American Spring Wire Corp., Insteel Wire Products Co., and Sumiden Wire Products Corp. have filed antidumping and countervailing duty petitions charging that dumped and subsidized imports of prestressed concrete steel wire strand (PC strand) from the People's Republic of China cause material injury to the domestic industry. In petitions filed through Washington, D.C., counsel Kelley Drye & Warren LLP, the producers allege dumping margins ranging from 140.31 to 314.99 percent, with an average margin of 223.47 percent, and significant subsidies from the Chinese government for its domestic strand producers.
The trade case was filed in the face of a massive volume of PC strand imports Û exceeding 175,000 tons/year Û from China since 2006. Wire from China accounted for more than 90 percent of all imported PC strand in the U.S. market in 2008. The petition alleges that China has expanded its share over that period at the expense of U.S. producers by selling PC strand at prices that significantly undercut those of the domestic market. The petition further alleges that China has massive, unused capacity and is likely to increase PC strand exports to the U.S. market to the detriment of competing domestic producers if duties are not imposed.
The volume of imports of PC strand from China alone in 2008 was higher than the peak aggregate volume of injurious imports of PC strand from five countries that were the target of successful trade cases we filed on behalf of this industry five years ago, says Kelley Drye & Warren's Kathleen Cannon. Capacity to produce PC strand in China is massive and a huge overhang of capacity currently exists that threatens further injury to the U.S. industry.
Antidumping duties are intended to offset the amount by which a product is sold at less than fair value in the United States. Because China is a non-market economy, the U.S. Department of Commerce will determine whether dumping exists. Officials will compare the amount by which PC strand is sold by Chinese producers and exporters in the U.S. market to a constructed cost derived from the Chinese producers' actual input quantities to produce wire valued at market economy rates. The petitions further allege that Chinese producers and exporters of PC strand have been targeted at all levels of the Chinese government for preferential treatment pursuant to various strategic plans that implement China's industrial policy objectives, including promotion of exports of value-added steel products. The U.S. International Trade Commission (ITC), an independent agency, will determine whether such imports are a cause of material injury to the domestic industry.
As a result of the petition filing, the Department of Commerce was to determine by early summer whether to initiate the antidumping duty investigation, with the ITC reaching a preliminary determination of material injury or threat of material injury shortly after. The entire investigative process takes approximately one year, and final determinations of injury, dumping and subsidies will occur in mid-2010.