation are carbon steel pipe

nipples, both finished and unfinished, defined as cut carbon steel pipe

having a maximum length of 12 inches. Unfinished pipe nipples (nipple

blanks) have not been subjected to any machining following the cutting

of the pipe. Finished pipe nipples have been machined after the

cutting, including, but not limited to, the following processes:

reaming/deburring, chamfering, and/or threading. The type of finish on

one end of a pipe nipple need not be the same as the finish on the

other end. For threaded pipe nipples, threading is performed along the

outside diameter to permit fastening of the pipe nipple to other

components with a matching inside diameter thread.

Pipe nipples manufactured from plain (black), galvanized, welded

and seamless carbon steel pipe are included within the scope of this

investigation.

The products under investigation are currently classifiable under

subheading 7307.99.5015 of the Harmonized Tariff Schedule of the United

States (HTSUS). Although the HTSUS subheading is provided for

convenience and customs purposes, our written description of the scope

of this investigation is dispositive.

United States Price and Foreign Market Value

Petitioner based U.S. price (USP) on F.O.B. U.S. port price lists

(for November 1993 and July 1994) obtained for pipe nipples produced by

a Mexican manufacturer. Petitioner calculated USP by subtracting the

estimated cost of shipping expenses based on the percentage difference

between customs value and C.I.F. value for pipe nipples from Mexico.

Because petitioner provided home market price quotes from 1994, the

Department is basing USP on the 1994 prices. We recalculated USP to

include value-added taxes (VAT) in accordance with section 772(d)(1)(C)

of the Act. In making our adjustment for VAT, we followed the

instructions of the United States Court of International Trade (CIT) in

Federal Mogul Corp. v. United States, 834 F.Supp. 1391 (CIT 1993). We

also deducted the amount of tax due solely to price deductions in the

original tax base. By making this additional tax adjustment, we avoid a

distortion that could cause the creation of a dumping margin even where

pre-tax dumping is zero. For discussion of this adjustment see Final

Results of Administrative Review: Certain Industrial Forklifts from

Japan, (59 FR 1374, January 10, 1994) and Final Determination of Sales

at Less Than Fair Value: Certain Stainless Steel Wire Rods from France,

(58 FR 68865, December 29, 1993).

Petitioner based foreign market value (FMV) on a home market price

list for identical merchandise, exclusive of VAT, obtained from a

Mexican manufacturer of pipe nipples. These prices are August 1994 ex-

factory prices. We recalculated FMV to include VAT. FMV was converted

to U.S. dollars based on the New York Federal Reserve's quarterly

exchange rate for the period July 1 through September 30, 1994.

Petitioner also supplied information on constructed value. Because

petitioner was able to provide information on home market sales, and

because of the regulatory preference for a home market price-to-price

comparison over constructed value, we based FMV for purposes of this

initiation notice on the home market price-to-price comparison (19 CFR

353.12(b)(7) and 19 CFR 353.48).

The range of alleged dumping margins of pipe nipples from Mexico,

based on a home market price-to-price comparison, is from 1.71 to 92.64

percent.

Initiation of Investigation

We have examined the petition for pipe nipples from Mexico, as

amended, and have found that it meets the requirements of section

732(b) of the Act. Therefore, we are initiating an antidumping duty

investigation to determine whether imports of pipe nipples from Mexico

are being, or are likely to be, sold in the United States at less than

fair value. If this investigation proceeds normally, we will make our

preliminary determination by February 7, 1995.

International Trade Commission (ITC) Notification

Section 732(d) of the Act requires us to notify the ITC of these

actions and we have done so.

Preliminary Determinations by the ITC

The ITC will determine by October 17, 1994, whether there is a

reasonable indication that imports of pipe nipples from Mexico are

materially injuring, or threaten material injury to, a U.S. industry.

Pursuant to section 733(a) of the Act, a negative ITC determination in

this investigation will result in the termination of this

investigation; otherwise, the investigation will proceed according to

statutory and regulatory time limits.

This notice is published pursuant to section 732(c)(2) of the Act

and 19 CFR 353.13(b).

Dated: September 20, 1994.

Susan G. Esserman,

Assistant Secretary for Import Administration.

[FR Doc. 94-23768 Filed 9-23-94; 8:45 am]

BILLING CODE 3510-DS-P