ITC Investigation 701-TA-670 is a U.S. International Trade Commission countervailing duty (CVD) proceeding on Freight Rail Coupler Systems and Components from China; Inv. Nos. 701-TA-670 and 731-TA-1570 (Final) from China. It's in the final phase and currently in completed status. No AD/CVD order has been issued from this investigation yet — the case will appear here once Commerce publishes a final determination.
Phase, parties, documents, and full text from USITC IDS
Freight Rail Coupler Systems and Components from China; Inv. Nos. 701-TA-670 and 731-TA-1570 (Final)
Pending ITC investigation (final/completed) on "Freight Rail Coupler Systems and Components".
Parties
Documents
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=== Determination – CVD – Final - China === 30869Federal Register / Vol. 87, No. 98 / Friday, May 20, 2022 / Notices Less-Than-Fair-Value Investigations, 87 FR 3965 (January 26, 2022). 2 See Petitioner’s Letter, ‘‘Certain Steel Nails from India, Sri Lanka, Thailand and Turkey—Petitioner’s Request for Postponement of Preliminary Determinations,’’ dated May 9, 2022. 3 Id. 1 See Freight Rail Coupler Systems and Certain Components Thereof: Preliminary Affirmative Countervailing Duty Determination, 87 FR 12662 (March 7, 2022) (Preliminary Determination), and accompanying Preliminary Decision Memorandum (PDM). 2 See Memorandum, ‘‘Antidumping and Countervailing Duty Investigations of Freight Rail Coupler Systems and Certain Components Thereof from the People’s Republic of China: Post- Preliminary Scope Decision Memorandum,’’ dated April 11, 2022 (Post-Preliminary Scope Decision Memorandum); see also Freight Rail Coupler Systems and Certain Components Thereof from the People’s Republic of China: Initiation of Countervailing Duty Investigation, 86 FR 58878 (October 25, 2021) (Initiation Notice). 3 See Strato’s Letter, ‘‘Strato Scope Case Brief’’; and Wabtec’s Letter, ‘‘Case Brief On Post- Preliminary Scope Decision,’’ both dated April 18, 2022. 4 See Petitioner’s Letter, ‘‘Rebuttal Brief,’’ dated April 25, 2022. 5 See Preliminary Determination, 87 FR at 12663. 6 See Initiation Notice. preliminary determinations are due no later than June 8, 2022. Postponement of Preliminary Determinations Section 733(b)(1)(A) of the Tariff Act of 1930, as amended (the Act), requires Commerce to issue the preliminary determination in an LTFV investigation within 140 days of the date on which Commerce initiated the investigation. However, section 733(c)(1) of the Act permits Commerce to postpone the preliminary determination until no later than 190 days after the date on which Commerce initiated the investigation if: (A) The petitioner makes a timely request for a postponement; or (B) Commerce concludes that the parties concerned are cooperating, that the investigation is extraordinarily complicated, and that additional time is necessary to make a preliminary determination. Under 19 CFR 351.205(e), the petitioner must submit a request for postponement 25 days or more before the scheduled date of the preliminary determination and must state the reasons for the request. Commerce will grant the request unless it finds compelling reasons to deny the request. On May 9, 2022, Mid Continent Steel & Wire, Inc. (the petitioner) submitted a timely request that Commerce postpone the preliminary determinations in these LTFV investigations. 2 The petitioner stated that it requests postponement because: (1) Commerce has not yet received complete responses to its initial and supplemental questionnaires from the respondents in these investigations; and (2) the petitioner has identified deficiencies in the responses already provided by the respondents that must be remedied prior to Commerce’s issuance of its preliminary determinations. 3 For the reasons stated above, and because there are no compelling reasons to deny the request, Commerce, in accordance with section 733(c)(1)(A) of the Act and 19 CFR 351.205(e), is postponing the deadline for these preliminary determinations by 50 days (i.e., 190 days after the date on which these investigations were initiated). As a result, Commerce will issue its preliminary determinations no later than July 28, 2022. In accordance with section 735(a)(1) of the Act and 19 CFR 351.210(b)(1), the deadline for the final determinations in these investigations will continue to be 75 days after the date of the preliminary determinations, unless postponed at a later date. Notification to Interested Parties This notice is issued and published pursuant to section 733(c)(2) of the Act and 19 CFR 351.205(f)(1). Dated: May 16, 2022. Lisa W. Wang, Assistant Secretary for Enforcement and Compliance. [FR Doc. 2022–10934 Filed 5–19–22; 8:45 am] BILLING CODE 3510–DS–P DEPARTMENT OF COMMERCE International Trade Administration [C–570–144] Freight Rail Coupler Systems and Certain Components Thereof From the People’s Republic of China: Final Affirmative Countervailing Duty Determination AGENCY : Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce. SUMMARY : The Department of Commerce (Commerce) determines that countervailable subsidies are being provided to producers and exporters of freight rail coupler systems and certain components thereof (freight rail couplers) from the People’s Republic of China (China) during the period of investigation January 1, 2020, through December 31, 2020. DATES : Applicable May 20, 2022. FOR FURTHER INFORMATION CONTACT : Whitley Herndon, AD/CVD Operations, Office V, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482–6274. SUPPLEMENTARY INFORMATION : Background The petitioner in this investigation is the Coalition of Freight Coupler Producers. In addition to the Government of China, the mandatory respondent in this investigation is Chongqing Tongyao Transportation Equipment Co. (Chongqing Tongyao). On March 7, 2022, Commerce published in the Federal Register the Preliminary Determination of this investigation. 1 The deadline for the final determination of this investigation is May 16, 2022. On April 11, 2022, we issued a post- preliminary decision memorandum addressing a scope issue raised in the context of this and the companion less- than-fair-value (LTFV) investigations, in which we preliminarily found that it was unnecessary to alter the scope stated in the Initiation Notice.2 We received case briefs addressing this preliminary scope decision from two importers of subject merchandise, Strato Inc. (Strato) and Wabtec Corporation (Wabtec), on April 18, 2022,3 and rebuttal comments from the petitioner on April 22, 2022.4 We received no comments or case briefs addressing any of the other findings in the Preliminary Determination; therefore, there is no unpublished Issues and Decision Memorandum accompanying this notice. Period of Investigation The period of investigation is January 1, 2020, through December 31, 2020. Scope of the Investigation The products covered by this investigation are freight rail coupler systems and certain components from China. For a complete description of the scope of this investigation, see the appendix. Scope Comments In Commerce’s Preliminary Determination,5 we set aside a period of time for parties to raise issues regarding product coverage (i.e., scope) in scope case briefs or other written comments on scope issues. As noted above, the petitioner and two interested parties, Strato and Wabtec, commented on the scope of the investigation as it appeared in the Initiation Notice,6 and Post- Preliminary Scope Decision Memorandum. For a summary of the product coverage comments and VerDate Sep<11>2014 19:22 May 19, 2022 Jkt 256001 PO 00000 Frm 00005 Fmt 4703 Sfmt 4703 E:\FR\FM\20MYN1.SGM 20MYN1 khammond on DSKJM1Z7X2PROD with NOTICES 30870 Federal Register / Vol. 87, No. 98 / Friday, May 20, 2022 / Notices 7 The deadline for Commerce’s final determination in the companion LTFV investigation of freight rail coupler systems and certain components from China is May 23, 2022. 8 See Preliminary Determination PDM at 5–16. 9 Id. 10 See Preliminary Determination, 87 FR at 12663. 11 Id., 87 FR at 12662–63. rebuttal comments, and an analysis of all comments received, see the final scope memorandum, which will be issued prior to, or in conjunction with, the final determination in the companion LTFV investigation from China. 7 For the reasons discussed in the final scope memorandum, Commerce is not modifying the scope language as it appeared in the Initiation Notice. See the final ‘‘Scope of the Investigation’’ in the appendix to this notice. Analysis of Subsidy Programs— Adverse Facts Available (AFA) For purposes of this final determination, we relied solely on facts available pursuant to section 776 of the Tariff Act of 1930, as amended (the Act), because neither the Government of China nor the selected mandatory respondent, Chongqing Tongyao, participated in this investigation. Furthermore, as stated in our Preliminary Determination, CRRC Corporation Limited, CRRC Qiqihar Co., Ltd., China Railway Materials Group Co., Ltd., Shaanxi Haiduo Railway Technology Development Co., Ltd., China Railway Materials Group Co., Ltd., and Shaanxi Haiduo Railway Technology Development Co., Ltd. (collectively, non-participating companies) also withheld necessary information that was requested of them by Commerce, failed to provide information within the deadlines established, and significantly impeded this proceeding by failing to respond to Commerce’s quantity and value questionnaires. Therefore, because the mandatory respondent, the non- participating companies, and the Government of China did not cooperate to the best of their abilities in responding to our requests for information in this investigation, we drew adverse inferences in selecting from among the facts otherwise available, in accordance with sections 776(a)–(b) of the Act. Consistent with the Preliminary Determination,8 we continue to apply AFA to determine the appropriate subsidy rates for this investigation. No interested party submitted comments on the subsidy rates selected in the Preliminary Determination. Thus, we made no changes to the subsidy rates for the final determination. A detailed discussion of our application of AFA is provided in the Preliminary Determination.9 All-Others Rate As discussed in the Preliminary Determination, Commerce based the selection of the all-others rate on the countervailable subsidy rate established for the mandatory respondent, in accordance with section 703(d) of the Act.10 Consistent with section 705(c)(5)(A)(ii) of the Act, we made no changes to the selection of the all-others rate for this final determination. Final Determination Commerce determines that the following estimated countervailable subsidy rates exist: Company Subsidy rate (ad valorem) (percent) Chongqing Tongyao Transportation Equipment Co .............................. 265.99 CRRC Corporation Limited ............. 265.99 CRRC Qiqihar Co., Ltd ................... 265.99 China Railway Materials Group Co., Ltd ................................................ 265.99 Shaanxi Haiduo Railway Tech- nology Development Co., Ltd ...... 265.99 All Others ........................................ 265.99 Disclosure The subsidy rate calculations in the Preliminary Determination were based on AFA.11 As noted above, there are no changes to the calculations for this final determination. Thus, no additional disclosure is necessary. Continuation of Suspension of Liquidation In accordance with section 705(c)(4)(A) of the Act, Commerce intends to instruct U.S. U.S. Customs and Border Protection (CBP) to continue to suspend the liquidation of all appropriate entries of subject merchandise, as described in the appendix of this notice, entered, or withdrawn from warehouse, for consumption on or after March 7, 2022, which is the date of publication of the affirmative Preliminary Determination in the Federal Register, at the cash deposit rates indicated above. These suspension of liquidation instructions will remain in effect until further notice. If the U.S. International Trade Commission (ITC) issues a final affirmative injury determination, we intend to issue a countervailing duty order, continue to require a cash deposit of estimated countervailing duties for such entries of subject merchandise in the amounts indicated above, in accordance with section 706(a) of the Act. If the ITC determines that material injury, or threat of material injury, does not exist, this proceeding will be terminated, and all estimated duties deposited as a result of the suspension of liquidation will be refunded or canceled. ITC Notification In accordance with section 705(d) of the Act, we intend to notify the ITC of our final affirmative determination that countervailable subsidies are being provided to producers and exporters of freight rail couplers from China. Because the final determination in this proceeding is affirmative, in accordance with section 705(b) of the Act, the ITC will make its final determination as to whether the domestic industry in the United States is materially injured, or threatened with material injury, by reason of imports of freight rail couplers from China no later than 45 days after our final determination. If the ITC determines that material injury or threat of material injury does not exist, this proceeding will be terminated and all cash deposits will be refunded or canceled, as Commerce determines to be appropriate. If the ITC determines that such injury does exist, Commerce intends to issue a countervailing duty order directing CBP to assess, upon further instruction by Commerce, countervailing duties on all imports of the subject merchandise that are entered, or withdrawn from warehouse, for consumption on or after the effective date of the suspension of liquidation, as discussed above in the ‘‘Continuation of Suspension of Liquidation’’ section. Notification Regarding Administrative Protective Order (APO) In the event that the ITC issues a final negative injury determination, this notice will serve as the only reminder to parties subject to an APO of their responsibility concerning the destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of the return/ destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction. Notification to Interested Parties This determination is issued and published pursuant to sections 705(d) and 777(i) of the Act, and 19 CFR 351.210(c). VerDate Sep<11>2014 19:22 May 19, 2022 Jkt 256001 PO 00000 Frm 00006 Fmt 4703 Sfmt 4703 E:\FR\FM\20MYN1.SGM 20MYN1 khammond on DSKJM1Z7X2PROD with NOTICES 30871Federal Register / Vol. 87, No. 98 / Friday, May 20, 2022 / Notices 1 See Barium Chloride from India: Initiation of Less-Than-Fair-Value Investigation, 87 FR 7100 (February 8, 2022). 2 The petitioner is Chemical Products Corporation. 3 See Petitioner’s Letter, ‘‘Antidumping Investigation of Barium Chloride from India: Petitioner’s Request for Extension of Preliminary Determination,’’ dated April 22, 2022. 4 Id. Dated: May 16, 2022. Lisa W. Wang, Assistant Secretary for Enforcement and Compliance. Appendix Scope of the Investigation The scope of this investigation covers freight rail car coupler systems and certain components thereof. Freight rail car coupler systems are composed of, at minimum, four main components (knuckles, coupler bodies, coupler yokes, and follower blocks, as specified below) but may also include other items (e.g., coupler locks, lock lift assemblies, knuckle pins, knuckle throwers, and rotors). The components covered by the investigation include: (1) E coupler bodies; (2) E/F coupler bodies; (3) F coupler bodies; (4) E yokes; (5) F yokes; (6) E knuckles; (7) F knuckles; (8) E type follower blocks; and (9) F type follower blocks, as set forth by the Association of American Railroads (AAR). The freight rail coupler components are included within the scope of the investigation when imported individually, or in some combination thereof, such as in the form of a coupler fit (a coupler body and knuckle assembled together), independent from a coupler system. Subject freight rail car coupler systems and components are included within the scope whether finished or unfinished, whether imported individually or with other subject or non-subject components, whether assembled or unassembled, whether mounted or unmounted, or if joined with non-subject merchandise, such as other non-subject system parts or a completed rail car. Finishing includes, but is not limited to, arc washing, welding, grinding, shot blasting, heat treatment, machining, and assembly of various components. When a subject coupler system or subject components are mounted on or to other non-subject merchandise, such as a rail car, only the coupler system or subject components are covered by the scope. The finished products covered by the scope of this investigation meet or exceed the AAR specifications of M–211, ‘‘Foundry and Product Approval Requirements for the Manufacture of Couplers, Coupler Yokes, Knuckles, Follower Blocks, and Coupler Parts’’ or AAR M–215 ‘‘Coupling Systems,’’ or other equivalent domestic or international standards (including any revisions to the standard(s)). The country of origin for subject coupler systems and components, whether fully assembled, unfinished or finished, or attached to a rail car, is the country where the subject coupler components were cast or forged. Subject merchandise includes coupler components as defined above that have been further processed or further assembled, including those coupler components attached to a rail car in third countries. Further processing includes, but is not limited to, arc washing, welding, grinding, shot blasting, heat treatment, painting, coating, priming, machining, and assembly of various components. The inclusion, attachment, joining, or assembly of non-subject components with subject components or coupler systems either in the country of manufacture of the in-scope product or in a third country does not remove the subject components or coupler systems from the scope. The coupler systems that are the subject of this investigation are currently classifiable in the Harmonized Tariff Schedule of the United States (HTSUS) statistical reporting number 8607.30.1000. Unfinished subject merchandise may also enter under HTSUS statistical reporting number 7326.90.8688. Subject merchandise attached to finished rail cars may also enter under HTSUS statistical reporting numbers 8606.10.0000, 8606.30.0000, 8606.91.0000, 8606.92.0000, 8606.99.0130, 8606.99.0160, or under subheading 9803.00.5000 if imported as an Instrument of International Traffic. These HTSUS subheadings are provided for convenience and customs purposes only; the written description of the scope of the investigation is dispositive. [FR Doc. 2022–10933 Filed 5–19–22; 8:45 am] BILLING CODE 3510–DS–P DEPARTMENT OF COMMERCE International Trade Administration [A–533–908] Barium Chloride From India: Postponement of Preliminary Determination in the Less-Than-Fair- Value Investigation AGENCY : Enforcement and Compliance, International Trade Administration, Department of Commerce. DATES : Applicable May 20, 2022. FOR FURTHER INFORMATION CONTACT : Fred Baker, AD/CVD Operations, Office VI, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482–2924. SUPPLEMENTARY INFORMATION : Background On February 1, 2022, the U.S. Department of Commerce (Commerce) initiated a less-than-fair-value investigation of imports of barium chloride from India. 1 Currently the preliminary determination is due no later than June 21, 2022. Postponement of Preliminary Determination Section 733(b)(1)(A) of the Tariff Act of 1930 (as amended) (the Act) requires Commerce to issue the preliminary determination in an LTFV investigation within 140 days after the date on which Commerce initiated the investigation. However, section 733(c)(1) of the Act permits Commerce to postpone the preliminary determination until no later than 190 days after the date on which Commerce initiated the investigation if: (A) The petitioner makes a timely request for a postponement; or (B) Commerce concludes that the parties concerned are cooperating, that the investigation is extraordinarily complicated, and that additional time is necessary to make a preliminary determination. Under 19 CFR 351.205(e), the petitioner must submit a request for postponement 25 days or more before the scheduled date of the preliminary determination and must state the reasons for the request. Commerce will grant the request unless it finds compelling reasons to deny the request. On April 22, 2022, the petitioner 2 submitted a timely request that Commerce postpone the preliminary determination in this LTFV investigation.3 The petitioner stated that it requests postponement because Commerce is still collecting information from the respondent, and the petitioner will need additional time to review the responses and prepare comments for Commerce’s consideration. 4 For the reasons stated above and because there are no compelling reasons to deny the request, Commerce, in accordance with section 733(c)(1)(A) of the Act, is postponing the deadline for the preliminary determination by 50 days (i.e., 190 days after the date on which the investigation was initiated). As a result, Commerce will issue its preliminary determination no later than August 10, 2022. In accordance with section 735(a)(1) of the Act and 19 CFR 351.201(b)(1), the deadline for the final determination of this investigation will continue to be 75 days after the date of the preliminary determination, unless postponed at a later date. Notification to Interested Parties This notice is issued and published pursuant to section 733(c)(2) of the Act and 19 CFR 351.205(f)(1). Dated: May 16, 2022. Lisa W. Wang, Assistant Secretary for Enforcement and Compliance. [FR Doc. 2022–10932 Filed 5–19–22; 8:45 am] BILLING CODE 3510–DS–P VerDate Sep<11>2014 19:22 May 19, 2022 Jkt 256001 PO 00000 Frm 00007 Fmt 4703 Sfmt 4703 E:\FR\FM\20MYN1.SGM 20MYN1 khammond on DSKJM1Z7X2PROD with NOTICES ──────────────────────────────────────────────────────────── === USITC PUB 5331 === U.S. International Trade Commission Publication 5331 July 2022 Washington, DC 20436 Freight Rail Coupler Systems and Components from China Investigation Nos. 701-TA-670 and 731-TA-1570 (Final) U.S. International Trade Commission COMMISSIONERS David S. Johanson, Chair Rhonda K. Schmidtlein, Vice Chair Jason E. Kearns Randolph J. Stayin Amy A. Karpel Catherine DeFilippo Staff assigned Address all communications to Secretary to the Commission United States International Trade Commission Washington, DC 20436 Director of Operations Stamen Borisson, Investigator Mitchell A. Semanik, Industry Analyst Kyle Westmoreland, Economist Zahra Bekkal, Accountant Onslow Hall, Statistician Ravi Soopramanien, Attorney Elizabeth Haines, Supervisory Investigator U.S. International Trade Commission Washington, DC 20436 www.usitc.gov Publication 5331 July 2022 Freight Rail Coupler Systems and Components from China Investigation Nos. 701-TA-670 and 731-TA-1570 (Final) CONTENTS Page i Determinations ............................................................................................................................... 1 Views of the Commission ............................................................................................................... 3 Introduction .............................................................................................................. I-1 Background................................................................................................................................ I-1 Statutory criteria ....................................................................................................................... I-2 Organization of report............................................................................................................... I-3 Market summary ....................................................................................................................... I-3 Summary data and data sources ............................................................................................... I-4 Previous and related investigations .......................................................................................... I-4 Nature and extent of subsidies and sales at LTFV .................................................................... I-5 Subsidies ................................................................................................................................ I-5 Sales at LTFV .......................................................................................................................... I-5 The subject merchandise .......................................................................................................... I-6 Commerce’s scope ................................................................................................................ I-6 Tariff treatment ..................................................................................................................... I-7 Section 301 tariff treatment .................................................................................................. I-7 The product ............................................................................................................................... I-8 Description and applications ................................................................................................. I-8 Manufacturing processes .................................................................................................... I-12 Domestic like product issues................................................................................................... I-13 Intermediate products ............................................................................................................ I-14 CONTENTS Page ii Part II: Conditions of competition in the U.S. market........................................................... II-1 U.S. market characteristics....................................................................................................... II-1 U.S. purchasers......................................................................................................................... II-2 Impact of section 301 tariffs .................................................................................................... II-3 Channels of distribution ........................................................................................................... II-4 Geographic distribution ........................................................................................................... II-5 Supply and demand considerations ......................................................................................... II-6 U.S. supply ............................................................................................................................ II-6 U.S. demand ......................................................................................................................... II-8 Substitutability issues............................................................................................................. II-16 Factors affecting purchasing decisions............................................................................... II-17 Purchase factor comparisons of domestic products, subject imports, and nonsubject imports ............................................................................................................................... II-22 Comparison of U.S.-produced and imported FRC .............................................................. II-28 Elasticity estimates ................................................................................................................. II-31 U.S. supply elasticity ........................................................................................................... II-31 U.S. demand elasticity ........................................................................................................ II-32 Substitution elasticity ......................................................................................................... II-32 Part III: U.S. producers’ production, shipments, and employment ...................................... III-1 U.S. producers ......................................................................................................................... III-1 U.S. production, capacity, and capacity utilization ................................................................. III-3 Alternative products ............................................................................................................ III-5 U.S. producers’ U.S. shipments and exports ........................................................................... III-6 U.S. producers’ inventories ..................................................................................................... III-9 U.S. producers’ imports from subject sources ...................................................................... III-10 U.S. producers' purchases of imports from subject sources ................................................ III-10 U.S. employment, wages, and productivity .......................................................................... III-10 CONTENTS Page iii Part IV: U.S. imports, apparent U.S. consumption, and market shares ............................... IV-1 U.S. importers.......................................................................................................................... IV-1 U.S. imports ............................................................................................................................. IV-2 Negligibility ............................................................................................................................ IV-10 Apparent U.S. consumption and market shares ................................................................... IV-11 Quantity ............................................................................................................................. IV-11 Value .................................................................................................................................. IV-12 Maintenance/replacement market ................................................................................... IV-14 OEM market ...................................................................................................................... IV-15 Part V: Pricing data ............................................................................................................. V-1 Factors affecting prices ............................................................................................................ V-1 Raw material costs ............................................................................................................... V-1 Impact of section 232 tariffs................................................................................................. V-3 Transportation costs to the U.S. market .............................................................................. V-3 U.S. inland transportation costs ........................................................................................... V-4 Pricing practices ....................................................................................................................... V-4 Pricing methods .................................................................................................................... V-4 Sales terms and discounts .................................................................................................... V-6 Price leadership .................................................................................................................... V-7 Price data.................................................................................................................................. V-7 Price trends......................................................................................................................... V-19 Price comparisons .............................................................................................................. V-22 Lost sales and lost revenue .................................................................................................... V-22 CONTENTS Page iv Part VI: Financial experience of U.S. producers .................................................................. VI-1 Background.............................................................................................................................. VI-1 Operations on FRC................................................................................................................... VI-2 Net sales ............................................................................................................................ VI-11 Cost of goods sold and gross profit or loss........................................................................ VI-12 SG&A expenses and operating income or loss.................................................................. VI-14 All other expenses and net income or loss ....................................................................... VI-14 Capital expenditures and research and development expenses .......................................... VI-15 Assets and return on assets .................................................................................................. VI-16 Capital and investment ......................................................................................................... VI-17 Threat considerations and information on nonsubject countries .......................... VII-1 The industry in China.............................................................................................................. VII-3 Changes in operations ........................................................................................................ VII-4 Operations on FRC .............................................................................................................. VII-4 Alternative products ........................................................................................................... VII-7 Exports ................................................................................................................................ VII-8 U.S. inventories of imported merchandise .......................................................................... VII-10 U.S. importers’ outstanding orders...................................................................................... VII-11 Third-country trade actions ................................................................................................. VII-11 Information on nonsubject countries .................................................................................. VII-11 CONTENTS Page v Appendixes A. Federal Register notices .................................................................................................. A-1 B. List of hearing witnesses ................................................................................................ B-1 C. Summary data ................................................................................................................. C-1 D. Nonsubject country price data ........................................................................................ D-1 E. U.S. shipments of nonsubject U.S. imports by product type .......................................... E-1 F. Raw material prices ......................................................................................................... F-1 G. U.S. market for complete FRC and FRC components ...................................................... G-1 Note.—Information that would reveal confidential operations of individual concerns may not be published. Such information is identified by brackets in confidential reports and is deleted and replaced with asterisks (***) in public reports. UNITED STATES INTERNATIONAL TRADE COMMISSION Investigation Nos. 701-TA-670 and 731-TA-1570 (Final) Freight Rail Coupler Systems and Components from China DETERMINATIONS On the basis of the record1 developed in the subject investigations, the United States International Trade Commission (“Commission”) determines, pursuant to the Tariff Act of 1930 (“the Act”), that an industry in the United States is not materially injured or threatened with material injury by reason of imports of freight rail coupler systems and components from China, provided for in subheading 8607.30.102 of the Harmonized Tariff Schedule of the United States, that have been found by the U.S. Department of Commerce (“Commerce”) to be sold in the United States at less than fair value (“LTFV”), and to be subsidized by the government of China.3 BACKGROUND The Commission instituted these investigations effective September 29, 2021, following receipt of petitions filed with the Commission and Commerce by the Coalition of Freight Coupler Producers consisting of McConway & Torley LLC (“M&T”), Pittsburgh, PA, and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFLCIO, CLC (“USW”).4 The final phase of the investigations was scheduled by the Commission following notification of preliminary determinations by Commerce that imports of freight rail coupler systems and components from China were subsidized within the meaning of section 703(b) of the Act (19 U.S.C. 1671b(b)) and sold at LTFV 1 The record is defined in § 207.2(f) of the Commission’s Rules of Practice and Procedure (19 CFR 207.2(f)). 2 Unfinished subject merchandise may also be imported under subheading 7326.90.86. Subject merchandise attached to finished rail cars may also be imported under subheadings 8606.10.00, 8606.30.00, 8606.91.00, 8606.92.00, 8606.99.01 or under subheading 9803.00.50 if imported as an Instrument of International Traffic. 3 87 FR 30869 (May 20, 2022) and 87 FR 32121 (May 27, 2022). 4 Initially, Petitioner was M&T and another domestic producer. However, the other domestic producer withdrew, and USW was added to the petitions. within the meaning of 733(b) of the Act (19 U.S.C. 1673b(b)). Notice of the scheduling of the final phase of the Commission’s investigations and of a public hearing to be held in connection therewith was given by posting copies of the notice in the Office of the Secretary, U.S. International Trade Commission, Washington, DC, and by publishing the notice in the Federal Register on March 8, 2022 (87 FR 14037). The Commission conducted its hearing on May 12, 2022. All persons who requested the opportunity were permitted to participate. 3 Views of the Commission Based on the record in the final phase of these investigations, we determine that an industry in the United States is not materially injured or threatened with material injury by reason of imports of freight rail coupler systems and certain components thereof (“FRCs”) found by the U.S. Department of Commerce (“Commerce”) to be sold in the United States at less than fair value (“LTFV”) and to be subsidized by the government of China. I. Background The Coalition of Freight Coupler Producers (“Petitioner”), filed the petitions in these investigations on September 29, 2021. Petitioner consists of McConway and Torley, LLC (“M&T”), a domestic producer of FRCs, and the United Steel, Paper, and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO, CLC (“USW”).1 Representatives for Petitioner appeared at the hearing accompanied by counsel and submitted prehearing and posthearing briefs, and final comments. Three respondent entities participated in these final phase investigations. Strato, Inc. (“Strato”) and Wabtec Corporation (“Wabtec”), U.S. importers of subject merchandise from China, and TTX Company (“TTX”), a U.S. purchaser of FRCs, appeared at the hearing accompanied by counsel and submitted prehearing and posthearing briefs, and final comments.2 U.S. industry data are based on the questionnaire responses from three firms that accounted for all known domestic production of FRCs in 2021.3 U.S. import data are based on the questionnaire responses of six U.S. importers of FRCs from China over the period of investigation, which covers January 2019 through December 2021 (“POI”); these importers accounted for *** percent of subject imports from China in 2021 under Harmonized Tariff Schedule (“HTS”) statistical reporting number 8607.30.1000.4 Data concerning the subject 1 Initially, Petitioner was M&T and another domestic producer, Amsted Rail Co., Inc. (“Amsted”). However, Amsted withdrew and USW was added to the petitions. Confidential Report, Memorandum INV-UU-060 (June 3, 2022), as amended by Memorandum INV-UU-063 (June 13, 2022) (“CR”) and Freight Rail Coupler Systems and Components from China, Inv. Nos. 701-TA-670 and 731-TA-1570 (Final), USITC Pub. 5331 (July 2022) (“PR”) at I-1 n.1. 2 Strato and Wabtec filed separate prehearing briefs and final comments, and a joint posthearing brief. 3 CR/PR at I-4, III-1. 4 CR/PR at IV-1. HTS statistical reporting number 8607.30.1000 is a “basket” category that contains out-of-scope merchandise. Twelve firms identified as importing product under this statistical (Continued...) 4 industry are based on questionnaire responses from three foreign producers that accounted for less than *** percent of FRC production in China in 2020 and approximately *** percent of U.S. imports of subject merchandise from China in 2021.5 II. Domestic Like Product A. In General In determining whether an industry in the United States is materially injured or threatened with material injury by reason of imports of subject merchandise, the Commission first defines the “domestic like product” and the “industry.”6 Section 771(4)(A) of the Tariff Act of 1930, as amended (“the Tariff Act”), defines the relevant domestic industry as the “producers as a whole of a domestic like product, or those producers whose collective output of a domestic like product constitutes a major proportion of the total domestic production of the product.”7 In turn, the Tariff Act defines “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.”8 By statute, the Commission’s “domestic like product” analysis begins with the “article subject to an investigation,” i.e., the subject merchandise as determined by Commerce.9 Therefore, Commerce’s determination as to the scope of the imported merchandise that is subsidized and/or sold at less than fair value is “necessarily the starting point of the Commission’s like product analysis.”10 The Commission then defines the domestic like product (…Continued) reporting number reported that they did not import FRC into the United States. CR/PR at IV-1 n.2. As such, official import statistics for HTS statistical reporting number 8607.30.1000 overstate in-scope FRCs and, thus, we have not relied on official import statistics to measure imports of FRCs. In addition, it is likely that a substantial portion of the imports under HTS statistical reporting number 8607.30.1000 not comprising FRCs are accounted for by these twelve firms and thus that imports reported in response to the questionnaire comprise significantly more than 57.9 percent of total FRC imports. 5 CR/PR at VII-3. 6 19 U.S.C. § 1677(4)(A). 7 19 U.S.C. § 1677(4)(A). 8 19 U.S.C. § 1677(10). 9 19 U.S.C. § 1677(10). The Commission must accept Commerce’s determination as to the scope of the imported merchandise that is subsidized and/or sold at less than fair value. See, e.g., USEC, Inc. v. United States, 34 Fed. App’x 725, 730 (Fed. Cir. 2002) (“The ITC may not modify the class or kind of imported merchandise examined by Commerce.”); Algoma Steel Corp. v. United States, 688 F. Supp. 639, 644 (Ct. Int’l Trade 1988), aff’d, 865 F.3d 240 (Fed. Cir.), cert. denied, 492 U.S. 919 (1989). 10 Cleo Inc. v. United States, 501 F.3d 1291, 1298 (Fed. Cir. 2007); see also Hitachi Metals, Ltd. v. (Continued...) 5 in light of the imported articles Commerce has identified.11 The decision regarding the appropriate domestic like product(s) in an investigation is a factual determination, and the Commission has applied the statutory standard of “like” or “most similar in characteristics and uses” on a case-by-case basis.12 No single factor is dispositive, and the Commission may consider other factors it deems relevant based on the facts of a particular investigation.13 The Commission looks for clear dividing lines among possible like products and disregards minor variations.14 B. Product Description Commerce defined the scope of the imported merchandise under investigation as follows: . . . freight rail car coupler systems and certain components thereof. Freight rail car coupler systems are composed of, at minimum, four main components (knuckles, coupler bodies, coupler yokes, and follower blocks, as specified below) (…Continued) United States, Case No. 19-1289, slip op. at 8-9 (Fed. Cir. Feb. 7, 2020) (the statute requires the Commission to start with Commerce’s subject merchandise in reaching its own like product determination). 11 Cleo, 501 F.3d at 1298 n.1 (“Commerce’s {scope} finding does not control the Commission’s {like product} determination.”); Hosiden Corp. v. Advanced Display Mfrs., 85 F.3d 1561, 1568 (Fed. Cir. 1996) (the Commission may find a single like product corresponding to several different classes or kinds defined by Commerce); Torrington Co. v. United States, 747 F. Supp. 744, 748–52 (Ct. Int’l Trade 1990), aff’d, 938 F.2d 1278 (Fed. Cir. 1991) (affirming the Commission’s determination defining six like products in investigations where Commerce found five classes or kinds). 12 See, e.g., Cleo Inc. v. United States, 501 F.3d 1291, 1299 (Fed. Cir. 2007); NEC Corp. v. Department of Commerce, 36 F. Supp. 2d 380, 383 (Ct. Int’l Trade 1998); Nippon Steel Corp. v. United States, 19 CIT 450, 455 (1995); Torrington Co. v. United States, 747 F. Supp. 744, 749 n.3 (Ct. Int’l Trade 1990), aff’d, 938 F.2d 1278 (Fed. Cir. 1991) (“every like product determination ‘must be made on the particular record at issue’ and the ‘unique facts of each case’”). The Commission generally considers a number of factors, including the following: (1) physical characteristics and uses; (2) interchangeability; (3) channels of distribution; (4) customer and producer perceptions of the products; (5) common manufacturing facilities, production processes, and production employees; and, where appropriate, (6) price. See Nippon, 19 CIT at 455 n.4; Timken Co. v. United States, 913 F. Supp. 580, 584 (Ct. Int’l Trade 1996). 13 See, e.g., S. Rep. No. 96-249 at 90-91 (1979). 14 Nippon, 19 CIT at 455; Torrington, 747 F. Supp. at 748-49; see also S. Rep. No. 96-249 at 90-91 (Congress has indicated that the like product standard should not be interpreted in “such a narrow fashion as to permit minor differences in physical characteristics or uses to lead to the conclusion that the product and article are not ‘like’ each other, nor should the definition of ‘like product’ be interpreted in such a fashion as to prevent consideration of an industry adversely affected by the imports under consideration.”). 6 but may also include other items (e.g., coupler locks, lock lift assemblies, knuckle pins, knuckle throwers, and rotors). The components covered by the investigation include: (1) E coupler bodies; (2) E/F coupler bodies; (3) F coupler bodies; (4) E yokes; (5) F yokes; (6) E knuckles; (7) F knuckles; (8) E type follower blocks; and (9) F type follower blocks, as set forth by the Association of American Railroads (AAR). The freight rail coupler components are included within the scope of the investigation when imported individually, or in some combination thereof, such as in the form of a coupler fit (a coupler body and knuckle assembled together), independent from a coupler system. Subject freight rail car coupler systems and components are included within the scope whether finished or unfinished, whether imported individually or with other subject or non-subject components, whether assembled or unassembled, whether mounted or unmounted, or if joined with non-subject merchandise, such as other non-subject system parts or a completed rail car. Finishing includes, but is not limited to, arc washing, welding, grinding, shot blasting, heat treatment, machining, and assembly of various components. When a subject coupler system or subject components are mounted on or to other non-subject merchandise, such as a rail car, only the coupler system or subject components are covered by the scope. The finished products covered by the scope of this investigation meet or exceed the AAR specifications of M-211, “Foundry and Product Approval Requirements for the Manufacture of Couplers, Coupler Yokes, Knuckles, Follower Blocks, and Coupler Parts” or AAR M-215 “Coupling Systems,” or other equivalent domestic or international standards (including any revisions to the standard(s)). The country of origin for subject coupler systems and components, whether fully assembled, unfinished or finished, or attached to a rail car, is the country where the subject coupler components were cast or forged. Subject merchandise includes coupler components as defined above that have been further processed or further assembled, including those coupler components attached to a rail car in third countries. Further processing includes, but is not limited to, arc washing, welding, grinding, shot blasting, heat treatment, painting, coating, priming, machining, and assembly of various components. The inclusion, attachment, joining, or assembly of non-subject components with subject components or coupler systems either in the country of manufacture of the in-scope product or in a third country does not remove the subject components or coupler systems from the scope.15 15 Freight Rail Coupler Systems and Certain Components Thereof from the People's Republic of China: Final Affirmative Countervailing Duty Determination, 87 Fed. Reg. 30,869, 30,871 (May 20, 2022); (Continued...) 7 FRCs generally comprise four main metal components: (1) knuckles, (2) coupler bodies, (3) coupler yokes, and (4) follower blocks, in addition to ancillary parts (e.g., coupler locks, coupler lock lifters, knuckle pins, knuckle throwers, and rotors). Railcars that rely on cushioned technology do not require coupler yokes or follower blocks.16 The main components of FRCs are manufactured in accordance with Association of American Railroad (“AAR”) standards to ensure FRCs in the United States are interoperable.17 Knuckles are typically metal castings in the shape of a hook that pivot on a vertical hinge between a “locked” and “unlocked” position to be able to interlock with knuckles of adjacent FRCs. Coupler bodies are a metal casting that holds the knuckle and allows it to pivot. The coupler body fits within the coupler yoke, which is the metal casting that attaches the FRC to the freight car. The follower block is a rectangular piece of metal that separates the FRC from the adjacent draft gear of the freight car (designed to absorb some of the forces when connecting railcars).18 FRCs are designed to connect two railcars together by automatically interlocking the knuckles of both FRCs when the railcars are pushed together, eliminating the need for previously required and potentially dangerous manual input. A manually operated lever on the side of a railcar connects to the FRC and is used to unlock the FRC by lifting the knuckle pin, allowing the knuckles to release and the railcars to be uncoupled. Railcars typically use two FRCs, one on each of the front and rear of the railcar, to allow for coupling additional railcars together. In addition to interlocking railcars together, FRCs are also designed to reduce shocks when railcars are in transit or braking.19 C. Arguments of the Parties Petitioner’s Arguments. In the final phase of these investigations, Petitioner has not addressed the issue of the definition of the domestic like product. It argued in the preliminary (…Continued) Freight Rail Coupler Systems and Certain Components Thereof from the People's Republic of China: Final Affirmative Determination of Sales at Less-Than-Fair Value, 87 Fed. Reg. 32,121, 32,123 (May 27, 2022). 16 See importer questionnaire responses of *** and *** at Table III-2a Note; Tr. at 232 (Werner), 308 (Foxx). 17 CR/PR at I-8. AAR standard M-211 covers foundry and product approval requirements for the manufacture of couplers, coupler yokes, knuckles, follower blocks, and coupler parts. AAR standard M- 215 covers complete coupler systems. CR/PR at I-8 n.11. 18 CR/PR at I-8. 19 CR/PR at I-8. 8 phase of these investigations that the Commission should define a single domestic like product consisting of all FRCs, coextensive with Commerce’s scope.20 Respondents’ Arguments. Respondents do not contest the domestic like product definition.21 D. Domestic Like Product Analysis In the preliminary determinations, the Commission defined a single domestic like product, coextensive with Commerce’s scope. It found that all domestically produced FRCs corresponding to the scope definition shared the same overall shape and common features, are generally produced through the same production processes, are generally interchangeable and used to connect and transport railcars, are sold through the same channels of distribution, albeit at appreciably varying prices, and are perceived to be a single product category by market participants.22 It also found that upstream FRC components and downstream finished FRCs belong in a single domestic like product.23 The record of the final phase of these investigations does not contain any new information about the characteristics of FRCs to suggest a different definition is warranted.24 Accordingly, we define a single domestic like product corresponding to Commerce’s scope. III. Domestic Industry The domestic industry is defined as the domestic “producers as a whole of a domestic like product, or those producers whose collective output of a domestic like product constitutes 20 Petitioner’s Postconference Br. at 6. 21 See Strato’s Prehearing Br. at 9-12. Strato, the only respondent to address the domestic like product in these final phase investigations, agrees with the Commission’s finding in the preliminary phase of these investigations that the domestic like product should be “co-extensive with Commerce’s current definition of the class or kind of merchandise subject to investigation.” Id. at 11-12. Strato and Wabtec argued in proceedings before Commerce that it lacked authority to include FRC components incorporated into railcars in third countries within the scope. Had Commerce agreed and modified the scope language by removing FRC components assembled into rail cars in third countries, Strato requested that the Commission should nevertheless continue to include all domestically manufactured FRC components, regardless to whom sold. Id. at 10-12. Commerce subsequently determined not to modify the scope language. 87 Fed. Reg. 30,869-30,870 (May 27, 2022). 22 Freight Rail Coupler Systems and Components from China, Inv. Nos. 701-TA-670 and 731-TA- 1570 (Preliminary), USITC Pub. 5243 (Nov. 2021) (“Preliminary Determinations”) at 9-13. 23 Preliminary Determinations at 13-16. 24 See generally CR/PR at I-8-I-14. 9 a major proportion of the total domestic production of the product.”25 In defining the domestic industry, the Commission’s general practice has been to include in the industry producers of all domestic production of the like product, whether toll-produced, captively consumed, or sold in the domestic merchant market. No party has addressed the definition of the domestic industry in the final phase of these investigations. In the preliminary determinations, the Commission found no evidence of a related party issue and defined a single domestic industry that included all U.S. producers of the domestic like product.26 There is no new evidence in the record of the final phase of these investigations to warrant revisiting the Commission’s definition of domestic industry from the preliminary determinations.27 28 Accordingly, we define a single domestic industry consisting of all U.S. producers of FRCs. IV. Negligible Imports Pursuant to Section 771(24) of the Tariff Act, imports from a subject country of merchandise corresponding to a domestic like product that account for less than 3 percent of all such merchandise imported into the United States during the most recent 12 months for which data are available preceding the filing of the petition shall be deemed negligible.29 Based on data submitted in response to the Commission’s U.S. importer questionnaire, imports from China subject to these antidumping and countervailing duty investigations accounted for *** percent of total U.S. imports of FRCs in the 12-month period (September 25 19 U.S.C. § 1677(4)(A). 26 Preliminary Determinations at 16-18. 27 No domestic producers are related to exporters or U.S. importers of subject merchandise, or directly imported or purchased FRCs from China during the POI. CR/PR at III-2, III-10. 28 In its preliminary determinations, the Commission determined that it lacked sufficient information to conduct an analysis of whether refurbishers of FRCs provide sufficient production-related activities to be included in the domestic industry. Preliminary Determinations at 16-18. In its comments on the draft final phase questionnaires, Wabtec argued that refurbishers of FRCs engage in sufficient production-related activities to be included in the domestic industry, requested that the Commission collect pricing and financial data from refurbishers in these proceedings, and identified nine possible refurbishers of FRCs. See Wabtec’s comments on draft questionnaires, EDIS Doc. No. 762807 (Feb. 2, 2022). Staff sent producer questionnaires to these nine possible refurbishers. Only one of the firms, ***, filed a questionnaire response, albeit with data that was not usable. Accordingly, the three responses provided by domestic producers represent all known U.S. production of FRCs. CR/PR at III-1. 29 19 U.S.C. §§ 1671b(a), 1673b(a), 1677(24)(A)(i), 1677(24)(B); see also 15 C.F.R. § 2013.1 (developing countries for purposes of 19 U.S.C. § 1677(36)). 10 2020 to August 2021) preceding the filing of the petitions.30 Thus, we find that subject imports from China are not negligible for purposes of both the antidumping and countervailing duty investigations. V. No Material Injury by Reason of Subject Imports Based on the record in the final phase of these investigations, we find that an industry in the United States is not materially injured by reason of subject imports of FRCs from China that Commerce has found to be sold in the United States at LTFV and to be subsidized by the government of China. A. Legal Standards In the final phase of antidumping and countervailing duty investigations, the Commission determines whether an industry in the United States is materially injured or threatened with material injury by reason of the imports under investigation.31 In making this determination, the Commission must consider the volume of subject imports, their effect on prices for the domestic like product, and their impact on domestic producers of the domestic like product, but only in the context of U.S. production operations.32 The statute defines “material injury” as “harm which is not inconsequential, immaterial, or unimportant.”33 In assessing whether the domestic industry is materially injured by reason of subject imports, we consider all relevant economic factors that bear on the state of the industry in the United States.34 No single factor is dispositive, and all relevant factors are considered “within the context of the business cycle and conditions of competition that are distinctive to the affected industry.”35 Although the statute requires the Commission to determine whether the domestic industry is “materially injured or threatened with material injury by reason of” unfairly traded imports,36 it does not define the phrase “by reason of,” indicating that this aspect of the injury 30 CR/PR at Table IV-5. 31 19 U.S.C. §§ 1671d(b), 1673d(b). 32 19 U.S.C. § 1677(7)(B). The Commission “may consider such other economic factors as are relevant to the determination” but shall “identify each {such} factor ... and explain in full its relevance to the determination.” 19 U.S.C. § 1677(7)(B). 33 19 U.S.C. § 1677(7)(A). 34 19 U.S.C. § 1677(7)(C)(iii). 35 19 U.S.C. § 1677(7)(C)(iii). 36 19 U.S.C. §§ 1671d(b), 1673d(b). 11 analysis is left to the Commission’s reasonable exercise of its discretion.37 In identifying a causal link, if any, between subject imports and material injury to the domestic industry, the Commission examines the facts of record that relate to the significance of the volume and price effects of the subject imports and any impact of those imports on the condition of the domestic industry. This evaluation under the “by reason of” standard must ensure that subject imports are more than a minimal or tangential cause of injury and that there is a sufficient causal, not merely a temporal, nexus between subject imports and material injury.38 In many investigations, there are other economic factors at work, some or all of which may also be having adverse effects on the domestic industry. Such economic factors might include nonsubject imports; changes in technology, demand, or consumer tastes; competition among domestic producers; or management decisions by domestic producers. The legislative history explains that the Commission must examine factors other than subject imports to ensure that it is not attributing injury from other factors to the subject imports, thereby inflating an otherwise tangential cause of injury into one that satisfies the statutory material injury threshold.39 In performing its examination, however, the Commission need not isolate 37 Angus Chemical Co. v. United States, 140 F.3d 1478, 1484-85 (Fed. Cir. 1998) (“{T}he statute does not ‘compel the commissioners’ to employ {a particular methodology}.”), aff’g, 944 F. Supp. 943, 951 (Ct. Int’l Trade 1996). 38 The Federal Circuit, in addressing the causation standard of the statute, observed that “{a}s long as its effects are not merely incidental, tangential, or trivial, the foreign product sold at less than fair value meets the causation requirement.” Nippon Steel Corp. v. USITC, 345 F.3d 1379, 1384 (Fed. Cir. 2003). This was further ratified in Mittal Steel Point Lisas Ltd. v. United States, 542 F.3d 867, 873 (Fed. Cir. 2008), where the Federal Circuit, quoting Gerald Metals, Inc. v. United States, 132 F.3d 716, 722 (Fed. Cir. 1997), stated that “this court requires evidence in the record ‘to show that the harm occurred “by reason of” the LTFV imports, not by reason of a minimal or tangential contribution to material harm caused by LTFV goods.’” See also Nippon Steel Corp. v. United States, 458 F.3d 1345, 1357 (Fed. Cir. 2006); Taiwan Semiconductor Industry Ass’n v. USITC, 266 F.3d 1339, 1345 (Fed. Cir. 2001). 39 SAA at 851-52 (“{T}he Commission must examine other factors to ensure that it is not attributing injury from other sources to the subject imports.”); S. Rep. 96-249 at 75 (1979) (the Commission “will consider information which indicates that harm is caused by factors other than less- than-fair-value imports.”); H.R. Rep. 96-317 at 47 (1979) (“in examining the overall injury being experienced by a domestic industry, the ITC will take into account evidence presented to it which demonstrates that the harm attributed by the petitioner to the subsidized or dumped imports is attributable to such other factors;” those factors include “the volume and prices of nonsubsidized imports or imports sold at fair value, contraction in demand or changes in patterns of consumption, trade restrictive practices of and competition between the foreign and domestic producers, developments in technology and the export performance and productivity of the domestic industry”); accord Mittal Steel, 542 F.3d at 877. 12 the injury caused by other factors from injury caused by unfairly traded imports.40 Nor does the “by reason of” standard require that unfairly traded imports be the “principal” cause of injury or contemplate that injury from unfairly traded imports be weighed against other factors, such as nonsubject imports, which may be contributing to overall injury to an industry.41 It is clear that the existence of injury caused by other factors does not compel a negative determination.42 Assessment of whether material injury to the domestic industry is “by reason of” subject imports “does not require the Commission to address the causation issue in any particular way” as long as “the injury to the domestic industry can reasonably be attributed to the subject imports.”43 The Commission ensures that it has “evidence in the record” to “show that the harm occurred ‘by reason of’ the LTFV imports,” and that it is “not attributing injury from other sources to the subject imports.” 44 The Federal Circuit has examined and affirmed various Commission methodologies and has disavowed “rigid adherence to a specific formula.”45 40 SAA at 851-52 (“{T}he Commission need not isolate the injury caused by other factors from injury caused by unfair imports.”); Taiwan Semiconductor Industry Ass’n, 266 F.3d at 1345 (“{T}he Commission need not isolate the injury caused by other factors from injury caused by unfair imports ... . Rather, the Commission must examine other factors to ensure that it is not attributing injury from other sources to the subject imports.” (emphasis in original)); Asociacion de Productores de Salmon y Trucha de Chile AG v. United States, 180 F. Supp. 2d 1360, 1375 (Ct. Int’l Trade 2002) (“{t}he Commission is not required to isolate the effects of subject imports from other factors contributing to injury” or make “bright-line distinctions” between the effects of subject imports and other causes.); see also Softwood Lumber from Canada, Inv. Nos. 701-TA-414 and 731-TA-928 (Remand), USITC Pub. 3658 at 100-01 (Dec. 2003) (Commission recognized that “{i}f an alleged other factor is found not to have or threaten to have injurious effects to the domestic industry, i.e., it is not an ‘other causal factor,’ then there is nothing to further examine regarding attribution to injury”), citing Gerald Metals, 132 F.3d at 722 (the statute “does not suggest that an importer of LTFV goods can escape countervailing duties by finding some tangential or minor cause unrelated to the LTFV goods that contributed to the harmful effects on domestic market prices.”). 41 S. Rep. 96-249 at 74-75; H.R. Rep. 96-317 at 47. 42 See Nippon Steel Corp., 345 F.3d at 1381 (“an affirmative material-injury determination under the statute requires no more than a substantial-factor showing. That is, the ‘dumping’ need not be the sole or principal cause of injury.”). 43 Mittal Steel, 542 F.3d at 876 &78; see also id. at 873 (“While the Commission may not enter an affirmative determination unless it finds that a domestic industry is materially injured ‘by reason of’ subject imports, the Commission is not required to follow a single methodology for making that determination ... {and has} broad discretion with respect to its choice of methodology.”), citing United States Steel Group v. United States, 96 F.3d 1352, 1362 (Fed. Cir. 1996) and S. Rep. 96-249 at 75. In its decision in Swiff-Train v. United States, 793 F.3d 1355 (Fed. Cir. 2015), the Federal Circuit affirmed the Commission’s causation analysis as comporting with the Court’s guidance in Mittal. 44 Mittal Steel, 542 F.3d at 873 (quoting from Gerald Metals, 132 F.3d at 722), 877-79. We note that one relevant “other factor” may involve the presence of significant volumes of price-competitive (Continued...) 13 The question of whether the material injury threshold for subject imports is satisfied notwithstanding any injury from other factors is factual, subject to review under the substantial evidence standard.46 Congress has delegated this factual finding to the Commission because of the agency’s institutional expertise in resolving injury issues.47 B. Conditions of Competition and the Business Cycle The following conditions of competition inform our analysis of whether there is material injury by reason of subject imports. 1. Demand Considerations Demand for FRCs is driven by demand for new freight railcars,48 as well as demand for the maintenance/replacement of FRCs for freight railcars already in service.49 The majority of domestic producers’ U.S. shipments of FRCs were to original equipment manufacturers (…Continued) nonsubject imports in the U.S. market, particularly when a commodity product is at issue. In appropriate cases, the Commission collects information regarding nonsubject imports and producers in nonsubject countries in order to conduct its analysis. 45 Nucor Corp. v. United States, 414 F.3d 1331, 1336, 1341 (Fed. Cir. 2005); see also Mittal Steel, 542 F.3d at 879 (“Bratsk did not read into the antidumping statute a Procrustean formula for determining whether a domestic injury was ‘by reason’ of subject imports.”). 46 We provide in our discussion below a full analysis of other factors alleged to have caused any material injury experienced by the domestic industry. 47 Mittal Steel, 542 F.3d at 873; Nippon Steel Corp., 458 F.3d at 1350, citing U.S. Steel Group, 96 F.3d at 1357; S. Rep. 96-249 at 75 (“The determination of the ITC with respect to causation is ... complex and difficult, and is a matter for the judgment of the ITC.”). 48 CR/PR at II-9. New railcar deliveries to the North American market declined by 49.5 percent during the POI, from 58,026 railcars in 2019 to 29,280 railcars in 2021. CR/PR at Table II-7. 49 CR/PR at II-15-II-16. Demand from the maintenance/replacement segment of the market may pertain to FRC components rather than complete FRCs, as information on the record indicates that knuckles are replaced every five to 10 years, coupler bodies and yokes are replaced every 15 to 30 years, and follower blocks are rarely replaced. Petition, Exh. I-11; Tr. at 210 (Lutz). The number of freight railcars owned and operated by class I railroads declined by 10.1 percent during the POI, from 270,378 railcars in 2019 to 243,087 in 2021. CR/PR at Table II-8. Demand in the maintenance/replacement market is driven by several factors, including freight railroad revenue, the number of railcars in storage, and the number of cars that are scrapped or put into storage (maintenance is not conducted on railcars that are scrapped or put into storage). Class I railroad traffic declined over the POI, as indicated by a 5.0 percent decrease in revenue per ton-miles from 2019 (at $1,614.5 billion) to 2021 (at $1,533.9 billion). CR/PR at II-15. The number of railcars that were scrapped increased by 8.3 percent during the POI, from 55,400 railcars in 2019 to 60,000 railcars in 2021. Id. Further, the number of railcars in storage increased irregularly, from *** railcars in 2019 to *** railcars in 2020, and *** railcars in 2021. Id. 14 (“OEMs”) in 2019, while in 2020 and 2021 the majority of their shipments were to the maintenance/replacement segment of the market.50 The majority of U.S. importers’ U.S. shipments of subject imports were to the maintenance/replacement segment, and the majority of their shipments of nonsubject imports were to OEMs.51 FRCs account for between one to three percent of OEM freight railcar production costs,52 but a higher percentage of costs in the maintenance/replacement market.53 Industry participants agreed there are no substitute products for FRCs.54 All FRCs used in North America railcars are manufactured in accordance with AAR standards and therefore completely interoperable – they are used to connect and transport railcars.55 The parties generally agree that the U.S. market for FRCs is subject to business cycles, and that the COVID-19 pandemic disrupted demand.56 Most firms reported that U.S. demand for FRCs fluctuated during the POI.57 Apparent U.S. consumption of FRCs overall during the POI declined by *** percent, from *** pounds in 2019 to *** pounds in 2020 and *** pounds in 2021.58 The record reflects that demand from OEMs decreased to a greater extent than did demand in the maintenance/replacement market.59 Combined U.S. producers’ and U.S. importers’ shipments to the OEMs as a ratio to overall apparent U.S. consumption decreased 50 CR/PR at Table II-2. 51 CR/PR at Table II-4. 52 CR/PR at II-9. 53 Tr. at 114-15 (Mautino, Kaplan). 54 CR/PR at II-16. 55 CR/PR at I-8; Tr. at 6-7 (Pickard) (“These are products that are manufactured to a specification of the American Association of Railroads, so that they can be used interchangeably throughout the North American railroad network … .”), id. at 14, 24 (Mautino); see also CR/PR at I-13. 56 CR/PR at II-9; Strato’s Prehearing Br. at 96, Exh. 12; Wabtec’s Prehearing Br., Exh. 3; TTX’s Posthearing Br., Exh. 1 at 4 n.15; Petitioner’s Prehearing Br. at 7; see also Tr. at 34 (“{W}hile we have always been deemed to be an essential business since COVID-19 started, it did cause a softening in demand for a period of time.”); Tr. at 122 (Mautino) (“Ultimately, there was a spike downward in the pandemic – the initial part of the pandemic area.”). 57 CR/PR at Tables II-5-II-6. 58 CR/PR at Table IV-6. Consumption in both the OEM and maintenance/replacement segments likewise declined from 2019 to 2021, with OEM consumption falling by *** percent and maintenance/replacement consumption falling by a lesser *** percent. CR/PR at Tables IV-8, IV-9. 59 CR/PR at Tables IV-8, IV-9; VI-11 n.11 (***); Tr. at 123 (Pickard) (“So I think the bottom line is maintenance demand stays relatively stable as a general rule and through the POI. And then consistent with what you see in, kind of, industry reports and projections is there's a decrease in new car builds, consistent with the cycle . . . .”) ; see also Strato’s Prehearing Br. at 15 (“The data . . . reveals that the decline in replacement market demand during the POI was ***”); Wabtec’s Prehearing Br. at 11 (“While demand in both channels declined over the POI, the decline in demand in the OEM channel was considerably steeper than in the replacement channel.”). 15 from *** percent in 2019 to *** percent in 2021, whereas combined U.S. producers’ and U.S. importers’ shipments to the maintenance/replacement market as a ratio to overall apparent U.S. consumption increased from *** percent in 2019 to *** percent in 2021.60 2. Supply Considerations The domestic industry consists of three firms (Amsted, Huron, and M&T); an additional firm, Columbia Castings Co., exited the market in 2016.61 During the POI, *** reported plant closings, production curtailments, and deferred maintenance of equipment and software.62 In 2020, *** stopped producing knuckles and coupler bodies.63 M&T has a long-term supply agreement with its former parent company and current U.S. purchaser Trinity Rail Group, LLC (“Trinity”); Trinity agreed to purchase set amounts of FRCs that decrease annually until the agreement’s expiry in 2023.64 The domestic industry was the second largest source of supply to the U.S. market in 2020 and 2021, whereas in 2019 it was the largest source of supply.65 The industry’s market share declined from *** percent in 2019 to *** percent in 2020 and *** percent in 2021.66 Subject imports were the third-largest source of supply to the U.S. market throughout the POI.67 Their market share increased from *** percent in 2019 to *** percent in 2020, then declined to *** percent in 2021. During the POI, U.S. importer of subject merchandise Strato had a long-term supply agreement for FRCs with TTX, the largest owner of railcars in North America, which requires TTX ***.68 Mexico was the leading source of nonsubject imports during the POI; many such imports entered the United States on finished railcars.69 Nonsubject imports were generally the largest 60 CR/PR at Tables IV-8, IV-9. 61 CR/PR at Table III-1; Tr. at 183 (Korzeniowski). 62 CR/PR at Table III-3. 63 ***’s U.S. producer questionnaire response at question II-9. See also Tr. at 195 (Cunkelman). 64 CR/PR at II-10. ***. *** U.S. purchaser questionnaire response at question III-9. In conference testimony, Mr. Korzeniowski of Wabtec indicated his understanding that this agreement, entered into when Trinity sold M&T in late 2018, reduces Trinity’s purchase obligations each year of the agreement “from a beginning of 90 percent down to 70 percent, and then, in 2023, it’s up altogether.” Conf. Tr. at 82. This testimony is *** Petitioners’ Posthearing Br., Exh. 5, at 3, 23. 65 CR/PR at Tables IV-6, C-1. 66 CR/PR at Tables IV-6, C-1. 67 CR/PR at Tables IV-6, C-1. 68 CR/PR at V-6 n.13; Strato’s Prehearing Br. at 40-41. This *** agreement, signed in ***, requires that ***. CR/PR at V-6 n.13. 69 CR/PR at II-7-II-8. There were also some quantities of FRCs shipped from India during the POI. Id. 16 source of supply to the U.S. market during the POI except for 2019, when they were the second-largest source of supply.70 Nonsubject imports’ market share increased from *** percent in 2019 to *** percent in 2020 and *** percent in 2021.71 When asked if they had experienced any supply constraints before and after the filing of the petitions on September 29, 2021, all three U.S. producers, three of six importers, and nine of 13 purchasers reported that they had not experienced supply constraints between January 1, 2019 and September 29, 2021.72 All three U.S. producers reported that they had not experienced supply constraints after the petitions were filed on September 29, 2021, whereas four of six importers and 10 of 12 responding purchasers reported that they had experienced supply constraints after the petitions were filed.73 Reasons cited included generally less available FRC from China, shortages in shipping containers, the pendency of these investigations, and increased lead times.74 3. Substitutability and Other Conditions We find that there is generally a high degree of substitutability between subject imports and domestically produced FRCs, but the choice between domestic FRCs and subject imports is affected to some degree by the use of long-term supply agreements, purchasers’ preferences for certain types or suppliers of FRCs, and quality considerations.75 76 Whether domestically 70 CR/PR at Tables IV-6, C-1. 71 CR/PR at Tables IV-6, C-1. 72 CR/PR at II-8. 73 CR/PR at II-8. 74 CR/PR at II-8. 75 CR/PR at II-16. 76 The parties disagree on the importance of Bedloe technology, which is unique to subject imports, as a factor limiting interchangeability between subject imports and domestically produced FRCs. Respondents argue that certain purchasers, namely TTX and the railroads, prefer products using Bedloe technology to the domestic like product due to their superior quality. See Strato and Wabtec’s Posthearing Br., Exh. 1 at 72-77; TTX’s Prehearing Br. at 26-31; TTX’s Posthearing Br., Exh. 1 at 4-8. Petitioner contends that the record does not support this argument. Petitioner’s Posthearing Br. at 2-3, Exh. 1 at 42. Among the *** railroads that filed a purchaser questionnaire in these final phase investigations, *** indicated that price was not the most important purchasing factor. See purchaser questionnaire responses of *** at question III-23. Only three of 13 responding purchasers identified proprietary technologies (such as Bedloe technology) as a very important purchasing factor and most responding purchasers reported that U.S. and Chinese FRCs were “comparable” on this factor. CR/PR at Tables II-11 and Table II-14. However, we note this group of purchasers includes the largest purchaser of FRCs in 2021, TTX. CR/PR at II-2. Respondents argue that purchasers do not indicate Bedloe technology by name because Strato does not use the term in its marketing efforts and is ***, but know that Strato’s (Continued...) 17 produced or imported, FRCs must meet AAR specifications.77 Most firms reported that subject imports and domestically produced FRCs are always interchangeable.78 Further, most firms reported that FRCs from Mexico were always interchangeable with subject and domestically produced FRCs.79 As noted above, certain large purchasers of FRCs have long-term agreements that require certain percentages of their FRCs be bought from specific suppliers.80 We further find that price is an important factor in purchasing decisions, although other factors, including availability and quality, are also important. Purchasers most frequently cited availability/supply as the first-most important factor.81 Purchasers also most frequently identified availability and quality meets industry standards as very important factors in their purchasing decisions, followed by product consistency and reliability of supply, delivery time, price, and delivery terms.82 All 13 responding purchasers require their suppliers to become certified or qualified to meet AAR standards.83 Further, most purchasers reported that domestically produced FRCs were comparable with subject imports and nonsubject FRCs from Mexico across 16 purchasing factors,84 though responses comparing the U.S. product and (…Continued) StratoMax brand is a superior product. Strato and Wabtec’s Posthearing Br., Exh. 1 at 77. Six of 13 responding purchasers reported that quality exceeding industry standards was a very important purchasing factor. CR/PR at Table II-11. Four of 10 responding purchasers reported that U.S.-produced product is inferior to Chinese product in this respect. Id. at Table II-14. In addition, TTX provided technical evidence that certain Bedloe-technology products had superior performance relative to other products. TTX Prehearing Br. at 26-30, Exhs 39-42. Based on this evidence, the Commission finds that, for a meaningful portion of the market, the use of Bedloe technology is a distinguishing factor as between domestic product and subject imports. 77 CR/PR at I-8. 78 CR/PR at Tables II-20-II-22. 79 CR/PR at Tables II-20-II-22. 80 CR/PR at II-10, V-6 n.13; see also Petitioner’s Posthearing Br., Exh. 5; Strato’s Prehearing Br. at 40-41. 81 CR/PR at Table II-10. Twelve of the 13 responding purchasers reported that they usually or sometimes purchase the lowest-priced product. Id. at II-18. 82 CR/PR at Table II-11. 83 CR/PR at II-20. Purchasers reported that the time to qualify a new supplier ranged from one to two years and that the supplier must be approved by the AAR before purchasing. Twelve of 13 purchasers reported that no domestic or foreign producers failed in their attempts to certify or qualify their FRCs. Id. 84 CR/PR at Tables II-14-II-15, II-17. Most purchasers reported that subject imports and domestically produced FRCs were comparable on every factor. Id. at Table II-14. Most purchasers reported that domestically produced FRCs and nonsubject imports from Mexico were comparable on every factor except price and U.S. transportation costs. Id. at Table II-15. Most purchasers reported that subject imports and nonsubject imports from Mexico were comparable on every factor, except delivery time and price. Id. at Table II-17. 18 subject imports were somewhat mixed with respect to delivery time,85 price,86 and quality exceeds industry standards.87 FRCs are primarily sold from inventory, with lead times for domestic producers averaging *** days and lead times for importers averaging *** days for shipments from U.S inventories and *** days for shipments from foreign inventories.88 Most domestically produced and subject FRCs sold in the U.S. market are sold pursuant to annual contracts; a substantial portion is also sold on the spot market. In 2021, annual contracts accounted for *** percent of the domestic industry’s U.S. shipments and *** percent of subject imports’ U.S. shipments.89 Raw materials accounted for *** percent of the cost of goods sold (“COGS”) for FRCs in 2019, *** percent in 2020, and *** percent in 2021.90 FRCs are primarily made of pig iron and scrap metal.91 Prices for FRCs generally follow the prices for scrap steel.92 Steel inputs are generally subject to additional 25 percent ad valorem duties pursuant to section 232 of the Trade Expansion Act of 1962 (“section 232”).93 Steel scrap prices fluctuated during the POI, generally declining in 2019, and increasing from 2020 through 2022.94 Subject merchandise entering under HTS subheadings 8607.30.10, 8606.10.00, 8606.30.00, 8606.91.00, 8606.92.00, and 8606.99.01 became subject to additional 25 percent ad valorem duties pursuant to section 301 of the Tariff Act of 1974 (“section 301”), which took 85 CR/PR at Table II-14 (five purchasers reported domestic and Chinese FRCs were comparable, four reported the U.S. was superior, and two reported the U.S. was inferior). 86 CR/PR at Table II-14 (five purchasers reported domestic and Chinese FRCs were comparable, three reported the U.S. was superior (i.e., lower priced than subject imports), and three purchasers reported the U.S. product was inferior (i.e., higher priced than subject imports)). 87 CR/PR at Table II-14 (six purchasers reported domestic FRCs and subject imports were comparable and four purchasers reported the U.S. product was inferior). 88 CR/PR at II-19. 89 CR/PR at Table V-3. One domestic producer, ***, reported that its annual contracts allowed for price renegotiations, and were indexed to raw material prices; the contract of the other reporting producer, ***, did not provide for price renegotiations and were not indexed to raw material price indices. Id. 90 CR/PR at Table VI-1. 91 CR/PR at V-1 and Table VI-4. 92 CR/PR at V-1. 93 19 U.S.C. § 1862; CR/PR at II-1, V-3. Imports of FRCs are not among the derivative steel products subject to section 232 tariffs. See Adjusting Imports of Derivative Aluminum Articles and Derivative Steel Articles into the United States, Presidential Proclamation 9980 of January 24, 2020; 85 Fed. Reg. 5,281 (Jan. 29, 2020). 94 CR/PR at V-1, Figure V-1, Table F-1. 19 effect on August 23, 2018.95 Exclusions for one year were granted effective July 31, 2019, for subject merchandise entering under HTS subheading 8607.30.10.96 These exclusions, however, expired and subject merchandise entering under HTS subheading 8607.30.10 became subject to additional 25 percent ad valorem duties pursuant to section 301 effective July 31, 2020.97 C. Volume of Subject Imports Section 771(7)(C)(i) of the Tariff Act provides that the “Commission shall consider whether the volume of imports of the merchandise, or any increase in that volume, either in absolute terms or relative to production or consumption in the United States, is significant.”98 Subject import volume declined from *** pounds in 2019 to *** pounds in 2020, and increased to *** pounds in 2021, a level that is *** percent lower than in 2019.99 U.S. 95 CR/PR at I-7-I-8. 96 CR/PR at I-7-I-8. 97 CR/PR at I-7-I-8. Most U.S. producers and importers reported that the section 301 duties had an impact on the U.S. market. Id. at Table II-1. U.S. producer *** reported that the section 301 duties caused an increase in exports of Chinese FRC to Mexico that were installed on freight railcars and transported for use in the United States, whereas U.S. producer *** reported generally that the section 301 duties impacted the overall market for U.S. producers. CR/PR at II-3. Importers and purchasers generally reported increased costs and prices and a reduced competitive landscape. Id. at II-3 to II-4. 98 19 U.S.C. § 1677(7)(C)(i). 99 CR/PR at Table IV-2. Petitioner has requested that we focus on the market share trends that occurred prior to 2021 and reduce the weight we accord to post-petition information concerning the volume, price effects, and impact of the subject imports on the domestic industry pursuant to 19 U.S.C. § 1677(7)(I), due to purported post-petition effects in the fourth quarter of 2021 that included declining subject import volumes, rising subject import prices, and the reshoring of some of Amsted’s domestic production from Mexico. See Petitioners’ Posthearing Br. at 8-9, Exh. 1 at 1-8. Among other things, Petitioners cite certain questionnaire responses and witness testimony indicating that purchases of subject imports decreased after the filing of the petitions. Id., Exh. 1 at 1-3 5-6, 7. We decline to discount 2021 data. Information on the record indicates that subject imports shipped from foreign inventory take an average of *** days to reach their destination in the United States, such that any subject imports directed towards the U.S. market for sale in the fourth quarter of 2021 would largely have been in transit prior to the filing of the petitions. CR/PR at II-19. See also Tr. at 187 (Korzeniowski). Further, several purchasers cited general supply chain disruptions and the COVID-19 pandemic as reasons for declining import volumes in 2021. See purchaser questionnaires at questions II-2 and III-13. We note, in this regard, that while *** indicated that it encountered supply constraints due to the filing of the petitions, it lists its increased railcar purchases from Mexico as its reason for lower purchases of subject imports in 2021. Moreover, its purchases of subject imports in that year exceeded its purchases of subject imports in 2020. See ***’s purchaser questionnaire at questions II-1-II-2 and III-13. We also find speculative Petitioner’s contention that the filing of the petitions drove certain capital investments and additional production-related workers (“PRWs”) at Amsted. With respect to price, while the pricing data show an increase in subject import prices for four of the five pricing products between the third and fourth quarters of 2021, price increases started prior to the fourth quarter of 2021 for three of (Continued...) 20 shipments of subject imports also declined during each year of the POI.100 As a share of apparent U.S. consumption by volume, U.S. shipments of subject imports increased from *** (…Continued) those four products. CR/PR at Tables V-4-V-8. Moreover, other than one other domestic producer, there is no indication that market participants had advance knowledge in 2021 of the likely filing of the petition. See Petitioner’s Posthearing Br., Exh. 1 at 58-60; Strato and Wabtec’s Posthearing Br., Exh. 1 at 94-96; TTX’s Posthearing Br., Exh. 1 at 4. Accordingly, we find that the record does not support Petitioner’s allegations of post-petition effects. Moreover, Petitioner requests that less weight be given to data for all of 2021, not just that less weight be given to the post-petition period. Thus, even to the extent there were some evidence of post-petition effects in the fourth quarter of 2021, the relevant statutory provision would not call on us to discount an entire year of data. 100 U.S. shipments of subject imports declined by *** percent during the POI, from *** pounds in 2019 to *** pounds in 2020 and *** pounds in 2021. CR/PR at Tables IV-6, C-1. In its final comments, Petitioner argues for the first time in these proceedings that the Commission should base its analysis of market shares on the total volume of subject imports, rather than U.S. shipments, of subject imports, as subject FRCs held in inventory may also be drawn down and injure the domestic industry. Petitioner’s Final Comments at 2-5. Petitioner argues that this analysis shows a *** increase in subject import market share relative to nonsubject imports during the POI. Id. at Table 1. Notwithstanding Petitioner’s contention, the Commission’s usual practice is to base its analysis of U.S. market share on questionnaire data for U.S. shipments of imports. The Commission has on occasion instead based its market share analysis on total subject import volume where, for example, questionnaire data are unreliable, due to poor questionnaire coverage, and there exists an HTS subheading for official import statistics that cleanly corresponds to Commerce’s scope. See, e.g., Urea Ammonium Nitrate Solutions from Russia and Trinidad and Tobago, Inv. Nos. 701-TA-668-669 and 731- TA-1565-1566 (Preliminary), USITC Pub. 5226 (Aug. 2021) at 22 n.113 and Table IV-7 Note. In these investigations, the Commission received responses to its importer questionnaire from six firms representing a substantial share of U.S. imports of FRCs from China in 2021 under HTS subheading 8607.30.10, a “basket” category that contains out-of-scope products. CR/PR at IV-1. There is no indication in the record or argument from parties that the questionnaire data for U.S. shipments of imports are unreliable due to poor coverage, and the HTS subheading corresponding to subject imports does not cleanly fit Commerce’s scope. Accordingly, although we have considered the absolute volume of subject imports, we have followed our usual practice of analyzing market shares on the basis of questionnaire data for U.S. shipments of imports in these investigations. Petitioner also argues in its posthearing brief that the Commission should base its analysis of market shares on value, which it asserts is a better measure than quantity for products when Commerce’s scope covers groupings of items differing in size, characteristics, and value. Petitioner’s Posthearing Br. at 11-12. We disagree, as the scope of these investigations, which covers only four FRC components, is not comparable to the scopes of other investigations, including those cited by Petitioner, where value was considered. We note, for instance, that in the investigations of the diamond sawblades industry, Commerce considered that it would be “more appropriate to use sales value to measure industry production,” and noted the petitioner’s argument in the underlying petitions that “quantity measures for industry production may not be meaningful because there is a great disparity in finished product prices that is not reflected in the quantity unit of measures (pieces).” U.S. Dep’t of Commerce, Case No. A-580-855, Initiation Checklist. We note that the record in these investigations does not show great disparities in finished product prices that are out of sync with quantity measurements. See CR/PR (Continued...) 21 percent in 2019 to *** percent in 2020, then declined to *** percent in 2021, for an overall period increase of *** percentage points.101 102 103 Based on the above, we conclude that the volume of subject imports was significant in absolute terms, and relative to apparent U.S. consumption and production, and that the increase in the volume of subject imports was significant relative to apparent U.S. consumption and production in the United States during the POI. However, for the reasons we discuss below, we find that subject imports did not have significant price effects on domestic prices and did not have a significant impact on the domestic industry. D. Price Effects of the Subject Imports Section 771(7)(C)(ii) of the Tariff Act provides that, in evaluating the price effects of the subject imports, the Commission shall consider whether (I) there has been significant price underselling by the imported merchandise as compared with the price of domestic like products of the United States, and (II) the effect of imports of such merchandise otherwise depresses prices to a significant degree or prevents price increases, which otherwise would have occurred, to a significant degree.104 As addressed in Section IV.B.3, the record indicates that there is a generally high degree of substitutability between subject imports and the domestic like product, which is affected by (…Continued) at Tables V-4-V-8. Moreover, an examination of value does not significantly alter the trends in these investigations: U.S. shipments of subject imports from China declined by *** percent in value, from $*** in 2019 to $*** in 2020 and $*** in 2021. CR/PR at Tables IV-7, C-1. As a share of apparent U.S. consumption by value, subject imports increased from *** percent in 2019 to *** percent in 2020, then declined to *** percent. Id. 101 CR/PR at Tables IV-6, C-1. 102 The ratio of subject imports to the domestic industry’s production increased from *** percent in 2019 to *** percent in 2020 and *** percent in 2021. CR/PR at Table IV-2. 103 Respondents argue that the volume of subject imports was not significant during the POI because the overall increase in subject imports’ market share during the POI is explained by the relatively greater decrease in OEM demand during the POI. Strato’s Prehearing Br. at 44-65; Wabtec’s Prehearing Br. at 23-24; Strato and Wabtec’s Posthearing Br., Exh. 1 at 15-30. Respondents contend the relatively greater decrease in OEM demand during the POI and an increase nonsubject imports from Mexico explain the domestic industry’s market share loss over the POI. Id. We address these issues below in our discussion of price effects. 104 19 U.S.C. § 1677(7)(C)(ii). 22 certain other factors, and that price is an important consideration in purchasing decisions, although other factors are also important. We have examined several sources of information in our underselling analysis, including pricing data, responses by purchasers to the Commission’s lost sales/lost revenue questionnaire, and additional documentary evidence provided by Petitioner. Three domestic producers and three importers provided usable quarterly net sales f.o.b. selling price data for five FRC pricing products, although not all firms reported data for all products for all quarters.105 Reported pricing data accounted for approximately *** percent of domestic producers’ U.S. shipments of FRCs in terms of value, and *** percent of U.S. shipments of subject imports from China.106 Additionally, one importer, ***, provided price data for nonsubject imports from Mexico.107 108 105 CR/PR at V-8. Product 1 was defined as “SE60, grade E steel complete coupler assembly, double shelves, 21.5” shank length, produced to AAR M-211 and/or AAR M-215 specifications.” Id. at V- 7. Product 2 was defined as “SBE60, grade E steel complete coupler assembly, bottom shelf, 21.5” shank length, produced to AAR M-211 and/or AAR M-215 specifications.” Id. Product 3 was defined as “E50 coupler knuckle, grade E steel, produced to AAR M-211 and/or AAR M-215 specifications.” Id. Product 4 was defined as “SY40 coupler yoke, grade E steel, produced to AAR M-211 and/or AAR M-215 specifications.” Id. Product 5 was defined as “SBE60, grade E steel coupler body, bottom shelf, 21.5” shank length, produced to AAR M-211 and/or AAR M-215 specifications.” Id. 106 CR/PR at V-8. 107 CR/PR at V-8; App. D. 108 Petitioner raises concerns with the product-specific pricing data. First, Petitioner contends that ***’s data should be excluded from the pricing data, as these data are derived from annual shipments data, implicate products that may not match pricing product specifications for pricing product 3, and were conducted at levels of trade that differed from those of other reporting firms. Petitioner’s Posthearing Br., Exh. 1 at 37-41. Second, Petitioner argues that the Commission should not rely on the pricing data provided by *** for nonsubject imports from Mexico as its U.S. shipments consist largely of bundled sales that may discount certain components. Petitioner’s Posthearing Br., Exh. 1 at 47-50. We find Petitioner’s arguments unpersuasive. With regard to *** data, while *** provided quarterly data for pricing products 3 and 5 derived from its annual shipment AUVs as it did not have pricing product data available by quarter, *** indicated that ***. See Note to APO, EDIS Doc. No. 768172 (Apr. 13, 2022) and Revision to Part IV, EDIS Doc. 766943 (Mar. 30, 2022). In addition, *** did not report any concerns about product mix when communicating with staff about its pricing data. See EDIS Doc. No. 766943 (Mar. 30, 2022). Although ***’s sales to *** were sales to ***, whereas those reported by other firms were sales to ***, Petitioner did not request that the pricing product definitions distinguish sales to *** from sales to *** and *** followed the questionnaire instructions by reporting its first sale to unrelated customers. See Petition at 28; Petitioner’s Comments on the Draft Questionnaires, EDIS Doc. No. 762806 (Feb. 8, 2022). With regard to *** data, we observe that the Commission’s producer and importer questionnaires direct respondents to report pricing net of all discounts and rebates, which would include any discounts or rebates resulting from the bundling of FRCs with other railcar components. See Producer questionnaires at question IV-2c and Importer (Continued...) 23 Price comparisons reflect mixed instances of underselling and overselling by subject imports, with subject imports overselling the domestically produced FRCs in a majority of comparisons. Subject imports oversold the domestic like product in 33 of 60 quarterly comparisons (55.0 percent of comparisons) at an average margin of *** percent; the volume of subject imports reported in quarters of overselling accounted for *** percent of the total volume reported for the pricing products.109 Subject imports undersold the domestic like product in 27 quarterly comparisons (45.0 percent of comparisons) at an average margin of *** percent; the volume of subject imports reported in quarters of underselling accounted for *** percent of the total volume reported for the pricing products.110 The parties generally agree that subject imports reported as “complete coupler assemblies” within the meaning of the product specifications for pricing products 1 and 2 may contain fewer components than those shipped by domestic products,111 which is supported in the record.112 Accordingly, we assign relatively less weight to the data for pricing products 1 and 2 in our analysis of underselling and price effects, as pricing products 1 and 2 may reflect product mix differences between complete FRCs shipped by importers and those shipped by domestic producers. When considering only pricing products 3 through 5, subject imports oversold the domestic like product in 23 of 36 quarterly comparisons (63.9 percent of comparisons), where the volume of subject imports reported in quarters of overselling accounted for *** percent of the total volume reported for these pricing products.113 In addition, information collected in response to lost sales allegations does not show that subject imports were predominantly lower priced than domestically produced FRCs; this (…Continued) questionnaires at question III-2c. Amsted confirmed that ***. Revision to Part II and Part III, EDIS Doc. 770913 (May 17, 2022). We thus decline to exclude these data from our analysis. 109 CR/PR at Table V-12. 110 CR/PR at Table V-12. We note that Product 3 (knuckles) accounts for the vast majority (*** percent) of the quantity of the reported pricing data, which are in the form of units. CR/PR at Table V- 12. This is so even though knuckles represent far less than half of the total weight or value of all FRCs or all FRC components. CR/PR at Table IV-4. Because of this discrepancy, we have found instances of under- and over-selling to be particularly relevant to our consideration. We further note that even if the pricing data of *** were excluded as urged by Petitioner, there would be even instances of overselling and underselling. Derived from U.S. producers’ questionnaires at question IV-2a and importers’ questionnaires at question III-2a. 111 Petitioner’s Posthearing Br., Exh. 1 at 17-18; Strato and Wabtec’s Posthearing Br. Attachment 1 at 10-11. 112 E.g., *** U.S. importer questionnaire response at question III-2a; *** U.S. importer questionnaire response at question III-2a. 113 See CR/PR at Table V-12. 24 information further shows that when subject imports were lower priced than domestically produced FRCs, this consideration did not lead purchasers to purchase subject imports instead of domestically produced FRCs. The Commission obtained purchaser questionnaire responses from 13 purchasers that purchased and imported *** pounds of FRCs during the POI.114 Ten firms reported that they purchased subject imports instead of domestically produced FRCs during the POI, five firms reported that the subject imports were lower priced, and only one firm reported that price was a primary reason for its decision to purchase an aggregate total of *** pounds of subject imports.115 This firm’s purchase quantity represents less than *** percent of purchasers’ total reported purchases of subject imports over the POI.116 Other firms reported reasons such as availability, customer requests, quality, shipping costs, and supplier stability to explain their purchasing decisions, regardless of whether the subject imports were priced lower or higher than the domestic product.117 These responses generally are consistent with other information in their questionnaires where purchasers reported the domestic product as being inferior to subject imports with respect to some of these factors.118 No responding purchaser reported that domestic producers reduced prices in order to compete with lower-priced subject imports.119 We have also considered other record information, including purchaser questionnaire responses regarding the comparability of subject imports and domestically produced FRCs with respect to price.120 A majority of purchasers reported that prices for the domestic like product were mostly “comparable” with those of subject sources and an equal number reported that U.S. prices were “inferior” and “superior” to subject imports.121 Questionnaire responses from several leading purchaser responses also indicate that subject imports were purchased for non- price reasons and do not support Petitioner’s allegations of significant price effects.122 123 114 CR/PR at V-23 and Table V-13. 115 CR/PR at Table V-14. 116 Compare CR/PR at Table V-14, with id. at Table IV-6. 117 CR/PR at V-23 and Table V-14. 118 See purchaser questionnaire responses of *** at question IV-3. 119 CR/PR at V-24. 120 Petitioner’s Prehearing Br., Exhs. 3, 9, 10; Petitioner’s Posthearing Br. at Exhs. 6, 9. 121 CR/PR at Table II-14. 122 See purchaser questionnaire responses of *** at question IV-3. 123 We note that *** and ***, which combined to purchase a substantial amount of subject imports during the POI, reported that domestically produced FRCs were inferior on quality issues and superior on price. See ***’s purchaser questionnaire response at question IV-3 and ***’s purchaser questionnaire response at questions II-3(c) and IV-2 (indicating that it purchased subject imports after experiencing “poor quality and service at a certain domestic producer” and that “price typically is not (Continued...) 25 Further, as reviewed above, the record reflects that the choice between domestic product and subject imports is affected to some degree by purchasers’ preferences for certain types or suppliers of FRCs or quality considerations. Finally, Petitioner contends that contemporaneous documents show that subject imports were priced lower than the domestic like product, and that major purchasers used subject import prices to exert downward pressure on domestic producers’ prices.124 We disagree. Documentary evidence submitted by Petitioner was limited in scope and in several instances unclear or incomplete.125 Moreover, an examination of data for the several portions of the U.S. FRC market suggests that any overall market share shift was affected by different demand trends for new railcars and maintenance of FRCs, as well as differing concentrations of shipments in these market segments by U.S. producers and importers, and confirms that whatever underselling by subject imports that did occur did not lead to significant shifts in market share from the (…Continued) the most important factor” owing to the stability of prices in the U.S. market). Petitioner filed a report card issued to M&T by TTX as an exhibit to its posthearing brief. Petitioner contends that this report card demonstrates that M&T received a “B” rating on ***.” Petitioner’s Posthearing Br., Exh. 1 at 31. A closer examination of this report card reveals that the cost component measures in-service cost, and is consistent with TTX’s contention that it encountered quality issues with M&T. Id. at Exh. 8. 124 Petitioner’s Posthearing Br., Exh. 1 at 26-32. 125 Exhibit 3 of Petitioner’s prehearing brief is a screenshot from a presentation Petitioner indicates that *** made to *** that appears to show Chinese prices for coupler bodies that are markedly lower than *** prices. Petitioner’s Prehearing Br., Exh. 3. The context of these data is unclear, and the subject import prices represented in the graphic are inconsistent with the pricing data collected by the Commission. Compare id. with CR/PR at Table V-8. Petitioner provided no indication as to whether *** as a result of this alleged subject import price competition. Exhibit 9 of Petitioner’s prehearing brief is an unmarked spreadsheet, purportedly issued to *** by ***, that provides sets of prices for couplers from different sources under different scenarios. Petitioner in its brief identifies the spreadsheet as ***, but otherwise provides no further explanation or context for what the prices contained therein reference; the spreadsheet also does not specifically reference subject imports. Petitioner’s Prehearing Br., Exh. 9. Exhibit 10 of Petitioner’s prehearing brief is an email correspondence between *** and *** from the third quarter of 2021 *** *** does not indicate in the correspondence that the competition is subject imports, and the quantity under discussion is not indicated. Whether *** lost the sale or reduced its price is also not indicated. Petitioner’s Prehearing Br., Exh. 10. Exhibit 6 of Petitioner’s posthearing brief is a ***. Petitioner’s Posthearing Br., Exh. 6. Subject imports are not referenced in this email exchange. Id. At Exhibit 2 of Petitioner’s posthearing brief, ***. Id., Exh. 2. The record does not confirm that ***; indeed, ***. Exhibit 9 of Petitioner’s posthearing brief is ***. The record does not indicate the result of this exchange. Petitioner’s Posthearing Br., Exh. 9. *** purchaser questionnaire response at question III- 13(a). 26 domestic industry to subject imports. With respect to the OEM portion of the market, the domestic industry’s share of U.S. shipments to OEMs declined from *** percent in 2019 to *** percent in 2020, and increased to *** percent in 2021, for an overall decline of *** percentage points.126 Subject imports’ share of U.S. shipments to OEMs increased from *** percent in 2019 to *** percent in 2020, and declined to *** percent in 2021, for an overall increase of *** percentage points. 127 Thus, although the domestic industry lost significant market share in the OEM portion of the market from 2019 to 2021, subject import share of the OEM market was only *** percentage points higher in 2021 than in 2019.128 With respect to the maintenance/replacement portion of the market, the domestic industry’s share of U.S. shipments to the maintenance/replacement segment of the market increased from *** percent in 2019 to *** percent in 2020, and declined to *** percent in 2021.129 Subject imports’ share of U.S. shipments to the maintenance/replacement segment of the market declined from *** percent in 2019 to *** percent in 2020, then increased to *** percent in 2021.130 Thus, subject imports’ share of U.S. shipments to the maintenance/repair segment resulted in a net gain of *** percentage points from 2019 to 2021, and despite its substantial increase in market share from 2020 to 2021, the domestic industry experienced a net loss of *** percentage points from 2019 to 2021.131 These data indicate that subject imports did not gain significant market share at the expense of the domestic industry in either OEM or maintenance/replacement segment of the FRC market.132 We note that data on the 126 Domestic producers’ U.S. shipments to OEMs declined sharply from *** pounds in 2019 to *** pounds in 2020, and increased to *** pounds in 2021, for an overall decline of *** percent. CR/PR at Table IV-9. 127 U.S. shipments of subject imports to OEMs declined throughout the POI, from *** pounds in 2019 to *** pounds in 2020 and *** pounds in 2021, for an overall decline of *** percent. CR/PR at Table IV-9. 128 By contrast, the share of nonsubject imports (primarily from Mexico) rose from *** percent in 2019 to *** percent in 2021. CR/PR at Table IV-9. 129 CR/PR at Table IV-8. Domestic producers’ U.S. shipments to the maintenance/replacement segment declined from *** pounds in 2019 to *** pounds in 2020 and *** pounds in 2021. CR/PR at Table IV-8. 130 CR/PR at Table IV-8. U.S. shipments of subject imports to the maintenance/replacement segment declined from *** pounds in 2019 to *** pounds in 2020, and increased to *** pounds in 2021. CR/PR at Table IV-8. 131 CR/PR at Table IV-8. The domestic industry’s share of U.S. shipments to the maintenance/replacement segment of the market increased from *** percent in 2019 to *** percent in 2020, and declined to *** percent in 2021. Id. 132 Petitioner contends that the Commission should not analyze market share trends on the basis of U.S. shipments data reported by distribution channel due to overlaps in competition between these segments, with the same suppliers selling the same products to the same customers in both (Continued...) 27 record for complete FRCs and combined FRC components generally are consistent with the data on OEMs and the maintenance/replacement segments of the market.133 134 Further, as discussed above in the context of demand conditions, the record reflects, and the parties agree, that demand from the OEMs decreased to a greater extent than did demand in the maintenance/replacement segment of the market.135 In particular, market participants reported that demand from the OEMs in 2020 contracted to a significantly greater extent than did demand in the maintenance/replacement segment of the market.136 With the majority of domestic producers’ shipments in 2019 directed to OEM purchasers and a relatively (…Continued) segments. Petitioner’s Posthearing Br., Exh. 1 at 9-15. We note that these data came directly from questionnaire responses and the record contains no indication that responding U.S. producers and importers encountered difficulties identifying end uses for their reported shipments. 133 These data also show that there was a larger decline in shipments of complete FRCs than there was in shipments of FRC components, consistent with the larger decline in the OEM segment relative to the maintenance/replacement segment. See CR/PR at Tables G-1, G-2, IV-8, and IV-9. Additionally, for complete FRCs, although domestic producers lost *** percentage points of market share from 2019 to 2021, subject imports gained only *** percentage points, with the rest captured by nonsubject imports. CR/PR at Table G-1. For all FRC components combined, it was again nonsubject imports that accounted for a significant majority of the market share lost by the U.S. industry from 2019 to 2021 (*** percentage points). CR/PR at Table G-2. 134 Petitioner contends these data are not a reliable indicator of sales to distinct market segments. See Petitioner Posthearing Br., Ex. 1 at 15-16. We acknowledge there appears to have been some confusion regarding the “complete FRC” category but find that these data, along with the shipment data for OEMs and replacement sales, provide the best evidence with which to assess the different demand trends and different shipment concentrations among sources and their impact on the overall market. As noted above, the complete FRC and FRC component data are generally consistent with the trends observed in the OEM and replacement sales data. Petitioner also contends that the Commission should not analyze market share trends on the basis of U.S. shipments data reported by product type either, owing to the fungibility of complete FRCs and FRC components. Petitioner’s Posthearing Br., Exh. 1 at 15-20. We find that the trends in these datasets consistently indicate that subject imports made limited market share gains in either segment of the market. We note, in this regard, that Petitioner accepts that these analyses have some probative value. Petitioner’s Posthearing Br., Exh. 1 at 18-20. 135 CR/PR at Tables IV-8, IV-9. While total U.S. shipments to OEMs from all sources declined by *** percent, total U.S. shipments to the replacement market declined by *** percent. Id. Total U.S. shipments to OEMs from all sources declined from *** pounds in 2019 to *** pounds in 2020 and *** pounds in 2021. CR/PR at Table IV-9. Total U.S. shipments to the maintenance/replacement segment of the market from all sources from *** million pounds in 2019 to *** pounds in 2020 and *** pounds in 2021. CR/PR at Table IV-8. 136 CR/PR at VI-11 n.11 (***); Tr. at 123 (Pickard) (“So I think the bottom line is maintenance demand stays relatively stable as a general rule and through the POI. And then consistent with what you see in, kind of, industry reports and projections is there's a decrease in new car builds, consistent with the cycle . . . .”) 28 higher share of their shipments comprising complete FRCs as compared to subject importers, the steeper decline in consumption in this portion of the market differentially affected each sources’ overall market shares.137 In addition, due to the dominant use of annual and long- term contracts, including the long-term supply contract between M&T and Trinity ***,138 domestic producers were not in a position to pivot as quickly to increase sales to the replacement market to avail themselves of the lesser decline in demand in that market. Thus, domestic producers’ greater reliance on OEM sales and complete FRC sales at the beginning of the POI relative to subject imports contributed to domestic producers’ *** percentage point market share loss to subject imports over the POI. We have also examined the available data on price trends. Domestic prices for the pricing products were mixed over the POI. Domestic prices for products 3 and 5 rose steadily, and were priced *** and *** percent higher, respectively, at the end of the POI.139 Domestic prices for products 1, 2, and 4, on the other hand, declined steadily, and were priced ***, ***, and *** percent lower, respectively, at the end of the POI.140 These price trends are generally consistent with the domestic industry’s overall AUVs by product type during the POI.141 Subject import prices fluctuated, but generally increased during the POI. Subject import prices for products 1, 3, 4, and 5 were priced ***, ***, ***, and *** percent higher, respectively, at the end of the POI; subject import prices for product 2 were priced *** percent lower.142 Petitioner observes that subject imports undersold the domestic like product more often than not in pricing products 1, 2, and 4, where domestic prices decreased, and argues that this correlation indicates that subject imports significantly depressed domestic prices.143 137 See CR/PR at Tables IV-6, IV-8, and IV-9 (showing domestic producers and nonsubject imports experiencing significant declines in shipments to OEMs between 2019 and 2020, which resulted in subject imports gaining market share as their shipments to OEMs declined to a much lesser extent, and subject imports gained market share in the overall market despite losing share in the replacement portion of the market during the same period). 138 We note that Trinity’s railcar deliveries declined sharply in 2020 at a rate faster than the overall drop in railcar demand. See Strato and Wabtec’s Posthearing Br. at 32-33 (citing CR/PR at Table II-7 and Trinity Industries, Inc. Form 10-K for Fiscal Year Ending December 31, 2021 (Feb. 17, 2022) at p.39). 139 CR/PR at Table V-9. 140 CR/PR at Table V-9. 141 See Table III-7. There is one exception in that yokes, when measured by dollars per unit, *** from 2019 to 2021, although the dollars per pounds metric ***, which with pricing product 4. Compare Table III-7 with Table V-7. 142 CR/PR at Table V-9. As stated above, pricing products 1 and 2 may reflect product mix differences between complete FRCs shipped by importers and domestic producers. 143 Petitioner’s Prehearing Br. at 26; Petitioner’s Final Comments at 2. 29 We disagree. As a preliminary matter, we reiterate our concern that there are product mix issues resulting from the manner in which domestic producers and importers reported their sales of products 1 and 2, which likely affect the comparability of these data and may account for underselling by subject imports in these products, and thus we give these products limited weight. We also note that the largest volume product for both domestic producers and importers was product 3, with subject import volumes ***.144 The margins of underselling and overselling by subject imports fluctuated within a narrow range for this product, generally between *** percent, suggesting that price competition was fairly tight and yet domestic producers were able to increase prices.145 With regard to pricing products 1, 2, and 4, nonsubject imports from Mexico were present in these pricing products mostly at prices below subject imports and mostly at volumes higher than subject imports, at times considerably so.146 Conversely, subject import volumes are roughly comparable to the volume of nonsubject imports from Mexico in pricing product 3 and generally higher in pricing product 5; as noted above, domestic prices increased for products 3 and 5.147 More broadly, the pricing data show that nonsubject imports from Mexico were priced lower than subject imports and the domestic like product in *** of 60 quarterly comparisons (*** percent of comparisons), with the volume of nonsubject imports from Mexico reported in quarters with prices lower than subject imports accounting for *** percent of the total volume reported for U.S. shipments of the pricing products from Mexico.148 To the extent that low-priced imports would have exerted downward pressure on domestic prices during the POI, which is not particularly apparent, nonsubject imports correlate with meaningful decreases to a greater degree than do subject imports. 149 144 CR/PR at Table V-9. Indeed, within pricing products 1, 2, and 4, where domestic prices decreased, the volume of domestic product in each case exceeded the volume of subject imports by ***. Id. 145 CR/PR at Table V-6. The exceptions to this general range are Q1 2021, where subject imports *** the domestic product by a margin of *** percent, and Q4 2021, where subject imports *** the domestic product by a margin of *** percent. Id. 146 See CR/PR at Tables D-1, D-2, D-4. 147 See CR/PR at Tables D-1 to D-5. 148 CR/PR at Tables D-1-D-5, D-7. Further, although the volume of nonsubject imports declined throughout the POI, U.S. shipments of nonsubject imports increased from 2020 to 2021. Specifically, CR/PR at Tables IV-2, IV-6, C-1. U.S. shipments of nonsubject imports declined from *** pounds in 2019 to *** pounds in 2020, and increased to *** pounds in 2021. Nonsubject imports’ market share increased from *** percent in 2019 to *** percent in 2020 and *** percent in 2021. Id. 149 Petitioner contends that the increased presence of nonsubject imports in the U.S. market is itself a manifestation of injury caused by subject imports, inasmuch as low-priced subject import competition drove Amsted to outshore some of its FRC production operations to Mexico. Petitioner’s Posthearing Br., Exh. 1 at 43-46; see also Petitioner’s Final Comments at 1 (“the complete record shows (Continued...) 30 Other record information likewise fails to show that subject imports had significant price depressing effects. First, no responding purchasers reported that U.S. producers had reduced prices in order to compete with low-priced subject imports.150 Second, to the extent that demand trends may have exerted downward pressure on domestic prices as apparent U.S. consumption decreased by *** percent over the POI, this consideration would diminish the degree to which observed price decreases may be attributed to any low-priced subject imports. Finally, as discussed above, additional documentary evidence submitted by Petitioner is of limited probative value.151 Accordingly, we do not find that subject imports depressed domestic prices to a significant degree. We have also considered whether subject imports prevented price increases which would otherwise have occurred to a significant degree. The domestic industry’s cost of goods sold (“COGS”) to net sales ratio increased considerably during the POI, from *** percent in 2019 to *** percent in 2020 and *** percent in 2021.152 While the domestic industry’s unit COGS increased by $*** per 1,000 pounds in this period, its net sales AUVs declined by $*** per 1,000 pounds.153 The domestic industry thus experienced a cost-price squeeze over the POI. However, as apparent U.S. consumption decreased by *** percent over the POI and the domestic industry’s net sales quantity decreased by more still, falling by *** percent from *** pounds in 2019 to *** pounds in 2021,154 a large portion of the domestic industry’s rising unit COGS is attributable to fixed expenses in direct labor and other factory costs being spread over (…Continued) that the offshoring of production to Mexico and the consequent loss of union jobs at Amsted was directly tied to unfairly traded, low-priced Chinese FRC.”). Petitioner bases its contention on statements by Amsted management to a union representative and a statement in the petitions that Amsted certified as true before withdrawing from the petitions. Petitioner’s Final Comments at 6-7. We note that other evidence on the record indicates that OEMs relocated to Mexico decades ago. See, e.g., Strato’s Prehearing Br., Exhs. 10 (indicating that Greenbrier’s predecessor opened its first production operation in Sahagun, Mexico in 1998 and a second plant in Monclova, Mexico in 2006) and 11 (indicating that Trinity opened its production operations in Sabinas, Mexico in 2005). Moreover, even if this assertion were true, it would not explain the disparate pricing between shipments of the domestic like product and nonsubject imports from Mexico. See CR/PR at Tables V-4-V-8, D-1-D-5, D-7. In addition, during the last year of the POI (2021), the AUV of nonsubject imports from Mexico was *** the AUV of subject imports. CR/PR at Table C-1. 150 CR/PR at V-24. We acknowledge that several responding purchasers reported not knowing whether U.S. producers had lowered prices in order to compete with lower-priced subject imports. Id. 151 See Petitioner’s Prehearing Br., Exhs. 3, 9, 10; Petitioner’s Posthearing Br. at Exhs. 6, 9. 152 CR/PR at Tables VI-1, C-1. 153 CR/PR at Tables VI-1, C-1. 154 CR/PR at Tables VI-1, C-1. 31 considerably lesser net sales quantities in 2020 and 2021. As a ratio to net sales, direct labor cost increased from *** percent in 2019 to *** percent in 2020 and *** percent in 2021, for an overall period increase of *** percentage points, and other factory cost increased from *** percent in 2019 to *** percent in 2020 before decreasing to *** percent in 2021, for an overall period increase of *** percentage points.155 As a share of net sales, raw materials cost increased from *** percent in 2019 to *** percent in 2020 and to *** percent in 2021, for an overall period increase of *** percentage points.156 Per-unit raw material costs increased from $*** per 1,000 pounds in 2019 to $*** in 2020 and $*** in 2021.157 We cannot conclude that low-priced subject imports are responsible for the domestic industry’s inability to pass on these rising costs in 2020 and 2021. As discussed above, the record does not show that the subject imports significantly undersold the domestic like product, nor is there substantial evidence of lower offers by subject imports undercutting domestic producers’ prices. The cost-price squeeze experienced by the domestic industry occurred as the volume of subject imports in the market declined, apparent U.S. consumption declined considerably, and lower-priced nonsubject imports competed for sales of FRCs.158 Further, a substantial portion of domestic producers’ sales prices are fixed by annual or long- term contracts.159 Most of these contracts appear to contain scrap metal surcharges.160 The prevalence of these contracts, some of which are indexed to raw material costs, would allow producers to recover some increases in raw material costs but also likely limit domestic producers’ ability to implement further prices increases.161 Accordingly, we do not find that subject imports prevented domestic price increases, which otherwise would have occurred, to a significant degree. In sum, we do not find that subject imports significantly undersold the domestic like product or that subject imports depressed prices or prevented price increases, which otherwise 155 CR/PR at Table VI-1. Other factory cost grew ***. Id. at VI-13 n.14. Id. at VI-13 n.14. 156 CR/PR at Table VI-1. 157 CR/PR at Table VI-1. 158 See CR/PR at Tables IV-2, IV-6, IV-9, C-1. 159 CR/PR at Table V-3. One of two responding producers indicated that their annual contracts allowed for price renegotiations. Id. 160 CR/PR at V-2. Nine of 11 responding purchasers indicated that information on raw material prices impacted their negotiations or contracts to purchase FRCs during the POI. Id. See also purchaser questionnaires at question III-16a. 161 Between 2019 and 2020, the industry’s per-unit raw material costs increased by *** percent and while the industry’s net sales AUV declined by *** percent. CR/PR at Table VI-2. Between 2020 and 2021, unit raw material costs increased by *** percent while the industry’s net sales AUV increased by *** percent. Id. 32 would have occurred, to a significant degree. Accordingly, we do not find that the subject imports have had significant price effects on the domestic industry. E. Impact of the Subject Imports162 Section 771(7)(C)(iii) of the Tariff Act provides that examining the impact of subject imports, the Commission “shall evaluate all relevant economic factors which have a bearing on the state of the industry.”163 These factors include output, sales, inventories, capacity utilization, market share, employment, wages, productivity, gross profits, net profits, operating profits, cash flow, return on investment, return on capital, ability to raise capital, ability to service debts, research and development, and factors affecting domestic prices. No single factor is dispositive and all relevant factors are considered “within the context of the business cycle and conditions of competition that are distinctive to the affected industry.”164 Although the domestic industry’s output and financial performance declined considerably according to most measures during the POI, as explained below, we do not find a causal nexus between subject imports and such declines. The domestic industry’s capacity declined by *** percent, from *** pounds in 2019 to *** pounds in 2020 and *** pounds in 2021.165 The industry’s production declined by *** percent, from *** pounds in 2019 to *** pounds in 2020 and *** pounds in 2021.166 Consequently, the domestic industry’s capacity utilization declined by *** percentage points, from *** percent in 2019 to *** percent in 2020 162 The statute instructs the Commission to consider the “magnitude of the dumping margin” in an antidumping proceeding as part of its consideration of the impact of imports. 19 U.S.C. § 1677(7)(C)(iii)(V). In its final determination of sales at LTFV, Commerce found an antidumping margin of 147.11 percent for imports from China. Freight Rail Coupler Systems and Certain Components Thereof from the People's Republic of China: Final Affirmative Determination of Sales at Less-Than-Fair Value, 87 Fed. Reg. 32,121, 32,122. We take into account in our analysis the fact that Commerce has made final findings that all subject producers in China are selling subject imports in the United States at less than fair value. However, in addition to this consideration, our analysis has considered that subject imports have not caused significant adverse price effects and other factors have affected domestic prices. 163 19 U.S.C. § 1677(7)(C)(iii); see also SAA at 851 and 885 (“In material injury determinations, the Commission considers, in addition to imports, other factors that may be contributing to overall injury. While these factors, in some cases, may account for the injury to the domestic industry, they also may demonstrate that an industry is facing difficulties from a variety of sources and is vulnerable to dumped or subsidized imports.”). 164 19 U.S.C. § 1677(7)(C)(iii). This provision was amended by the Trade Preferences Extension Act of 2015, Pub. L. 114-27. 165 CR/PR at Tables III-4, C-1. 166 CR/PR at Tables III-4, C-1. 33 and *** percent in 2021.167 The domestic industry’s U.S. shipments declined by *** percent, from *** pounds in 2019 to *** pounds in 2020 and *** pounds in 2021,168 while its end-of- period inventories declined irregularly by *** percent during the POI, increasing from *** pounds in 2019 to *** pounds in 2020, then declining to *** pounds in 2021.169 The industry’s overall market share declined by *** percentage points, from *** percent in 2019 to *** percent in 2020 and *** percent in 2021.170 The domestic industry’s employment indicia also generally declined during the POI: the number of production-related workers (“PRWs”) in 2021 was *** percent lower than in 2019,171 total hours worked declined by *** percent,172 wages paid declined by *** percent,173 and productivity declined by *** percent.174 Unit labor costs increased by *** percent during this period,175 whereas hourly wages increased by *** percent.176 The domestic industry’s declining sales volume resulted in a deterioration in the industry’s financial performance during the POI.177 The industry’s net sales value declined by *** percent, from $*** in 2019 to $*** in 2020 and $*** in 2021.178 As the domestic industry’s net sales value declined more than its total COGS from 2019 to 2021,179 the domestic industry’s operating income declined irregularly, from $*** in 2019 to negative $*** in 2020 and negative $*** in 2021.180 Similarly, the domestic industry’s operating income margin 167 CR/PR at Tables III-4, C-1. 168 CR/PR at Tables III-6, C-1. 169 CR/PR at Tables III-8, C-1. 170 CR/PR at Tables IV-6, C-1. 171 PRWs declined from *** in 2019 to *** in 2020 and *** in 2021. CR/PR at Tables III-9, C-1. 172 Total hours worked by PRWs declined from *** hours in 2019 to *** hours in 2020 and *** hours in 2021. CR/PR at Tables III-9, C-1. 173 Total wages paid to PRWs declined from $*** in 2019 to $*** in 2020 and $*** in 2021. CR/PR at Tables III-9, C-1. 174 Productivity declined from *** pounds per hour in 2019 to *** pounds per hour in 2020 and *** pounds per hour in 2021. CR/PR at Tables III-9, C-1. 175 Unit labor costs increased from $*** in 2019 to $*** in 2020 and $*** in 2021. CR/PR at Tables III-9, C-1. 176 Hourly wages increased from $*** per hour in 2019 to $*** per hour in 2020 and $*** per hour in 2021. CR/PR at Tables III-9, C-1. 177 The domestic industry’s net sales volume declined by *** percent during the POI, from *** pounds in 2019 to *** pounds in 2020 and *** pounds in 2021. CR/CR at Tables VI-1, C-1. 178 CR/CR at Tables VI-1, C-1. 179 Total COGS declined by *** percent, from $*** in 2019 to $*** in 2020 and $*** in 2021. CR/PR at Tables VI-1, C-1. 180 CR/PR at Tables VI-1, C-1. The domestic industry’s net income declined irregularly, from $*** in 2019 to negative $*** in 2020 and negative $*** in 2021. Id. 34 declined from *** percent in 2019 to operating losses of *** percent in 2020 and *** percent in 2021.181 The domestic industry’s gross profit declined irregularly, from $*** in 2019 to negative $*** in 2020 and negative $*** in 2021.182 The industry’s average operating return on assets declined from *** percent in 2019 to negative *** percent in 2020 and negative *** percent in 2021.183 The domestic industry’s capital expenditures declined by *** percent during the POI, from $*** in 2019 to $*** in 2020 and $*** in 2021.184 Additionally, *** reported negative effects on investment, growth, and development purportedly due to subject imports.185 186 We find that the record in the final phase of these investigations does not show a causal nexus between subject imports and the domestic industry’s declining performance during the POI. As discussed above, the volume of subject imports declined overall between 2019 and 2021.187 U.S. shipments of subject imports also declined during the POI.188 The domestic industry’s worst performance during the POI, in 2020, coincided with large declines in demand and the volume of subject imports in the market. As the domestic industry’s performance declined, the volume of subject imports also declined. While subject imports increased as a share of overall apparent U.S. consumption relative to domestic producers during the POI, as discussed above, changes in relative consumption in the OEM and replacement market segments and predominant use of long-term and annual contracts contributed to the overall shift in market share; subject imports’ gain in market share from domestic producers was substantially less when examined by market segment. As also discussed above, the available evidence reflects that purchases of subject imports were due largely to non-price purchasing factors.189 Moreover, as we found above, subject imports did not have significant price 181 CR/PR at Tables VI-1, C-1. Similarly, the domestic industry’s net income margin declined from *** percent in 2019 to net losses of *** percent in 2020 and *** percent in 2021. Id. 182 CR/PR at Tables VI-1, C-1. 183 CR/PR at Table VI-10. 184 CR/PR at Tables VI-5, C-1. 185 CR/PR at Tables VI-12-VI-13. 186 Research and development expenses, which averaged less than *** dollars during the POI, fluctuated throughout the POI, increasing from $*** in 2019 to $*** in 2020, and declining to $*** in 2021. CR/PR at Table VI-6.C-1. 187 CR/PR at Table IV-2. 188 CR/PR at Tables IV-6, C-1. 189 Petitioner emphasizes certain statements by TTX, including its characterization of purchases of subject imports from Strato at ***, and its past purchases of refurbished coupler bodies, as indicative of TTX’s purchase of FRCs primarily due to price and support a finding of significant underselling. Petitioner’s Final Comments at 9-11. Notwithstanding TTX’s characterization of its purchases of subject imports from Strato as being ***, we have found above in Section IV.D. that the record contains no (Continued...) 35 depressing or suppressing effects, and, thus, such effects cannot account for reduced or inadequate industry revenues. Finally, as explained above, we recognize that non-subject imports increased in market share over the POI in the overall FRC market as well as in the OEM and maintenance/replacement portions of the market. For the foregoing reasons, we do not find that subject imports are having a significant impact on the domestic industry. Accordingly, we find that the domestic industry is not materially injured by reason of subject imports of FRCs from China that were found by Commerce to be sold in the United States at LTFV and subsidized by the government of China. VI. No Threat of Material Injury by Reason of Subject Imports A. Legal Standard Section 771(7)(F) of the Tariff Act directs the Commission to determine whether the U.S. industry is threatened with material injury by reason of the subject imports by analyzing whether “further dumped or subsidized imports are imminent and whether material injury by reason of imports would occur unless an order is issued or a suspension agreement is accepted.”190 The Commission may not make such a determination “on the basis of mere conjecture or supposition,” and considers the threat factors “as a whole” in making its determination whether dumped or subsidized imports are imminent and whether material injury by reason of subject imports would occur unless an order is issued.191 In making our determination, we consider all statutory threat factors that are relevant to these investigations.192 (…Continued) evidence that price drove purchasers’ purchases of subject imports. We note, moreover, that M&T also has a most favored customer pricing clause in its long-term supply agreement with Trinity. See Petitioner’s Posthearing Br., Exh. 5 at Cl. 3(b). Accordingly, the available record information suggests that long-term supply agreements in this market contain preferential pricing provisions. 190 19 U.S.C. § 1677(7)(F)(ii). 191 19 U.S.C. § 1677(7)(F)(ii). 192 These factors are as follows: (I) if a countervailable subsidy is involved, such information as may be presented to it by the administering authority as to the nature of the subsidy (particularly as to whether the countervailable subsidy is a subsidy described in Article 3 or 6.1 of the Subsidies Agreement) and whether imports of the subject merchandise are likely to increase, (II) any existing unused production capacity or imminent, substantial increase in production capacity in the exporting country indicating the likelihood of substantially increased imports of the subject merchandise into the United States, taking into account the availability of other export markets to absorb any additional exports, (Continued...) 36 B. Analysis 1. Likely Volume As discussed above in Section IV.C, subject import volume declined by *** percent and U.S. shipments of subject imports declined by *** percent during the POI.193 While subject imports’ market share increased *** overall during the POI, such market share declined from *** percent in 2020 to *** percent in 2021.194 Consequently, there was no significant rate of increase in either the volume or the market share of the subject imports during the POI indicating a likelihood of substantially increased subject imports. We note that while the subject industry has the ability to increase its exports to the United States in the imminent future, that ability also existed during the POI and did not materialize.195 While subject producers decreased their capacity by *** percent during the POI, (…Continued) (III) a significant rate of increase of the volume or market penetration of imports of the subject merchandise indicating the likelihood of substantially increased imports, (IV) whether imports of the subject merchandise are entering at prices that are likely to have a significant depressing or suppressing effect on domestic prices and are likely to increase demand for further imports, (V) inventories of the subject merchandise, (VI) the potential for product-shifting if production facilities in the foreign country, which can be used to produce the subject merchandise, are currently being used to produce other products, … (VIII) the actual and potential negative effects on the existing development and production efforts of the domestic industry, including efforts to develop a derivative or more advanced version of the domestic like product, and (IX) any other demonstrable adverse trends that indicate the probability that there is likely to be material injury by reason of imports (or sale for importation) of the subject merchandise (whether or not it is actually being imported at the time). 19 U.S.C. § 1677(7)(F)(i). To organize our analysis, we discuss the applicable statutory threat factors using the same volume/price/impact framework that applies to our material injury analysis. Statutory threat factors (I), (II), (III), (V), and (VI) are discussed in the analysis of subject import volume. Statutory threat factor (IV) is discussed in the analysis of subject import price effects. Statutory factors (VIII) and (IX) are discussed in the analysis of impact. Statutory factor (VII) concerning agricultural products is inapplicable to these investigations. 193 CR/PR at Tables IV-2, IV-6, C-1. 194 CR/PR at Tables VI-6, C-1. 195 Foreign industry data in these proceedings were based on questionnaire responses from subject producers accounting for less than *** percent of FRC production in China in 2020, and approximately *** percent of U.S. imports of subject merchandise from China in 2021. CR/PR at VII-3. Petitioner requests that the Commission exercise its discretion to apply adverse inferences concerning the subject industry’s capacity and inventory, which it claims are substantial. Petitioner’s Posthearing (Continued...) 37 from *** pounds in 2019 to *** pounds in 2020 and *** pounds in 2021,196 their production declined by *** percent, from *** pounds in 2019 to *** pounds in 2020 and *** pounds in 2021.197 As their rate of capacity utilization declined during the POI, from *** percent in 2019 to *** percent in 2020 and *** percent in 2021, subject producers possessed substantial and increasing excess capacity.198 However, in 2020 and 2021, although subject producers had sufficient excess capacity to supply the entire U.S. market, subject imports declined.199 Subject producers’ end-of-period inventories declined during the POI, from *** pounds in 2019 to *** pounds in 2020 and *** pounds in 2021.200 Importers’ inventories of subject merchandise from China fluctuated during the POI, declining overall by *** percent.201 Importers reported arranging for a declining level of subject imports, with no arranged imports of subject merchandise reported past the first quarter of 2022.202 Subject producers produced products other than FRCs on the same equipment that they use to produce subject merchandise, indicating some potential to switch from the production of out-of-scope products to FRCs.203 Notwithstanding the subject industry’s ability to increase exports of FRCs to the United States, the record does not indicate that subject producers have the incentive to increase exports to the United States in the imminent future. Subject producers’ exports declined by (…Continued) Br. at 13-15, Exh. 1 at 51-53. As the available record information corroborates Petitioner’s contention that the subject industry is large and has the ability to increase its exports to the United States, we decline to apply adverse inferences with respect to the subject industry’s output indicia. 196 CR/PR at Table VII-3. Based on available data, capacity is projected to decline to *** pounds in 2022, and increase to *** pounds in 2023. Id. 197 CR/PR at Table VII-3. Production is projected to decline to *** pounds in 2022, and increase to *** pounds in 2023. Id. 198 CR/PR at Table VII-3. Capacity utilization is projected to decline to *** percent in 2022, and increase to *** percent in 2023. Id. 199 Compare CR/PR at Table VII-3 with Table VI-6. 200 CR/PR at Table VII-3. End-of-period inventories are projected to decline further, to *** pounds in 2022 and *** pounds in 2023. Id. 201 CR/PR at Table VII-6. Inventories of subject imports declined from *** pounds in 2019 to *** pounds in 2020, and increased to *** pounds in 2021. Id. The ratio of inventories of subject imports to U.S. shipments of imports was *** percent in 2019, *** percent in 2020, and *** percent in 2021. Id. 202 CR/PR at Table VII-7. Importers reported arranging imports of *** pounds of subject merchandise in the first quarter of 2022. Id. 203 CR/PR at Table VII-4. FRC’s accounted for *** percent of total production in 2019, *** percent in 2020, and *** percent in 2021. Id. Out-of-scope product produced on the same machinery as FRCs included ***. Id. We discuss below that barriers to entry to the U.S. market limit subject producers from directing increased volumes of subject import shipments to the United States. 38 *** percent during the POI, from *** pounds in 2019 to *** pounds in 2020 and *** pounds in 2021.204 Their exports as a share of total shipments increased during the same period, from *** percent in 2019 to *** percent in 2020 and *** percent in 2021.205 Their exports to the United States declined by *** percent during the POI, from *** pounds in 2019 to *** pounds in 2020 and *** pounds in 2021.206 Their exports to the United States as a share of total shipments increased from *** percent in 2019 to *** percent in 2020, and declined slightly to *** percent in 2021.207 We acknowledge that subject producers are export oriented, and that the U.S. market was its single largest export destination throughout the POI. However, information on the record indicates that demand for FRCs is expected to increase in China, certain of its neighboring countries, and Europe.208 The record also indicates that there are no antidumping or countervailing duty orders or investigations concerning FRCs from China in any other market.209 Further, barriers to enter the U.S. market limits the potential for additional subject imports, as Chinese foundries are unable to sell FRCs to purchasers in the U.S. market without appropriate certification from the AAR, which requires partnership with or sponsorship by an AAR member.210 Information on the record indicates that designing an AAR-compatible FRC component requires prospective foundries have access to proprietary specifications held by domestic producers, and that obtaining certification to produce AAR-certified FRCs, which may be withdrawn by the AAR, can take up to five years.211 212 These barriers to entry, which are structural and unlikely to change in the imminent future, will likely restrain subject producers from significantly increasing exports of FRCs to the United States. 204 CR/PR at Table VII-3. Total export shipments are projected to decline to *** pounds in 2022, and increase to *** pounds in 2023. Id. 205 CR/PR at Table VII-3. Exports as a share of total shipments are projected to increase to *** percent in 2022, and decline to *** percent in 2023. Id. 206 CR/PR at Table VII-3. Export shipments to the United States are projected to decline to *** pounds in 2022 and 2023. Id. 207 CR/PR at Table VII-3. Exports to the United States as a share of total shipments are projected to increase to *** percent in 2022, and decline to *** percent in 2023. Id. 208 See Strato’s Prehearing Br., Exh. 14. 209 CR/PR at VII-11. 210 CR/PR at I-8-I-12; Strato’s Prehearing Br., Exh. 9. 211 Strato’s Prehearing Br. at 20-32. Additionally, a licensing agreement filed to the record contains provisions that restrain certain AAR-certified foundries in China from selling outside of their home market and certain other markets, including North America. Strato and Wabtec’s Posthearing Br., Exh. 24. 212 Further, as discussed in Section IV.B.3 above, imports of subject FRCs from China are subject to section 301 duties of 25 percent on an ad valorem basis. 39 Given the declining volume of subject imports in the U.S. market during the POI, the subject industry’s declining U.S. exports, the expected increase in demand for FRCs in China, as well as its neighboring countries and Europe, and barriers to entry into the U.S. market, we do not find a likelihood of substantially increased subject imports in the imminent future.213 2. Likely Price Effects As discussed above in Section IV.D, we have found that subject imports predominantly oversold the domestic like product in quarterly price comparisons, both in terms of instances and sales volume, and that they are not currently having significant adverse price effects. Nothing in the record suggests that this will change appreciably in the imminent future. We observe, in this regard, that there were fewer instances of underselling by subject imports in the last year of the POI, i.e., 2021 (***), and more instances of overselling (***) than in any other year of the POI.214 Thus, the record does not suggest that subject imports’ pricing behavior was getting increasingly aggressive toward the end of the POI such that they may imminently cause adverse price effects on the domestic industry. We did not find that any declines in prices for domestically produced FRCs observed during the POI were caused by subject imports, nor did we find that subject imports prevented price increases for the domestic like product that otherwise would have occurred to a significant degree. Given that subject import volume and pricing patterns are unlikely to change appreciably in the imminent future, this lack of adverse effects will likely continue. Accordingly, we find that imports of subject merchandise are not likely to enter at prices that would be likely to have a significant depressing or suppressing effect on domestic prices, or would likely increase demand for such imports. 213 In our analysis, we have considered the nature of the subsidies Commerce has found to be countervailable, particularly whether the countervailable subsidies are ones described in Articles 3 or 6.1 of the WTO Agreement on Subsidies and Countervailing Measures, and whether imports of the subject merchandise are likely to increase. 19 U.S.C. § 1677(7)(F)(i)(I). We observe that Commerce found 34 countervailable subsidy programs, including a number of programs directed specifically towards exports. Freight Rail Coupler Systems and Certain Components Thereof from the People's Republic of China: Final Affirmative Countervailing Duty Determination, 87 Fed. Reg. 30,869 (May 20, 2022); Commerce Memorandum from James Maeder to Lisa W. Wang, Issues and Decision Memorandum for the Preliminary Determination in the Countervailing Duty Investigation of Freight Rail Coupler Systems and Certain Components Thereof from the People’s Republic of China (Feb. 28. 2022) at 8-30. Commerce did not issue an Issues and Decision Memorandum with its final countervailing duty determination. 87 Fed. Reg. 30,869, 30,870. We have taken these subsidy findings into account in our analysis of likely subject import volume. 214 CR/PR at Tables V-4-V-8; Strato’s Prehearing Br. at 20-32, Exh. 9. 40 3. Likely Impact As discussed above, we have found that the volume of subject imports is not likely to increase significantly in the imminent future. Further, consistent with their behavior during the POI, subject imports are not likely to significantly undersell the domestic like product, and are not likely to enter at prices that are likely to have a significant depressing or suppressing effect on domestic prices. While the domestic industry’s performance declined according to most measures throughout the POI, such that it is in a vulnerable condition, we have discussed above in Section IV.E. that the subject imports were not a material cause of the industry’s condition, and the domestic industry’s declining output and financial performance mirrored the sharp decline in apparent U.S. consumption during the POI.215 216 In view of the foregoing, we find that subject imports are not likely to have a significant adverse impact so as to threaten material injury to an industry in the United States in the imminent future. VII. Conclusion For the reasons stated above, we determine that an industry in the United States is not materially injured or threatened with material injury by reason of subject imports of FRCs from China that are sold in the United States at LTFV and that are subsidized by the government of China. 215 For these reasons, we find that subject imports, which did not have a significant adverse impact on the domestic industry during the POI, are not likely to have an actual or potential negative effect on the domestic industry’s existing development and production efforts. 216 Moreover, the record does not show that there are other demonstrable adverse trends that indicate the probability that there is likely to be material injury by reason of subject imports. I-1 Part I: Introduction Background These investigations result from petitions filed with the U.S. Department of Commerce (“Commerce”) and the U.S. International Trade Commission (“USITC” or “Commission”) by the Coalition of Freight Coupler Producers, consisting of McConway & Torley LLC (“M&T”), Pittsburgh, PA, and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO, CLC (“USW”)1 on September 29, 2021, alleging that an industry in the United States is materially injured and threatened with material injury by reason of subsidized and less-than-fair-value (“LTFV”) imports of freight rail coupler systems and components (“FRC”)2 from China. Table I-1 presents information relating to the background of these investigations.3 4 Table I-1 FRC: Information relating to the background and schedule of this proceeding Effective date Action September 29, 2021 Petitions filed with Commerce and the Commission; institution of Commission investigations (86 FR 54997, October 5, 2021) October 19, 2021 Commerce’s notice of initiation AD (86 FR 58864, October 25, 2021) October 19, 2021 Commerce’s notice of initiation CVD (86 FR 58878, October 25, 2021) November 15, 2021 Commission’s preliminary determinations (86 FR 64958, November 19, 2021) March 7, 2022 Commerce’s preliminary CVD determination (87 FR 12662, March 7, 2022); March 8, 2022 Scheduling of final phase of Commission investigations (87 FR 14037, March 11, 2022) March 15, 2022 Commerce’s preliminary AD determination (87 FR 14511, March 15, 2022) May 12, 2022 Commission’s hearing May 20, 2022 Commerce’s final CVD determination (87 FR 30869, May 20, 2022) May 27, 2022 Commerce’s final AD determination (87 FR 32121, May 27, 2022) June 14, 2022 Commission’s vote July 5, 2022 Commission’s views 1 Initially, Petitioner consisted of M&T and another domestic producer. However, the other domestic producer withdrew, and USW was added to the petitions. 2 See the section entitled “The subject merchandise” in Part I of this report for a complete description of the merchandise subject in this proceeding. 3 Pertinent Federal Register notices are referenced in appendix A, and may be found at the Commission’s website (www.usitc.gov). 4 Appendix B presents the witnesses who appeared at the Commission’s hearing. I-2 Statutory criteria Section 771(7)(B) of the Tariff Act of 1930 (the “Act”) (19 U.S.C. § 1677(7)(B)) provides that in making its determinations of injury to an industry in the United States, the Commission-- shall consider (I) the volume of imports of the subject merchandise, (II) the effect of imports of that merchandise on prices in the United States for domestic like products, and (III) the impact of imports of such merchandise on domestic producers of domestic like products, but only in the context of production operations within the United States; and. . . may consider such other economic factors as are relevant to the determination regarding whether there is material injury by reason of imports. Section 771(7)(C) of the Act (19 U.S.C. § 1677(7)(C)) further provides that--5 In evaluating the volume of imports of merchandise, the Commission shall consider whether the volume of imports of the merchandise, or any increase in that volume, either in absolute terms or relative to production or consumption in the United States is significant.. . .In evaluating the effect of imports of such merchandise on prices, the Commission shall consider whether. . .(I) there has been significant price underselling by the imported merchandise as compared with the price of domestic like products of the United States, and (II) the effect of imports of such merchandise otherwise depresses prices to a significant degree or prevents price increases, which otherwise would have occurred, to a significant degree.. . . In examining the impact required to be considered under subparagraph (B)(i)(III), the Commission shall evaluate (within the context of the business cycle and conditions of competition that are distinctive to the affected industry) all relevant economic factors which have a bearing on the state of the industry in the United States, including, but not limited to. . . (I) actual and potential decline in output, sales, market share, gross profits, operating profits, net profits, ability to service debt, productivity, return on investments, return on assets, and utilization of capacity, (II) factors affecting domestic prices, (III) actual and potential negative effects on cash flow, inventories, employment, wages, growth, ability to raise capital, and investment, (IV) actual and potential negative effects on the existing development and production efforts of the domestic industry, including efforts to develop a derivative or more advanced version of the domestic like product, and (V) in {an antidumping investigation}, the magnitude of the margin of dumping. 5 Amended by PL 114-27 (as signed, June 29, 2015), Trade Preferences Extension Act of 2015. I-3 In addition, Section 771(7)(J) of the Act (19 U.S.C. § 1677(7)(J)) provides that—6 (J) EFFECT OF PROFITABILITY.—The Commission may not determine that there is no material injury or threat of material injury to an industry in the United States merely because that industry is profitable or because the performance of that industry has recently improved. Organization of report Part I of this report presents information on the subject merchandise, subsidy and dumping margins, and domestic like product. Part II of this report presents information on conditions of competition and other relevant economic factors. Part III presents information on the condition of the U.S. industry, including data on capacity, production, shipments, inventories, and employment. Parts IV and V present the volume of subject imports and pricing of domestic and imported products, respectively. Part VI presents information on the financial experience of U.S. producers. Part VII presents the statutory requirements and information obtained for use in the Commission’s consideration of the question of threat of material injury as well as information regarding nonsubject countries. Market summary FRC are generally used to connect freight rail cars together. The leading U.S. producers of FRC are *** and ***, while leading producers of FRC outside the United States include ***. The leading U.S. importers of FRC from China are *** and ***. Leading importers of product from nonsubject countries (primarily Mexico) include ***. U.S. purchasers of FRC are firms that build new railcars, railcar pooling companies and firms that service existing railcars; leading purchasers that responded to the Commission’s questionnaire include ***. 6 Amended by PL 114-27 (as signed, June 29, 2015), Trade Preferences Extension Act of 2015. I-4 Apparent U.S. consumption of FRC totaled approximately *** pounds ($***) in 2021. Currently, three firms are known to produce FRC in the United States. U.S. producers’ U.S. shipments of FRC totaled *** pounds ($***) in 2021 and accounted for *** percent of apparent U.S. consumption by quantity and *** percent by value. U.S. shipments of imports from subject sources totaled *** pounds ($***) in 2021 and accounted for *** percent of apparent U.S. consumption by quantity and *** percent by value. U.S. shipments of imports from nonsubject sources totaled *** pounds ($***) in 2021 and accounted for *** percent of apparent U.S. consumption by quantity and *** percent by value. Summary data and data sources A summary of data collected in these investigations is presented in appendix C, table C- 1. Except as noted, U.S. industry data are based on questionnaire responses of three firms that accounted for all known U.S. production of FRC during 2021. U.S. imports are based on six firms’ responses to the Commission’s questionnaires and are somewhat understated. The Commission received three questionnaire responses from Chinese producers that the Commission solicited responses from. Global Trade Atlas data is used in part VII of this report for Chinese exports of a broad category of hooks and other coupling devices, including products outside of the scope of these investigations. Previous and related investigations FRC have not been the subject of any prior countervailing or antidumping duty investigations in the United States. I-5 Nature and extent of subsidies and sales at LTFV Subsidies On May 20, 2022, Commerce published a notice in the Federal Register of its final determination of countervailable subsidies for producers and exporters of FRC from China.7 Table I-2 presents Commerce’s findings of subsidization of FRC in China. Table I-2 FRC: Commerce’s final subsidy determination with respect to imports from China Entity Final countervailable subsidy rate (ad valorem) (percent) Chongqing Tongyao Transportation Equipment Co. 265.99 CRRC Corporation Limited 265.99 CRRC Qiqihar Co., Ltd. 265.99 China Railway Materials Group Co., Ltd. 265.99 Shaanxi Haiduo Railway Technology Development Co., Ltd. 265.99 All others 265.99 Source: 87 FR 30869, May 20, 2022. Note: For further information on programs determined to be countervailable, see Commerce’s associated Issues and Decision Memorandum for the preliminary subsidy determination. Due to lack of comments or case briefs, there is no associated Issues and Decision Memorandum accompanying Commerce’s final determination notice. Sales at LTFV On May 27, 2022, Commerce published a notice in the Federal Register of its final determination of sales at LTFV with respect to imports from China.8 Table I-3 presents Commerce’s dumping margins with respect to imports of product from China. Table I-3 FRC: Commerce’s final weighted-average LTFV margins with respect to imports from China Exporter/producer Final estimated weighted- average dumping margin (percent) Final estimated weighted-average dumping margin adjusted for export subsidy offset(s) (percent) China-Wide Entity 147.11 116.70 Source: 87 FR 32121, May 27, 2022. 7 87 FR 30869, May 20, 2022. 8 87 FR 32121, May 27, 2022. I-6 The subject merchandise Commerce’s scope In the current proceeding, Commerce has defined the scope as follows:9 The scope of this investigation covers freight rail car coupler systems and certain components thereof. Freight rail car coupler systems are composed of, at minimum, four main components (knuckles, coupler bodies, coupler yokes, and follower blocks, as specified below) but may also include other items (e.g., coupler locks, lock lift assemblies, knuckle pins, knuckle throwers, and rotors). The components covered by the investigation include: (1) E coupler bodies; (2) E/F coupler bodies; (3) F coupler bodies; (4) E yokes; (5) F yokes; (6) E knuckles; (7) F knuckles; (8) E type follower blocks; and (9) F type follower blocks, as set forth by the Association of American Railroads (AAR). The freight rail coupler components are included within the scope of the investigation when imported individually, or in some combination thereof, such as in the form of a coupler fit (a coupler body and knuckle assembled together), independent from a coupler system. Subject freight rail car coupler systems and components are included within the scope whether finished or unfinished, whether imported individually or with other subject or non-subject components, whether assembled or unassembled, whether mounted or unmounted, or if joined with non-subject merchandise, such as other non-subject system parts or a completed rail car. Finishing includes, but is not limited to, arc washing, welding, grinding, shot blasting, heat treatment, machining, and assembly of various components. When a subject coupler system or subject components are mounted on or to other non-subject merchandise, such as a rail car, only the coupler system or subject components are covered by the scope. The finished products covered by the scope of this investigation meet or exceed the AAR specifications of M-211, “Foundry and Product Approval Requirements for the Manufacture of Couplers, Coupler Yokes, Knuckles, Follower Blocks, and Coupler Parts” or AAR M-215 “Coupling Systems,” or other equivalent domestic or international standards (including any revisions to the standard(s)). 9 87 FR 32121, May 27, 2022. I-7 The country of origin for subject coupler systems and components, whether fully assembled, unfinished or finished, or attached to a rail car, is the country where the subject coupler components were cast or forged. Subject merchandise includes coupler components as defined above that have been further processed or further assembled, including those coupler components attached to a rail car in third countries. Further processing includes, but is not limited to, arc washing, welding, grinding, shot blasting, heat treatment, painting, coating, priming, machining, and assembly of various components. The inclusion, attachment, joining, or assembly of non-subject components with subject components or coupler systems either in the country of manufacture of the in-scope product or in a third country does not remove the subject components or coupler systems from the scope. Tariff treatment Based upon the scope set forth by Commerce, information available to the Commission indicates that the merchandise subject to these investigations is imported under subheading 8607.30.10 of the Harmonized Tariff Schedule of the United States (“HTS”). Unfinished subject merchandise may also be imported under HTSUS statistical reporting number 7326.90.8688. Freight rail couplers attached to a freight car may also be imported under HTS subheadings 8606.10.00, 8606.30.00, 8606.91.00, and 8606.92.00, as well as statistical reporting numbers 8606.99.0130 and 8606.99.0160. In addition, HTS heading 9803.00.50 may be claimed when the freight rail coupler is attached to a freight car used as an instrument of international traffic. The 2022 general rate of duty is 3.6 percent ad valorem for HTS subheading 8607.30.10; 2.9 percent ad valorem for HTS subheading 7326.90.86; 14 percent ad valorem for HTS subheadings 8606.10.00, 8606.30.00, 8606.91.00, 8606.92.00, and 8606.99.01; and free for HTS heading 9803.00.50. Decisions on the tariff classification and treatment of imported goods are within the authority of U.S. Customs and Border Protection. Section 301 tariff treatment U.S. imports of subject goods produced in China are also subject to additional duties under Section 301 of the Trade Act of 1974. HTS subheadings 8607.30.10, 8606.10.00, 8606.30.00, 8606.91.00, 8606.92.00, and 8606.99.01 were included in the list of articles subject to additional 25 percent ad valorem duties effective August 23, 2018, and HTS subheading 7326.90.86 was included in the list of articles subject to additional 25 percent ad valorem duties effective September 24, 2018. U.S. imports entering under HTS subheading 8607.30.10 were I-8 excluded from Section 301 duties effective July 31, 2019 for one year. The exclusion for HTS subheading 8607.30.10 was originally extended until October 2, 2020 and further extended until December 31, 2020, after which U.S. imports were subject to the additional 25 percent ad valorem duties effective July 31, 2020.10 The product Description and applications FRC are comprised of a system of four main metal components: knuckles, coupler bodies, coupler yokes, and follower blocks; in addition to ancillary parts (e.g., coupler locks, coupler lock lifters, knuckle pins, knuckle throwers, and rotors). The main components of FRC are manufactured in accordance with Association of American Railroad (AAR) standards to ensure FRC in the United States are interoperable.11 Knuckles are typically metal castings in the shape of a hook that pivot on a vertical hinge between a “locked” and an “unlocked” position to allow for interlocking with knuckles of adjacent FRC. Coupler bodies are a metal casting that hold the knuckle and allow it to pivot. The coupler body fits within the coupler yoke, which is a metal casting that attaches the FRC to a freight car. The follower block is a rectangular piece of metal that separates the FRC with the adjacent draft gear of a freight car (designed to absorb some of the forces when connecting freight rail cars). FRC are designed to connect two freight cars together by automatically interlocking the knuckles of both FRC when the freight cars are pushed together, eliminating previously required and potentially dangerous manual input. A manually operated lever on the side of a freight car connects to the FRC and is used to lift the knuckle pin, allowing the knuckles to release and the freight cars to be uncoupled. Freight cars typically use two FRC, one on each of the front and rear of the freight car, to allow for coupling additional freight cars together in greater numbers. In addition to interlocking freight cars together, FRC are also designed to reduce shocks when freight cars are in transit or braking. 10 83 FR 40823, August 16, 2018; 83 FR 47974, September 21, 2018; 84 FR 37381, July 31, 2019; 84 FR 52553, October 2, 2019; 85 FR 62786, October 5, 2020. 11 AAR standard M-211 covers foundry and product approval requirements for the manufacture of couplers, coupler yokes, knuckles, follower blocks, and coupler parts. AAR standard M-215 covers complete coupler systems. I-9 Figure I-1 Interlocked freight rail couplers Source: https://www.railwayage.com/mechanical/freight-cars/mechanical-couplers/ For the purpose of these investigations FRC and components are classified under the following AAR designations: type E, E/F, and F couplers, type E and F knuckles, type E and F yokes, and type E and F follower blocks. Type E couplers, knuckles, yokes, and follower blocks meet the basic standards set by AAR but do not have the additional features included in type F components. Additional type F features include interlocking wing pockets and lugs that reduce the likelihood of certain freight car derailments as well as reducing the gap between coupled knuckles to improve freight car handling.12 Type F couplers are typically used for freight cars transporting hazardous materials. Type E/F couplers contain a basic type E knuckle and type F coupler body components. 12 Vantuono, “Mechanical Focus: Couplers,” December 27, 2016, https://www.railwayage.com/mechanical/freight-cars/mechanical-couplers/. I-10 Figure I-2 Type E and F knuckles Type E knuckle Type F knuckle Source: https://www.wabteccorp.com/freight-car/end-of-car-systems/coupler-system/knuckles Figure I-3 Type E and F coupler bodies Type E coupler body Type F coupler body Source: https://www.wabteccorp.com/freight-car/end-of-car-systems/coupler-system/coupler-bodies I-11 Figure I-4 Type E and F coupler yokes Type E coupler yoke Type F coupler yoke Source: https://www.wabteccorp.com/freight-car/end-of-car-systems/coupler-system/yokes-followers- components Figure I-5 Type E and F follower blocks Type E follower block Type F follower block Source: https://www.wabteccorp.com/freight-car/end-of-car-systems/coupler-system/yokes-followers- components I-12 Manufacturers of FRC sell their products through two main channels of distribution. The first is to freight car original equipment manufacturers that use FRC in new freight car production. The second is to maintenance companies, freight railroads, and freight car producers that use FRC and individual components as replacement parts in used freight cars.13 Manufacturing processes Freight rail knuckles, coupler bodies, coupler yokes, and follower blocks are typically iron castings manufactured in foundries certified by AAR.14 To begin the process, pig iron and scrap metal are melted in a furnace and poured into molds formed from hardened sand that provide the rough shape for each FRC component. Once the metal has cooled, the hardened sand molds are removed, and any imperfections present in the mold that were transferred to the casting are also removed. The casting undergoes heat treatment processes, such as annealing and tempering, designed to strengthen and harden the metal. Once the metal is hardened, machine tools are used to grind the rough casting into the final desired dimensions, as well as to drill holes and grooves into the components as necessary. Once the specified form is achieved, the components are painted, oiled, or primed to prevent rusting. Lastly, the castings are subjected to several safety and fatigue tests to comply with AAR standards. For complete FRC, the individual casted components are assembled along with additional ancillary parts (e.g., coupler locks, coupler lock lifters, knuckle pins, knuckle throwers, and rotors). These additional parts do not have to be manufactured in foundries certified by AAR but may still be manufactured by the same producers of the FRC components or purchased from secondary manufacturers. 13 Petition, p. 17. 14 Some FRC components are forged from a single piece of steel using dies instead of being cast using molten iron. I-13 Domestic like product issues No issues with respect to domestic like product have been raised in these investigations. The petitioner proposes a single domestic like product that is co-extensive with the scope of the investigations. It contends that all domestically-produced FRC within the scope share the same general physical characteristics and uses, channels of distribution, common manufacturing facilities, production processes, and employees, customer and producer perceptions, are interchangeable, and are sold within a reasonable range of similar prices.15 No respondents contested the domestic like product definition in the preliminary phase of these investigations. No party requested that the Commission collect data on other possible domestic like products in their comments on the Commission’s draft final phase questionnaires. The petitioner contends that FRC are a separate domestic product from railway or tramway passenger coupler systems (“passenger railway couplers”). It argues that passenger railway couplers have distinct physical characteristics and uses, are not interchangeable with FRC, are distributed through different channels of distribution than FRC, are perceived by customers and producers to be distinct from FRC, require different production processes and production employees, and are sold at a significantly higher price point than FRC.16 The Commission’s questionnaires in the preliminary phase investigations asked for producers and importers to compare FRC and passenger railway couplers using the factors which the Commission typically considers in regarding the appropriate domestic product(s) that are “like” the subject imported product.17 During the preliminary phase of these investigations the Commission found that all domestically produced FRCs share the same basic overall shape and common features, are produced through the same production process, are generally interchangeable and used to connect and transport railcars, are sold overwhelmingly through 15 Petition, pp. 17-19; Petitioner’s postconference brief, pp. 6-9. 16 Petition, pp. 18-19; Petitioner’s postconference brief, pp. 6-9. 17 The Commission typically considers the following factors in regarding the appropriate domestic product(s) that are “like” the subject imported product: (1) physical characteristics and uses; (2) interchangeability; (3) channels of distribution; (4) common manufacturing facilities, production processes, and production employees; (5) customer and producer perceptions; and (6) price. I-14 the same channels of distribution, and are perceived to be a single product category by market participants, and defined a single domestic like product consisting of all domestically produced FRC, coextensive with the scope.18 Intermediate products The domestic like product proposed by the Petitioner includes the intermediate, or unfinished products (unfinished and unassembled FRC components) as well as downstream products (finished and complete FRC). Employing the Commission’s semi-finished analysis for domestic like product, Petitioner contends that in-scope unfinished and unassembled FRC components are not a separate domestic like product from finished and complete FRC.19 The Commission’s questionnaires in the preliminary phase investigations asked for producers and importers to compare FRC and FRC components using the Commission’s five- factor semi-finished products analysis.20 Applying the semifinished products analysis, the Commission found that upstream FRC components and downstream finished FRC belong in a single domestic like product.21 18 Freight Rail Coupler Systems and Components from China, Inv. Nos. 701-TA-670 and 731-TA-1570 (Preliminary), USITC Publication 5243, November 2021 (“Preliminary phase publication”), p.13. 19 Petition, pp. 19-21; Petitioner’s postconference brief, pp. 9-11. 20 The Commission’s five-factor semi-finished products analysis examines the following: 1) the significance and extent of the processes used to transform the upstream into the downstream articles; (2) whether the upstream article is dedicated to the production of the downstream article or has independent uses; (3) differences in the physical characteristics and functions of the upstream and downstream articles; (4) whether there are perceived to be separate markets for the upstream and downstream articles; and (5) differences in the costs or value of the vertically differentiated articles. 21 Preliminary phase publication, p.14. II-1 Part II: Conditions of competition in the U.S. market U.S. market characteristics The U.S. FRC market is supplied by U.S. producers, subject imports from China, and nonsubject imports, mainly from Mexico.1 2 There are two sectors, original equipment manufacturers (“OEM”) and maintenance/replacement. New freight railcar builds only use new FRC while refurbished FRC are used on reconditioned railcars.3 The average coupler body replacement rate is 20 years while the average knuckle replacement rate is 5 to 10 years because the knuckle takes the brunt of the force of railcars. Purchasers reported that refurbished FRC can generally be used in the same applications as new FRC, other than in new freight railcar builds. All FRC must comply with the Association of American Railroads (“AAR”) standards, including imports from China and Mexico.4 FRC may be imported into the United States fully assembled or as subassemblies, with most or all of the integral parts needed to assemble an FRC into a finished form.5 FRC may also be imported as part of a finished railcar.6 Chinese FRC are subject to section 301 tariffs7 and some FRC raw materials are subject to section 232 tariffs.8 Most purchases during 2021 were for new, completely assembled, standalone FRC. Purchasers reported that 76.0 percent of their total purchases during 2021 were of standalone FRC and the remaining 24.0 percent were FRC attached to railcars or other out-of-scope system parts. Purchasers reported that 90.3 percent of their total purchases during 2021 were of new FRC and the remaining 9.7 percent were refurbished FRC. Purchasers reported that 73.8 percent of their total purchases during 2021 were of complete assembly FRC and the remaining 1 U.S.-produced FRC accounted for *** percent of the U.S. market, Chinese FRC accounted for *** percent, and Mexican FRC accounted for *** percent in 2021. The remaining *** percent is from India. 2 Responding U.S. producers include ***; responding importers include ***. 3 Several purchasers reported that only newly manufactured FRC can be used on new freight railcars. 4 Petitions, Volume I, Part I, pp. 3, 9-10, 23. 5 Petitions, Volume I, Part I, p. 10. 6 There are instances where FRC from China are imported into Mexico, assembled and attached to newly produced freight railcars, and ultimately exported to the United States market via the finished railcar. Petitions, Volume I, Part I, pp. 23-24. 7 See below for a discussion of the impact of the section 301 tariffs on FRC. 8 See Part V for a discussion of the impact of the section 232 tariffs on FRC raw materials. II-2 26.2 percent were individual components (i.e., knuckles, bodies, yokes, and/or follower blocks).9 One importer (***) and no U.S. producers reported changes to the product mix or marketing of FRC since January 1, 2019. *** reported that its patented designs and technological advancements exceed AAR specifications and improve the return on investment for its customers. Apparent U.S. consumption of FRC decreased during 2019-21. Overall, apparent U.S. consumption in 2021 was *** percent lower than in 2019. U.S. purchasers The Commission received 13 usable questionnaire responses from firms that had purchased FRC during 2019-21.10 11 12 Ten responding purchasers are end users that service existing railcars, four are end users that are new railcar builders, three are distributors, two describe themselves as a railroad, and one is an end user that is a railcar pooling company.13 In general, responding U.S. purchasers were located in the Northeast, Southeast, Midwest, Central Southwest, and Northwest regions of the United States. The responding purchasers represented firms in the freight rail industry. Large purchasers of FRC include ***. 9 Petitioners reported that approximately *** percent of coupler bodies were sold in “fits” (a combined knuckle and body) during 2019-21. Petitioners’ posthearing briefs, p. 10, Exhibit 2. 10 The following firms provided purchaser questionnaire responses: ***. 11 Of the 13 responding purchasers, 12 purchased the domestic FRC, 11 purchased imports of the subject FRC from China, 8 purchased imports of FRC from Mexico, and 1 purchased imports of FRC from nonsubject country India. 12 All 13 purchasers indicated they had marketing/pricing knowledge of domestic product, 9 of Chinese product, 6 of nonsubject Mexican product, and 2 of other nonsubject countries (Canada, India, and Indonesia). 13 New railcar builders reported manufacturing railcars in ***. II-3 Impact of section 301 tariffs As discussed in Part I, FRC subject to these investigations have been subject to section 301 tariffs beginning in September 2018 of 10 percent ad valorem, which were increased to 25 percent in May 2019.14 U.S. producers, importers, and purchasers were asked to report the impact of section 301 tariffs on overall FRC cost, demand, supply, and prices (table II-1). Two U.S. producers, five importers, and five purchasers reported that the imposition of tariffs on Chinese-origin products under section 301 have had an impact on the FRC market in the United States; no U.S. producers, no importers, and one purchaser reported no impact; one U.S. producer, one importer and six purchasers did not know. Table II-1 FRC: Count of firms' responses regarding the impact of the 301 tariffs on Chinese origin products Market Firm type Yes No Don't Know Impact on US market from 301 actions U.S. producers 2 0 1 Impact on US market from 301 actions Importers 5 0 1 Impact on US market from 301 actions Purchasers 5 1 6 Source: Compiled from data submitted in response to Commission questionnaires. U.S. producer *** reported that the section 301 tariffs caused an increase in exports of Chinese FRC to Mexico that were installed on freight railcars and transported for use in the United States. U.S. producer *** reported that the section 301 tariffs impacted the overall market for U.S. producers. Importer *** reported that the section 301 tariffs increased its costs and prices while the tariffs decreased the supply and demand of FRC imported to the United States from China after the exclusion for FRC expired in 2020. Importer *** reported that the cost of steel increased and U.S. producers and suppliers of FRC increased pricing as a result. Importer *** reported that FRC imports to the United States from China generally stopped due to the tariffs. Importer *** reported that the section 301 tariffs increased sourcing costs, making the firm less competitive, which created a loss of sales contracts and revenue. Purchaser *** reported that the section 301 tariffs have essentially reduced the competitive landscape from five suppliers to two, but capacity constraints for domestic suppliers will limit their ability to meet demand for both new railcar manufacturing and 14 Notice of Modification of Section 301 Action: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation, 83 FR 48,000, September 21, 2018; Notice of Modification of Section 301 Action: China's Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation, 84 FR 20,459, May 9, 2019. II-4 maintenance needs.15 Purchasers *** reported that the tariffs resulted in immediate increases in prices for FRC from all suppliers. Purchaser *** reported that the section 301 tariffs had a minimal impact on its purchases of FRC. Channels of distribution U.S. producers sold mainly to the OEM market during 2019 and to the maintenance/replacement market during 2020-21, as shown in table II-2. Importers of subject FRC from China sold mainly to the maintenance/replacement market while importers of nonsubject FRC from Mexico sold mainly to the OEM market. Table II-2 FRC: Share of U.S. shipments by source, channel of distribution, and period Shares in percent Source Channel 2019 2020 2021 United States OEM *** *** *** United States Replacement *** *** *** China OEM *** *** *** China Replacement *** *** *** Mexico OEM *** *** *** Mexico Replacement *** *** *** All other sources OEM *** *** *** All other sources Replacement *** *** *** Nonsubject OEM *** *** *** Nonsubject Replacement *** *** *** All imports OEM *** *** *** All imports Replacement *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. 15 The firm reported that ***. II-5 Geographic distribution U.S. producers and importers reported selling FRC to all regions the United States (table II-3). For U.S. producers, *** percent of sales were within 100 miles of their production facility, *** percent were between 101 and 1,000 miles, and *** percent were over 1,000 miles. Importers sold *** percent within 100 miles of their U.S. point of shipment, *** percent between 101 and 1,000 miles, and *** percent over 1,000 miles. Table II-3 FRC: Count of U.S. producers’ and U.S. importers’ geographic markets Count in number of firms reporting Region U.S. producers China Northeast 3 3 Midwest 3 3 Southeast 2 3 Central Southwest 2 3 Mountains 2 2 Pacific Coast 2 2 Other 2 --- All regions (except Other) 2 2 Reporting firms 3 3 Source: Compiled from data submitted in response to Commission questionnaires. Note: Other U.S. markets include AK, HI, PR, and VI. II-6 Supply and demand considerations U.S. supply Table II-4 provides a summary of the supply factors regarding FRC from U.S. producers and responding producers from China.16 Both U.S. and Chinese capacity and capacity utilization decreased; U.S. capacity decreased at a higher rate than Chinese capacity and Chinese capacity utilization decreased at a higher rate than U.S. capacity utilization. U.S. inventories increased substantially more than Chinese inventories. Table II-4 FRC: Supply factors that affect the ability to increase shipments to the U.S. market, by country Quantity in 1,000 pounds; ratio and share in percent; count in number of firms reporting Factor Measure United States China Capacity 2019 Quantity *** *** Capacity 2021 Quantity *** *** Capacity utilization 2019 Ratio *** *** Capacity utilization 2021 Ratio *** *** Ending inventories 2019 Share *** *** Ending inventories 2021 Share *** *** Home market 2021 Share *** *** Non-US export markets 2021 Share *** *** Ability to shift production (firms reporting “yes”) Count *** *** Source: Compiled from data submitted in response to Commission questionnaires. Note: Responding U.S. producers accounted for virtually all of U.S. production of FRC in 2021. Responding foreign producer/exporter firms accounted for approximately one-fifth of U.S. imports of FRC from China during 2021. For additional data on the number of responding firms and their share of U.S. production and of U.S. imports from China, please refer to Part I, “Summary Data and Data Sources.” Note: Capacity utilization is measured as a ratio of production to capacity, ending inventories is measured as a share of total shipments, home market 2021 and non-U.S. export market 2021 shipments are measured as a share of total shipments. Domestic production Based on available information, U.S. producers of FRC have the ability to respond to changes in demand with large changes in the quantity of shipments of U.S.-produced FRC to the U.S. market. The main contributing factors to this degree of responsiveness of supply are the availability of large amounts of unused capacity, large amounts of inventories, and the ability to 16 Three foreign producers in China *** submitted questionnaires after the prehearing Staff Report. II-7 shift production to or from alternate products. Factors mitigating responsiveness of supply include a limited ability to shift shipments from export markets. Domestic capacity and production decreased during 2019-21 but production decreased at a much higher rate, resulting in large decreases in capacity utilization.17 Inventories as a share of total shipments increased substantially as U.S. shipments decreased by *** percent and inventories decreased by *** percent during 2019-21. Domestic export shipments as a share of U.S. producers’ total shipments increased slightly from *** percent in 2019 to *** percent in 2021. Other products that producers reportedly can produce on the same equipment as FRC include heavy equipment, mining and agricultural equipment castings, and transit products. Factors affecting U.S. producers’ ability to shift production include setting up the machinery and safety training. Reported production constraints include the physical number of heats that producers can pour and the amount of time it takes to melt a furnace full of steel while pouring steel from another furnace. Subject imports from China Based on available information, producers of FRC from China have the ability to respond to changes in demand with large changes in the quantity of shipments of FRC to the U.S. market. The main contributing factors to this degree of responsiveness of supply are the availability of unused capacity, the ability to shift shipments from inventories, and the ability to shift production to or from alternate products. Factors mitigating responsiveness of supply include the limited ability to shift shipments from non-U.S. export markets. Chinese producers’ capacity, production, and capacity utilization decreased during 2019- 21 while the ratio of inventories to total shipments increased. Factors affecting Chinese producers’ ability to shift production included mold and raw material price changes, time, tooling, the establishment of new technical teams, and development costs.18 Chinese producers shipped a small amount of their FRC production to non-U.S. markets Canada and Mexico. Imports from nonsubject sources Nonsubject imports accounted for *** percent of total U.S. imports by quantity in 2021. The largest source of nonsubject imports during 2019-21 was Mexico. Reported nonsubject imports from Mexico accounted for *** percent by quantity of total U.S. imports in 2019, *** percent by quantity in 2020, and *** percent by quantity in 2021. The other 17 Capacity decreased by *** percent and production decreased by *** percent during 2019-21. 18 Foreign producer *** reported that it would take at least one-half of a year to a year to reach its original capacity should it switch production. II-8 nonsubject import source was India and it accounted for *** percent by quantity in 2019, *** percent by quantity in 2020, and *** percent by quantity in 2021. Supply constraints U.S. producers, importers, and purchasers were asked if they had experienced any supply constraints before and after the filing of the petitions on September 29, 2021. All three U.S. producers, three of six importers, and nine of 13 purchasers reported that they had not experienced supply constraints between January 1, 2019 and September 29, 2021. Of the firms that did report supply constraints, importer *** reported that it has often not been able to supply FRC when a customer requests due to volatile demand and supply chain logistics.19 Importer *** reported vendor capacity and availability limitations. Importer *** reported that its U.S. supplier *** had stopped manufacturing certain FRC and terminated its agreements. Purchaser *** reported that it had multiple suppliers delay shipments after the onset of the COVID-19 pandemic. All three U.S. producers reported that they had not experienced supply constraints after the petitions were filed on September 29, 2021. Four of six importers and 10 of 12 responding purchasers reported that they had experienced supply constraints after the petitions were filed. Importers *** reported generally less available FRC from China. Importer *** reported shortages in shipping containers having an impact on its ability to supply a customer. Several purchasers reported supply constraints for Chinese FRC due to these AD/CVD investigations. Other purchasers reported increased lead times. New suppliers Ten of the 13 responding purchasers indicated that no new suppliers entered the U.S. market since January 1, 2019. U.S. demand Based on available information, the overall demand for FRC is likely to experience small changes in response to changes in price. The main contributing factors are the lack of substitute products and the small cost share of FRC in the production of new freight railcars and the reconditioning of used freight railcars. 19 ***. II-9 End uses and cost share U.S. demand for FRC depends on the demand for U.S.-produced freight railcars. FRC accounts for a small share of the cost of the freight railcars in which it is used. Reported cost shares for freight railcar production were 1 to 3 percent. U.S. producer *** reported that demand for FRC is also driven by the need to repair freight railcars already in service. While new cars need complete FRC, maintenance on existing FRC may only require individual parts.20 Business cycles Two of three U.S. producers, five of six importers, and 10 of 13 purchasers indicated that the market was subject to business cycles or conditions of competition. U.S. producer *** reported that the business cycle is typically seven years from peak to trough. Importer *** reported that demand in the OEM market is aligned to the number of new cars built, while demand for the maintenance parts in the aftermarket is more dependent on Class I railcar traffic volume and is more consistent than the OEM market.21 Importer *** reported that finished railcar demand drives cyclicality of FRC. Importer *** reported an 8- to 10-year cycle and indicated that downtrends tend to happen with downturns in the economy. Importer *** further reported that during downturns, railcars are put into storage and general maintenance is deferred, reducing demand for FRC further. Purchaser *** reported that availability of FRC in the maintenance market is subject to new railcar manufacturing levels. The firm also reported that the maintenance market is relatively constant while the new freight railcar market can have large swings from year to year. Purchaser *** reported that once newly manufactured railcars are put in service, they come up for inspection on a cycle. Purchaser *** reported that the need for replacement FRC increases during winter months because of a higher occurrence of coupler breakage due to cold temperatures. Most responding firms (two U.S. producers, five importers, and seven purchasers) reported that there have been changes in the business cycles or conditions of competition for FRC since January 1, 2019. U.S. producer *** reported that some freight car manufacturers moved production to Mexico to avoid section 301 duties. U.S. producer *** 20 Petitioner stated that the replacement rate for knuckles is about 5 years. Petitions, Volume I, Part I, p. 22, Exhibit I-11. Respondent Strato stated that the replacement rate for its knuckles is about 5 to 10 years. Conference transcript, p. 96 (Foxx). 21 “The seven private Class I railroads are the largest railway carriers, and account for the majority of the rail infrastructure in the country. They operate over nearly 92,000 route miles across 46 states (not Alaska, Hawaii, New Hampshire or Rhode Island).” https://www.aar.org/integrated-rail-network. II-10 reported that the COVID-19 pandemic had an impact. Importer *** reported changes due to the imposition of section 301 tariffs and an increase in the percentage of railcars being produced in Mexico. Importer *** reported that the implementation of Precision Scheduled Railroading (“PSR”) by Class 1 railroads led to fewer railcars in operation, more rail time for each car, and more cars in storage. Purchaser *** reported global supply chain constraints. In December 2017, Trinity announced that it would transfer its ownership in M&T to Arcosa, Inc. As part of the sale, Trinity agreed to purchase set amounts of FRC from M&T to decrease annually through 2023.22 Petitioner M&T testified that “the contract {with Trinity} includes tapered volume over time, and as stated before, annual negotiations have resulted in decreased pricing over the POI”.23 Respondents reported that Trinity’s new railcar deliveries decreased more than the overall drop in demand for new railcars during 2019-21.24 Demand trends U.S. producers, importers, and purchasers were asked how demand for FRC has changed before and after the onset of the COVID-19 pandemic. U.S. producers reported a fluctuation in U.S. and foreign demand for FRC during 2019; importers reported a fluctuation and a decrease in both U.S. and foreign demand; purchasers mostly reported a fluctuation and a decrease in U.S. and foreign demand (table II-5). Table II-5 FRC: Count of firms’ responses regarding overall domestic and foreign demand during 2019, by firm type Count in number of firms reporting Market Firm type Increase No change Decrease Fluctuate Domestic demand U.S. producers 0 0 0 2 Domestic demand Importers 0 0 3 3 Domestic demand Purchasers 1 0 5 5 Foreign demand U.S. producers 0 0 0 2 Foreign demand Importers 1 0 2 2 Foreign demand Purchasers 0 1 2 2 Source: Compiled from data submitted in response to Commission questionnaires. 22 Strato’s postconference brief, p. 19. 23 Hearing transcript, p. 35 (Lefevre). 24 Respondents Strato’s and Wabtec’s posthearing briefs, Attachment I, Responses to Commissioner Questions, p. 32. II-11 When describing demand in the United States during 2019 (before the COVID-19 pandemic), U.S. producers, importers, and purchasers reported that demand for FRC was cyclical and followed the business cycle. Several importers and purchasers reported that the expansion of PSR in the Class 1 railroads impacted demand. Purchaser *** reported an increase in the scrapping of old railcars, which typically lowers demand for FRC in the maintenance/replacement market. When describing demand outside of the United States during 2019, importers *** reported that more U.S. railcar builders had moved to Mexico. U.S. producers reported a fluctuation in U.S. and foreign demand for FRC since 2020; importers mostly reported a fluctuation and a decrease in both U.S. and foreign demand; purchasers mostly reported a fluctuation and a decrease in U.S. demand and a fluctuation and increase in foreign demand (table II-6). Table II-6 FRC: Count of firms’ responses regarding overall domestic and foreign demand since 2020, by firm type Count in number of firms reporting Market Firm type Increase No change Decrease Fluctuate Domestic demand U.S. producers 0 0 0 1 Domestic demand Importers 1 0 3 2 Domestic demand Purchasers 2 1 3 5 Foreign demand U.S. producers 0 0 0 1 Foreign demand Importers 1 0 2 2 Foreign demand Purchasers 2 0 1 2 Source: Compiled from data submitted in response to Commission questionnaires. When describing demand since 2020 (after the onset of the COVID-19 pandemic), firms reported decreases in new car builds during 2020 but rebounds during 2021. Purchaser *** reported that demand started to pick up during the second quarter of 2021 and has been strong since then. When describing demand outside of the United States since 2020, importer *** reported that new car builds in Mexico dropped by more than 43 percent, the lowest levels of production and demand since 2010. Purchasers were also asked how demand for end-use products has changed since 2019. Purchasers reported mixed demand for end-use products since 2019 (3 firms reported that it fluctuated, 2 reported that it increased, 2 that it decreased, and 1 that it did not change). Most purchasers reported that the cyclical nature of the freight railcar market drives demand for FRC. Purchaser *** reported that in addition to normal fluctuations in the II-12 business cycle, demand for its end-use products is affected by the implementation of various efficiency initiatives (such as PSR) and the scrapping of railcars past their useful lives. The new railcar market has experienced several surges and declines in recent decades as the market follows general trends in the overall economy (figure II-1 and table II-7).25 New railcar deliveries to the North American market decreased by 49.5 percent from 2019 (58,026 railcars) to 2021 (29,280 railcars). The average annual number of deliveries during 1994-2021 was about 51,406.26 Figure II-1 Freight railcars: Deliveries in North America by year Sources: Years 1994-2019: https://www.railwayage.com/mechanical/freight-cars/do-we-need-another- north-american-railcar-builder/#. Years 2020-21: Railway Supply Institute Inc., ARCI 2021 4th Quarter Reporting Statistics, January 31, 2022. 25 The United States experienced economic recessions during 2001, 2007-09, and 2020. 26 Trinity Rail estimates industry deliveries of new railcars to be 40,000 to 50,000 railcars in 2022. https://www.railwayage.com/mechanical/freight-cars/trinity-strong-4q21-highlights-improving-market- conditions/?RAchannel=freight-cars. II-13 Table II-7 Freight railcars: Deliveries in North America by year Year Freight railcar deliveries 1994 53,269 1995 60,618 1996 54,031 1997 49,902 1998 74,832 1999 74,223 2000 55,791 2001 34,258 2002 17,714 2003 32,180 2004 46,871 2005 68,612 2006 69,733 2007 63,149 2008 59,954 2009 21,150 2010 16,579 2011 46,125 2012 58,891 2013 53,043 2014 67,228 2015 82,296 2016 62,433 2017 44,963 2018 50,803 2019 58,026 2020 33,417 2021 29,280 Sources: Years 1994-2019: https://www.railwayage.com/mechanical/freight-cars/do-we-need-another- north-american-railcar-builder/#. Years 2020-21: Railway Supply Institute Inc., ARCI 2021 4th Quarter Reporting Statistics, January 31, 2022. II-14 Additionally, the number of freight railcars owned and operated by Class I railroads decreased by 10.1 percent from 2019 (270,378 railcars) to 2021 (243,087 railcars) (figure II-2 and table II-8). The decrease has been attributed to improved utilization (e.g., double-stack container railcars) and the deployment of larger cars.27 M&T reported that most of its product ends up in the Class I rail system.28 Figure II-2 Freight railcars: Count of freight railcars owned and operated by Class I railroads Sources: Years 2010-20: U.S. Department of Transportation, Bureau of Transportation Statistics, National Transportation Statistics, Table 1-11, available at https://www.bts.gov/topics/national-transportation- statistics as of August 2021. Year 2021: U.S. Department of Transportation, Bureau of Transportation Statistics and Surface Transportation Board, Annual R-1 Reports, Schedule 710. 27 U.S. Department of Transportation, Bureau of Transportation Statistics, Transportation Statistics Annual Report, 2020. 28 Conference transcript, p. 64 (Mautino). II-15 Table II-8 Freight railcars: Count of freight railcars owned and operated by Class I railroads Year Freight railcars (number) 2010 397,730 2011 380,699 2012 380,641 2013 373,838 2014 371,642 2015 330,996 2016 315,227 2017 306,268 2018 293,742 2019 270,378 2020 252,400 2021 243,087 Sources: Years 2010-20: U.S. Department of Transportation, Bureau of Transportation Statistics, National Transportation Statistics, Table 1-11, available at https://www.bts.gov/topics/national-transportation- statistics as of August 2021. Year 2021: U.S. Department of Transportation, Bureau of Transportation Statistics and Surface Transportation Board, Annual R-1 Reports, Schedule 710. Demand for FRC in the maintenance/replacement market is driven by several factors, including the amount of freight railroad traffic that is occurring, the number of freight railcars in storage, and the number of cars that are scrapped each year. The maintenance/replacement market is closely tied to railroad revenue per ton-miles.29 Class I railroad revenue per ton-miles decreased by 5.0 percent from 2019 ($1,614.5 billion) to 2021 ($1,533.9 billion).30 The average number of freight railcars in storage was *** during 2019, *** during 2020, and *** during January-September 2021.31 Maintenance is not conducted on freight railcars that are in storage. The estimated number of freight railcars that were scrapped increased by 8.3 percent from 2019 (55,400 railcars) to 2021 (60,000 railcars).32 An increase in steel scrap prices has been attributed to the increase in the number of freight railcars scrapped during this period.33 Estimates for average annual FRC units in the North American 29 “{Revenue per ton-miles} is the amount of traffic that railroads are pulling on a day-to-day basis. This means that railcars are traveling fewer miles on average, and railcar owners are deferring maintenance or reconditioning their freight car couplers in lieu of them replacing with new. The result has been lower demand in this market.” Conference transcript, p. 80 (Korzeniowski). 30 Surface Transportation Board, Annual R-1 Reports, Schedule 755, Line 110. 31 Petitions, Volume I, Part I, Exhibit I-11. 32 Strato’s Conference Witness Testimony, Factors Impacting Demand, Car Build vs Car Scrapped. 33 https://www.freightwaves.com/news/sky-high-steel-prices-bolster-market-for-railcar-scrap-metal- greenbrier. For more information on steel scrap prices, please see “Raw material costs” in Part V. II-16 maintenance/replacement market were *** units during 2019, *** units during 2020, and *** units during January-September 2021.34 Substitute products U.S. producers, importers, and purchasers reported that there were no substitutes for FRC. Substitutability issues This section assesses the degree to which U.S.-produced FRC and imports of FRC from China can be substituted for one another by examining the importance of certain purchasing factors and the comparability of FRC from domestic and imported sources based on those factors. Based on available information, staff believes that there is a high degree of substitutability between domestically produced FRC and FRC imported from China.35 36 The primary factors contributing to this level of substitutability include little preference for any particular country of origin, similarities between domestically produced FRC and FRC imported from China across multiple purchase factors, and the high degree of interchangeability between domestic and subject sources from China. Factors reducing substitutability include differences in availability, lead times, and certain purchasers’ preference for certain types of FRC only available from China. 34 Petitions, Volume I, Part I, Exhibit I-11. 35 The degree of substitution between domestic and imported FRC depends upon the extent of product differentiation between the domestic and imported products and reflects how easily purchasers can switch from domestically produced FRC to the FRC imported from China (or vice versa) when prices change. The degree of substitution may include such factors as relative prices (discounts/rebates), quality differences (e.g., grade standards, defect rates, etc.), and differences in sales conditions (e.g., lead times between order and delivery dates, reliability of supply, product services, etc.). 36 The prehearing Staff Report had a finding of “at least a moderate-to-high degree of substitutability”. The moderate finding was based, in part, on certain FRC from China incorporating the Bedloe technology, whereas domestic producers of FRC do not. After information provided in posthearing briefs and hearing testimony, it is staff’s understanding that the Bedloe technology may increase the useful life of FRC, but all FRC must meet AAR standards, regardless of the source or technology used. Additionally, when making purchasing decisions, purchasers may not know that certain FRC from China incorporate the Bedloe technology and may make decisions based on other factors. See “Availability of specific product types” below for more information. II-17 Factors affecting purchasing decisions Purchaser decisions based on source As shown in table II-9, purchasers’ responses were mixed regarding whether their and their customers’ purchasing decisions were made based on the producer. Several firms reported having contracts with certain producers based on reliability, quality, and performance. Most purchasers reported never making purchasing decisions based on the country of origin. Of the four purchasers that sometimes make decisions based on the country of origin, purchaser *** reported that it prefers U.S.-origin FRC to minimize transportation costs and lead time issues. Most responding purchasers reported sometimes making decisions based on customer preference for the country of origin. Purchasers *** reported that certain customers must comply with U.S. government regulations that require a certain percent of purchases to be domestic. Table II-9 FRC: Count of purchasers’ responses regarding frequency of purchasing decisions based on producer and country of origin Count in number of firms reporting Firm making decision Decision based on Always Usually Sometimes Never Purchaser Producer 1 4 4 4 Customer Producer 0 3 3 1 Purchaser Country 0 0 4 9 Customer Country 0 0 4 3 Source: Compiled from data submitted in response to Commission questionnaires. Importance of purchasing domestic product Twelve of 13 purchasers reported that most or all of their purchases did not require purchasing U.S.-produced product. Two reported that domestic product was required by law (for 1 to 2 percent of their purchases), 1 reported it was required by their customers (for 5 percent of its purchases), and 1 reported other preferences for domestic product. The reason cited for preferring domestic product in this latter instance was a contract with ***. Availability of specific product types Six of 11 responding purchasers reported that all types of FRC are available from all country sources. Of the five purchasers that reported certain types of FRC only being available from certain country sources, purchasers *** reported that FRC that incorporate II-18 the Bedloe technology are currently only available from Chinese sources.37 38 39 Purchaser *** reported that U.S. suppliers could not supply certain yokes and coupler bodies. Most important purchase factors The most often cited top three factors firms consider in their purchasing decisions for FRC were price/cost (10 firms), availability/supply (9 firms), and quality (7 firms) as shown in table II-10. Availability/supply was the most frequently cited first-most important factor (cited by 4 firms); quality was the most frequently reported second-most important factor (4 firms); and price/cost was the most frequently reported third-most important factor (6 firms). Table II-10 FRC: Count of ranking of factors used in purchasing decisions as reported by purchasers, by factor Count in number of firms reporting Factor First Second Third Total Price / Cost 3 1 6 10 Availability / Supply 4 3 2 9 Quality 2 4 1 7 All other factors 4 5 3 NA Source: Compiled from data submitted in response to Commission questionnaires. Note: Other factors include contracts (3 firms), lead time/delivery (2 firms), total cost of ownership (2 firms), Bedloe technology, product performance and durability, delivery performance, supplier performance, and geographical proximity (1 each). The majority of purchasers (12 of 13) reported that they usually or sometimes (6 each) purchase the lowest-priced product; one purchaser reported that it never does. 37 Purchaser *** reported that the Bedloe technology is a patented coupler design that improves air brake hose connections during service. 38 Respondent Strato testified that purchasers may not know that they are buying FRC that incorporate the Bedloe technology, stating “I mean, you can imagine how many parts are used on the railroads, and a coupler is pretty obvious, but many times, I can tell you, they {purchasers} don't know what they're buying. And then it's based on price and are you approved by the AAR.” Hearing transcript, p. 230 (Foxx). 39 Respondent TTX reported that certain FRC from China are not substitutable with domestically produced FRC given Bedloe’s superior quality and durability although the firm reported that it purchases some non-Bedloe FRC because “{t}he supply chain risk of relying too heavily on a single source is unacceptable”. Respondent TTX’s prehearing briefs, pp. 3, 24. TTX further testified that it “can use a non-Bedloe component in conjunction with a Bedloe component”. Hearing transcript, p. 261 (Werner). II-19 Importance of specified purchase factors Purchasers were asked to rate the importance of 16 factors in their purchasing decisions (table II-11). The factors rated as very important by more than half of responding purchasers were availability and quality meets industry standards (13 each); product consistency and reliability of supply (12 each); delivery time (11); price (8); and delivery terms (7). Table II-11 FRC: Count of purchasers’ responses regarding importance of purchase factors, by factor Count in number of firms reporting Factor Very important Somewhat important Not important Availability 13 0 0 Delivery terms 7 3 3 Delivery time 11 2 0 Discounts offered 3 9 1 Minimum quantity requirements 3 5 5 Packaging 2 6 5 Payment terms 3 7 3 Price 8 5 0 Product consistency 12 1 0 Product range 0 6 7 Proprietary technologies (e.g. Bedloe) 3 2 8 Quality meets industry standards 13 0 0 Quality exceeds industry standards 6 5 2 Reliability of supply 12 1 0 Technical support/service 5 7 1 U.S. transportation costs 5 7 1 Source: Compiled from data submitted in response to Commission questionnaires. Lead times FRC is primarily sold from inventory. U.S. producers reported that *** percent of their commercial shipments came from inventories, with lead times averaging *** days. The remaining *** percent of their commercial shipments were produced-to-order, with lead times averaging *** days. Importers reported that *** percent of their commercial shipments came from inventories (*** percent from U.S. inventories with lead times averaging *** days and *** percent from foreign inventories with lead times averaging *** days). The remaining *** percent of their commercial shipments were produced-to-order, with lead times averaging *** days. II-20 Supplier certification All 13 responding purchasers require their suppliers to become certified or qualified to sell FRC to their firm. Purchasers reported that the time to qualify a new supplier ranged from 1 to 2 years and that the supplier must be approved by the AAR before purchasing. Twelve of 13 purchasers reported that domestic and/or foreign producers had not failed in their attempts to certify or qualify their FRC.40 Respondent Strato testified that in 2015 it attempted to work with Blue Diamond {Huron Casting}, a U.S. producer in Michigan, to obtain AAR approval and to have it produce Strato’s products but the project ended because Blue Diamond could not find adequate labor and the company has since lost its AAR certification.41 Strato also reported that it has four foundries in China that it worked with to obtain AAR certification, but one of these four has since lost its certification.42 Minimum quality specifications As can be seen from table II-12, a majority of responding purchasers reported that FRC from the United States, China, and Mexico always or usually met minimum quality specifications. Table II-12 FRC: Count of purchasers’ responses regarding suppliers’ ability to meet minimum quality specifications, by source Count in number of firms reporting Source of purchases Always Usually Sometimes Rarely or never Don't Know United States 7 4 1 0 1 China 8 3 0 0 1 Mexico 5 3 0 0 4 Nonsubject sources 0 0 0 0 5 Source: Compiled from data submitted in response to Commission questionnaires. Note: Purchasers were asked how often domestically produced or imported FRC meets minimum quality specifications for their own or their customers’ uses. 40 Purchaser *** reported that although no suppliers had entirely lost their certification, it had downgraded Strato Mudanjiang to a conditional approval for certain FRC due to the couplers not meeting a dimensional requirement and that these couplers must be separately inspected before being applied to its railcars. 41 Hearing transcript, p. 196 (Cunkelman). 42 Respondent Stato’s prehearing briefs, p. 27. Strato testified in reference to the foundry that lost its certification that it “made the decision no longer to continue their certification” and that Strato had “plenty of available capacity” with its other foundries. Hearing transcript, p. 263 (Cunkelman). II-21 Most responding purchasers reported that the quality of FRC is determined by meeting AAR standards. Other reported measures of quality include useful life, consistency of physical characteristics, defects (visible or not), fatigue life cycles, warranties, and Bedloe requirements. Changes in purchasing patterns Purchasers were asked about changes in their purchasing patterns from different sources since 2019 (table II-13). Pluralities of firms reported increasing domestic purchases and decreasing purchases of imports from China. Purchaser *** reported increasing purchases of domestic FRC and decreasing purchases of Chinese FRC after switching from new to refurbished FRC. Purchaser *** reported decreasing purchases of Chinese FRC due to overall downturns in the railroad industry and the switch to PSR at the Class I railroads. Purchaser *** reported that its decrease in Chinese FRC purchases was driven by an increase in purchases from Mexico *** and by these AD/CVD investigations. Reasons reported for decreasing purchases of domestic FRC included a decrease in finished railcar demand, reductions in both new railcar and maintenance purchases due to the COVID-19 pandemic, and a preferred U.S. producer ending FRC production. Table II-13 FRC: Count of purchasers’ responses regarding changes in purchase patterns from U.S., subject, and nonsubject countries Count in number of firms reporting Source of purchases Decreased Increased Constant Fluctuated Did not purchase United States 3 5 2 2 1 China 7 1 2 1 2 Mexico 3 3 2 0 4 Nonsubject sources 2 0 1 0 8 Sources unknown 1 1 3 2 5 Source: Compiled from data submitted in response to Commission questionnaires. Six of 13 responding purchasers reported that they had changed suppliers since January 1, 2019. Specifically, purchaser *** stopped purchasing from *** because second-hand knuckles were available from *** with no shipping cost. The firm further reported that changes in suppliers are based on the availability of reconditioned FRC. Purchaser *** reported that it had reduced knuckle purchases from *** because of reduced competitiveness due to the uncertainty of these AD/CVD investigations and increased purchases from *** at a lower cost but lesser quality. Purchaser *** reported that it had II-22 reduced purchases from *** because of refusal of service, breach of contract, and general instability and increased purchases from *** to cover those reductions. Purchaser *** reported dropping *** because it could not meet its demands. Purchase factor comparisons of domestic products, subject imports, and nonsubject imports Purchasers were asked a number of questions comparing FRC produced in the United States, China, nonsubject Mexico, and other nonsubject countries. First, purchasers were asked for a country-by-country comparison on the same 16 factors for which they were asked to rate the importance. Most purchasers reported that U.S. FRC and FRC imported from China were comparable on every factor (table II-14). Most purchasers reported that U.S. FRC and FRC imported from Mexico were comparable on every factor except price43 and U.S. transportation costs44 (table II-15). Most purchasers reported that Chinese and Mexican FRC were comparable on every factor except delivery time45 and price46 (table II-17). Responding purchasers reported that delivery time and price were very important factors in their purchasing decisions and U.S. transportation costs was a somewhat important factor (table II-11). 43 Three purchasers each reported that U.S.-produced FRC was comparable or inferior (higher priced) to FRC from Mexico. 44 Three purchasers each reported that U.S.-produced FRC comparable or inferior (higher priced) to FRC from Mexico. 45 Three purchasers each reported that Chinese-produced FRC was comparable or inferior to FRC from Mexico. 46 Two purchasers each reported that Chinese-produced FRC was comparable, superior, or inferior to FRC from Mexico. II-23 Table II-14 FRC: Count of purchasers’ responses comparing U.S.-produced and imported product, by factor and country pair Count in number of firms reporting Factor Country pair Superior Comparable Inferior Availability U.S. vs China 1 8 2 Delivery terms U.S. vs China 0 9 2 Delivery time U.S. vs China 4 5 2 Discounts offered U.S. vs China 0 9 2 Minimum quantity requirements U.S. vs China 1 10 0 Packaging U.S. vs China 0 10 1 Payment terms U.S. vs China 0 11 0 Price U.S. vs China 3 5 3 Product consistency U.S. vs China 0 9 2 Product range U.S. vs China 1 10 0 Proprietary technologies (e.g. Bedloe) U.S. vs China 0 7 2 Quality meets industry standards U.S. vs China 0 10 1 Quality exceeds industry standards U.S. vs China 0 6 4 Reliability of supply U.S. vs China 1 9 1 Technical support/service U.S. vs China 0 8 3 U.S. transportation costs U.S. vs China 0 8 3 Source: Compiled from data submitted in response to Commission questionnaires. Note: A rating of superior means that price/U.S. transportation cost is generally lower. For example, if a firm reported “U.S. superior,” it meant that the U.S. product was generally priced lower than the imported product. II-24 Table II-15 FRC: Count of purchasers’ responses comparing U.S.-produced and imported product, by factor and country pair Count in number of firms reporting Factor Country pair Superior Comparable Inferior Availability U.S. vs Mexico 0 5 2 Delivery terms U.S. vs Mexico 0 6 1 Delivery time U.S. vs Mexico 0 4 3 Discounts offered U.S. vs Mexico 0 5 2 Minimum quantity requirements U.S. vs Mexico 0 7 0 Packaging U.S. vs Mexico 0 7 0 Payment terms U.S. vs Mexico 0 5 2 Price U.S. vs Mexico 1 3 3 Product consistency U.S. vs Mexico 0 6 1 Product range U.S. vs Mexico 0 7 0 Proprietary technologies (e.g. Bedloe) U.S. vs Mexico 0 5 0 Quality meets industry standards U.S. vs Mexico 0 6 1 Quality exceeds industry standards U.S. vs Mexico 0 5 1 Reliability of supply U.S. vs Mexico 1 5 1 Technical support/service U.S. vs Mexico 0 6 1 U.S. transportation costs U.S. vs Mexico 1 3 3 Source: Compiled from data submitted in response to Commission questionnaires. Note: A rating of superior means that price/U.S. transportation cost is generally lower. For example, if a firm reported “U.S. superior,” it meant that the U.S. product was generally priced lower than the imported product. II-25 Table II-16 FRC: Count of purchasers’ responses comparing U.S.-produced and imported product, by factor and country pair Count in number of firms reporting Factor Country pair Superior Comparable Inferior Availability U.S. vs All other sources 1 1 0 Delivery terms U.S. vs All other sources 0 1 1 Delivery time U.S. vs All other sources 1 1 0 Discounts offered U.S. vs All other sources 0 2 0 Minimum quantity requirements U.S. vs All other sources 1 1 0 Packaging U.S. vs All other sources 0 1 1 Payment terms U.S. vs All other sources 0 2 0 Price U.S. vs All other sources 0 1 1 Product consistency U.S. vs All other sources 0 2 0 Product range U.S. vs All other sources 0 1 1 Proprietary technologies (e.g. Bedloe) U.S. vs All other sources 0 1 0 Quality meets industry standards U.S. vs All other sources 0 2 0 Quality exceeds industry standards U.S. vs All other sources 0 2 0 Reliability of supply U.S. vs All other sources 0 2 0 Technical support/service U.S. vs All other sources 0 2 0 U.S. transportation costs U.S. vs All other sources 1 0 1 Source: Compiled from data submitted in response to Commission questionnaires. Note: A rating of superior means that price/U.S. transportation cost is generally lower. For example, if a firm reported “U.S. superior,” it meant that the U.S. product was generally priced lower than the imported product. II-26 Table II-17 FRC: Count of purchasers’ responses comparing U.S.-produced and imported product, by factor and country pair Count in number of firms reporting Factor Country pair Superior Comparable Inferior Availability China vs Mexico 0 4 2 Delivery terms China vs Mexico 0 5 1 Delivery time China vs Mexico 0 3 3 Discounts offered China vs Mexico 0 5 1 Minimum quantity requirements China vs Mexico 0 5 1 Packaging China vs Mexico 1 5 0 Payment terms China vs Mexico 0 4 2 Price China vs Mexico 2 2 2 Product consistency China vs Mexico 0 6 0 Product range China vs Mexico 0 6 0 Proprietary technologies (e.g. Bedloe) China vs Mexico 1 5 0 Quality meets industry standards China vs Mexico 0 6 0 Quality exceeds industry standards China vs Mexico 1 5 0 Reliability of supply China vs Mexico 1 3 2 Technical support/service China vs Mexico 0 6 0 U.S. transportation costs China vs Mexico 0 6 0 Source: Compiled from data submitted in response to Commission questionnaires. Note: A rating of superior means that price/U.S. transportation cost is generally lower. For example, if a firm reported “U.S. superior,” it meant that the U.S. product was generally priced lower than the imported product. II-27 Table II-18 FRC: Count of purchasers’ responses comparing U.S.-produced and imported product, by factor and country pair Count in number of firms reporting Factor Country pair Superior Comparable Inferior Availability China vs All other sources 0 1 0 Delivery terms China vs All other sources 0 1 0 Delivery time China vs All other sources 0 1 0 Discounts offered China vs All other sources 0 1 0 Minimum quantity requirements China vs All other sources 0 1 0 Packaging China vs All other sources 0 1 0 Payment terms China vs All other sources 0 1 0 Price China vs All other sources 0 1 0 Product consistency China vs All other sources 0 1 0 Product range China vs All other sources 1 0 0 Proprietary technologies (e.g. Bedloe) China vs All other sources 0 1 0 Quality meets industry standards China vs All other sources 0 1 0 Quality exceeds industry standards China vs All other sources 0 1 0 Reliability of supply China vs All other sources 0 1 0 Technical support/service China vs All other sources 0 1 0 U.S. transportation costs China vs All other sources 0 1 0 Source: Compiled from data submitted in response to Commission questionnaires. Note: A rating of superior means that price/U.S. transportation cost is generally lower. For example, if a firm reported “U.S. superior,” it meant that the U.S. product was generally priced lower than the imported product. II-28 Table II-19 FRC: Count of purchasers’ responses comparing U.S.-produced and imported product, by factor and country pair Count in number of firms reporting Factor Country pair Superior Comparable Inferior Availability Mexico vs All other sources 1 0 0 Delivery terms Mexico vs All other sources 0 1 0 Delivery time Mexico vs All other sources 1 0 0 Discounts offered Mexico vs All other sources 0 1 0 Minimum quantity requirements Mexico vs All other sources 1 0 0 Packaging Mexico vs All other sources 0 0 1 Payment terms Mexico vs All other sources 1 0 0 Price Mexico vs All other sources 0 0 1 Product consistency Mexico vs All other sources 0 1 0 Product range Mexico vs All other sources 1 0 0 Proprietary technologies (e.g. Bedloe) Mexico vs All other sources 0 1 0 Quality meets industry standards Mexico vs All other sources 0 1 0 Quality exceeds industry standards Mexico vs All other sources 0 1 0 Reliability of supply Mexico vs All other sources 1 0 0 Technical support/service Mexico vs All other sources 0 1 0 U.S. transportation costs Mexico vs All other sources 0 1 0 Source: Compiled from data submitted in response to Commission questionnaires. Note: A rating of superior means that price/U.S. transportation cost is generally lower. For example, if a firm reported “U.S. superior,” it meant that the U.S. product was generally priced lower than the imported product. Comparison of U.S.-produced and imported FRC In order to determine whether U.S.-produced FRC can generally be used in the same applications as imports from China, nonsubject country Mexico, and other nonsubject countries, U.S. producers, importers, and purchasers were asked whether the products can always, frequently, sometimes, or never be used interchangeably. As shown in tables II-20 to II- 22, most U.S. producers, importers, and purchasers reported that FRC from the United States and all other countries can always or frequently be used in the same applications. Purchaser *** reported that all AAR approved materials are interchangeable regardless of the country of origin. II-29 Table II-20 FRC: Count of U.S. producers reporting the interchangeability between product produced in the United States and in other countries, by country pair Count in number of firms reporting Country pair Always Frequently Sometimes Never United States vs. China 1 1 0 0 United States vs. Mexico 1 1 0 0 United States vs. Other 1 1 0 0 China vs. Mexico 1 1 0 0 China vs. Other 1 1 0 0 Mexico vs. Other 1 1 0 0 Source: Compiled from data submitted in response to Commission questionnaires. Table II-21 FRC: Count of importers reporting the interchangeability between product produced in the United States and in other countries, by country pair Count in number of firms reporting Country pair Always Frequently Sometimes Never United States vs. China 6 0 0 0 United States vs. Mexico 6 0 0 0 United States vs. Other 3 0 0 0 China vs. Mexico 6 0 0 0 China vs. Other 3 0 0 0 Mexico vs. Other 3 0 0 0 Source: Compiled from data submitted in response to Commission questionnaires. Table II-22 FRC: Count of purchasers reporting the interchangeability between product produced in the United States and in other countries, by country pair Count in number of firms reporting Country pair Always Frequently Sometimes Never United States vs. China 11 0 1 0 United States vs. Mexico 10 0 0 0 United States vs. Other 3 0 0 0 China vs. Mexico 8 0 0 0 China vs. Other 2 0 0 0 Mexico vs. Other 2 0 0 0 Source: Compiled from data submitted in response to Commission questionnaires. II-30 In addition, U.S. producers, importers, and purchasers were asked to assess how often differences other than price were significant in sales of FRC from the United States, China, nonsubject Mexico, or other nonsubject countries. As seen in tables II-23 to II-25, most U.S. producers, importers, and purchasers reported that factors other than price were sometimes or never significant in sales or purchases of FRC from the United States versus all other countries. Table II-23 FRC: Count of U.S. producers reporting the significance of differences other than price between product produced in the United States and in other countries, by country pair Count in number of firms reporting Country pair Always Frequently Sometimes Never United States vs. China 0 0 1 1 United States vs. Mexico 0 0 1 1 United States vs. Other 0 0 1 1 China vs. Mexico 0 0 1 1 China vs. Other 0 0 1 1 Mexico vs. Other 0 0 1 1 Source: Compiled from data submitted in response to Commission questionnaires. Table II-24 FRC: Count of importers reporting the significance of differences between product produced in the United States and in other countries, by country pair Count in number of firms reporting Country pair Always Frequently Sometimes Never United States vs. China 2 0 3 1 United States vs. Mexico 1 0 3 1 United States vs. Other 0 0 2 1 China vs. Mexico 1 0 3 1 China vs. Other 0 0 2 1 Mexico vs. Other 0 0 2 1 Source: Compiled from data submitted in response to Commission questionnaires. II-31 Table II-25 FRC: Count of purchasers reporting the significance of differences between product produced in the United States and in other countries, by country pair Count in number of firms reporting Country pair Always Frequently Sometimes Never United States vs. China 4 1 6 0 United States vs. Mexico 2 0 6 0 United States vs. Other 0 0 3 0 China vs. Mexico 3 0 3 1 China vs. Other 0 0 2 0 Mexico vs. Other 0 0 2 0 Source: Compiled from data submitted in response to Commission questionnaires. Importer *** reported that availability and reliability of supply are the most important factors, and it is critical to have more than one source of FRC. The firm also reported quality, transportation, and freight as very important factors. Importer *** reported that there are always differences other than price between the products from the United States and China, citing differences in transportation network, availability, and product range. Other factors reported by purchasers include delivery/lead time and Bedloe technology. Elasticity estimates This section discusses elasticity estimates. Parties did not provide comments on these estimates in their prehearing or posthearing briefs. U.S. supply elasticity The domestic supply elasticity for FRC measures the sensitivity of the quantity supplied by U.S. producers to changes in the U.S. market price of FRC. The elasticity of domestic supply depends on several factors including the level of excess capacity, the ease with which producers can alter capacity, producers’ ability to shift to production of other products, the existence of inventories, and the availability of alternate markets for U.S.-produced FRC. Analysis of these factors above indicates that the U.S. industry has the ability to greatly increase or decrease shipments to the U.S. market; an estimate in the range of 6 to 10 is suggested. II-32 U.S. demand elasticity The U.S. demand elasticity for FRC measures the sensitivity of the overall quantity demanded to a change in the U.S. market price of FRC. This estimate depends on factors discussed above such as the existence, availability, and commercial viability of substitute products, as well as the component share of the FRC in the production of any downstream products. Based on the available information, the aggregate demand for FRC is likely to be highly inelastic; a range of -0.25 to -0.5 is suggested. Substitution elasticity The elasticity of substitution depends upon the extent of product differentiation between the domestic and imported products.47 Product differentiation, in turn, depends upon such factors as quality (e.g., chemistry, appearance, etc.) and conditions of sale (e.g., availability, sales terms/discounts/promotions, etc.). Based on available information, the elasticity of substitution between U.S.-produced FRC and imported FRC is likely to be in the range of 4 to 7.48 Factors contributing to the higher-end level of substitutability include little preference for particular country of origin, similarities between domestically produced FRC and FRC imported from China across multiple purchase factors, and the high degree of interchangeability between domestic and subject sources from China. Factors reducing substitutability include differences in availability, lead times, and certain purchasers’ preference for certain types of FRC only available only from China. 47 The substitution elasticity measures the responsiveness of the relative U.S. consumption levels of the subject imports and the domestic like products to changes in their relative prices. This reflects how easily purchasers switch from the U.S. product to the Chinese product (or vice versa) when prices change. 48 Staff suggested a range of 4 to 6 in the prehearing Staff Report. After information provided in posthearing briefs and hearing testimony, staff believes that there is likely a higher level of substitutability. III-1 Part III: U.S. producers’ production, shipments, and employment The Commission analyzes a number of factors in making injury determinations (see 19 U.S.C. §§ 1677(7)(B) and 1677(7)(C)). Information on the subsidies and dumping margins was presented in Part I of this report and information on the volume and pricing of imports of the subject merchandise is presented in Part IV and Part V. Information on the other factors specified is presented in this section and/or Part VI and (except as noted) is based on the questionnaire responses of three firms that accounted all known U.S. production of FRC during 2021. U.S. producers The Commission issued a U.S. producer questionnaire to the three known U.S. producers and nine possible refurbishers of FRC based on information contained in the petitions, industry sources, information from the preliminary phase of these investigations, and party comments on draft questionnaires.1 The three U.S. producers provided usable data on their operations.2 Staff believes that these responses represent all known U.S. production of FRC. Table III-1 lists U.S. producers of FRC, their production locations, positions on the petition, and shares of total production. 1 The nine possible refurbishers were identified in Wabtec’s comments on draft questionnaires, EDIS document 762807, pp.11-12. 2 *** submitted a questionnaire response as a refurbisher of FRC with data that was not usable. Respondent ***. III-2 Table III-1 FRC: U.S. producers, their positions on the petition, production locations, and shares of reported production, 2021 Firm Position on petition Production location(s) Share of production Amsted *** Granite City, IL *** Huron *** Pigeon, MI *** M&T Petitioner Pittsburgh, PA *** All firms Various Various 100.0 Source: Compiled from data submitted in response to Commission questionnaires. Table III-2 presents information on U.S. producers’ ownership, related and/or affiliated firms. Table III-2 FRC: U.S. producers’ ownership, related and/or affiliated firms Reporting firm Relationship type and related firm Details of relationship *** *** *** *** *** *** *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. As indicated in U.S. producer responses presented in table III-2, one U.S. producer, ***, is related to a foreign producer of nonsubject merchandise. No U.S. producers are related to U.S. importers of the subject merchandise. In addition, as discussed in greater detail below, no U.S. producers directly import subject merchandise or purchase the subject merchandise from U.S. importers. Table III-3 presents U.S. producers’ reported changes in operations since January 1, 2019. In ***.3 *** reported ***.4 3 ***’s producer questionnaire response, section II-2a. 4 ***’s producer questionnaire response, section II-2a-2b. III-3 Table III-3 FRC: U.S. producers’ reported changes in operations, since January 1, 2019 Item Firm name and narrative response on changes in operations Plant closings *** Prolonged shutdowns or curtailments *** Prolonged shutdowns or curtailments *** Other *** Source: Compiled from data submitted in response to Commission questionnaires. U.S. production, capacity, and capacity utilization Table III-4 and figure III-1 present U.S. producers’ production, capacity, and capacity utilization. U.S. producers’ capacity decreased from *** pounds in 2019 to *** pounds in 2021, a *** percent decrease during 2019-21. During the same period, U.S. producers’ production decreased by *** percent, from *** pounds to *** pounds. Capacity utilization also decreased from *** percent to *** percent from 2019 to 2021. Table III-4 FRC: Firm-by-firm capacity, by period Capacity Capacity in 1,000 pounds Firm 2019 2020 2021 Amsted *** *** *** Huron *** *** *** M&T *** *** *** All firms *** *** *** Table continued. III-4 Table III-4--Continued FRC: Firm-by-firm production, by period Production Production in 1,000 pounds Firm 2019 2020 2021 Amsted *** *** *** Huron *** *** *** M&T *** *** *** All firms *** *** *** Table continued. Table III-4--Continued FRC: Firm-by-firm capacity utilization, by period Capacity utilization Ratio in percent Firm 2019 2020 2021 Amsted *** *** *** Huron *** *** *** M&T *** *** *** All firms *** *** *** Note: Capacity utilization ratio represents the ratio of the U.S. producer’s production to its production capacity. Table continued. Table III-4--Continued FRC: Firm-by-firm share of production, by period Share of production Share in percent Firm 2019 2020 2021 Amsted *** *** *** Huron *** *** *** M&T *** *** *** All firms 100.0 100.0 100.0 Source: Compiled from data submitted in response to Commission questionnaires. III-5 Figure III-1 FRC: U.S. producers’ production, capacity, and capacity utilization, by period * * * * * * * Source: Compiled from data submitted in response to Commission questionnaires. Alternative products As shown in table III‐5, FRC’s share of overall production by U.S. producers on shared equipment decreased from *** percent in 2019 to *** percent in 2021. *** U.S. producers reported producing other products using the same equipment, machinery, or employees as used to produce FRC. These products included ***. Overall capacity declined by *** percent from 2019 to 2021.5 Two U.S. producers, ***, described market constraints as a limiting factor of production and production capacity. The other U.S. producer’s (***) reported production constraint was the ***. Two of the three U.S. producers reported that they are able to switch production/capacity between FRC and other products using the same equipment and/or labor. The U.S. producer that was not able to switch production/capacity was involved in the 5 The decrease of overall capacity was due to the decrease in ***’s reported overall production capacity during 2018-20. ***’s producer questionnaire response, section II-3a. III-6 production of ***. Reported factors that affect the ability to shift production capacity between products included ***. Table III-5 FRC: U.S. producers’ overall capacity and production on the same equipment used to produce FRC, by period Quantity in 1,000 pounds; ratio and share in percent Item Measure 2019 2020 2021 Overall capacity Quantity *** *** *** FRC production Quantity *** *** *** Passenger railcar couplers production Quantity *** *** *** Other products Quantity *** *** *** Out of scope production Quantity *** *** *** Total production Quantity *** *** *** Overall capacity utilization Ratio *** *** *** FRC production Share *** *** *** Passenger railcar couplers production Share *** *** *** Other products Share *** *** *** Out of scope production Share *** *** *** Total production Share 100.0 100.0 100.0 Source: Compiled from data submitted in response to Commission questionnaires. U.S. producers’ U.S. shipments and exports Table III-6 presents U.S. producers’ U.S. shipments, export shipments, and total shipments. No U.S. producers reported internal consumption or transfer to related firms shipments during 2019-21. U.S. producers’ U.S. shipments decreased by quantity and by value from 2019-21, from *** pounds to *** pounds, and from $*** to $***, respectively. *** U.S. producers, ***, reported export shipments, primarily to ***, which ranged from *** to *** percent of total U.S. producers’ total shipments during 2019-21. Average unit values of both U.S. shipments and export shipments ***. III-7 Table III-6 FRC: U.S. producers’ shipments, by destination and period Quantity in 1,000 pounds; value in 1,000 dollars; unit value in dollars per 1,000 pounds; shares in percent Item Measure 2019 2020 2021 U.S. shipments Quantity *** *** *** Export shipments Quantity *** *** *** Total shipments Quantity *** *** *** U.S. shipments Value *** *** *** Export shipments Value *** *** *** Total shipments Value *** *** *** U.S. shipments Unit value *** *** *** Export shipments Unit value *** *** *** Total shipments Unit value *** *** *** U.S. shipments Share of quantity *** *** *** Export shipments Share of quantity *** *** *** Total shipments Share of quantity 100.0 100.0 100.0 U.S. shipments Share of value *** *** *** Export shipments Share of value *** *** *** Total shipments Share of value 100.0 100.0 100.0 Source: Compiled from data submitted in response to Commission questionnaires. The Commission also asked U.S. producers to differentiate their U.S. shipments of FRC between complete FRC systems and in-scope FRC components (knuckles, coupler bodies, yokes and follower blocks). Table III-7 presents U.S. producers’ U.S. shipments by product type. While U.S. shipments of all product types decreased during 2019-21, the share of quantity (based on 1,000 pounds) of complete FRC systems decreased from *** percent in 2019 to *** percent in 2021. During the same period, the share of quantity (based on 1,000 pounds) of all FRC components increased - coupler bodies from *** percent to *** percent, knuckles from *** percent to *** percent, yokes from *** percent to *** percent, and follower blocks from *** percent to *** percent. During 2019-21, unit values (per 1,000 pounds) for shipments of complete FRC systems decreased by *** percent, while unit values for shipments of knuckles, coupler bodies, and follower blocks increased by *** percent, *** percent, and *** percent, respectively, and unit values of shipments of yokes decreased by *** percent. Overall, unit values (per 1,000 pounds) of FRC and FRC components decreased by *** percent during 2019-21. III-8 Table III-7 FRC: U.S. producers’ U.S. shipments, by product type and period Quantity in 1,000 pounds and units; Value in 1,000 dollars; Unit values in dollars per 1,000 pounds and dollars per unit Item Measure 2019 2020 2021 Complete FRC 1,000 pounds *** *** *** Knuckles 1,000 pounds *** *** *** Coupler bodies 1,000 pounds *** *** *** Yokes 1,000 pounds *** *** *** Follower blocks 1,000 pounds *** *** *** Complete FRC Units *** *** *** Knuckles Units *** *** *** Coupler bodies Units *** *** *** Yokes Units *** *** *** Follower blocks Units *** *** *** Complete FRC Value *** *** *** Knuckles Value *** *** *** Coupler bodies Value *** *** *** Yokes Value *** *** *** Follower blocks Value *** *** *** Complete FRC Dollars per 1,000 pounds *** *** *** Knuckles Dollars per 1,000 pounds *** *** *** Coupler bodies Dollars per 1,000 pounds *** *** *** Yokes Dollars per 1,000 pounds *** *** *** Follower blocks Dollars per 1,000 pounds *** *** *** Complete FRC Dollars per unit *** *** *** Knuckles Dollars per unit *** *** *** Coupler bodies Dollars per unit *** *** *** Yokes Dollars per unit *** *** *** Follower blocks Dollars per unit *** *** *** Table continued. III-9 Table III-7--Continued FRC: U.S. producers’ U.S. shipments, by product type and period Shares in percent Item Measure 2019 2020 2021 Complete FRC Share based on 1,000 pounds *** *** *** Knuckles Share based on 1,000 pounds *** *** *** Coupler bodies Share based on 1,000 pounds *** *** *** Yokes Share based on 1,000 pounds *** *** *** Follower blocks Share based on 1,000 pounds *** *** *** Complete FRC Share based on units *** *** *** Knuckles Share based on units *** *** *** Coupler bodies Share based on units *** *** *** Yokes Share based on units *** *** *** Follower blocks Share based on units *** *** *** Complete FRC Share of value *** *** *** Knuckles Share of value *** *** *** Coupler bodies Share of value *** *** *** Yokes Share of value *** *** *** Follower blocks Share of value *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. U.S. producers’ inventories Table III-8 presents U.S. producers’ end-of-period inventories and the ratio of these inventories to U.S. producers’ production, U.S. shipments, and total shipments. U.S. producers' end-of-period inventories decreased by *** percent during 2019-21. During the same period, the ratio of inventories to U.S. production, U.S. shipments, and total shipments increased by ***, ***, and *** percentage points, respectively. III-10 Table III-8 FRC: U.S. producers’ inventories and their ratio to select items, by period Quantity in 1,000 pounds; ratio in percent Item 2019 2020 2021 End-of-period inventory quantity *** *** *** Inventory ratio to U.S. production *** *** *** Inventory ratio to U.S. shipments *** *** *** Inventory ratio to total shipments *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. U.S. producers’ imports from subject sources No responding U.S. producer reported imports of FRC from subject sources during 2019- 21. One firm, *** reported importing FRC from nonsubject sources (***). U.S. producers' purchases of imports from subject sources No responding U.S. producer reported purchases of FRC from subject sources during 2019-21. U.S. employment, wages, and productivity Table III-9 shows U.S. producers’ employment-related data. The number of production and related workers (“PRWs”) decreased by *** between 2019 and 2021, with a net decline of *** PRWs from *** to ***. During 2019-21, total hours worked declined by *** percent, and hours worked per PRW also declined by *** percent. Hourly wages for PRWs increased by *** percent from $*** per hour to $*** per hour while productivity decreased by *** percent. Unit labor costs increased by *** percent, from $*** per unit in 2019 to $*** per unit in 2021. Table III-9 FRC: U.S. producers’ employment related information, by period Item 2019 2020 2021 Production and related workers (PRWs) (number) *** *** *** Total hours worked (1,000 hours) *** *** *** Hours worked per PRW (hours) *** *** *** Wages paid ($1,000) *** *** *** Hourly wages (dollars per hour) *** *** *** Productivity (pounds per hour) *** *** *** Unit labor costs (dollars per 1,000 pounds) *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. IV-1 Part IV: U.S. imports, apparent U.S. consumption, and market shares U.S. importers The Commission issued importer questionnaires to 26 firms believed to be importers of subject FRC, as well as to all U.S. producers of FRC.1 Usable questionnaire responses were received from six companies, representing 57.9 percent of U.S. imports from China in 2021 under HTS subheading 8607.30.10, a “basket” category.2 Table IV-1 lists all responding U.S. importers of FRC from China and other sources, their locations, and their shares of U.S. imports, in 2021. Five U.S. importers reported imports of FRC from China in 2021 with two firms, ***, accounting for *** percent of such imports. Four U.S. importers reported imports of FRC from nonsubject sources, primarily from Mexico, with *** accounting for *** percent of nonsubject imports. Other reported nonsubject sources of FRC imports were ***. 1 The Commission issued questionnaires to those firms identified in the petitions, preliminary phase questionnaire responses, along with firms that, based on a review of data from third-party sources, may have accounted for more than one percent of total imports under HTS subheading 8607.30.1000 in 2021. 2 Twelve firms reported that they did not import FRC into the United States: ***. As such, since the Commission received responses from firms that staff believes account for a substantial share of imports of FRC, staff believes that official import statistics for HTS subheading 8607.30.10 are overstated with respect to in-scope FRC. IV-2 Table IV-1 FRC: U.S. importers, their headquarters, and share of imports within each source, 2021 Shares in percent Firm Headquarters China Mexico All other sources Nonsubject sources All import sources Amsted Chicago, IL *** *** *** *** *** Greenbrier Lake Oswego, OR *** *** *** *** *** Strato Piscataway, NJ *** *** *** *** *** Stucky Moon Township, PA *** *** *** *** *** Trinity Dallas, TX *** *** *** *** *** Wabtec Pittsburgh, PA *** *** *** *** *** All firms Various 100.0 100.0 100.0 100.0 100.0 Source: Compiled from data submitted in response to Commission questionnaires. Note: Shares and ratios shown as "0.0" represent values greater than zero, but less than "0.05" percent. Zeroes, null values, and undefined calculations are suppressed and shown as “---“. U.S. imports Table IV-2 presents data for U.S. imports of FRC from China, Mexico, and all other sources.3 U.S. imports of FRC from China decreased by 26.0 percent by quantity, and by 32.6 percent by value from 2019 to 2020 before increasing by 7.4 percent by quantity, and by 24.1 percent by value from 2020 to 2021. During 2019-21, U.S. imports of FRC from nonsubject sources decreased by *** percent by quantity and by *** percent by value. Overall, U.S. imports of FRC from all sources decreased by *** percent by quantity, and *** percent by value, between 2019 and 2021. U.S. imports of FRC from China increased as a share of total imports of FRC by quantity from *** percent in 2019 to *** percent in 2021. Average unit values of U.S. imports from China were lower than those from Mexico but higher than those from other nonsubject sources across all periods. During 2019-21, U.S. imports of FRC as a ratio to U.S. production increased by *** percentage points for subject imports from China and by *** percentage points for imports from nonsubject sources for an overall increase of *** percentage points for imports from all sources. 3 ***. ***’s importer questionnaire response, section II-7a. Based on this explanation, staff has removed these data *** from the data set. IV-3 Table IV-2 FRC: U.S. imports by source and period Quantity in 1,000 pounds; value in 1,000 dollars; unit value in dollars per 1,000 pounds; share and ratio in percent Source Measure 2019 2020 2021 China Quantity 24,453 18,093 19,424 Mexico Quantity *** *** *** All other sources Quantity *** *** *** Nonsubject sources Quantity *** *** *** All import sources Quantity *** *** *** China Value 36,998 24,937 30,954 Mexico Value *** *** *** All other sources Value *** *** *** Nonsubject sources Value *** *** *** All import sources Value *** *** *** China Unit value 1,513 1,378 1,594 Mexico Unit value *** *** *** All other sources Unit value *** *** *** Nonsubject sources Unit value *** *** *** All import sources Unit value *** *** *** China Share of quantity *** *** *** Mexico Share of quantity *** *** *** All other sources Share of quantity *** *** *** Nonsubject sources Share of quantity *** *** *** All import sources Share of quantity 100.0 100.0 100.0 China Share of value *** *** *** Mexico Share of value *** *** *** All other sources Share of value *** *** *** Nonsubject sources Share of value *** *** *** All import sources Share of value 100.0 100.0 100.0 China Ratio *** *** *** Mexico Ratio *** *** *** All other sources Ratio *** *** *** Nonsubject sources Ratio *** *** *** All import sources Ratio *** *** *** Table continued on next page. IV-4 Table IV-2--Continued FRC: Share of U.S. imports by source and period %Δ in percent Source Measure 2019-21 2019-20 2020-21 China %Δ Quantity ▼*** ▼*** ▲*** Mexico %Δ Quantity ▼*** ▼*** ▼*** All other sources %Δ Quantity ▼*** ▼*** ▼*** Nonsubject sources %Δ Quantity ▼*** ▼*** ▼*** All import sources %Δ Quantity ▼*** ▼*** ▼*** China %Δ Value ▼*** ▼*** ▲*** Mexico %Δ Value ▼*** ▼*** ▲*** All other sources %Δ Value ▼*** ▼*** ▲*** Nonsubject sources %Δ Value ▼*** ▼*** ▲*** All import sources %Δ Value ▼*** ▼*** ▲*** China %Δ Unit value ▲*** ▼*** ▲*** Mexico %Δ Unit value ▼*** ▼*** ▲*** All other sources %Δ Unit value ▲*** ▼*** ▲*** Nonsubject sources %Δ Unit value ▼*** ▼*** ▲*** All import sources %Δ Unit value ▲*** ▼*** ▲*** Source: Compiled from data submitted in response to Commission questionnaires. Note: Share of quantity is the share of U.S. imports by quantity; share of value is the share of U.S. imports by value; ratio are U.S. imports to U.S. production. IV-5 Figure IV-1 FRC: U.S. import quantities and average unit values, by source and period * * * * * * * Source: Compiled from data submitted in response to Commission questionnaires. The Commission asked U.S. importers to report their U.S. imports of FRC as standalone complete FRC units or components and as FRC attached to new railcars or other out-of-scope system parts. These data are presented in table IV-3. The majority of FRC imports, both from China and nonsubject sources, were imported into the U.S. as standalone FRC units or components. IV-6 Table IV-3 FRC: U.S. imports of standalone FRC units versus FRC attached to railcars, by source and period Quantity in 1,000 pounds Source Measure 2019 2020 2021 China: Standalone FRC Quantity *** *** *** China: FRC attached to railcars Quantity *** *** *** China: All FRC Quantity *** *** *** Mexico: Standalone FRC Quantity *** *** *** Mexico: FRC attached to railcars Quantity *** *** *** Mexico: All FRC Quantity *** *** *** All other sources: Standalone FRC Quantity *** *** *** All other sources: FRC attached to railcars Quantity *** *** *** All other sources: All FRC Quantity *** *** *** Nonsubject sources: Standalone FRC Quantity *** *** *** Nonsubject sources: FRC attached to railcars Quantity *** *** *** Nonsubject sources: All FRC Quantity *** *** *** All import sources: Standalone FRC Quantity *** *** *** All import sources: FRC attached to railcars Quantity *** *** *** All import sources: All FRC Quantity *** *** *** Table continued. Table IV-3--Continued FRC: U.S. imports of standalone FRC units versus FRC attached to railcars, by source and period Share in percent Source Measure 2019 2020 2021 China: standalone FRC Share of quantity *** *** *** China: FRC attached to railcars Share of quantity *** *** *** China: all FRC Share of quantity *** *** *** Mexico: standalone FRC Share of quantity *** *** *** Mexico: FRC attached to railcars Share of quantity *** *** *** Mexico: all FRC Share of quantity *** *** *** All other sources: standalone FRC Share of quantity *** *** *** All other sources: FRC attached to railcars Share of quantity *** *** *** All other sources: all FRC Share of quantity *** *** *** Nonsubject sources: standalone FRC Share of quantity *** *** *** Nonsubject sources: FRC attached to railcars Share of quantity *** *** *** Nonsubject sources: all FRC Share of quantity *** *** *** All import sources: standalone FRC Share of quantity *** *** *** All import sources: FRC attached to railcars Share of quantity *** *** *** All import sources: all FRC Share of quantity 100.0 100.0 100.0 Table continued. IV-7 Table IV-3--Continued FRC: U.S. imports of standalone FRC units versus FRC attached to railcars, by source and period %Δ in percent Source Measure 2019-21 2019-20 2020-21 China: standalone FRC %Δ Quantity ▼*** ▼*** ▲*** China: FRC attached to railcars %Δ Quantity ▼*** ▼*** ▼*** China: all FRC %Δ Quantity ▼*** ▼*** ▲*** Mexico: standalone FRC %Δ Quantity ▼*** ▼*** ▼*** Mexico: FRC attached to railcars %Δ Quantity ▼*** ▼*** ▲*** Mexico: all FRC %Δ Quantity ▼*** ▼*** ▼*** All other sources: standalone FRC %Δ Quantity ▼*** ▼*** ▼*** All other sources: FRC attached to railcars %Δ Quantity *** *** *** All other sources: all FRC %Δ Quantity ▼*** ▼*** ▼*** Nonsubject sources: standalone FRC %Δ Quantity ▼*** ▼*** ▼*** Nonsubject sources: FRC attached to railcars %Δ Quantity ▼*** ▼*** ▲*** Nonsubject sources: all FRC %Δ Quantity ▼*** ▼*** ▼*** All import sources: standalone FRC %Δ Quantity ▼*** ▼*** ▼*** All import sources: FRC attached to railcars %Δ Quantity ▼*** ▼*** ▼*** All import sources: all FRC %Δ Quantity ▼*** ▼*** ▼*** Source: Compiled from data submitted in response to Commission questionnaires. Note: Data are based on the country of origin of the FRC, not on the location of the manufacture of the railcar that FRC are mounted on or the country from which the railcar the FRC is mounted on enters the United States. The Commission also asked U.S. importers to report their U.S. shipments of U.S. imports of FRC between complete FRC and in-scope components – knuckles, coupler bodies, yokes, and follower blocks. These data for subject imports from China are presented in table IV-4 and Appendix E for imports from nonsubject sources. From 2019 to 2021, shares of quantity (per 1,000 pounds) decreased from *** percent to *** percent for complete FRC, from *** percent to *** percent for yokes, and from *** percent to *** percent for follower blocks, while increasing from *** percent to *** percent for knuckles, and from *** percent to *** percent for coupler bodies. IV-8 Table IV-4 FRC: U.S. importers' U.S. shipments of imports from China, by product type and by period Quantity in 1,000 pounds and units; value in 1,000 dollars; shares in percent; unit values in dollars per 1,000 pounds and dollars per unit Item Measure 2019 2020 2021 Complete FRC 1,000 pounds *** *** *** Knuckles 1,000 pounds *** *** *** Coupler bodies 1,000 pounds *** *** *** Yokes 1,000 pounds *** *** *** Follower blocks 1,000 pounds *** *** *** FRC components 1,000 pounds *** *** *** Total FRC 1,000 pounds *** *** *** Complete FRC Units *** *** *** Knuckles Units *** *** *** Coupler bodies Units *** *** *** Yokes Units *** *** *** Follower blocks Units *** *** *** FRC components Units *** *** *** Total FRC Units *** *** *** Complete FRC Value *** *** *** Knuckles Value *** *** *** Coupler bodies Value *** *** *** Yokes Value *** *** *** Follower blocks Value *** *** *** FRC components Value *** *** *** Total FRC Value *** *** *** Complete FRC Dollars per 1,000 pounds *** *** *** Knuckles Dollars per 1,000 pounds *** *** *** Coupler bodies Dollars per 1,000 pounds *** *** *** Yokes Dollars per 1,000 pounds *** *** *** Follower blocks Dollars per 1,000 pounds *** *** *** FRC components Dollars per 1,000 pounds *** *** *** Total FRC Dollars per 1,000 pounds *** *** *** Complete FRC Dollars per unit *** *** *** Knuckles Dollars per unit *** *** *** Coupler bodies Dollars per unit *** *** *** Yokes Dollars per unit *** *** *** Follower blocks Dollars per unit *** *** *** Table continued. IV-9 Table IV-4--Continued FRC: U.S. importers' U.S. shipments of imports from China, by product type and by period Shares in percent Item Measure 2019 2020 2021 Complete FRC Share of 1,000 pounds *** *** *** Knuckles Share of 1,000 pounds *** *** *** Coupler bodies Share of 1,000 pounds *** *** *** Yokes Share of 1,000 pounds *** *** *** Follower blocks Share of 1,000 pounds *** *** *** FRC components Share of 1,000 pounds *** *** *** Total FRC Share of 1,000 pounds 100.0 100.0 100.0 Complete FRC Share of units *** *** *** Knuckles Share of units *** *** *** Coupler bodies Share of units *** *** *** Yokes Share of units *** *** *** Follower blocks Share of units *** *** *** FRC components Share of units *** *** *** Total FRC Share of units 100.0 100.0 100.0 Complete FRC Share of value *** *** *** Knuckles Share of value *** *** *** Coupler bodies Share of value *** *** *** Yokes Share of value *** *** *** Follower blocks Share of value *** *** *** FRC components Share of value *** *** *** Total FRC Share of value 100.0 100.0 100.0 Source: Compiled from data submitted in response to Commission questionnaires. In its questionnaire, the Commission asked importers to indicate whether they enter FRC into, or withdraw FRC from, foreign trade zones or bonded warehouses as well as indicate whether they import FRC under the temporary importation under bond program. Only one U.S. importer, *** responded in the affirmative. *** admitted *** pounds of FRC into a bonded warehouse in 2019, withdrawing all of it for export shipments in the same year,4 and *** pounds of FRC in 2020, withdrawing all of it for U.S. consumption in the same year.5 4 These figures only include export shipments that were exported without clearing them first through U.S. Customs. 5 These withdrawals into U.S. consumption are included as U.S. imports in the Commission’s data set in this report. IV-10 Negligibility The statute requires that an investigation be terminated without an injury determination if imports of the subject merchandise are found to be negligible.6 Negligible imports are generally defined in the Act, as amended, as imports from a country of merchandise corresponding to a domestic like product where such imports account for less than 3 percent of the volume of all such merchandise imported into the United States in the most recent 12-month period for which data are available that precedes the filing of the petition or the initiation of the investigation. However, if there are imports of such merchandise from a number of countries subject to investigations initiated on the same day that individually account for less than 3 percent of the total volume of the subject merchandise, and if the imports from those countries collectively account for more than 7 percent of the volume of all such merchandise imported into the United States during the applicable 12-month period, then imports from such countries are deemed not to be negligible.7 Imports from China accounted for *** percent of total imports of FRC by quantity during September 2020 through August 2021, as presented in table IV-5. Table IV-5 FRC: U.S. imports in the twelve-month period preceding the filing of the petition, September 2020 through August 2021 Quantity in 1,000 pounds; share in percent Source of imports Quantity Share of quantity China *** *** Mexico *** *** All other sources *** *** Nonsubject sources *** *** All import sources *** 100.0 Source: Compiled from data submitted in response to Commission questionnaires. 6 Sections 703(a)(1), 705(b)(1), 733(a)(1), and 735(b)(1) of the Act (19 U.S.C. §§ 1671b(a)(1), 1671d(b)(1), 1673b(a)(1), and 1673d(b)(1)). 7 Section 771 (24) of the Act (19 U.S.C § 1677(24)). IV-11 Apparent U.S. consumption and market shares Quantity Table IV-6 and figure IV-2 present data on apparent U.S. consumption and U.S. market shares by quantity for FRC. Overall, from 2019 to 2021, apparent U.S. consumption by quantity declined by *** percent, from *** pounds to *** pounds. U.S. producers’ share of apparent U.S. consumption decreased from *** percent to *** percent. Subject imports’ share of the U.S. market increased from *** percent in 2019 to *** percent in 2020 before declining to *** percent in 2021. The share of nonsubject imports (***) increased from *** percent to *** percent, during 2019-21. Table IV-6 FRC: Apparent U.S. consumption and market shares based on quantity, by source and period Quantity in 1,000 pounds; shares in percent Source Measure 2019 2020 2021 U.S. producers Quantity *** *** *** China Quantity 22,655 17,687 15,346 Mexico Quantity *** *** *** All other sources Quantity *** *** *** Nonsubject sources Quantity *** *** *** All import sources Quantity *** *** *** All sources Quantity *** *** *** U.S. producers Share *** *** *** China Share *** *** *** Mexico Share *** *** *** All other sources Share *** *** *** Nonsubject sources Share *** *** *** All import sources Share *** *** *** All sources Share 100.0 100.0 100.0 Source: Compiled from data submitted in response to Commission questionnaires. Note: Import source data are based on U.S. shipments of imports from questionnaire responses. IV-12 Figure IV-2 FRC: Apparent U.S. consumption based on quantity, by source and period * * * * * * * Source: Compiled from data submitted in response to Commission questionnaires. Value Table IV-7 and figure IV-3 present data on apparent U.S. consumption and U.S. market shares by value for FRC. Overall, from 2019 to 2021, apparent U.S. consumption by value declined by *** percent, from *** dollars to *** dollars. U.S. producers’ share of apparent U.S. consumption decreased from *** percent to *** percent. Subject imports’ share of the U.S. market increased from *** percent to *** percent. The share of nonsubject imports (***) increased from *** percent to *** percent, during 2019-21. IV-13 Table IV-7 FRC: Apparent U.S. consumption and market shares based on value, by source and period Value in 1,000 dollars; shares in percent Source Measure 2019 2020 2021 U.S. producers Value *** *** *** China Value 40,330 29,366 26,988 Mexico Value *** *** *** All other sources Value *** *** *** Nonsubject sources Value *** *** *** All import sources Value *** *** *** All sources Value *** *** *** U.S. producers Share *** *** *** China Share *** *** *** Mexico Share *** *** *** All other sources Share *** *** *** Nonsubject sources Share *** *** *** All import sources Share *** *** *** All sources Share 100.0 100.0 100.0 Source: Compiled from data submitted in response to Commission questionnaires. Note: Import source data are based on U.S. shipments of imports from questionnaire responses. Figure IV-3 FRC: Apparent U.S. consumption based on value, by source and period * * * * * * * Source: Compiled from data submitted in response to Commission questionnaires. IV-14 Maintenance/replacement market The Commission asked U.S. importers to report their U.S. shipments of U.S. imports of FRC by channels of distribution, between the OEM (end users) and maintenance/replacement markets. Table IV-8 presents data on apparent U.S. consumption and U.S. market shares by quantity for FRC for the maintenance/replacement market. Overall, from 2019 to 2021, total U.S. shipments for the maintenance/replacement market by quantity declined by *** percent, from *** pounds to *** pounds. U.S. producers’ share of such U.S. shipments increased from *** percent in 2019 to *** percent in 2020 before declining to *** percent in 2021. Subject imports’ share of such U.S. shipments decreased from *** percent in 2019 to *** percent in 2020 before increasing to *** percent in 2021 while the share of nonsubject imports of such U.S. shipments (***) decreased from *** percent in 2019 to *** percent in 2020 before increasing to *** percent in 2021. Table IV-8 FRC: U.S. producers' and U.S. importers' U.S. shipments to maintenance/replacement market, by sources and period Quantity in 1,000 pounds; shares in percent Source Measure 2019 2020 2021 U.S. producers Quantity *** *** *** China Quantity *** *** *** Mexico Quantity *** *** *** All other sources Quantity *** *** *** Nonsubject sources Quantity *** *** *** All import sources Quantity *** *** *** All sources Quantity *** *** *** U.S. producers Share *** *** *** China Share *** *** *** Mexico Share *** *** *** All other sources Share *** *** *** Nonsubject sources Share *** *** *** All import sources Share *** *** *** All sources Share 100.0 100.0 100.0 U.S. producers Ratio to overall apparent consumption *** *** *** China Ratio to overall apparent consumption *** *** *** Mexico Ratio to overall apparent consumption *** *** *** All other sources Ratio to overall apparent consumption *** *** *** Nonsubject sources Ratio to overall apparent consumption *** *** *** All import sources Ratio to overall apparent consumption *** *** *** All sources Ratio to overall apparent consumption *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. IV-15 OEM market Table IV-9 presents data on apparent U.S. consumption and U.S. market shares by quantity for the OEM market. Overall, from 2019 to 2021, total U.S. shipments for the OEM market by quantity declined by *** percent, from *** pounds to *** pounds. U.S. producers’ share of such U.S. shipments decreased from *** percent in 2019 to *** percent in 2020 before increasing to *** percent in 2021. Subject imports’ share of such U.S. shipments increased from *** percent in 2019 to *** percent in 2020 before decreasing to *** percent in 2021 while the share of nonsubject imports of such U.S. shipments (***) increased from *** percent in 2019 to *** percent in 2020 and *** percent in 2021. Table IV-9 FRC: U.S. producers' and U.S. importers' U.S. shipments to OEM market, by sources and period Quantity in 1,000 pounds; shares in percent Source Measure 2019 2020 2021 U.S. producers Quantity *** *** *** China Quantity *** *** *** Mexico Quantity *** *** *** All other sources Quantity *** *** *** Nonsubject sources Quantity *** *** *** All import sources Quantity *** *** *** All sources Quantity *** *** *** U.S. producers Share *** *** *** China Share *** *** *** Mexico Share *** *** *** All other sources Share *** *** *** Nonsubject sources Share *** *** *** All import sources Share *** *** *** All sources Share 100.0 100.0 100.0 U.S. producers Ratio to overall apparent consumption *** *** *** China Ratio to overall apparent consumption *** *** *** Mexico Ratio to overall apparent consumption *** *** *** All other sources Ratio to overall apparent consumption *** *** *** Nonsubject sources Ratio to overall apparent consumption *** *** *** All import sources Ratio to overall apparent consumption *** *** *** All sources Ratio to overall apparent consumption *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. V-1 Part V: Pricing data Factors affecting prices Raw material costs The manufacturing process for FRC includes molding, metal melting, heat treatment,1 finishing, assembly, testing, and quality control. FRC are produced from pig iron and ferrous scrap metal using a standard foundry process; prices for FRC generally follow the price for scrap steel.2 Raw material costs as a share of total cost of goods sold (“COGS”) were *** percent in 2019, *** percent in 2020, and *** percent in 2021.3 Steel scrap prices fluctuated between January 2019 and December 2021, with *** in October 2019 and *** in July 2021 (figure V-1). Steel scrap prices generally decreased during 2019 and increased during 2020-21. Overall, prices for no. 1 busheling scrap increased by *** percent during January 2019-December 2021, no. 1 heavy melt scrap increased by *** percent, and shredded auto scrap increased by *** percent.4 1 Common energy sources for metal melting and heat treatment are electricity and gas. M&T stated that electricity and gas are approximately 25 percent of its costs to produce FRC. The firm noted that most of its electricity is generated by gas and that it experiences large savings because Pittsburgh has relatively low gas rates. Conference transcript, p. 65 (Mautino). 2 Petitions, Volume 1, Part I, pp. 10, 29. 3 For more information on COGS, please see table VI-1 in Part VI. 4 Prices for no. 1 busheling scrap increased by *** percent during January 2022-March 2022, no. 1 heavy melt scrap increased by *** percent, and shredded auto scrap increased by *** percent. V-2 Figure V-1 Raw materials: Monthly U.S. ferrous scrap prices, January 2019-March 2022 * * * * * * * Source: American Metal Market LLC. Accessed April 5, 2022. Note: Data associated with this figure are provided in Appendix F. All three U.S. producers and five responding importers reported that the cost of raw materials has increased since January 1, 2019; one importer reported that these costs fluctuated. U.S. producer *** reported an increase in surcharges associated with the increase in the cost of raw materials.5 U.S. producer *** reported a cost-price squeeze due to the rising costs of scrap steel. U.S. producer *** reported no change to the market price for FRC due to raw material price changes. Three importers reported an increase in FRC selling price due to the cost of raw materials. Nine of 13 purchasers reported that they were familiar with the prices of raw materials used in the production of FRC. Nine of 11 responding purchasers reported that information on raw material prices had affected their negotiations or contracts to purchase FRC since 2019. Several purchasers reported that price fluctuations in the steel market and associated scrap surcharges have impacted contracts. 5 *** reported being able to pass on some (but not all) of the increased costs of raw materials via surcharges. V-3 Impact of section 232 tariffs U.S. producers and importers were asked to report the impact of section 232 tariffs on raw material costs and sales prices for FRC (table V-1). Most firms reported that the section 232 tariffs did not change the raw material costs or prices for FRC. One U.S. producer reported that the imposition of tariffs under section 232 on imported steel/aluminum products caused raw material prices to fluctuate and subsequently caused its selling prices for FRC to fluctuate; the other two U.S. producers reported no change. Two importers reported that the tariffs caused raw material prices to increase; four importers reported no change. One U.S. producer reported that the tariffs caused FRC prices to fluctuate; the other two U.S. producers reported no change. All four responding importers reported that the tariffs had no change on FRC prices. Table V-1 FRC: Count of firms' responses regarding the impact of the 232 tariffs on steel and aluminum imports Count in number of firms reporting Market Firm type Increase No change Decrease Fluctuate Impact on raw materials costs for FRC U.S. producers 0 2 0 1 Impact on raw materials costs for FRC Importers 2 4 0 0 Impact on prices of FRC U.S. producers 0 2 0 1 Impact on prices of FRC Importers 0 4 0 0 Source: Compiled from data submitted in response to Commission questionnaires. Transportation costs to the U.S. market Transportation costs for FRC shipped from China to the United States averaged 19.8 percent during 2021, up 12.2 percentage points from 7.6 percent during 2020; and FRC transported from Mexico to the United States averaged 1.8 percent during 2021, up 0.5 percentage points from 1.3 percent during 2020. These estimates were derived from official import data and represent the transportation and other charges on imports.6 Importer Strato reported that prices to ship containers from Asia to the United States are surging due to supply chain issues resulting from the COVID-19 pandemic.7 6 The estimated transportation costs were obtained by subtracting the customs value from the c.i.f. value of the imports for 2020 and 2021 and then dividing by the customs value based on the HTS statistical reporting numbers 8606.10.0000, 8606.30.0000, 8606.91.0000, 8606.92.0000, 8606.99.0130, 8606.99.0160. 7 Strato’s postconference brief, p. 43. V-4 U.S. inland transportation costs All three responding U.S. producers and all four responding importers reported that transportation is arranged by the purchaser. One U.S. producer reported U.S. inland transportation costs of *** percent and two importers reported costs ranging from *** to *** percent. Pricing practices Pricing methods U.S. producers and importers reported typically setting prices using transaction-by- transaction negotiations, contracts, and price lists (table V-2).8 Two importers reported price setting using other methods.9 Table V-2 FRC: Count of U.S. producers’ and importers’ reported price setting methods Count in number of firms reporting Method U.S. producers U.S. importers Transaction-by-transaction 3 3 Contract 2 4 Set price list 2 3 Other 0 2 Responding firms 3 5 Source: Compiled from data submitted in response to Commission questionnaires. Note: The sum of responses down may not add up to the total number of responding firms as each firm was instructed to check all applicable price setting methods employed. U.S. producers reported selling a substantial amount of FRC under annual contracts, but also considerable portions on the spot market (table V-3). Importers reported selling a substantial share of FRC pursuant to long-term contracts, but also considerable portions under annual contracts and on the spot market. 8 Multiple firms reported using more than one way to set prices. 9 *** reported using the AAR Field Manual to obtain average rates for specific FRC components. V-5 Table V-3 FRC: U.S. producers’ and importers’ shares of commercial U.S. shipments by type of sale, 2021 Share in percent Item U.S. producers Subject U.S. importers Long-term contracts *** *** Annual contract *** *** Short-term contracts *** *** Spot sales *** *** Total 100.0 100.0 Source: Compiled from data submitted in response to Commission questionnaires. Note: Because of rounding, figures may not add to the totals shown. Two U.S. producers reported using annual contracts to set prices; one firm allowed for price renegotiations, one did not. U.S. producers’ annual contracts had a fixed price.10 One U.S. producer reported that annual contracts were indexed to raw material prices.11 Two U.S. producers reported using long-term contracts, and one firm reported an average of three years. One firm allowed for price negotiations, both firms fixed the price, and neither firm indexed to raw material prices on long-term contracts.12 10 *** reported allowing for price renegotiation but also reported fixing the price. 11 Indexes reportedly used by *** include American Metal Market, Ryan’s Notes, Platts, PJM, and Henry Hub. 12 ***. ***. V-6 Two importers reported using long-term contracts averaging from about 2 to 5 years.13 14 One firm allowed for price renegotiations and one did not. One firm fixed the price and one firm fixed both the quantity and price.15 Both firms indexed to raw material prices on long-term contracts.16 Three firms reported using annual contracts; none allowed for price negotiations, one firm fixed the price and one firm fixed both the quantity and price, and all three firms indexed to raw material prices. Three purchasers reported that they purchase product daily, seven purchase weekly, and one purchases quarterly. Nine of 13 responding purchasers reported that their purchasing frequency had not changed since 2019. Of the four that did, purchaser *** reported ordering less often in 2020 due to the COVID-19 pandemic. Most (10 of 13) purchasers contact one to five suppliers before making a purchase. Twelve of 13 responding purchasers reported that their purchases of FRC usually involve negotiations with the supplier. Factors that firms generally negotiate are availability, billable rates, labor rates, lead time/delivery, payment terms, price, quality, quantity, raw material costs, shipping costs, and warranties. Seven purchasers reported not quoting competing prices during negotiations. Purchaser *** reported that purchases of FRC from a supplier may be combined with purchases of other non-FRC products, which can affect negotiations. Sales terms and discounts U.S. producers and importers typically quote FRC prices on an f.o.b. basis. U.S. producers and importers offer quantity, total volume, and rail part package discounts. U.S. producer *** reported offering discounts to support long-term customer relationships but does not offer discounts on spot sales. U.S. producer *** reported offering rebates on quarterly, annual, or contractual bases and that these discounts have increased due 13 Importer ***. ***. 14 ***. ***. 15 *** reported allowing for price renegotiation but also reported fixing the price and quantity. 16 *** reported making price adjustments based on the Producer Price Index and scrap steel indexes. *** reported using X-Rates.com, Freightos Baltic, and CUSTEEL average scrap steel. V-7 to Chinese competition in the market. Importer *** reported offering 1 to 2 percent cash discounts for early payments from certain customers. Importer Wabtec testified that it bundles freight car components as packages, noting that “{c}omponent suppliers will reduce prices on packages, at times losing money on some products to increase sales on others in order to increase the average content per railcar,” which simplifies the buying process and creates cost savings in the OEM market.17 Wabtec can quote packages up to $18,000.18 Price leadership Most purchasers reported that there were no price leaders in the FRC market. Purchaser *** reported that there are very few certified suppliers of FRC but that among them, Amsted, M&T, and Wabtec were price leaders. Price data The Commission requested U.S. producers and importers to provide quarterly data for the total quantity and f.o.b. value of the following FRC products shipped to unrelated U.S. customers during 2019-21. Product 1.--SE60, grade E steel complete coupler assembly, double shelves, 21.5” shank length, produced to AAR M-211 and/or AAR M-215 specifications. Product 2.--SBE60, grade E steel complete coupler assembly, bottom shelf, 21.5” shank length, produced to AAR M-211 and/or AAR M-215 specifications. Product 3.--E50 coupler knuckle, grade E steel, produced to AAR M-211 and/or AAR M- 215 specifications. Product 4.--SY40 coupler yoke, grade E steel, produced to AAR M-211 and/or AAR M- 215 specifications. Product 5.--SBE60, grade E steel coupler body, bottom shelf, 21.5” shank length, produced to AAR M-211 and/or AAR M-215 specifications. 17 Conference transcript, pp. 84-85 (Korzeniowski). 18 The firm noted that Amsted can quote packages up to $30,000 and M&T up to $2,000, where the dollar value of the package reflects the size of the portfolio of products that can be offered. Wabtec’s postconference brief, pp. 11-12. V-8 Three U.S. producers and three importers provided usable pricing data for sales of the requested products, although not all firms reported pricing for all products for all quarters.19 20 Pricing data reported by these firms accounted for approximately *** percent of U.S. producers’ U.S. commercial shipments in terms of value of FRC and *** percent of U.S. shipments in terms of value of subject imports from China in 2021.21 Price data for products 1-5 are presented in tables V-4 to V-8 and figures V-2 to V-6.22 Nonsubject Mexico prices are presented in Appendix D.23 19 Per-unit pricing data are calculated from total quantity and total value data provided by U.S. producers and importers. The precision and variation of these figures may be affected by rounding, limited quantities, and producer or importer estimates. 20 U.S. producer ***. Email from *** to USITC Staff dated May 16, 2022 (EDIS Doc. 770912). 21 Pricing coverage is based on U.S. shipments reported in questionnaires. 22 ***. Strato reported that “{a}ll of the *** that Strato sells are Bedloe products; the only non- Bedloe products are ***”. Respondents Strato’s and Wabtec’s posthearing briefs, Attachment II, Strato Response to Posthearing Questions, p. 5. 23 ***. Email from *** to USITC Staff dated May 16, 2022 (EDIS Doc. 770913). V-9 Table V-4 FRC: Weighted-average f.o.b. prices and quantities of domestic and imported product 1 and margins of underselling/(overselling), by source and quarter Price in dollars per unit, quantity in units, margin in percent. Period U.S. price U.S. quantity China price China quantity China margin 2019 Q1 *** *** *** *** *** 2019 Q2 *** *** *** *** *** 2019 Q3 *** *** *** *** *** 2019 Q4 *** *** *** *** *** 2020 Q1 *** *** *** *** *** 2020 Q2 *** *** *** *** *** 2020 Q3 *** *** *** *** *** 2020 Q4 *** *** *** *** *** 2021 Q1 *** *** *** *** *** 2021 Q2 *** *** *** *** *** 2021 Q3 *** *** *** *** *** 2021 Q4 *** *** *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Note: Product 1: SE60, grade E steel complete coupler assembly, double shelves, 21.5” shank length, produced to AAR M‐211 and/or AAR M‐215 specifications. V-10 Figure V-2 FRC: Weighted-average f.o.b. prices and quantities of domestic and imported product 1, by source and quarter Price of product 1 * * * * * * * Volume of product 1 * * * * * * * Source: Compiled from data submitted in response to Commission questionnaires. Note: Product 1: SE60, grade E steel complete coupler assembly, double shelves, 21.5” shank length, produced to AAR M‐211 and/or AAR M‐215 specifications. V-11 Table V-5 FRC: Weighted-average f.o.b. prices and quantities of domestic and imported product 2 and margins of underselling/(overselling), by source and quarter Price in dollars per unit, quantity in units, margin in percent. Period U.S. price U.S. quantity China price China quantity China margin 2019 Q1 *** *** *** *** *** 2019 Q2 *** *** *** *** *** 2019 Q3 *** *** *** *** *** 2019 Q4 *** *** *** *** *** 2020 Q1 *** *** *** *** *** 2020 Q2 *** *** *** *** *** 2020 Q3 *** *** *** *** *** 2020 Q4 *** *** *** *** *** 2021 Q1 *** *** *** *** *** 2021 Q2 *** *** *** *** *** 2021 Q3 *** *** *** *** *** 2021 Q4 *** *** *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Note: Product 2: SBE60, grade E steel complete coupler assembly, bottom shelf, 21.5” shank length, produced to AAR M‐211 and/or AAR M‐215 specifications. V-12 Figure V-3 FRC: Weighted-average f.o.b. prices and quantities of domestic and imported product 2, by source and quarter Price of product 2 * * * * * * * Volume of product 2 * * * * * * * Source: Compiled from data submitted in response to Commission questionnaires. Note: Product 2: SBE60, grade E steel complete coupler assembly, bottom shelf, 21.5” shank length, produced to AAR M‐211 and/or AAR M‐215 specifications. V-13 Table V-6 FRC: Weighted-average f.o.b. prices and quantities of domestic and imported product 3 and margins of underselling/(overselling), by source and quarter Price in dollars per unit, quantity in units, margin in percent. Period U.S. price U.S. quantity China price China quantity China margin 2019 Q1 *** *** *** *** *** 2019 Q2 *** *** *** *** *** 2019 Q3 *** *** *** *** *** 2019 Q4 *** *** *** *** *** 2020 Q1 *** *** *** *** *** 2020 Q2 *** *** *** *** *** 2020 Q3 *** *** *** *** *** 2020 Q4 *** *** *** *** *** 2021 Q1 *** *** *** *** *** 2021 Q2 *** *** *** *** *** 2021 Q3 *** *** *** *** *** 2021 Q4 *** *** *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Note: Product 3: E50 coupler knuckle, grade E steel, produced to AAR M‐211 and/or AAR M‐215 specifications. V-14 Figure V-4 FRC: Weighted-average f.o.b. prices and quantities of domestic and imported product 3, by source and quarter Price of product 3 * * * * * * * Volume of product 3 * * * * * * * Source: Compiled from data submitted in response to Commission questionnaires. Note: Product 3: E50 coupler knuckle, grade E steel, produced to AAR M‐211 and/or AAR M‐215 specifications. V-15 Table V-7 FRC: Weighted-average f.o.b. prices and quantities of domestic and imported product 4 and margins of underselling/(overselling), by source and quarter Price in dollars per unit, quantity in units, margin in percent. Period U.S. price U.S. quantity China price China quantity China margin 2019 Q1 *** *** *** *** *** 2019 Q2 *** *** *** *** *** 2019 Q3 *** *** *** *** *** 2019 Q4 *** *** *** *** *** 2020 Q1 *** *** *** *** *** 2020 Q2 *** *** *** *** *** 2020 Q3 *** *** *** *** *** 2020 Q4 *** *** *** *** *** 2021 Q1 *** *** *** *** *** 2021 Q2 *** *** *** *** *** 2021 Q3 *** *** *** *** *** 2021 Q4 *** *** *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Note: Product 4: SY40 coupler yoke, grade E steel, produced to AAR M‐211 and/or AAR M‐ 215 specifications. V-16 Figure V-5 FRC: Weighted-average f.o.b. prices and quantities of domestic and imported product 4, by source and quarter Price of product 4 * * * * * * * Volume of product 4 * * * * * * * Source: Compiled from data submitted in response to Commission questionnaires. Note: Product 4: SY40 coupler yoke, grade E steel, produced to AAR M‐211 and/or AAR M‐ 215 specifications. V-17 Table V-8 FRC: Weighted-average f.o.b. prices and quantities of domestic and imported product 5 and margins of underselling/(overselling), by source and quarter Price in dollars per unit, quantity in units, margin in percent. Period U.S. price U.S. quantity China price China quantity China margin 2019 Q1 *** *** *** *** *** 2019 Q2 *** *** *** *** *** 2019 Q3 *** *** *** *** *** 2019 Q4 *** *** *** *** *** 2020 Q1 *** *** *** *** *** 2020 Q2 *** *** *** *** *** 2020 Q3 *** *** *** *** *** 2020 Q4 *** *** *** *** *** 2021 Q1 *** *** *** *** *** 2021 Q2 *** *** *** *** *** 2021 Q3 *** *** *** *** *** 2021 Q4 *** *** *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Note: Product 5: SBE60, grade E steel coupler body, bottom shelf, 21.5” shank length, produced to AAR M‐211 and/or AAR M‐215 specifications. V-18 Figure V-6 FRC: Weighted-average f.o.b. prices and quantities of domestic and imported product 5, by source and quarter Price of product 5 * * * * * * * Volume of product 5 * * * * * * * Source: Compiled from data submitted in response to Commission questionnaires. Note: Product 5: SBE60, grade E steel coupler body, bottom shelf, 21.5” shank length, produced to AAR M‐211 and/or AAR M‐215 specifications. V-19 Price trends In general, prices were mixed during 2019-21. Table V-9 summarizes the price trends, by country and by product. As shown in the table, domestic price increases ranged from *** to *** percent during 2019-21, while domestic price decreases ranged from *** to *** percent. Import price increases ranged from *** to *** percent during 2019-21, while import prices decreased by *** percent for product 2. Table V-9 FRC: Summary of price data, by product and source, January 2019-December 2021 Quantity in units, price in dollars per unit Product Source Number of quarters Quantity Low price High price First quarter price Last quarter price Change over period Product 1 United States *** *** *** *** *** *** *** Product 1 China *** *** *** *** *** *** *** Product 2 United States *** *** *** *** *** *** *** Product 2 China *** *** *** *** *** *** *** Product 3 United States *** *** *** *** *** *** *** Product 3 China *** *** *** *** *** *** *** Product 4 United States *** *** *** *** *** *** *** Product 4 China *** *** *** *** *** *** *** Product 5 United States *** *** *** *** *** *** *** Product 5 China *** *** *** *** *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Note: Percent change column is percentage change from the first quarter 2019 to the last quarter in 2021. V-20 Figure V-7 FRC: Indexed U.S. producer prices, by quarter Source: Compiled from data submitted in response to Commission questionnaires. Figure V-8 FRC: Indexed subject U.S. importer prices, by quarter Source: Compiled from data submitted in response to Commission questionnaires. V-21 Table V-10 FRC: Indexed U.S. producer prices, by quarter Period Product 1 Product 2 Product 3 Product 4 Product 5 2019 Q1 100.0 100.0 100.0 100.0 100.0 2019 Q2 97.8 99.4 100.8 98.9 100.7 2019 Q3 97.9 94.8 99.1 96.4 98.6 2019 Q4 94.5 91.4 98.9 94.2 97.4 2020 Q1 80.3 84.6 98.8 91.6 97.4 2020 Q2 81.4 86.5 101.3 93.1 98.6 2020 Q3 80.9 87.8 100.8 92.1 98.4 2020 Q4 81.2 89.1 102.6 92.7 99.7 2021 Q1 74.7 85.2 105.0 78.2 102.2 2021 Q2 74.7 81.3 103.1 77.8 102.8 2021 Q3 82.1 81.4 103.2 78.4 106.2 2021 Q4 74.7 80.5 108.2 78.2 112.6 Source: Compiled from data submitted in response to Commission questionnaires. Table V-11 FRC: Indexed subject U.S. importer prices, by quarter Period Product 1 Product 2 Product 3 Product 4 Product 5 2019 Q1 100.0 100.0 100.0 100.0 100.0 2019 Q2 103.9 100.1 102.1 98.0 100.3 2019 Q3 101.2 89.3 99.8 100.9 101.1 2019 Q4 80.7 84.3 98.9 92.0 97.6 2020 Q1 78.0 74.8 99.3 93.4 95.0 2020 Q2 83.0 93.1 98.0 93.1 93.3 2020 Q3 82.0 74.1 99.3 91.5 97.3 2020 Q4 82.7 77.4 99.5 90.8 95.8 2021 Q1 102.4 98.8 99.8 98.4 96.0 2021 Q2 104.1 100.6 100.4 97.6 96.7 2021 Q3 106.3 91.1 103.2 93.1 99.8 2021 Q4 107.2 75.4 115.8 123.4 121.8 Source: Compiled from data submitted in response to Commission questionnaires. V-22 Price comparisons As shown in table V-12, prices for product imported from China were below those for U.S.-produced product in 27 of 60 instances (*** units); margins of underselling ranged from *** to *** percent. In the remaining 33 instances (*** units), prices for product from China were between *** and *** percent above prices for the domestic product. Table V-12 FRC: Instances of underselling and overselling and the range and average of margins, by product Quantity in units; margin in percent Products Type Number of quarters Quantity Average margin MIn margin Max margin Product 1 Underselling 8 *** *** *** *** Product 2 Underselling 6 *** *** *** *** Product 3 Underselling 5 *** *** *** *** Product 4 Underselling 8 *** *** *** *** Product 5 Underselling --- *** *** *** *** All products Underselling 27 *** *** *** *** Product 1 Overselling 4 *** *** *** *** Product 2 Overselling 6 *** *** *** *** Product 3 Overselling 7 *** *** *** *** Product 4 Overselling 4 *** *** *** *** Product 5 Overselling 12 *** *** *** *** All products Overselling 33 *** *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Note: These data include only quarters in which there is a comparison between the U.S. and subject product. Lost sales and lost revenue In the preliminary phase of these investigations, the Commission requested that U.S. producers of FRC report purchasers with which they experienced instances of lost sales or revenue due to competition from imports of FRC from China during January 2018-June 2021. One U.S. producer submitted lost sales and lost revenue allegations and identified three purchasers with which it lost sales and revenue. The reported lost sales and lost revenue from these firms were from ***. The estimated value of these allegations was $***. V-23 In the final phase of these investigations, of the three responding U.S. producers, *** reported either reducing prices or rolling back announced price increases, and *** reported lost sales. Staff contacted 18 purchasers and received responses from 13 purchasers. Responding purchasers reported purchasing *** pounds of FRC during 2019-21 (table V-13). Table V-13 FRC: Purchasers’ reported purchases and imports, by firm and source Quantity in 1,000 pounds, share in percent Firm Domestic quantity Subject quantity All other quantity Change in domestic share Change in subject share *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** All firms *** *** *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Note: All other includes all other sources and unknown sources. Change is the percentage point change in the share of the firm’s total purchases of domestic and/or subject country imports between first and last years. Of the 13 responding purchasers, 10 reported that, since 2019, they had purchased imported FRC from China instead of U.S.-produced product. Five of these purchasers reported that subject import prices were lower than U.S.-produced product, and one of these purchasers reported that price was a primary reason for the decision to purchase imported product rather than U.S.-produced product. One purchaser estimated it purchased *** pounds of FRC from China instead of domestic product (table V-14). Purchasers identified availability, customer requests, quality, shipping cost, and supplier stability as non-price reasons for purchasing imported rather than U.S.-produced product. V-24 No responding purchaser reported that U.S. producers had reduced prices in order to compete with lower-priced imports from China; five reported that they did not know. Table V-14 FRC: Purchasers’ responses to purchasing subject imports instead of domestic product, by firm Quantity in 1,000 pounds Firm Purchased subject imports instead of domestic Imports priced lower Choice based on price Quantity Narrative on reasons for purchasing imports *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** Table continued. V-25 Table V-14 Continued FRC: Purchasers’ responses to purchasing subject imports instead of domestic product, by firm Quantity in 1,000 pounds Firm Purchased subject imports instead of domestic Imports priced lower Choice based on price Quantity Narrative on reasons for purchasing imports *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** All firms Yes--10; No--3 Yes--5; No--5 Yes--1; No--9 *** NA Source: Compiled from data submitted in response to Commission questionnaires. VI-1 Part VI: Financial experience of U.S. producers Background1 Three U.S. producers, Amsted, Huron, and M&T provided usable financial results on their FRC operations. *** responding U.S. producers reported financial data on the basis of GAAP and *** responding U.S. producers provided their financial data on a calendar year basis.2 *** produced complete FRC systems and FRC components while *** did not produce any complete FRC systems from January 2019 through January 2021.3 4 5 Figure VI-1 presents each responding firm’s share of the total reported net sales quantity in 2021. As depicted in figure VI-1 and the data tables that follow, ***. 1 The following abbreviations may be used in the tables and/or text of this section: generally accepted accounting principles (“GAAP”), fiscal year (“FY”), net sales (“NS”), cost of goods sold (“COGS”), selling, general, and administrative expenses (“SG&A expenses”), average unit values (“AUVs”), research and development expenses (“R&D expenses”), and return on assets (“ROA”). 2 ***. 3 ***, Emails from ***, October 14, and November 1, 2021. 4 ***. Calculated from data in U.S. producers’ questionnaire response, sections II-9 and III-9a. 5 Staff conducted a verification of *** U.S. producer questionnaire data, and changes from the verification are incorporated within the report. VI-2 Figure VI-1 FRC: Share of net sales quantity, by firm, 2021 * * * * * * * Source: Compiled from data submitted in response to Commission questionnaires. Operations on FRC Table VI-1 presents aggregated data on U.S. producers’ operations in relation to FRC, while table VI-2 presents corresponding changes in AUVs. Table VI-3 presents selected company-specific financial data. VI-3 Table VI-1 FRC: Results of operations of U.S. producers, by item and period Quantity in 1,000 pounds; value in 1,000 dollars; ratios in percent Item Measure 2019 2020 2021 Total net sales Quantity *** *** *** Total net sales Value *** *** *** COGS: Raw materials Value *** *** *** COGS: Direct labor Value *** *** *** COGS: Other factory Value *** *** *** COGS: Total Value *** *** *** Gross profit or (loss) Value *** *** *** SG&A expenses Value *** *** *** Operating income or (loss) Value *** *** *** All other expense / (income), net Value *** *** *** Net income or (loss) Value *** *** *** Depreciation/amortization Value *** *** *** Cash flow Value *** *** *** COGS: Raw materials Ratio to NS *** *** *** COGS: Direct labor Ratio to NS *** *** *** COGS: Other factory Ratio to NS *** *** *** COGS: Total Ratio to NS *** *** *** Gross profit Ratio to NS *** *** *** SG&A expense Ratio to NS *** *** *** Operating income or (loss) Ratio to NS *** *** *** Net income or (loss) Ratio to NS *** *** *** Table continued on next page. VI-4 Table VI-1 Continued FRC: Results of operations of U.S. producers, by item and period Shares in percent; unit values in dollars per 1,000 pounds; count in number of firms reporting Item Measure 2019 2020 2021 COGS: Raw materials Share *** *** *** COGS: Direct labor Share *** *** *** COGS: Other factory Share *** *** *** COGS: Total Share *** *** *** Total net sales Unit value *** *** *** COGS: Raw materials Unit value *** *** *** COGS: Direct labor Unit value *** *** *** COGS: Other factory Unit value *** *** *** COGS: Total Unit value *** *** *** Gross profit or (loss) Unit value *** *** *** SG&A expenses Unit value *** *** *** Operating income or (loss) Unit value *** *** *** Net income or (loss) Unit value *** *** *** Operating losses Count *** *** *** Net losses Count *** *** *** Data Count *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Note: Shares represent the share of COGS. VI-5 Table VI-2 FRC: Changes in AUVs between comparison periods Changes in percent Item 2019-21 2019-20 2020-21 Total net sales ▼ *** ▼ *** ▲ *** COGS: Raw materials ▲ *** ▲ *** ▲ *** COGS: Direct labor ▲ *** ▲ *** ▲ *** COGS: Other factory ▲ *** ▲ *** ▼ *** COGS: Total ▲ *** ▲ *** ▲ *** Table continued. Table VI-2 Continued FRC: Changes in AUVs between comparison periods Changes in dollars per 1,000 pounds Item 2019-21 2019-20 2020-21 Total net sales ▼ *** ▼ *** ▲ *** COGS: Raw materials ▲ *** ▲ *** ▲ *** COGS: Direct labor ▲ *** ▲ *** ▲ *** COGS: Other factory ▲ *** ▲ *** ▼ *** COGS: Total ▲ *** ▲ *** ▲ *** Gross profit or (loss) ▼ *** ▼ *** ▲ *** SG&A expense ▲ *** ▲ *** ▲ *** Operating income or (loss) ▼ *** ▼ *** ▲ *** Net income or (loss) ▼ *** ▼ *** ▲ *** Source: Compiled from data submitted in response to Commission questionnaires. VI-6 Table VI-3 FRC: Firm-by-firm total net sales quantity, by period Net sales quantity Quantity in 1,000 pounds Firm 2019 2020 2021 Amsted *** *** *** Huron *** *** *** M&T *** *** *** All firms *** *** *** Table continued. Table VI-3 Continued FRC: Firm-by-firm total net sales value, by period Net sales value Value in 1,000 dollars Firm 2019 2020 2021 Amsted *** *** *** Huron *** *** *** M&T *** *** *** All firms *** *** *** Table continued. Table VI-3 Continued FRC: Firm-by-firm COGS, by period COGS Value in 1,000 dollars Firm 2019 2020 2021 Amsted *** *** *** Huron *** *** *** M&T *** *** *** All firms *** *** *** Table continued. Table VI-3 Continued FRC: Firm-by-firm gross profit or (loss), by period Gross profit or (loss) Value in 1,000 dollars Firm 2019 2020 2021 Amsted *** *** *** Huron *** *** *** M&T *** *** *** All firms *** *** *** Table continued on next page. VI-7 Table VI-3 Continued FRC: Firm-by-firm SG&A expenses, by period SG&A expenses Value in 1,000 dollars Firm 2019 2020 2021 Amsted *** *** *** Huron *** *** *** M&T *** *** *** All firms *** *** *** Table continued. Table VI-3 Continued FRC: Firm-by-firm operating income or (loss), by period Operating income or (loss) Value in 1,000 dollars Firm 2019 2020 2021 Amsted *** *** *** Huron *** *** *** M&T *** *** *** All firms *** *** *** Table continued. Table VI-3 Continued FRC: Firm-by-firm net income or (loss), by period Net income or (loss) Value in 1,000 dollars Firm 2019 2020 2021 Amsted *** *** *** Huron *** *** *** M&T *** *** *** All firms *** *** *** Table continued. Table VI-3 Continued FRC: Firm-by-firm ratio of COGS to net sales value, by period COGS to net sales ratio Ratios in percent Firm 2019 2020 2021 Amsted *** *** *** Huron *** *** *** M&T *** *** *** All firms *** *** *** Table continued on next page. VI-8 Table VI-3 Continued FRC: Firm-by-firm ratio of gross profit or (loss) to net sales value, by period Gross profit or (loss) to net sales ratio Ratios in percent Firm 2019 2020 2021 Amsted *** *** *** Huron *** *** *** M&T *** *** *** All firms *** *** *** Table continued. Table VI-3 Continued FRC: Firm-by-firm ratio of SG&A expenses to net sales value, by period SG&A expenses to net sales ratio Ratios in percent Firm 2019 2020 2021 Amsted *** *** *** Huron *** *** *** M&T *** *** *** All firms *** *** *** Table continued. Table VI-3 Continued FRC: Firm-by-firm ratio of operating income or (loss) to net sales value, by period Operating income or (loss) to net sales ratio Ratios in percent Firm 2019 2020 2021 Amsted *** *** *** Huron *** *** *** M&T *** *** *** All firms *** *** *** Table continued. Table VI-3 Continued FRC: Firm-by-firm ratio of net income or (loss) to net sales value, by period Net income or (loss) to net sales ratio Ratios in percent Firm 2019 2020 2021 Amsted *** *** *** Huron *** *** *** M&T *** *** *** All firms *** *** *** Table continued on next page. VI-9 Table VI-3 Continued FRC: Firm-by-firm unit net sales value, by period Unit net sales value Unit values in dollars per 1,000 pounds Firm 2019 2020 2021 Amsted *** *** *** Huron *** *** *** M&T *** *** *** All firms *** *** *** Table continued. Table VI-3 Continued FRC: Firm-by-firm unit raw material cost, by period Unit raw material costs Unit values in dollars per 1,000 pounds Firm 2019 2020 2021 Amsted *** *** *** Huron *** *** *** M&T *** *** *** All firms *** *** *** Table continued. Table VI-3 Continued FRC: Firm-by-firm unit direct labor cost, by period Unit direct labor costs Unit values in dollars per 1,000 pounds Firm 2019 2020 2021 Amsted *** *** *** Huron *** *** *** M&T *** *** *** All firms *** *** *** Table continued. Table VI-3 Continued FRC: Firm-by-firm unit other factory costs, by period Unit other factory costs Unit values in dollars per 1,000 pounds Firm 2019 2020 2021 Amsted *** *** *** Huron *** *** *** M&T *** *** *** All firms *** *** *** Table continued on next page. VI-10 Table VI-3 Continued FRC: Firm-by-firm unit COGS, by period Unit COGS Unit values in dollars per 1,000 pounds Firm 2019 2020 2021 Amsted *** *** *** Huron *** *** *** M&T *** *** *** All firms *** *** *** Table continued. Table VI-3 Continued FRC: Firm-by-firm unit gross profit or (loss), by period Unit gross profit or (loss) Unit values in dollars per 1,000 pounds Firm 2019 2020 2021 Amsted *** *** *** Huron *** *** *** M&T *** *** *** All firms *** *** *** Table continued. Table VI-3 Continued FRC: Firm-by-firm unit SG&A expenses, by period Unit SG&A expenses Unit values in dollars per 1,000 pounds Firm 2019 2020 2021 Amsted *** *** *** Huron *** *** *** M&T *** *** *** All firms *** *** *** Table continued. Table VI-3 Continued FRC: Firm-by-firm unit operating income or (loss), by period Unit operating income or (loss) Unit values in dollars per 1,000 pounds Firm 2019 2020 2021 Amsted *** *** *** Huron *** *** *** M&T *** *** *** All firms *** *** *** Table continued on next page. VI-11 Table VI-3 Continued FRC: Firm-by-firm unit net income or (loss), by period Unit net income or (loss) Unit values in dollars per 1,000 pounds Firm 2019 2020 2021 Amsted *** *** *** Huron *** *** *** M&T *** *** *** All firms *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Net sales Total net sales reflects commercial sales and exports of complete FRC systems and FRC components. As shown in part III of this report complete FRC systems, knuckles, coupler bodies, follower blocks and all other components accounted for *** of total FRC sales quantity, respectively, in 2021 (table III-7). As shown in table VI-1, total net sales quantity and value declined by *** and *** percent, respectively, from 2019 to 2021. *** U.S. producers reported a decline in sales quantities and values from 2019 to 2020, and *** reported declining sales trends from 2020 to 2021.6 7 8 On an average per unit basis of dollars per thousand pounds, net sales 6 ***. U.S. producers’ questionnaire response, section II-2b, email from ***, October 19, 2021, and email from ***, April 13, 2022. 7 *** . Email from ***, November 2, 2021, and email from ***, April 14, 2022. 8 *** . Email from ***, April 12, 2022. VI-12 decreased from $ *** in 2019 to $ *** in 2020 before increasing to $ *** in 2021. As shown in table VI-3, per unit net sales of *** increased during 2019-21, while those of *** continuously declined during the same period.9 Cost of goods sold and gross profit or loss Raw material costs, direct labor and other factory costs accounted for *** percent of total COGS, respectively, in 2021. Raw material costs, which accounted for the *** component of COGS, declined by *** percent from 2019 to 2020 and further declined by *** percent from 2020 to 2021. The average unit value of raw material costs increased from $*** in 2019 to $ *** in 2020 and $*** in 2021. As seen in table VI-3, *** U.S. producers showed an increase in their average unit values of raw material costs from 2019 to 2021. As a ratio to net sales, raw material costs increased from *** percent in 2019 to *** percent in 2020 and *** percent in 2021. Table VI-4 presents details on specific raw material inputs as a share of total raw material costs in 2021. Scrap steel accounted for the largest share of raw material costs at *** percent. Other material inputs accounted for the remaining *** percent and included sand, resin, and alloys such as (ferrosilicon, silicomanganese, molybdenum, and ferrochrome).10 11 12 9 ***. Email from ***, April 14, 2022. 10 U.S. producers’ questionnaire response, section III-9c. 11 ***. U.S. producers’ questionnaire responses, sections III-9d and IV-18. 12 ***. Email from ***, May 6, 2022. VI-13 Table VI-4 FRC: Raw material costs in 2021 Value in 1,000 dollars; unit values in dollars per 1,000 pounds; share of value in percent Item Value Unit value Share of value Scrap steel *** *** *** Other material inputs *** *** *** All raw materials *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Direct labor costs, which accounted for the *** share of total COGS, declined by *** percent from 2019 to 2020 and further declined by *** in 2021; this category of costs decreased overall by *** percent from 2019 to 2021. The average unit value of direct labor costs increased from $*** in 2019 to $*** in 2020 and $*** in 2021. *** U.S. producers reported an overall increase in their average per unit labor costs from 2019 to 2021.13 As a ratio to net sales, direct labor costs increased from *** percent in 2019 to *** percent in 2020 and *** percent in 2021. Other factory costs, which was the *** component of COGS, decreased by *** percent from 2019 to 2020 and *** percent from 2020 to 2021, with an overall decline of *** percent during 2019-21. The average unit value of other factory costs increased from $*** in 2019 to $*** in 2020, then declined to $*** in 2021. As shown in table VI-3, ***’s average unit values increased from $*** in 2019 to $*** in 2020 before slightly declining to $*** in 2021; while the average unit values of *** increased in each year from 2019 to 2021. 14 As a ratio to net sales, other factory costs increased from *** percent in 2019 to *** percent in 2020 before decreasing to *** percent in 2021. Total COGS reflected the overall trends of its components and sales, declining by *** percent from 2019 to 2021. The average unit value of total COGS increased from $ *** in 2019 to $*** in 2020 and $*** in 2021. As a ratio to net sales, total COGS increased from *** percent in 2019 to *** percent in 2020 and *** percent in 2021. 13 M&T testified that the firm relies heavily on skilled expensive labor during the melting and molding parts of the production process. ***. Conference transcript, p.70 (Mautino) and email from ***, October 27, 2021. 14 ***. Email from ***, May 19, 2022. VI-14 As shown in table VI-1, gross profit decreased from $ *** in 2019 to a gross loss of $ *** in 2020 and $*** in 2021. As a ratio to net sales, gross profit decreased from *** percent in 2019 to a negative *** percent in 2020 and *** percent in 2021. On a firm-by-firm basis, *** reported gross losses in 2020 and 2021 compared with positive gross profits in 2019; while *** did not report any losses and its gross profit declined from 2019 to 2020 and slightly improved in 2021 compared with 2020. SG&A expenses and operating income or loss U.S. producers’ SG&A expenses declined from $*** in 2019 to $*** in 2020 and further declined to $*** in 2021. The overall decline from 2019 to 2021 was *** percent. The corresponding SG&A expense ratio increased from *** percent in 2019 to *** percent in 2021.15 Operating income decreased from $ *** in 2019 to an operating loss of $*** in 2020 and a loss of $*** in 2021. On a firm-by-firm basis, the operating profits of *** declined to operating losses in 2020 and 2021; *** reported declining operating profits from 2019 to 2021 but ***. As a ratio to net sales, operating income declined from *** percent in 2019 to a negative *** percent in 2020 and a negative *** percent in 2021. All other expenses and net income or loss Classified below the operating income level are interest expenses, other expenses, and other income. In table VI-1, these items are aggregated with the net amount shown. *** of the U.S. producers reported either interest expenses or other income. All other expenses, which were reported *** in 2020 and 2021 decreased during that same period.16 Net income declined from $*** in 2019 to losses of $ *** and $ *** in 2020 and 2021, respectively. Similar to the trends of operating income ***’s positive net income in 2019 declined to losses in 2020 and 2021; while *** did not report any losses, its net income declined from 2019 to 2021.17 15 ***. Email from ***, November 3, 2021. 16 Other expenses reported by ***, Email from ***, October 28, 2021. 17 Given the mix of complete FRC systems and FRC components and changes in product mix during the period, a variance analysis is not shown in this section of the report. VI-15 Capital expenditures and research and development expenses Table VI-5 presents capital expenditures, by firm, and table VI-7 presents R&D expenses, by firm. Tables VI-6 and VI-8 present the firms’ narrative explanations of the nature, focus, and significance of their capital expenditures and R&D expenses, respectively. Capital expenditures declined overall by *** percent from 2019 to 2021. R&D expenses, reported by *** only, increased from 2019 to 2020 before declining in 2021. Table VI-5 FRC: U.S. producers’ capital expenditures, by firm and period Value in 1,000 dollars Firm 2019 2020 2021 Amsted *** *** *** Huron *** *** *** M&T *** *** *** All firms *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Table VI-6 FRC: Narrative descriptions of U.S. producers’ capital expenditures, by firm Firm Narrative on capital expenditures Amsted *** Huron *** M&T *** Source: Compiled from data submitted in response to Commission questionnaires. VI-16 Table VI-7 FRC: U.S. producers’ R&D expenses, by firm and period Value in 1,000 dollars Firm 2019 2020 2021 *** *** *** *** All firms *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Table VI-8 FRC: Narrative descriptions of U.S. producers’ R&D expenses, by firm Firm Narrative on R&D expenses *** *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Assets and return on assets Table VI-9 presents data on the U.S. producers’ total assets while table VI-10 presents their operating ROA.18 Table VI-11 presents U.S. producers’ narrative responses explaining their major asset categories and any significant changes in asset levels over time. Total assets declined from $*** in 2019 to $*** in 2021. Return on assets also declined from a positive *** percent in 2019 to a negative *** percent in 2021.19 Table VI-9 FRC: U.S. producers’ total net assets, by firm and period Value in 1,000 dollars Firm 2019 2020 2021 Amsted *** *** *** Huron *** *** *** M&T *** *** *** All firms *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. 18 The operating ROA is calculated as operating income divided by total assets. With respect to a firm’s overall operations, the total asset value reflects an aggregation of a number of assets which are generally not product specific. Thus, high-level allocations are generally required in order to report a total asset value for FRC. 19 ***. Email from ***, November 3, 2021. VI-17 Table VI-10 FRC: U.S. producers’ ROA, by firm and period Ratio in percent Firm 2019 2020 2021 Amsted *** *** *** Huron *** *** *** M&T *** *** *** All firms *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Table VI-11 FRC: Narrative descriptions of U.S. producers’ total net assets, by firm Firm Narrative on assets Amsted *** Huron *** M&T *** Source: Compiled from data submitted in response to Commission questionnaires. Capital and investment The Commission requested U.S. producers of FRC to describe any actual or potential negative effects of imports of FRC from China on their firms’ growth, investment, ability to raise capital, development and production efforts, or the scale of capital investments. Table VI-12 presents the number of firms reporting an impact in each category and table VI-13 provides the U.S. producers’ narrative responses. VI-18 Table VI-12 FRC: Count of firms indicating actual and anticipated negative effects of imports from subject sources on investment, growth, and development since January 1, 2019, by effect Number of firms reporting Effect Category Count Cancellation, postponement, or rejection of expansion projects Investment 1 Denial or rejection of investment proposal Investment 0 Reduction in the size of capital investments Investment 1 Return on specific investments negatively impacted Investment 1 Other investment effects Investment 0 Any negative effects on investment Investment 1 Rejection of bank loans Growth 0 Lowering of credit rating Growth 0 Problem related to the issue of stocks or bonds Growth 0 Ability to service debt Growth 0 Other growth and development effects Growth 1 Any negative effects on growth and development Growth 1 Anticipated negative effects of imports Future 1 Source: Compiled from data submitted in response to Commission questionnaires. Note: ***. VI-19 Table VI-13 FRC: Narratives relating to actual and anticipated negative effects of imports on investment, growth, and development, since January 1, 2019 Item Firm name and narrative on impact of imports Cancellation, postponement, or rejection of expansion projects *** Reduction in the size of capital investments *** Return on specific investments negatively impacted *** Other effects on growth and development *** Anticipated effects of imports *** Anticipated effects of imports *** Source: Compiled from data submitted in response to Commission questionnaires. VII-1 Threat considerations and information on nonsubject countries Section 771(7)(F)(i) of the Act (19 U.S.C. § 1677(7)(F)(i)) provides that— In determining whether an industry in the United States is threatened with material injury by reason of imports (or sales for importation) of the subject merchandise, the Commission shall consider, among other relevant economic factors1-- (I) if a countervailable subsidy is involved, such information as may be presented to it by the administering authority as to the nature of the subsidy (particularly as to whether the countervailable subsidy is a subsidy described in Article 3 or 6.1 of the Subsidies Agreement), and whether imports of the subject merchandise are likely to increase, (II) any existing unused production capacity or imminent, substantial increase in production capacity in the exporting country indicating the likelihood of substantially increased imports of the subject merchandise into the United States, taking into account the availability of other export markets to absorb any additional exports, (III) a significant rate of increase of the volume or market penetration of imports of the subject merchandise indicating the likelihood of substantially increased imports, (IV) whether imports of the subject merchandise are entering at prices that are likely to have a significant depressing or suppressing effect on domestic prices, and are likely to increase demand for further imports, (V) inventories of the subject merchandise, 1 Section 771(7)(F)(ii) of the Act (19 U.S.C. § 1677(7)(F)(ii)) provides that “The Commission shall consider {these factors} . . . as a whole in making a determination of whether further dumped or subsidized imports are imminent and whether material injury by reason of imports would occur unless an order is issued or a suspension agreement is accepted under this title. The presence or absence of any factor which the Commission is required to consider . . . shall not necessarily give decisive guidance with respect to the determination. Such a determination may not be made on the basis of mere conjecture or supposition.” VII-2 (VI) the potential for product-shifting if production facilities in the foreign country, which can be used to produce the subject merchandise, are currently being used to produce other products, (VII) in any investigation under this title which involves imports of both a raw agricultural product (within the meaning of paragraph (4)(E)(iv)) and any product processed from such raw agricultural product, the likelihood that there will be increased imports, by reason of product shifting, if there is an affirmative determination by the Commission under section 705(b)(1) or 735(b)(1) with respect to either the raw agricultural product or the processed agricultural product (but not both), (VIII) the actual and potential negative effects on the existing development and production efforts of the domestic industry, including efforts to develop a derivative or more advanced version of the domestic like product, and (IX) any other demonstrable adverse trends that indicate the probability that there is likely to be material injury by reason of imports (or sale for importation) of the subject merchandise (whether or not it is actually being imported at the time).2 Information on the nature of the subsidies was presented earlier in this report; information on the volume and pricing of imports of the subject merchandise is presented in Parts IV and V; and information on the effects of imports of the subject merchandise on U.S. producers’ existing development and production efforts is presented in Part VI. Information on inventories of the subject merchandise; foreign producers’ operations, including the potential for “product-shifting;” any other threat indicators, if applicable; and any dumping in third- country markets, follows. Also presented in this section of the report is information obtained for consideration by the Commission on nonsubject countries. 2 Section 771(7)(F)(iii) of the Act (19 U.S.C. § 1677(7)(F)(iii)) further provides that, in antidumping investigations, “. . . the Commission shall consider whether dumping in the markets of foreign countries (as evidenced by dumping findings or antidumping remedies in other WTO member markets against the same class or kind of merchandise manufactured or exported by the same party as under investigation) suggests a threat of material injury to the domestic industry.” VII-3 The industry in China According to the Global Trade Atlas (“GTA”) HS subheading 8607.30 (a broad category that in addition to FRC includes hooks and other coupling devices, buffers and parts thereof, for railway or tramway vehicles), China leads the world in such exports in terms of value, accounting for 20.7 percent of exports in 2021 – up from 20.6 percent in 2019.3 The Commission issued foreign producers’ or exporters’ questionnaires to ten firms believed to produce and/or export FRC from China.4 Usable responses to the Commission’s questionnaire were received from three firms: Baotou Shengyu Machinery Mfg. Co. LTD (“Baotou”), Qingdao Sanheshan Precision Casting Co., Ltd. (“Sanheshan”), and Tongyao.5 These firms’ exports to the United States accounted for approximately *** percent of U.S. imports of FRC from China, by quantity, in 2021.6 According to estimates requested of the responding producers in China, the production of FRC in China reported in the questionnaires accounted for less than *** percent of overall production of FRC in China in 2020. Table VII-1 presents information on the FRC operations of the responding producers and exporters in China. 3 Official exports statistics under HS subheading 8607.30 as reported by various national statistical authorities in the Global Trade Atlas database, accessed April 13, 2022. HS subheading 8607.30 includes hooks and other coupling devices, buffers and parts thereof, for railway or tramway vehicles. 4 These firms were identified through a review of information submitted in the petitions, preliminary questionnaire responses, and presented in third-party sources. 5 Qingdao Lianshan Casting Co., Ltd (“Lianshan”) provided an incomplete questionnaire response missing several data during the preliminary phase of these investigations but did not submit a response in the final phase. The Commission received responses from one firm, ***, certifying that they had not produced or exported FRC to the U.S. since January 2019. *** certified that they had not produced or exported FRC to the U.S. since January 1, 2018 in the preliminary phase of these investigations but did not provide a response in this final phase. 6 This calculation is based on the ratio of reported exports of FRC from China to the United States to official import statistics (which may be overstated, as statistical reporting number 8607.30.1000 is a “basket” category). The firms’ reported exports to the United States compared to questionnaire imports data accounted for *** percent of U.S. imports of FRC from China, by quantity, in 2021. VII-4 Table VII-1 FRC: Summary data for producers in China, 2020 Quantity in 1,000 pounds; share in percent Firm Production (1,000 pounds) Share of reported production (percent) Exports to the United States (1,000 pounds) Share of reported exports to the United States (percent) Total shipments (1,000 pounds) Share of firm's total shipments exported to the United States (percent) Sanheshan *** *** *** *** *** *** Shengyu *** *** *** *** *** *** Tongyao *** *** *** *** *** *** All firms *** 100.0 *** 100.0 *** *** Source: Compiled from data submitted in response to Commission questionnaires. Changes in operations Table VII-2 presents operational and organizational changes since January 1, 2019 reported by responding producers in China. Table VII-2 FRC: Reported changes in operations by producers in China, since January 1, 2018 Item Firm name and accompanying narrative response Prolonged shutdowns or Curtailments *** Source: Compiled from data submitted in response to Commission questionnaires in the preliminary phase of these investigations. Operations on FRC Table VII-3 presents information on the FRC operations of the responding producers and exporters in China. Reported FRC capacity, *** in 2021, declined by *** percent during 2019-21 and was projected to increase by *** percent by 2023. FRC production decreased by *** percent from 2018 to 2019, and by *** percent from 2019 to 2020, a decrease from *** million pounds to *** million pounds during 2019-21 and is projected to decrease further in 2022 and 2023. This trend reflects the reported impact of *** in their questionnaire response. Capacity utilization decreased from *** percent in 2019 to *** percent in 2021 and was projected to ***. VII-5 Total home market shipments and export shipments both decreased during 2019-21, by *** percent and by *** percent, respectively. Export shipments to the United States decreased by *** percent while export shipments to Mexico decreased by *** percent and export shipments to Canada decreased by *** percent during the same period. Export shipments to the United States as a share of total shipments increased from *** percent to *** percent during 2019-21. Total home market shipments as a share of total shipments decreased from *** percent to *** percent during 2019-21, while export shipments to Mexico and Canada as a share of total shipments increased by *** and *** percentage points, respectively. Table VII-3 FRC: Data for producers in China, by period Quantity in 1,000 pounds Item 2019 2020 2021 Projection 2022 Projection 2023 Capacity *** *** *** *** *** Production *** *** *** *** *** End-of-period inventories *** *** *** *** *** Internal consumption *** *** *** *** *** Commercial home market shipments *** *** *** *** *** Home market shipments *** *** *** *** *** Exports to the United States *** *** *** *** *** Exports to Mexico *** *** *** *** *** Exports to Canada *** *** *** *** *** Exports to all other markets *** *** *** *** *** Export shipments *** *** *** *** *** Total shipments *** *** *** *** *** Table continued. VII-6 Table VII-3 Continued FRC: Data on producers in China, by period Shares and ratios in percent Item 2019 2020 2021 Projection 2022 Projection 2023 Capacity utilization ratio *** *** *** *** *** Inventory ratio to production *** *** *** *** *** Inventory ratio to total shipments *** *** *** *** *** Internal consumption share *** *** *** *** *** Commercial home market shipments share *** *** *** *** *** Home market shipments share *** *** *** *** *** Exports to the United States share *** *** *** *** *** Exports to Mexico share *** *** *** *** *** Exports to Canada share *** *** *** *** *** Exports to all other markets share *** *** *** *** *** Export shipments share *** *** *** *** *** Total shipments share 100.0 100.0 100.0 100.0 100.0 Source: Compiled from data submitted in response to Commission questionnaires in the preliminary phase of these investigations. VII-7 Alternative products As shown in table VII-4, responding firms in China produced other products on the same equipment and machinery used to produce FRC. Other products included *** with FRC production accounting for about *** of total production during 2019-21. FRC’s share of total production on the same equipment decreased from *** percent in 2019 to *** percent in 2021. Reported factors affecting the ability to switch production include ***. Table VII-4 FRC: Overall capacity and production on the same equipment as in-scope production by producers in China, by period Quantities in 1,000 pounds; shares and ratios in percent Item Measure 2019 2020 2021 Overall capacity Quantity *** *** *** Production: FRC Quantity *** *** *** Production: Passenger railcar couplers Quantity *** *** *** Production: Other products Quantity *** *** *** Production: Out-of-scope products Quantity *** *** *** Production: Total Quantity *** *** *** Overall capacity utilization Ratio *** *** *** Production: FRC Share *** *** *** Production: Passenger railcar couplers Share *** *** *** Production: Other products Share *** *** *** Production: Out-of-scope products Share *** *** *** Production: Total Share 100.0 100.0 100.0 Source: Compiled from data submitted in response to Commission questionnaires in the preliminary phase of these investigations. VII-8 Exports According to GTA, the leading export markets for hooks and other coupling devices, buffers and parts thereof, for railway or tramway vehicles from China are the United States, Mexico, and Australia (table VII-5). During 2021, the United States was the top export market for such merchandise from China, accounting for 47.6 percent, followed by Mexico, accounting for 17.4 percent, and Australia, accounting for 9.7 percent. Table VII-5 Hooks and other coupling devices, buffers and parts thereof, for railway or tramway vehicles: Exports from China, by destination market and by period Quantity in 1,000 pounds; value in 1,000 dollars Destination market Measure 2019 2020 2021 United States Quantity 56,027 27,823 37,592 Mexico Quantity 17,200 7,103 13,759 Australia Quantity 8,995 9,834 7,690 Canada Quantity 6,813 4,937 4,019 India Quantity 2,714 2,243 2,845 Germany Quantity 1,403 1,641 1,428 Indonesia Quantity 124 29 1,423 Poland Quantity 1,016 1,119 1,256 France Quantity 823 797 1,035 All other destination markets Quantity 12,703 11,762 7,869 All destination markets Quantity 107,817 67,288 78,916 United States Value 65,880 34,722 43,318 Mexico Value 15,624 6,629 14,819 Australia Value 22,842 30,085 23,160 Canada Value 9,343 5,932 5,233 India Value 9,253 7,544 11,734 Germany Value 8,773 11,378 12,991 Indonesia Value 735 131 3,189 Poland Value 4,311 4,675 5,244 France Value 5,309 5,438 6,594 All other destination markets Value 42,029 87,832 38,718 All destination markets Value 184,097 194,365 165,001 Table continued. VII-9 Table VII-5 Hooks and other coupling devices, buffers and parts thereof, for railway or tramway vehicles: Exports from China, by destination market and by period Unit value in dollars per 1,000 pounds; shares in percent Destination market Measure 2019 2020 2021 United States Unit value 1,176 1,248 1,152 Mexico Unit value 908 933 1,077 Australia Unit value 2,539 3,059 3,012 Canada Unit value 1,371 1,201 1,302 India Unit value 3,409 3,364 4,125 Germany Unit value 6,252 6,934 9,096 Indonesia Unit value 5,944 4,532 2,240 Poland Unit value 4,244 4,176 4,174 France Unit value 6,450 6,820 6,369 All other destination markets Unit value 3,309 7,467 4,920 All destination markets Unit value 1,707 2,889 2,091 United States Share of quantity 52.0 41.3 47.6 Mexico Share of quantity 16.0 10.6 17.4 Australia Share of quantity 8.3 14.6 9.7 Canada Share of quantity 6.3 7.3 5.1 India Share of quantity 2.5 3.3 3.6 Germany Share of quantity 1.3 2.4 1.8 Indonesia Share of quantity 0.1 0.0 1.8 Poland Share of quantity 0.9 1.7 1.6 France Share of quantity 0.8 1.2 1.3 All other destination markets Share of quantity 11.8 17.5 10.0 All destination markets Share of quantity 100.0 100.0 100.0 Source: Official exports statistics under HS subheading 8607.30 as reported by China Customs in the Global Trade Atlas database, accessed April 13, 2022. Note: United States is shown at the top. All remaining top export destinations are shown in descending order of 2021 data. VII-10 U.S. inventories of imported merchandise Table VII-6 presents data on U.S. importers’ reported inventories of FRC. Inventories of FRC imports from China decreased by *** percent from 2019 to 2021, while inventories of FRC imports from nonsubject sources increased by *** percent.7 The ratio of importers’ inventories to U.S. shipments of imports of FRC from China decreased from *** percent in 2019 to *** percent in 2020 before increasing to *** percent in 2021. The ratio of importers’ inventories to U.S. shipments of imports of FRC from nonsubject sources increased from *** percent in 2019 to *** percent in 2020 before decreasing to *** percent in 2021. Table VII-6 FRC: U.S. importers’ end-of-period inventories and their ratio to select items, by source and period Quantity in 1,000 pounds; ratio in percent Measure Source 2019 2020 2021 Inventories quantity China *** *** *** Ratio to imports China *** *** *** Ratio to U.S. shipments of imports China *** *** *** Ratio to total shipments of imports China *** *** *** Inventories quantity Mexico *** *** *** Ratio to imports Mexico *** *** *** Ratio to U.S. shipments of imports Mexico *** *** *** Ratio to total shipments of imports Mexico *** *** *** Inventories quantity All other *** *** *** Ratio to imports All other *** *** *** Ratio to U.S. shipments of imports All other *** *** *** Ratio to total shipments of imports All other *** *** *** Inventories quantity Nonsubject *** *** *** Ratio to imports Nonsubject *** *** *** Ratio to U.S. shipments of imports Nonsubject *** *** *** Ratio to total shipments of imports Nonsubject *** *** *** Inventories quantity All *** *** *** Ratio to imports All *** *** *** Ratio to U.S. shipments of imports All *** *** *** Ratio to total shipments of imports All *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. 7 *** accounted for *** increased inventory of FRC from nonsubject sources (Mexico) during 2019- 21. VII-11 U.S. importers’ outstanding orders The Commission requested importers to indicate whether they imported or arranged for the importation of FRC from China and other sources after December 31, 2021. Four of six responding firms indicated they had arranged FRC imports, *** from China and *** from nonsubject sources. No arranged subject FRC imports from China were reported past the first quarter of 2022. These data are presented in table VII-7. Table VII-7 FRC: U.S. importers’ arranged imports, by source and period Quantity in 1,000 pounds Source Jan-Mar 2022 Apr-Jun 2022 Jul-Sept 2022 Oct-Dec 2022 Total China *** *** *** *** *** Mexico *** *** *** *** *** All other sources *** *** *** *** *** Nonsubject sources *** *** *** *** *** All import sources *** *** *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Third-country trade actions There are no known antidumping or countervailing duty orders on FRC in third-country markets. Information on nonsubject countries Global exports for China and the largest nonsubject countries are presented in table VII- 8. There are AAR certified manufacturing plants for FRC components in Mexico and India, in addition to facilities in the United States and China. ASF-K de Mexico, S. de R. L. de C.V. Sahagun manufactures freight couplers, knuckles, and yokes in Mexico.8 Texmaco Rail and Engineering Limited (“Texmaco”) manufactures freight yokes in India.9 Texmaco recently added new yoke designs, hoping to increase its exports to the U.S. market.10 Petitioner believes that production of freight cars in Mexico increased after implementation of Section 301 duties on FRC. It asserts that instead of importing FRC from China into the United States that would be subject to Section 301 tariffs, U.S. railcar producers 8 ASF-K de Mexico, S. de R. L. de C.V. Sahagun is owned by ASF-Keystone, which is a division of Amsted Industries’ Amsted Rail Group. 9 Petitions, Exhibit I-3. 10 Texmaco, Annual Report 2020-21, p. 26. VII-12 moved manufacturing to Mexico. FRC from China would then be installed on freight cars in Mexico, and those freight cars would subsequently be exported to the United States.11 Table VII-8 Hooks and other coupling devices, buffers and parts thereof, for railway or tramway vehicles: Global exports, by reporting country and by period Value in 1,000 dollars, shares in percent Exporting country Measure 2019 2020 2021 United States Value 173,140 95,692 114,617 China Value 184,097 194,365 165,001 Germany Value 151,104 141,756 150,260 Poland Value 96,742 95,686 118,159 Sweden Value 66,045 56,557 41,733 Czech Republic Value 34,349 45,694 43,362 United Kingdom Value 30,873 27,924 31,666 Russia Value 27,754 19,807 21,356 Hong Kong Value 23,137 72,129 2,809 Mexico Value 18,373 17,405 20,673 Ukraine Value 15,857 8,792 6,690 Japan Value 15,769 12,558 11,653 All other exporters Value 54,979 52,575 69,223 All reporting exporters Value 892,218 840,941 797,202 United States Share of value 19.4 11.4 14.4 China Share of value 20.6 23.1 20.7 Germany Share of value 16.9 16.9 18.8 Poland Share of value 10.8 11.4 14.8 Sweden Share of value 7.4 6.7 5.2 Czech Republic Share of value 3.8 5.4 5.4 United Kingdom Share of value 3.5 3.3 4.0 Russia Share of value 3.1 2.4 2.7 Hong Kong Share of value 2.6 8.6 0.4 Mexico Share of value 2.1 2.1 2.6 Ukraine Share of value 1.8 1.0 0.8 Japan Share of value 1.8 1.5 1.5 All other exporters Share of value 6.2 6.3 8.7 All reporting exporters Share of value 100.0 100.0 100.0 Source: Official exports statistics under HS subheading 8607.30 as reported by various national statistical authorities in the Global Trade Atlas database, accessed April 13, 2022. Note: United States is shown at the top followed by the countries under investigation, all remaining top exporting countries in descending order of 2020 data. 11 Petitions, pp. 23-24. A-1 APPENDIX A FEDERAL REGISTER NOTICES A-3 The Commission makes available notices relevant to its investigations and reviews on its website, www.usitc.gov. In addition, the following tabulation presents, in chronological order, Federal Register notices issued by the Commission and Commerce during the current proceeding. Citation Title Link 86 FR 54997, October 5, 2021 Freight Rail Coupler Systems and Components From China; Institution of Anti-Dumping and Countervailing Duty Investigations and Scheduling of Preliminary Phase Investigations https://www.govinfo.gov/ content/pkg/FR-2021-10- 05/pdf/2021-21725.pdf 86 FR 58864, October 25, 2021 Freight Rail Coupler Systems and Certain Components Thereof From the People's Republic of China: Initiation of Less-Than-Fair-Value Investigation https://www.govinfo.gov/ content/pkg/FR-2021-10- 25/pdf/2021-23231.pdf 86 FR 58878, October 25, 2021 Freight Rail Coupler Systems and Certain Components Thereof From the People's Republic of China: Initiation of Countervailing Duty Investigation https://www.govinfo.gov/ content/pkg/FR-2021-10- 25/pdf/2021-23232.pdf 86 FR 64958, November 19, 2021 Freight Rail Coupler Systems and Components From China https://www.govinfo.gov/ content/pkg/FR-2021-11- 19/pdf/2021-25233.pdf 86 FR 70113, December 9, 2021 Freight Rail Coupler Systems and Certain Components Thereof From the People's Republic of China: Postponement of Preliminary Determination in the Countervailing Duty Investigation https://www.govinfo.gov/ content/pkg/FR-2021-12- 09/pdf/2021-26642.pdf 87 FR 12662, March 7, 2022 Freight Rail Coupler Systems and Certain Components Thereof: Preliminary Affirmative Countervailing Duty Determination https://www.govinfo.gov/ content/pkg/FR-2022-03- 07/pdf/2022-04692.pdf 87 FR 14037, March 11, 2022 Freight Rail Coupler Systems and Components From China; Scheduling of the Final Phase of Countervailing Duty and Anti-Dumping Duty Investigations https://www.govinfo.gov/ content/pkg/FR-2022-03- 11/pdf/2022-05236.pdf A-4 Citation Title Link 87 FR 14511, March 15, 2022 Freight Rail Coupler Systems and Certain Components Thereof From the People's Republic of China: Preliminary Affirmative Determination of Sales at Less-Than- Fair Value https://www.govinfo.gov/ content/pkg/FR-2022-03- 15/pdf/2022-05381.pdf 87 FR 30869, May 20, 2022 Freight Rail Coupler Systems and Certain Components Thereof From the People's Republic of China: Final Affirmative Countervailing Duty Determination https://www.govinfo.gov/ content/pkg/FR-2022-05- 20/pdf/2022-10933.pdf 87 FR 32121, May 27, 2022 Freight Rail Coupler Systems and Certain Components Thereof From the People's Republic of China: Final Affirmative Determination of Sales at Less-Than-Fair Value https://www.govinfo.gov/ content/pkg/FR-2022-05- 27/pdf/2022-11480.pdf B-1 APPENDIX B LIST OF HEARING WITNESSES CALENDAR OF PUBLIC HEARING Those listed below appeared in the United States International Trade Commission’s hearing via videoconference: Subject: Freight Rail Coupler Systems and Components from China Inv. Nos.: 701-TA-670 and 731-TA-1570 (Final) Date and Time: May 12, 2022 - 9:30 a.m. TIME OPENING REMARKS: ALLOCATION: Petitioner (Daniel B. Pickard, Buchanan Ingersoll & Rooney PC) 5 minutes Respondents (David M. Morrell, JONES DAY) 5 minutes In Support of the Imposition of TIME Antidumping and Countervailing Duty Orders: ALLOCATION: Buchanan Ingersoll & Rooney PC 60 minutes Washington, DC on behalf of The Coalition of Freight Coupler Producers Scott Mautino, Executive Vice President, McConway & Torley Chris LeFevre, Director of Sales, McConway & Torley Antonio Wellmaker, President of USW Local 1063 Seth Kaplan, President, International Economic Research LLC Travis Pope, Project Manager, Capital Trade Inc. Daniel B. Pickard ) ) – OF COUNSEL Amanda Wetzel ) B-3 In Opposition of the Imposition of TIME Antidumping and Countervailing Duty Orders: ALLOCATION: Grunsfeld Desiderio Lebowitz Silverman & Klestadt LLP 60 minutes total Covington & Burling Washington, DC on behalf of Strato Inc. (“Strato”) Mike Foxx, CEO, Strato Inc. Brian Cunkelman, President, Strato Inc. Dan Foxx, CIO, Strato Inc. Jennifer Lutz, Partner, ION Economics, LLC Jerrie Mirga, Director, ION Economics, LLC Cara Groden, Senior Economic Consultant, ION Economics LLC Ned H. Marshak ) Andrew T. Schutz ) Michael S. Holton ) – OF COUNSEL James M. Smith ) Shara L. Aranoff ) Covington & Burling Washington, DC on behalf of TTX Company (“TTX”) Maureen Werner, Assistant Vice President of Engineering and Research, New Product Development, TTX James M. Smith ) ) – OF COUNSEL Shara L. Aranoff ) B-4 In Opposition of the Imposition of Antidumping and Countervailing Duty Orders (continued): JONES DAY Washington, DC on behalf of Wabtec Corporation (“Wabtec”) Mickey Korzeniowski, Freight Car Product Specialist, Wabtec David M. Morrell ) – OF COUNSEL REBUTTAL/CLOSING REMARKS: Petitioners (Daniel B. Pickard, Buchanan Ingersoll & Rooney PC) 5 minutes + time remaining from direct Respondents (James M. Smith, Covington & Burling) 5 minutes + time remaining from direct -END- B-5 C-1 APPENDIX C SUMMARY DATA Table C-1 FRC: Summary data concerning the U.S. market, 2019-21 2019 2020 2021 2019-21 2019-20 2020-21 U.S. consumption quantity: Amount...................................................... *** *** *** ▼*** ▼*** ▼*** Producers' share (fn1)............................... *** *** *** ▼*** ▼*** ▼*** Importers' share (fn1): China...................................................... *** *** *** ▲*** ▲*** ▼*** Mexico.................................................... *** *** *** ▲*** ▲*** ▲*** All other sources..................................... *** *** *** ▼*** ▼*** ▲*** Nonsubject sources............................. *** *** *** ▲*** ▲*** ▲*** All import sources............................. *** *** *** ▲*** ▲*** ▲*** U.S. consumption value: Amount...................................................... *** *** *** ▼*** ▼*** ▼*** Producers' share (fn1)............................... *** *** *** ▼*** ▼*** ▼*** Importers' share (fn1): China...................................................... *** *** *** ▲*** ▲*** ▼*** Mexico.................................................... *** *** *** ▲*** ▲*** ▲*** All other sources..................................... *** *** *** ▲*** ▼*** ▲*** Nonsubject sources............................. *** *** *** ▲*** ▼*** ▲*** All import sources............................. *** *** *** ▲*** ▲*** ▲*** U.S. importers' U.S. shipments of imports from: China: Quantity.................................................. 22,655 17,687 15,346 ▼(32.3) ▼(21.9) ▼(13.2) Value...................................................... 40,330 29,366 26,988 ▼(33.1) ▼(27.2) ▼(8.1) Unit value............................................... $1,780 $1,660 $1,759 ▼(1.2) ▼(6.7) ▲5.9 Ending inventory quantity....................... *** *** *** ▼*** ▼*** ▲*** Mexico: Quantity.................................................. *** *** *** ▼*** ▼*** ▲*** Value...................................................... *** *** *** ▼*** ▼*** ▲*** Unit value............................................... *** *** *** ▼*** ▼*** ▲*** Ending inventory quantity....................... *** *** *** ▲*** ▲*** ▼*** All other sources sources: Quantity.................................................. *** *** *** ▼*** ▼*** ▲*** Value...................................................... *** *** *** ▼*** ▼*** ▲*** Unit value............................................... *** *** *** ▲*** ▼*** ▲*** Ending inventory quantity....................... *** *** *** ▲*** ▲*** ▼*** Nonsubject sources: Quantity.................................................. *** *** *** ▼*** ▼*** ▲*** Value...................................................... *** *** *** ▼*** ▼*** ▲*** Unit value............................................... *** *** *** ▼*** ▼*** ▲*** Ending inventory quantity....................... *** *** *** ▲*** ▲*** ▼*** All import sources: Quantity.................................................. *** *** *** ▼*** ▼*** ▼*** Value...................................................... *** *** *** ▼*** ▼*** ▲*** Unit value............................................... *** *** *** ▼*** ▼*** ▲*** Ending inventory quantity....................... *** *** *** ▲*** ▲*** ▲*** Table continued. C-3 Quantity=1,000 pounds; Value=1,000 dollars; Unit values, unit labor costs, and unit expenses=dollars per 1,000 pounds; Period changes=percent--exceptions noted Reported data Period changes Calendar year Comparison years Table C-1 continued FRC: Summary data concerning the U.S. market, 2019-21 2019 2020 2021 2019-21 2019-20 2020-21 U.S. producers': Average capacity quantity......................... *** *** *** ▼*** ▼*** ▼*** Production quantity.................................... *** *** *** ▼*** ▼*** ▼*** Capacity utilization (fn1)............................ *** *** *** ▼*** ▼*** ▼*** U.S. shipments: Quantity.................................................. *** *** *** ▼*** ▼*** ▼*** Value...................................................... *** *** *** ▼*** ▼*** ▼*** Unit value............................................... *** *** *** ▼*** ▼*** ▲*** Export shipments: Quantity.................................................. *** *** *** ▼*** ▼*** ▼*** Value...................................................... *** *** *** ▼*** ▼*** ▼*** Unit value............................................... *** *** *** ▼*** ▲*** ▼*** Ending inventory quantity.......................... *** *** *** ▼*** ▲*** ▼*** Inventories/total shipments (fn1)............... *** *** *** ▲*** ▲*** ▲*** Production workers.................................... *** *** *** ▼*** ▼*** ▲*** Hours worked (1,000s).............................. *** *** *** ▼*** ▼*** ▼*** Wages paid ($1,000)................................. *** *** *** ▼*** ▼*** ▼*** Hourly wages (dollars per hour)................ *** *** *** ▲*** ▲*** ▲*** Productivity (pounds per hour).................. *** *** *** ▼*** ▼*** ▼*** Unit labor costs.......................................... *** *** *** ▲*** ▲*** ▲*** Net sales: Quantity.................................................. *** *** *** ▼*** ▼*** ▼*** Value...................................................... *** *** *** ▼*** ▼*** ▼*** Unit value............................................... *** *** *** ▼*** ▼*** ▲*** Cost of goods sold (COGS)....................... *** *** *** ▼*** ▼*** ▼*** Gross profit or (loss) (fn2)......................... *** *** *** ▼*** ▼*** ▲*** SG&A expenses........................................ *** *** *** ▼*** ▼*** ▼*** Operating income or (loss) (fn2)................ *** *** *** ▼*** ▼*** ▲*** Net income or (loss) (fn2).......................... *** *** *** ▼*** ▼*** ▲*** Unit COGS................................................ *** *** *** ▲*** ▲*** ▲*** Unit SG&A expenses................................. *** *** *** ▲*** ▲*** ▲*** Unit operating income or (loss) (fn2)......... *** *** *** ▼*** ▼*** ▲*** Unit net income or (loss) (fn2)................... *** *** *** ▼*** ▼*** ▲*** COGS/sales (fn1)...................................... *** *** *** ▲*** ▲*** ▼*** Operating income or (loss)/sales (fn1)...... *** *** *** ▼*** ▼*** ▲*** Net income or (loss)/sales (fn1)................ *** *** *** ▼*** ▼*** ▲*** Capital expenditures.................................. *** *** *** ▼*** ▼*** ▼*** Research and development expenses...... *** *** *** ▲*** ▲*** ▼*** Net assets................................................. *** *** *** ▼*** ▼*** ▼*** fn1.--Reported data are in percent and period changes are in percentage points. Note.--Shares and ratios shown as “0.0” percent represent non-zero values less than “0.05” percent (if positive) and greater than “(0.05)” percent (if negative). Zeroes, null values, and undefined calculations are suppressed and shown as “---“. Period changes preceded by a “▲” represent an increase, while period changes preceded by a “▼” represent a decrease. fn2.--Percent changes only calculated when both comparison values represent profits; The directional change in profitability provided when one or both comparison values represent a loss. Source: Compiled from data submitted in response to Commission questionnaires. 508-compliant tables containing these data are contained in parts III, IV, VI, and VII of this report. C-4 Quantity=1,000 pounds; Value=1,000 dollars; Unit values and unit expenses=dollars per 1,000 pounds;Unit labor costs = dollars per 1,000 pounds; Period changes=percent--exceptions noted Reported data Period changes Calendar year Comparison years D-1 APPENDIX D NONSUBJECT COUNTRY PRICE DATA D-2 Table D-1: FRC: Weighted-average f.o.b. prices and quantities of domestic and imported product 1, and margins of underselling/(overselling), by source and quarter ...........................D-3 Figure D-1: FRC: Weighted-average f.o.b. prices and quantities of domestic and imported product 1, by source and quarter ................................................................................................D-4 Table D-2: FRC: Weighted-average f.o.b. prices and quantities of domestic and imported product 2, and margins of underselling/(overselling), by source and quarter ...........................D-5 Figure D-2: FRC: Weighted-average f.o.b. prices and quantities of domestic and imported product 2, by source and quarter ................................................................................................D-6 Table D-3: FRC: Weighted-average f.o.b. prices and quantities of domestic and imported product 3, and margins of underselling/(overselling), by source and quarter ...........................D-7 Figure D-3: FRC: Weighted-average f.o.b. prices and quantities of domestic and imported product 3, by source and quarter ................................................................................................D-8 Table D-4: FRC: Weighted-average f.o.b. prices and quantities of domestic and imported product 4, and margins of underselling/(overselling), by source and quarter ...........................D-9 Figure D-4: FRC: Weighted-average f.o.b. prices and quantities of domestic and imported product 4, by source and quarter ..............................................................................................D-10 Table D-5: FRC: Weighted-average f.o.b. prices and quantities of domestic and imported product 5, and margins of underselling/(overselling), by source and quarter .........................D-11 Figure D-5: FRC: Weighted-average f.o.b. prices and quantities of domestic and imported product 5, by source and quarter ..............................................................................................D-12 Table D-6: FRC: Summary of price data, by product and source, January 2019-December 2021 ....................................................................................................................................................D-13 Table D-7: FRC: Summary of higher/(lower) unit values for nonsubject price data, by source, January 2019-December 2021 ...................................................................................................D-13 D-3 Table D-1 FRC: Weighted-average f.o.b. prices and quantities of domestic and imported product 1, and margins of underselling/(overselling), by source and quarter Quantity in units; Prices in dollars per unit; Margins in percent Period U.S. price U.S. quantity China price China quantity China margin Mexico price Mexico quantity 2019 Q1 *** *** *** *** *** *** *** 2019 Q2 *** *** *** *** *** *** *** 2019 Q3 *** *** *** *** *** *** *** 2019 Q4 *** *** *** *** *** *** *** 2020 Q1 *** *** *** *** *** *** *** 2020 Q2 *** *** *** *** *** *** *** 2020 Q3 *** *** *** *** *** *** *** 2020 Q4 *** *** *** *** *** *** *** 2021 Q1 *** *** *** *** *** *** *** 2021 Q2 *** *** *** *** *** *** *** 2021 Q3 *** *** *** *** *** *** *** 2021 Q4 *** *** *** *** *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Note: Product 1: SE60, grade E steel complete coupler assembly, double shelves, 21.5” shank length, produced to AAR M‐211 and/or AAR M‐215 specifications. D-4 Figure D-1 FRC: Weighted-average f.o.b. prices and quantities of domestic and imported product 1, by source and quarter Price of product 1 * * * * * * * Volume of product 1 * * * * * * * Source: Compiled from data submitted in response to Commission questionnaires. Note: Product 1: SE60, grade E steel complete coupler assembly, double shelves, 21.5” shank length, produced to AAR M‐211 and/or AAR M‐215 specifications. D-5 Table D-2 FRC: Weighted-average f.o.b. prices and quantities of domestic and imported product 2, and margins of underselling/(overselling), by source and quarter Quantity in units; Prices in dollars per unit; Margins in percent Period U.S. price U.S. quantity China price China quantity China margin Mexico price Mexico quantity 2019 Q1 *** *** *** *** *** *** *** 2019 Q2 *** *** *** *** *** *** *** 2019 Q3 *** *** *** *** *** *** *** 2019 Q4 *** *** *** *** *** *** *** 2020 Q1 *** *** *** *** *** *** *** 2020 Q2 *** *** *** *** *** *** *** 2020 Q3 *** *** *** *** *** *** *** 2020 Q4 *** *** *** *** *** *** *** 2021 Q1 *** *** *** *** *** *** *** 2021 Q2 *** *** *** *** *** *** *** 2021 Q3 *** *** *** *** *** *** *** 2021 Q4 *** *** *** *** *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Note: Product 2: SBE60, grade E steel complete coupler assembly, bottom shelf, 21.5” shank length, produced to AAR M‐211 and/or AAR M‐215 specifications. D-6 Figure D-2 FRC: Weighted-average f.o.b. prices and quantities of domestic and imported product 2, by source and quarter Price of product 2 * * * * * * * Volume of product 2 * * * * * * * Source: Compiled from data submitted in response to Commission questionnaires. Note: Product 2: SBE60, grade E steel complete coupler assembly, bottom shelf, 21.5” shank length, produced to AAR M‐211 and/or AAR M‐215 specifications. D-7 Table D-3 FRC: Weighted-average f.o.b. prices and quantities of domestic and imported product 3, and margins of underselling/(overselling), by source and quarter Quantity in units; Prices in dollars per unit; Margins in percent Period U.S. price U.S. quantity China price China quantity China margin Mexico price Mexico quantity 2019 Q1 *** *** *** *** *** *** *** 2019 Q2 *** *** *** *** *** *** *** 2019 Q3 *** *** *** *** *** *** *** 2019 Q4 *** *** *** *** *** *** *** 2020 Q1 *** *** *** *** *** *** *** 2020 Q2 *** *** *** *** *** *** *** 2020 Q3 *** *** *** *** *** *** *** 2020 Q4 *** *** *** *** *** *** *** 2021 Q1 *** *** *** *** *** *** *** 2021 Q2 *** *** *** *** *** *** *** 2021 Q3 *** *** *** *** *** *** *** 2021 Q4 *** *** *** *** *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Note: Product 3: E50 coupler knuckle, grade E steel, produced to AAR M‐211 and/or AAR M‐215 specifications. D-8 Figure D-3 FRC: Weighted-average f.o.b. prices and quantities of domestic and imported product 3, by source and quarter Price of product 3 * * * * * * * Volume of product 3 * * * * * * * Source: Compiled from data submitted in response to Commission questionnaires. Note: Product 3: E50 coupler knuckle, grade E steel, produced to AAR M‐211 and/or AAR M‐215 specifications. D-9 Table D-4 FRC: Weighted-average f.o.b. prices and quantities of domestic and imported product 4, and margins of underselling/(overselling), by source and quarter Quantity in units; Prices in dollars per unit; Margins in percent Period U.S. price U.S. quantity China price China quantity China margin Mexico price Mexico quantity 2019 Q1 *** *** *** *** *** *** *** 2019 Q2 *** *** *** *** *** *** *** 2019 Q3 *** *** *** *** *** *** *** 2019 Q4 *** *** *** *** *** *** *** 2020 Q1 *** *** *** *** *** *** *** 2020 Q2 *** *** *** *** *** *** *** 2020 Q3 *** *** *** *** *** *** *** 2020 Q4 *** *** *** *** *** *** *** 2021 Q1 *** *** *** *** *** *** *** 2021 Q2 *** *** *** *** *** *** *** 2021 Q3 *** *** *** *** *** *** *** 2021 Q4 *** *** *** *** *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Note: Product 4: SY40 coupler yoke, grade E steel, produced to AAR M‐211 and/or AAR M‐ 215 specifications. D-10 Figure D-4 FRC: Weighted-average f.o.b. prices and quantities of domestic and imported product 4, by source and quarter Price of product 4 * * * * * * * Volume of product 4 * * * * * * * Source: Compiled from data submitted in response to Commission questionnaires. Note: Product 4: SY40 coupler yoke, grade E steel, produced to AAR M‐211 and/or AAR M‐ 215 specifications. D-11 Table D-5 FRC: Weighted-average f.o.b. prices and quantities of domestic and imported product 5, and margins of underselling/(overselling), by source and quarter Quantity in units; Prices in dollars per unit; Margins in percent Period U.S. price U.S. quantity China price China quantity China margin Mexico price Mexico quantity 2019 Q1 *** *** *** *** *** *** *** 2019 Q2 *** *** *** *** *** *** *** 2019 Q3 *** *** *** *** *** *** *** 2019 Q4 *** *** *** *** *** *** *** 2020 Q1 *** *** *** *** *** *** *** 2020 Q2 *** *** *** *** *** *** *** 2020 Q3 *** *** *** *** *** *** *** 2020 Q4 *** *** *** *** *** *** *** 2021 Q1 *** *** *** *** *** *** *** 2021 Q2 *** *** *** *** *** *** *** 2021 Q3 *** *** *** *** *** *** *** 2021 Q4 *** *** *** *** *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Note: Product 5: SBE60, grade E steel coupler body, bottom shelf, 21.5” shank length, produced to AAR M‐211 and/or AAR M‐215 specifications. D-12 Figure D-5 FRC: Weighted-average f.o.b. prices and quantities of domestic and imported product 5, by source and quarter Price of product 5 * * * * * * * Volume of product 5 * * * * * * * Source: Compiled from data submitted in response to Commission questionnaires. Note: Product 5: SBE60, grade E steel coupler body, bottom shelf, 21.5” shank length, produced to AAR M‐211 and/or AAR M‐215 specifications. D-13 Table D-6 FRC: Summary of price data, by product and source, January 2019-December 2021 Quantity in units; Price in dollars per unit; Change in percent Product Source Number of quarters Quantity Low price High price First quarter price Last quarter price Change over period Product 1 United States *** *** *** *** *** *** *** Product 1 China *** *** *** *** *** *** *** Product 1 Mexico *** *** *** *** *** *** *** Product 2 United States *** *** *** *** *** *** *** Product 2 China *** *** *** *** *** *** *** Product 2 Mexico *** *** *** *** *** *** *** Product 3 United States *** *** *** *** *** *** *** Product 3 China *** *** *** *** *** *** *** Product 3 Mexico *** *** *** *** *** *** *** Product 4 United States *** *** *** *** *** *** *** Product 4 China *** *** *** *** *** *** *** Product 4 Mexico *** *** *** *** *** *** *** Product 5 United States *** *** *** *** *** *** *** Product 5 China *** *** *** *** *** *** *** Product 5 Mexico *** *** *** *** *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Note: Percent change column is percentage change from the first quarter 2019 to the last quarter in 2021. Table D-7 FRC: Summary of higher/(lower) unit values for nonsubject price data, by source, January 2019- December 2021 Quantity in units Comparison source Benchmark source Number of quarters lower Quantity lower Number of quarters higher Quantity higher Mexico United States *** *** *** *** Mexico China *** *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. E-1 APPENDIX E U.S. SHIPMENTS OF NONSUBJECT U.S. IMPORTS BY PRODUCT TYPE Table E-1: FRC: U.S. importers' U.S. shipments from Mexico..................................................... E-3 Table E-2: FRC: U.S. importers' U.S. shipments from all other sources...................................... E-5 E-3 Table E-1 FRC: U.S. importers' U.S. shipments of imports from Mexico, by type and period Quantity in 1,000 pounds and units; value in 1,000 dollars; unit values in dollars per 1,000 pounds and dollars per unit Item Measure 2019 2020 2021 Complete FRC 1,000 pounds *** *** *** Knuckles 1,000 pounds *** *** *** Coupler bodies 1,000 pounds *** *** *** Yokes 1,000 pounds *** *** *** Follower blocks 1,000 pounds *** *** *** FRC components 1,000 pounds *** *** *** Total FRC 1,000 pounds *** *** *** Complete FRC Units *** *** *** Knuckles Units *** *** *** Coupler bodies Units *** *** *** Yokes Units *** *** *** Follower blocks Units *** *** *** FRC components Units *** *** *** Total FRC Units *** *** *** Complete FRC Value *** *** *** Knuckles Value *** *** *** Coupler bodies Value *** *** *** Yokes Value *** *** *** Follower blocks Value *** *** *** FRC components Value *** *** *** Total FRC Value *** *** *** Complete FRC Dollars per 1,000 pounds *** *** *** Knuckles Dollars per 1,000 pounds *** *** *** Coupler bodies Dollars per 1,000 pounds *** *** *** Yokes Dollars per 1,000 pounds *** *** *** Follower blocks Dollars per 1,000 pounds *** *** *** FRC components Dollars per 1,000 pounds *** *** *** Total FRC Dollars per 1,000 pounds *** *** *** Complete FRC Dollars per unit *** *** *** Knuckles Dollars per unit *** *** *** Coupler bodies Dollars per unit *** *** *** Yokes Dollars per unit *** *** *** Follower blocks Dollars per unit *** *** *** Table continued. E-4 Table E-1--Continued FRC: U.S. importers' U.S. shipments of imports from Mexico, by type and period Shares in percent Item Measure 2019 2020 2021 Complete FRC Share of 1,000 pounds *** *** *** Knuckles Share of 1,000 pounds *** *** *** Coupler bodies Share of 1,000 pounds *** *** *** Yokes Share of 1,000 pounds *** *** *** Follower blocks Share of 1,000 pounds *** *** *** FRC components Share of 1,000 pounds *** *** *** Total FRC Share of 1,000 pounds 100.0 100.0 100.0 Complete FRC Share of units *** *** *** Knuckles Share of units *** *** *** Coupler bodies Share of units *** *** *** Yokes Share of units *** *** *** Follower blocks Share of units *** *** *** FRC components Share of units *** *** *** Total FRC Share of units 100.0 100.0 100.0 Complete FRC Share of value *** *** *** Knuckles Share of value *** *** *** Coupler bodies Share of value *** *** *** Yokes Share of value *** *** *** Follower blocks Share of value *** *** *** FRC components Share of value *** *** *** Total FRC Share of value 100.0 100.0 100.0 Source: Compiled from data submitted in response to Commission questionnaires. Note: Shares and ratios shown as "0.0" represent values greater than zero, but less than "0.05" percent. Zeroes, null values, and undefined calculations are suppressed and shown as “---“. E-5 Table E-2 FRC: U.S. importers' U.S. shipments of imports from all other sources, by type and period Quantity in 1,000 pounds and units; Value in 1,000 dollars; Unit values in dollars per 1,000 pounds and dollars per unit Item Measure 2019 2020 2021 Complete FRC 1,000 pounds *** *** *** Knuckles 1,000 pounds *** *** *** Coupler bodies 1,000 pounds *** *** *** Yokes 1,000 pounds *** *** *** Follower blocks 1,000 pounds *** *** *** FRC components 1,000 pounds *** *** *** Total FRC 1,000 pounds *** *** *** Complete FRC Units *** *** *** Knuckles Units *** *** *** Coupler bodies Units *** *** *** Yokes Units *** *** *** Follower blocks Units *** *** *** FRC components Units *** *** *** Total FRC Units *** *** *** Complete FRC Value *** *** *** Knuckles Value *** *** *** Coupler bodies Value *** *** *** Yokes Value *** *** *** Follower blocks Value *** *** *** FRC components Value *** *** *** Total FRC Value *** *** *** Complete FRC Dollars per 1,000 pounds *** *** *** Knuckles Dollars per 1,000 pounds *** *** *** Coupler bodies Dollars per 1,000 pounds *** *** *** Yokes Dollars per 1,000 pounds *** *** *** Follower blocks Dollars per 1,000 pounds *** *** *** FRC components Dollars per 1,000 pounds *** *** *** Total FRC Dollars per 1,000 pounds *** *** *** Complete FRC Dollars per unit *** *** *** Knuckles Dollars per unit *** *** *** Coupler bodies Dollars per unit *** *** *** Yokes Dollars per unit *** *** *** Follower blocks Dollars per unit *** *** *** Table continued. E-6 Table E-2--Continued FRC: U.S. importers' U.S. shipments of imports from all other sources, by type and period Shares in percent Item Measure 2019 2020 2021 Complete FRC Share of 1,000 pounds *** *** *** Knuckles Share of 1,000 pounds *** *** *** Coupler bodies Share of 1,000 pounds *** *** *** Yokes Share of 1,000 pounds *** *** *** Follower blocks Share of 1,000 pounds *** *** *** FRC components Share of 1,000 pounds *** *** *** Total FRC Share of 1,000 pounds 100.0 100.0 100.0 Complete FRC Share of units *** *** *** Knuckles Share of units *** *** *** Coupler bodies Share of units *** *** *** Yokes Share of units *** *** *** Follower blocks Share of units *** *** *** FRC components Share of units *** *** *** Total FRC Share of units 100.0 100.0 100.0 Complete FRC Share of value *** *** *** Knuckles Share of value *** *** *** Coupler bodies Share of value *** *** *** Yokes Share of value *** *** *** Follower blocks Share of value *** *** *** FRC components Share of value *** *** *** Total FRC Share of value 100.0 100.0 100.0 Source: Compiled from data submitted in response to Commission questionnaires. Note: Shares and ratios shown as "0.0" represent values greater than zero, but less than "0.05" percent. Zeroes, null values, and undefined calculations are suppressed and shown as “---“. F-1 APPENDIX F RAW MATERIAL PRICES F-2 Table F-1: Raw materials: Monthly U.S. ferrous scrap prices, January 2019-March 2022.......... F-3 F-3 Table F-1 Raw materials: Monthly U.S. ferrous scrap prices, January 2019-March 2022 Year Month Steel Scrap Prices No1 busheling $/gross ton No1 heavy melt $/gross ton Shredded auto scrap $/gross ton 2019 January *** *** *** 2019 February *** *** *** 2019 March *** *** *** 2019 April *** *** *** 2019 May *** *** *** 2019 June *** *** *** 2019 July *** *** *** 2019 August *** *** *** 2019 September *** *** *** 2019 October *** *** *** 2019 November *** *** *** 2019 December *** *** *** 2020 January *** *** *** 2020 February *** *** *** 2020 March *** *** *** 2020 April *** *** *** 2020 May *** *** *** 2020 June *** *** *** 2020 July *** *** *** 2020 August *** *** *** 2020 September *** *** *** 2020 October *** *** *** 2020 November *** *** *** 2020 December *** *** *** Table Continued. F-4 Table F-1 Continued Raw materials: Monthly U.S. ferrous scrap prices, January 2019-March 2022 Year Month Steel Scrap Prices No1 busheling $/gross ton No1 heavy melt $/gross ton Shredded auto scrap $/gross ton 2021 January *** *** *** 2021 February *** *** *** 2021 March *** *** *** 2021 April *** *** *** 2021 May *** *** *** 2021 June *** *** *** 2021 July *** *** *** 2021 August *** *** *** 2021 September *** *** *** 2021 October *** *** *** 2021 November *** *** *** 2021 December *** *** *** 2022 January *** *** *** 2022 February *** *** *** 2022 March *** *** *** Source: American Metal Market LLC. Accessed April 5, 2022. G-1 APPENDIX G U.S. MARKET FOR COMPLETE FRC AND FRC COMPONENTS Table G-1: FRC: Market for complete FRC ..................................................................................G-3 Table G-2: FRC: Market for all FRC components.........................................................................G-4 Table G-3: FRC: Market for knuckles...........................................................................................G-5 Table G-4: FRC: Market for coupler bodies.................................................................................G-6 Table G-5: FRC: Market for yokes ...............................................................................................G-7 Table G-6: FRC: Market for follower blocks ................................................................................G-8 G-3 Table G-1 FRC: Market for complete FRC, by source and period Quantity in 1,000 pounds; shares and ratios in percent Source Measure 2019 2020 2021 U.S. producers Quantity *** *** *** China Quantity *** *** *** Mexico Quantity *** *** *** All other sources Quantity *** *** *** Nonsubject sources Quantity *** *** *** All import sources Quantity *** *** *** All sources Quantity *** *** *** U.S. producers Share *** *** *** China Share *** *** *** Mexico Share *** *** *** All other sources Share *** *** *** Nonsubject sources Share *** *** *** All import sources Share *** *** *** All sources Share 100.0 100.0 100.0 U.S. producers Ratio *** *** *** China Ratio *** *** *** Mexico Ratio *** *** *** All other sources Ratio *** *** *** Nonsubject sources Ratio *** *** *** All import sources Ratio *** *** *** All sources Ratio *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Note: Shares and ratios shown as "0.0" represent values greater than zero, but less than "0.05" percent. Zeroes, null values, and undefined calculations are suppressed and shown as “---“. Ratios are ratio to overall apparent consumption quantity as presented in Part IV of the report. G-4 Table G-2 FRC: Market for all FRC components, by source and period Quantity in 1,000 pounds; shares and ratios in percent Source Measure 2019 2020 2021 U.S. producers Quantity *** *** *** China Quantity *** *** *** Mexico Quantity *** *** *** All other sources Quantity *** *** *** Nonsubject sources Quantity *** *** *** All import sources Quantity *** *** *** All sources Quantity *** *** *** U.S. producers Share *** *** *** China Share *** *** *** Mexico Share *** *** *** All other sources Share *** *** *** Nonsubject sources Share *** *** *** All import sources Share *** *** *** All sources Share 100.0 100.0 100.0 U.S. producers Ratio *** *** *** China Ratio *** *** *** Mexico Ratio *** *** *** All other sources Ratio *** *** *** Nonsubject sources Ratio *** *** *** All import sources Ratio *** *** *** All sources Ratio *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Note: Ratios are ratio to overall apparent consumption quantity as presented in Part IV of the report. All FRC components is the subtotal of knuckles, coupler bodies, yokes, and follower blocks tables below. G-5 Table G-3 FRC: Market for knuckles, by source and period Quantity in 1,000 pounds; shares and ratios in percent Source Measure 2019 2020 2021 U.S. producers Quantity *** *** *** China Quantity *** *** *** Mexico Quantity *** *** *** All other sources Quantity *** *** *** Nonsubject sources Quantity *** *** *** All import sources Quantity *** *** *** All sources Quantity *** *** *** U.S. producers Share *** *** *** China Share *** *** *** Mexico Share *** *** *** All other sources Share *** *** *** Nonsubject sources Share *** *** *** All import sources Share *** *** *** All sources Share 100.0 100.0 100.0 U.S. producers Ratio *** *** *** China Ratio *** *** *** Mexico Ratio *** *** *** All other sources Ratio *** *** *** Nonsubject sources Ratio *** *** *** All import sources Ratio *** *** *** All sources Ratio *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Note: Shares and ratios shown as "0.0" represent values greater than zero, but less than "0.05" percent. Zeroes, null values, and undefined calculations are suppressed and shown as “---“. Ratios are ratio to overall apparent consumption quantity as presented in Part IV of the report. G-6 Table G-4 FRC: Market for coupler bodies, by source and period Quantity in 1,000 pounds; shares and ratios in percent Source Measure 2019 2020 2021 U.S. producers Quantity *** *** *** China Quantity *** *** *** Mexico Quantity *** *** *** All other sources Quantity *** *** *** Nonsubject sources Quantity *** *** *** All import sources Quantity *** *** *** All sources Quantity *** *** *** U.S. producers Share *** *** *** China Share *** *** *** Mexico Share *** *** *** All other sources Share *** *** *** Nonsubject sources Share *** *** *** All import sources Share *** *** *** All sources Share 100.0 100.0 100.0 U.S. producers Ratio *** *** *** China Ratio *** *** *** Mexico Ratio *** *** *** All other sources Ratio *** *** *** Nonsubject sources Ratio *** *** *** All import sources Ratio *** *** *** All sources Ratio *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Note: Shares and ratios shown as "0.0" represent values greater than zero, but less than "0.05" percent. Zeroes, null values, and undefined calculations are suppressed and shown as “---“. Ratios are ratio to overall apparent consumption quantity as presented in Part IV of the report. G-7 Table G-5 FRC: Market for yokes, by source and period Quantity in 1,000 pounds; shares and ratios in percent Source Measure 2019 2020 2021 U.S. producers Quantity *** *** *** China Quantity *** *** *** Mexico Quantity *** *** *** All other sources Quantity *** *** *** Nonsubject sources Quantity *** *** *** All import sources Quantity *** *** *** All sources Quantity *** *** *** U.S. producers Share *** *** *** China Share *** *** *** Mexico Share *** *** *** All other sources Share *** *** *** Nonsubject sources Share *** *** *** All import sources Share *** *** *** All sources Share 100.0 100.0 100.0 U.S. producers Ratio *** *** *** China Ratio *** *** *** Mexico Ratio *** *** *** All other sources Ratio *** *** *** Nonsubject sources Ratio *** *** *** All import sources Ratio *** *** *** All sources Ratio *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Note: Shares and ratios shown as "0.0" represent values greater than zero, but less than "0.05" percent. Zeroes, null values, and undefined calculations are suppressed and shown as “---“. Ratios are ratio to overall apparent consumption quantity as presented in Part IV of the report. G-8 Table G-6 FRC: Market for follower blocks, by source and period Quantity in 1,000 pounds; shares and ratios in percent Source Measure 2019 2020 2021 U.S. producers Quantity *** *** *** China Quantity *** *** *** Mexico Quantity *** *** *** All other sources Quantity *** *** *** Nonsubject sources Quantity *** *** *** All import sources Quantity *** *** *** All sources Quantity *** *** *** U.S. producers Share *** *** *** China Share *** *** *** Mexico Share *** *** *** All other sources Share *** *** *** Nonsubject sources Share *** *** *** All import sources Share *** *** *** All sources Share 100.0 100.0 100.0 U.S. producers Ratio *** *** *** China Ratio *** *** *** Mexico Ratio *** *** *** All other sources Ratio *** *** *** Nonsubject sources Ratio *** *** *** All import sources Ratio *** *** *** All sources Ratio *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Note: Shares and ratios shown as "0.0" represent values greater than zero, but less than "0.05" percent. Zeroes, null values, and undefined calculations are suppressed and shown as “---“. Ratios are ratio to overall apparent consumption quantity as presented in Part IV of the report. ──────────────────────────────────────────────────────────── === USITC Scheduling === 14037Federal Register / Vol. 87, No. 48 / Friday, March 11, 2022 / Notices 1 Unfinished subject merchandise may also enter under subheading 7326.90.86. Subject merchandise attached to finished rail cars may also enter under subheadings 8606.10.00, 8606.30.00, 8606.91.00, 8606.92.00, 8606.99.01 or under subheading 9803.00.50 if imported as an Instrument of International Traffic. 2 Initially, Petitioner was M&T and another domestic producer. However, the other domestic producer withdrew, and USW was added to the petitions. State Museum, Carson City, 600 North Carson Street, Carson City, NV 89701, telephone (775) 687–4810 Ext. 261, email acamp@nevadaculture.org, by April 11, 2022. After that date, if no additional requestors have come forward, transfer of control of the human remains to The Tribes may proceed. The Nevada State Museum, Carson City is responsible for notifying The Consulted and Invited Tribes that this notice has been published. Dated: March 2, 2022. Melanie O’Brien, Manager, National NAGPRA Program. [FR Doc. 2022–05062 Filed 3–10–22; 8:45 am] BILLING CODE 4312–52–P INTERNATIONAL TRADE COMMISSION [Investigation Nos. 701–TA–670 and 731– TA–1570 (Final)] Freight Rail Coupler Systems and Components From China; Scheduling of the Final Phase of Countervailing Duty and Anti-Dumping Duty Investigations AGENCY : United States International Trade Commission. ACTION : Notice. SUMMARY : The Commission hereby gives notice of the scheduling of the final phase of antidumping and countervailing duty investigation Nos. 701–TA–670 and 731–TA–1570 (Final) pursuant to the Tariff Act of 1930 (‘‘the Act’’) to determine whether an industry in the United States is materially injured or threatened with material injury, or the establishment of an industry in the United States is materially retarded, by reason of imports of freight rail coupler systems and components from China, provided for in subheading 8607.30.10 1 of the Harmonized Tariff Schedule of the United States, preliminarily determined by the Department of Commerce (‘‘Commerce’’) to be subsidized. DATES : February 28, 2022. FOR FURTHER INFORMATION CONTACT : Stamen Borisson (202) 205–3125), Office of Investigations, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436. Hearing-impaired persons can obtain information on this matter by contacting the Commission’s TDD terminal on 202– 205–1810. Persons with mobility impairments who will need special assistance in gaining access to the Commission should contact the Office of the Secretary at 202–205–2000. General information concerning the Commission may also be obtained by accessing its internet server (https:// www.usitc.gov). The public record for these investigations may be viewed on the Commission’s electronic docket (EDIS) at https://edis.usitc.gov. SUPPLEMENTARY INFORMATION : Scope.—For purposes of these investigations, Commerce has defined the subject merchandise as ‘‘freight rail car coupler systems and certain components thereof. Freight rail car coupler systems are composed of, at minimum, four main components (knuckles, coupler bodies, coupler yokes, and follower blocks, as specified below) but may also include other items (e.g., coupler locks, lock lift assemblies, knuckle pins, knuckle throwers, and rotors). Subject freight rail car coupler systems and components are included within the scope whether finished or unfinished, whether imported individually or with other subject or non-subject components, whether assembled or unassembled, whether mounted or unmounted, or if joined with non-subject merchandise, such as other non-subject system parts or a completed rail car.’’ For Commerce’s complete scope and tariff treatment, see 87 FR 12662, March 7, 2022. Background.—The final phase of these investigations is being scheduled pursuant to sections 705(b) and 731(b) of the Tariff Act of 1930 (19 U.S.C. 1671d(b) and 1673d(b)), as a result of an affirmative preliminary determination by Commerce that certain benefits which constitute subsidies within the meaning of § 703 of the Act (19 U.S.C. 1671b) are being provided to manufacturers, producers, or exporters in China of freight rail coupler systems and components. The investigations were requested in petitions filed on September 29, 2021, by the Coalition of Freight Coupler Producers consisting of McConway & Torley LLC (‘‘M&T), Pittsburgh, PA, and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL–CIO, CLC (‘‘USW’’). 2 For further information concerning the conduct of this phase of the investigations, hearing procedures, and rules of general application, consult the Commission’s Rules of Practice and Procedure, part 201, subparts A and B (19 CFR part 201), and part 207, subparts A and C (19 CFR part 207). Participation in the investigations and public service list.—Persons, including industrial users of the subject merchandise and, if the merchandise is sold at the retail level, representative consumer organizations, wishing to participate in the final phase of these investigations as parties must file an entry of appearance with the Secretary to the Commission, as provided in § 201.11 of the Commission’s rules, no later than 21 days prior to the hearing date specified in this notice. A party that filed a notice of appearance during the preliminary phase of the investigations need not file an additional notice of appearance during this final phase. The Secretary will maintain a public service list containing the names and addresses of all persons, or their representatives, who are parties to the investigations. Please note the Secretary’s Office will accept only electronic filings during this time. Filings must be made through the Commission’s Electronic Document Information System (EDIS, https:// edis.usitc.gov.) No in-person paper- based filings or paper copies of any electronic filings will be accepted until further notice. Limited disclosure of business proprietary information (BPI) under an administrative protective order (APO) and BPI service list.—Pursuant to § 207.7(a) of the Commission’s rules, the Secretary will make BPI gathered in the final phase of these investigations available to authorized applicants under the APO issued in the investigations, provided that the application is made no later than 21 days prior to the hearing date specified in this notice. Authorized applicants must represent interested parties, as defined by 19 U.S.C. 1677(9), who are parties to the investigations. A party granted access to BPI in the preliminary phase of the investigations need not reapply for such access. A separate service list will be maintained by the Secretary for those parties authorized to receive BPI under the APO. Staff report.—The prehearing staff report in the final phase of these investigations will be placed in the nonpublic record on April 28, 2022, and a public version will be issued thereafter, pursuant to § 207.22 of the Commission’s rules. VerDate Sep<11>2014 17:10 Mar 10, 2022 Jkt 256001 PO 00000 Frm 00077 Fmt 4703 Sfmt 4703 E:\FR\FM\11MRN1.SGM 11MRN1 lotter on DSK11XQN23PROD with NOTICES1 14038 Federal Register / Vol. 87, No. 48 / Friday, March 11, 2022 / Notices 1 The record is defined in § 207.2(f) of the Commission’s Rules of Practice and Procedure (19 CFR 207.2(f)). 2 87 FR 3764, 87 FR 3765, 87 FR 3772, and 87 FR 3774 (January 25, 2022). 3 The Commission also finds that imports subject to Commerce’s affirmative critical circumstances determination are not likely to undermine seriously the remedial effect of the countervailing and antidumping duty orders on granular PTFE resin from India. Hearing.—The Commission will hold a hearing in connection with the final phase of these investigations beginning at 9:30 a.m. on May 12, 2022. Information about the place and form of the hearing, including about how to participate in and/or view the hearing, will be posted on the Commission’s website at https://www.usitc.gov/ calendarpad/calendar.html. Interested parties should check the Commission’s website periodically for updates. Requests to appear at the hearing should be filed in writing with the Secretary to the Commission on or before May 9, 2022. A nonparty who has testimony that may aid the Commission’s deliberations may request permission to present a short statement at the hearing. All parties and nonparties desiring to appear at the hearing and make oral presentations should attend a prehearing conference to be held at 9:30 a.m. on May 10, 2022. Oral testimony and written materials to be submitted at the public hearing are governed by sections 201.6(b)(2), 201.13(f), and 207.24 of the Commission’s rules. Parties must submit any request to present a portion of their hearing testimony in camera no later than 7 business days prior to the date of the hearing. Written submissions.—Each party who is an interested party shall submit a prehearing brief to the Commission. Prehearing briefs must conform with the provisions of § 207.23 of the Commission’s rules; the deadline for filing is May 5, 2022. Parties may also file written testimony in connection with their presentation at the hearing, as provided in § 207.24 of the Commission’s rules, and posthearing briefs, which must conform with the provisions of § 207.25 of the Commission’s rules. The deadline for filing posthearing briefs is May 20, 2022. In addition, any person who has not entered an appearance as a party to the investigations may submit a written statement of information pertinent to the subject of the investigations, including statements of support or opposition to the petition, on or before May 20, 2022. On June 8, 2022, the Commission will make available to parties all information on which they have not had an opportunity to comment. Parties may submit final comments on this information on or before June 10, 2022, but such final comments must not contain new factual information and must otherwise comply with § 207.30 of the Commission’s rules. All written submissions must conform with the provisions of § 201.8 of the Commission’s rules; any submissions that contain BPI must also conform with the requirements of §§ 201.6, 207.3, and 207.7 of the Commission’s rules. The Commission’s Handbook on Filing Procedures, available on the Commission’s website at https:// www.usitc.gov/documents/handbook_ on_filing_procedures.pdf, elaborates upon the Commission’s procedures with respect to filings. Additional written submissions to the Commission, including requests pursuant to § 201.12 of the Commission’s rules, shall not be accepted unless good cause is shown for accepting such submissions, or unless the submission is pursuant to a specific request by a Commissioner or Commission staff. In accordance with §§ 201.16(c) and 207.3 of the Commission’s rules, each document filed by a party to the investigations must be served on all other parties to the investigations (as identified by either the public or BPI service list), and a certificate of service must be timely filed. The Secretary will not accept a document for filing without a certificate of service. Authority: These investigations are being conducted under authority of title VII of the Tariff Act of 1930; this notice is published pursuant to § 207.21 of the Commission’s rules. By order of the Commission. Issued: March 8, 2022. Lisa Barton, Secretary to the Commission. [FR Doc. 2022–05236 Filed 3–10–22; 8:45 am] BILLING CODE 7020–02–P INTERNATIONAL TRADE COMMISSION [Investigation Nos. 701–TA–663–664 and 731–TA–1555–1556 (Final)] Granular Polytetrafluoroethylene (PTFE) Resin From India and Russia; Determinations On the basis of the record 1 developed in the subject investigations, the United States International Trade Commission (‘‘Commission’’) determines, pursuant to the Tariff Act of 1930 (‘‘the Act’’), that an industry in the United States is materially injured by reason of imports of granular polytetrafluoroethylene (‘‘PTFE’’) resin from India and Russia, provided for in subheadings 3904.61.00 and 3904.69.50 of the Harmonized Tariff Schedule of the United States, that have been found by the U.S. Department of Commerce (‘‘Commerce’’) to be sold in the United States at less than fair value (‘‘LTFV’’), and to be subsidized by the governments of India and Russia.2 3 Background The Commission instituted these investigations effective January 27, 2021, following receipt of petitions filed with the Commission and Commerce by Daikin America, Inc., Orangeburg, New York. The final phase of the investigations was scheduled by the Commission following notification of preliminary determinations by Commerce that imports of granular PTFE resin from India and Russia were subsidized within the meaning of section 703(b) of the Act (19 U.S.C. 1671b(b)) and sold at LTFV within the meaning of 733(b) of the Act (19 U.S.C. 1673b(b)). Notice of the scheduling of the final phase of the Commission’s investigations and of a public hearing to be held in connection therewith was given by posting copies of the notice in the Office of the Secretary, U.S. International Trade Commission, Washington, DC, and by publishing the notice in the Federal Register on September 15, 2021 (86 FR 51378). In light of the restrictions on access to the Commission building due to the COVID–19 pandemic, the Commission conducted its hearing through written testimony and videoconference held on January 19, 2022. All persons who requested the opportunity were permitted to participate. The Commission made these determinations pursuant to §§ 705(b) and 735(b) of the Act (19 U.S.C. 1671d(b) and 19 U.S.C. 1673d(b)). It completed and filed its determinations in these investigations on March 8, 2022. The views of the Commission are contained in USITC Publication 5285 (March 2022), entitled Granular Polytetrafluoroethylene (PTFE) Resin from India and Russia: Investigation Nos. 701–TA–663–664 and 731–TA– 1555–1556 (Final). By order of the Commission. Issued: March 8, 2022. Lisa Barton, Secretary to the Commission. [FR Doc. 2022–05183 Filed 3–10–22; 8:45 am] BILLING CODE 7020–02–P VerDate Sep<11>2014 17:10 Mar 10, 2022 Jkt 256001 PO 00000 Frm 00078 Fmt 4703 Sfmt 9990 E:\FR\FM\11MRN1.SGM 11MRN1 lotter on DSK11XQN23PROD with NOTICES1 ──────────────────────────────────────────────────────────── === USITC Determination - Final === 41144 Federal Register / Vol. 87, No. 131 / Monday, July 11, 2022 / Notices 1 The record is defined in § 207.2(f) of the Commission’s Rules of Practice and Procedure (19 CFR 207.2(f)). 2 Unfinished subject merchandise may also be imported under subheading 7326.90.86. Subject merchandise attached to finished rail cars may also be imported under subheadings 8606.10.00, 8606.30.00, 8606.91.00, 8606.92.00, 8606.99.01 or under subheading 9803.00.50 if imported as an Instrument of International Traffic. 3 87 FR 30869 (May 20, 2022) and 87 FR 32121 (May 27, 2022). Authority N1–311–95–001, Item 2; N1– 311–01–008, Item 1; and N1–311–04– 001, Item 1, FEMA stores all other grant records for six years and three months from the date of closeout (when closeout is the date FEMA closes the grant in its financial system) and final audit and appeals are resolved and then deleted. The customer service assessment forms that have been filled out and returned by disaster assistance applicants are temporary records that are destroyed upon transmission of the final report, per NARA Authority N1– 311–00–001, Item 1. The statistical and analytical reports resulting from these assessments are temporary records that are retired three years after the final report cutoff and destroyed 20 years after the report cutoff per NARA Authority N1–311–00–001, Item 2. The assessment results database are temporary records that are destroyed when no longer needed for analysis purposes, per NARA Authority N1–311– 00–001, Item 3. ADMINISTRATIVE, TECHNICAL, AND PHYSICAL SAFEGUARDS: DHS/FEMA safeguards records in this system in accordance with applicable rules and policies, including all applicable DHS automated systems security and access policies. DHS/ FEMA imposes strict controls to minimize the risk of compromising the information that is being stored. DHS/ FEMA limits access to the computer system containing the records in this system to those individuals who have a need-to-know the information for the performance of their official duties and who have appropriate clearances or permissions. RECORD ACCESS PROCEDURES : Individuals seeking access to and notification of any record contained in this system of records, or seeking to contest its content, may submit a request in writing to the Chief Privacy Officer and FEMA’s Freedom of Information Act (FOIA) Officer whose contact information can be found at https://www.dhs.gov/foia-contact- information. If an individual believes more than one component maintains Privacy Act records concerning him or her, the individual may submit the request to the Chief Privacy Officer and Chief Freedom of Information Act Officer, Department of Homeland Security, Washington, DC 20528–0655, or electronically at https:// www.dhs.gov/dhs-foia-privacy-act- request-submission-form. Even if neither the Privacy Act nor the Judicial Redress Act provide a right of access, certain records about you may be available under the Freedom of Information Act. When an individual is seeking records about himself or herself from this system of records or any other Departmental system of records, the individual’s request must conform with the Privacy Act regulations set forth in 6 CFR part 5. The individual must first verify his/her identity, meaning that the individual must provide his/her full name, current address, and date and place of birth. The individual must sign the request, and the individual’s signature must either be notarized or submitted under 28 U.S.C. 1746, a law that permits statements to be made under penalty of perjury as a substitute for notarization. An individual may obtain more information about this process at http://www.dhs.gov/foia. In addition, the individual should: • Explain why he or she believes the Department would have information being requested; • Identify which component(s) of the Department he or she believes may have the information; • Specify when the individual believes the records would have been created; and • Provide any other information that will help the FOIA staff determine which DHS component agency may have responsive records. If the request is seeking records pertaining to another living individual, the request must include an authorization from the individual whose record is being requested, authorizing the release to the requester. Without the above information, the component(s) may not be able to conduct an effective search, and the individual’s request may be denied due to lack of specificity or lack of compliance with applicable regulations. CONTESTING RECORD PROCEDURES: For records covered by the Privacy Act or covered Judicial Redress Act records, individuals may make a request for amendment or correction of a record of the Department about the individual by writing directly to the Department component that maintains the record, unless the record is not subject to amendment or correction. The request should identify each particular record in question, state the amendment or correction desired, and state why the individual believes that the record is not accurate, relevant, timely, or complete. The individual may submit any documentation that would be helpful. If the individual believes that the same record is in more than one system of records, the request should state that and be addressed to each component that maintains a system of records containing the record. NOTIFICATION PROCEDURES: See ‘‘Record Access Procedures’’ above. EXEMPTIONS PROMULGATED FOR THE SYSTEM: None. HISTORY: 80 FR 13404 (March 13, 2015); and FR 39705 (August 7, 2009). * * * * * Lynn P. Dupree, Chief Privacy Officer, Department of Homeland Security. [FR Doc. 2022–14673 Filed 7–8–22; 8:45 am] BILLING CODE 4410–10–P INTERNATIONAL TRADE COMMISSION [Investigation Nos. 701–TA–670 and 731– TA–1570 (Final)] Freight Rail Coupler Systems and Components From China Determinations On the basis of the record 1 developed in the subject investigations, the United States International Trade Commission (‘‘Commission’’) determines, pursuant to the Tariff Act of 1930 (‘‘the Act’’), that an industry in the United States is not materially injured or threatened with material injury by reason of imports of freight rail coupler systems and components from China, provided for in subheading 8607.30.10 2 of the Harmonized Tariff Schedule of the United States, that have been found by the U.S. Department of Commerce (‘‘Commerce’’) to be sold in the United States at less than fair value (‘‘LTFV’’), and to be subsidized by the government of China.3 Background The Commission instituted these investigations effective September 29, 2021, following receipt of petitions filed with the Commission and Commerce by the Coalition of Freight Coupler Producers consisting of McConway & Torley LLC (‘‘M&T’’), Pittsburgh, PA, VerDate Sep<11>2014 16:48 Jul 08, 2022 Jkt 256001 PO 00000 Frm 00049 Fmt 4703 Sfmt 4703 E:\FR\FM\11JYN1.SGM 11JYN1 khammond on DSKJM1Z7X2PROD with NOTICES 41145Federal Register / Vol. 87, No. 131 / Monday, July 11, 2022 / Notices 4 Initially, Petitioner was M&T and another domestic producer. However, the other domestic producer withdrew, and USW was added to the petitions. and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFLCIO, CLC (‘‘USW’’). 4 The final phase of the investigations was scheduled by the Commission following notification of preliminary determinations by Commerce that imports of freight rail coupler systems and components from China were subsidized within the meaning of section 703(b) of the Act (19 U.S.C. 1671b(b)) and sold at LTFV within the meaning of 733(b) of the Act (19 U.S.C. 1673b(b)). Notice of the scheduling of the final phase of the Commission’s investigations and of a public hearing to be held in connection therewith was given by posting copies of the notice in the Office of the Secretary, U.S. International Trade Commission, Washington, DC, and by publishing the notice in the Federal Register on March 8, 2022 (87 FR 14037). The Commission conducted its hearing on May 12, 2022. All persons who requested the opportunity were permitted to participate. The Commission made these determinations pursuant to §§ 705(b) and 735(b) of the Act (19 U.S.C. 1671d(b) and 19 U.S.C. 1673d(b)). It completed and filed its determinations in these investigations on July 5, 2022. The views of the Commission are contained in USITC Publication 5331 (July 2022), entitled Freight Rail Coupler Systems and Components from China: Investigation Nos. 701–TA–670 and 731–TA–1570 (Final). By order of the Commission. Issued: July 5, 2022. William Bishop, Supervisory Hearing and Information Officer. [FR Doc. 2022–14639 Filed 7–8–22; 8:45 am] BILLING CODE 7020–02–P INTERNATIONAL TRADE COMMISSION [Investigation No. 337–TA–1005 (Rescission)] Certain L-Tryptophan, L-Tryptophan Products, and Their Methods of Production; Notice of Commission Determination To Institute a Rescission Proceeding; Rescission of the Remedial Orders; Termination of Rescission Proceeding AGENCY : U.S. International Trade Commission. ACTION : Notice. SUMMARY : Notice is hereby given that the U.S. International Trade Commission has determined to institute a rescission proceeding and to grant a joint petition to rescind the limited exclusion order (‘‘LEO’’) and cease and desist order (‘‘CDO’’) (collectively, ‘‘the remedial orders’’) issued in the underlying investigation. The rescission proceeding is terminated. FOR FURTHER INFORMATION CONTACT : Houda Morad, Office of the General Counsel, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436, telephone (202) 708–4716. Copies of non-confidential documents filed in connection with this investigation may be viewed on the Commission’s electronic docket (EDIS) at https://edis.usitc.gov. For help accessing EDIS, please email EDIS3Help@usitc.gov. General information concerning the Commission may also be obtained by accessing its internet server at https://www.usitc.gov. Hearing-impaired persons are advised that information on this matter can be obtained by contacting the Commission’s TDD terminal on (202) 205–1810. SUPPLEMENTARY INFORMATION : The Commission instituted this investigation on June 14, 2016, based on a complaint filed by complainants Ajinomoto Co., Inc. of Tokyo, Japan and Ajinomoto Heartland Inc. of Chicago, Illinois (collectively, ‘‘Ajinomoto’’). See 81 FR 38735–36 (June 14, 2016). The complaint, as supplemented, alleged violations of section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337) (‘‘section 337’’), based upon the importation into the United States, the sale for importation, and the sale within the United States after importation of certain L-tryptophan, L-tryptophan products, and their methods of production by reason of infringement of certain claims of U.S. Patent No. 7,666,655 (‘‘the ’655 patent’’) and U.S. Patent No. 6,180,373 (‘‘the ’373 patent’’). See id. The notice of investigation named CJ CheilJedang Corp. of Seoul, Republic of Korea, CJ America, Inc. of Downers Grove, Illinois, and PT CheilJedang Indonesia of Jakarta, Indonesia (collectively, ‘‘CJ’’) as respondents in this investigation. See id. The Office of Unfair Import Investigations was not a party to the investigation. On December 18, 2017, the Commission issued a final determination finding a violation of section 337 with respect to certain tryptophan-producing bacteria strains (‘‘the later strains’’), but no violation of section 337 with respect to other strains (‘‘the earlier strains’’). The Commission issued the remedial orders, i.e., an LEO against the infringing articles and a CDO against CJ America. On February 16, 2018, Ajinomoto filed an appeal with the United States Court of Appeals for the Federal Circuit (‘‘Federal Circuit’’) from the Commission’s final determination finding no violation of section 337 with respect to the earlier strains. On February 27, 2018, CJ also filed an appeal with the Federal Circuit from the Commission’s final determination finding a violation of section 337 with respect to the later strains. On May 25, 2018, CJ filed a motion for partial dismissal of the appeal with respect to the ’373 patent based on expiration of that patent. On June 27, 2018, the Federal Circuit issued an order dismissing the appeal with respect to the ’373 patent. On August 6, 2019, the Federal Circuit affirmed the Commission’s final determination with respect to the remaining ’655 patent. On June 3, 2022, Ajinomoto and CJ filed a joint petition to rescind the remedial orders based on settlement. The petition includes a confidential and public version of the settlement agreement and indicates that there are no other agreements, written or oral, express or implied between the parties concerning the subject matter of the investigation. No response to the petition was filed. Having reviewed the petition and the settlement agreement between Ajinomoto and CJ provided therewith, the Commission finds that the conditions which led to the issuance of the remedial orders no longer exist, and therefore, granting the joint petition to rescind is warranted under section 337(k) (19 U.S.C. 1337(k)). The Commission also finds that the requirements of Commission Rule 210.76(a) (19 CFR 210.76(a)) are satisfied. Accordingly, the Commission has determined to institute a rescission proceeding and to grant the joint petition to rescind the remedial orders. The rescission proceeding is terminated. The Commission vote for this determination took place on July 5, 2022. The authority for the Commission’s determination is contained in section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), and in part 210 of the Commission’s Rules of Practice and Procedure (19 CFR part 210). By order of the Commission. VerDate Sep<11>2014 16:48 Jul 08, 2022 Jkt 256001 PO 00000 Frm 00050 Fmt 4703 Sfmt 4703 E:\FR\FM\11JYN1.SGM 11JYN1 khammond on DSKJM1Z7X2PROD with NOTICES ──────────────────────────────────────────────────────────── === Determination – AD – Final - China === 32121Federal Register / Vol. 87, No. 103 / Friday, May 27, 2022 / Notices 1 See Freight Rail Coupler Systems and Certain Components Thereof from the People’s Republic of China: Preliminary Affirmative Determination of Sales at Less-Than-Fair Value, 87 FR 14511 (March Continued Daylight Time. The meeting will be available via teleconference. The Committee advises the Office of the Assistant Secretary for Export Administration on the identification of emerging and foundational technologies with potential dual-use applications as early as possible in their developmental stages both within the United States and abroad. Agenda Open Session 1. Welcome and Introductions. 2. Introduction by the Bureau of Industry and Security Leadership. 3. Presentation: Assessing Emerging Technologies (by Daniel M. Gerstein, Ph.D.). 4. Questions and Answers. 5. Public Comments/Announcements. Closed Session 6. Discussion of matters determined to be exempt from the provisions relating to public meetings found in 5 U.S.C. app. 10(a)(1) and 10(a)(3). The open session will be accessible via teleconference. To join the conference, submit inquiries to Ms. Yvette Springer at Yvette.Springer@ bis.doc.gov no later than June 9, 2022. To the extent time permits, members of the public may present oral statements to the Committee. The public may submit written statements at any time before or after the meeting. However, to facilitate distribution of public presentation materials to Committee members, the Committee suggests that presenters forward the public presentation materials prior to the meeting to Ms. Springer via email. The Assistant Secretary for Administration, with the concurrence of the delegate of the General Counsel, formally determined on February 1, 2022, pursuant to Section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. app. 10(d)), that the portion of the meeting dealing with pre- decisional changes to the Commerce Control List and the U.S. export control policies shall be exempt from the provisions relating to public meetings found in 5 U.S.C. app. 10(a)(1) and 10(a)(3). The remaining portions of the meeting will be open to the public. For more information, please contact Yvette Springer via email. Yvette Springer, Committee Liaison Officer. [FR Doc. 2022–11492 Filed 5–26–22; 8:45 am] BILLING CODE 3510–JT–P DEPARTMENT OF COMMERCE Bureau of Industry and Security Agency Information Collection Activities; Submission to the Office of Management and Budget (OMB) for Review and Approval; Comment Request; Offsets in Military Exports The Department of Commerce will submit the following information collection request to the Office of Management and Budget (OMB) for review and clearance in accordance with the Paperwork Reduction Act of 1995, on or after the date of publication of this notice. We invite the general public and other Federal agencies to comment on proposed, and continuing information collections, which helps us assess the impact of our information collection requirements and minimize the public’s reporting burden. Public comments were previously requested via the Federal Register on January 14, 2022, during a 60-day comment period. This notice allows for an additional 30 days for public comments. Agency: Bureau of Industry and Security, Commerce. Title: Offsets in Military Exports. OMB Control Number: 0694–0084. Form Number(s): None. Type of Request: Regular submission, extension of a current information collection. Number of Respondents: 30. Average Hours per Response: 12 hours. Burden Hours: 360. Needs and Uses: This collection of information is required by the Defense Production Act (DPA). The DPA requires U.S. firms to furnish information to the Department of Commerce regarding offset agreements exceeding $5,000,000 in value associated with sales of weapon systems or defense-related items to foreign countries or foreign firms. Offsets are industrial or commercial compensation practices required as a condition of purchase in either government-to- government or commercial sales of defense articles and/or defense services as defined by the Arms Export Control Act and the International Traffic in Arms Regulations. Such offsets are required by most major trading partners when purchasing U.S. military equipment or defense related items. Affected Public: Business or other for- profit organizations. Frequency: On occasion. Respondent’s Obligation: Mandatory. Legal Authority: Defense Production Act of 1950, Section 309. This information collection request may be viewed at www.reginfo.gov. Follow the instructions to view the Department of Commerce collections currently under review by OMB. Written comments and recommendations for the proposed information collection should be submitted within 30 days of the publication of this notice on the following website www.reginfo.gov/ public/do/PRAMain. Find this particular information collection by selecting ‘‘Currently under 30-day Review—Open for Public Comments’’ or by using the search function and entering either the title of the collection or the OMB Control Number 0694–0084. Sheleen Dumas, Department PRA Clearance Officer, Office of the Chief Information Officer, Commerce Department. [FR Doc. 2022–11465 Filed 5–26–22; 8:45 am] BILLING CODE 3510–33–P DEPARTMENT OF COMMERCE International Trade Administration [A–570–143] Freight Rail Coupler Systems and Certain Components Thereof From the People’s Republic of China: Final Affirmative Determination of Sales at Less-Than-Fair Value AGENCY : Enforcement and Compliance, International Trade Administration, Department of Commerce. SUMMARY : The U.S. Department of Commerce (Commerce) determines that freight rail coupler systems and certain components thereof (freight rail couplers) from the People’s Republic of China (China) are being, or are likely to be, sold in the United States at less- than-fair value (LTFV) during the period of investigation, January 1, 2021, through June 30, 2021. DATES : Applicable May 27, 2022. FOR FURTHER INFORMATION CONTACT : Kabir Archuletta, AD/CVD Operations, Office V, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482–2593. SUPPLEMENTARY INFORMATION : Background On March 15, 2022, Commerce published in the Federal Register the Preliminary Determination in this investigation. 1 The deadline for the final VerDate Sep<11>2014 17:51 May 26, 2022 Jkt 256001 PO 00000 Frm 00012 Fmt 4703 Sfmt 4703 E:\FR\FM\27MYN1.SGM 27MYN1 jspears on DSK121TN23PROD with NOTICES1 32122 Federal Register / Vol. 87, No. 103 / Friday, May 27, 2022 / Notices 15, 2022) (Preliminary Determination), and accompanying Preliminary Decision Memorandum (PDM). 2 See Memorandum, ‘‘Antidumping and Countervailing Duty Investigations of Freight Rail Coupler Systems and Certain Components Thereof from the People’s Republic of China: Post- Preliminary Scope Decision Memorandum,’’ dated April 11, 2022; see also See Freight Rail Coupler Systems and Certain Components Thereof from the People’s Republic of China: Initiation of Less-Than- Fair-Value Investigation, 86 FR 58864 (October 25, 2021) (Initiation Notice). 3 See Strato’s Letter, ‘‘Strato Scope Case Brief,’’ dated April 18, 2022; and Wabtec’s Letter, ‘‘Case Brief On Post-Preliminary Scope Decision,’’ dated April 18, 2022. 4 The petitioner is the Coalition of Freight Coupler Producers. See Petitioner’s Letter, ‘‘Rebuttal Brief,’’ dated April 25, 2022. 5 See Preliminary Determination, 87 FR 14513. 6 See Initiation Notice, 86 FR 58869. 7 See Preliminary Determination, 87 FR 14513– 14. 8 See Memorandum, ‘‘Final Scope Memorandum,’’ dated concurrently with, and hereby adopted by, this notice. 9 See Preliminary Determination PDM at 6–9. 10 Id. determination in this investigation is May 23, 2022. On April 11, 2022, we issued a post- preliminary decision memorandum addressing a scope issue raised in the context of this and the companion countervailing duty investigation, in which we preliminarily found that it was unnecessary to alter the scope stated in the Initiation Notice.2 We received case briefs addressing this preliminary scope decision from two importers of subject merchandise, Strato, Inc. (Strato) and Wabtec Corporation (Wabtec), on April 18, 2022,3 and rebuttal comments from the petitioner on April 22, 2022. 4 We received no comments or case briefs addressing any of the other findings in the Preliminary Determination; therefore, there is no Issues and Decision Memorandum accompanying this notice. Period of Investigation The period of investigation is January 1, 2021, through June 30, 2021. Scope of the Investigation The products covered by this investigation are freight rail coupler systems and certain components thereof from China. For a complete description of the scope of this investigation, see the appendix to this notice. Scope Comments In Commerce’s Preliminary Determination,5 we set aside a period of time for parties to raise issues regarding product coverage (i.e., scope) in scope case briefs or other written comments on scope issues. As noted above, the petitioner and two interested parties, Strato and Wabtec, commented on the scope of the investigation as it appeared in the Initiation Notice 6 and Preliminary Determination.7 For a summary of the product coverage comments and rebuttal comments, and an analysis of all comments received, see the final scope memorandum issued concurrently with this final determination. 8 For the reasons discussed in the final scope memorandum, Commerce is not modifying the scope language as it appeared in the Initiation Notice. See the final ‘‘Scope of the Investigation’’ in the appendix to this notice. China-Wide Entity and Use of Adverse Facts Available (AFA) For the purposes of this final determination, consistent with the Preliminary Determination,9 we relied solely on the application of AFA for the China-wide entity, pursuant to sections 776(a) and (b) of the Tariff Act of 1930, as amended (the Act). Further, because no companies are eligible for a rate separate from the China-wide entity, we continue to find that all exporters of Chinese freight rail couplers are part of the China-wide entity. No interested party submitted comments on the Preliminary Determination. Thus, we made no changes to our analysis or to the China-wide entity’s dumping margin for the final determination. A detailed discussion of our application of AFA is provided in the Preliminary Determination.10 Combination Rates Because no Chinese exporters qualified for a separate rate, producer/ exporter combination rates were not calculated for this final determination. Final Determination The final estimated weighted-average dumping margins are as follows: Exporter/producer Estimated weighted-average dumping margin (percent) Estimated weighted-average dumping margin adjusted for export subsidy offset(s) (percent) China-Wide Entity ................................................................................................................................ 147.11 116.70 Disclosure Because Commerce continues to find that all Chinese exporters of freight rail couplers are part of the China-wide entity and continues to rely solely on the application of AFA for the China- wide entity, there are no calculations to disclose for this final determination. Continuation of Suspension of Liquidation As a result of our Preliminary Determination and pursuant to section 735(c)(1)(B) of the Act, Commerce will instruct U.S. Customs and Border Protection (CBP) to continue to suspend liquidation of subject merchandise as described in the ‘‘Scope of the Investigation’’ section entered, or withdrawn from warehouse, for consumption, on or after March 15, 2022, which is the date of publication of the Preliminary Determination in the Federal Register, at the cash deposit rate indicated above. Pursuant to section 735(c)(1)(B)(ii) of the Act and 19 CFR 351.210(d), we will instruct CBP to require a cash deposit for such entries of merchandise equal to the amount by which the normal value exceeds the U.S. price as follows: (1) For all Chinese exporters of subject merchandise, the cash deposit rate will be equal to the estimated dumping margin established for the China-wide entity; and (2) for all third country exporters of subject merchandise, the cash deposit rate is also the cash deposit rate applicable to the China-wide entity. These suspension of liquidation instructions will remain in effect until further notice. If the U.S. International Trade Commission (ITC) issues a final affirmative injury determination, we intend to issue an antidumping duty order and continue to require a cash deposit of estimated antidumping duties VerDate Sep<11>2014 17:51 May 26, 2022 Jkt 256001 PO 00000 Frm 00013 Fmt 4703 Sfmt 4703 E:\FR\FM\27MYN1.SGM 27MYN1 jspears on DSK121TN23PROD with NOTICES1 32123Federal Register / Vol. 87, No. 103 / Friday, May 27, 2022 / Notices for such entries of subject merchandise in the amounts indicated above, in accordance with section 736(a) of the Act. If the ITC determines that material injury, or threat of material injury, does not exist, this proceeding will be terminated, and all estimated duties deposited as a result of the suspension of liquidation will be refunded or canceled. ITC Notification In accordance with section 735(d) of the Act, we will notify the ITC of our final affirmative determination of sales at LTFV. Because the final determination in this proceeding is affirmative, in accordance with section 735(b) of the Act, the ITC will make its final determination as to whether the domestic industry in the United States is materially injured, or threatened with material injury, by reason of imports of freight rail couplers from China no later than 45 days after our final determination. If the ITC determines that material injury or threat of material injury does not exist, the proceeding will be terminated and all cash deposits will be refunded or canceled, as Commerce determines to be appropriate. If the ITC determines that such injury does exist, Commerce intends to issue an antidumping duty order directing CBP to assess, upon further instruction by Commerce, antidumping duties on all imports of the subject merchandise that are entered, or withdrawn from warehouse, for consumption on or after the effective date of the suspension of liquidation, as discussed above in the ‘‘Continuation of Suspension of Liquidation’’ section. Notification Regarding Administrative Protective Order (APO) In the event that the ITC issues a final negative injury determination, this notice will serve as the only reminder to parties subject to an APO of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of the return/ destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction. Notification to Interested Parties This determination is issued and published in pursuant to sections 735(d) and 777(i) of the Act, and 19 CFR 351.210(c). Dated: May 23, 2022. Lisa W. Wang, Assistant Secretary for Enforcement and Compliance. Appendix Scope of the Investigation The scope of this investigation covers freight rail car coupler systems and certain components thereof. Freight rail car coupler systems are composed of, at minimum, four main components (knuckles, coupler bodies, coupler yokes, and follower blocks, as specified below) but may also include other items (e.g., coupler locks, lock lift assemblies, knuckle pins, knuckle throwers, and rotors). The components covered by the investigation include: (1) E coupler bodies; (2) E/F coupler bodies; (3) F coupler bodies; (4) E yokes; (5) F yokes; (6) E knuckles; (7) F knuckles; (8) E type follower blocks; and (9) F type follower blocks, as set forth by the Association of American Railroads (AAR). The freight rail coupler components are included within the scope of the investigation when imported individually, or in some combination thereof, such as in the form of a coupler fit (a coupler body and knuckle assembled together), independent from a coupler system. Subject freight rail car coupler systems and components are included within the scope whether finished or unfinished, whether imported individually or with other subject or non-subject components, whether assembled or unassembled, whether mounted or unmounted, or if joined with non-subject merchandise, such as other non-subject system parts or a completed rail car. Finishing includes, but is not limited to, arc washing, welding, grinding, shot blasting, heat treatment, machining, and assembly of various components. When a subject coupler system or subject components are mounted on or to other non-subject merchandise, such as a rail car, only the coupler system or subject components are covered by the scope. The finished products covered by the scope of this investigation meet or exceed the AAR specifications of M–211, ‘‘Foundry and Product Approval Requirements for the Manufacture of Couplers, Coupler Yokes, Knuckles, Follower Blocks, and Coupler Parts’’ or AAR M–215 ‘‘Coupling Systems,’’ or other equivalent domestic or international standards (including any revisions to the standard(s)). The country of origin for subject coupler systems and components, whether fully assembled, unfinished or finished, or attached to a rail car, is the country where the subject coupler components were cast or forged. Subject merchandise includes coupler components as defined above that have been further processed or further assembled, including those coupler components attached to a rail car in third countries. Further processing includes, but is not limited to, arc washing, welding, grinding, shot blasting, heat treatment, painting, coating, priming, machining, and assembly of various components. The inclusion, attachment, joining, or assembly of non-subject components with subject components or coupler systems either in the country of manufacture of the in-scope product or in a third country does not remove the subject components or coupler systems from the scope. The coupler systems that are the subject of this investigation are currently classifiable in the Harmonized Tariff Schedule of the United States (HTSUS) statistical reporting number 8607.30.1000. Unfinished subject merchandise may also enter under HTSUS statistical reporting number 7326.90.8688. Subject merchandise attached to finished rail cars may also enter under HTSUS statistical reporting numbers 8606.10.0000, 8606.30.0000, 8606.91.0000, 8606.92.0000, 8606.99.0130, 8606.99.0160, or under subheading 9803.00.5000 if imported as an Instrument of International Traffic. These HTSUS subheadings are provided for convenience and customs purposes only; the written description of the scope of the investigation is dispositive. [FR Doc. 2022–11480 Filed 5–26–22; 8:45 am] BILLING CODE 3510–DS–P DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration [RTID 0648–XB758] Takes of Marine Mammals Incidental to Specified Activities; Taking Marine Mammals Incidental to New England Wind, Phase 1 Park City Wind Marine Site Characterization Surveys AGENCY : National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce. ACTION : Notice; proposed incidental harassment authorization; request for comments on proposed authorization and possible renewal. SUMMARY : NMFS has received a request from Park City Wind LLC (PCW) for authorization to take marine mammals incidental to marine site characterization surveys for Phase 1 of the New England Wind Project located in the Bureau of Ocean Energy Management (BOEM) Lease Area OCS– A0534 (Lease Area) in waters offshore of Massachusetts south through Long Island, New York. Pursuant to the Marine Mammal Protection Act (MMPA), NMFS is requesting comments on its proposal to issue an incidental harassment authorization (IHA) to incidentally take marine mammals during the specified activities. NMFS is also requesting comments on a possible one-time, one-year renewal that could be issued under certain circumstances and if all requirements are met, as described in Request for Public Comments at the end of this notice. NMFS will consider public comments VerDate Sep<11>2014 17:51 May 26, 2022 Jkt 256001 PO 00000 Frm 00014 Fmt 4703 Sfmt 4703 E:\FR\FM\27MYN1.SGM 27MYN1 jspears on DSK121TN23PROD with NOTICES1 ──────────────────────────────────────────────────────────── === Determination – CVD – Preliminary - China === 12662 Federal Register / Vol. 87, No. 44 / Monday, March 7, 2022 / Notices 1 See Freight Rail Coupler Systems and Certain Components Thereof from the People’s Republic of China: Initiation of Countervailing Duty Investigation, 86 FR 58878 (October 25, 2021) (Initiation Notice). 2 See Freight Rail Coupler Systems and Certain Components Thereof from the People’s Republic of China: Postponement of Preliminary Determination in the Countervailing Duty Investigation, 86 FR 70113 (December 9, 2021). 3 See Memorandum, ‘‘Decision Memorandum for the Preliminary Determination in the Countervailing Duty Investigation of Freight Rail Coupler Systems and Certain Components Thereof from the People’s Republic of China,’’ dated concurrently with, and hereby adopted by, this notice (Preliminary Decision Memorandum). 4 See Antidumping Duties; Countervailing Duties, Final Rule, 62 FR 27296, 27323 (May 19, 1997) (Preamble). 5 See Initiation Notice, 86 FR 58879. 6 See Memorandum, ‘‘Countervailing Duty Investigation of Freight Rail Coupler Systems and Certain Components Thereof from the People’s Republic of China: Request for Additional Scope Comments,’’ dated February 11, 2022. 7 See Freight Rail Coupler Systems and Certain Components Thereof from the People’s Republic of China: Initiation of Less-Than-Fair-Value Investigation, 86 FR 58864 (October 25, 2021). 8 See sections 771(5)(B) and (D) of the Act regarding financial contribution; section 771(5)(E) of the Act regarding benefit; and section 771(5A) of the Act regarding specificity. 9 See sections 776(a) and (b) of the Act. disclosed under the APO in accordance with 19 CFR 351.305(a)(3), which continues to govern business proprietary information in this segment of the proceeding. Timely written notification of the return/destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction. Notification to Interested Parties We are issuing and publishing this notice in accordance with sections 751(a)(1) and 777(i) of the Act, and 19 CFR 351.221(b)(5). Dated: February 28, 2022. Lisa W. Wang, Assistant Secretary for Enforcement and Compliance. Appendix List of Topics Discussed in the Issues and Decision Memorandum I. Summary II. Background III. Scope of the Order IV. Changes Since the Preliminary Results V. Discussion of the Issues Comment 1: Particular Market Situation (PMS) Comment 2: Cost Smoothing Comment 3: Hyundai Steel’s Constructed Export Price (CEP) Offset Comment 4: Affiliated-Party Inputs Regarding POSCO and Hyundai Steel Comment 5: Hyundai Steel’s Affiliated Party Input Adjustment Comment 6: POSCO’s Freight Revenue Comment 7: POSCO’s U.S. Indirect Selling Expenses (ISEs) VI. Recommendation [FR Doc. 2022–04691 Filed 3–4–22; 8:45 am] BILLING CODE 3510–DS–P DEPARTMENT OF COMMERCE International Trade Administration Freight Rail Coupler Systems and Certain Components Thereof: Preliminary Affirmative Countervailing Duty Determination AGENCY : Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce. SUMMARY : The Department of Commerce (Commerce) preliminarily determines that countervailable subsidies are being provided to producers and exporters of freight rail coupler systems and certain components thereof (freight rail couplers) from the People’s Republic of China (China) during the period of investigation January 1, 2020, through December 31, 2020. Interested parties are invited to comment on this preliminary determination. DATES : Applicable March 7, 2022. FOR FURTHER INFORMATION CONTACT : Whitley Herndon or Robert Scully, AD/ CVD Operations, Office V, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482–6274, or (202) 482–0572, respectively. SUPPLEMENTARY INFORMATION : Background This preliminary determination is made in accordance with section 703(b) of the Tariff Act of 1930, as amended (the Act). Commerce published the notice of initiation of this investigation on October 25, 2021. 1 On December 9, 2021, Commerce postponed the preliminary determination to February 28, 2022. 2 For a complete description of the events that followed the initiation of this investigation, see the Preliminary Decision Memorandum.3 A list of topics discussed in the Preliminary Decision Memorandum is included as Appendix II to this notice. The Preliminary Decision Memorandum is a public document and is on file electronically via Enforcement and Compliance’s Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS). ACCESS is available to registered users at http:// access.trade.gov. In addition, a complete version of the Preliminary Decision Memorandum can be accessed directly at http://enforcement.trade.gov/frn/. Scope of the Investigation The product covered by this investigation is freight rail couplers from China. For a complete description of the scope of this investigation, see Appendix I. Scope Comments In accordance with the Preamble to Commerce’s regulations, 4 the Initiation Notice set aside a period of time for parties to raise issues regarding product coverage (i.e., scope).5 We received several comments concerning the scope of the antidumping duty (AD) and countervailing duty (CVD) investigations of freight rail couplers as it appeared in the Initiation Notice. On February 11, 2022, we requested additional scope comments from interested parties regarding merchandise under consideration attached to rail cars.6 On February 22, 2022, we received comments from several interested parties; with rebuttal comments due March 1, 2022. Because these comments were submitted in close proximity to the preliminary determinations, we intend to issue our preliminary decision regarding the scope of the AD and CVD investigations after the preliminary determination of the companion AD investigation, the deadline for which is March 8, 2022. 7 We will incorporate the scope decisions from the AD investigation into the scope of the final CVD determination for this investigation after considering any relevant comments submitted in scope case and rebuttal briefs. Methodology Commerce is conducting this investigation in accordance with section 701 of the Act. For each of the subsidy programs found countervailable, Commerce preliminarily determines that there is a subsidy, i.e., a financial contribution by an ‘‘authority’’ that gives rise to a benefit to the recipient, and that the subsidy is specific.8 Commerce notes that, in making these findings, it relied on facts available and, because Commerce finds that necessary information was missing from the record and because respondents did not act to the best of their ability to respond to Commerce’s requests for information, Commerce drew an adverse inference in selecting from among the facts otherwise available. 9 For further information, see ‘‘Use of Facts Otherwise Available and Adverse Inferences’’ in the Preliminary Decision Memorandum. VerDate Sep<11>2014 17:50 Mar 04, 2022 Jkt 256001 PO 00000 Frm 00007 Fmt 4703 Sfmt 4703 E:\FR\FM\07MRN1.SGM 07MRN1 khammond on DSKJM1Z7X2PROD with NOTICES 12663Federal Register / Vol. 87, No. 44 / Monday, March 7, 2022 / Notices 10 See 19 CFR 351.309; see also 19 CFR 351.303 (for general filing requirements). 11 See Temporary Rule Modifying AD/CVD Service Requirements Due to COVID–19; Extension of Effective Period, 85 FR 41363 (July 10, 2020). All-Others Rate Sections 703(d) and 705(c)(5)(A) of the Act provide that in the preliminary determination, Commerce shall determine an estimated all-others rate for companies not individually examined. This rate shall be an amount equal to the weighted average of the estimated subsidy rates established for those companies individually examined, excluding any zero and de minimis rates and any rates based entirely under section 776 of the Act. Pursuant to section 705(c)(5)(A)(ii) of the Act, if the individual estimated countervailable subsidy rates established for all exporters and producers individually examined are zero, de minimis or determined based entirely on facts otherwise available, Commerce may use ‘‘any reasonable method’’ to establish the estimated subsidy rate for all-other producers or exporters. In this investigation, Commerce preliminarily determined the individually estimated subsidy rate for the individually examined respondent based entirely on facts available under section 776 of the Act. Consequently, pursuant to sections 703(d) and 705(c)(5)(A)(ii) of the Act, we established the all-others rate by applying the countervailable subsidy rate assigned to the mandatory respondent. Preliminary Determination Commerce preliminarily determines that the following estimated countervailable subsidy rates exist: Company Subsidy rate (ad valorem) (percent) Chongqing Tongyao Transportation Equipment Co .............................. 265.99 CRRC Corporation Limited ............. 265.99 CRRC Qiqihar Co., Ltd ................... 265.99 China Railway Materials Group Co., Ltd ................................................ 265.99 Shaanxi Haiduo Railway Tech- nology Development Co., Ltd ...... 265.99 All Others ........................................ 265.99 Suspension of Liquidation In accordance with section 703(d)(1)(B) and (d)(2) of the Act, Commerce will direct U.S. Customs and Border Protection (CBP) to suspend liquidation of entries of subject merchandise as described in the scope of the investigation entered, or withdrawn from warehouse, for consumption on or after the date of publication of this notice in the Federal Register. Further, pursuant to 19 CFR 351.205(d), Commerce will instruct CBP to require a cash deposit equal to the rates indicated above. Disclosure Normally, Commerce discloses its calculations and analysis performed in connection with the preliminary determination to interested parties within five days of its public announcement, or if there is no public announcement, within five days of the date of publication of this notice, in accordance with 19 CFR 351.224(b). However, because Commerce preliminarily applied total AFA rates to the individually examined company, Chongqing Tongyao, and to the companies that did not respond to Commerce’s quantity and value questionnaire, and the applied AFA rates are based on rates calculated in prior proceedings, there are no calculations to disclose. Verification Because the examined respondent in this investigation did not provide information requested by Commerce and Commerce preliminarily determines that the examined respondent to have been uncooperative, we will not conduct verification. Public Comment All interested parties will have the opportunity to submit case and rebuttal briefs on the preliminary scope determination. The deadline to submit case briefs on the preliminary scope determination will be seven days after the signature date of the preliminary scope decision memorandum. Scope rebuttal briefs (which are limited to issues raised in the scope briefs) may be submitted no later than seven days after the deadline for the scope briefs. For all scope briefs and rebuttals thereto, parties must file identical documents simultaneously on the records of the ongoing AD and CVD freight rail coupler investigations. No new factual information or business proprietary information may be included in either scope briefs or rebuttal scope briefs. Case briefs or other written comments on non-scope matters may be submitted to the Assistant Secretary for Enforcement and Compliance no later than 20 days after the date of publication of the preliminary determination. Rebuttal briefs, limited to issues raised in case briefs, may be submitted no later than seven days after the deadline date for case briefs.10 Pursuant to 19 CFR 351.309(c)(2) and (d)(2), parties who submit case briefs or rebuttal briefs in this investigation are encouraged to submit with each argument: (1) A statement of the issue; (2) a brief summary of the argument; and (3) a table of authorities. Commerce has modified certain of its requirements for serving documents containing business proprietary information until further notice.11 Pursuant to 19 CFR 351.310(c), interested parties who wish to request a hearing, limited to issues raised in the case and rebuttal briefs, must submit a written request to the Assistant Secretary for Enforcement and Compliance, U.S. Department of Commerce within 30 days after the date of publication of this notice. Requests should contain the party’s name, address, and telephone number, the number of participants, whether any participant is a foreign national, and a list of the issues to be discussed. If a request for a hearing is made, Commerce intends to hold the hearing at a date and time to be determined. Parties should confirm by telephone the date, time, and location of the hearing two days before the scheduled date. International Trade Commission Notification In accordance with section 703(f) of the Act, Commerce will notify the International Trade Commission (ITC) of its determination. If the final determination is affirmative, then the ITC will determine before the later of 120 days after the date of this preliminary determination or 45 days after the final determination whether imports of freight rail couplers from China are materially injuring, or threaten material injury to, the U.S. industry. Notification to Interested Parties This determination is issued and published pursuant to sections 703(f) and 777(i) of the Act, and 19 CFR 351.205(c). Dated: February 28, 2022. Lisa W. Wang, Assistant Secretary for Enforcement and Compliance. Appendix I Scope of the Investigation The scope of this investigation covers freight rail car coupler systems and certain components thereof. Freight rail car coupler systems are composed of, at minimum, four main components (knuckles, coupler bodies, coupler yokes, and follower blocks, as specified below) but may also include other items (e.g., coupler locks, lock lift assemblies, knuckle pins, knuckle throwers, and rotors). The components covered by the investigation include: (1) E coupler bodies; (2) E/F coupler VerDate Sep<11>2014 17:50 Mar 04, 2022 Jkt 256001 PO 00000 Frm 00008 Fmt 4703 Sfmt 4703 E:\FR\FM\07MRN1.SGM 07MRN1 khammond on DSKJM1Z7X2PROD with NOTICES 12664 Federal Register / Vol. 87, No. 44 / Monday, March 7, 2022 / Notices bodies; (3) F coupler bodies; (4) E yokes; (5) F yokes; (6) E knuckles; (7) F knuckles; (8) E type follower blocks; and (9) F type follower blocks, as set forth by the Association of American Railroads (AAR). The freight rail coupler components are included within the scope of the investigation when imported individually, or in some combination thereof, such as in the form of a coupler fit (a coupler body and knuckle assembled together), independent from a coupler system. Subject freight rail car coupler systems and components are included within the scope whether finished or unfinished, whether imported individually or with other subject or non-subject components, whether assembled or unassembled, whether mounted or unmounted, or if joined with non-subject merchandise, such as other non-subject system parts or a completed rail car. Finishing includes, but is not limited to, arc washing, welding, grinding, shot blasting, heat treatment, machining, and assembly of various components. When a subject coupler system or subject components are mounted on or to other non-subject merchandise, such as a rail car, only the coupler system or subject components are covered by the scope. The finished products covered by the scope of this investigation meet or exceed the AAR specifications of M–211, ‘‘Foundry and Product Approval Requirements for the Manufacture of Couplers, Coupler Yokes, Knuckles, Follower Blocks, and Coupler Parts’’ or AAR M–215 ‘‘Coupling Systems,’’ or other equivalent domestic or international standards (including any revisions to the standard(s)). The country of origin for subject coupler systems and components, whether fully assembled, unfinished or finished, or attached to a rail car, is the country where the subject coupler components were cast or forged. Subject merchandise includes coupler components as defined above that have been further processed or further assembled, including those coupler components attached to a rail car in third countries. Further processing includes, but is not limited to, arc washing, welding, grinding, shot blasting, heat treatment, painting, coating, priming, machining, and assembly of various components. The inclusion, attachment, joining, or assembly of non-subject components with subject components or coupler systems either in the country of manufacture of the in-scope product or in a third country does not remove the subject components or coupler systems from the scope. The coupler systems that are the subject of this investigation are currently classifiable in the Harmonized Tariff Schedule of the United States (HTSUS) statistical reporting number 8607.30.1000. Unfinished subject merchandise may also enter under HTSUS statistical reporting number 7326.90.8688. Subject merchandise attached to finished rail cars may also enter under HTSUS statistical reporting numbers 8606.10.0000, 8606.30.0000, 8606.91.0000, 8606.92.0000, 8606.99.0130, 8606.99.0160, or under subheading 9803.00.5000 if imported as an Instrument of International Traffic. These HTSUS subheadings are provided for convenience and customs purposes only; the written description of the scope of the investigation is dispositive. Appendix II List of Topics Discussed in the Preliminary Decision Memorandum I. Summary II. Background III. Scope Comments IV. Scope of the Investigation V. Use of Facts Otherwise Available and Adverse Inferences VI. Analysis of Programs VII. Recommendation [FR Doc. 2022–04692 Filed 3–4–22; 8:45 am] BILLING CODE 3510–DS–P DEPARTMENT OF COMMERCE International Trade Administration Civil Nuclear Trade Advisory Committee; Meeting AGENCY : International Trade Administration, U.S. Department of Commerce. ACTION : Notice of a partially closed Federal Advisory Committee meeting. SUMMARY : This notice sets forth the schedule and proposed agenda for a partially closed meeting of the Civil Nuclear Trade Advisory Committee (CINTAC). DATES : The meeting is scheduled for Thursday, April 21, 2022, from 10:00 a.m. to 3:00 p.m. Eastern Daylight Time (EDT). The deadline for members of the public to register to participate, including requests to make comments during the meeting and for auxiliary aids, or to submit written comments for dissemination prior to the meeting, is 5:00 p.m. EDT on Friday, April 15, 2022. ADDRESSES : The meeting will be held virtually via Microsoft Teams. Requests to register to participate (including to speak or for auxiliary aids) and any written comments should be submitted via email to Mr. Jonathan Chesebro, Office of Energy & Environmental Industries, International Trade Administration, at jonathan.chesebro@ trade.gov. FOR FURTHER INFORMATION CONTACT : Mr. Jonathan Chesebro, Office of Energy & Environmental Industries, International Trade Administration (Phone: 202–482– 1297; email: jonathan.chesebro@ trade.gov). SUPPLEMENTARY INFORMATION : Background: The CINTAC was established under the discretionary authority of the Secretary of Commerce and in accordance with the Federal Advisory Committee Act, as amended (5 U.S.C. App.), in response to an identified need for consensus advice from U.S. industry to the U.S. Government regarding the development and administration of programs to expand United States exports of civil nuclear goods and services in accordance with applicable U.S. laws and regulations, including advice on how U.S. civil nuclear goods and services export policies, programs, and activities will affect the U.S. civil nuclear industry’s competitiveness and ability to participate in the international market. The Department of Commerce renewed the CINTAC charter on August 5, 2020. This meeting is being convened under the seventh charter of the CINTAC. Topics to be considered: The agenda for the CINTAC meeting on Thursday, April 21, 2022, is as follows: Closed Session (10:00 a.m.–1:00 p.m.)—Discussion of matters determined to be exempt from the provisions of the Federal Advisory Committee Act relating to public meetings found in 5 U.S.C. App. §§ (10)(a)(1) and 10(a)(3). The session will be closed to the public pursuant to Section 10(d) of FACA as amended by Section 5(c) of the Government in Sunshine Act, Public Law 94–409, and in accordance with Section 552b(c)(4) and Section 552b(c)(9)(B) of Title 5, United States Code, which authorize closure of meetings that are ‘‘likely to disclose trade secrets and commercial or financial information obtained from a person and privileged or confidential’’ and ‘‘likely to significantly frustrate implementation of a proposed agency action,’’ respectively. The part of the meeting that will be closed will address (1) nuclear cooperation agreements; (2) encouraging ratification of the Convention on Supplementary Compensation for Nuclear Damage; and (3) identification of specific trade barriers impacting the U.S. civil nuclear industry. Public Session (1:00 p.m.–3:00 p.m.)—Discuss work of the subcommittees, review of deliberative recommendations, and opportunity to hear from members of the public. Members of the public wishing to attend the public session of the meeting must notify Mr. Chesebro at the contact information above by 5:00 p.m. EDT on Friday, April 15, 2022 in order to pre- register to participate. Please specify any requests for reasonable accommodation at least five business days in advance of the meeting. Last minute requests will be accepted but may not be possible to fill. A limited VerDate Sep<11>2014 17:50 Mar 04, 2022 Jkt 256001 PO 00000 Frm 00009 Fmt 4703 Sfmt 4703 E:\FR\FM\07MRN1.SGM 07MRN1 khammond on DSKJM1Z7X2PROD with NOTICES ──────────────────────────────────────────────────────────── === Determination – AD – Preliminary - China === 14511Federal Register / Vol. 87, No. 50 / Tuesday, March 15, 2022 / Notices 11 See Final Rule, 86 FR at 52335. 1 See Freight Rail Coupler Systems and Certain Components Thereof from the People’s Republic of China: Initiation of Less-Than-Fair-Value Investigation, 86 FR 58864 (October 25, 2021) (Initiation Notice). 2 See Memorandum, ‘‘Decision Memorandum for the Preliminary Determination in the Less-Than- Fair-Value Investigation of Freight Rail Coupler Systems and Certain Components Thereof from the People’s Republic of China,’’ dated concurrently with, and hereby adopted by, this notice (Preliminary Decision Memorandum). 3 See Antidumping Duties; Countervailing Duties, Final Rule, 62 FR 27296, 27323 (May 19, 1997) (Preamble). 4 See Initiation Notice, 86 FR 58865. 5 See Strato Inc. (Strato)’s Letter, ‘‘Strato Scope Comments: Antidumping & Countervailing Duty Investigation of Freight Rail Coupler Systems and Components Thereof from the People’s Republic of China,’’ dated November 8, 2021; see also Wabtec Corporation’s (Wabtec’s) Letter, ‘‘Certain Freight Rail Coupler Systems and Components Thereof from the People’s Republic of China: Comment on Continued Commerce may update an annual inquiry service list at any time as needed based on interested parties’ amendments to their entries of appearance to remove or otherwise modify their list of members and representatives, or to update contact information. Any changes or announcements pertaining to these procedures will be posted to the ACCESS website at https:// access.trade.gov. Special Instructions for Petitioners and Foreign Governments In the Final Rule, Commerce stated that, ‘‘after an initial request and placement on the annual inquiry service list, both petitioners and foreign governments will automatically be placed on the annual inquiry service list in the years that follow.’’ 11 Accordingly, as stated above, the petitioners and foreign governments should submit their initial entry of appearance after publication of this notice in order to appear in the first annual inquiry service list for those orders for which they qualify as an interested party. Pursuant to 19 CFR 351.225(n)(3), the petitioners and foreign governments will not need to resubmit their entries of appearance each year to continue to be included on the annual inquiry service list. However, the petitioners and foreign governments are responsible for making amendments to their entries of appearance during the annual update to the annual inquiry service list in accordance with the procedures described above. Notifications to Interested Parties This notice constitutes the countervailing duty orders with respect to granular PTFE resin from India and Russia pursuant to section 706(a) of the Act. Interested parties can find a list of countervailing duty orders currently in effect at http://enforcement.trade.gov/ stats/iastats1.html. These orders are issued and published in accordance with section 706(a) of the Act and 19 CFR 351.211(b). Dated: March 9, 2022. Lisa W. Wang, Assistance Secretary for Enforcement and Compliance. Appendix—Scope of the Orders The product covered by these orders is granular polytetrafluoroethylene (PTFE) resin. Granular PTFE resin is covered by the scope of these orders whether filled or unfilled, whether or not modified, and whether or not containing co-polymer, additives, pigments, or other materials. Also included is PTFE wet raw polymer. The chemical formula for granular PTFE resin is C2F4, and the Chemical Abstracts Service (CAS) Registry number is 9002–84–0. Subject merchandise includes material matching the above description that has been finished, packaged, or otherwise processed in a third country, including by filling, modifying, compounding, packaging with another product, or performing any other finishing, packaging, or processing that would not otherwise remove the merchandise from the scope of the orders if performed in the country of manufacture of the granular PTFE resin. The product covered by these orders does not include dispersion or coagulated dispersion (also known as fine powder) PTFE. PTFE further processed into micropowder, having particle size typically ranging from 1 to 25 microns, and a melt-flow rate no less than 0.1 gram/10 minutes, is excluded from the scope of these orders. Granular PTFE resin is classified in the Harmonized Tariff Schedule of the United States (HTSUS) under subheading 3904.61.0010. Subject merchandise may also be classified under HTSUS subheading 3904.69.5000. Although the HTSUS subheadings and CAS Number are provided for convenience and customs purposes, the written description of the scope is dispositive. [FR Doc. 2022–05419 Filed 3–14–22; 8:45 am] BILLING CODE 3510–DS–P DEPARTMENT OF COMMERCE International Trade Administration [A–570–143] Freight Rail Coupler Systems and Certain Components Thereof From the People’s Republic of China: Preliminary Affirmative Determination of Sales at Less-Than-Fair Value AGENCY : Enforcement and Compliance, International Trade Administration, Department of Commerce. SUMMARY : The Department of Commerce (Commerce) preliminarily determines that freight rail coupler systems and certain components thereof (freight rail couplers) from the People’s Republic of China (China) are being, or are likely to be, sold in the United States at less- than-fair value (LTFV). The period of investigation is January 1, 2021, through June 30, 2021. Interested parties are invited to comment on this preliminary determination. DATES : Applicable March 15, 2022. FOR FURTHER INFORMATION CONTACT : Kabir Archuletta, AD/CVD Operations, Office V, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482–2593. SUPPLEMENTARY INFORMATION : Background This preliminary determination is made in accordance with section 733(b) of the Tariff Act of 1930, as amended (the Act). Commerce published the notice of initiation of this investigation on October 25, 2021. 1 For a complete description of the events that followed the initiation of this investigation, see the Preliminary Decision Memorandum. 2 A list of topics included in the Preliminary Decision Memorandum is included as Appendix II to this notice. The Preliminary Decision Memorandum is a public document and is on file electronically via Enforcement and Compliance’s Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS). ACCESS is available to registered users at https:// access.trade.gov. In addition, a complete version of the Preliminary Decision Memorandum can be accessed directly at https://access.trade.gov/public/ FRNoticesListLayout.aspx. Scope of the Investigation The products covered by this investigation are freight rail coupler systems and certain components thereof from China. For a complete description of the scope of this investigation, see Appendix I. Scope Comments In accordance with the Preamble to Commerce’s regulations, 3 the Initiation Notice set aside a period of time for parties to raise issues regarding product coverage (i.e., scope).4 In November 2021, we received timely scope comments from two interested parties,5 VerDate Sep<11>2014 21:10 Mar 14, 2022 Jkt 256001 PO 00000 Frm 00072 Fmt 4703 Sfmt 4703 E:\FR\FM\15MRN1.SGM 15MRN1 khammond on DSKJM1Z7X2PROD with NOTICES 14512 Federal Register / Vol. 87, No. 50 / Tuesday, March 15, 2022 / Notices the Proposed Scope of the Investigation,’’ dated November 8, 2021. 6 The petitioner is the Coalition of Freight Coupler Producers. See Petitioner’s Letter, ‘‘Freight Rail Car Coupler Systems and Certain Components Thereof from the People’s Republic of China: Rebuttal Scope Comments,’’ dated November 18, 2021. 7 See Commerce’s Letter, ‘‘Less-Than-Fair Value Investigation of Freight Rail Coupler Systems and Certain Components Thereof from the People’s Republic of China: Request for Additional Scope Comments,’’ dated February 11, 2022. 8 See Strato’s Letter, ‘‘Response to Scope Questions: Antidumping and Countervailing Duty Investigation of Freight Rail Coupler Systems and Certain Components Thereof from the People’s Republic of China (A–570–143/C–570–144),’’ dated February 22, 2022; see also Wabtec’s Letter, ‘‘Certain Freight Rail Coupler Systems and Components Thereof from the People’s Republic of China: Additional Scope Comments’’ dated February 22, 2022; see also Petitioner’s Letter, ‘‘Freight Rail Car Coupler Systems and Certain Components Thereof from the People’s Republic of China: Petitioner’s Response to Request for Scope Comments,’’ dated February 22, 2022; see also Strato’s Letter, ‘‘Strato, Inc., Reply to Petitioners Response to Scope Questions: Antidumping and Countervailing Duty Investigation of Freight Rail Coupler Systems and Certain Components Thereof from the People’s Republic of China (A–570–143/ C–570–144),’’ dated March 1, 2022; see also Wabtec’s Letter, ‘‘Certain Freight Rail Coupler Systems and Components Thereof from the People’s Republic of China: Rebuttal Scope Comments,’’ dated March 1, 2022; see also Petitioner’s Letter, ‘‘Freight Rail Car Coupler Systems and Certain Components Thereof from the People’s Republic of China: Petitioner’s Rebuttal Response to Strato and Wabtec’s Additional Scope Comments,’’ dated March 1, 2022. 9 See Initiation Notice, 86 FR at 58868 (‘‘Commerce requires that respondents from China submit a response to both the Q&V questionnaire and the separate rate application by the respective deadlines in order to receive consideration for separate-rate status’’). 10 See Initiation Notice, 86 FR 58868. 11 See Enforcement and Compliance’s Policy Bulletin No. 05.1, regarding, ‘‘Separate-Rates Practice and Application of Combination Rates in Antidumping Investigations involving Non-Market Economy Countries,’’ (April 5, 2005) (Policy Bulletin 05.1), available on Commerce’s website at http://enforcement.trade.gov/policy/bull05-1.pdf. 12 See Preliminary Decision Memorandum. 13 See Preliminary Decision Memorandum at 11– 12. as well as timely rebuttal scope comments from the petitioner. 6 In February and March 2022, at our request, 7 we received additional information, as well as additional comments, from interested parties regarding merchandise under consideration attached to rail cars. 8 Because this information was submitted in close proximity to this preliminary determination, we intend to evaluate it and issue a decision regarding the scope of this investigation after this preliminary determination. Methodology Commerce is conducting this investigation in accordance with section 731 of the Act. Pursuant to sections 776(a) and (b) of the Act, we have preliminarily relied upon facts otherwise available, with adverse inferences (AFA) for the China-wide entity. The China-wide entity includes both companies selected for individual examination, because they failed to respond to Commerce’s questionnaire, and all other exporters who responded to Commerce’s quantity and value (Q&V) questionnaire, because they failed to submit a separate rate application, as instructed in the Initiation Notice.9 Because no companies are eligible for a rate separate from the China-wide entity, all exporters of Chinese freight rail couplers are preliminarily found to be part of the China-wide entity. We assigned the highest margin alleged in the petition (i.e., 147.11 percent) to the China-wide entity as AFA, pursuant to sections 776(a) and (b) of the Act. For a full description of the methodology underlying the preliminary determination, see the Preliminary Decision Memorandum. Combination Rates In the Initiation Notice, Commerce stated that it would calculate producer/ exporter combination rates for the respondents that are eligible for a separate rate in this investigation.10 Policy Bulletin 05.1 describes this practice.11 In this case, because no companies qualified for a separate rate, producer/exporter combination rates were not calculated for this preliminary determination.12 Preliminary Determination Commerce preliminarily determines that the following estimated dumping margins exist: Exporter/producer Estimated dumping margin (percent) Estimated dumping margin adjusted for export subsidy offset(s) (percent) China-Wide Entity .................................................................................................................... 147.11 116.70 Suspension of Liquidation In accordance with section 733(d)(2) of the Act, Commerce will direct U.S. Customs and Border Protection (CBP) to suspend liquidation of entries of subject merchandise, as described in Appendix I, entered, or withdrawn from warehouse, for consumption on or after the date of publication of this notice in the Federal Register. Further, pursuant to section 733(d)(1)(B) of the Act and 19 CFR 351.205(d), Commerce will instruct CBP to require a cash deposit equal to the weighted average amount by which normal value exceeds U.S. price, as indicated in the chart above, as follows: (1) For all Chinese exporters of subject merchandise, the cash deposit rate will be equal to the estimated dumping margin established for the China-wide entity; and (2) for all third-county exporters of subject merchandise, the cash deposit rate is also the cash deposit rate applicable to the China-wide entity. These suspension of liquidation instructions will remain in effect until further notice. To determine the cash deposit rate, Commerce normally adjusts the estimated weighted-average dumping margin by the amount of domestic subsidy pass-through and export subsidies determined in a companion countervailing duty (CVD) proceeding when CVD provisional measures are in effect. Accordingly, where Commerce has made a preliminary affirmative determination for domestic subsidy pass-through or export subsidies, Commerce has offset the calculated estimated weighted-average dumping margin by the appropriate rate(s). As discussed in the Preliminary Decision Memorandum, we made no adjustment for domestic subsidy pass-through. As further explained in the Preliminary Decision Memorandum, we made an adjustment for export subsidies found in the companion CVD investigation.13 The adjusted rate may be found in the ‘‘Preliminary Determination’’ section chart above. Should provisional measures in the companion CVD investigation expire prior to the expiration of provisional measures in this LTFV investigation, Commerce will direct CBP to begin collecting cash deposits at a rate equal to the estimated weighted-average VerDate Sep<11>2014 21:10 Mar 14, 2022 Jkt 256001 PO 00000 Frm 00073 Fmt 4703 Sfmt 4703 E:\FR\FM\15MRN1.SGM 15MRN1 khammond on DSKJM1Z7X2PROD with NOTICES 14513Federal Register / Vol. 87, No. 50 / Tuesday, March 15, 2022 / Notices 14 See 19 CFR 351.309; see also 19 CFR 351.303 (for general filing requirements). 15 See Temporary Rule Modifying AD/CVD Service Requirements Due to COVID–19; Extension of Effective Period, 85 FR 41363 (July 10, 2020). dumping margin calculated in this preliminary determination unadjusted for export subsidies at the time the CVD provisional measures expire. These suspension of liquidation instructions will remain in effect until further notice. Disclosure Normally, Commerce discloses to interested parties the calculations performed in connection with a preliminary determination within five days of its public announcement or, if there is no public announcement, within five days of the date of publication of this notice, in accordance with 19 CFR 351.224(b). However, because Commerce preliminarily determined that all companies are part of the China-wide entity and assigned as AFA to the China-wide entity a rate that is based solely on the margin alleged in the petition, there are no calculations to disclose. Verification Because the mandatory respondents in this investigation did not provide information requested by Commerce by the established deadline and Commerce preliminarily determines in accordance with section 776(b) of the Act that each of the mandatory respondents has been uncooperative, verification will not be conducted. Public Comment Case briefs or other written comments on non-scope matters may be submitted to the Assistant Secretary for Enforcement and Compliance no later than 30 days after the date of publication of the preliminary determination. Rebuttal briefs, limited to issues raised in case briefs, may be submitted no later than seven days after the deadline date for case briefs.14 Pursuant to 19 CFR 351.309(c)(2) and (d)(2), parties who submit case briefs or rebuttal briefs in this investigation are encouraged to submit with each argument: (1) A statement of the issue; (2) a brief summary of the argument; and (3) a table of authorities. Commerce has modified certain of its requirements for serving documents containing business proprietary information until further notice.15 All interested parties will have the opportunity to submit case and rebuttal briefs on the post-preliminary scope determination. The deadline to submit case briefs on the post-preliminary scope decision will be seven days after the signature date of the post- preliminary scope determination memorandum. Rebuttal scope briefs (which are limited to issues raised in the scope briefs) may be submitted no later than seven days after the deadline for the scope briefs. For all scope briefs and rebuttals thereto, parties must file identical documents simultaneously on the records of the ongoing AD and CVD freight rail coupler investigations. No new factual information or business proprietary information may be included in either scope briefs or rebuttal scope briefs. Pursuant to 19 CFR 351.310(c), interested parties who wish to request a hearing, limited to issues raised in the case and rebuttal briefs, must submit a written request to the Assistant Secretary for Enforcement and Compliance, U.S. Department of Commerce, within 30 days after the date of publication of this notice. Requests should contain the party’s name, address, and telephone number, the number of participants, whether any participant is a foreign national, and a list of the issues to be discussed. If a request for a hearing is made, Commerce intends to hold the hearing at a date and time to be determined. Parties should confirm by telephone the date, time, and location of the hearing two days before the scheduled date. Final Determination Section 735(a)(1) of the Act and 19 CFR 351.210(b)(1) provide that Commerce will issue the final determination within 75 days after the date of its preliminary determination. Accordingly, Commerce will make its final determination no later than 75 days after the signature date of this preliminary determination. International Trade Commission Notification In accordance with section 733(f) of the Act, Commerce will notify the International Trade Commission (ITC) of its preliminary determination. If the final determination is affirmative, the ITC will determine before the later of 120 days after the date of this preliminary determination or 45 days after the final determination whether these imports are materially injuring, or threaten material injury to, the U.S. industry. Notification to Interested Parties This determination is issued and published in accordance with sections 733(f) and 777(i)(1) of the Act, and 19 CFR 351.205(c). Dated: March 8, 2022. Lisa W. Wang, Assistant Secretary for Enforcement and Compliance. Appendix I—Scope of the Investigation The scope of this investigation covers freight rail car coupler systems and certain components thereof. Freight rail car coupler systems are composed of, at minimum, four main components (knuckles, coupler bodies, coupler yokes, and follower blocks, as specified below) but may also include other items (e.g., coupler locks, lock lift assemblies, knuckle pins, knuckle throwers, and rotors). The components covered by the investigation include: (1) E coupler bodies; (2) E/F coupler bodies; (3) F coupler bodies; (4) E yokes; (5) F yokes; (6) E knuckles; (7) F knuckles; (8) E type follower blocks; and (9) F type follower blocks, as set forth by the Association of American Railroads (AAR). The freight rail coupler components are included within the scope of the investigation when imported individually, or in some combination thereof, such as in the form of a coupler fit (a coupler body and knuckle assembled together), independent from a coupler system. Subject freight rail car coupler systems and components are included within the scope whether finished or unfinished, whether imported individually or with other subject or non-subject components, whether assembled or unassembled, whether mounted or unmounted, or if joined with non-subject merchandise, such as other non-subject system parts or a completed rail car. Finishing includes, but is not limited to, arc washing, welding, grinding, shot blasting, heat treatment, machining, and assembly of various components. When a subject coupler system or subject components are mounted on or to other non-subject merchandise, such as a rail car, only the coupler system or subject components are covered by the scope. The finished products covered by the scope of this investigation meet or exceed the AAR specifications of M–211, ‘‘Foundry and Product Approval Requirements for the Manufacture of Couplers, Coupler Yokes, Knuckles, Follower Blocks, and Coupler Parts’’ or AAR M–215 ‘‘Coupling Systems,’’ or other equivalent domestic or international standards (including any revisions to the standard(s)). The country of origin for subject coupler systems and components, whether fully assembled, unfinished or finished, or attached to a rail car, is the country where the subject coupler components were cast or forged. Subject merchandise includes coupler components as defined above that have been further processed or further assembled, including those coupler components attached to a rail car in third countries. Further processing includes, but is not limited to, arc washing, welding, grinding, shot blasting, heat treatment, painting, coating, priming, machining, and assembly of various components. The inclusion, attachment, joining, or assembly of non-subject components with subject components or coupler systems either in the country of manufacture of the in-scope product or in a third country does not remove the subject VerDate Sep<11>2014 21:10 Mar 14, 2022 Jkt 256001 PO 00000 Frm 00074 Fmt 4703 Sfmt 4703 E:\FR\FM\15MRN1.SGM 15MRN1 khammond on DSKJM1Z7X2PROD with NOTICES 14514 Federal Register / Vol. 87, No. 50 / Tuesday, March 15, 2022 / Notices 1 See Granular Polytetrafluoroethylene Resin from India: Final Determination of Sales at Less Than Fair Value and Final Affirmative Determination of Critical Circumstances, 87 FR 3772 (January 25, 2022); see also Granular Polytetrafluoroethylene Resin from the Russian Federation: Final Determination of Sales at Less Than Fair Value, 87 FR 3774 (January 25, 2022). 2 See ITC Notification Letter, Investigation Nos. 701–TA–663–664 and 731–TA–1555–1556 (Final) dated March 8, 2022 (ITC Notification Letter). 3 Id. 4 See Granular Polytetrafluoroethylene Resin from India: Preliminary Affirmative Determination of Sales at Less Than Fair Value, Preliminary Affirmative Determination of Critical Circumstances, Postponement of Final Determination, and Extension of Provisional Measures, 86 FR 49299 (September 2, 2021) (India Preliminary Determination); and Granular Polytetrafluoroethylene Resin from the Russian Federation: Preliminary Affirmative Determination of Sales at Less Than Fair Value, Postponement of Final Determination, and Extension of Provisional Measures, 86 FR 49297 (September 2, 2021) (Russia Preliminary Determination) (collectively, Preliminary Determinations). components or coupler systems from the scope. The coupler systems that are the subject of this investigation are currently classifiable in the Harmonized Tariff Schedule of the United States (HTSUS) statistical reporting number 8607.30.1000. Unfinished subject merchandise may also enter under HTSUS statistical reporting number 7326.90.8688. Subject merchandise attached to finished rail cars may also enter under HTSUS statistical reporting numbers 8606.10.0000, 8606.30.0000, 8606.91.0000, 8606.92.0000, 8606.99.0130, 8606.99.0160, or under subheading 9803.00.5000 if imported as an Instrument of International Traffic. These HTSUS subheadings are provided for convenience and customs purposes only; the written description of the scope of the investigation is dispositive. Appendix II—List of Topics Discussed in the Preliminary Decision Memorandum I. Summary II. Background III. Period of Investigation IV. Scope Comments V. Discussion of the Methodology VI. Adjustment Under Section 777A(f) of the Act VII. Adjustment to Cash Deposit Rate for Export Subsidies VIII. ITC Notification IX. Recommendation [FR Doc. 2022–05381 Filed 3–14–22; 8:45 am] BILLING CODE 3510–DS–P DEPARTMENT OF COMMERCE International Trade Administration [A–533–899, A–821–829] Granular Polytetrafluoroethylene Resin From India and the Russian Federation: Antidumping Duty Orders AGENCY : Enforcement and Compliance, International Trade Administration, Department of Commerce. SUMMARY : Based on affirmative final determinations by the Department of Commerce (Commerce) and the International Trade Commission (ITC), Commerce is issuing antidumping duty orders on granular polytetrafluoroethylene (PTFE) resin from India and the Russian Federation (Russia). DATES : Applicable March 15, 2022. FOR FURTHER INFORMATION CONTACT : Alexis Cherry at (202) 482–0607 (India); and Jaron Moore at (202) 482–3640 (Russia); AD/CVD Operations, Office VIII, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230. SUPPLEMENTARY INFORMATION : Background On January 25, 2022, Commerce published in the Federal Register its affirmative final determinations in the less-than-fair-value (LTFV) investigations of granular PTFE resin from India and Russia. 1 On March 8, 2022, the ITC notified Commerce of its final determinations, pursuant to section 735(d) of the Tariff Act of 1930, as amended (the Act), that an industry in the United States is materially injured within the meaning of section 735(b)(1)(A)(i) of the Act by reason of LTFV imports of granular PTFE resin from India and Russia, and of its determination that critical circumstances do not exist with respect to dumped imports of granular PTFE resin from India. 2 Scope of the Orders The product covered by these orders is granular PTFE resin from India and Russia. For a complete description of the scope of these orders, see the Appendix to this notice. Antidumping Duty Orders On March 8, 2022, in accordance with section 735(d) of the Act, the ITC notified Commerce of its final determinations in these investigations, in which it found that an industry in the United States is materially injured by reason of imports of granular PTFE resin from India and Russia. 3 Therefore, in accordance with section 735(c)(2) of the Act, Commerce is issuing these antidumping duty orders. Because the ITC determined that imports of granular PTFE resin from India and Russia are materially injuring a U.S. industry, unliquidated entries of such merchandise from India and Russia, entered or withdrawn from warehouse for consumption, are subject to the assessment of antidumping duties. Therefore, in accordance with section 736(a)(1) of the Act, Commerce will direct U.S. Customs and Border Protection (CBP) to assess, upon further instruction by Commerce, antidumping duties equal to the amount by which the normal value of the merchandise exceeds the export price (or constructed export price) of the merchandise, for all relevant entries of granular PTFE resin from India and Russia. With the exception of entries occurring after the expiration of the provisional measures period and before publication of the ITC’s final affirmative injury determinations, as further described below, antidumping duties will be assessed on unliquidated entries of granular PTFE resin from India and Russia entered, or withdrawn from warehouse, for consumption, on or after September 2, 2021, the date of publication of the Preliminary Determinations in the Federal Register.4 Critical Circumstances With regard to the ITC’s negative critical circumstances determination on imports of granular PTFE resin from India, we will instruct CBP to lift suspension and to refund any cash deposits made to secure the payment of estimated antidumping duties with respect to entries of the subject merchandise from India entered, or withdrawn from warehouse, for consumption on or after June 4, 2021 (i.e., 90 days prior to the date of the publication of the India Preliminary Determination), but before September 2, 2021 (i.e., the date of publication of the India Preliminary Determination). Continuation of Suspension of Liquidation Except as noted in the ‘‘Provisional Measures’’ section of this notice, in accordance with section 736 of the Act, Commerce will instruct CBP to continue to suspend liquidation on all relevant entries of granular PTFE resin from India and Russia. These instructions suspending liquidation will remain in effect until further notice. Commerce will also instruct CBP to require cash deposits equal to the estimated weighted-average dumping margins indicated in the tables below, adjusted by the export subsidy offset. Accordingly, effective on the date of publication in the Federal Register of the notice of the ITC’s final affirmative injury determinations, CBP will require, at the same time as importers would normally deposit estimated duties on subject merchandise, a cash deposit VerDate Sep<11>2014 21:10 Mar 14, 2022 Jkt 256001 PO 00000 Frm 00075 Fmt 4703 Sfmt 4703 E:\FR\FM\15MRN1.SGM 15MRN1 khammond on DSKJM1Z7X2PROD with NOTICES
Investigation 701-TA-670 is a U.S. International Trade Commission countervailing duty (CVD) proceeding on Freight Rail Coupler Systems and Components from China; Inv. Nos. 701-TA-670 and 731-TA-1570 (Final) from China. The ITC determines whether U.S. industry is materially injured (or threatened) by imports under investigation; Commerce determines whether dumping or subsidization is occurring. Both findings are required for an AD/CVD order to be issued.
701-TA-670 is in the final phase, with status completed. Final phase — the ITC's final determination on injury, after Commerce issues its final dumping/subsidy determination. An affirmative final determination from both agencies triggers issuance of an AD/CVD order.
Not yet. 701-TA-670 has not produced an AD/CVD order in Tandom's catalog. If both Commerce and the ITC issue affirmative final determinations, an order would issue and link to this investigation. Until then, no cash deposits apply.
Tandom guides relevant to AD/CVD investigations
Cash deposit cascade, separate rates, all-others, and PRC-wide rates. Worked example on case A-570-910 (galvanized welded steel pipe from China) with three exporter-specific rates.
Open resource
Scope text is authoritative; the HTS list is illustrative. Read scope, find past rulings, and file a 19 CFR 351.225 inquiry. Worked example on case A-570-106 (wooden cabinets from China).
Open resource
The USITC publishes investigation determinations and milestones on its Investigations Data Service (IDS) at ids.usitc.gov. Tandom's catalog re-syncs from IDS daily; new phases, votes, and determinations appear here within 24 hours of USITC publication.
A practical workflow for checking antidumping and countervailing duty exposure on a US entry. For brokers and ops teams who need the answer before filing.
Open resource