Commission also used record evidence to establish that the price of
the subject imports did not have significant price depressing effects
on the domestic like product. Final Determination at 28. The
Commission cited to specific record evidence that substantiated its
finding that the subject imports did not negatively affect domestic
like product prices.
Commission collected quarterly price information on seven types of
steel wire rope, designated products 1 through 7. The volume of the
sales of the domestic like product was very small in all but 1 and
2 (consisting of bright carbon steel wire rope) and product 5 (consisting
of galvanized carbon wire rope). There was no clear downward trend
in the price of domestically produced steel wire rope in any of these
three product categories. For product 1, prices for the domestic product
were highest at the end of the review. Prices for domestic product
2 increased and then fell during the period, but ended at a level
[ ] above their starting point. Prices for the domestic product 5
ended [ ] lower than they began, but increased in each of the last
Determination 26-27 (footnotes omitted). Additionally, the Commission
noted that the substitutability between subject imports and the domestic
like product was limited because
imports generally are lower in quality than the domestic like product.
Moreover, galvanized carbon steel wire rope accounts for over half
of subject imports but only a small share of domestic production.
These factors limit substitutability between the domestic like product
and the subject imports, and therefore limit the potential effects
on subject imports domestic prices.
Determination at 26. Similarly, the record evidence demonstrated
that (1) petitioners announced various price increases, (2) domestic
producers cost of goods sold as a percentage of net sales increased
minimally, while their operating income remained stable, and (3) the
attenuated competition between the subject imports and the
domestic like product limited the ability of the subject importers to
suppress price increases of the domestic like product.
also found that subject imports did not have significant price depressing
effects on the domestic like product. The record does not reflect
any clear downward trend in prices for the domestic like product.
Nor do we find that subject imports prevented to a significant degree
price increases by the domestic industry that otherwise would have
occurred. First, petitioners announced various price increases, which
the record suggests were collected, in whole or in part, in at least
some instances. Second, domestic producers cost of goods sold
as a percentage of net sales increased very little, while their operating
income was generally stable. Third, because competition between subject
imports and domestic like product is attenuated, subject imports
ability to suppress price increases is similarly limited.
Determination at 28-29 (footnotes omitted).
its impact analysis, the Commission must consider all the relevant economic
factors that bear on the state of the industry in the United States. See 19 U.S.C. § 1677(7)(C)(iii) (1994). The Commission noted
that although the industrys performance was not particularly strong,
the cause of the weakness was not the subject imports. In fact, the
Commission found that the major reason for the domestic industrys
market share loss was caused by nonsubject imports.
Subject imports market share increased less than [ ] from 1998
to1999, from [ ] to [ ] percent. While subject imports market
share was the highest in interim 2000, that was also the period the
industry was most profitable. In addition, prices collected on various
subject products did not exhibit a clear downward trend, and AUVs
(average unit values) for the subject imports decreased only [ ] from
1998 to 1999, from $[ ] per short to $[ ] per short ton. Previously,
from 1997 to 1998, the domestic industry lost [ ] in market share,
but nonsubject imports accounted for the bulk of the loss [ ].
Determination at 33-34 (footnotes omitted).
addition to the price, volume and impact analysis, the Commission also
noted in its injury analysis important conditions of competition that
supported its negative injury determination. The Commission found that
domestic and imported steel wire rope both generally conform to specifications,
certain factors limit competition between them. More than onehalf
of subject imports are galvanized carbon steel wire rope, while less
than two percent of domestic production is galvanized. Many purchasers
and distributors state that only domestic product is used for so-called
critical applications: those in which failure of the rope
could result in damage, injury or death. Similarly, various steel
wire rope distributors expressed concern over liability arising out
of any failure by imported steel wire rope they might sell, particularly
imports from China.
Determination at 22 (footnotes omitted). Similarly, a contributing
factor to the domestic industrys drop in capacity, which caused
a drop in production in 1999, could be attributed to consolidation within
the industry. In its impact analysis the Commission stated:
[t]he decline in capacity in 1999 reflects the fact that domestic
producer WRCA (Wire Rope Corporation of America) retired all but one
of the production facilities it acquired from Rochester and Macwhyte.
Domestic production capacity was 123,715 short tons in interim 1999
and 135,535 short tons in interim 2000, consistent with [ ]. The domestic
industrys production fell from 127,833 short tons in 1997, to
118,047 short tons in 1998, and to 108,655 short tons in 1999. However,
production was higher in interim 2000, at 80,801 short tons, than
in interim 1999, at 78,955 short tons.
Determination at 30-31 (footnotes omitted). Therefore, the Commission
concluded that purchasers preference for domestic product and
industry consolidation were significant factors that supported a finding
that subject imports did not cause material injury to the domestic industry.
determined that the subject imports did not cause material injury to
a domestic industry, the Commission then focused its analysis to determine
if the subject imports threatened material injury to the domestic industry.
Under 19 U.S.C. § 1677(7)(F)(ii) (1994), the Commission is required
to determine whether further dumped or subsidized imports are
imminent and whether material injury by reason of imports would occur
unless an order is issued or a suspension agreement is accepted. . .
Commission found that:
record indicates that no significant increase in the volume or market
penetration of subject imports is imminent. Although subject producers
had the ability to increase significantly the volume of their exports
to the U.S. market during the period of investigation,
they did not do so. There is no persuasive evidence in the record
that indicates that this behavior will change in the imminent future.
We also find that subject imports are not likely to enter the United
States at prices that will depress prices for the domestic like product.
Prices for the subject imports are already significantly lower than
prices for the domestic like product, yet prices for the latter are
steady or increasing, and any market share lost by the domestic industry
to subject imports has been small. We see no evidence that competition
between subject imports and the domestic like product will become
less attenuated in the imminent future.
Determination at 39-40. Therefore, the Commission concluded that
the subject imports did not present a threat of material injury to the
domestic industry. This determination is in accordance with law as the
Commission discussed the relevant statutory factors that it considered
in reaching its conclusion, namely, market penetration and volume of
imports pursuant to 19 U.S.C. § 1677(F)(i)(III) and the effect
of import prices on domestic prices pursuant to 19 U.S.C. § 1677(F)(i)(IV).
It also cited attenuated competition between imports and domestic production
as another economic factor it considered relevant, as it is required
to by 19
U.S.C. § 1677(F)(i). The Commissions conclusions with regard
to these economic factors find factual support in the record as well.
In Part VII of its Staff Report, there is evidence that supported
its determination that the imports from China and India did not threaten
a domestic industry and these findings are included in its analysis.
In examining the capacity levels of the importers as required by 19
U.S.C. § 1677(F)(i)(II) the Commission found that
record shows no indication of increased capacity in China or India
during the period of investigation that would indicate the likelihood of substantially increased imports
of subject merchandise, and capacity is projected to be [ ] in 2000
and 2001 as it was in 1999. Capacity utilization for the industry
in China, which was estimated at [ ] percent in 1999, showed projected
increases to rates of [ ] percent in 2000 and [ ] percent for 2001.
For the industry in India, capacity utilization was [ ] percent in
1999, and is projected to increase to [ ] percent in both 2000 and
2001. While foreign producers capacity utilization figures reflect
some available excess capacity, unused capacity existed during the
period investigated, but did not result in materially injurious exports
to the United States. Moreover, unused capacity declined late during
the period of investigation,
and it is projected to decline in the imminent future.
Determination at 37 (footnoting to the statistical tables included
in Part VII of the Staff Report). Therefore, the court finds that the
Commissions determination that there was no threat of injury to
the domestic industry is in accordance with law and supported by substantial
evidence in the record of the Commissions proceeding.
19 U.S.C. § 1677(F) states the factors the Commission is required
to consider in its threat of material injury determination.
Threat of material injury
determining whether an industry in the United States is threatened
with material injury by reason of imports (or sales for importation)
of the subject merchandise, the Commission shall consider, among
other relevant economic factors--
if a countervailable subsidy is involved, such information as
may be presented to it by the administering authority as to the
nature of the subsidy (particularly as to whether the countervailable
subsidy is a subsidy described in Article 3 or 6.1 of the Subsidies
Agreement), and whether imports of the subject merchandise are
likely to increase,
any existing unused production capacity or imminent, substantial
increase in production capacity in the exporting country indicating
the likelihood of substantially increased imports of the subject
merchandise into the United States, taking into account the availability
of other export markets to absorb any additional exports,
a significant rate of increase of the volume or market penetration
of imports of the subject merchandise indicating the likelihood
of substantially increased imports,
whether imports of the subject merchandise are entering at prices
that are likely to have a significant depressing or suppressing
effect on domestic prices, and are likely to increase demand for
inventories of the subject merchandise,
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,
in any investigation under this subtitle which involves imports of both a raw agricultural
product (within the meaning of paragraph (4)(E)(iv)) and any product
processed from such raw agricultural product, the likelihood that
there will be increased imports, by reason of product shifting,
if there is an affirmative determination by the Commission under
section 1671d(b)(1) or 1673d(b)(1) of this title with respect
to either the raw agricultural product or the processed agricultural
product (but not both),
the actual and potential negative effects on the existing development
and production efforts of the domestic industry, including efforts
to develop a derivative or more advanced version of the domestic
like product, and
any other demonstrable adverse trends that indicate the probability
that there is likely to be material injury by reason of imports
(or sale for importation) of the subject merchandise (whether
or not it is actually being imported at the time).
Basis for determination
Commission shall consider the factors set forth in clause (i)
as a whole in making a determination of whether further dumped
or subsidized imports are imminent and whether material injury
by reason of imports would occur unless an order is issued or
a suspension agreement is accepted under this subtitle. The presence
or absence of any factor which the Commission is required to consider
under clause (i) shall not necessarily give decisive guidance
with respect to the determination. Such a determination may not
be made on the basis of mere conjecture or supposition.