Bruneian, Philippine OCTG Exporters Blast Commerce's Anti-Circumvention Inquiry in CIT Complaint

The Commerce Department's decision to compare two foreign manufacturers' production processes with integrated steel mills from China was unreasonable, Bruneian company HLDS (B) Steel and Philippine company HLD Clark Steel Pipe Co. told the Court of International Trade in a Jan. 24 complaint. Such a comparison -- used in a recent anti-circumvention inquiry -- was unreasonable since integrated steel mills make primary steel in many forms, not just oil country tubular goods -- the merchandise subject to the anti-circumvention inquiry, the complaint said (HLDS (B) Steel SDN BHD v. United States, CIT #21-00638).

The complaint concerns the antidumping and countervailing duty anti-circumvention inquiry that covered welded OCTG made in Brunei and the Philippines using Chinese hot-rolled steel coils as a primary input. Commerce found that the OCTG made by the HLD Companies was of the same class as the merchandise covered by the orders, the merchandise was completed in Brunei and the Philippines from the hot-rolled steel from China, and that the manufacture of the OCTG in Brunei and the Philippines was insignificant compared with the production of hot-rolled steel made by integrated steel mills in China.

The HLD companies told Commerce that the comparison between Chinese integrated steel mills with OCTG manufacturing was a faulty task. "Only a very small portion of an integrated mill’s investment, facilities, and operations would be used to supply a single OCTG manufacturer such as HDL Clark or HLDSB," the complaint said. "The Department’s decision to evaluate the HLD Companies’ OCTG facilities and production based on investments and production facilities of integrated steel mills was arbitrary, capricious, and an abuse of discretion," the two plaintiffs said. "The basis for the Department’s analysis is 'so implausible that it could not be ascribed to a difference in view or the product of agency expertise.'"

During the anti-circumvention inquiry, Commerce also said it wanted to set up a certification process whereby OCTG producers from Brunei and the Philippines could certify that their U.S. exports were not made using Chinese hot-rolled steel. However, Commerce did not let the HLD Companies use this mechanism since they didn't show they could track the country of origin of their inputs, the plaintiffs said. HLDSB and HLD Clark said this position is not backed by substantial evidence.