On May 10, 2013, the Chinese Ministry of Commerce (MOFCOM) initiated an antidumping (AD) investigation on certain alloy-steel seamless tubes and pipes for high temperature and pressure service from the United States, the European Union and Japan. The seamless tubes and pipes subject to investigation are used primarily in the construction of boilers and steam water pipes for supercritical and ultra-supercritical power plants. In 2012, the import value from the three targeted countries was approximately US$369 million, which accounted for around 97% of China’s total imports of this product. The petitioner’s estimated dumping margins for imports of these specialty pipes from the European Union, the United States and Japan are 44.42%, 39.06%, and 36.45%, respectively.

Foreign producers and exporters intending to participate in the investigation must register with both the Bureau of Fair Trade for Imports and Exports (BOFT) and the Bureau of Investigation for Industry Injury (BIII) within MOFCOM. Registration documents must be submitted within 20 days from the date of initiation, i.e., by May 30, 2013. Foreign producers who do not properly register by this deadline are likely to be assigned a punitive high AD margin which could effectively shut them out of the Chinese market.

During the AD investigation, BOFT will examine whether alloy-steel seamless tubes and pipes imports from the targeted countries have been dumped in China, and BIII will determine whether the domestic industry has been injured by these imports. Based on information collected from the parties through questionnaires, the agencies will first make a preliminary determination approximately 180 days from the initiation of the investigation, though this step could be delayed based on the complexity of the investigation. If the agencies’ preliminary determinations are affirmative, China’s General Administration of Customs will begin to impose "provisional duties" on imports from these countries in the amount of the preliminarily calculated dumping margin. In rare cases, MOFCOM can impose duties on imports made prior to the preliminary determinations if it finds that "critical circumstances" are present.

This investigation is scheduled to conclude 12 months after initiation, though this deadline can be extended for an additional six months if necessary. If BOFT and BIII’s final determinations are also affirmative, an AD order will be issued mandating the collection of duties in the amount of the final dumping margin calculated by BOFT. This additional duty

liability will then remain in place for a period of at least five years. Periodic recalculations of this duty amount and/or early termination are possible, but rare.

In November 2012, MOFCOM completed another case against high-performance stainless steel seamless tubes from the EU and Japan. In that case, products under two specific tariff numbers were excluded from the proceedings, over the objections of the domestic industry. This newly initiated case covers those imports.

The initiation of this case comes at a particularly sensitive moment in China-EU trade relations. Several media sources reported yesterday that the European Commission plans to impose provisional AD tariffs of up to 67.9% on imports of China-made solar panels and cells beginning next month. Separately, the EU is also conducting AD/CVD investigations of imports from China of specialty glass used in the production of solar cells. The initiation of today’s case could be seen as the first step in an effort by China to take countermeasures against these EU-based trade actions.