Steel Nails from China; Inv. No. 731-TA-1114 (Review)

=== USITC PUB 4442 === U.S. International Trade Commission Publication 4442 December 2013 Washington, DC 20436 Steel Nails from China Investigation No. 731-TA-1114 (Review) U.S. International Trade Commission COMMISSIONERS Irving A. Williamson, Chairman Shara L. Aranoff Dean A. Pinkert David S. Johanson Meredith M. Broadbent F. Scott Kieff Robert B. Koopman Staff assigned Address all communications to Secretary to the Commission United States International Trade Commission Washington, DC 20436 Director of Operations Michael Szustakowski, Investigator Gerald Houck, Industry Analyst Nataline Viray-Fung, Attorney Douglas Corkran, Supervisory Investigator Special assistance from Douglas Thibeau, Intern Samuel Brecker, Intern U.S. International Trade Commission Washington, DC 20436 www.usitc.gov Publication 4442 December 2013 Steel Nails from China Investigation No. 731-TA-1114 (Review) CONTENTS Page i Determination ......................................................................................................................... 1 Views of the Commission ......................................................................................................... 3 Information obtained in the review ....................................................................................... I‐1 Introduction............................................................................................................................... I‐1 Background ............................................................................................................................ I‐1 The original investigations..................................................................................................... I‐2 Commerce’s reviews ............................................................................................................. I‐3 Previous and related title VII investigations.......................................................................... I‐4 The product ............................................................................................................................... I‐8 Commerce’s scope ................................................................................................................ I‐8 U.S. tariff treatment .............................................................................................................. I‐9 Domestic like product and domestic industry .................................................................... I‐10 Description and uses ........................................................................................................... I‐10 Production process .............................................................................................................. I‐11 Interchangeability and customer and producer perceptions ............................................. I‐13 Channels of distribution ...................................................................................................... I‐13 Pricing and related information .......................................................................................... I‐13 The industry in the United States ........................................................................................... I‐15 U.S. producers ..................................................................................................................... I‐15 U.S. producers’ trade and financial data ............................................................................. I‐16 U.S. imports and apparent consumption ................................................................................ I‐18 U.S. importers ...................................................................................................................... I‐18 U.S. imports ......................................................................................................................... I‐18 Ratio of imports to U.S. production .................................................................................... I‐22 Apparent U.S. consumption and market shares ................................................................. I‐22 CONTENTS Page ii The industry in China............................................................................................................... I‐26 Background .......................................................................................................................... I‐26 Capacity and production ..................................................................................................... I‐26 Exports ................................................................................................................................. I‐27 Tariff or non‐tariff barriers to trade .................................................................................... I‐29 The global market ................................................................................................................... I‐30 Appendixes A. Summary data from the original investigation ................................................................. A‐1 Note.—Information that would reveal confidential operations of individual concerns may not be published and therefore has been deleted. Such deletions are indicated by asterisks. UNITED STATES INTERNATIONAL TRADE COMMISSION Investigation No. 731‐TA‐1114 (Review) Steel Nails from China DETERMINATION On the basis of the record1 developed in the subject five‐year review, the United States International Trade Commission (Commission) determines, pursuant to section 751(c) of the Tariff Act of 1930 (19 U.S.C. ' 1675(c)), that revocation of the antidumping duty order on steel nails from China would be likely to lead to continuation or recurrence of material injury to an industry in the United States within a reasonably foreseeable time. BACKGROUND The Commission instituted this review on July 1, 2013 (78 F.R. 40172) and determined on October 21, 2013 that it would conduct an expedited review (78 F.R. 68472, November 14, 2013). 1 The record is defined in sec. 207.2(f) of the Commission=s Rules of Practice and Procedure (19 CFR ' 207.2(f)). 3 Views of the Commission Based on the record in this five‐year review, we determine under section 751(c) of the Tariff Act of 1930, as amended (“the Tariff Act”), that revocation of the antidumping duty order on certain steel nails from China would likely lead to continuation or recurrence of material injury to an industry in the United States within a reasonably foreseeable time. I. Background The original investigation of steel nails from China was instituted in response to a petition filed on May 29, 2007 by Davis Wire Corp., Gerdau Ameristeel Corp., Maze Nails, Mid Continent Nail Corp. (“Mid Continent”), Treasure Coast Fasteners, Inc., and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union. 1 The period of investigation (“POI”) was January 1, 2005 to December 31, 2007. In July 2008, the Commission unanimously determined that an industry in the United States was materially injured by reason of imports of certain steel nails from China that the U.S. Department of Commerce found had been sold at less than fair value.2 Commerce issued an antidumping duty order covering the subject merchandise on August 1, 2008. 3 The Commission instituted this review effective July 1, 2013. 4 The Commission received one substantive response to the notice of institution from Mid Continent. 5 It did not receive a response from any respondent interested party. On October 21, 2013, the Commission found Mid Continent’s response to the notice of institution to be individually adequate, the domestic interested party group response to be adequate, and the respondent interested party group response to be inadequate. The Commission did not find any circumstances that would warrant conducting a full review and determined that it would conduct an expedited review pursuant to section 751(c)(3) of the Tariff Act.6 1 Confidential Report (“CR”) at I‐3, Public Report (“PR”) at I‐2‐3. 2 Certain Steel Nails from China, Inv. No. 731‐TA‐1114 (Final), USITC Pub. 4022 (July 2008) (“Original Determination”); Certain Steel Nails from China, 73 Fed. Reg. 43474 (July 25, 2008) (final determination). 3 Certain Steel Nails from the People’s Republic of China, 73 Fed. Reg. 44961 (Aug. 1, 2008) (antidumping duty order) (“Order”). 4 Steel Nails from China: Institution of a Five‐Year Review, 78 Fed. Reg. 40172 (July 3, 2013). 5 Mid Continent Response to Notice Initiating Sunset Review, July 31, 2013 (“Response”). Mid Continent provided industry data from four additional domestic producers, one of which was unidentified. In making our determination, we rely solely on the data from the identified domestic producers. We have examined the data from the unidentified domestic producer, and note that its use would not have affected our conclusions. 6 See Explanation of Commission Determination on Adequacy, EDIS Doc. No. 520554 (Oct. 28, 2013). 4 II. Domestic Like Product and Industry A. Domestic Like Product In making its determination under section 751(c) of the Tariff Act, the Commission defines the “domestic like product” and the “industry.” 7 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 under this subtitle.” 8 The Commission’s practice in five‐year reviews is to examine the domestic like product definition from the original investigation and consider whether the record indicates any reason to revisit the prior findings. 9 Commerce has defined the imported merchandise within the scope of the order under review as follows: {C}ertain steel nails having a shaft length up to 12 inches. Certain steel nails include, but are not limited to, nails made of round wire and nails that are cut. Certain steel nails may be of one piece construction or constructed of two or more pieces. Certain steel nails may be produced from any type of steel, and have a variety of finishes, heads, shanks, point types, shaft lengths and shaft diameters. Finishes include, but are not limited to, coating in vinyl, zinc (galvanized, whether by electroplating or hot dipping one or more times), phosphate cement, and paint. Head styles include, but are not limited to, flat, projection, cupped, oval, brad, headless, double, countersunk, and sinker. Shank styles include, but are not limited to, smooth, barbed, screw threaded, ring shank and fluted shank styles. Screw‐threaded nails subject to this proceeding are driven using direct force and not by turning the fastener using a tool that engages with the head. Point styles include, but are not limited to, diamond, blunt, needle, chisel and no point. Finished nails may be sold in bulk, or they may be collated into strips or coils using materials such as plastic, paper, or wire. Certain steel nails subject to the order are currently classified under the Harmonized Tariff Schedule of the United States (‘‘HTSUS’’) subheadings 7317.00.55, 7317.00.65 and 7317.00.75. 7 19 U.S.C. § 1677(4)(A). 8 19 U.S.C. § 1677(10); 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); Timken Co. v. United States, 913 F. Supp. 580, 584 (Ct. Int’l Trade 1996); Torrington Co. v. United States, 747 F. Supp. 744, 748‐49 (Ct. Int’l Trade 1990), aff’d, 938 F.2d 1278 (Fed. Cir. 1991); see also S. Rep. No. 249, 96 th Cong., 1 st Sess. 90‐91 (1979). 9 See, e.g., Internal Combustion Industrial Forklift Trucks from Japan, Inv. No. 731‐TA‐377 (Second Review), USITC Pub. 3831 at 8‐9 (Dec. 2005); Crawfish Tail Meat from China, Inv. No. 731‐TA‐ 752 (Review), USITC Pub. 3614 at 4 (July 2003); Steel Concrete Reinforcing Bar from Turkey, Inv. No. 731‐ TA‐745 (Review), USITC Pub. 3577 at 4 (Feb. 2003). 5 Excluded from the scope of the order are steel roofing nails of all lengths and diameter, whether collated or in bulk, and whether or not galvanized. Steel roofing nails are specifically enumerated and identified in ASTM Standard F 1667 (2005 revision) as Type I, Style 20 nails. Also excluded from the scope are the following steel nails: 1) Non‐collated (i.e., hand‐driven or bulk), two‐piece steel nails having plastic or steel washers (caps) already assembled to the nail, having a bright or galvanized finish, a ring, fluted or spiral shank, an actual length of 0.500” to 8”, inclusive; and an actual shank diameter of 0.1015” to 0.166”, inclusive; and an actual washer or cap diameter of 0.900” to 1.10”, inclusive; 2) Non‐collated (i.e., hand‐driven or bulk), steel nails having a bright or galvanized finish, a smooth, barbed or ringed shank, an actual length of 0.500” to 4”, inclusive; an actual shank diameter of 0.1015” to 0.166”, inclusive; and an actual head diameter of 0.3375” to 0.500”, inclusive; 3) Wire collated steel nails, in coils, having a galvanized finish, a smooth, barbed or ringed shank, an actual length of 0.500” to 1.75”, inclusive; an actual shank diameter of 0.116” to 0.166”, inclusive; and an actual head diameter of 0.3375” to 0.500”, inclusive; and 4) Non‐collated (i.e., hand‐driven or bulk), steel nails having a convex head (commonly known as an umbrella head), a smooth or spiral shank, a galvanized finish, an actual length of 1.75” to 3”, inclusive; an actual shank diameter of 0.131” to 0.152”, inclusive; and an actual head diameter of 0.450” to 0.813”, inclusive. Also excluded from the scope of the order are corrugated nails. A corrugated nail is made of a small strip of corrugated steel with sharp points on one side. Also excluded from the scope of the order are fasteners suitable for use in powder‐actuated hand tools, not threaded and threaded, which are currently classified under HTSUS 7317.00.20 and 7317.00.30. Also excluded from the scope of the order are thumb tacks, which are currently classified under HTSUS 7317.00.10.00. Also excluded from the scope of the order are certain brads and finish nails that are equal to or less than 0.0720 inches in shank diameter, round or rectangular in cross section, between 0.375 inches and 2.5 inches in length, and that are collated with adhesive or polyester film tape backed with a heat seal adhesive. Also excluded from the scope of the order are fasteners having a case hardness greater than or equal to 50 HRC, a carbon content greater than or equal to 0.5 percent, a round head, a secondary reduced‐diameter raised head section, a centered shank, and a smooth symmetrical point, suitable for use in gas‐actuated hand tools.10 10 Steel Nails from China: Final Results of Expedited First Sunset Review of the Antidumping Duty Order, 78 Fed. Reg. 34989 (June 11, 2013). The scope definition set out above is different from Commerce’s scope definition in the original investigation. Shortly after the original investigation, Commerce initiated a changed circumstances review at Mid Continent’s request and decided to revoke (Continued…) 6 The steel nails covered by the scope are produced from low‐carbon, stainless, or hardenable medium to high‐carbon steel. They are packaged either in bulk (loose in a container) or collated (joined into strips for use in pneumatic nailing tools). While most nails are produced from a single piece of steel, some are produced from two or more pieces.11 The nails covered by the scope of this review are used for a wide variety of purposes, including residential construction for flooring and roofing, and industrial uses such as pallet construction. 12 In the original investigation, the Commission found a single domestic like product consisting of steel nails, which was coextensive with the scope of the investigation. 13 Mid Continent has stated that it agrees with the Commission’s domestic like product definition, which is identical to Commerce’s amended scope from the original investigation. 14 There is no new information obtained during this review that would suggest any reason to revisit the Commission’s domestic like product definition in the original determination. 15 Therefore, we define the domestic like product as certain steel nails, coextensive with Commerce’s scope definition. (…Continued) the order with regard to four specific products: (1) non‐collated (i.e., hand‐driven or bulk), two‐piece steel nails having plastic or steel washers (caps) already assembled to the nail, having a bright or galvanized finish, a ring, fluted or spiral shank, an actual length of 0.500” to 8”, inclusive; and an actual shank diameter of 0.1015” to 0.166”, inclusive; and an actual washer or cap diameter of 0.900” to 1.10”, inclusive; (2) non‐collated (i.e., hand‐driven or bulk), steel nails having a bright or galvanized finish, a smooth, barbed or ringed shank, an actual length of 0.500” to 4”, inclusive; an actual shank diameter of 0.1015” to 0.166”, inclusive; and an actual head diameter of 0.3375” to 0.500”, inclusive; (3) wire collated steel nails, in coils, having a galvanized finish, a smooth, barbed or ringed shank, an actual length of 0.500” to 1.75”, inclusive; an actual shank diameter of 0.116” to 0.166”, inclusive; and an actual head diameter of 0.3375” to 0.500”, inclusive; and (4) non‐collated (i.e., hand‐driven or bulk), steel nails having a convex head (commonly known as an umbrella head), a smooth or spiral shank, a galvanized finish, an actual length of 1.75” to 3”, inclusive; an actual length of 1.75” to 3”, inclusive; an actual shank diameter of 0.131” to 0.152”, inclusive; and an actual head diameter of 0.450” to 0.813”, inclusive. Certain Steel Nails From the People’s Republic of China: Final Results of Antidumping Duty Changed Circumstances Review, 76 Fed. Reg. 30101 (May 24, 2011). The effective date of the partial revocation is an issue still in litigation. See Itochu Bldg. Products v. United States, 733 F.3d 1140 (Fed. Cir. 2013). 11 CR at I‐14, PR at I‐10. 12 CR at I‐14,17, PR at I‐10,12. 13 Original Determination, USITC Pub. 4022 at 5‐6. The Commission found that subject steel nails, whether used by the construction industry, woodworkers, or other sectors, share certain general physical characteristic and uses, are interchangeable in most end uses, are sold to end users and distributors, are produced by similar production processes, and are generally perceived to be similar products. Id. at 5. 14 Response at 8 and 23; Certain Steel Nails from China: Mid Continent’s Comments on the Record (Oct. 23, 2013) (“Comments”) at 2‐3. 15 Response at Exhibit 1. 7 B. Domestic Industry Section 771(4)(A) of the Tariff Act defines the relevant industry as the domestic “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.” 16 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. In the original determination, the Commission excluded three domestic producers, Senco, Stanley Fastening Systems, LP (“Stanley”), and Specialty Fastening (“Specialty”), from the domestic industry pursuant to the related parties provision. It found that each firm’s primary interest had shifted from domestic production to importation. 17 There are no related party issues in this review.18 Accordingly, we define the domestic industry to include all domestic producers of steel nails. III. Revocation of the Antidumping Duty Order Would Likely Lead to Continuation or Recurrence of Material Injury Within a Reasonably Foreseeable Time A. Legal Standards In a five‐year review conducted under section 751(c) of the Tariff Act, Commerce will revoke an antidumping or countervailing duty order unless: (1) it makes a determination that dumping or subsidization is likely to continue or recur and (2) the Commission makes a determination that revocation of the antidumping or countervailing duty order “would be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time.”19 The Uruguay Round Agreements Act Statement of Administrative Action (“SAA”) states that “under the likelihood standard, the Commission will engage in a counterfactual analysis; it must decide the likely impact in the reasonably foreseeable future of an important change in the status quo – the revocation or termination of a proceeding and the elimination of its restraining effects on volumes and prices of imports.” 20 Thus, the likelihood standard is prospective in 16 19 U.S.C. § 1677(4)(A). The definitions in 19 U.S.C. § 1677 are applicable to the entire subtitle containing the antidumping and countervailing duty laws, including 19 U.S.C. §§ 1675 and 1675a. See 19 U.S.C. § 1677. 17 Original Determination, USITC Pub. 4022 at 7‐8. 18 ***. See generally, Response. ***. 19 19 U.S.C. § 1675a(a). 20 Uruguay Round Agreements Act Statement of Administrative Action, H.R. Doc. 103‐316, vol. I at 883‐84 (1994) (“SAA”). The SAA states that “{t}he likelihood of injury standard applies regardless of the nature of the Commission’s original determination (material injury, threat of material injury, or (Continued…) 8 nature.21 The U.S. Court of International Trade has found that “likely,” as used in the five‐year review provisions of the Act, means “probable,” and the Commission applies that standard in five‐year reviews.22 The statute states that “the Commission shall consider that the effects of revocation or termination may not be imminent, but may manifest themselves only over a longer period of time.”23 According to the SAA, a “‘reasonably foreseeable time’ will vary from case‐to‐case, but normally will exceed the ‘imminent’ timeframe applicable in a threat of injury analysis in original investigations.” 24 Although the standard in a five‐year review is not the same as the standard applied in an original investigation, it contains some of the same fundamental elements. The statute provides that the Commission is to “consider the likely volume, price effect, and impact of imports of the subject merchandise on the industry if the orders are revoked or the suspended investigation is terminated.” 25 It directs the Commission to take into account its prior injury determination, whether any improvement in the state of the industry is related to the order or the suspension agreement under review, whether the industry is vulnerable to material injury if the orders are revoked or a suspension agreement is terminated, and any findings by Commerce regarding duty absorption pursuant to 19 U.S.C. § 1675(a)(4).26 The statute further (…Continued) material retardation of an industry). Likewise, the standard applies to suspended investigations that were never completed.” Id. at 883. 21 While the SAA states that “a separate determination regarding current material injury is not necessary,” it indicates that “the Commission may consider relevant factors such as current and likely continued depressed shipment levels and current and likely continued {sic} prices for the domestic like product in the U.S. market in making its determination of the likelihood of continuation or recurrence of material injury if the order is revoked.” SAA at 884. 22 See NMB Singapore Ltd. v. United States, 288 F. Supp. 2d 1306, 1352 (Ct. Int’l Trade 2003) (“‘likely’ means probable within the context of 19 U.S.C. § 1675(c) and 19 U.S.C. § 1675a(a)”), aff’d mem., 140 Fed. Appx. 268 (Fed. Cir. 2005); Nippon Steel Corp. v. United States, 26 CIT 1416, 1419 (2002) (same); Usinor Industeel, S.A. v. United States, 26 CIT 1402, 1404 nn.3, 6 (2002) (“more likely than not” standard is “consistent with the court’s opinion;” “the court has not interpreted ‘likely’ to imply any particular degree of ‘certainty’”); Indorama Chemicals (Thailand) Ltd. v. United States, 26 CIT 1059, 1070 (2002) (“standard is based on a likelihood of continuation or recurrence of injury, not a certainty”); Usinor v. United States, 26 CIT 767, 794 (2002) (“‘likely’ is tantamount to ‘probable,’ not merely ‘possible’”). 23 19 U.S.C. § 1675a(a)(5). 24 SAA at 887. Among the factors that the Commission should consider in this regard are “the fungibility or differentiation within the product in question, the level of substitutability between the imported and domestic products, the channels of distribution used, the methods of contracting (such as spot sales or long‐term contracts), and lead times for delivery of goods, as well as other factors that may only manifest themselves in the longer term, such as planned investment and the shifting of production facilities.” Id. 25 19 U.S.C. § 1675a(a)(1). 26 19 U.S.C. § 1675a(a)(1). Commerce has not made any duty absorption findings with respect to the subject order. See generally CR at I‐3‐5, PR at I‐3‐4. 9 provides that the presence or absence of any factor that the Commission is required to consider shall not necessarily give decisive guidance with respect to the Commission’s determination.27 In evaluating the likely volume of imports of subject merchandise if the order under review is revoked, the Commission is directed to consider whether the likely volume of imports would be significant either in absolute terms or relative to production or consumption in the United States. 28 The Commission must consider “all relevant economic factors,” including four enumerated factors: (1) any likely increase in production capacity or existing unused production capacity in the exporting country; (2) existing inventories of the subject merchandise, or likely increases in inventories; (3) the existence of barriers to the importation of the subject merchandise into countries other than the United States; and (4) 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. 29 In evaluating the likely price effects of subject imports if the order under review is revoked, the Commission is directed to consider whether there is likely to be significant underselling by the subject imports as compared to the domestic like product and whether the subject imports are likely to enter the United States at prices that otherwise would have a significant depressing or suppressing effect on the price of the domestic like product.30 In evaluating the likely impact of imports of subject merchandise if the order under review is revoked, the Commission is directed to consider all relevant economic factors that are likely to have a bearing on the state of the industry in the United States, including but not limited to the following: (1) likely declines in output, sales, market share, profits, productivity, return on investments, and utilization of capacity; (2) likely negative effects on cash flow, inventories, employment, wages, growth, ability to raise capital, and investment; and (3) likely negative effects on the existing development and production efforts of the industry, including efforts to develop a derivative or more advanced version of the domestic like product.31 All relevant economic factors are to be considered within the context of the business cycle and the conditions of competition that are distinctive to the industry. As instructed by the statute, we have considered the extent to which any improvement in the state of the domestic industry is related to the order under review and whether the industry is vulnerable to material injury upon revocation. 32 27 19 U.S.C. § 1675a(a)(5). Although the Commission must consider all factors, no one factor is necessarily dispositive. SAA at 886. 28 19 U.S.C. § 1675a(a)(2). 29 19 U.S.C. § 1675a(a)(2)(A‐D). 30 See 19 U.S.C. § 1675a(a)(3). The SAA states that “{c}onsistent with its practice in investigations, in considering the likely price effects of imports in the event of revocation and termination, the Commission may rely on circumstantial, as well as direct, evidence of the adverse effects of unfairly traded imports on domestic prices.” SAA at 886. 31 19 U.S.C. § 1675a(a)(4). 32 The SAA states that in assessing whether the domestic industry is vulnerable to injury if the order is revoked, 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 (Continued…) 10 No respondent interested party participated in this expedited review. The record, therefore, contains limited information with respect to the steel nail industry in China. There is also limited information regarding the steel nail market in the United States during the period of review. Accordingly, for our determination, we rely on the facts available from the original investigation and the new information on the record in this five‐year review, including data submitted in the response to the notice of institution. B. Conditions of Competition and the Business Cycle In evaluating the likely impact of the subject imports on the domestic industry if an order is revoked, the statute directs the Commission to consider all relevant economic factors “within the context of the business cycle and conditions of competition that are distinctive to the affected industry.” 33 The following conditions of competition inform our determinations. Demand Conditions. In the original investigation, the Commission found that steel nails were used primarily in the construction and industrial sectors. 34 The primary uses in construction involved the building of houses and other structures, and primary uses in industrial sectors were the manufacture of shipping crates and pallets.35 Nails were packaged either in bulk or collated form, and the Commission observed a shift in sales from bulk nails to collated nails during the original POI. 36 The Commission found that demand for steel nails was largely determined by the size of the residential and commercial construction markets, the largest end users of steel nails.37 Apparent U.S. consumption of steel nails declined steadily during the POI, from 1.2 million short tons in 2005 to 912,175 short tons in 2007, for an overall decrease of 22.7 percent.38 In this review, the information available indicates that the conditions of competition that influence demand for steel nails have not changed significantly since the original investigation. Demand for steel nails is still influenced by activity in the residential and commercial construction markets.39 U.S. housing starts, a major factor influencing overall U.S. demand for nails, declined in 2008 and by June 2013 remained at levels below those in the beginning of 2008 despite intervening increases.40 The value of private residential and non‐ residential construction also remained lower through June 2013 than at the beginning of 2008. 41 Apparent U.S. consumption of steel nails in 2012 based on data from responding (…Continued) domestic industry, they may also demonstrate that an industry is facing difficulties from a variety of sources and is vulnerable to dumped or subsidized imports.” SAA at 885. 33 19 U.S.C. § 1675a(a)(4). 34 Original Determination, USITC Pub. 4022 at 14. 35 Original Determination, USITC Pub. 4022 at 14. 36 Original Determination, USITC Pub. 4022 at 14. 37 Original Determination, USITC Pub. 4022 at 14. 38 Original Determination, USITC Pub. 4022 at 14. 39 See CR at I‐32‐34, PR at I‐24‐25. 40 CR/PR at Figure I‐3. 41 CR/PR at Figure I‐4. 11 domestic producers was *** short tons. 42 In the original investigation, apparent U.S. consumption was 1.2 million short tons in 2005, 1.1 million short tons in 2006, and 912,175 short tons in 2007. 43 Supply Conditions. In the original investigation, the Commission observed that, historically, the domestic industry supplied only a portion of the U.S. market with steel nails, with the remainder being supplied by imports.44 The Commission found that 17 domestic producers accounted for *** U.S. production of steel nails and that the domestic industry had substantial and increasing excess capacity, largely due to a decline in production during the POI. 45 The domestic industry’s share of the U.S. market declined steadily, from *** percent in 2005 to *** percent in 2007, while subject imports increased their share of the U.S. market from *** percent in 2005 to *** percent in 2007.46 Nonsubject imports’ share of the U.S. market decreased steadily, from *** percent in 2005 to *** percent in 2007. 47 With respect to supply conditions in this review, the U.S. industry has experienced additional consolidation and restructuring, but held a *** percentage of apparent U.S consumption in 2012 than at the end of the original investigation. 48 U.S. producers held *** percent of apparent U.S. consumption in 2012, compared with 23.3 percent of apparent U.S. consumption in 2005, 17.5 percent in 2006, and 15.8 percent in 2007. 49 Evidence on the record indicates that imposition of the antidumping duty order had a disciplining effect on subject imports. 50 In 2012, subject imports held *** percent of apparent U.S. consumption, compared with *** percent in 2005, *** percent in 2006, and *** percent in 2007. 51 Imports from nonsubject sources continue to be present in the U.S. market, holding *** percent of apparent U.S. consumption in 2012, compared with *** percent in 2005, *** percent in 2006, and *** percent in 2007. 52 Nonsubject sources during the period of review include a steel nail producer from China which was not subject to the antidumping duty order 42 CR/PR at Table I‐6. 43 CR/PR at Table I‐6. Apparent consumption data in the original investigation were based on a larger group of U.S. producers than the data in this review. 44 Original Determination, USITC Pub. 4022 at 15. 45 Original Determination, USITC Pub. 4022 at 15. 46 Original Determination, USITC Pub. 4022 at 15. 47 Original Determination, USITC Pub. 4022 at 15. 48 CR at I‐21, PR at I‐15‐16; CR/PR at Table I‐7. 49 CR/PR at Table I‐7. The data cited is for all reporting domestic producers for comparison purposes with the new data. (When data from the three related parties are excluded, as they were in the original investigation under the related parties provision, the domestic industry held *** percent of apparent U.S. consumption in 2005, *** percent in 2006, and *** percent in 2007. Id. at Table C‐2). 50 CR/PR at Table I‐6. 51 CR/PR at Table I‐7. 52 CR/PR at Table I‐7. 12 because Commerce found it had a de minimis margin and imports of steel nails from the United Arab Emirates (“UAE”), which became subject to an antidumping duty order in 2012. 53 Substitutability and Other Conditions. In the original investigation, the Commission found that steel nails regardless of where they were produced, were generally interchangeable within each type, size, and finish because they were produced to certain industry specifications. 54 The majority of responding U.S. producers, importers, and purchasers stated that there was a high degree of substitutability between U.S. steel nails and subject imports. 55 They also reported that there were no direct substitutes for nails and that any substitute fastening product would be usable only in certain specific applications. 56 The Commission also found that price was the single factor that most affected purchasing decisions provided the nails met the specifications required for the specific end use.57 There is nothing in the information available in this review which indicates that the substitutability between subject and domestic nails has changed since the original investigation. Steel nails continue to be manufactured in a range of sizes and finishes that generally conform to industry specifications and there is no indication that any direct substitute for steel nails has entered the market.58 Accordingly, we again find that there is generally a high degree of substitutability between domestic and subject steel nails and that price continues to be an important factor in purchasing decisions. C. Likely Volume of Subject Imports Original Investigation. In the original investigation, the Commission found that subject imports accounted for a large and increasing share of apparent U.S. consumption and increased relative to U.S. production during the period of investigation. The volume of subject imports increased from *** short tons in 2005 to *** short tons in 2006, and decreased to *** short tons in 2007.59 The market share of subject imports increased steadily from *** percent in 2005 to *** percent in 2006 and *** percent in 2007. 60 Similarly, the ratio of subject imports to U.S. production rose steadily, from *** percent in 2005 to *** percent in 2006 and *** percent in 2007. 61 53 See Certain Steel Nails from United Arab Emirates, Inv. No. 731‐TA‐1185, USITC Pub. No. 4321 (May 2012) (Final); CR at I‐10, PR at I‐7. 54 Original Determination, USITC Pub. 4022 at 15‐16. 55 Original Determination, USITC Pub. 4022 at 16. 56 Original Determination, USITC Pub. 4022 at 16. 57 Original Determination, USITC Pub. 4022 at 16. 58 CR at I‐18, PR at I‐13. 59 Original Determination, USITC Pub. 4022 at 16‐17. The Commission observed that the 2007 decrease in the volume of subject imports was attributable to the pendency of the original investigation. Id. 60 Original Determination, USITC Pub. 4022 at 17. 61 Original Determination, USITC Pub. 4022 at 17. 13 The Commission found that subject imports gained market share largely at the expense of the domestic industry. As subject imports increased their market share from 2005 to 2007, domestic producers’ market share declined steadily, dropping from *** percent in 2005 to *** percent in 2007. The Commission found that nonsubject imports also declined during the POI, both in absolute terms and relative to U.S. consumption. Accordingly, the Commission found the volume of subject imports to be significant, both in absolute terms and relative to consumption and production in the United States. 62 Current Review. In this review, the information available indicates that the order has had a disciplining effect on the volume of subject imports, which declined significantly since the imposition of the order in 2008. 63 Subject imports decreased from *** short tons in 2007 to *** short tons in 2012. 64 The record contains no current data specific to subject steel nail capacity or production because subject producers in China failed to participate or furnish information in this review. Nonetheless, the data available in the record indicate that subject producers continue to manufacture steel nails and are highly export oriented. China has been the largest exporter of nails and staples (a category that includes merchandise outside the scope of this review) since the original investigation, and the United States has been China’s largest export market for nails, tacks, and staples since 2008. 65 We find that the steel nail industry in China has the ability to increase exports of subject merchandise to the United States upon revocation, as it did during the original investigation, in light of its position as the world’s largest exporter of nails and staples. It has the incentive to do so because the United States is the world’s largest importer of nails and staples, thus making it a highly attractive export market for producers of steel nails in China. 66 The record also indicates that there are barriers to the importation of subject merchandise into countries other than the United States. Mexico and New Zealand currently maintain antidumping duties on steel nails from China.67 The scopes of the orders in other countries differ somewhat from the scope of the order currently under review. 68 However, there is sufficient overlap for us to find that there are third‐country barriers that could create further incentives for subject producers to direct exports to the U.S. market should the order under review be revoked. In light of these considerations, we find that the subject producers are likely, absent the restraining effects of the order, to direct increasing volumes of steel nails to the U.S. market, as 62 Original Determination, USITC Pub. 4022 at 17. 63 See, e.g., CR/PR at Table I‐6. 64 CR/PR at Table I‐6. 65 CR/PR at Table I‐8. The data in Table I‐8 are for HTS heading 7317, which encompasses a broader range of nails and fasteners than covered by the scope of this review. Id. 66 CR/PR at Table I‐8. 67 CR at I‐38‐39, PR at I‐29‐30. Mexico issued an antidumping duty order on concrete steel nails from China in November 29, 2004. New Zealand has maintained antidumping duties on imports of steel nails from China since June 3, 2011. 68 CR at I‐38‐39, PR at I‐29‐30. 14 they did during the original POI. We find that the likely volume of subject imports, both in absolute terms and relative to consumption in the United States, would be significant if the order were revoked. D. Likely Price Effects Original Investigation. In the original investigation, the Commission found that imports of steel nails from China had significant adverse effects on domestic prices. The Commission found price was generally the most important factor affecting purchasing decisions, but acknowledged that the record showed the majority of responding importers reported that non‐ price differences were sometimes important.69 The Commission observed that the record showed subject imports underselling domestic nails in 41 of 84 price comparisons at margins ranging from 0.1 to 32.1 percent.70 In addition, approximately 82 percent of responding purchasers reported that subject imports were priced lower than domestic steel nails. In light of these facts and the high degree of substitutability of the domestic like product and the subject imports, the Commission found the underselling to be significant. The Commission concluded that the record as a whole demonstrated that subject imports depressed domestic prices to a significant degree in light of price declines from 2005 to the first half of 2007. 71 Thus, the Commission found that subject imports had significant adverse effects on domestic prices.72 Current Review. We find that subject imports continue to be close substitutes for domestic steel nails and that price continues to be an important factor in purchasing decisions. Because no Chinese exporters responded to the notice of institution, the record of this review contains no pricing comparisons between the domestic like product and the subject imports. We find that significant underselling observed during the original investigation would likely recur if the antidumping order was revoked. This in turn would likely cause the domestic producers to cut prices or restrain price increases to avoid losing sales. Accordingly, we conclude that the subject imports would likely undersell the domestic like product to gain market share and would likely have significant adverse effects on the price of the domestic like product if the antidumping duty order was revoked. 69 Original Determination, USITC Pub. 4022 at 17‐18. 70 Original Determination, USITC Pub. 4022 at 18. 71 Original Determination, USITC Pub. 4022 at 19‐20. The Commission found that price increases in the second half of 2007 were related to the filing of the petition. See also id. at n. 130‐32 (discussing observations that the domestic industry was barely able to cover its increases in unit cost of goods sold (“COGS”) during the POI and a finding by three Commissioners that subject imports to a limited extent prevented domestic price increases that would otherwise have occurred). 72 Original Determination, USITC Pub. 4022 at 20. 15 E. Likely Impact Original Investigation. In the original investigation, the Commission found that the domestic industry’s production, capacity utilization, shipments, and net sales quantity and value all declined overall during the POI. Domestic producers’ U.S. production and U.S. shipments of steel nails declined each year for an overall decline of *** percent, respectively, from 2005 to 2007. 73 Capacity declined by *** percent from 2005 to 2007, and capacity utilization followed production and shipment trends, declining steadily throughout the POI. 74 Domestic producers’ inventories decreased over the POI in absolute terms, but increased during the POI when measured as a share of U.S. shipments, from *** percent in 2005 to *** percent in 2007. 75 The average number of production and related workers, hours worked, and wages paid also declined from 2005 to 2007. 76 The Commission also found that the domestic industry’s financial indicators declined steadily over the POI. Operating income declined in each year of the POI, with the largest decline reported between 2005 and 2006, coinciding with a *** percent increase in subject imports. 77 The domestic industry’s ratio of operating income to net sales declined from *** percent in 2005 to *** percent in 2006 and *** percent in 2007. 78 Net sales measured by quantity and value showed similar decreases during the POI. 79 Finally, the Commission found that the domestic industry experienced a cost/price squeeze over the POI, as reflected in an increase in the ratio of COGS to net sales. 80 The Commission concluded that subject imports had an adverse impact on the condition of the domestic industry during the period of investigation. It found that the absolute and relative volumes of subject imports were significant and that the subject imports gained market share at the expense of the domestic industry, undersold the domestic like product, and depressed prices to a significant degree. The Commission further concluded that the depressed prices and reduced sales volumes caused declines in the domestic industry’s financial performance over the period of investigation. 81 Current Review. The information available concerning the domestic industry’s condition in this review consists of the data that the domestic producers provided in response to the notice of institution. Because this is an expedited review, we have only limited information 73 Original Determination, USITC Pub. 4022 at 21. 74 Original Determination, USITC Pub. 4022 at 21. Capacity utilization decreased from *** percent in 2005 to *** percent in 2006 and *** percent in 2007. 75 Original Determination, USITC Pub. 4022 at 21. 76 Original Determination, USITC Pub. 4022 at 21. The average number of production workers declined steadily from *** in 2005 to *** in 2007. Hours worked decreased from *** to *** over the POI. Wages paid decreased overall from $*** to $*** during the POI. 77 Original Determination, USITC Pub. 4022 at 21‐22. 78 Original Determination, USITC Pub. 4022 at 21‐22. 79 Original Determination, USITC Pub. 4022 at 22. 80 Original Determination, USITC Pub. 4022 at 22. 81 Original Determination, USITC Pub. 4022 at 23. 16 with respect to the domestic industry’s financial performance. The limited record is insufficient for us to make a finding as to whether the domestic industry is vulnerable to the continuation or recurrence of material injury in the event of revocation of the order. The information on the record indicates that the capacity of reporting U.S. steel nail producers was *** short tons in 2012. 82 Reported production was *** short tons in 2012; accordingly, capacity utilization was *** percent. 83 U.S. shipments were *** short tons in 2012. 84 Domestic producers reported an operating income of $*** from sales of $***, resulting in an operating margin of *** percent in 2012. 85 During the original POI, the domestic industry’s share of apparent U.S. consumption ranged between *** and *** percent. 86 Its share of apparent U.S. consumption in 2012 was *** percent. 87 Based on the information on the record, we find that should the order be revoked, the likely significant volume and price effects of the subject imports would likely have a significant adverse impact on the production, shipments, sales, market share and revenues of the domestic industry. These declines would likely have a direct adverse impact on the domestic industry’s profitability. We also have considered the role of factors other than subject imports, including the presence of nonsubject imports, so as not to attribute injury from other factors to the subject imports. Nonsubject imports, which include nails from a Chinese producer not subject to the order and nails from the UAE subject to an antidumping duty order, have been present in increasing quantities in the U.S. market since the order was imposed in 2008. However, we observe that during the original investigation, subject imports steadily gained market share in the U.S. market while both nonsubject and domestic steel nails lost market share. In light of this, we find that, upon revocation, the significant volume of subject imports would again likely take market share from both the domestic industry and the nonsubject imports and would likely reduce overall price levels in the U.S. market. This is consistent with our finding above that revocation would have adverse effects on the domestic industry’s output and revenues. Accordingly, we conclude that, if the antidumping duty order were revoked, subject imports would likely have a significant adverse impact on the domestic industry within a reasonably foreseeable time. IV. Conclusion For the above reasons, we determine that revocation of the antidumping duty order on steel nails from China would likely lead to continuation or recurrence of material injury to an industry in the United States within a reasonably foreseeable time. 82 CR/PR at Table I‐2. 83 CR/PR at Table I‐2. 84 CR/PR at Table I‐6. 85 CR/PR at Table I‐2. 86 CR/PR at Table C‐2. 87 CR/PR at Table I‐7. I‐1 INFORMATION OBTAINED IN THE REVIEW INTRODUCTION Background Effective July 1, 2013, the U.S. International Trade Commission (“Commission” or “USITC”) gave notice, pursuant to section 751(c) of the Tariff Act of 1930, as amended (“the Act”),1 that it had instituted a review to determine whether revocation of the antidumping duty order on certain steel nails (“nails”) from China would likely lead to the continuation or recurrence of material injury to a domestic industry.2 3 On October 21, 2013, the Commission determined that it would conduct an expedited review pursuant to section 751(c)(3) of the Act.4 The following tabulation presents information relating to the background and schedule of this proceeding: 1 19 U.S.C. 1675(c). 2 Steel Nails from China; Institution of a Five‐Year Review, 78 FR 40172, July 3, 2013. All interested parties were requested to respond to this notice by submitting the information requested by the Commission. 3 In accordance with section 751(c) of the Act, the U.S. Department of Commerce (“Commerce”) published a notice of initiation of a five‐year review of the subject antidumping duty order concurrently with the Commission’s notice of institution. Initiation of Five‐Year (“Sunset”) Review, 78 FR 39256, July 1, 2013. 4 Steel Nails From China: Scheduling of an Expedited Five‐Year Review Concerning the Antidumping Duty Order on Steel Nails From China, 78 FR 68472, November 14, 2013. The Commission received one submission in response to its notice of institution in the subject review. It was filed on behalf of Mid Continent Nail Corporation (“Mid Continent”), a U.S. producer of the domestic like product. Mid Continent’s response to the notice of institution included data for four additional U.S. producers (with the inclusion of Mid Continent, collectively the “five producers”), three of which were identified on a confidential basis (with the inclusion of Mid Continent, collectively the “four identified producers”) and one that was not identified. The identified producers are: ***. The four identified U.S. producers are believed to account for a substantial portion of production of the domestic like product in 2012. Where appropriate, data for the domestic industry are presented separately for the four identified producers and for the five producers. The Commission did not receive any responses from producers in China or importers of the subject merchandise from China. The Commission determined that the domestic interested party group response to its notice of institution was adequate and that the respondent interested party group response was inadequate. In the absence of respondent interested party responses and any other circumstances that would warrant the conduct of full reviews, the Commission determined to conduct expedited reviews. I‐2 Effective date Action August 1, 2008 Commerce’s antidumping duty order on certain steel nails from China (73 FR 44961, August 1, 2008) http://www.gpo.gov/fdsys/pkg/FR-2008-08-01/pdf/E8-17714.pdf July 1, 2013 Commission’s institution of first five-year reviews (78 FR 40172, July 3, 2013) http://www.gpo.gov/fdsys/pkg/FR-2013-07-03/pdf/2013-16103.pdf July 1, 2013 Commerce’s initiation of first five-year reviews (78 FR 39256, July 1, 2013) http://www.gpo.gov/fdsys/pkg/FR-2013-07-01/pdf/2013-15708.pdf October 21, 2013 Commission’s determination to conduct an expedited five-year review (78 FR 68472, November 14, 2013) http://www.gpo.gov/fdsys/pkg/FR-2013-11-14/pdf/2013-27209.pdf (The press release announcing the Commission’s determination concerning adequacy and the conduct of an expedited review can be found at http://www.usitc.gov/press_room/news_release/2013/er1021ll2.htm. A summary of the Commission’s votes concerning the adequacy and the conduct of an expedited review can be found at (http://pubapps2.usitc.gov/sunset/caseProfSuppAttmnt/download/11581). The Commission’s explanation of its determination can be found at (http://pubapps2.usitc.gov/sunset/caseProfSuppAttmnt/download/11580). November 20, 2013 Commerce’s final result of expedited five-year review of the antidumping duty order (78 FR 69644, November 20, 2013) http://www.gpo.gov/fdsys/pkg/FR-2013-11-20/pdf/2013-27824.pdf December 11, 2013 Commission’s vote December 19, 2013 Commission’s determination The original investigations The original investigation resulted from a petition filed on May 29, 2007, by five U.S. producers5 of nails alleging that an industry in the United States was materially injured and threatened with material injury by reason of less‐than‐fair‐value (“LTFV”) imports of nails from China and the United Arab Emirates (“UAE”).6 7 On June 16, 2008, Commerce determined that 5 The five petitioner producers were: Davis Wire Corp., Irwindale, California; Gerdau Ameristeel Corp., Tampa, Florida; Maze Nails, Peru, Illinois; Mid Continent Nail Corp., Poplar Bluff, Missouri; and Treasure Coast Fasteners, Inc., Fort Pierce, Florida. 6 On June 22, 2007, the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union was added as a co‐petitioner. 7 On June 16, 2008, Commerce found that certain steel nails from the UAE were not being, or were not likely to be, sold in the United States at LTFV, and thus certain steel nails from the UAE were no longer considered to be subject merchandise. Certain Steel Nails from the United Arab Emirates: Notice of Final Determination of Sales at Not Less Than Fair Value, 73 FR 33985, June 16, 2008. Accordingly, the Commission terminated the final phase of its investigation regarding the UAE. Certain Steel Nails From the United Arab Emirates, 73 FR 39041, July 8, 2008. I‐3 imports of nails from China were being sold at LTFV. 8 On July 21, 2008, the Commission issued its determination that an industry in the United States was materially injured by reason of LTFV imports of nails from China.9 Commerce issued an antidumping duty order of nails from China on August 1, 2008. 10 Commerce’s reviews Commerce has conducted two inquiries regarding the scope of the order, but neither has been resolved due to ensuing litigation. As a result of a changed circumstances review initiated at Mid Continent’s request, Commerce decided to revoke the order with respect to four specific products. 11 Itochu Building Products supported the exclusion of these products but contested the effective date of the partial revocation, a question that remains unresolved.12 Separately, Commerce also conducted a scope inquiry concerning whether certain tool kits imported by Target are within the scope of the order because the tool kits contained some subject brass‐coated steel nails in addition to other products outside the scope of the order.13 This question also remains unresolved. 8 Certain Steel Nails from the People’s Republic of China: Final Determination of Sales at Less Than Fair Value and Partial Affirmative Determination of Critical Circumstances, 73 FR 33977, June 16, 2008. 9 Certain Steel Nails from China: Determination, 73 FR 43474, July 25, 2008. 10 Notice of Antidumping Duty Order: Certain Steel Nails From the People’s Republic of China, 73 FR 44961, August 1, 2008. 11 Commerce decided to revoke the order with respect to four types of nails: (1) non‐collated (i.e., hand‐driven or bulk), two‐piece steel nails having plastic or steel washers (caps) already assembled to the nail, having a bright or galvanized finish, a ring, fluted or spiral shank, an actual length of 0.500” to 8”, inclusive; and an actual shank diameter of 0.1015” to 0.166”, inclusive; and an actual washer or cap diameter of 0.900” to 1.10”, inclusive; (2) non‐collated (i.e., hand‐driven or bulk), steel nails having a bright or galvanized finish, a smooth, barbed or ringed shank, an actual length of 0.500” to 4”, inclusive; an actual shank diameter of 0.1015” to 0.166”, inclusive; and an actual head diameter of 0.3375” to 0.500”, inclusive; (3) wire collated steel nails, in coils, having a galvanized finish, a smooth, barbed or ringed shank, an actual length of 0.500” to 1.75”, inclusive; an actual shank diameter of 0.116” to 0.166”, inclusive; and an actual head diameter of 0.3375” to 0.500”, inclusive; and (4) non‐collated (i.e., hand‐driven or bulk), steel nails having a convex head (commonly known as an umbrella head), a smooth or spiral shank, a galvanized finish, an actual length of 1.75” to 3”, inclusive; an actual length of 1.75” to 3”, inclusive; an actual shank diameter of 0.131” to 0.152”, inclusive; and an actual head diameter of 0.450” to 0.813”, inclusive. Certain Steel Nails From the People’s Republic of China: Final Results of Antidumping Duty Changed Circumstances Review, 76 FR 30101, May 24, 2011. 12 After concluding that the CIT should not have dismissed Itochu’s appeal for failure to exhaust administrative remedies, on August 19, 2013, the Federal Circuit remanded the case for further proceedings regarding the effective date of the revocation. Itochu Building Products v. United States, Ct. No. 2013‐1044 (Fed. Cir. Aug. 19, 2013) (rehearing denied November 7, 2013). 13 In August 2010, Commerce initially concluded that the tool kits were outside the scope of the order, but after two remands, in July 2012 the CIT affirmed Commerce’s finding under protest that the tool kits were within the scope. See Mid Continent Nail Corp. v. United States, 770 F. Supp.2d 1372 (Ct. (continued...) I‐4 In the recent investigation of steel nails from the UAE, the scope largely mirrored Commerce’s scope in the original investigation underlying this review but also excluded the four products at issue in the Itochu appeal.14 Commerce’s results of its expedited sunset review of the subject antidumping duty order was published in the Federal Register on November 20, 2013. 15 Commerce determined that revocation of the subject order would likely lead to continuation or recurrence of dumping margins of 21.24‐118.04 percent. Previous and related title VII investigations On November 21, 1977, a complaint was filed by Armco Steel Corp.; Atlantic Steel Co.; Bethlehem Steel Corp.; CF & I Steel Corp.; Keystone Steel & Wire Division of Keystone Consolidated Industries, Inc.; Northwestern Steel & Wire Co.; and the Penn‐Dixie Steel Corp., alleging that certain steel wire nails from Canada were being sold at LTFV.16 In November 1978, the Department of the Treasury (“Treasury”) determined that certain steel wire nails from Canada, except those produced by Tree Island Steel Co., Ltd. and the Steel Co. of Canada, Ltd., were being, or were likely to be, sold in the United States at LTFV. 17 In February 1979, the Commission determined that the domestic steel wire nails industry was not, nor likely to be, injured and was not prevented from being established, by reason of the importation of certain steel wire nails from Canada that were being, or were likely to be, sold at LTFV. 18 On April 20, 1979, Treasury, in conjunction with its administration of a “Trigger Price Mechanism,” self‐initiated an investigation to determine whether certain steel wire nails from Korea were being sold at LTFV. The investigation was subsequently terminated under the Antidumping Act, but was continued under section 731 of the Tariff Act of 1930, as amended. Commerce found that certain steel wire nails from Korea were being sold at LTFV. 19 However, the Commission determined that the domestic steel wire nails industry was not materially (…continued) Int’l Trade 2011); Mid Continent Nail Corp. v. United States, 825 F. Supp.2d 1290 (Ct. Int’l Trade 2012); Mid Continent Nail Corp. v. United States, Slip Op. 12‐97, 34 I.T.R.D. 1839 (Ct. Int’l Trade Jul. 25, 2012). In July 2013, however, the Federal Circuit vacated the CIT’s decision and remanded the case so that Commerce could refine its methodology to analyze so‐called “mixed media” questions and then explain how it applies the revised methodology to analyze whether the tool kits are within the scope of the order. See Mid Continent Nail Corp. v. United States, 2013 WL 3746081 (Fed. Cir. Jul. 18, 2013) (remand result pending). 14 Certain Steel Nails from the United Arab Emirates, Inv. No. 731‐TA‐1185 (Final), USITC Publication 4022, July 2008, pp. 5‐6. 15 Certain Steel Nails From the People’s Republic of China: Final Results of Expedited First Sunset Review of the Antidumping Duty Order, 78 FR 69644, November 20, 2013. 16 42 FR 64942, December 29, 1977. 17 43 FR 51743, November 6, 1978. 18 Steel Wire Nails From Canada, Investigation No. AA1921‐189, USITC Publication 937, February 1979. 19 45 FR 34941, May 23, 1980. I‐5 injured and was not threatened with material injury, and that the establishment of an industry in the United States was not materially retarded, by reason of imports of certain steel wire nails from Korea.20 On July 2, 1981, Commerce self‐initiated antidumping investigations concerning imports of certain steel wire nails from Japan, Korea, and Yugoslavia pursuant to additional information developed under the trigger price mechanism.21 Commerce found that subject imports from these countries were likely being sold below trigger prices and, therefore, possibly at LTFV. Although the Commission made a negative determination with respect to certain steel wire nails from Korea in the previous year, the Commission found new evidence indicating that sales of Korean nails may be having an injurious effect on the domestic industry.22 The investigation of imports from Japan was subsequently terminated, while the investigation of imports from Yugoslavia resulted in a negative determination by the Commission. 23 After a final affirmative material injury determination by the Commission, an antidumping duty order was issued covering steel wire nails from Korea.24 The order against Korea was revoked effective October 1, 1984, following a Voluntary Restraint Agreement 25 concerning imports of nails from Korea.26 On January 19, 1982, Armco Inc.; Tree Island Steel, Inc.; Atlantic Steel Co.; Florida Wire and Nails; New York Wire Mills; and Virginia Wire and Fabric filed a petition alleging that certain steel wire nails from Korea were being subsidized. 27 In September 1982, however, the countervailing duty investigation was terminated following a determination by Commerce that Korean producers and exporters of nails were not receiving benefits that constituted subsidies. 28 On January 24, 1984, the United Steelworkers of America, AFL‐CIO/CLC, and Bethlehem Steel Corp. filed a petition under section 201 of the Trade Act of 1974 alleging that carbon and certain alloy steel products, including steel wire nails, were being imported into the United States in such increased quantities as to be a substantial cause of serious injury, or the threat thereof, to the domestic industry producing an article like or directly competitive with the 20 Certain Steel Wire Nails From The Republic of Korea, Investigation No. 731‐TA‐26 (Final), USITC Publication 1088, August 1980. 21 46 FR 34613, July 2, 1981. 22 46 FR 34615, July 2, 1981. 23 46 FR 41122, August 14, 1981; and Certain Steel Wire Nails From Japan, The Republic of Korea, and Yugoslavia, Investigation Nos. 731‐TA‐45, 46, and 47 (Preliminary), USITC Publication 1175, August 1981. 24 47 FR 35266, August 13, 1982. 25 On September 18, 1984, the President established a national policy for the steel industry that led to the creation of the Voluntary Restraint Agreements (“VRAs”). These VRAs established new measures limiting steel exports into the United States from certain steel‐supplying countries. 49 FR 36813, September 20, 1984. The VRAs expired on March 31, 1992. 26 50 FR 40045, October 1, 1985. 27 47 FR 6458, February 8, 1982. 28 47 FR 39549, September 8, 1982. I‐6 imported articles.29 Following the Commission’s affirmative determinations in July 1984 for several of the products, including steel wire nails, the United States negotiated various agreements to limit the importation of steel products into the United States, such as the VRAs.30 On June 5, 1985, petitions were filed alleging that certain steel wire nails from China, Poland, and Yugoslavia were being, or were likely to be, sold in the United States at LTFV. 31 The petitions concerning imports from Poland and Yugoslavia were subsequently withdrawn following VRAs with Poland and Yugoslavia with respect to exports of steel wire nails to the United States. As a result, Commerce terminated the investigations with respect to Poland and Yugoslavia. 32 The investigation with respect to China led to a finding that the domestic steel wire nails industry was materially injured by reason of LTFV imports of certain steel wire nails from China.33 On April 20, 1987, a petition was filed alleging that certain steel wire nails from New Zealand and Thailand were receiving bounties or grants.34 Commerce conducted a section 303 investigation and made affirmative findings with respect to both countries and issued countervailing duty orders covering steel wire nails from Thailand and New Zealand in October 1987. 35 On August 9, 1995, the orders were revoked by Commerce as no domestic interested party requested a review.36 On March 22, 1989, a petition was filed alleging that certain steel wire nails from Malaysia were receiving bounties or grants.37 Commerce, however, determined that no 29 Carbon and Alloy Steel Products, Investigation No. TA‐201‐51, USITC Publication 1553, July 1984, p. 7. 30 Carbon and Alloy Steel Products, Investigation No. TA‐201‐51, USITC Publication 1553, July 1984, p. 7. 31 The petitions were filed by Atlantic Steel Co.; Atlas Steel & Wire Corp.; Continental Steel Corp.; Dickson Weatherproof Nail Co.; Florida Wire & Nail Co.; Keystone Steel & Wire Co.; Northwestern Steel & Wire Co.; Virginia Wire & Fabric Co.; and Wire Products Co. 50 FR 27479, July 3, 1985. 32 51 FR 4205, February 3, 1986, and 50 FR 35281, August 30, 1985. 33 Certain Steel Wire Nails From The People’s Republic of China, Investigation No. 731‐TA‐266 (Final), USITC Publication 1842, April 1986; 51 FR 10247, March 25, 1986. An antidumping duty order on certain steel wire nails from China entered into effect on May 21, 1986 (51 FR 18640), but because of changed circumstances (“petitioners’ affirmative statement of no interest in continuation of the antidumping duty order”), the order was revoked on September 3, 1987, retroactive to January 1, 1986 (52 FR 33463). 34 The petition was filed by Air Nail Co.; Atlas Steel & Wire Corp.; CF&I Steel Corp.; Davis‐Walker Corp.; Dickson Weatherproof Nail Co.; Exposaic Industries, Inc.; Keystone Steel and Wire Co.; and Northwestern Steel & Wire Co. 52 FR 18590, May 18, 1987; 52 FR 18591, May 18, 1987. 35 52 FR 36987, October 2, 1987, and 52 FR 37196, October 5, 1987. 36 60 FR 40568, August 9, 1995. 37 The petition was filed by members of the Nail Committee of the American Wire Producers Association. 54 FR 15534, April 18, 1989. I‐7 benefits which constitute bounties or grants were being provided to Malaysian producers or exporters.38 On November 26, 1996, a petition was filed alleging that collated roofing nails imported from China, Korea, and Taiwan were being sold at LTFV. 39 These investigations led to a finding that the domestic collated roofing nails industry was threatened with material injury by reason of LTFV imports of collated roofing nails from China and Taiwan.40 The investigation with respect to collated roofing nails from Korea was terminated by the Commission following a negative determination by Commerce.41 On November 19, 1997, Commerce issued antidumping duty orders covering collated roofing nails from China and Taiwan. 42 These orders were revoked effective November 19, 2002, because no domestic interested party responded to Commerce’s notice of initiation of five‐year reviews.43 On July 3, 2001, following a request from the United States Trade Representative (“USTR”) and subsequently a request from the Senate Finance Committee, a section 201 investigation was initiated by the Commission to determine whether certain steel products were being imported into the United States in such increased quantities as to be a substantial cause of serious injury, or the threat thereof, to the domestic industry. The Commission, however, made a negative determination with respect to carbon and alloy steel nails. 44 On March 31, 2011, a petition was filed alleging that certain steel nails (“certain steel nails”) imported from the UAE were being sold at LTFV. 45 The Commission determined that an industry in the United States was materially injured by reason of imports from the UAE of certain steel nails. 46 On May 10, 2012, Commerce issued an antidumping duty order covering certain steel nails from the UAE.47 38 54 FR 36841, September 5, 1989. 39 The petition was filed by Paslode Division of Illinois Tool Works Inc. 61 FR 67306, December 20, 1996. 40 Collated Roofing Nails From China and Taiwan, Investigation Nos. 731‐TA‐757 and 759 (Final), USITC Publication 3070, November 1997. 41 62 FR 51420, October 1, 1997, and 62 FR 53799, October 16, 1997. 42 62 FR 61729, November 19, 1997, and 62 FR 61730, November 19, 1997. 43 67 FR 70578, November 25, 2002. 44 Steel, Investigation No. TA‐201‐73, USITC Publication 3479, December 2001. 45 The petition was filed by Mid Continent. 46 Certain Steel Nails from the United Arab Emirates, Inv. No. 731‐TA‐1185 (Final), USITC Publication 4022, July 2008. 47 Certain Steel Nails From the United Arab Emirates: Amended Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order, 77 FR 27421, May 10, 2012. I‐8 THE PRODUCT Commerce’s scope In its final results of the expedited first five year review of the antidumping duty order, Commerce defined the subject merchandise as: certain steel nails having a shaft length up to 12 inches. Certain steel nails include, but are not limited to, nails made of round wire and nails that are cut. Certain steel nails may be of one piece construction or constructed of two or more pieces. Certain steel nails may be produced from any type of steel, and have a variety of finishes, heads, shanks, point types, shaft lengths and shaft diameters. Finishes include, but are not limited to, coating in vinyl, zinc (galvanized, whether by electroplating or hot dipping one or more times), phosphate cement, and paint. Head styles include, but are not limited to, flat, projection, cupped, oval, brad, headless, double, countersunk, and sinker. Shank styles include, but are not limited to, smooth, barbed, screw threaded, ring shank and fluted shank styles. Screw‐threaded nails subject to this proceeding are driven using direct force and not by turning the fastener using a tool that engages with the head. Point styles include, but are not limited to, diamond, blunt, needle, chisel and no point. Finished nails may be sold in bulk, or they may be collated into strips or coils using materials such as plastic, paper, or wire. Certain steel nails subject to the order are currently classified under the Harmonized Tariff Schedule of the United States (‘‘HTSUS’’) subheadings 7317.00.55, 7317.00.65 and 7317.00.75. Excluded from the scope of the order are steel roofing nails of all lengths and diameter, whether collated or in bulk, and whether or not galvanized. Steel roofing nails are specifically enumerated and identified in ASTM Standard F 1667 (2005 revision) as Type I, Style 20 nails. Also excluded from the scope are the following steel nails: 1) Non‐collated (i.e., hand‐driven or bulk), two‐piece steel nails having plastic or steel washers (caps) already assembled to the nail, having a bright or galvanized finish, a ring, fluted or spiral shank, an actual length of 0.500” to 8”, inclusive; and an actual shank diameter of 0.1015” to 0.166”, inclusive; and an actual washer or cap diameter of 0.900” to 1.10”, inclusive; 2) Non‐collated (i.e., hand‐driven or bulk), steel nails having a bright or galvanized finish, a smooth, barbed or ringed shank, an actual length of 0.500” to 4”, inclusive; an actual shank diameter of 0.1015” to 0.166”, inclusive; and an actual head diameter of 0.3375” to 0.500”, inclusive; 3) Wire collated steel nails, in coils, having a galvanized finish, a smooth, barbed or ringed shank, an actual length of 0.500” to 1.75”, inclusive; an actual shank diameter of 0.116” to 0.166”, inclusive; and an I‐9 actual head diameter of 0.3375” to 0.500”, inclusive; and 4) Non‐collated (i.e., hand‐driven or bulk), steel nails having a convex head (commonly known as an umbrella head), a smooth or spiral shank, a galvanized finish, an actual length of 1.75” to 3”, inclusive; an actual shank diameter of 0.131” to 0.152”, inclusive; and an actual head diameter of 0.450” to 0.813”, inclusive. Also excluded from the scope of the order are corrugated nails. A corrugated nail is made of a small strip of corrugated steel with sharp points on one side. Also excluded from the scope of the order are fasteners suitable for use in powder‐actuated hand tools, not threaded and threaded, which are currently classified under HTSUS 7317.00.20 and 7317.00.30. Also excluded from the scope of the order are thumb tacks, which are currently classified under HTSUS 7317.00.10.00. Also excluded from the scope of the order are certain brads and finish nails that are equal to or less than 0.0720 inches in shank diameter, round or rectangular in cross section, between 0.375 inches and 2.5 inches in length, and that are collated with adhesive or polyester film tape backed with a heat seal adhesive. Also excluded from the scope of the order are fasteners having a case hardness greater than or equal to 50 HRC, a carbon content greater than or equal to 0.5 percent, a round head, a secondary reduced‐diameter raised head section, a centered shank, and a smooth symmetrical point, suitable for use in gas‐actuated hand tools. While the HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of the order is dispositive.48 U.S. tariff treatment The nails products that are the subject of these reviews are currently imported under the following Harmonized Tariff Schedule of the United States (“HTSUS”) subheadings: 7317.00.55 (excluding statistical reporting number 7317.00.5501), 7317.00.65, and 7317.00.75. The column 1‐general (normal trade relations) rate of duty for these products is “free”. 48 Certain Steel Nails From the People’s Republic of China: Final Results of Expedited First Sunset Review of the Antidumping Duty Order, 78 FR 69644, November 20, 2013 and Certain Steel Nails from the People’s Republic of China: Issues and Decision Memorandum for the Final Results of Expedited First Sunset Review of the Antidumping Duty Order, from Christian Marsh, Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations, to Ronald K. Lorentzen, Acting Assistant Secretary for Enforcement and Compliance, November 13, 2013. I‐10 Domestic like product and domestic industry In the final phase of the original investigation, the Commission defined a single domestic like product, coextensive with the scope of the investigation. 49 The Commission excluded three U.S. producers (Senco, Specialty Fastening, and Stanley) from the domestic industry. 50 The Commission determined that these three firms imported *** and increasing volumes of subject merchandise as their domestic production of steel nails declined, indicating that their primary interest was shifting from domestic production to importation. 51 In the final phase of the investigation, Commerce determined that exports from ITW’s related Chinese producer ITW/Paslode Fasteners (Shanghai) were not sold at LTFV. Therefore, ITW’s imports of steel nails from China were no longer subject merchandise and ITW no longer met the definition of a related party. In its notice of institution for this review, the Commission solicited comments from interested parties regarding the appropriate domestic like product and domestic industry. In Mid Continent’s response to the Commission’s notice of institution, it indicated that it agrees with the Commission’s definition of the domestic like product and domestic industry that were adopted in the original investigation. 52 No further comment on the domestic like product or domestic industry has been filed with the Commission in this proceeding. Description and uses53 Although most steel nails are produced of low‐carbon steel, nails also are produced of stainless steel (to resist corrosion) and of hardenable medium‐ to high‐carbon steel. Nails are packaged for shipment in bulk, that is, loose in a carton or other container, or collated, that is, joined with wire, paper strips, plastic strips, or glue into coils or straight strips for use in pneumatic nailing tools. Although most nails are produced from a single piece of steel, some nails are produced from two or more pieces. Examples include a nail with a decorative head, such as an upholstery nail; a masonry anchor that comprises a zinc anchor and a steel wire nail; a nail with a large thin attached head (for nailing roofing felt, for example); and a nail with a rubber or neoprene washer assembled over its shaft (to seal the nailhole in metal or fiberglass roofing or siding). 49 Certain Steel Nails from China, Inv. No. 731‐TA‐1114 (Final), USITC Publication 4022, July 2008, pp. 6‐8. 50 Ibid. 51 Certain Steel Nails from China, Inv. No. 731‐TA‐1114 (Final), Confidential Views of the Commission, p. 2. 52 Mid Continent’s Substantive Response To The Notice Of Institution, July 31, 2013, p. 8. 53 Unless otherwise noted this information is based on the following publication: Certain Steel Nails from China, Inv. No. 731‐TA‐1114 (Final), USITC Publication 4022, July 2008. I‐11 Production process54 Most steel nails are produced from steel wire, and a small proportion of steel nails are produced from steel plate and referred to as "cut nails." Some producers of wire nails use purchased steel wire as a starting raw material and are known as nonintegrated producers, whereas some producers utilize their own facilities to produce wire for nails, using steel wire rod as their starting material; these producers are called "integrated producers." Some integrated producers are further integrated through the steelmaking process, and produce steel wire rod from raw materials such as scrap, pig iron, and ferroalloys. Figure 1‐1 shows the general process for producing steel wire nails. To produce nails, wire is fed from a large coil into a nail machine that automatically straightens the wire, forms the head of the nail, and cuts the nail from the wire, simultaneously forming the point and ejecting the finished nail. Nail machines are of two general types: one, known as a "cold‐heading machine," holds the wire near its end in gripper dies and forms the head by striking the leading end of the wire, forcing the end of the wire to fill a die cavity of the desired shape. The wire is fed through the grippers, and shape cutters form the point and cut the nail free from the wire coming off of the coil. The process is repeated for each individual nail produced by the cold‐heading process. In the second type of nail machine, known as a "rotary heading machine," the wire is fed continuously and cutting rollers cut individual nail blanks, simultaneously forming the point. The nail blanks are then inserted into a die ring and the heads are formed by compression of the end of the nail between the rotating ring and a heading roller. The completed nail is then ejected from the machine. Both types of nail machines are used to produce all styles of nails, and some manufacturers have both types in their facilities. These automatic machines are capable of producing a range of nail sizes and head and point styles by changing tooling and adjustment. Nails that have helical twists, serrations, and other configurations on the shanks require an additional forming process. These nails are fed into other machines that roll, twist, stamp, or cut to required forms. These operations may also require heating of the nails before forming. After forming, nails are tumbled on themselves in rotating drums to remove particles of head flash and the whiskers, which often remain on the cut and pointed ends. The same drum may contain a medium (such as sawdust) which effects cleaning and polishing of the nails during tumbling, otherwise the tumbled nails can be transferred to units that clean the nails with solvents or vapor degreasers. After tumbling and cleaning, the nails may be given subsequent processing, such as painting, resin coating, or galvanizing. Finally, nails for use in pneumatic nailing tools are processed through automatic equipment to collate the nails using paper strips, plastic strips, fine steel wire, or adhesive. Nails for hand‐driving are packaged in bulk (loose) in cartons or in smaller count boxes, including one‐ and five‐pound boxes for mass 54 Unless otherwise noted this information is based on the following publications: Certain Steel Nails from China, Inv. No. 731‐TA‐1114 (Final), USITC Publication 4022, July 2008 and Certain Steel Nails from the United Arab Emirates, Inv. No. 731‐TA‐1185 (Final), USITC Publication 4321, May 2012. I‐12 merchandise retail repair and remodeling customers. Special packaging equipment may be used in order to pack small (one‐ and five‐pound) boxes at high speed and lowest possible cost. Figure 1-1 Steel nails: General process of producing nails Source: Certain Steel Nails from China, Inv. No. 731-TA-1114 (Final), USITC Publication 4022, July 2008, figure I-1. Cut nails are produced from plate rather than from wire and are rectangular rather than round. Cut nails are used primarily for joining to masonry or concrete. Although cut nails may be made for any carpentry use, the main use other than masonry is for flooring in applications where an antique appearance is required. Cut nails are made from high‐carbon steel plate that is sheared into strips. The strips are fed into specially designed nail machines, which shape the nails and form the heads. The cut nails are then case‐hardened in a furnace. Cut nails are packed in 50‐pound cartons (also known as large‐count industry standard boxes) on pallets for the construction trades or either 1‐pound or 5‐pound boxes for mass merchandise retail repair and remodeling customers. I‐13 Interchangeability and customer and producer perceptions In its original investigation, the Commission observed that steel nails are produced to certain industry specifications, including ICC and ASTM. The Commission noted that while “the type, size and finish may limit the interchangeability of a specific product for a particular end use, this limitation applies whether it is a U.S. product, subject import, or nonsubject import.” 55 The Commission remarked that “the record supports the conclusion that steel nails are generally interchangeable within type, size and finish, regardless of where produced.” 56 The Commission observed that “{t}he majority of responding U.S. producers, importers, and purchasers reported that the U.S. product, the subject imports, and nonsubject imports are frequently or always interchangeable” and that the parties agreed that there is a high degree of substitutability between U.S. nails and subject imports. 57 Channels of distribution During 2005‐07, the vast majority of U.S. producers’ and U.S. importers’ U.S. shipments of steel nails was shipped to distributors. For U.S. producers, distributor sales accounted for 79.8‐86.8 percent of U.S. shipments. 58 For subject importers, distributor sales accounted for *** percent of U.S. shipments.59 Data from a more recent investigation show that U.S. producers’ share of sales to distributors relative to end users has declined.60 In 2011, U.S. producers’ sales to distributors accounted for 67.4 percent of their shipments and sales to end users accounted for 32.6 percent their shipments. 61 Pricing and related information In the original investigation, the Commission collected price data for eight products. Four of the products were plastic‐strip collated nail products, two were bulk nail products, and two were wire coil collated nail products. A total of 96 quarterly net weighted‐average U.S. f.o.b. selling price comparisons were possible between the domestic and imported Chinese 55 Certain Steel Nails from China, Inv. No. 731‐TA‐1114 (Final), USITC Publication 4022, July 2008, p. 15.56 Ibid. 57 Ibid, pp. 14‐15. 58 Certain Steel Nails from China, Inv. No. 731‐TA‐1114 (Final), Staff Report, INV‐FF‐074, June 25, 2008, p. II‐2. 59 Ibid. 60 Certain Steel Nails from the United Arab Emirates, Inv. No. 731‐TA‐1185 (Final), USITC Publication 4022, July 2008, p. II‐1. 61 Ibid. I‐14 steel nails shipped to U.S. customers during 2005‐07. In total, products imported from China undersold the U.S.‐produced product in 51 of 96 possible quarterly comparisons. 62 The overall demand for steel nails depends upon the demand for a variety of end‐use applications. Steel nails are used in building houses and other structures, while in the industrial sector, nails are used to make furniture, cabinets, and crates and pallets for shipping. As a result, demand is generally related to the amount of housing‐related activity in the economy, and demand for all end uses generally tracks overall economic activity.63 Raw materials account for approximately 60 percent of the cost of steel nails. The primary raw material used in the production of steel nails in the United States is carbon steel wire. Price information regarding low‐carbon steel wire rod is show in figure I‐2. Prices for low‐ carbon steel wire rod varied greatly during 2008 and have declined slightly since the beginning of 2012. Figure I-2 Steel nails: Industrial quality low-carbon steel wire rod price series, January 2008-June 2013 Source: American Metal Market. 62 Certain Steel Nails from China, Inv. No. 731‐TA‐1114 (Final), USITC Publication 4022, July 2008, V‐ 13. Excluding the three related parties from the domestic industry, subject imports undersold the domestic like product in 50 of 96 quarterly comparisons. Further exclusion of a product with *** for which price comparisons or trends were *** shows that subject imports undersold the domestic like product in 41 of 84 quarterly comparisons. Certain Steel Nails from China, Inv. No. 731‐TA‐1114 (Final), Confidential Views of the Commission, p. 25. 63 Demand indicators appear following the discussion of apparent U.S. consumption. I‐15 THE INDUSTRY IN THE UNITED STATES U.S. producers In the original investigation, the Commission issued questionnaires to the 15 producers cited in the petition, and received questionnaire responses with usable data from all 5 petitioners, from 8 of the other 10 firms identified in the petition, and from 2 other firms that were identified after receiving the petition. 64 The five petitioners in the original investigation together accounted for *** percent of reported U.S. production of the domestic like product in 2007. In its substantive response to the Commission’s notice of institution, Mid Continent identified 10 known and currently operating steel nail producers. Table I‐1 lists the domestic interested parties (believed to account for a substantial portion of production of the domestic like product in 2012), each company’s position on the orders, production location, parent company, and share of reported production of steel nails in 2012. No U.S. producer directly imports the subject merchandise from China, and none are known to have any affiliation with subject Chinese producers of steel nails.65 The U.S. nails industry has experienced a mix of expansion, plant closure, and acquisition over the past several years. In November 2011, PrimeSource Building Products (“PrimeSource”) (a distributor of building materials) and Dubai Wire (a UAE nails producer) announced the formation of a joint venture, Progressive Steel and Wire (“PSW”), for the purpose of manufacturing nail and wire products in the United States.66 PSW’s plant is in Dallas, TX, and the company is planning to sell products produced at this facility through 42 distribution centers across North America operated by its parent company, PrimeSource.67 In February 2012, Mid Continent’s parent company, Libla Industries, Inc., was purchased by Deacero USA, a unit of Deacero S.A. de C.V. ‐‐ a Mexican steel processor and producer of mesh and wire products. According to ***,68 ***. According to ***. In 2012, Maze Nails ***.69 64 The 10 firms other than the petitioners cited in the petition were (1) Air Nail ISM Fastening Systems, (2) Fox Valley Steel & Wire, (3) Keystone Steel & Wire Company, (4) Parker Metal Corporation, (5) ITW, (6) Pneu‐Fast Co., (7) Senco, (8) Specialty Fastening, (9) Stanley, and (10) Tree Island. 65 Mid Continent’s Substantive Response To The Notice Of Institution, July 31, 2013, exh. 1 and exh. 4. 66 PrimeSource® Building Products, Inc. Announces Joint Venture with Dubai Wire, November 8, 2011, found at http://www.enap.com/newsletters/newsbrief/pdfs/PrimeSourcePR111511.pdf, retrieved on November 12, 2013. 67 Progressive Steel & Wire, found at http://pswnail.com/, retrieved on November 12, 2013. 68 Adequacy Phase U.S. Purchasers’ Questionnaire Response of ***. 69 Mid Continent’s Substantive Response To The Notice Of Institution, July 31, 2013, exh. 1. I‐16 Table I-1 Steel nails: U.S. producers, positions on the subject order, U.S. production locations, related and/or affiliated firms, and shares of 2012 reported U.S. production Firm Position on orders U.S. plant location(s) Parent company Share of production (percent) Mid Continent Support Poplar Bluff, MO Deacero, Mexico *** *** Support *** *** *** *** Support *** *** *** *** Support *** *** *** Unidentified 1 Support --- --- *** 1 ***. Source: Mid Continent’s Substantive Response To The Notice Of Institution, July 31, 2013, exh. 1 and exh. 4 and Certain Steel Nails from the United Arab Emirates, Inv. No. 731-TA-1185 (Final), USITC Publication 4321, May 2012, table III-1. In its substantive response to the Commission’s notice of institution, Mid Continent reported that in addition to itself, the following nine companies currently produce certain steel nails in the United States: (1) Mid Continent, (2) Davis Wire Corporation, (3) ITW, (4) Maze Nails, (5) Pneu‐Fast Company, (6) Senco Brands, (7) Specialty Fastening, (8) Stanley Black and Decker, and (9) Tree Island. In addition, PSW also identified itself as a U.S. producer of steel nails in its entry of appearance. In the original investigation, the Commission excluded three U.S. producers (Senco, Specialty Fastening, and Stanley) from the domestic industry. 70 The Commission determined that these three firms imported *** and increasing volumes of subject merchandise as their domestic production of steel nails declined, indicating that their primary interest was shifting from domestic production to importation. 71 In this current review, Mid Continent and the other U.S. producers agree with the definition of the domestic industry stated in the Commission’s notice. 72 Furthermore, Mid Continent reported that it is not aware of other currently operating U.S. producers that are related parties.73 U.S. producers’ trade and financial data The Commission requested domestic interested parties to provide trade and financial data in their response to the notice of institution of the five‐year reviews of the subject orders. Table I‐2 presents the data reported by responding U.S. producers from both the original 70 Certain Steel Nails from China, Inv. No. 731‐TA‐1114 (Final), USITC Pub. 4022 (July 2008), pp. 6‐8. 71 Certain Steel Nails from China, Inv. No. 731‐TA‐1114 (Final), Confidential Views of the Commission, p. 10. 72 Mid Continent’s Substantive Response To The Notice Of Institution, July 31, 2013, exh. 1 and exh. 4. 73 Mid Continent’s Substantive Response To The Notice Of Institution, July 31, 2013, exh. 1 and exh. 4. Based on ***. Certain Steel Nails from China, Inv. No. 731‐TA‐1114 (Final), Staff Report, INV‐FF‐074, June 25, 2008, table III‐7. I‐17 investigation (2005‐07) and the response to the notice of institution (2012). The table presents data provided by 14 firms for the period 2005‐07, and presents data for 2012 in two ways: (1) for the four identified firms and (2) for the five firms, including the unidentified firm. Table I-2 Steel nails: U.S. producers’ trade and financial data, 2005-07 and 2012 Item 2005 2006 2007 2012 1 2012 2 Capacity (short tons) 694,236 704,958 645,227 *** *** Production (short tons) 276,358 196,488 146,259 *** *** Capacity utilization (percent) 39.8 27.9 22.7 *** *** U.S. shipments Quantity (short tons) 275,448 196,601 143,868 *** *** Value (1,000 dollars) 385,057 287,606 220,411 *** *** Unit value (dollars per short ton) 1,398 1,463 1,532 *** *** Net sales value (1,000 dollars) 391,509 299,920 238,774 *** *** Cost of goods sold (COGS) ($1,000) 326,652 251,886 199,460 *** *** Gross profit or (loss) ($1,000) 64,857 48,034 39,314 *** *** SG&A ($1,000) 36,098 29,812 30,184 *** *** Operating income or (loss) ($1,000) 28,759 18,222 9,130 *** *** COGS/sales (percent) 83.4 84.0 83.5 *** *** Operating income or (loss)/sales (percent) 7.3 6.1 3.8 *** *** 1 Data for four identified producers. 2 Data for five producers. Source: Certain Steel Nails from China, Inv. No. 731-TA-1114 (Final), USITC Publication 4022, July 2008, III-3 and VI-2. Mid Continent’s Substantive Response To The Notice Of Institution, July 31, 2013, exh. 1 and exh. 4. Mid Continent contends that the domestic industry is extremely vulnerable to injury from unfairly traded imports from China. Mid Continent stated that the domestic industry is in an even more weakened state than that prior to the imposition to the antidumping duty order on nails from China. It points to the investigation on steel nails from the UAE, in which the Commission found that the domestic industry was unable to take full advantage of the order and unable to take advantage of improvements in the economy and housing market. Mid Continent argues that the domestic industry’s market share decreased between 2009 and 2011, a period of gradually increasing demand.74 Financial indicators also declined during this period, production increased slightly, production capacity declined, and capacity utilization rates were characterized as low. 75 Mid Continent contends that little has changed since the investigation on nails from the UAE, as illustrated by industry data provided for 2012. 74 Mid Continent’s Substantive Response To The Notice Of Institution, July 31, 2013, p. 23. 75 Ibid. I‐18 U.S. IMPORTS AND APPARENT CONSUMPTION U.S. importers In the original investigation, 41 firms provided usable importer questionnaire responses, 38 of which imported steel nails from China, accounting for *** percent of the quantity of subject U.S. imports from China during 2005‐07. 76 In its substantive response to the Commission’s notice of institution, Mid Continent identified 86 known and currently operating importers of steel nails.77 U.S. imports In its original investigation, the Commission found the subject import volume and the increases in that volume were significant, both in absolute terms and relative to consumption and production in the United States. The volume of subject imports measured by quantity increased from *** short tons in 2005 to *** short tons in 2006, and then decreased to *** short tons in 2007, for an overall increase of *** from 2005 to 2007. 78 Data regarding U.S. imports of steel nails, as reported in the final original investigation, as well as data from 2012, are presented in table I‐3. U.S. subject imports from China decreased from *** short tons in 2007 to *** short tons in 2012. As a result, their share of the total quantity of imports declined from *** percent to *** percent. Although imports from all nonsubject sources increased from *** short tons in 2007 to *** short tons in 2012, total imports decreased from 768,307 short tons in 2007 to 461,814 short tons in 2012. Mid Continent acknowledged the Commission’s findings in its original investigation. 79 Mid Continent contends that although the U.S. industry did not enjoy the full benefits of the antidumping duty order on nails from China due to the influx of unfairly traded imports from the UAE, the order did provide some benefits by limiting Chinese import volume and pricing behavior.80 Mid Continent argues that Chinese steel nail producers have available capacity for export along with “the ability and incentive to export large and significant volumes to the United States.” 81 Mid Continent estimates that Chinese steel nail producers have 933,921 short tons of capacity, arguing that it could use this capacity to return to pre‐order shipment volumes to the United States.82 76 Certain Steel Nails from China, Inv. No. 731‐TA‐1114 (Final), USITC Publication 4022, July 2008, III‐3 and IV‐1. 77 Mid Continent’s Substantive Response To The Notice Of Institution, July 31, 2013, p. 58 and exh 2. 78 Certain Steel Nails from China, Inv. No. 731‐TA‐1114 (Final), Confidential Views of the Commission, p. 22. 79 Mid Continent’s Substantive Response To The Notice Of Institution, July 31, 2013, p. 13. 80 Mid Continent’s Substantive Response To The Notice Of Institution, July 31, 2013, p. 17. 81 Mid Continent’s Substantive Response To The Notice Of Institution, July 31, 2013, p. 37. 82 Mid Continent’s Substantive Response To The Notice Of Institution, July 31, 2013, p. 37. I‐19 Table I-3 Steel nails: U.S. import data, 2005-07 and 2012 Item 2005 2006 2007 2012 Quantity (short tons) China - subject *** *** *** *** China - nonsubject *** *** *** *** All other 425,250 312,644 206,818 316,878 Subtotal - nonsubject *** *** *** *** Total imports 905,001 928,191 768,307 461,814 Value ($1,000) China - subject *** *** *** *** China - nonsubject *** *** *** *** All other 491,721 375,204 271,225 445,617 Subtotal - nonsubject *** *** *** *** Total imports 882,879 861,198 763,859 652,853 Unit value (dollars per short ton) China - subject *** *** *** *** China - nonsubject *** *** *** *** All other 1,156 1,200 1,311 1,406 Subtotal - nonsubject *** *** *** *** Total imports 976 928 994 1,414 Share of quantity (percent) China - subject *** *** *** *** China - nonsubject *** *** *** *** All other 47.0 33.7 26.9 68.6 Subtotal - nonsubject *** *** *** *** Total imports 100.0 100.0 100.0 100.0 Source: Certain Steel Nails from China, Inv. No. 731-TA-1114 (Final), Staff Report, INV-FF-074, June 25, 2008, p. IV-4 and compiled from official Commerce statistics, adjusted ***. Table I‐4 presents the quantity, value, unit value, and share of quantity for the top ten sources of U.S. imports as well as China. I‐20 Table I-4 Steel nails: U.S. imports, by source, 2008-12 Source Calendar year 2008 2009 2010 2011 2012 Quantity (short tons) China (including nonsubject) 266,703 137,975 150,730 144,675 144,935 Nonsubject countries: Taiwan 76,520 61,438 57,166 58,754 84,987 Korea 56,336 25,245 34,163 39,598 49,142 United Arab Emirates 48,256 63,494 118,558 110,395 46,632 Malaysia 13,283 10,493 11,634 23,110 31,921 Vietnam 2,515 3,275 4,424 12,731 28,925 Canada 30,712 17,898 17,673 19,118 20,605 Mexico 16,238 10,626 13,704 14,277 16,968 Poland 4,965 6,306 12,439 8,919 9,117 Oman 0 0 0 40 7,445 Bulgaria 0 0 669 2,138 3,426 All other sources 23,157 7,282 11,694 10,319 17,711 Subtotal nonsubject 271,981 206,056 282,124 299,400 316,878 Total 538,684 344,031 432,854 444,075 461,814 Value (1,000 dollars) China (including nonsubject) 326,549 147,976 173,257 188,383 207,236 Nonsubject countries: Taiwan 117,931 69,499 74,550 87,222 123,919 Korea 85,059 30,019 43,528 52,354 64,555 United Arab Emirates 70,517 56,662 111,764 130,417 64,288 Malaysia 16,954 9,426 12,176 26,572 38,939 Vietnam 2,923 3,698 4,454 13,362 28,948 Canada 52,716 26,723 29,276 33,837 37,172 Mexico 23,188 13,100 11,282 16,089 18,886 Poland 8,567 8,715 15,159 11,825 12,430 Oman 0 0 0 54 9,356 Bulgaria 0 0 370 1,853 3,074 All other sources 52,219 27,591 31,211 30,666 44,049 Subtotal nonsubject 430,073 245,434 333,772 404,251 445,617 Total 756,623 393,409 507,030 592,634 652,853 Table continued on next page. I‐21 Table I-4--Continued Steel nails: U.S. imports, by source, 2008-12 Source Calendar year 2008 2009 2010 2011 2012 Unit value (dollars per short ton) China (including nonsubject) 1,224 1,072 1,149 1,302 1,430 Nonsubject countries: Taiwan 1,541 1,131 1,304 1,485 1,458 Korea 1,510 1,189 1,274 1,322 1,314 United Arab Emirates 1,461 892 943 1,181 1,379 Malaysia 1,276 898 1,047 1,150 1,220 Vietnam 1,162 1,129 1,007 1,050 1,001 Canada 1,716 1,493 1,657 1,770 1,804 Mexico 1,428 1,233 823 1,127 1,113 Poland 1,726 1,382 1,219 1,326 1,363 Oman ( 1 ) ( 1 ) ( 1 ) 1,350 1,257 Bulgaria ( 1 ) ( 1 ) 553 867 897 All other sources 2,255 3,789 2,669 2,972 2,487 Subtotal nonsubject 1,581 1,191 1,183 1,350 1,406 Total 1,405 1,144 1,171 1,335 1,414 Share of quantity (percent) China (including nonsubject) 49.5 40.1 34.8 32.6 31.4 Nonsubject countries: Taiwan 14.2 17.9 13.2 13.2 18.4 Korea 10.5 7.3 7.9 8.9 10.6 United Arab Emirates 9.0 18.5 27.4 24.9 10.1 Malaysia 2.5 3.0 2.7 5.2 6.9 Vietnam 0.5 1.0 1.0 2.9 6.3 Canada 5.7 5.2 4.1 4.3 4.5 Mexico 3.0 3.1 3.2 3.2 3.7 Poland 0.9 1.8 2.9 2.0 2.0 Oman ( 1 ) ( 1 ) ( 1 ) 0.0 1.6 Bulgaria ( 1 ) ( 1 ) 0.2 0.5 0.7 All other sources 4.3 2.1 2.7 2.3 3.8 Subtotal nonsubject 50.5 59.9 65.2 67.4 68.6 Total 100.0 100.0 100.0 100.0 100.0 1 Not applicable. Source: Official Commerce statistics. I‐22 Ratio of imports to U.S. production Imports of subject steel nails from China ranged from *** percent to *** percent of reported U.S. production during 2005‐07. Imports from nonsubject sources ranged from *** percent to *** percent of reported U.S. production. Total imports ranged from 327.5 percent to 525.3 percent of total reported U.S. production during 2005‐07. The ratios of imports from China and nonsubject countries during 2005‐07 and 2012 are shown in table I‐5 below. Table I-5 Steel nails: Ratio of U.S. imports to U.S. production, 2005-07 and 2012 Item Calendar year 2005 2006 2007 2012 1 2012 2 Ratio of imports to U.S. production (percent) China - subject *** *** *** *** *** China - nonsubject *** *** *** *** *** All other 153.9 159.1 141.4 *** *** Subtotal - nonsubject *** *** *** *** *** All countries 327.5 472.4 525.3 *** *** 1 Data for four identified producers. 2 Data for five producers. Source: Certain Steel Nails from China, Inv. No. 731-TA-1114 (Final), Staff Report, INV-FF-074, June 25, 2008, pp. III-3 and IV-4 and compiled from official Commerce statistics, adjusted ***. Apparent U.S. consumption and market shares Table I‐6 shows U.S. shipments of domestic product, U.S. imports and apparent U.S. consumption in 2005‐07 and 2012. Table I‐7 shows U.S. market shares during 2005‐07 and 2012. Apparent consumption decreased from 1.2 million short tons in 2005 to approximately 900,000 short tons in 2007. In 2012, consumption was ***‐*** short tons. The responding producers’ share of consumption was 15.8 percent in 2007 and ***‐*** percent in 2012. I‐23 Table I-6 Steel nails: U.S. shipments of domestic product, U.S. imports, and apparent U.S. consumption, 2005-07 and 2012 Item 2005 2006 2007 2012 1 2012 2 Quantity (short tons) U.S. producers’ U.S. shipments 275,448 196,601 143,868 *** *** U.S. imports from-- China - subject *** *** *** *** *** China - nonsubject *** *** *** *** *** All other sources 425,250 312,644 206,818 316,878 316,878 Subtotal - nonsubject *** *** *** *** *** Total imports 905,001 928,191 768,307 461,814 461,814 Apparent U.S. consumption 1,180,449 1,124,792 912,175 *** *** Value (1,000 dollars) U.S. producers’ U.S. shipments 385,057 287,606 220,411 *** *** U.S. imports from-- China - subject *** *** *** *** *** China - nonsubject *** *** *** *** *** All other sources 491,721 375,204 271,225 445,617 445,617 Subtotal - nonsubject *** *** *** *** *** Total imports 882,879 861,198 763,859 652,853 652,853 Apparent U.S. consumption 1,267,936 1,148,804 984,270 *** *** 1 Data for four identified producers. 2 Data for five producers. Source: Certain Steel Nails from China, Inv. No. 731-TA-1114 (Final), USITC Publication 4022, July 2008, p. III-5, Certain Steel Nails from China, Inv. No. 731-TA-1114 (Final), Staff Report, INV-FF-074, June 25, 2008, p. IV-4, compiled from official Commerce statistics, adjusted ***, and Mid Continent’s Substantive Response To The Notice Of Institution, July 31, 2013, exh. 1 and exh. 4. I‐24 Table I-7 Steel nails: U.S. market shares, 2005-07 and 2012 Item 2005 2006 2007 2012 1 2012 2 Quantity (short tons) Apparent U.S. consumption 1,180,449 1,124,792 912,175 *** *** Value (1,000 dollars) Apparent U.S. consumption 1,267,936 1,148,804 984,270 *** *** Share of quantity (percent) U.S. producers’ U.S. shipments 23.3 17.5 15.8 *** *** U.S. imports from-- China - subject *** *** *** *** *** China - nonsubject *** *** *** *** *** All other sources 36.0 27.8 22.7 *** *** Subtotal - nonsubject *** *** *** *** *** Total imports 76.7 82.5 84.2 *** *** Share of value (percent) U.S. producers’ U.S. shipments 30.4 25.0 22.4 *** *** U.S. imports from-- China - subject *** *** *** *** *** China - nonsubject *** *** *** *** *** All other sources 38.8 32.7 27.6 *** *** Subtotal - nonsubject *** *** *** *** *** Total imports 69.6 75.0 77.6 *** *** 1 Data for four identified producers. 2 Data for five producers. Source: Certain Steel Nails from China, Inv. No. 731-TA-1114 (Final), USITC Publication 4022, July 2008, p. III-5, Certain Steel Nails from China, Inv. No. 731-TA-1114 (Final), Staff Report, INV-FF-074, June 25, 2008, p. IV-4, compiled from official Commerce statistics, adjusted ***, and Mid Continent’s Substantive Response To The Notice Of Institution, July 31, 2013, exh. 1 and exh. 4. In its original determination, the Commission found that demand for steel nails is largely determined by the size of the construction market, both residential and commercial, which is the single largest end user of steel nails.83 Mid Continent notes the Commission’s determination in the investigation on nails from the UAE “confirmed the new residential housing starts in the U.S. are a major factor influencing the overall demand for steel nails” and that the market indicators were below historic averages.84 According to Mid Continent, this key demand condition still exists. Figure I‐3 shows that new housing starts declined during 2008, and in spite of increasing since then, have remained at levels below those in the beginning of 2008. In 83 Certain Steel Nails from China, Inv. No. 731‐TA‐1114 (Final), Confidential Views of the Commission, p. 14. 84 Mid Continent’s Substantive Response To The Notice Of Institution, July 31, 2013, p. 26. I‐25 addition, figure I‐4 shows the levels of private residential and nonresidential construction since 2008. Figure I-3 Steel nails: Annualized rate of monthly housing starts, seasonally adjusted, January 2008-June 2013 Source: http://www.census.gov/construction/nrc/pdf/startssa.pdf Figure I-4 Value of private residential and nonresidential construction put in place, January 2007-June 2013 Source: Data gathered from U.S. Census Bureau at: http://www.census.gov/construction/c30/c30index.html. I‐26 THE INDUSTRY IN CHINA Background During the original investigation, the petition identified 75 alleged producers of steel nails in China. Chinese producers and exporters of steel nails supplied 8 questionnaires, accounting for *** percent of U.S. imports of steel nails from China during 2007. 85 Respondents to the original questionnaire included: Cana Hardware; Master International Co.; Rizhao Qingdong Electronic Appliance; Senco‐Xingya Products; Shanghai Taiping Hardware Co.; Suzhou Xingya Nail; Tianjin Lianda Group Co.; and The Stanley Works Fastener Co. The Commission did not receive any responses to the notice of inquiry from foreign producers or exporters. The domestic industry identified 63 Chinese producers/exporters of steel nails.86 Capacity and production During the original investigation, 7 firms provided data on their individual capacity and production in 2007. 87 The two largest firms (***) combined accounted for approximately *** percent of the reported production and *** percent of the reported exports to the United States (equivalent to ***) in 2007. 88 Since no Chinese producers responded to the notice of institution, no further data are available specific to the production or capacity of subject steel nails in China. 85 During the preliminary phase of the investigation, 43 firms supplied questionnaire response, reporting 525,419 short tons of steel nail production in 2006 (USITC Pub. 3939, Table VIII‐2). In contrast, the eight subject firms responding in the final phase reported only *** short tons of steel nail production in 2007. 86 Mid Continent’s Substantive Response To The Notice Of Institution, July 31, 2013, exh. 3. 87 ***. 88 Certain Steel Nails from China, Inv. No. 731‐TA‐1114 (Final), Staff Report, INV‐FF‐074, June 25, 2008, p. VII‐2. I‐27 Exports Table I‐8 presents data for the top 20 markets for Chinese exports of nails and staples. 89 The United States has been the largest market for Chinese product since 2008. Total Chinese exports declined from 2008 to 2009, have risen steadily since 2009, but have not reached their 2008 level. Table I-8 Nails and staples: Chinese exports to partner countries Partner country Quantity (short tons) 2008 2009 2010 2011 2012 United States 355,117 220,053 233,979 245,278 248,798 Japan 69,310 62,629 79,241 85,755 85,586 Canada 49,389 40,158 58,174 59,748 60,608 United Kingdom 33,756 20,709 29,271 24,415 25,126 United Arab Emirates 48,191 34,933 28,938 32,980 37,361 Korea South 57,384 26,250 23,337 25,782 30,081 Nigeria 29,629 25,238 14,453 18,614 30,488 Indonesia 71,245 49,397 23,310 27,462 34,616 Malaysia 19,538 16,668 23,679 19,867 24,841 Australia 18,463 18,208 20,830 16,157 17,036 Saudi Arabia 18,003 15,022 18,558 16,090 17,170 South Africa 12,578 11,224 14,823 17,338 17,468 Tanzania 11,561 10,078 8,541 13,211 19,871 Germany 25,190 9,537 13,600 17,229 13,358 Myanmar 22,640 22,002 23,084 21,918 21,128 Ghana 12,241 9,584 8,483 15,191 16,487 Chile 20,435 8,637 18,436 14,106 14,066 India 3,757 6,491 6,087 9,941 11,652 Philippines 21,676 10,997 11,105 10,445 15,121 Kenya 9,750 9,088 9,963 13,381 15,430 All others 363,008 264,806 276,951 316,644 334,225 World 1,272,860 891,708 944,844 1,021,551 1,090,517 Table continued on next page. 89 Data are for HTS heading 7317, which includes all nails, tacks, and staples, including roofing nails and other nonsubject product. I‐28 Table I-8--Continued Nails and staples: Chinese exports to partner countries Partner country Value ($1,000) 2008 2009 2010 2011 2012 United States 375,273 195,780 226,855 274,927 282,183 Japan 78,479 62,826 80,147 101,632 96,568 Canada 50,590 34,325 53,633 63,256 65,399 United Kingdom 41,736 22,204 33,138 32,899 34,867 United Arab Emirates 46,842 25,458 23,739 28,698 32,014 Korea South 55,216 21,487 20,780 27,040 30,330 Nigeria 29,054 19,178 11,173 17,108 28,589 Indonesia 65,917 31,018 15,336 18,391 26,446 Malaysia 16,479 11,990 17,850 19,618 23,741 Australia 22,904 20,254 23,333 21,077 22,359 Saudi Arabia 17,613 11,135 15,754 18,545 20,681 South Africa 13,177 9,737 13,223 18,624 18,545 Tanzania 9,719 7,185 7,013 12,206 17,886 Germany 29,871 10,184 15,291 22,572 17,527 Myanmar 17,056 12,745 15,069 16,467 16,716 Ghana 11,865 6,895 6,873 13,791 16,435 Chile 20,282 6,570 14,900 14,142 15,048 India 3,555 5,120 5,441 9,714 14,860 Philippines 19,586 8,670 8,520 10,450 14,406 Kenya 9,800 6,933 7,955 11,688 14,379 All other 381,851 243,873 282,742 357,232 405,037 World 1,316,866 773,568 898,766 1,110,079 1,214,016 Table continued on next page. I‐29 Table I-8--Continued Nails and staples: Chinese exports to partner countries Partner country Unit value (dollars per short ton) 2008 2009 2010 2011 2012 United States 1,057 890 970 1,121 1,134 Japan 1,132 1,003 1,011 1,185 1,128 Canada 1,024 855 922 1,059 1,079 United Kingdom 1,236 1,072 1,132 1,347 1,388 United Arab Emirates 972 729 820 870 857 Korea South 962 819 890 1,049 1,008 Nigeria 981 760 773 919 938 Indonesia 925 628 658 670 764 Malaysia 843 719 754 987 956 Australia 1,241 1,112 1,120 1,304 1,312 Saudi Arabia 978 741 849 1,153 1,204 South Africa 1,048 868 892 1,074 1,062 Tanzania 841 713 821 924 900 Germany 1,186 1,068 1,124 1,310 1,312 Myanmar 753 579 653 751 791 Ghana 969 719 810 908 997 Chile 993 761 808 1,003 1,070 India 946 789 894 977 1,275 Philippines 904 788 767 1,001 953 Kenya 1,005 763 798 873 932 All others 1,052 921 1,021 1,128 1,212 World 1,035 868 951 1,087 1,113 Source: China Customs reported by Global Trade Information Service, "Global Trade Atlas." Tariff or non‐tariff barriers to trade During the original investigation, no producer, importer, or foreign producer reported any countervailing or antidumping duty orders on steel nails from China in third‐country markets. However, on November 29, 2004, Mexico issued an antidumping duty order on concrete steel nails from China.90 Since the original investigation, New Zealand and Indonesia have undertaken import restrictions on Chinese nails. On October 1, 2009, Indonesia instituted a safeguard duty on imports of steel nails from China. The safeguard was in effect from October 1, 2009 through September 30, 2012. The duty rates on imports of Chinese nails were 145 90 Mexico, Semi‐Annual Report Under Article 16.4 of the Agreement, WTO, Committee on Anti‐ Dumping Practices, September 12, 2013. I‐30 percent in the first year, 115 percent in the second year, and 85 percent in the final year of the safeguard.91 New Zealand currently has in place antidumping duties on imports of Chinese steel nails, dating from June 3, 2011. 92 THE GLOBAL MARKET Table I‐9 shows the 10 largest exporters of nails and staples. 93 China is the largest exporter, a position it held during the original investigation. 94 Total exports decreased from 2008 to 2009, and in spite of increasing since 2009, have yet to reach their 2008 level. Table I-9 Nails and staples: Exports by reporting country, 2008-12 Reporting country Quantity (short tons) 2008 2009 2010 2011 2012 China 1,272,861 891,708 944,844 1,021,551 1,090,517 Taiwan 92,002 81,196 74,108 75,538 104,534 Poland 61,896 52,924 68,838 67,005 61,867 Belarus 46,584 58,754 58,030 60,232 60,734 South Korea 64,132 30,451 41,051 47,431 53,582 Germany 46,222 30,642 31,130 31,716 30,772 Lithuania 25,754 23,586 27,021 31,009 34,350 Malaysia 23,836 25,304 23,671 30,891 49,673 United States 39,983 26,935 31,045 29,960 29,108 Belgium 31,137 24,492 27,272 28,833 26,374 All other 334,026 291,250 306,677 310,012 293,300 Total 2,038,433 1,537,243 1,633,689 1,734,179 1,834,812 Source: Global Trade Atlas. Table I‐10 shows the top 10 importers of nails and staples. 95 The United States has been the largest importer of HTS heading 7317 by substantial margins during 2008‐12. 91 Indonesia, Notification Under Article 12.1(B) of the Agreement on Safeguards on Finding a Serious Injury or Threat Thereof Caused by Increased Imports, WTO, Committee on Safeguards, October 14, 2009. 92 New Zealand, Semi‐Annual Report Under Article 16.4 of the Agreement, WTO, Committee on Anti‐ Dumping Practices, September 18, 2013. 93 Data are for HTS heading 7317, which includes all nails, tacks, and staples, including roofing nails and other nonsubject product. 94 Certain Steel Nails from China, Inv. No. 731‐TA‐1114 (Final), USITC Publication 4022, July 2008, VII‐ 6. I‐31 Table I-10 Nails and staples: Imports by reporting country, 2008-12 Reporting country Quantity (short tons) 2008 2009 2010 2011 2012 United States 621,771 402,956 508,875 523,675 555,202 Japan 70,675 62,901 81,542 90,315 91,432 Canada 79,881 53,146 83,275 76,862 78,481 Germany 76,628 56,316 66,511 68,491 63,166 United Kingdom HMRC 65,052 44,131 56,417 51,830 50,065 France 53,894 44,393 43,560 46,558 34,038 Belgium 50,266 39,196 43,531 43,834 43,454 Netherlands 33,533 24,068 31,254 33,747 27,293 South Korea 56,231 26,263 27,071 29,644 31,243 Indonesia 78,179 52,918 25,365 29,100 42,652 All other 547,982 383,948 441,284 423,716 413,025 Total 1,734,093 1,190,236 1,408,686 1,417,773 1,430,051 Source: Global Trade Atlas. (…continued) 95 Data are for HTS heading 7317, which includes all nails, tacks, and staples, including roofing nails and other nonsubject product. A‐1 APPENDIX A SUMMARY DATA A‐3 Data Are Confidential In Their Entirety