Certain Steel Nails from the

United Arab Emirates

Investigation No. 731-TA-1185 (Preliminary)

Publication 4235 May 2011

U.S. International Trade Commission

Washington, DC 20436
U.S. International Trade Commission

COMMISSIONERS

Deanna Tanner Okun, Chairman

Irving A. Williamson, Vice Chairman
Charlotte R. Lane
Daniel R. Pearson
Shara L. Aranoff
Dean A. Pinkert

Robert B. Koopman
Acting Director of Operations

Staff assigned
Fred Ruggles, Investigator
Vince DeSapio, Industry Analyst
Clark Workman, Economist
Mary Klir, Accountant
Patrick Gallagher, Attorney
Lita David-Harris, Statistician
Douglas Corkran, Supervisory Investigator

Address all communications to

Secretary to the Commission
United States International Trade Commission
Washington, DC 20436
 U.S. International Trade Commission
Washington, DC 20436
[Link]

Certain Steel Nails from the

United Arab Emirates
Investigation No. 731-TA-1185 (Preliminary)

Publication 4235 May 2011

 CONTENTS

Page

Determination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Views of the Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Dissenting views of Chairman Deanna Tanner Okun and
Commissioner Daniel R. Pearson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Part I: Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1

Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1
Statutory criteria and organization of the report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1
Statutory criteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1
Organization of the report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-2
U.S. market summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-2
Summary data and data sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-3
Previous and related investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-3
Nature and extent of alleged sales at LTFV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-6
The subject merchandise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-6
Commerce’s scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7
U.S. tariff treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8
The product . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-9
Description and applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-9
Manufacturing processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-9
Domestic like product issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-11

Part II: Conditions of competition in the U.S. market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1
Channels of distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1
Geographic distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1
Supply and demand considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-2
U.S. supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-2
U.S. demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-3
Substitutability issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-5
Lead times . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-5
Comparisons of domestic products, subject imports, and nonsubject imports . . . . . . . . . . . . II-5

i
 CONTENTS

Page

Part III: U.S. producers’ production, shipments, and employment . . . . . . . . . . . . . . . . . . . . . . III-1

U.S. producers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-1
U.S. capacity, production, and capacity utilization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-3
U.S. producers’ shipments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-4
U.S. producers’ imports and purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-6
U.S. producers’ inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-7
U.S. producers’ employment, wages, and productivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-7

Part IV: U.S. imports, apparent U.S. consumption, and market shares . . . . . . . . . . . . . . . . . . IV-1
U.S. importers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1
U.S. imports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1
Negligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-5
Apparent U.S. consumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-6
U.S. market shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-8
Ratio of imports to U.S. production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-9

Part V: Pricing and related information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1

Factors affecting prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1
Raw materials costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1
U.S. inland transportation costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1
Pricing practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-2
Pricing methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-2
Sales terms and discounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-2
Price data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-3
Price trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-3
Price comparisons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-5
Lost sales and lost revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-5

Part VI: Financial experience of U.S. producers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-1

Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-1
Operations on steel nails . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-1
Variance analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-3
Capital expenditures and research and development expenses . . . . . . . . . . . . . . . . . . . . . . . . VI-4
Assets and return on investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-5
Capital and investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-5
Actual negative effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-5
Anticipated negative effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-5

ii
 CONTENTS

Page

Part VII: Threat considerations and information on nonsubject countries . . . . . . . . . . . . . . . VII-1

The industry in the United Arab Emirates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-1
U.S. importers’ inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-2
U.S. importers’ current orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-2
Antidumping and countervailing duty orders in third-country markets . . . . . . . . . . . . . . . . . . . . VII-2
Information on nonsubject countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-3

Appendixes

A. Federal Register notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1

B. Conference witnesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
C. Summary data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1
D. Nonsubject country price data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D-1

Note.--Information that would reveal confidential operations of individual concerns may not be published
and therefore has been deleted from this report. Such deletions are indicated by asterisks.

iii
 UNITED STATES INTERNATIONAL TRADE COMMISSION

Investigation No. 731-TA-1185 (Preliminary)

CERTAIN STEEL NAILS FROM THE UNITED ARAB EMIRATES

DETERMINATION

On the basis of the record1 developed in the subject investigation, the United States International
Trade Commission (Commission) determines, pursuant to section 733(a) of the Tariff Act of 1930
(19 U.S.C. § 1673b(a)) (the Act), that there is a reasonable indication that an industry in the United States
is materially injured by reason of imports from the United Arab Emirates of certain steel nails, provided
for in subheadings 7317.00.55, 7317.00.65 and 7317.00.75 of the Harmonized Tariff Schedule of the
United States, that are alleged to be sold in the United States at less than fair value (LTFV).2
Pursuant to section 207.18 of the Commission’s rules, the Commission also gives notice of the
commencement of the final phase of its investigation. The Commission will issue a final phase notice of
scheduling, which will be published in the Federal Register as provided in section 207.21 of the
Commission’s rules, upon notice from the Department of Commerce (Commerce) of an affirmative
preliminary determination in the investigation under section 733(b) of the Act, or, if the preliminary
determination is negative, upon notice of an affirmative final determination in that investigation under
section 735(a) of the Act. Parties that filed entries of appearance in the preliminary phase of the
investigation need not enter a separate appearance for the final phase of the investigation. Industrial
users, and, if the merchandise under investigation is sold at the retail level, representative consumer
organizations have the right to appear as parties in Commission antidumping and countervailing duty
investigations. The Secretary will prepare a public service list containing the names and addresses of all
persons, or their representatives, who are parties to the investigation.

BACKGROUND

On March 31, 2011, a petition was filed with the Commission and Commerce by Mid Continent
Nail Corporation, Poplar Bluff, Missouri, alleging that an industry in the United States is materially
injured or threatened with material injury by reason of LTFV imports of certain steel nails from the
United Arab Emirates. Accordingly, effective March 31, 2011, the Commission instituted antidumping
duty investigation No. 731-TA-1185 (Preliminary).
Notice of the institution of the Commission’s investigation and of a public conference to be held
in connection therewith was given by posting copies of the notice in the Office of the Secretary, U.S.
International Trade Commission, Washington, DC, and by publishing the notice in the Federal Register
of April 6, 2011 (76 FR 19124). The conference was held in Washington, DC, on April 21, 2011, and all
persons who requested the opportunity were permitted to appear in person or by counsel.

1
The record is defined in sec. 207.2(f) of the Commission’s Rules of Practice and Procedure (19 CFR § 207.2(f)).
2
Chairman Deanna Tanner Okun and Commissioner Daniel R. Pearson determined that there is no reasonable
indication that an industry in the United States is materially injured or threatened with material injury.

1
 VIEWS OF THE COMMISSION

Based on the record in the preliminary phase of this investigation, we find a reasonable indication
that an industry in the United States is materially injured by reason of imports of certain steel nails (“steel
nails”) from the United Arab Emirates (“UAE”) that are allegedly sold in the United States at less than
fair value (“LTFV”).1

I. THE LEGAL STANDARD FOR PRELIMINARY DETERMINATIONS

The legal standard for preliminary antidumping and countervailing duty determinations requires
the Commission to determine, based upon the information available at the time of the preliminary
determination, whether there is a reasonable indication that a domestic industry is materially injured,
threatened with material injury, or the establishment of an industry is materially retarded, by reason of the
allegedly unfairly traded imports.2 In applying this standard, the Commission weighs the evidence before
it and determines whether “(1) the record as a whole contains clear and convincing evidence that there is
no reasonable indication of material injury or threat of such injury; and (2) no likelihood exists that
contrary evidence will arise in a final investigation.”3

II. BACKGROUND

The antidumping petition in this investigation was filed on March 31, 2011. The petitioner,
domestic producer Mid Continent Nail Corporation (“Mid Continent”), is headquartered in Poplar Bluff,
Missouri.4 Representatives from Mid Continent appeared at the staff conference accompanied by counsel
and submitted a postconference brief. The Commission sent questionnaires to 13 U.S. producers of steel
nails identified in the petition as producers of nails and to six other firms identified in a prior
investigation.5 The Commission received 10 usable questionnaire responses.6 These domestic producers
accounted for the large majority of U.S. production of the domestic like product in 2010.7

1
Chairman Okun and Commissioner Pearson find that there is no reasonable indication that an industry in the
United States is materially injured or threatened with material injury, or that there is a reasonable indication that the
establishment of an industry is materially retarded, by reason of subject imports of certain steel nails that are
allegedly sold at less than fair value. See Dissenting Views of Chairman Deanna Tanner Okun and Commissioner
Daniel R. Pearson. Chairman Okun and Commissioner Pearson join in Parts I-IV and Part V.A & B of these Views.
2
19 U.S.C. §§ 1671b(a), 1673b(a) (2000); see also American Lamb Co. v. United States, 785 F.2d 994, 1001-04
(Fed. Cir. 1986); Aristech Chemical Corp. v. United States, 20 CIT 353, 354 (1996). No party argued that the
establishment of an industry is materially retarded by reason of the allegedly unfairly traded imports.
3
American Lamb, 785 F.2d at 1001; see also Texas Crushed Stone Co. v. United States, 35 F.3d 1535, 1543
(Fed. Cir. 1994).
4
Petition at 1; Confidential Staff Report, Mem. INV-JJ-042 at I-1 and III-1 (May 9, 2011) (“CR/PR”).
5
The six firms identified during a previous investigation are believed to no longer manufacture the domestic like
product. ***. See Petition at 2-5; and CR/PR at III-1 and n.2.
6
***. See Petition at 2-5; CR/PR at III-1 and n.1.
7
These 10 domestic producers accounted for more than *** percent of U.S. production of the domestic like
product in 2010. CR/PR at III-1.

3
 Representatives and counsel for a United Arab Emirates’ (“UAE”) producer, Dubai Wire FZE
(“Dubai Wire”) and U.S. importer Itochu Building Products Company, Inc., (“Itochu”)8 (jointly,
“Respondents”) appeared at the staff conference and jointly submitted a postconference brief. Counsel
for UAE producer Precision Fasteners LLC (“Precision Fasteners”) appeared at the staff conference and
submitted a postconference brief.
The Commission sent questionnaires to firms believed to be importers of subject steel nails, based
on information provided in the Petition and information provided by U.S. Customs and Border Protection.
Usable questionnaire responses were received from 27 companies, including 14 U.S. importers
accounting for 100 percent of subject steel nail imports from the UAE during the period of investigation.9
In addition, the Commission received questionnaire responses from 21 importers of steel nails that
accounted for nearly one-half of U.S. imports from nonsubject countries during 2010.10
The Commission sent foreign producer questionnaires to five UAE firms believed to be
producing certain steel nails. Three firms11 provided usable responses.12 The exports to the United States
of these firms account for all certain steel nails imported from the UAE in 2010.13

III. DOMESTIC LIKE PRODUCT

A. In General

In determining whether an industry in the United States is materially injured or threatened with
material injury by reason of imports of the subject merchandise, the Commission first defines the
“domestic like product” and the “industry.”14 Section 771(4)(A) of the Tariff Act of 1930, as amended
(“the Act”), defines the relevant domestic industry as the “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.”15 In turn, the 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 ....”16

8
Itochu reports that it imports nails from around the world which Itochu then sells to its sister company, Prime
Source Building Products, Inc. (“Prime Source”). Itochu claims that Prime Source is the largest distributor of steel
nails in the United States. According to Itochu, Prime Source maintains 34 distribution centers in 28 states and
currently employs more than 1000 workers in the United States. Conf. Tr. at 51 (Zinman).
9
CR/PR at Table IV-1 contains a list of the 14 importers of record responding to the Commission’s questionnaire,
and the sources and shares of imports in the period 2008 to 2010.
10
CR/PR at IV-1. Nonsubject imports were reportedly from Austria, China Denmark, Korea, Liechtenstein,
Malaysia, Mexico, Poland, Spain, and Taiwan. Id.
11
The firms are as follows: Dubai Wire; Millennium Steel & Wire, LLC (“Millennium”); and Precision
Fasteners. Two other UAE firms, Samrat Wire Industry LLC (“Samrat”), and Steel Racks Factory (“Steel Racks”),
were identified by the Petitioner as producers of certain steel nails, but neither firm responded to the Commission’s
foreign producer questionnaire. These firms reportedly are small companies that only produce certain steel nails for
the local market and not for export. Conf. Tr. at 75 (Ved).
12
Data for these UAE respondents are presented in Table VII-3. Millennium reportedly ceased production of
certain steel nails in 2009 and, according to its questionnaire response, ***. Millennium Foreign Producer
Questionnaire Response at Question II-5; CR/PR at VII-1 n.3.
13
CR at VII-3, PR at VII-2, and CR/PR at Table VII-1.
14
19 U.S.C. § 1677(4)(A).
15
19 U.S.C. § 1677(4)(A).
16
19 U.S.C. § 1677(10).

4
 The decision regarding the appropriate domestic like product(s) in an investigation is a factual
determination, and the Commission has applied the statutory standard of “like” or “most similar in
characteristics and uses” on a case-by-case basis.17 No single factor is dispositive, and the Commission
may consider other factors it deems relevant based on the facts of a particular investigation.18 The
Commission looks for clear dividing lines among possible like products and disregards minor variations.19
Although the Commission must accept the determination of the U.S. Department of Commerce
(“Commerce”) as to the scope of the imported merchandise that is subsidized or sold at less than fair
value,20 the Commission determines what domestic product is like the imported articles Commerce has
identified.21 The Commission must base its domestic like product determination on the record in these
investigations. The Commission is not bound by prior determinations, even those pertaining to the same
imported products, but may draw upon previous determinations in addressing pertinent like product
issues.22 Each like product determination made by the Commission is sui generis, and starts with the
scope of the investigation.

B. Product Description

In its notice of initiation, Commerce defined the imported merchandise within the scope of this
investigation as follows:

The merchandise covered by this investigation includes 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

17
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); Torrington Co. v. United States, 747 F. Supp. 744, 749 n.3 (Ct. Int’l Trade 1990), aff’d, 938 F.2d 1278 (Fed.
Cir. 1991) (“every like product determination ‘must be made on the particular record at issue’ and the ‘unique facts
of each case’”). The Commission generally considers a number of factors including: (1) physical characteristics and
uses; (2) interchangeability; (3) channels of distribution; (4) customer and producer perceptions of the products;
(5) common manufacturing facilities, production processes, and production employees; and, where appropriate,
(6) price. See Nippon, 19 CIT at 455 n.4; Timken Co. v. United States, 913 F. Supp. 580, 584 (Ct. Int’l Trade 1996).
18
See, e.g., S. Rep. No. 96-249 at 90-91 (1979).
19
Nippon, 19 CIT at 455; Torrington, 747 F. Supp. at 748-49; see also S. Rep. No. 96-249 at 90-91 (1979)
(Congress has indicated that the like product standard should not be interpreted in “such a narrow fashion as to
permit minor differences in physical characteristics or uses to lead to the conclusion that the product and article are
not ‘like’ each other, nor should the definition of ‘like product’ be interpreted in such a fashion as to prevent
consideration of an industry adversely affected by the imports under consideration.”).
20
See, e.g., USEC, Inc. v. United States, Slip Op. 01-1421at 9 (Fed. Cir. April 25, 2002) (“The ITC may not
modify the class or kind of imported merchandise examined by Commerce.”); Algoma Steel Corp. v. United States,
688 F. Supp. 639, 644 (Ct. Int’l Trade 1988), aff’d, 865 F.3d 240 (Fed. Cir.), cert. denied, 492 U.S. 919 (1989).
21
Hosiden Corp. v. Advanced Display Mfrs., 85 F.3d 1561, 1568 (Fed. Cir. 1996) (Commission may find a single
like product corresponding to several different classes or kinds defined by Commerce); Cleo, 501 F.3d at 1298 n.1
(“Commerce’s {scope} finding does not control the Commission’s {like product} determination.”); Torrington, 747
F. Supp. at 748-52 (affirming Commission determination of six like products in investigations where Commerce
found five classes or kinds).
22
See, e.g., Acciai Speciali Terni S.p.A. v. United States, 118 F. Supp. 2d 1298, 1304-05 (Ct. Int’l Trade 2000);
Nippon, 19 CIT at 455; Asociacion Colombiana de Exportadores de Flores v. United States, 693 F. Supp. 1165,
1169 n.5 (Ct. Int’l Trade 1988); Citrosuco Paulista, S.A. v. United States, 704 F. Supp. 1075, 1087-88 (Ct. Int’l
Trade 1988).

5
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 hotdipping 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 investigation 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. Certain steel 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 this investigation 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 this investigation are steel nails
specifically enumerated and identified in ASTM Standard F 1667 (2005 revision) as
Type I, Style 20 nails, whether collated or in bulk, and whether or not galvanized. Also
excluded from the scope of this investigation are the following products:
• Non-collated (i.e., hand-drive 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; 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;
• Non-collated (i.e., hand-drive 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, and whose packaging and packaging marking are clearly
and prominently labeled ‘‘Roofing’’ or ‘‘Roof’’ nails;
• 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 whose packaging and packaging marking are clearly and prominently
labeled ‘‘Roofing’’ or ‘‘Roof’’ nails;
• Non-collated (i.e., hand-drive 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, and whose
packaging and packaging marking are clearly and prominently labeled ‘‘Roofing’’ or
‘‘Roof’’ nails;
• Corrugated nails. A corrugated nail is made of a small strip of corrugated steel
with sharp points on one side;
• Thumb tacks, which are currently classified under HTSUS 7317.00.10.00;
• 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;
• Certain steel 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;
and
• 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

6
 raised head section, a centered shank, and a smooth symmetrical point, suitable for use in
gas-actuated hand tools.23

C. Domestic Like Product Analysis

No party has requested that the Commission define the domestic like product more broadly than
the scope of these investigations. Mid Continent requests that the Commission define a single domestic
like product consisting of certain steel nails, coextensive with the scope, maintaining that minor variations
in nail features do not justify segmenting various types of nails into separate domestic like products.24
Dubai Wire agrees with the proposed definition of the domestic like product for the purposes of the
Commission’s preliminary phase injury determination.25

Physical Characteristics and Uses. All steel nails share the same basic characteristics, consisting
of a head, shaft, and point, and are produced to the same industry-wide standards.26 Although most steel
nails are produced from low-carbon steel, nails are also produced from stainless steel (to resist corrosion)
and of hardenable medium- to high-carbon steel.27 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).28
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.29
Specific uses for nails include the building of houses and other structures, both for structural
framing and interior applications, decks and fences, cabinets and furniture, and crates and pallets for
shipping.30 Cut nails are produced from high-carbon 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 packed in 50-pound cartons (also known as large-count
industry standard boxes) on pallets for the construction trades, and are also packed in smaller count
packages.31 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 for the mass merchandise retail repair and remodeling
market.32

23
76 Fed. Reg. 23559, 23564 (April 27, 2011).
24
Mid Continent Postconference Brief at 3.
25
Dubai Wire Postconference Brief at 1, n.1; Conf. Tr. at 78 (Marshak). Precision Fasteners expressed no
position on Mid Continent’s proposed definition of the domestic like product.
26
Mid Continent Postconference Brief at 17.
27
Although woodworking nails may have smaller heads and may differ in length and diameter, the differences are
minor and do not delineate separate domestic like products. CR at I-12, n.42, PR at I-9, n.42.
28
CR at I-12, PR at I-9.
29
CR at I-12, PR at I-9.
30
CR/PR at I-3 and II-1.
31
CR at I-14 to I-15 and n.44, PR at I-10 and n.44.
32
CR at I-14, PR at I-10; Conf. Tr. at 96-97 (Zinman).

7
 Interchangeability. Both Mid Continent and Dubai Wire agree that certain steel nails produced
to industry specifications are generally interchangeable within type, size, and finish, no matter where they
are produced.33 Although there may be some limitations on the interchangeability of certain steel nails
resulting from differences in types, sizes, and finishes, as well as the compatibility of even the same type
of nail with different nailing tools,34 a lack of interchangeability among types of products comprising a
continuum is not unexpected.35

Channels of distribution. The majority of shipments by both domestic producers and importers
of certain steel nails from the UAE and other sources went to distributors during the period of
investigation.36

Common Manufacturing Facilities, Production Processes, and Production Employees. As

noted, most steel nails are produced from steel wire, while a small proportion (cut nails) are produced
from steel plate. Nonintegrated nails producers use purchased steel wire as a starting raw material,
whereas integrated producers utilize their own facilities to produce wire for nails, using steel wire rod as
their starting material. Some integrated producers have their own steelmaking facilities and produce steel
wire rod from raw materials such as scrap, pig iron, and ferroalloys.37
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. Nails are made on two general types of equipment, known as a “cold-heading
machines” and “rotary heading machines.” 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 a helical twist, 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.38

Producer and Customer Perceptions. Both Mid Continent and Dubai Wire agree that certain
steel nails are a commodity product and that purchasers do not perceive the range of types of certain steel
nails as distinct products.39

33
Mid Continent Postconference Brief at 14; Dubai Wire Postconference Brief at 22; Conf. Tr. at 24-25 (Skarich)
and 79-80 (Zinman).
34
See Conf. Tr. at 79-81 (Zinman).
35
See, e.g., Carbon and Certain Alloy Steel Wire Rod from China, Germany, and Turkey, Inv. Nos. 731-TA-
1099-1101 (Preliminary), USITC Pub. 3832 at 10 (January 2006) (“a lack of interchangeability among products
comprising a continuum is not unexpected and not inconsistent with finding a single like product”); Outboard
Engines from Japan, Inv. No. 731-TA-1069 (Preliminary), USITC Pub. 3673 at 7-8 (March 2004) (“A lack of
interchangeability between products at either end of a continuum is not inconsistent with a finding of a single
domestic like product when the products are all part of a continuum.”).
36
CR/PR at II-1 and CR/PR at Table II-1.
37
CR at I-12, PR at I-9.
38
CR at I-13 to I-14, PR at I-9.
39
Mid Continent Postconference Brief at 17; Dubai Wire Postconference Brief at 22; Conf. Tr. at 24 (Skarich).

8
 Price. There is no evidence that there are significant price variations across the continuum of
types of steel nails.40

Conclusion. Certain steel nails share certain general physical characteristics and uses, are sold
primarily to distributors, are produced in similar production processes, and generally are perceived to be
similar products. Limitations in interchangeability among types of steel nails comprising a continuum
product are not unexpected. Thus, we define a single domestic like product consisting of certain steel
nails, coextensive with the scope of the investigation.

IV. DOMESTIC INDUSTRY

A. Domestic Industry

The domestic industry is defined as the “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.”41 In defining the domestic industry, the Commission’s general
practice has been to include in the industry all domestic production of the domestic like product, whether
toll-produced, captively consumed, or sold in the domestic merchant market. Based on our finding of a
single domestic like product that is co-extensive with the scope of these investigations, we find that the
domestic industry includes all domestic producers of certain steel nails, coextensive with the scope of
investigation.

B. Related Parties

We must determine whether any producer of the domestic like product should be excluded from
the domestic industry pursuant to section 19 U.S.C. § 1677(4)(B). The provision allows the Commission,
if appropriate circumstances exist, to exclude from the domestic industry producers that are related to an
exporter or importer of subject merchandise or which are themselves importers.42 Exclusion
of such a producer is within the Commission’s discretion based upon the facts presented in each
investigation.43

40
The evidence in a prior nails investigation suggested that prices for woodworking-based nails were
substantially higher than those for construction-based nails. The Commission determined, however, that it was not
clear from the record whether similar price variations were present across the continuum of other types of steel nails.
See Certain Steel Nails from China and the United Arab Emirates, Investigation Nos. 731-TA-1114 and 1115
(Preliminary), USITC Pub. 3939 (August 2007) (“2008 Investigation (Preliminary)”) at 8.
41
19 U.S.C. § 1677(4)(A).
42
19 U.S.C. § 1677(4)(B).
43
19 U.S.C. § 1677(4)(B). The primary factors the Commission has examined in deciding whether appropriate
circumstances exist to exclude a related party include the following:

(1) the percentage of domestic production attributable to the importing producer;

(2) the reason the U.S. producer has decided to import the product subject to investigation,
i.e., whether the firm benefits from the LTFV sales or subsidies or whether the firm must
import in order to enable it to continue production and compete in the U.S. market, and

(3) the position of the related producer vis-a-vis the rest of the industry, i.e., whether
inclusion or exclusion of the related party will skew the data for the rest of the industry.
(continued...)

9
 Three U.S. producers, *** reported that they imported the subject merchandise during the period
of investigation.44 Thus, they qualify as “related parties” under 19 U.S.C. § 1677(4)(B) and, therefore, the
Commission must consider whether “appropriate circumstances” exist to exclude any of these U.S.
producers from the domestic industry.
Although Mid Continent contends that “appropriate circumstances exist to exclude *** from the
domestic industry, we decline to exclude any domestic producer from the domestic industry as related
parties for the purposes of the preliminary phase of this investigation.
***’s imports were low in relation to its domestic production.45 ***’s subject imports totaled ***
short tons in 2008, *** short tons in 2009, and *** short tons in 2010.46 The ratio of ***’s subject
imports to its domestic production was *** percent in 2008, *** percent in 2009, and *** in 2010.
Accordingly, we find that ***’s primary interest lies in domestic production rather than in importation.47
***’s U.S. production, as a share of the overall domestic production of the domestic like product, was ***
percent in 2010.48 *** the Petition.49 The record does not appear to indicate that *** may be deriving a
benefit from importing subject merchandise because its operating income margins ***.50 51 We find that
appropriate circumstances do not exist for the Commission to exclude *** from the domestic industry as a
related party for purposes of the preliminary phase investigation.
***’s imports of subject merchandise were also very low in relation to its domestic production.
*** imported *** short tons in 2008, *** short tons in 2009, and *** short tons in 2010.52 The ratio of
***’s subject imports to its domestic production was *** percent in 2008, *** percent in 2009, and ***

43
(...continued)
See, e.g., Torrington Co. v. United States, 790 F. Supp. 1161 (Ct. Int’l Trade 1992), aff’d without opinion, 991 F.2d
809 (Fed. Cir. 1993). The Commission has also considered the ratio of import shipments to U.S. production for
related producers and whether the primary interest of the related producer lies in domestic production or importation.
See, e.g., Open-End Spun Rayon Singles Yarn from Austria, Inv. No. 731-TA-751 (Preliminary), USITC Pub. 2999
at 7 n.39 (October 1996). These latter two considerations were cited as appropriate factors as well in Allied Mineral
Products, Inc. v. United States, —Fed. Supp. 2d.—, Slip Op. 04-139 (Ct. Int’l Trade November 12, 2004) at 6.
44
CR/PR at Table III-5. Neither Dubai Wire nor Precision Fasteners expressed a position with respect to the
possible exclusion of related parties from the domestic industry.
45
See CR at III-9, PR at III-6, and CR/PR at Table III-5.
46
CR/PR at Table III-5.
47
Consistent with her practice in past investigations and reviews, Commissioner Aranoff does not rely on
individual-company operating income margins, which reflect a domestic producer’s financial operations related to
production of the domestic like product, in assessing whether a related party has benefitted from importation of
subject merchandise. Rather, she determines whether to exclude a related party based principally on its ratio of
subject imports to domestic production and whether its primary interests lie in domestic production or importation.
48
CR/PR at Table III-1.
49
*** operating income margin was *** percent in 2010 while the industry average was *** percent. CR/PR at
Table III-1.
50
CR/PR at Table VI-2.
51
For purposes of this preliminary investigation, Commissioner Pinkert does not rely upon related parties’
financial performance as a factor in determining whether there are appropriate circumstances to exclude them from
the domestic industry and relies instead on other information relevant to this issue. The present record is not
sufficient to link the related parties' profitability on U.S. operations to any specific benefit they derive from
importing. See Allied Mineral Products, Inc. v. United States, 28 C.I.T. 1861, 1865-1867 (2004). For any final
investigation, Commissioner Pinkert invites the parties to provide any information they may have with respect to
whether related parties are benefitting financially from their status as related parties.
52
CR/PR at Table III-5.

10
percent in 2010.53 ***’s U.S. production, as a share of the overall domestic production of the domestic
like product, was *** percent in 2010;54 thus its interests appear to lie in domestic production. *** the
Petition.55 As noted earlier, however, ***. Given that *** did not provide any usable financial data, its
exclusion in the preliminary phase is largely moot.56 Therefore, we find that appropriate circumstances do
not exist to exclude *** from the domestic industry as a related party for purposes of the preliminary
phase investigation.
***’s imports of subject merchandise likewise were low relative to its domestic production.57
*** imported *** short tons in 2008, *** short tons in 2009, and *** short tons in 2010.58 The ratio of
***’s subject imports to its domestic production was *** percent in 2008, *** percent in 2009, and ***
percent in 2010.59 ***’s U.S. production, as a share of the overall domestic production of the domestic
like product, was *** percent in 2010.60 *** the Petition.61 We conclude that ***’s interests lie
principally in domestic production rather than importation. *** may have derived some benefit from its
purchases of subject imports, particularly in 2010, as its financial results were *** of the industry in that
year.62 We find that appropriate circumstances do not exist to exclude *** from the domestic industry as
a related party for purposes of the preliminary phase investigation.

V. REASONABLE INDICATION OF MATERIAL INJURY BY REASON OF SUBJECT

IMPORTS63

A. Legal Standard

In the preliminary phase of antidumping or countervailing duty investigations, the Commission

determines whether there is a reasonable indication that an industry in the United States is materially
injured or threatened with material injury by reason of the imports under investigation.64 In making this
determination, the Commission must consider the volume of subject imports, their effect on prices for the
domestic like product, and their impact on domestic producers of the domestic like product, but only in
the context of U.S. production operations.65 The statute defines “material injury” as “harm which is not

53
CR/PR at Table III-5.
54
CR/PR at Table III-1.
55
CR/PR at Table III-1.
56
See CR/PR at III-1 n.3.
57
See CR/PR at Table III-5.
58
CR/PR at Table III-5.
59
CR/PR at Table III-5. Mid Continent also reports that ***. Mid Continent Postconference Brief at 4.
60
CR/PR at Table III-1.
61
CR/PR at Table III-1; *** Importer Questionnaire at II-5 to II-6; Mid Continent Postconference Brief at 4.
62
CR/PR at Tables VI-2 and C-1.
63
Negligibility under 19 U.S.C. § 1677(24) is not an issue in this investigation. Official statistics from
Commerce indicate that subject imports from the UAE, by quantity, accounted for 27.3 percent of total certain steel
nail imports in March 2010 to February 2011, the most recent 12-month period preceding the filing of the petition
for which data were available. CR at IV-7, PR at IV-5. Therefore, the volume of subject imports was well above the
statute’s three percent negligibility level.
64
19 U.S.C. §§ 1671b(a), 1673b(a).
65
19 U.S.C. § 1677(7)(B)(i). The Commission “may consider such other economic factors as are relevant to the
determination” but shall “identify each {such} factor ... {and} explain in full its relevance to the determination.”
(continued...)

11
inconsequential, immaterial, or unimportant.”66 In assessing whether there is a reasonable indication that
the domestic industry is materially injured or threatened with material injury by reason of subject imports,
we consider all relevant economic factors that bear on the state of the industry in the United States.67 No
single factor is dispositive, and all relevant factors are considered “within the context of the business
cycle and conditions of competition that are distinctive to the affected industry.”68
Although the statute requires the Commission to determine whether there is a reasonable
indication that the domestic industry is materially injured or threatened with material injury “by reason
of” unfairly traded imports,69 it does not define the phrase “by reason of,” indicating that this aspect of the
injury analysis is left to the Commission’s reasonable exercise of its discretion.70 In identifying a causal
link, if any, between subject imports and material injury to the domestic industry, the Commission
examines the facts of record that relate to the significance of the volume and price effects of the subject
imports and any impact of those imports on the condition of the domestic industry. This evaluation under
the “by reason of” standard must ensure that subject imports are more than a minimal or tangential cause
of injury and that there is a sufficient causal, not merely a temporal, nexus between subject imports and
material injury.71
In many investigations, there are other economic factors at work, some or all of which may also
be having adverse effects on the domestic industry. Such economic factors might include nonsubject
imports; changes in technology, demand, or consumer tastes; competition among domestic producers; or
management decisions by domestic producers. The legislative history explains that the Commission must
examine factors other than subject imports to ensure that it is not attributing injury from other factors to
the subject imports, thereby inflating an otherwise tangential cause of injury into one that satisfies the
statutory material injury threshold.72 In performing its examination, however, the Commission need not

65
(...continued)
19 U.S.C. § 1677(7)(B).
66
19 U.S.C. § 1677(7)(A).
67
19 U.S.C. § 1677(7)(C)(iii).
68
19 U.S.C. § 1677(7)(C)(iii).
69
19 U.S.C. §§ 1671b(a), 1673b(a).
70
Angus Chemical Co. v. United States, 140 F.3d 1478, 1484-85 (Fed. Cir. 1998) (“{T}he statute does not
‘compel the commissioners’ to employ {a particular methodology}.”), aff’g 944 F. Supp. 943, 951 (Ct. Int’l Trade
1996).
71
The Federal Circuit, in addressing the causation standard of the statute, observed that “{a}s long as its effects
are not merely incidental, tangential, or trivial, the foreign product sold at less than fair value meets the causation
requirement.” Nippon Steel Corp. v. USITC, 345 F.3d 1379, 1384 (Fed. Cir. 2003). This was further ratified in
Mittal Steel Point Lisas Ltd. v. United States, 542 F.3d 867, 873 (Fed. Cir. 2008), where the Federal Circuit, quoting
Gerald Metals, Inc. v. United States, 132 F.3d 716, 722 (Fed. Cir. 1997), stated that “this court requires evidence in
the record ‘to show that the harm occurred “by reason of” the LTFV imports, not by reason of a minimal or
tangential contribution to material harm caused by LTFV goods.’” See also Nippon Steel Corp. v. United States,
458 F.3d 1345, 1357 (Fed. Cir. 2006); Taiwan Semiconductor Industry Ass’n v. USITC, 266 F.3d 1339, 1345 (Fed.
Cir. 2001).
72
Statement of Administrative Action (“SAA”) on Uruguay Round Agreements Act (“URAA”), H.R. Rep.
103-316, Vol. I at 851-52 (1994) (“{T}he Commission must examine other factors to ensure that it is not attributing
injury from other sources to the subject imports.”); S. Rep. 96-249 at 75 (1979) (the Commission “will consider
information which indicates that harm is caused by factors other than less-than-fair-value imports.”); H.R. Rep.
96-317 at 47 (1979) (“in examining the overall injury being experienced by a domestic industry, the ITC will take
into account evidence presented to it which demonstrates that the harm attributed by the petitioner to the subsidized
or dumped imports is attributable to such other factors;” those factors include “the volume and prices of
(continued...)

12
isolate the injury caused by other factors from injury caused by unfairly traded imports.73 Nor does the
“by reason of” standard require that unfairly traded imports be the “principal” cause of injury or
contemplate that injury from unfairly traded imports be weighed against other factors, such as nonsubject
imports, which may be contributing to overall injury to an industry.74 It is clear that the existence of
injury caused by other factors does not compel a negative determination.75
Assessment of whether material injury or threat of material injury to the domestic industry is “by
reason of” subject imports “does not require the Commission to address the causation issue in any
particular way” as long as “the injury to the domestic industry can reasonably be attributed to the subject
imports” and the Commission “ensure{s} that it is not attributing injury from other sources to the subject

72
(...continued)
nonsubsidized imports or imports sold at fair value, contraction in demand or changes in patterns of consumption,
trade restrictive practices of and competition between the foreign and domestic producers, developments in
technology and the export performance and productivity of the domestic industry”); accord Mittal Steel, 542 F.3d at
877.
73
SAA at 851-52 (“{T}he Commission need not isolate the injury caused by other factors from injury caused by
unfair imports.”); Taiwan Semiconductor Industry Ass’n v. USITC, 266 F.3d 1339, 1345 (Fed. Cir. 2001) (“{T}he
Commission need not isolate the injury caused by other factors from injury caused by unfair imports ... . Rather, the
Commission must examine other factors to ensure that it is not attributing injury from other sources to the subject
imports.” (emphasis in original)); Asociacion de Productores de Salmon y Trucha de Chile AG v. United States,
180 F. Supp. 2d 1360, 1375 (Ct. Int’l Trade 2002) (“{t}he Commission is not required to isolate the effects of
subject imports from other factors contributing to injury” or make “bright-line distinctions” between the effects of
subject imports and other causes.); see also Softwood Lumber from Canada, Inv. Nos. 701-TA-414 and 731-TA-928
(Remand), USITC Pub. 3658 at 100-01 (Dec. 2003) (Commission recognized that “{i}f an alleged other factor is
found not to have or threaten to have injurious effects to the domestic industry, i.e., it is not an ‘other causal factor,’
then there is nothing to further examine regarding attribution to injury”), citing Gerald Metals, Inc. v. United States,
132 F.3d 716, 722 (Fed. Cir. 1997) (the statute “does not suggest that an importer of LTFV goods can escape
countervailing duties by finding some tangential or minor cause unrelated to the LTFV goods that contributed to the
harmful effects on domestic market prices.”).
74
S. Rep. 96-249 at 74-75; H.R. Rep. 96-317 at 47.
75
See Nippon Steel Corp., 345 F.3d at 1381 (“an affirmative material-injury determination under the statute
requires no more than a substantial-factor showing. That is, the ‘dumping’ need not be the sole or principal cause of
injury.”).

13
imports.”76 77 Indeed, the Federal Circuit has examined and affirmed various Commission methodologies
and has disavowed “rigid adherence to a specific formula.”78
The Federal Circuit’s decisions in Gerald Metals, Bratsk, and Mittal Steel all involved cases
where the relevant “other factor” was the presence in the market of significant volumes of price-
competitive nonsubject imports. The Commission interpreted the Federal Circuit’s guidance in Bratsk as
requiring it to apply a particular additional methodology following its finding of material injury in cases
involving commodity products and a significant market presence of price-competitive nonsubject
imports.79 The additional “replacement/benefit” test looked at whether nonsubject imports might have
replaced subject imports without any benefit to the U.S. industry. The Commission applied that specific
additional test in subsequent cases, including the Carbon and Certain Alloy Steel Wire Rod from Trinidad
and Tobago determination that underlies the Mittal Steel litigation.
Mittal Steel clarifies that the Commission’s interpretation of Bratsk was too rigid and makes clear
that the Federal Circuit does not require the Commission to apply an additional test nor any one specific
methodology; instead, the court requires the Commission to have “evidence in the record ‘to show that
the harm occurred ‘by reason of’ the LTFV imports,’” and requires that the Commission not attribute
injury from nonsubject imports or other factors to subject imports.80 Accordingly, we do not consider
ourselves required to apply the replacement/benefit test that was included in Commission opinions
subsequent to Bratsk.
The progression of Gerald Metals, Bratsk, and Mittal Steel clarifies that, in cases involving
commodity products where price-competitive nonsubject imports are a significant factor in the U.S.

76
Mittal Steel, 542 F.3d at 877-78; see also id. at 873 (“While the Commission may not enter an affirmative
determination unless it finds that a domestic industry is materially injured ‘by reason of’ subject imports, the
Commission is not required to follow a single methodology for making that determination ... . {and has} broad
discretion with respect to its choice of methodology.”) citing United States Steel Group v. United States, 96 F.3d
1352, 1362 (Fed. Cir. 1996) and S. Rep. 96-249 at 75.
77
Commissioner Pinkert does not join this paragraph or the following three paragraphs. He points out that the
Federal Circuit, in Bratsk, 444 F.3d 1369, and Mittal, held that the Commission is required, in certain circumstances,
when considering present material injury, to undertake a particular kind of analysis of nonsubject imports, albeit
without reliance upon presumptions or rigid formulas. Mittal explains as follows:

What Bratsk held is that “where commodity products are at issue and fairly traded, price-competitive, non-
subject imports are in the market,” the Commission would not fulfill its obligation to consider an important
aspect of the problem if it failed to consider whether non-subject or non-LTFV imports would have
replaced LTFV subject imports during the period of investigation without a continuing benefit to the
domestic industry. 444 F.3d at 1369. Under those circumstances, Bratsk requires the Commission to
consider whether replacement of the LTFV subject imports might have occurred during the period of
investigation, and it requires the Commission to provide an explanation of its conclusion with respect to
that factor.

542 F.3d at 878.

78
Nucor Corp. v. United States, 414 F.3d 1331, 1336, 1341 (Fed. Cir. 2005); see also Mittal Steel, 542 F.3d at
879 (“Bratsk did not read into the antidumping statute a Procrustean formula for determining whether a domestic
injury was ‘by reason’ of subject imports.”).
79
Mittal Steel, 542 F.3d at 875-79.
80
Mittal Steel, 542 F.3d at 873 (quoting from Gerald Metals, 132 F.3d at 722), 875-79 & n.2 (recognizing the
Commission’s alternative interpretation of Bratsk as a reminder to conduct a non-attribution analysis).

14
market, the Court will require the Commission to give full consideration, with adequate explanation, to
non-attribution issues when it performs its causation analysis.81 82
The question of whether the material injury threshold for subject imports is satisfied
notwithstanding any injury from other factors is factual, subject to review under the substantial evidence
standard. Congress has delegated this factual finding to the Commission because of the agency’s
institutional expertise in resolving injury issues.83 84
As noted above, the Commission has nearly complete data coverage for the domestic industry.
The Commission also received questionnaire responses from 14 importers that accounted for all of the
subject imports, by quantity, for the period of investigation.85 The Commission received questionnaire
responses from two subject producers in the UAE that accounted for all of the subject imports in 2010.86
When appropriate in these investigations, we have relied on the facts otherwise available, including
official import statistics from Commerce and information available from published sources, as well as
information submitted in these investigations.87
For the reasons stated below, we find there is a reasonable indication that the domestic industry
producing certain steel nails is materially injured by reason of subject imports from the United Arab
Emirates that are allegedly sold in the United States at less than fair value.88

81
Commissioner Lane also refers to her dissenting views in Polyethylene Terephthalate Film, Sheet, and Strip
from Brazil, China, Thailand, and the United Arab Emirates, Inv. Nos. 731-TA-1131-1134 (Final), USITC Pub.
4040 (Oct. 2008), for further discussion of Mittal Steel.
82
To that end, after the Federal Circuit issued its decision in Bratsk, the Commission began to present published
information or send out information requests in final phase investigations to producers in nonsubject countries that
accounted for substantial shares of U.S. imports of subject merchandise (if, in fact, there were large nonsubject
import suppliers). In order to provide a more complete record for the Commission’s causation analysis, these
requests typically seek information on capacity, production, and shipments of the product under investigation in the
major source countries that export to the United States. The Commission plans to continue utilizing published or
requested information in final phase investigations in which there are substantial levels of nonsubject imports.
83
Mittal Steel, 542 F.3d at 873; Nippon Steel Corp., 458 F.3d at 1350, citing U.S. Steel Group, 96 F.3d at 1357;
S. Rep. 96-249 at 75 (“The determination of the ITC with respect to causation is ... complex and difficult, and is a
matter for the judgment of the ITC.”).
84
We provide in the discussion of impact below an analysis of other factors alleged to have caused any material
injury that likely would be experienced by the domestic industry.
85
CR/PR at Table IV-1.
86
CR/PR at Table VII-1. Subject exports from these producers match or exceed U.S. imports from the UAE in
all threes years of the period of investigation.
87
Chairman Okun notes that the statute authorizes the Commission to take adverse inferences in injury
investigations, but such authorization does not relieve the Commission of its obligation to consider the record
evidence as a whole in making its determination. 19 U.S.C. § 1677e. She generally gives credence to the facts
supplied by the participating parties and certified by them as true, but bases her decision on the evidence as a whole,
and does not automatically accept participating parties’ suggested interpretations of the record evidence. Regardless
of the level of participation and the interpretations urged by participating parties, the Commission is obligated to
consider all evidence relating to each of the statutory factors and may not draw adverse inferences that render such
analysis superfluous. “In general, the Commission makes determinations by weighing all of the available evidence
regarding a multiplicity of factors relating to the domestic industry as a whole and by drawing reasonable inferences
from the evidence it finds most persuasive.” SAA at 869.
88
Chairman Okun and Commissioner Pearson find that there is no reasonable indication that an industry in the
United States is materially injured or threatened with material injury, or that there is a reasonable indication that the
establishment of an industry is materially retarded, by reason of subject imports of certain steel nails that are
allegedly sold at less than fair value. See Dissenting Views of Chairman Deanna Tanner Okun and Commissioner
(continued...)

15
 B. Conditions of Competition and the Business Cycle

The following conditions of competition inform our analysis in the preliminary phase of this
investigation.

1. Demand Considerations

Steel nails generally are used in residential and commercial construction and industrial sectors to
fasten two pieces of material, typically wood or other solid building materials, together. In the
construction sector, steel nails are used in the building of houses and other structures, while in the
industrial sector they are used to make furniture and cabinets, as well as crates and pallets for shipping.
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.89
Apparent U.S. consumption of steel nails decreased from 661,518 short tons in 2008 to 440,997
short tons in 2009, then increased to 526,467 short tons in 2010.90 The construction sector is the single
largest end use for steel nails. Consequently, demand for steel nails is strongly influenced by activity in
the construction market.91 New housing starts in the United States are the major factor influencing the
overall demand.92 Monthly new housing starts declined sharply during 2008 and then fluctuated within a
narrow range from 2009 to 2010.93 According to questionnaire responses, demand for steel nails has
decreased since January 2008 due to decreases in housing construction and the weak general economy.94
The parties agree that the construction market is the primary driver of demand for steel nails in
the U.S. market.95 Dubai Wire alleges, however, that the construction sector can be subdivided into new
construction market activity, in which nails are sold through wholesalers, and the remodeling/repair/Do-
It-Yourself (“DIY”) activity, in which nails are sold through mass merchandise retailers, such as Home
Depot and Lowes.96 Dubai Wire also alleges that the domestic producers do not compete for sales to the
mass merchandisers primarily because they cannot meet the significant demands made by these
customers, such as 100s of SKUs,97 just-in-time delivery, private labeling, and multiple small packages.98

88
(...continued)
Daniel R. Pearson.
89
CR at I-12, PR at I-9.
90
CR at II-4, PR at II-2, and CR/PR at Table C-1.
91
CR/PR at II-1.
92
CR at II-4, PR at II-2.
93
CR/PR at Figure II-1.
94
CR at II-4, PR at II-2. All eight responding domestic producers and 15 of 22 responding importers reported
that demand had decreased; the other seven responding importers reported that demand had fluctuated since January
2008. Id.
95
Mid Continent Postconference Brief at 5; Dubai Wire Postconference Brief at 20.
96
Dubai Wire Postconference Brief at 20. Reportedly, *** percent of PrimeSource’s sales are to mass
merchandise retailers, with a substantial portion of the “hand drive” nails packaged in small packs (1- and 5-pound
packs). CR at II-8 n.9, PR at II-6 n.9; Dubai Wire Postconference Brief at 49-50.
97
A Stock Keeping Unit (“SKU”) “is a code number, typically used as a machine-readable bar code, assigned to a
single item of inventory. As part of a system for inventory control, the SKU represents the smallest unit of a product
that can be sold from inventory, purchased, or added to inventory.” Encyclopaedia Britannica
([Link] Thus, a merchant may assign different SKUs to a product for
(continued...)

16
Mid Continent counters that the principal U.S. market activity remains residential construction,
notwithstanding the decreases in housing starts and the economic downturn,99 and that the domestic
producers sell steel nails in all channels of distribution with all the types of nails sold by the subject
producers in the U.S. market.100 There is some evidence in the record to support Mid Continent’s
assertion that the domestic producers compete for sales to remodel/repair/DIY customers.101 We intend to
revisit the issue of demand in the various sectors of the domestic market for steel nails and the extent to
which the domestic product and subject imports compete in each of these sectors in any final phase
investigation.

2. Supply Considerations

There are three sources of supply in the U.S. market: domestic shipments, imports of subject
merchandise from the UAE, and imports from nonsubject countries, including imports of certain steel
nails from China that are subject to an antidumping duty order imposed in August 2008.102 During the
period of investigation, 10 domestic producers accounted for over *** percent of U.S. production of steel
nails in 2010.103 A number of domestic producers reported both mill closures and the curtailment and
consolidation of production from 2008 to 2010.104
The domestic industry historically has supplied a relatively small portion of the U.S. market for
steel nails, with the remainder supplied by imports.105 Nonsubject imports had a larger share of the U.S.
market than either the domestic industry or the subject imports over the period of investigation, but their
share of the market decreased steadily over the period. At the same time, subject imports steadily gained

97
(...continued)
inventory control purposes based on differences in packaging, model variations, or locations of the inventory.
98
Dubai Wire Postconference Brief at 21-22. The record shows, however, that domestic producers are also
capable of packaging nails in 1-and 5-pound boxes. Currently, Maze Nails, Specialty Nail, and ITW, advertise
boxes of steel nails as small as 1-and 5-pounds. Pneu-Fast advertises boxes of steel nails as small as 7-pounds.
CR at I-14 n.44, PR at I-10 n.44.
99
Mid Continent alleges that demand in the remodeling/repair/DIY market, like the housing market, decreased
significantly, down 23 percent from mid-2007 through 2009, as a result of the recession. Mid Continent
Postconference Brief at 7-8.
100
Mid Continent Postconference Brief at 38; Conf. Tr. at 25 (Skarich) (“Both the domestic producers and the
UAE producers produce and sell a full spectrum of steel nails through distribution channels. We even produce and
sell private label nails to some longstanding customers despite the fact that it can dilute our brand. We also sell
some nails directly to end users. Distributors compete with each other to sell retailers, construction and industrial
users throughout our country. Therefore, our {Mid Continent} nails and the rest of the domestic industry's nails
compete in all channels of distribution with all types of nails sold by the UAE in the U.S. market.”).
101
***.
102
Antidumping duties were imposed on U.S. imports of certain steel nails from China in August 2008. See
Antidumping Duty Order; Certain Steel Nails from the People’s Republic of China, 73 Fed. Reg. 44961 (August 1,
2008). Paslode Fasteners (Shanghai) Co., Ltd. (“Paslode”), a division of domestic producer ITW, was excluded
from the order and, consequently, its imports are not subject to the antidumping duty order on certain steel nails from
China. See Certain Steel Nails from the People’s Republic of China: Final Determination of Sales at Less Than Fair
Value, 73 Fed. Reg. 33977, 33981 (June 16, 2008), and CR/PR at Table IV-3 note.
103
CR/PR at III-1. There were 17 domestic producers of certain steel nails at the time of the 2008 Investigation.
2008 Investigation (Preliminary) at 18.
104
CR/PR at Table III-2. Examples include: ***. Id.
105
CR/PR at Table IV-4.

17
market share and the domestic industry’s market share initially increased from 2008 to 2009, and then
decreased from 2009 to 2010.106

3. Substitutability & Other Conditions

Steel nails are produced to certain industry specifications, including FF-N and ASTM.107 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 domestic product, subject import, or nonsubject import. Thus, the
record supports the conclusion that steel nails are generally interchangeable within type, size, and finish,
regardless of where produced. The majority of responding domestic producers and importers reported
that the domestic like product, the subject imports, and nonsubject imports are frequently or always
interchangeable.108
The parties disagree on whether the types of nails supplied by the domestic producers compete
with nails imported from the UAE. Dubai Wire alleges that the domestic producers manufacture only a
limited range of products that do not compete with the wider range and variety of packaging options
available from the UAE producers. Dubai Wire alleges that there are numerous categories of subject nails
that the domestic industry does not produce, and that competition between domestically produced steel
nails and a substantial volume of subject imports is therefore attenuated.109 Mid Continent counters that
the domestic industry has the capability to produce, and supply the full range of steel nails exported by
Dubai Wire to the U.S. market. Mid Continent also disputes the assertion of attenuated competition
between subject imports and the domestic like product and that a single producer source of supply is
available in the UAE, but not from domestic producers. Mid Continent asserts that the domestic
producers collectively are “fully capable” of supplying the full range of nail products “should the demand
exist at a fairly-traded price range.”110 In any final phase of this investigation, we will seek additional
information regarding the degree of head-to-head competition between steel nails produced domestically
and subject imports.
The majority of producers and importers reported that no substitutes exist for steel nails.111
Although quality is the most common non-price factor listed, so long as nails meet the specifications
required for the specific end use, price is generally the largest single factor affecting purchasing
decisions.112 Steel nails are sold mostly on a spot basis,113 and raw materials account for a substantial
share of the cost of steel nails.114

106
CR/PR at Table C-1.
107
Mid Continent Postconference Brief at 14; Dubai Wire Postconference Brief at 22; Conf. Tr. at 24-25
(Skarich) and 79-80 (Zinman).
108
CR at II-7, PR at II-5, and CR/PR at Table II-2.
109
Dubai Wire Postconference Brief at 21-22.
110
Mid Continent Postconference Brief at 11.
111
CR at II-5, PR at II-4. Several firms listed a number of possible substitutes, including screws, staples, and
anchors for applications. These products, however, are not considered to be price competitive with steel nails. Id.
112
CR at II-9, PR at II-7, and CR/PR at Table II-3.
113
CR at V-3, PR at V-2.
114
CR/PR at V-1. Raw material costs accounted for 65.8 percent of the cost of goods sold (“COGS”) in 2008,
65.2 percent in 2009, and 58.8 percent in 2010. Id. The main raw material used to produce certain steel nails is
carbon steel wire rod. Carbon steel wire prices increased during the first part of 2008, peaked in July and August
2008, and then fell sharply during the remainder of 2008 and the early part of 2009. Carbon steel wire rod prices
increased irregularly thereafter, but remained below the peak levels reached in 2008. See CR/PR at Figure V-1.

18
 C. Volume of the Subject Imports

Section 771(7)(C) of the Act provides that the “Commission shall consider whether the volume of
imports of the merchandise, or any increase in that volume, either in absolute terms or relative to
production or consumption in the United States, is significant.”115
The volume of subject imports is significant and increased substantially from 2008 to 2010, both
in absolute terms and relative to apparent U.S. consumption. The increases were sharpest from 2009 to
2010,116 after imports of certain steel nails from China became subject to antidumping duties and began to
reduce their presence in the U.S. market.117 U.S. imports of steel nails from the UAE increased by 31.6
percent from 2008 to 2009 and by 86.7 percent from 2009 to 2010. The volume of subject imports
measured by quantity increased from 48,256 short tons in 2008 to 63,494 short tons in 2009, and then to
118,558 short tons in 2010, for an overall increase of 145.7 percent over the period of investigation.118
Subject imports made significant gains in market share over the period of investigation,
increasing from 7.3 percent in 2008 to 14.4 percent in 2009, and to 22.5 percent in 2010. Domestic
producers’ market share increased from 18.6 percent in 2008 to 22.0 percent in 2009, before decreasing to
17.8 percent in 2010. The volume of nonsubject imports decreased by 42.8 percent from 2008 to 2009,
before increasing by 12 percent in 2010.119 The nonsubject imports’ share of apparent U.S. consumption,
however, decreased from 74.1 percent in 2008 to 63.6 percent in 2009, and then to 59.7 percent in 2010.
Thus, during 2008 to 2009, subject imports and domestic production both gained market share at the
expense of nonsubject imports, whereas during 2009 to 2010 the 86.7 percent increase in subject imports
resulted in a loss of market share not only for nonsubject imports but for domestic producers as well.120
In addition, while volumes of subject imports increased and apparent U.S. consumption decreased over
the period of investigation, U.S. importers’ inventories of subject imports almost *** over the period.121
In sum, the volume of subject imports increased both absolutely and relative to consumption over
the period of investigation. For the foregoing reasons, we find that the volume and increase in volume of
subject imports were significant.

115
19 U.S.C. § 1677(7)(C)(i).
116
CR at IV-2, PR at IV-1 and CR/PR at Table IV-2.
117
Antidumping duties were imposed on imports of certain steel nails from China in August 2008. See
Antidumping Duty Order, Certain Steel Nails from the People’s Republic of China, 73 Fed. Reg. 44961 (August 1,
2008). The petition in that investigation was filed in May 2007 and the Commission’s final phase period of
investigation was calendar years 2005 through 2007. See Certain Steel Nails from China, Inv. No. 731-TA-1114
(Final), USITC Pub. 4022 (July 2008).
118
CR/PR at Table IV-3.
119
A large portion of these nonsubject imports were from China. China accounted for 34.8 percent and Taiwan
for 13.2 percent of total U.S. imports of steel nails during 2010. CR at IV-4, PR at IV-3. Imports of nonsubject
certain steel nails from China were 266,703 short tons in 2008, 137,975 short tons in 2009, and 150,730 short tons
in 2010. CR/PR at Table IV-3. The imports from China entering the United States prior to August 1, 2008, were the
subject an affirmative material injury determination by the Commission that year. Imports from the second largest
source of certain steel nails, Taiwan, were 76,520 short tons in 2008, 61,438 short tons in 2009, and 57,166 short
tons in 2010. Id.
120
CR/PR at Table C-1.
121
CR/PR at Table VII-2. Inventories of subject nails held by U.S. importers were in *** short tons 2008, ***
short tons in 2009, and *** short tons in 2010. Id.

19
 D. Price Effects of the Subject Imports

Section 771(C)(ii) of the Act provides that, in evaluating the price effects of subject imports,
the Commission shall consider whether – (I) there has been significant
price underselling by the imported merchandise as compared with the
price of domestic like products of the United States, and (II) the effect of
imports of such merchandise otherwise depresses prices to a significant
degree or prevents price increases, which otherwise would have
occurred, to a significant degree.122

There is some divergence in views by market participants on the importance of price in

purchasing decisions. As noted above, the majority of responding domestic producers and importers
found that subject imports from the UAE were always or frequently interchangeable with domestically
produced steel nails.123 While a majority of responding domestic producers reported that non-price
differences between subject imports and the domestic like product were never a factor in purchasing
decisions, the majority of responding importers reported that non-price differences were always,
frequently, or sometimes an important factor, with only a few responding that such differences were never
a factor.124 We conclude that price is an important factor in purchasing decisions, but it is not the only
factor.125
In this investigation, the Commission collected quarterly pricing data for six types of steel nail
products.126 Six domestic producers and 13 importers of steel nails from the UAE provided usable pricing
data for the Commission’s six pricing products. Pricing data reported by these firms accounted for
6.7 percent of domestic producers’ shipments, by value, and 1.5 percent of shipments of subject imports,
by value, during the period of investigation.127 Subject imports undersold the domestic like product in
46 of 62 quarterly pricing comparisons with margins of underselling ranging from 1.1 percent to
83.3 percent over the period of investigation.128 We find this underselling to be significant.

122
19 U.S.C. § 1677(7)(C)(ii).
123
CR/PR at Table II-2.
124
CR/PR at Table II-3.
125
CR at II-9-, PR at II-6, and CR/PR at Table II-3.
126
CR at V-4, PR at V-3. No firms reported pricing data for all products for all quarters. The products for which
pricing data were collected are as follows:

Product 1.– 3" by 0.131" bright smooth, plastic-strip collated nails.

Product 2.– 3" by 0.120" bright smooth, plastic-strip collated nails.

Product 3.– 2 3/8" by 0.113" bright screw and ring shank nails, plastic-strip collated.

Product 4.– 3 1/4" by 0.148" 16D smooth vinyl-coated sinkers, bulk.

Product 5.– 2" by 0.113" bright, drive screw, machine quality pallet nails, bulk.

Product 6.– 2" by 0.099" bright, drive screw, wire-welded collated in coils.
127
CR at V-4, PR at V-3.
128
CR at V-18, PR at V-6; and CR/PR at Table V-8.

20
 Moreover, during this preliminary phase of the investigation, the Commission was able to
confirm 26 lost sale allegations totaling $***, and 28 lost revenue allegations totaling $***.129 Of the
eight responding domestic producers, three reported that they either had to reduce prices or roll back
announced price increases in response to the prices of subject imports.130 Moreover, some of the
purchasers indicated that they switched from domestic steel nails to subject imports based on price.131
The significant underselling by the subject imports and the evidence of lost sales leads us to conclude that
the subject imports were able to maintain a significant presence in the U.S. market during the period of
investigation through aggressive pricing.
We find evidence of price depressing effects of subject imports. U.S. prices for five of the six
products chosen by the Commission for comparison purposes decreased during the period of
investigation, ranging from 3.4 percent to 48.3 percent.132 In addition, eight of 11 responding purchasers
reported that U.S. producers had reduced prices because of subject imports.133 Given that the volume of
nonsubject imports decreased substantially over the period and that demand partially recovered from 2009
to 2010, we attribute the fall in prices to subject imports in substantial part.134
We also find that there is some evidence of price suppression.135 The COGS-to-net sales ratio
decreased from 81.3 percent to 79.1 percent from 2008 to 2009, reflecting a slight improvement in the
domestic industry’s financial condition as these firms gained market share from nonsubject imports
following the imposition of antidumping duties on imports of certain steel nails from China in 2008. The
ratio increased, however, to 81.9 percent from 2009 to 2010, an indicator of a “cost/price” squeeze for the
domestic industry, despite a 19 percent increase in apparent U.S. consumption and a 14 percent decrease
in raw material costs during this period, a circumstance we attribute to the 87 percent increase in the
volume of subject imports.136
For the foregoing reasons, we find evidence that subject imports probably have had adverse
effects on domestic prices.

129
See CR/PR at Table V-9. The Commission was also able to partially confirm an additional 47 lost sales
totaling more than $***. Id.
130
CR at V-18, PR at V-6.
131
CR at V-39, PR at V-7.
132
CR/PR at Table V-7.
133
CR at V-39, PR at V-7.
134
Having found evidence of price depression, Commissioner Aranoff does not reach price suppression for
purposes of this preliminary determination.
135
Commissioner Pinkert relies on evidence of price depression -- not price suppression -- to provide support for
his finding of probable adverse price effects on this preliminary record.
136
CR/PR at Table VI-1.

21
 E. Impact of the Subject Imports

Section 771(7)(C)(iii) of the Act provides that the Commission, in examining the impact of the
subject imports on the domestic industry, “shall evaluate all relevant economic factors which have a
bearing on the state of the industry.”137 These factors include output, sales, inventories, capacity
utilization, market share, employment, wages, productivity, profits, cash flow, return on investment,
ability to raise capital, research and development, and factors affecting domestic prices. No single factor
is dispositive and all relevant factors are considered “within the context of the business cycle and
conditions of competition that are distinctive to the affected industry.”138
In evaluating the performance of the domestic industry, we bear in mind two important conditions
of competition. First, the volume of nonsubject imports from China, as well as the total volume of
nonsubject imports, fell sharply after the imposition of an antidumping duty order on imports of certain
steel nails from China in 2008. Second, demand for steel nails staged a substantial recovery in 2010 over
2009, although it remained lower than in 2008. Taken together, these two developments should have
presented an opportunity for the domestic industry to register performance gains, particularly from 2009
to 2010. What the record shows is that subject imports prevented the domestic industry from realizing the
gains that should have been achieved in this context.
As noted, the domestic industry’s volume-based performance indicators decreased steadily from
2008 to 2010.139 The domestic industry’s financial results deteriorated, with operating income, unit
operating income, and gross profit decreasing steadily over the period of investigation.140 Other
indicators of the domestic industry’s financial condition fluctuated somewhat over the period of
investigation, but overall the domestic industry’s financial performance in 2010 was below what it was at
the beginning of the period,141 when imports from China were replaced to a significant degree by
increased volumes of low-priced imports from the UAE following imposition of an antidumping duty
order on U.S. imports of certain steel nails from China in 2008. In this regard, we note the close

137
19 U.S.C. § 1677(7)(C)(iii); see also SAA at 851 and 885 (“In material injury determinations, 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 domestic industry, they also may demonstrate that an industry is facing
difficulties from a variety of sources and is vulnerable to dumped or subsidized imports.”)
138
19 U.S.C. § 1677(7)(C)(iii); see also SAA at 851, 885; Live Cattle from Canada and Mexico, Inv. Nos. 701-
TA-386, 731-TA-812-813 (Preliminary), USITC Pub. 3155 at 25 n.148 (Feb. 1999).
139
Domestic shipments, by quantity, were 122,834 short tons in 2008, 96,916 short tons in 2009, and 93,379
short tons in 2010. Domestic shipments, by value, decreased steadily over the period and totaled $221.5 million in
2008, $170.5 million in 2009, and $151.0 million in 2010. Net sales, by quantity, was 122,495 short tons in 2008,
97,544 short tons in 2009, and 93,006 short tons in 2010. Net sales, by value, also decreased steadily over the period
and totaled $221.0 million in 2008, $172.6 million in 2009, and $151.0 million in 2010. End-of-period inventories
were 16,397 short tons in 2008, 9,416 short tons in 2009, and 9,105 short tons in 2010. Hours worked totaled 1.6
million in 2008, and 1.2 million in 2009 and 2010. Wages paid were $26.5 million in 2008, $21.4 million in 2009,
and $18.6 million in 2010. Hourly wages were $17.11 in 2008, $17.33 in 2009, and $15.60 in 2010. CR/PR at
Table C-1.
140
The domestic industry’s operating income was $18.4 million in 2008, $14.5 million in 2009, and $10.6 million
in 2010. Unit operating income was $150 in 2008, $149 in 2009, and $114 in 2010. Gross profit was $41.4 million
in 2008, $36.0 million in 2009, and $27.3 million in 2010. CR/PR at Table C-1.
141
The domestic industry’s ratio of operating income to net sales was 8.3 percent in 2008, 8.4 percent in 2009,
and 7.0 percent in 2010. Capital expenditures were $*** in 2008, $*** in 2009, and $*** in 2010. CR/PR at Table
C-1.

22
correlation between the increases in subject imports, more than 82 percent from 2009 to 2010, and the
deterioration of the domestic industry’s performance in 2010.142
For the purposes of this preliminary investigation, we conclude that significant volumes of low-
priced subject imports that undersold the domestic like product achieved substantial sales volumes and
revenues at the expense of the domestic industry. Even as the volume of nonsubject imports from China
decreased following the imposition of the antidumping duty order in August 2008, and demand recovered
somewhat in 2010, the domestic industry’s performance worsened from 2009 to 2010. The domestic
industry was unable to benefit from improved conditions, as subject imports increased market share at the
expense of the domestic industry and nonsubject imports. The domestic industry lost market share, and
experienced decreases in shipments and sales revenue in 2010, while demand for steel nails improved and
subject imports increased their already significant presence in the U.S. market by 86.7 percent. The
domestic industry’s output and revenue declines, in turn, have contributed to the domestic industry’s
observed decreases in employment and operating performance.
Consequently, we conclude for purposes of this preliminary phase investigation that there is a
causal nexus between the subject imports and the observed declines in domestic industry performance. In
light of this, we determine that there is a reasonable indication that the domestic industry is materially
injured by reason of the subject imports.
We have considered whether there are other factors that may have had an adverse impact on the
domestic industry during the period examined. We recognize that the depressed state of the economy
generally and the construction market specifically, particularly when measured by housing starts, had a
role in the domestic industry’s performance. Nevertheless, as previously noted, apparent U.S.
consumption improved in 2010 while the domestic industry’s financial performance and other indicators
deteriorated. Consequently, given the improvement in apparent U.S. consumption in 2010, the domestic
industry’s performance in 2010 cannot reasonably be attributed to the continued depressed state of the
economy based upon the record in these preliminary phase investigations.
We recognize that nonsubject imports may have had an adverse impact on the domestic industry’s
performance during the period of investigation. As discussed above, at the beginning of the period
examined, nonsubject imports accounted for 74.1 percent of the U.S. market, followed by domestic
producers’ shipments with 18.6 percent, and then subject imports at 7.3 percent.143 By 2010, the domestic
industry’s market share had decreased to 17.8 percent of the U.S. market, subject imports had increased
their market share to 22.5 percent, followed by nonsubject imports at 59.7 percent, which was below their
market share at the beginning of the period of investigation.144 Thus, although nonsubject imports lost
market share over the period of investigation, primarily to subject imports, they still maintained a
significant presence in the U.S. market. We intend to revisit the issue of the role of nonsubject imports in
the U.S. market in any final phase investigation.145

142
CR/PR at Tables IV-3 and C-1. As discussed above, a number of domestic producers have exited the industry
or have ceased production of steel nails in the United States. These domestic producers have provided limited or no
production and financial data for the period of investigation. Therefore, we find that the data collected by the
Commission in this investigation may actually understate the impact of the subject imports on the domestic industry
during the period of investigation.
143
CR/PR Table IV-5, and CR/PR at Table C-1.
144
CR/PR at Table IV-5, and CR/PR at Table C-1.
145
Based on the record evidence in these investigations, Commissioner Pinkert finds that price competitive,
nonsubject imports, particularly imports from China (which was the predominant nonsubject source), were a
significant factor in the U.S. market for steel nails during the period under examination. CR/PR at Table IV-3.
Imports from China, however, were placed under an antidumping duty order during the period of investigation.
Imports from Taiwan and Korea, the second and third most significant sources of nonsubject imports in the U.S.
(continued...)

23
 CONCLUSION

For the reasons stated above, and based on the record in the preliminary phase of these
investigations, we find that there is a reasonable indication that the domestic industry producing certain
steel nails is materially injured by reason of subject imports from the United Arab Emirates that are
allegedly being sold in the United States at less than fair value.

145
(...continued)
market, respectively, were higher priced than subject imports from the UAE in most of the available price
comparisons (99 out of 122). CR/PR at Table D-1. Thus, for purposes of the analysis required under Bratsk and
Mittal, Commissioner Pinkert finds that there is record evidence to suggest that, had the subject imports exited the
U.S. market, any replacement of them by nonsubject imports would not have been without benefit to the domestic
industry. Commissioner Pinkert invites parties to comment on the application of Bratsk and Mittal to the facts of
this case in any final phase of these investigations.

24
 DISSENTING VIEWS OF CHAIRMAN DEANNA TANNER OKUN AND
COMMISSIONER DANIEL R. PEARSON

Based on the record in the preliminary phase of this investigation, we find that there is no
reasonable indication that an industry in the United States is materially injured or threatened with material
injury by reason of subject imports of certain steel nails (“CSN”) from the United Arab Emirates (“UAE”)
that are allegedly sold in the United States at less than fair value.
We join the Commission’s Views with respect to background, domestic like product, domestic
industry, legal standards, and conditions of competition.1 We write separately, however, with respect to
clarifying certain conditions of competition and our analysis of reasonable indication of material injury
and threat of material injury by reason of subject imports.

I. NO REASONABLE INDICATION OF MATERIAL INJURY BY REASON OF SUBJECT

IMPORTS FROM THE UAE

A. Additional Conditions of Competition

The record suggests that nails from the domestic industry and from the various import sources are
generally interchangeable.2 But there is less overlap in the customer bases for the domestic like product
and subject imports than might be expected for a product with a reasonable degree of interchangeability.
***3 ***.4 Sales to such big-box customers accounted for upwards of *** percent of sales of subject
merchandise imported from Dubai Wire.5 By the end of the period examined, subject imports from the
UAE were more likely to be shipped to end users than nonsubject imports or the domestic like product;
this ratio for subject imports changed very significantly over the period of investigation whereas the mix
between shipments to end users and distributors was relatively constant for the domestic product and
nonsubject imports.6
The differences in customers seems to be rooted in differences in product offerings and business
models. While the domestic industry as a whole appears to be capable of producing the full line of
products,7 the record suggests that the domestic industry has not offered a full line of products during the
period of investigation. Respondents have suggested that as much as *** percent of the products they sell
are not available from a domestic producer.8 ***.9

1
We join and adopt as our own sections I-V.1-V.5.
2
CR at II-7 and Table II-2, PR at II-5 and Table II-2.
3
CR/PR at Table III-1.
4
***. CR/PR at Table III-2.
5
Dubai Wire Postconference Brief at 33-34.
6
CR/PR at Table II-1.
7
It has been alleged that there are some items that the domestic industry cannot make for environmental reasons,
although the record does not suggest that these specific products account for a significant share of the U.S. market.
CR at V-39, PR at V-7.
8
Dubai Wire Postconference Brief at 23-25; Conf. Tr. at 58-66 (Zinman).
9
CR at V-38-V-39, PR at V-7.

25
 B. Volume Effects of Subject Imports

Section 771(7)(C)(I) of the Act provides that the “Commission shall consider whether the volume
of imports of the merchandise, or any increase in that volume, either in absolute terms or relative to
production or consumption in the United States, is significant.”10
An antidumping duty order was imposed on imports of CSN from China in July 2008.11 In the
wake of that order, imports from China continued to have a significant presence in the U.S. market. In
2010, imports from China held a greater share of the U.S. market than the domestic industry or any other
import source.12 But import volume from China declined significantly and absolutely, with 2010 import
volume down 43.5 percent from the 2008 level and market share down from 40.3 percent in 2008 to
28.6 percent in 2010.13
After the order was imposed on imports from China, the volume of subject imports from the UAE
increased significantly over the period of investigation. Subject import volume was 118,558 short tons in
2010, compared to 48,256 short tons in 2008, an increase of 145.7 percent. Subject imports from the
UAE accounted for 7.3 percent of apparent U.S. consumption in 2008 and 22.5 percent in 2010.14
While the period of investigation saw significant redistributions of volume and market share
among imports, it brought little overall change to the domestic industry. The volume and market share of
domestic shipments did change significantly from 2008 to 2009, but the record suggests that the decline
in U.S. shipments was driven by the significant contraction in demand in 2009. The domestic industry’s
market share in 2010, at 17.8 percent, was little changed from its 2008 market share of 18.6 percent.15
It is indisputable that the volume of subject imports increased significantly over the period of
investigation, and the increase was significant both absolutely and relative to domestic production and
shipments. Nevertheless, we do not find that the volume of subject imports or any increase in that volume
warrants an affirmative finding in light of our findings concerning the lack of significant price effects and
impact.

C. Price Effects of Subject Imports

Section 771(C)(ii) of the Act provides that, in evaluating the price effects of subject imports,
the Commission shall consider whether – (I) there has been significant price underselling
by the imported merchandise as compared with the price of domestic like products of the
United States, and (II) the effect of imports of such merchandise otherwise depresses
prices to a significant degree or prevents price increases, which otherwise would have
occurred, to a significant degree.16

10
19 U.S.C. § 1677(7)(C)(i).
11
CR at I-8, PR at I-6.
12
CR/PR at Table C-1.
13
Calculated from CR/PR at Table IV-3 and Table C-1.
14
CR/PR at Table C-1. Subject imports were equivalent to 39.4 percent of U.S. production in 2008, 70.5 percent
in 2009, and 127.0 percent in 2010. CR/PR at Table IV-6.
15
CR/PR at Table C-1.
16
19 U.S.C. § 1677(7)(C)(ii).

26
 The record suggests that CSN made to the same industry standards are generally interchangeable,
regardless of source.17 Price is an important factor in sales, but producers and importers also cited *** as
important considerations.18 No party indicated that there are cost-effective substitutes for CSN.19 The
product is typically sold on the spot market and prices are set in a variety of methods by both domestic
producers and importers.20
The Commission gathered product-specific pricing data on six CSN items. The pricing data
gathered counted for relatively small shares of the domestic like product (6.7 percent of the value of U.S.
producers’ shipments) and even smaller shares of subject imports (1.5 percent of the value of U.S.
shipments of subject imports). While this is not surprising for a product with such a wide variety of types
as CSN, it may affect the comparability of the pricing data.21 The product-specific data indicated a fair
degree of underselling, with subject imports underselling the domestic like product in 46 of
62 instances.22 The domestic industry also produced a significant number of lost sales and lost revenue
allegations, some of which were at least partially confirmed by purchasers.23
While the product-specific data might suggest significant price effects by subject imports, we find
the evidence of underselling to be lessened by our findings regarding the apparent lack of substantial
overlap in market segments served by the domestic like product and subject imports. Nor does the record
indicate significant price depression or suppression by reason of subject imports. Prices for CSN in 2010
were in some cases lower than prices in 2008, but this seems to be more closely related to the overall
level of demand, which was at its peak for the period of investigation in 2008, and more importantly to
raw material price trends. Raw materials consistently accounted for over half of the cost of goods sold for
the domestic like product over the period of investigation.24 Raw material costs spiked in 2008, fell
sharply in 2009, and rose moderately in 2010.25 Domestic prices generally followed this pattern,
regardless of subject import volume or pricing.26 The domestic industry’s ratio of cost of goods sold to
sales in 2010 was little changed from 2008.27
For the foregoing reasons, despite predominant underselling of the domestic like product by
subject imports during the period of investigation, we do not find that domestic prices were depressed to a
significant degree, or that subject imports have prevented price increases, which otherwise would have
occurred, to a significant degree.

17
CR at II-8, PR at II-6
18
CR at II-9, PR at II-6.
19
CR at II-5, PR at II-4.
20
CR at V-2-V-3, PR at V-2.
21
CR at V-4, PR at V-3.
22
CR/PR at Table V-8.
23
CR at V-18, V-37-V-40, and Tables V-9-V-10, PR at V-6, V-7, and Tables V-9-V-10.
24
CR/PR at V-1. Raw material costs accounted for 65.8 percent of COGS in 2008, 65.2 percent in 2009, and
58.8 percent in 2010. Id.
25
CR/PR at Figure V-1. The main raw material used to produce certain steel nails is carbon steel wire rod.
Carbon steel wire rod prices increased during the first part of 2008, peaked in July and August 2008, and then fell
sharply during the remainder of 2008 and early part of 2009. Carbon steel wire rod prices increased irregularly
thereafter but remained below the peak levels reached in 2008. Id.
26
CR/PR at Figures V-2-V-7.
27
CR/PR at Table C-1. COGS to net sales fluctuated between years from 81.3 percent in 2008 to 79.1 percent in
2009 and 81.9 percent in 2010. Unit COGS declined steadily from $1,465 in 2008 to $1,328 in 2010, due primarily
to declines in raw material costs. CR/PR at Table VI-1.

27
 D. Impact of Subject Imports28

Section 771(7)(C)(iii) of the Act provides that the Commission, in examining the impact of the
subject imports on the domestic industry, “shall evaluate all relevant economic factors which have a
bearing on the state of the industry.”29 These factors include output, sales, inventories, capacity
utilization, market share, employment, wages, productivity, profits, cash flow, return on investment,
ability to raise capital, research and development, and factors affecting domestic prices. No single factor
is dispositive and all relevant factors are considered “within the context of the business cycle and
conditions of competition that are distinctive to the affected industry.”30
The period of investigation included the sharpest economic contraction seen in the U.S. market
since the Great Depression. The housing sector was particularly hard hit by the recession, and housing
starts fell sharply.31 New residential construction accounts for a significant portion of the CSN market.32
It would not be surprising if the period of investigation had shown the domestic industry suffering
significant losses.
But the industry’s financial performance was strong given the situation. The industry’s operating
income relative to sales was 8.3 percent in 2008, 8.4 percent in 2009, and 7.0 percent in 2010.33 This
seems particularly notable given the market’s reliance on new residential construction and the failure of
other segments, such as residential repair and remodeling, to fill the void created by the decline in new
residential construction. The financial data suggest an industry that, for all its apparent contractions, was
able to weather a sharp reduction in demand, increases in subject imports, and still remain profitable.
The domestic industry did see some contraction over the period of investigation, primarily from
2008 to 2009 as the U.S. economy plummeted. Production and shipments declined, as did capacity
utilization.34 The number of production workers declined by nearly 20 percent over the period of
investigation.35 There was a significant amount of consolidation in the domestic industry, with
15 producers in 2007 and 11 in 2010.36 But while the number of producers declined, actual production
capacity increased by 14.2 percent between 2008 and 2010.37
We find a general lack of correlation over the period of investigation between the increased
volume of subject imports, and the performance of the domestic industry. This is even more apparent

28
In its notice initiating an antidumping duty investigation on certain steel nails from the United Arab Emirates,
Commerce reported estimated dumping margins ranging from 61.54 to 81.82 percent or, depending on the basis of
the calculation, from 152.37 to 184.41 percent for Dubai Wire and from 150.13 to 154.26 percent for Millennium
Steel & Wire. 76 Fed. Reg. 23559, 23563.
29
19 U.S.C. § 1677(7)(C)(iii); see also SAA at 851 and 885 (“In material injury determinations, 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 domestic industry, they also may demonstrate that an industry is facing
difficulties from a variety of sources and is vulnerable to dumped or subsidized imports.”)
30
19 U.S.C. § 1677(7)(C)(iii); see also SAA at 851, 885; Live Cattle from Canada and Mexico, Invs. Nos.
701-TA-386, 731-TA-812-813 (Prelim.), USITC Pub. 3155 at 25 n.148 (Feb. 1999).
31
CR/PR at Figure II-1.
32
See, e.g., Mid Continent Postconference Brief at 5.
33
CR/PR at Table C-1.
34
CR/PR at Table C-1.
35
CR/PR at Table C-1.
36
Mid Continent Postconference Brief at 31-32.
37
CR/PR at Table C-1.

28
given that the steel nails industry relies on the construction/housing industry and would not be expected to
experience 7-8 percent operating income margins during the 2008/2009 economic downturn if it was
adversely impacted by increases in unfairly traded imports. In addition to demand, we have also
considered nonsubject imports, particularly from China, so as not to attribute injury from such other
factors to subject imports. While maintaining a significance presence in the U.S. market, nonsubject
imports declined by 35.9 percent during the period of investigation.38 We therefore do not find that there
is a reasonable indication that subject imports from the UAE are having an adverse impact on the
domestic industry. We find that the record as a whole contains clear and convincing evidence that there is
no reasonable indication of material injury by reason of subject imports of CSN and that no likelihood
exists that contrary evidence would arise in any final phase investigation.

II. NO REASONABLE INDICATION OF A THREAT OF MATERIAL INJURY BY

REASON OF SUBJECT IMPORTS FROM THE UAE

Section 771(7)(F) of the Tariff Act directs the Commission to determine whether the U.S.
industry is threatened with material injury by reason of the subject imports by analyzing 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.”39 The Commission may not make
such a determination “on the basis of mere conjecture or supposition,” and considers the threat factors “as
a whole” in making its determination whether dumped or subsidized imports are imminent and whether
material injury by reason of subject imports would occur unless an order is issued.40 In making our
determination, we consider all statutory threat factors that are relevant to these investigations.41

38
CR/PR at Table C-1.
39
19 U.S.C. § 1677(7)(F)(ii).
40
19 U.S.C. § 1677(7)(F)(ii).
41
These factors are as follows:

(I) 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,

(II) 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,

(III) a significant rate of increase of the volume or market penetration of imports of the subject merchandise
indicating the likelihood of substantially increased imports,

(IV) 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 further imports,

(V) inventories of the subject merchandise,

(VI) 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.
(continued...)

29
 As an initial matter, we do not find that the domestic industry is vulnerable to a threat of material
injury by reason of subject imports from the UAE. As discussed above, the domestic industry was able to
weather a sharp reduction in demand, increases in subject imports, and still remain profitable during the
period of investigation. The record indicates that the industry will have the benefit of continued
improvements in demand in the imminent future. Moreover, we do not find that further increases in
subject imports, as discussed below, are likely in the imminent future.
The period of investigation saw a *** in production capacity in the UAE.42 But the industry has
43
***. The UAE industry operated at *** capacity utilization levels throughout the period of
investigation and projects similarly *** rates in the future, leaving *** capacity for additional exports.44
The industry ***.45 Inventories of subject imports held by U.S. importers rose over the period of
investigation, but by the end of the period of investigation were low relative to the volume of both
imports and shipments and were particularly low compared to the level of nonsubject imports held by
importers.46 An even lower volume of CSN was held by producers in the UAE.47 While the UAE
industry is *** export-oriented, *** of those exports already are to the U.S. market, and are projected to
remain so in the imminent future.48 Moreover, the share of shipments exported to the United States has
been relatively stable over the period of investigation. Thus, the industry in the UAE does not have
significant additional production that can be shifted away from other markets or customers to be directed
to the U.S. market.49
The period of investigation saw a significant expansion of subject imports from the UAE, but we
have already found that the increase in subject import volume was part of a larger reshuffling of imports
in the wake of the 2008 order on CSN from China, a reshuffling that left the domestic industry’s market

41
(...continued)
* * *

(IX) 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).

19 U.S.C. § 1677(7)(F)(I). Statutory threat factor (VII) is inapplicable, as no imports of agricultural products are
involved in these investigations. No argument was made that the domestic industry is currently engaging or will
imminently engage in any efforts to develop a derivative or more advanced version of the domestic like product,
which would implicate statutory threat factor (VIII).
42
CR/PR at Table VII-1.
43
CR at VII-2, PR at VII-2. There are five known producers of steel nails in the UAE: Dubai Wire, which
estimates that it accounts for *** percent of total UAE steel nail production and *** percent of UAE exports to the
U.S. market in 2010; Precision Fasteners, which commenced commercial operations and shipments to the U.S.
market in 2008; Millennium Steel & Wire, which ceased production in 2009; and ***; and two small producers –
Samrat Wire and Steel Racks Factory – which did not provide responses to the Commission, but reportedly produce
only for the local market and do not export. VII-1-VII-2 and nn.1-6, PR at VII-1-VII-2 and nn.1-6; Conference Tr. at
75; Dubai Wire Postconference Brief at 41-43.
44
CR/PR at Table VII-1. The UAE industry’s capacity utilization rates were *** in 2011 and 2012. Id.
45
CR at VII-2, PR at VII-2.
46
CR/PR at Table VII-2.
47
CR/PR at Table VII-1.
48
CR/PR at Table VII-1. Exports to the U.S. market already account for *** of the UAE industry’s shipments
ranging *** in 2012. Id.
49
CR/PR at Table VII-1.

30
share largely unchanged. The relevant facts regarding the UAE do not suggest a likely substantial
increase in subject imports from UAE in the imminent future. The UAE industry already is dependent on
the U.S. market for virtually all of its sales, and capacity will limit additional exports to the U.S. market
to levels seen during the latter part of the period of investigation. In light of the consistently high
capacity utilization levels, the limited availability of excess capacity and relatively low inventory levels,
we find no likelihood of a substantial increase in the volume of subject imports in the imminent future.
We have already considered whether subject imports had a significant depressing or suppressing
effect on domestic prices and were not able to find such effects. Nothing in the record suggests that this
will change in the imminent future, as CSN price movements are likely to be largely determined by raw
material price changes, and subject imports and the domestic like product are likely to continue serving
somewhat different markets. We therefore conclude that the record as a whole contains clear and
convincing evidence that there is no reasonable indication of a threat of material injury by reason of
subject imports of CSN from the UAE and that no likelihood exists that contrary evidence would arise in
any final phase investigation.

CONCLUSION

For the foregoing reasons, we conclude that there is no reasonable indication that the domestic
CSN industry is materially injured or threatened with material injury by reason of imports of CSN from
the UAE that are allegedly sold in the United States at less than fair value.

31
 PART I: INTRODUCTION

BACKGROUND

This investigation results from a petition filed with the U.S. Department of Commerce
(“Commerce”) and the U.S. International Trade Commission (“USITC” or “Commission”) by Mid
Continent Nail Corporation, Poplar Bluff, MO, on March 31, 2011, alleging that an industry in the United
States is materially injured and threatened with material injury by reason of less-than-fair-value (“LTFV”)
imports of certain steel nails (“steel nails”)1 from the United Arab Emirates (“the UAE”). Information
relating to the background of the investigation is provided below.2

Effective date Action

Petition filed with Commerce and the Commission; institution of Commission
March 31, 2011 investigation (76 FR 19124, April 6, 2011)
April 21, 2011 Commission’s conference1
April 27, 2011 Commerce’s notice of initiation (76 FR 23559)
May 16, 2011 Commission’s vote
May 16, 2011 Commission determination transmitted to Commerce
May 23, 2011 Commission views transmitted to Commerce
1
A list of witnesses appearing at the conference is presented in app. B.

STATUTORY CRITERIA AND ORGANIZATION OF THE REPORT

Statutory Criteria

Section 771(7)(B) of the Tariff Act of 1930 (the “Act”) (19 U.S.C. § 1677(7)(B)) provides that in
making its determinations of injury to an industry in the United States, the Commission--

shall consider (I) the volume of imports of the subject merchandise, (II)
the effect of imports of that merchandise on prices in the United States
for domestic like products, and (III) the impact of imports of such
merchandise on domestic producers of domestic like products, but only
in the context of production operations within the United States; and . . .
may consider such other economic factors as are relevant to the
determination regarding whether there is material injury by reason of
imports.

1
See the section entitled “The Subject Merchandise” in Part I of this report for a complete description of the
merchandise subject to this investigation.
2
Federal Register notices cited in the tabulation are presented in app. A.

I-1
 Section 771(7)(C) of the Act (19 U.S.C. § 1677(7)(C)) further provides that--

In evaluating the volume of imports of merchandise, the Commission

shall consider whether the volume of imports of the merchandise, or any
increase in that volume, either in absolute terms or relative to production
or consumption in the United States is significant.
...
In evaluating the effect of imports of such merchandise on prices, the
Commission shall consider whether . . . (I) there has been significant
price underselling by the imported merchandise as compared with the
price of domestic like products of the United States, and (II) the effect of
imports of such merchandise otherwise depresses prices to a significant
degree or prevents price increases, which otherwise would have
occurred, to a significant degree.
...
In examining the impact required to be considered under subparagraph
(B)(i)(III), the Commission shall evaluate (within the context of the
business cycle and conditions of competition that are distinctive to the
affected industry) all relevant economic factors which have a bearing on
the state of the industry in the United States, including, but not limited to
...
(I) actual and potential declines in output, sales, market share, profits,
productivity, return on investments, and utilization of capacity, (II)
factors affecting domestic prices, (III) actual and potential negative
effects on cash flow, inventories, employment, wages, growth, ability to
raise capital, and investment, (IV) 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 (V) in {an antidumping
investigation}, the magnitude of the margin of dumping.

Organization of the Report

Part I of this report presents information on the subject merchandise, estimated dumping margins,
and domestic like product. Part II of this report presents information on conditions of competition and
other relevant economic factors. Part III presents information on the condition of the U.S. industry,
including data on capacity, production, shipments, inventories, and employment. Parts IV and V present
the volume and pricing of imports of the subject merchandise, respectively. Part VI presents information
on the financial experience of U.S. producers. Part VII presents the statutory requirements and
information obtained for use in the Commission’s consideration of the question of threat of material
injury as well as information regarding nonsubject countries.

U.S. MARKET SUMMARY

Steel nails generally are used in residential and commercial construction to join objects together.
The leading U.S. producer of steel nails is petitioner Mid Continent; other large producers include Illinois
Tool Works (“ITW”), Senco Products, Inc. (“Senco”), and Stanley Fastening Systems, L.P.A (“Stanley”).
Major responding producers of subject steel nails include the UAE producers Dubai Wire FZE (“Dubai
Wire”) and Precision Fasteners LLC (“Precision Fasteners”). The leading U.S. importers of subject steel

I-2
nails from the UAE are ***. Leading U. S. importers of steel nails from nonsubject sources (primarily
China, Korea, Mexico, Poland, and Taiwan) include ***.
Apparent U.S. consumption of steel nails totaled approximately 526,467 short tons
($658.1 million) in 2010. Currently, 13 firms are believed to produce steel nails in the United States.3
The nine responding U.S. producers’ U.S. shipments of steel nails totaled 93,613 short tons
($151.0 million) in 2010, and accounted for 17.8 percent of apparent U.S. consumption by quantity and
23.0 percent by value. U.S. imports from the UAE totaled 118,558 short tons ($111.8 million) in 2010
and accounted for 22.5 percent of apparent U.S. consumption by quantity and 17.0 percent by value. U.S.
imports from nonsubject sources totaled 314,296 short tons ($395.3 million) in 2010 and accounted for
59.7 percent of apparent U.S. consumption by quantity and 60.1 percent by value.

SUMMARY DATA AND DATA SOURCES

A summary of data collected in the investigation is presented in appendix C, table C-1. Except as
noted, U.S. industry data are based on questionnaire responses of nine firms that accounted for
approximately *** percent of U.S. production of steel nails during 2010.4 U.S. imports are based on
official statistics from Commerce except where noted.

PREVIOUS AND RELATED 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.5 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.6 In February 1979, the Commission determined that the domestic steel wire nails
industry was not being, and was not 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.7
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.8 However, the Commission determined that the
domestic steel wire nails industry was not materially 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.9

3
Wheeling-LaBelle Nail ceased nail production in June 2010 and its entire operation closed in September 2010.
4
***.
5
42 FR 64942, December 29, 1977.
6
43 FR 51743, November 6, 1978.
7
Steel Wire Nails From Canada, Investigation No. AA1921-189, USITC Publication 937, February 1979.
8
45 FR 34941, May 23, 1980.
9
Certain Steel Wire Nails From The Republic of Korea, Investigation No. 731-TA-26 (Final), USITC Publication
1088, August 1980.

I-3
 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.10 Specifically, 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 material injury 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.11 The investigation of imports from Japan was
subsequently terminated, while the investigation of imports from Yugoslavia resulted in a negative
material injury determination by the Commission.12 After a final affirmative material injury
determination by the Commission, an antidumping duty order was issued against steel wire nails from
Korea.13 The order against Korea was revoked effective October 1, 1984, following a Voluntary Restraint
Agreement14 concerning imports of nails from Korea.15
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.16 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.17
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 imported articles.18 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.19
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.20 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,

10
46 FR 34613-34615, July 2, 1981.
11
46 FR 34615, July 2, 1981.
12
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.
13
47 FR 35266, August 13, 1982.
14
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.
15
50 FR 40045, October 1, 1985.
16
47 FR 6458, February 8, 1982.
17
47 FR 39549, September 8, 1982.
18
Carbon and Alloy Steel Products, Investigation No. TA-201-51, USITC Publication 1553, July 1984, p. 7.
19
Carbon and Alloy Steel Products, Investigation No. TA-201-51, USITC Publication 1553, July 1984, p. 7.
20
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.

I-4
Commerce terminated the investigations with respect to Poland and Yugoslavia.21 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.22
On April 20, 1987, a petition was filed alleging that certain steel wire nails from New Zealand
and Thailand were receiving bounties or grants.23 Commerce conducted a section 303 investigation and
made affirmative findings with respect to both countries and issued countervailing duty orders against
steel wire nails from Thailand and New Zealand in October 1987.24 On August 9, 1995, the orders were
revoked by Commerce as no domestic interested party requested a review.25
On March 22, 1989, a petition was filed alleging that certain steel wire nails from Malaysia were
receiving bounties or grants.26 Commerce, however, determined that no benefits which constitute
bounties or grants were being provided to Malaysian producers or exporters.27
On November 26, 1996, a petition was filed alleging that collated roofing nails imported from
China, Korea, and Taiwan were being sold at LTFV.28 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.29 The investigation with respect to collated roofing
nails from Korea was terminated by the Commission following a negative determination by Commerce.30
On November 19, 1997, Commerce issued antidumping duty orders against collated roofing nails from
China and Taiwan.31 These orders were revoked effective November 19, 2002 because no domestic
interested party responded to Commerce’s notice of initiation of five-year reviews.32
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.33

21
51 FR 4205, February 3, 1986, and 50 FR 35281, August 30, 1985.
22
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 was imposed on certain
steel wire nails from China 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).
23
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.
24
52 FR 36987, October 2, 1987, and 52 FR 37196, October 5, 1987.
25
60 FR 40568, August 9, 1995.
26
The petition was filed by members of the Nail Committee of the American Wire Producers Association. 54 FR
15534, April 18, 1989.
27
54 FR 36841, September 5, 1989.
28
The petition was filed by Paslode Division of Illinois Tool Works Inc. 61 FR 67306, December 20, 1996.
29
Collated Roofing Nails From China and Taiwan, Investigation Nos. 731-TA-757 and 759 (Final), USITC
Publication 3070, November 1997.
30
62 FR 51420, October 1, 1997, and 62 FR 53799, October 16, 1997.
31
62 FR 61729, November 19, 1997, and 62 FR 61730, November 19, 1997.
32
67 FR 70578, November 25, 2002.
33
Steel, Investigation No. TA-201-73, USITC Publication 3479, December 2001.

I-5
 On May 29, 2007, following receipt of a petition filed with the Commission and Commerce by
Davis Wire Corp. (Irwindale, CA), Gerdau Ameristeel Corp. (Tampa, FL), Maze Nails (Peru, IL), Mid
Continent Nail Corp. (Poplar Bluff, MO), and Treasure Coast Fasteners, Inc. (Fort Pierce, FL),34 the
Commission instituted antidumping duty investigations on steel nails from the UAE and China. The
Commission determined that an industry in the United States was materially injured by reason of imports
from China of steel nails, found by Commerce to be sold in the United States at less than fair value
(LTFV).35 36 37

NATURE AND EXTENT OF ALLEGED SALES AT LTFV

On April 27, 2011, Commerce published a notice in the Federal Register of the initiation of its
antidumping duty investigation on steel nails from the UAE. Commerce initiated the antidumping duty
investigation based on estimated dumping margins that range from 61.54 to 81.82 percent or, depending
on the basis of the calculation, from 152.37 to 184.41 percent for Dubai Wire FZE (“Dubai Wire”) and
from 150.13 to 154.26 percent for Millennium Steel & Wire LLC (“Millennium”).38

THE SUBJECT MERCHANDISE

The imported products subject to these investigations are steel nails. A nail is “a slender,
typically rod-shaped rigid piece of metal, usually in any of numerous standard lengths from a fraction of
an inch to several inches and having one end pointed and the other enlarged and flattened, for hammering
into or through wood, other building materials, etc., as used in building, in fastening, or in holding
separate pieces together.”39 Nails are produced in many different lengths, and with many different styles
of heads, shanks, and points, depending upon the intended use. Nails are produced uncoated (bright) or
with any of several different coatings such as zinc (to retard corrosion), cement (to provide better
adherence in the wood or other material into which the nail is to be driven), and paint (for improved
appearance).

34
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.
35
The petition alleged that an industry in the United States was materially injured or threatened with material
injury by reason of LTFV imports of certain steel nails from the UAE. On June 16, 2008, Commerce found that
certain steel nails from the UAE are not being, or are not likely to be, sold in the United States at LTFV, and thus
certain steel nails from the UAE are no longer considered to be subject merchandise. 73 FR 33985, June 16, 2008.
Accordingly, the Commission terminated its final phase of the investigation regarding the UAE. 73 Fed. Reg. 39041
(July 8, 2008).
36
Certain Steel Nails From China: Determination, 73 FR 43474, July 25, 2008.
37
Commerce is conducting a changed-circumstances review concerning the antidumping duty order on certain
steel nails from China that addresses the exclusion of roofing nails. See Certain Steel Nails from the People’s
Republic of China: Initiation and Preliminary Results of Antidumping Duty Changed Circumstances Review (signed
April 14, 2011).
38
Certain Steel Nails From the United Arab Emirates: Initiation of Antidumping Duty Investigation, 76 FR
23559, April 27, 2011.
39
[Link]. Unabridged (v 1.1). Random House, Inc. [Link]
(accessed June 01, 2007).

I-6
 Commerce’s Scope

Commerce has defined the imported product subject to this investigation as:40

The merchandise covered by this investigation includes 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 investigation 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. Certain steel 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 this investigation
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 this investigation are steel nails specifically
enumerated and identified in ASTM Standard F 1667 (2005 revision) as Type I,
Style 20 nails, whether collated or in bulk, and whether or not galvanized.

Also excluded from the scope of this investigation are the following products:

• non-collated (i.e., hand-drive 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; 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; · ·

• non-collated (i.e., hand-drive 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,
and whose packaging and packaging marking are clearly and
prominently labeled “Roofing” or “Roof’ nails;

40
Certain Steel Nails From the United Arab Emirates: Initiation of Antidumping Duty Investigation, 76 FR
23559, April 27, 2011.

I-7
 • 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 whose packaging and
packaging marking are clearly and prominently labeled “Roofing” or
“Roof’ nails;

• non-collated (i.e., hand-drive 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, and whose packaging and
packaging marking are clearly and prominently labeled “Roofing” or
“Roof’ nails;

• corrugated nails. A corrugated nail is made of a small strip of

corrugated steel with sharp points on one side;

• thumb tacks, which are currently classified under HTSUS

7317.00.10.00;

• 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;

• certain steel 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; and

• 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 this investigation is dispositive.

Tariff Treatment

Based upon the scope set forth by Commerce, information available to the Commission indicates
that the subject goods currently are classifiable in 7317.00.55, 7317.00.65, and 7317.00.75 of the
Harmonized Tariff Schedule of the United States (HTS). The current general rate of duty for the subject
steel nails is free.

I-8
 THE PRODUCT41

Description and Applications

Although most steel nails are produced of low-carbon steel, nails are also produced of stainless
steel (to resist corrosion) and of hardenable medium- to high-carbon steel.42 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 nail-
hole in metal or fiberglass roofing or siding).

Manufacturing Processes

Most steel nails are produced from steel wire, although 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 I-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 twist, 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.

41
Unless otherwise noted, the information in this section is drawn from Certain Steel Nails from China,
Investigation No. 731-TA-1114 (Final), USITC Publication 4022, July 2008.
42
According to petitioners, all steel nails share the same basic physical characteristics, consisting of a head, shaft,
and point; are produced to the same industry-wide standards; and although woodworking nails may have smaller
heads and may differ in length and diameter, the differences are minor and do not delineate separate domestic like
products.

I-9
Figure I-1
Steel nails: General process of producing nails

Source: USITC Pub. 4022, Certain Steel Nails from China, Investigation No. 731-TA-1114 (Final), July 2008, p I-13.

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 for the mass merchandise retail repair and
remodeling market.43 44

43
Conference transcript, pp. 57-58 and 96-97 (Zinman).
44
All domestic producers are capable of packaging nails in 1-and 5-pound boxes. Currently, Maze Nails,
Specialty Nail, and ITW Paslode, advertise boxes of steel nails as small as 1-and 5-pounds. Pneu Fast advertises
boxes of steel nails as small as 7-pounds. E-mail from ***, May 9, 2011.

I-10
 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 and 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 the
mass merchandise retail repair and remodeling market.

DOMESTIC LIKE PRODUCT ISSUES

Petitioners contend that there is a single domestic like product that is coextensive with the scope
of the case, and further argue that the minor variations in nail features do not justify segmenting various
types of nails into separate domestic like products.45

45
Petition, p. 15, and postconference brief of petitioners, p. 3.

I-11
 PART II: CONDITIONS OF COMPETITION IN THE U.S. MARKET

INTRODUCTION

Steel nails are used in the building of houses and other structures, and are also used to make
furniture and cabinets, as well as crates and pallets for shipping. Since construction is the single largest
end use for steel nails, demand for steel nails is strongly influenced by activity in the construction market.

Channels of Distribution

The majority of shipments of steel nails by both U.S. producers and importers of product from the
UAE and other sources went to distributors during 2008-10 (table II-1). While U.S. producers’ shipments
fluctuated modestly between distributor and end-user sales, and shipments of nonsubject imports were
relatively stable in their distribution, shipments of imports from the UAE shifted markedly toward end
users between 2008 and 2010.

Table II-1
Steel nails: Channels of distribution for domestic product and imports sold in the U.S. market, by
source, 2008-10
Year
Item
2008 2009 2010
Share of reported shipment quantity (percent)
U.S. producers’ U.S. shipments:

Distributors 67.7 60.9 63.6

End users 32.3 39.1 36.4

U.S. shipments of imports from the UAE:

Distributors *** *** ***

End users *** *** ***

U.S. shipments of imports from all other sources:

Distributors 59.5 60.7 60.8

End users 40.5 39.3 39.2

Source: Compiled from data submitted in response to Commission questionnaires.

Geographic Distribution

U.S.-produced and imported steel nails are sold throughout the United States. Among eight
responding producers, five firms reported selling throughout the continental United States,1 while the
other three producers sold only in certain regions (including the Pacific Coast, Mountains, Midwest,
Central Southwest and Southeast). Among 25 responding importers, 14 reported selling throughout the

1
Three of these five producers also sold to Alaska, Hawaii, Puerto Rico, and the U.S. Virgin Islands.

II-1
continental United States,2 and the other 11 reported selling in specific regions (including the Northeast,
Midwest, Pacific Coast, Southeast, Central Southwest, and Mountains).

SUPPLY AND DEMAND CONSIDERATIONS

U.S. Supply

Domestic Production

Based on available information, U.S. producers of steel nails have the ability to respond to
changes in demand with moderate to large changes in the quantity of shipments of U.S.-produced steel
nails to the U.S. market. The main contributing factors to this degree of responsiveness of supply are
substantial excess capacity and moderate inventory levels.

Industry capacity

U.S. producers’ capacity increased from 304,064 short tons in 2008 to 347,372 short tons in
2010. The industry capacity utilization rate declined from 40.3 percent in 2008 to 26.9 percent in 2010.

Alternative markets

U. S. producers’ exports of steel nails have consistently accounted for less than 1 percent of their
total shipments during 2008-10.

Inventory levels

The ratio of U.S. producers’ inventories to total shipments was 13.3 percent in 2008, and
9.7 percent in both 2009 and 2010.

Production alternatives

None of the U.S. producers have produced other products on the machinery and equipment used
to produce steel nails since 2008.

Subject Imports

Based on available information, the two responding UAE producers are likely to respond to
changes in demand with moderate changes in the quantity of shipments of steel nails to the U.S. market.3
The main contributing factors to this degree of responsiveness of supply are the availability of a moderate
amount of unused capacity, small to moderate inventory levels, and the fact that most current production
is already directed to the United States.

2
Eleven of these 14 importers also sold to Alaska, Hawaii, Puerto Rico, and the U.S. Virgin Islands.
3
These two producers, Dubai Wire and Precision Fasteners, accounted for ***.

II-2
Industry capacity

Total industry capacity in the UAE increased from *** short tons in 2008 to *** short tons in
2010. It is estimated to remain at *** short tons for 2011 and 2012. The industry capacity utilization rate
was *** percent in 2008, *** percent in 2009, and *** percent in 2010.

Alternative markets

Most shipments of steel nails produced in the UAE ***. Exports to the United States increased
from *** percent of shipments in 2008 to *** percent in 2010. U.S. exports are projected to be
*** percent of total shipments in 2011 and *** percent in 2012.

Inventory levels

The ratio of inventories to total shipments for steel nails imported from the UAE declined from
*** percent in 2008 to *** percent in 2010. The ratio is projected to be *** percent in 2011 and
*** percent in 2012.

Production alternatives

***.

U.S. Demand

Demand Characteristics

Overall U.S. demand for steel nails is likely to be relatively insensitive to price changes since
there are no close substitute products, and since steel nails account for a very small share of the cost of the
final products in which they are used. New housing starts in the United States are the major factor
influencing the overall demand for this product.4 Monthly new housing starts declined sharply during
2008 and then fluctuated within a narrow range during January 2009-March 2011 (figure II-1). Similarly,
apparent U.S. consumption of steel nails decreased from 661,518 short tons in 2008 to 440,947 short tons
in 2009 and then partially recovered to 526,467 short tons in 2010.
When asked how U.S. demand for steel nails had changed since January 2008, all 8 responding
U.S. producers and 15 of 22 responding importers reported that demand had decreased. The other
7 importers reported that demand had fluctuated. Firms attributed the decrease to declines in housing
construction and/or the weak general economy. Some firms also reported a decline in pallet and crate
production and reduced expenditures on home improvements. Firms that reported that demand had
fluctuated since 2008 reported that demand had improved slightly in 2009 and 2010.

4
Mr. George Skarich, the executive vice president of Mid Continent Nail, stated that housing starts are the major
driver influencing nail sales. A smaller influence is the demand for pallet construction and other wood products.
Conference transcript, pp. 30-31 (Skarich).

II-3
Figure II-1
Housing starts: Annualized rate of monthly housing starts, seasonally adjusted, January 2008-
March 2011

Source: U.S. Census Bureau, [Link]/const/starts.

Business Cycles

When asked whether the demand for steel nails is subject to business cycles or distinctive
conditions of competition, 5 of 8 U.S. producers and 19 of 24 importers answered “yes.” While responses
varied, some producers and importers reported that seasonality is influenced by construction activity,
which is in turn influenced by weather conditions. These firms reported that demand is softer during
November through February than at other times of the year. When asked if there have been any changes
in business cycles since January 2008, a majority of firms reported that conditions have changed due to
the recession and the severe slump in housing construction.

Substitute Products

The majority of producers and importers reported that no substitutes exist for steel nails. A few
firms listed a number of possible substitutes including screws, staples, and anchors for applications.
However, these products are not considered price competitive with steel nails.

Cost Share

Estimates by producers and importers indicate that steel nails account for a small share of the
total cost of the final products in which they are used. In residential framing, roofing, fencing, siding,
home remodeling, and general construction, the share of the final cost was estimated at one percent or
less. In pallet and crate manufacturing, the cost share was estimated to be somewhat higher, ranging from
over 1 percent to as much as 5 to 12 percent.

II-4
 SUBSTITUTABILITY ISSUES

The degree of substitution between domestic and imported steel nails depends upon such factors
as relative prices, quality (e.g., grade standards, reliability of supply, defect rates, etc.), and conditions of
sale (e.g., price discounts/rebates, lead times between order and delivery dates, payment terms, product
services, etc.).

Lead Times

The majority of all sales of steel nails by U.S. producers and importers of product from the UAE
are from inventories rather than produced to order. Five of eight producers reported that 80 to 95 percent
of their sales were from inventory, one reported that 50 percent were from inventory, one reported that
20 percent were from inventory, and one firm reported that all of its steel nails were produced to order.
Producers’ lead times from inventory ranged from 1 to 5 days, while lead times for items produced to
order generally ranged from 14 to 28 days.5
Among 13 importers of steel nails from the UAE, the percentage of sales from U.S. inventories
ranged from 50 percent to 100 percent, with 12 of the 13 firms reporting that 70 percent or more of its
sales were from U.S. inventories. Reported lead times from U.S. inventories ranged from 1 to 7 days.
For items produced to order, lead times ranged from 60 to 120 days. In addition, two importers reported
that *** percent of their sales were from the UAE foreign producer inventories, with lead times from ***
to *** days, and one importer reported that *** percent of its sales were from the UAE foreign producer
inventories with a lead time of *** days.

Comparisons of Domestic Products, Subject Imports, and Nonsubject Imports

To determine whether U.S.-produced steel nails can generally be used in the same applications as
imports from the UAE and nonsubject countries, producers and importers were asked whether the
products can “always,” “frequently,” “sometimes,” or “never” be used interchangeably. A majority of
firms reported that U.S.-produced products and imports from the UAE and nonsubject countries
can always or frequently be used interchangeably (table II-2).

Table II-2
Steel nails: Perceived degree of interchangeability of product produced in the United States and in
other countries, by country pairs
U.S. producers U.S. importers
Country pair A F S N A F S N
U.S. vs. UAE 2 5 0 0 13 2 3 0
U.S. vs. nonsubject 2 5 0 0 14 3 4 0
UAE vs. nonsubject 2 5 0 0 11 3 4 0
Note.--“A” = Always, “F” = Frequently, “S” = Sometimes, and “N” = Never.

Source: Compiled from data submitted in response to Commission questionnaires.

Petitioners contend that steel nails are “commodity products” available in many different varieties
from multiple suppliers. They point to common uses and specifications, and to the availability of nails

5
One producer reported that its lead times ranged from 30 to 60 days.

II-5
through distribution channels.6 Respondents, however, view the range of U.S.-produced nails differently
and suggest several areas in which competition between U.S.-produced and UAE-produced steel nails
might be limited. At the conference and in their postconference brief, the respondents stated that U.S.
producers do not offer a wide enough product range in sufficient quantities to effectively service the
broad U.S. market for steel nails and compete with the wide range of imports available from the UAE. In
their brief, the respondents listed *** categories of nails that either are not produced in the United States,
or where commercial production is “insignificant.” They stated that domestic mills do not have the
ability to produce *** percent of the types of nails that they sell their customers.7 They also argued that
U.S. producers do not offer nails in the widely varied packages that are purchased by do-it-yourself
customers.8 Finally, they distinguish between steel nails that are hot-dipped galvanized and those that are
produced from galvanized steel wire.9 10
Importer *** reported that as long as the products are manufactured to the same specifications,
they should always be interchangeable. Importer *** reported that the following factors limit the
interchangeability of steel nails from the UAE with U.S.-produced products and imports from other
countries: quality assurance; tool adaptability to match the exact tool tolerance of its customers; a
superior coating from its galvanizing process; heat treatment of the nails; an in-house application test to
ensure that the product that is being dispatched is perfectly fitted for the application for which it is
bought; and a wide product line that is superior to product from the United States or any other country.
Firms were also asked how often differences in factors other than price between the U.S.-
produced products and imports from the UAE and other nonsubject sources were a factor in their sales of
steel nails (table II-3). With respect to the UAE, a majority of producers reported that these differences
are “sometimes” or “never” a factor, while a majority of importers reported that they are “always” or
“frequently” a factor. Producer *** reported that the base steel used in many imported nails ***.
Importer *** reported that it purchases special galvanized nails from the UAE that are produced in an
environmentally-conscious way and are not available from U.S. producers. Importer *** stated that its
imports from the UAE are superior in technical support and packaging. Also, importer *** reported that
the quality of the U.S.-produced product is inferior, the range of size/types in extremely limited, and

6
See conference transcript, p. 25 (Skarich). “Steel nails are commodity products. We all produce the same nails
in bulk and collated to the same industry standards and specifications...Both the domestic producers and the UAE
producers produce and sell a full spectrum of steel nails through distribution channels. We even produce and sell
private label nails to some longstanding customers despite the fact that it can dilute our brand. We also sell some
nails directly to end users. Distributors compete with each other to sell retailers, construction and industrial users
throughout our country. Therefore, our nails and the rest of the domestic industry's nails compete in all channels of
distribution with all types of nails sold by the UAE in the U.S. market.”
7
Respondent’s Postconference Brief, pp. 23-25 and conference transcript, pp. 58-66 (Zinman).
8
The respondents stated that an important reason why Itochu buys from Dubai Wire is that it packages nails in
private label boxes. Itochu’s private label program allows its retailers to place their store name, logo, and individual
product SKUs on the products that Itochu sells them. Itochu’s witness stated that similar packaging is not available
from U.S. producers. Conference transcript p. 66 (Zinman).
9
Conference transcript, pp. 58-60 (Zinman); Respondents’ Postconference Brief, pp. 22-25. Reportedly,
*** percent of PrimeSource’s sales are to mass merchandise customers, with a substantial portion of the “hand
drive” nails packaged in small packs (that is, one- and five-pound packs). Respondents’ Postconference Brief, pp.
49-50.
10
Petitioners, in turn, identify U.S. producers that sell to “Big Box” stores or otherwise sell bulk nails to
customers such as PrimeSource itself (***). Petitioners’ Postconference Brief, pp. 26, 39. They further contend that
the domestic industry collectively is “fully capable” of producing each nail product “should the demand exist at a
fairly-traded price range.” Petitioners’ Postconference Brief, p. 11. See also id., p. 20. Petitioners also dispute the
significance of hot-dipped galvanizing nails, while noting that at least one U.S. producer (Maze) uses this
manufacturing process. Conference transcript, p. 101 (Gordon).

II-6
customer service is nonexistent. With respect to nonsubject imports, a majority of both U.S. producers
and U.S. importers reported that factors other than price were “sometimes” or “never” a factor in their
sales of steel nails.

Table II-3
Steel nails: Perceived importance of factors other than price between steel nails produced in the
United States and in other countries, by country pairs
U.S. producers U.S. importers

Country pair A F S N A F S N
U.S. vs. UAE 0 2 3 2 5 4 6 2
U.S. vs. nonsubject 0 2 3 2 5 3 9 2
UAE vs. nonsubject 0 1 3 2 3 2 6 2
Note.--“A” = Always, “F” = Frequently, “S” = Sometimes, and “N” = Never.

Source: Compiled from data submitted in response to Commission questionnaires.

II-7
 PART III: U.S. PRODUCERS’ PRODUCTION, SHIPMENTS, AND
EMPLOYMENT
The Commission analyzes a number of factors in making injury determinations (see 19 U.S.C. §§
1677(7)(B) and 1677(7)(C)). Information on the alleged margin of dumping was presented earlier in this
report and information on the volume and pricing of imports of the subject merchandise is presented in
Parts IV and V. Information on the other factors specified is presented in this section and/or Part VI and
(except as noted) is based on the questionnaire responses of 10 firms1 that accounted for more than
*** percent of U.S. production of steel nails during 2010.

U.S. PRODUCERS

The petition identified 13 U.S. producers of steel nails.2 The Commission received completed
questionnaire responses from the petitioner, and from 8 of the other 12 firms identified in the petition, as
well as partial information from two additional producers. Table III-1 presents U.S. producers’ positions
on the petition, ownership, plant locations, and shares of total reported U.S. production in 2010. Ten
producers support the petition, none oppose it, and one takes no position. Producers accounting for
*** percent of U.S. production in 2010 support the petition, while producers accounting for *** percent
take no position. *** was the largest producer in 2010, followed by ***, and ***,3 all of which
collectively accounted for nearly three-quarters of domestic production in 2010. Table III-2 presents
important industry events during 2008-11.
Four U.S. producers are related to foreign producers of the subject merchandise and four are
related to U.S. importers of the subject merchandise. In addition, as discussed in greater detail below,
three U.S. producers directly import the subject merchandise from the UAE and one purchases the subject
merchandise from U.S. importers.

1
***.
2
Petition, pp. 2-5. Six other firms, identified during a previous investigation, were sent questionnaires although
they are thought to be out-of-business. ***.
3
***.

III-1
Table III-1
Steel nails: U.S. producers, positions on the petition, ownership, plant locations, and shares of
total reported U.S. production, 2010
2010 U.S. production
Position Quantity
on U.S. plant (short Share
Firm petition Firm ownership location(s) tons) (percent)
Heico Acquisitions,
Davis Wire Corp. *** Chicago, IL Pueblo, CO *** ***
a division of WH Maze Co.,
Independent Nail *** Peru, IL Taunton, MA *** ***
Vernon Hills, IL;
Schaumburg, IL;
ITW 1 *** ITW Glenview, IL Grand Prarie, TX *** ***
Maze Nails *** None Peru, IL *** ***
Libla Industries, Poplar
Mid Continent Nail Corp. Support Bluff, MO Poplar Bluff, MO *** ***
Pneu-Fast Co. *** N/A Evanston, IL *** ***
Senco Holdings, Inc.,
Senco Brands, Inc.2 *** Newport, KY Cincinnati, OH *** ***
Specialty Fastening
Systems, Inc. *** Falcon Enterprises Canada Prairie Grove, AR *** ***
North Kingstown, RI;
Stanley-Bostitch Holding Clinton, CT; East
Stanley Fastening Systems, Corp. and The Stanley Greenwich, RI;
L.P.3 *** Works, New Britain, CT Shelbyville, IN *** ***
Tree Island Industries, Ltd.
Tree Island Wire USA, Inc. *** Richmond, BC Ontario, CA *** ***
Wheeling-LaBelle Nail Co. Support None Wheeling, WV *** ***
Total *** 100.0
1
***.
2
***. Senco provided ***.
3
***.

Note.–*** did not respond to the Commission’s questionnaire request and are believed to amount to less than *** percent of U.S.
production.

Source: Compiled from data submitted in response to Commission questionnaires and from public sources.

Table III-2
Steel nails: Important industry events, 2008-11

* * * * * * *

III-2
 U.S. CAPACITY, PRODUCTION, AND CAPACITY UTILIZATION 4

Table III-3 presents data on reported U.S. producers’ capacity, production, and capacity
utilization between 2008 and 2010. Figure III-1 graphically presents data on reported U.S. producers’
capacity, production, and capacity utilization during the period for which data were collected in the
investigation.
U.S. capacity of steel nails increased by 14.2 percent from 304,064 short tons in 2008 to 347,372
short tons in 2010.5 Production fell by 23.7 percent over the period, with the average capacity utilization
rate dropped from 40.3 percent in 2008 to 26.9 percent in 2010. U.S. producers’ capacity was well below
apparent U.S. consumption in each year for which data were collected. Generally, U.S. producers of steel
nails reported “prolonged shutdowns or production curtailment” as a result of reduction in demand. This
led to a reduction in production workers. Reported constraints in the manufacturing process for U.S.
producers of steel nails include the machinery used to produce the nails, as well as labor availability,
maintenance of the machines, and consistent orders.6

Table III-3
Steel nails: U.S. capacity, production, and capacity utilization, 2008-10
Calendar year
Item 2008 2009 2010
Capacity (short tons) 304,064 337,287 347,372
Production (short tons) 122,391 90,023 93,379
Capacity utilization (percent) 40.3 26.7 26.9
Source: Compiled from data submitted in response to Commission questionnaires.

4
***.
5
Capacity was calculated ranging from 40 - 154 hours per week and 50 - 52 weeks per year. Reported capacity
in the Commission’s 2008 report (Investigation No. 731-TA-1114 (Final), June 2008) was nearly 650,000 short tons.
6
As reported in questionnaire responses.

III-3
Figure III-1
Steel nails: U.S. capacity, production, and capacity utilization, 2008-10

Source: Table III-3.

U.S. PRODUCERS’ SHIPMENTS

Table III-4 presents information on U.S. producers’ shipments of steel nails between 2008 and
2010. Three U.S. producers reported exporting steel nails,7 which made up a minimal share of the
quantity of U.S. producers’ shipments of steel nails.8
No U.S. producer reported any internal consumption of steel nails while transfers of steel nails to
related firms ranged between *** and *** percent by quantity. U.S. producers’ commercial shipments of
steel nails decreased by *** percent by quantity from 2008 to 2010, and overall U.S. shipments fell by
23.8 percent.

7
***.
8
U.S. producers of steel nails reported exporting to Australia, Canada, “Europe,” Japan, Korea, Kuwait, Mexico,
the Netherlands, and New Zealand.

III-4
Table III-4
Steel nails: U.S. producers’ shipments, by types and shares, 2008-10
Calendar year
Item 2008 2009 2010
Quantity (short tons)
Commercial shipments *** *** ***
Internal consumption *** *** ***
Transfers to related firms *** *** ***
U.S. shipments 122,834 96,916 93,613
Export shipments *** *** ***
Total shipments *** *** ***
Value (1,000 dollars)1
Commercial shipments *** *** ***
Internal consumption *** *** ***
Transfers to related firms *** *** ***
U.S. shipments 221,481 170,494 151,027
Export shipments *** *** ***
Total shipments *** *** ***
1
Unit value (dollars per short ton)
Commercial shipments *** *** ***
Internal consumption *** *** ***
Transfers to related firms *** *** ***
U.S. shipments $1,803 $1,759 $1,613
Export shipments *** *** ***
Total shipments *** *** ***

Table continued on next page.

III-5
Table III-4--Continued
Steel nails: U.S. producers’ shipments, by types and shares, 2008-10
Calendar year
Item 2008 2009 2010
Share of quantity (percent)
Commercial shipments *** *** ***
Internal consumption *** *** ***
Transfers to related firms *** *** ***
U.S. shipments *** *** ***
Export shipments *** *** ***
Total shipments 100.0 100.0 100.0
Share of value (percent)
Commercial shipments *** *** ***
Internal consumption *** *** ***
Transfers to related firms *** *** ***
U.S. shipments *** *** ***
Export shipments *** *** ***
Total shipments 100.0 100.0 100.0
1
F.o.b. U.S. point of shipment.
2
Not applicable.

Note.–Because of rounding, figures may not add to the totals shown.

Source: Compiled from data submitted in response to Commission questionnaires.

U.S. PRODUCERS’ IMPORTS AND PURCHASES

During the period for which data were collected, three U.S. producers reported direct imports of
steel nails from the UAE. Five U.S. producers imported steel nails from nonsubject countries.9 Table III-
5 presents data, by company, on domestic producers’ direct imports, purchases of imported product, and
purchases from other domestic producers.

Table III-5
Steel nails: U.S. producers’ imports, purchases, and ratios to production, 2008-10

* * * * * * *

9
U.S. producers imported nonsubject steel nails from Austria, Canada, Colombia, Denmark, “Europe,” Italy,
Korea, Malaysia, Spain, and Taiwan.

III-6
 Table III-6 presents combined data of five domestic producers’ direct imports, purchases of
imported product, and purchases from other domestic producers. U.S. producers of steel nails made
purchases of steel nails from other domestic producers, the UAE, and other countries (both direct imports
and purchases). The reasons cited for making these imports and purchases were generally to be able to
offer products at lower prices, to complement a firm’s product line with something it does not produce, to
fill out inventory, to supplement capacity, and as an alternative to producing low-volume products.

Table III-6
Steel nails: U.S. producers’ imports, purchases, and ratios to production, 2008-10

* * * * * * *

U.S. PRODUCERS’ INVENTORIES

Table III-7, which presents end-of-period inventories for steel nails from 2008 to 2010, shows
that inventories were declining, both absolutely and relative to production and shipments over the period
for which data were collected.

Table III-7
Steel nails: U.S. producers’ end-of-period inventories, 2008-10
Calendar year
Item 2008 2009 2010
Quantity (short tons)
Inventories (short tons) 16,397 9,416 9,105
Ratio to production (percent) 13.4 10.5 9.8
Ratio to U.S. shipments (percent) 13.3 9.7 9.7
Ratio to total shipments (percent) 13.3 9.7 9.7
Note.–Because of rounding, figures may not add to the totals shown.

Source: Compiled from data submitted in response to Commission questionnaires.

U.S. PRODUCERS’ EMPLOYMENT, WAGES, AND PRODUCTIVITY 10

Table III-8 presents data on U.S. producers’ employment-related indicia. Employment of

production-related workers (“PRWs”) in the U.S. steel nail industry declined by 19.9 percent between
2008 and 2010, and total hours worked decreased by 23.2 percent. This drop was consistent with
diminished production levels reported throughout the U.S. steel nail industry. Wages paid and hourly
wages to PRWs also declined from 2008 to 2010, while productivity was relatively unchanged, resulting
in a decrease in unit labor costs of 8.2 percent.

10
***.

III-7
Table III-8
Steel nails: U.S. producers’ employment-related data, 2008-10
Calendar year
Item 2008 2009 2010
Production and related workers (PRWs) 737 575 590
Hours worked by PRWs (1,000 hours) 1,551 1,232 1,192
Hours worked per worker 2,104 2,143 2,020
Wages paid to PRWs (1,000 dollars) 26,529 21,359 18,591
Hourly wages $17.11 $17.33 $15.60
Productivity (short tons produced per 1,000 hours) 78.9 73.1 78.4
Unit labor costs (per short ton) $216.76 $237.27 $199.09
Note.–Because of rounding, figures may not add to the totals shown.

Source: Compiled from data submitted in response to Commission questionnaires.

III-8
 PART IV: U.S. IMPORTS, APPARENT U.S. CONSUMPTION, AND
MARKET SHARES

U.S. Importers

Table IV-1 presents information on U.S. importers. Fourteen of the twenty-seven importers that
submitted data in response to the Commission’s U.S. importers’ questionnaire indicated that they
imported steel nails from the UAE. These 14 firms’ imports of steel nails from the UAE appear to
account for all of the subject U.S. imports from the UAE by quantity in the period 2008 to 2010. The
22 reporting importers of nonsubject imports accounted for nearly half of nonsubject imports in 2010, and
reported imports from Austria, China, Denmark, Korean, Liechtenstein, Malaysia, Mexico, Poland, Spain,
and Taiwan.

Table IV-1
Steel nails: U.S. importers and imports, by source, 2010

* * * * * * *

Four firms reported the following changes in their operations: office/warehouse openings,
office/warehouse closings, acquisitions, assets sold to another firm, and relocation.

U.S. IMPORTS

Table IV-2 and figure IV-1 present and depict U.S. imports of steel nails during 2008 to 2010.
U.S. import data are based on official Commerce statistics excluding roofing nails.1 U.S. imports of
subject steel nails from the UAE increased by 145.7 percent from 48,256 short tons in 2008 to
118,558 short tons in 2010. The UAE accounted for 27.4 percent of total U.S. imports of steel nails
during 2010. U.S. nonsubject imports fell by 35.9 percent from 490,428 short tons in 2008 to 314,296
short tons in 2010. Based on the import data presented in table IV-2. The average unit value of subject
imports from the UAE exceeded those of nonsubject imports in 2008. However, the average unit value of
subject imports from the UAE declined by 35.5 percent between 2008 and 2010, while those of
nonsubject imports decreased by 10.1 percent. thus, in both 2009 and 2010, the average unit values of
subject imports from the UAE were more than $300 per short ton below those of nonsubject imports.

1
HTS subheadings 7317.00.55, excluding statistical reporting number 7317.00.5501 (roofing nails); 7317.00.65;
and 7317.00.75.

IV-1
Table IV-2
Steel nails: U.S. imports, by sources, 2008-10
Calendar year
Source 2008 2009 2010
Quantity (short tons)
UAE 48,256 63,494 118,558
Other sources 490,428 280,537 314,296
Total 538,684 344,031 432,854
1
Value (1,000 dollars)
UAE 70,517 56,662 111,764
Other sources 686,105 336,747 395,266
Total 756,623 393,409 507,030
Unit value (per short ton)1
UAE $1,461 $892 $943
Other sources 1,399 1,200 1,258
Total 1,405 1,144 1,171
Share of quantity (percent)
UAE 9.0 18.5 27.4
Other sources 91.0 81.5 72.6
Total 100.0 100.0 100.0
Share of value (percent)
UAE 9.3 14.4 22.0
Other sources 90.7 85.6 78.0
Total 100.0 100.0 100.0
1
Landed, duty-paid.

Source: Compiled from official Commerce statistics.

IV-2
Figure IV-1
Steel nails: Quantity of subject and nonsubject U.S. imports, 2008-10

Source: Table IV-2.

The leading nonsubject countries are China (accounting for 34.8 percent of total U.S. imports of
steel nails during 2010), Taiwan (13.2 percent), Korea (7.9 percent), Canada (4.1 percent), Mexico
(3.2 percent), Poland (2.9 percent), and Malaysia (2.7 percent), with 33 other countries ranging between
less than 0.05 percent and 0.9 percent of 2010 imports (table IV-3). The unit values of imports from each
of the named nonsubject countries, except for Mexico, were higher than the unit values of imports from
the UAE in 2009 and 2010, although unit values may be affected by the product mix.

IV-3
Table IV-3
Steel nails: U.S. imports, by sources, 2008-10
Calendar year
Source 2008 2009 2010
Quantity (short tons)
UAE 48,256 63,494 118,558
China 266,703 137,975 150,730
Taiwan 76,520 61,438 57,166
Korea 56,336 25,245 34,163
Canada 30,712 17,898 17,673
Mexico 16,238 10,626 13,704
Poland 4,965 6,306 12,439
Malaysia 13,283 10,493 11,634
Other sources 25,672 10,557 16,787
Total 538,684 344,031 432,854
1
Value (1,000 dollars)
UAE 70,517 56,662 111,764
China 326,549 147,976 173,257
Taiwan 117,931 69,499 74,550
Korea 85,059 30,019 43,528
Canada 52,716 26,723 29,276
Mexico 23,188 13,100 11,282
Poland 8,567 8,715 15,159
Malaysia 16,954 9,426 12,176
Other sources 55,142 31,289 36,036
Total 756,623 393,409 507,030

Table continued on next page.

IV-4
Table IV-3--Continued
Steel nails: U.S. imports, by sources, 2008-10
Calendar year
Source 2008 2009 2010
Unit value (per short ton)1
UAE 1,461 892 943
China 1,224 1,072 1,149
Taiwan 1,541 1,131 1,304
Korea 1,510 1,189 1,274
Canada 1,716 1,493 1,657
Mexico 1,428 1,233 823
Poland 1,726 1,382 1,219
Malaysia 1,276 898 1,047
Other sources 2,148 2,964 2,147
Average 1,405 1,144 1,171
1
Landed, duty-paid.

Not.--As discussed in Part I of this report, imports of steel nails from China, other than those from Paslode, are
currently subject to an antidumping duty order.

Source: Compiled from official Commerce statistics.

NEGLIGIBILITY

The statute requires that an investigation be terminated without an injury determination if imports
of the subject merchandise are found to be negligible.2 Negligible imports are generally defined in the
Tariff Act of 1930, as amended, as imports from a country of merchandise corresponding to a domestic
like product where such imports account for less than 3 percent of the volume of all such merchandise
imported into the United States in the most recent 12-month period for which data are available that
precedes the filing of the petition or the initiation of the investigation. However, if there are imports of
such merchandise from a number of countries subject to investigations initiated on the same day that
individually account for less than 3 percent of the total volume of the subject merchandise, and if the
imports from those countries collectively account for more than 7 percent of the volume of all such
merchandise imported into the United States during the applicable 12-month period, then imports from
such countries are deemed not to be negligible.3 Imports from the UAE accounted for 27.4 percent of
total imports of steel nails by quantity during 2010 and 27.3 percent between March 2010 and February
2011. Such imports occurred in every month during January 2008 - February 2011.

2
Sections 703(a)(1), 705(b)(1), 733(a)(1), and 735(b)(1) of the Act (19 U.S.C. §§ 1671b(a)(1), 1671d(b)(1),
1673b(a)(1), and 1673d(b)(1)).
3
Section 771(24) of the Act (19 U.S.C. § 1677(24)).

IV-5
 APPARENT U.S. CONSUMPTION

Data concerning apparent U.S. consumption of steel nails during the period for which data were
collected are shown in table IV-4 and figure IV-2.

Table IV-4
Steel nails: U.S. shipments of domestic product, U.S. imports, and apparent U.S. consumption,
2008-10
Calendar year
Item 2008 2009 2010
Quantity (short tons)
U.S. producers’ U.S. shipments 122,834 96,916 93,613
U.S. imports from–
UAE 48,256 63,494 118,558
1
Nonsubject countries 490,428 280,537 314,296
Total U.S. imports 538,684 344,031 432,854
Apparent U.S. consumption 661,518 440,947 526,467
Value (1,000 dollars)
U.S. producers’ U.S. shipments 221,481 170,494 151,027
U.S. imports from--
UAE 70,517 56,662 111,764
Nonsubject countries1 686,105 336,747 395,266
Total U.S. imports 756,623 393,409 507,030
Apparent U.S. consumption 978,104 563,903 658,057
Source: Compiled from data submitted in response to Commission questionnaires and official Commerce statistics.

IV-6
Figure IV-2
Steel nails: Apparent U.S. consumption, by sources, 2008-10

Source: Table IV-4.

IV-7
 U.S. MARKET SHARES

U.S. market share data are presented in table IV-5.

Table IV-5
Steel nails: U.S. consumption and market shares, 2008-10
Calendar year
Item 2008 2009 2010
Quantity (short tons)
Apparent U.S. consumption 661,518 440,947 526,467
Value (1,000 dollars)
Apparent U.S. consumption 978,104 563,903 658,057
Share of quantity (percent)
U.S. producers’ U.S. shipments 18.6 22.0 17.8
U.S. imports from--
UAE 7.3 14.4 22.5
Nonsubject countries 74.1 63.6 59.7
All countries 81.4 78.0 82.2
Share of value (percent)
U.S. producers’ U.S. shipments 22.6 30.2 23.0
U.S. imports from--
UAE 7.2 10.0 17.0
Nonsubject countries 70.1 59.7 60.1
All countries 77.4 69.8 77.0
Note.–Because of rounding, figures may not add to the totals shown.

Source: Compiled from data submitted in response to Commission questionnaires and official Commerce statistics.

IV-8
 RATIO OF IMPORTS TO U.S. PRODUCTION

Information concerning the ratio of imports to U.S. production of steel nails is presented in table

IV-6.

Table IV-6
Steel nails: U.S. production, U.S. imports, and ratios of imports to U.S. production, 2008-10
Calendar year
Item 2008 2009 2010
Quantity (short tons)
U.S. production 122,391 90,023 93,379
Imports from:
UAE 48,256 63,494 118,558
Nonsubject countries 490,428 280,537 314,296
Total imports 538,684 344,031 432,854
Ratio of U.S. imports to production (percent)
Imports from:
UAE 39.4 70.5 127.0
Nonsubject countries 400.7 311.6 336.6
Total imports 440.1 382.2 463.5
Note.–Because of rounding, figures may not add to the totals shown.

Source: Compiled from data submitted in response to Commission questionnaires and official Commerce statistics.

IV-9
 PART V: PRICING AND RELATED INFORMATION
FACTORS AFFECTING PRICES

Raw Material Costs

Raw materials account for a substantial share of the cost of steel nails. They accounted for
65.8 percent of the cost of goods sold in 2008, 65.2 percent in 2009, and 58.8 percent in 2010. The main
raw material used to produce certain steel nails is carbon steel wire rod. As shown in figure V-1, carbon
steel wire prices increased during the first part of 2008, peaked in July/August, and then fell sharply
during the remainder of 2008 and the early part of 2009. Carbon steel wire rod prices increased
irregularly thereafter but remained below the peak levels reached in 2008.

Figure V-1
Carbon steel wire rod (mesh): North America, monthly, January 2008-December 2010

Source: http: //[Link]/world-price, retrieved on May 4, 2011.

U.S. Inland Transportation Costs

U.S. producers and importers of steel nails from the UAE were asked to estimate the percentage
of the total delivered cost of these nails accounted for by U.S. inland transportation costs. The majority of
producers’ estimates ranged from 2 to 8 percent. Among importers, estimates ranged from 1.5 to
6 percent.
U.S. producers and importers of steel nails were also asked to estimate the percentages of their
sales that were delivered within 100 miles, 101 to 1,000 miles, and over 1,000 miles from their production
or storage facilities. Seven of eight producers reported that 70 to 100 percent of their sales were shipped
1,000 miles or less from their production facilities, while one producer reported that all of its shipments
were over 1,000 miles. All importers of steel nails from the UAE reported that between 85 and
100 percent of their U.S. shipments were for distances of 1,000 miles or less from their U.S. point of
shipment. The majority of producers and importers reported that they arrange shipping for their
customers.

V-1
 PRICING PRACTICES

Pricing Methods

Prices of steel nails are determined in a variety of ways including set price lists, transaction-by-
transaction negotiations, and contracts. Among eight responding U.S. producers, two reported that they
use set price lists, two use transaction-by-transaction negotiations, one uses both transaction-by-
transaction negotiations and set price lists, and one uses both contracts and set price lists. Of the
remaining producers, one begins with set price lists as a guide in negotiating a price, and the other uses
set price lists with deviations made by specific geographic market to meet competition.
Importers reported using transaction-by-transaction negotiations, set price lists, contracts and
combinations of these methods. One importer reported that it has a multi-level pricing structure that takes
into account factors as the type of customer, the cost to service the customer, and reasonable margins.
Another importer reported that its method of price setting varies by the market and by consumer demand.
Most sales of steel nails by U.S. producers and importers of steel nails from the UAE are on a
spot basis. Seven of eight producers reported that all of their sales are on a spot basis, one reported that
76.5 percent of sales are on a spot basis, and one reported that 97.4 percent are on a spot basis.1 Of the
two producers reporting contract sales, one reported that its contracts are for three years with both prices
and quantities fixed and no meet-or-release provisions, and the other reported that its contracts are for one
year with prices but not quantities fixed and with meet-or-release provisions. For UAE, nine of 15
responding importers reported that all of their sales are on a spot basis, two reported that all sales are on a
contract basis, and four reported a mixture of spot and contract sales. Importers’ contracts range in
duration from less than 6 months to 3 years, typically fix both prices and quantities, and may or may not
contain meet-or-release provisions.

Sales Terms and Discounts

Quantity discounts and annual total volume discounts are commonly used by U.S. producers and
importers. Three of eight producers reported using quantity discounts; one reported annual total volume
discounts; two reported using a combination of quantity discounts and annual total volume discounts; one
reported using quantity discounts, annual total volume discounts, and other specialized discounts broken
out by different channels of distribution;2 and one reported that it does not provide discounts. Sixteen of
25 importers also reported using quantity and/or annual total volume discounts or negotiated rebates to
large customers. Six producers and three importers reported providing early payment discounts of 1 to 2
percent. U.S. producers and importers quote on both an f.o.b and on a delivered basis.

1
Of the two producers reporting contract sales, one reported that its contracts are for three years with both prices
and quantities fixed and no meet-or-release provisions, and the other reported that its contracts are for one year with
prices but not quantities fixed and with meet-or-release provisions.
2
***.

V-2
 PRICE DATA

The Commission requested U.S. producers and importers of steel nails to provide quarterly data
for the total quantity and net f.o.b. value of the following products shipped to unrelated U.S. customers
during January 2008-December 2010:

Product 1.– 3" by 0.131" bright smooth, plastic-strip collated nails

Product 2.– 3" by 0.120" bright smooth, plastic-strip collated nails
Product 3.– 2 3/8" by 0.113" bright screw and ring shank nails, plastic-strip collated
Product 4.– 3 1/4" by 0.148" 16D smooth vinyl-coated sinkers, bulk
Product 5.– 2" by 0.113" bright, drive screw, machine quality pallet nails, bulk
Product 6.– 2" by 0.099" bright, drive screw, wire-welded collated in coils

Six U.S. producers and 13 importers of steel nails from the UAE provided usable pricing data for
sales of the requested products, although no firms reported pricing for all products for all quarters.
Pricing data reported by these firms accounted for approximately 6.7 percent of the value of U.S.
producers’ shipments of steel nails and 1.5 percent of the value of U.S. shipments of U.S. imports from
the UAE during 2008-10.

Price Trends

Quarterly weighted-average prices and shipment quantities for the six products are presented in
tables V-1 through V-6 and figure V-2.3 U.S. prices for all six products reached their highest levels
during the third or fourth quarters of 2008, then declined in the following quarters, and remained at lower
levels throughout 2009 and 2010. Prices of products 1, 2, 3, and 6 imported from the UAE also reached
peak levels in 2008 and then were lower during the following two years. The prices of products 4 and 5
from the UAE both fluctuated with no clear trends during the periods where sales were reported. U.S.
shipment quantities for products 1, 2, 3, and 5 all declined irregularly between the first quarter of 2008
and the fourth quarter of 2010, while shipments of product 6 increased moderately during this period.4
U.S. imports of all six products from the UAE increased during the periods where they were reported. A
summary of price ranges and percentage changes in prices is presented in table V-7.

3
Price data for nonsubject imports are presented in appendix D. Prices of products 4 and 5, which are sold on a
bulk basis, were requested and reported in short tons rather than in thousands of nails, since this is how they are
commonly sold.
4
Sales of U.S.-produced product 4 were sporadic.

V-3
Table V-1
Steel nails: Weighted-average f.o.b. prices and quantities of domestic and imported product and
margins of underselling/(overselling), by quarters, 2008-10

* * * * * * *

Table V-2
Steel nails: Weighted-average f.o.b. prices and quantities of domestic and imported product 2 and
margins of underselling/(overselling), by quarters, 2008-10

* * * * * * *

Table V-3
Steel nails: Weighted-average f.o.b. prices and quantities of domestic and imported product 3 and
margins of underselling/(overselling), by quarters, 2008-10

* * * * * * *

Table V-4
Steel nails: Weighted-average f.o.b. prices and quantities of domestic and imported product 4 and
margins of underselling/(overselling), by quarters, 2008-10

* * * * * * *

Table V-5
Steel nails: Weighted-average f.o.b. prices and quantities of domestic and imported product 5 and
margins of underselling/(overselling), by quarters, 2008-10

* * * * * * *

Table V-6
Steel nails: Weighted-average f.o.b. prices and quantities of domestic and imported product 6 and
margins of underselling/(overselling), by quarters, 2008-10

* * * * * * *

Figure V-2
Steel nails: Weighted-average prices and quantities of domestic and imported product, by
quarters, January 2008-December 2010

* * * * * * *

Table V-7
Steel nails: Summary of weighted-average f.o.b. prices for products 1-6 from the United States
and the UAE, January 2008-December 2010

* * * * * * *

V-4
 Price Comparisons

Margins of underselling and overselling by product are presented in table V-8. Prices for steel
nails imported from the UAE were below those for U.S.-produced product in 46 of 62 quarterly
comparisons; margins of underselling ranged from 1.1 to 83.3 percent. In 16 instances, prices of product
from the UAE were higher; margins of overselling ranged from 0.0 to 43.7 percent.

Table-V-8
Steel nails: Instances of underselling (overselling) of imports from UAE and the range of margins,
by products, January 2008-December 2010
Underselling Overselling
Number of
Item Number of instances Range (percent) instances Range (percent)
Product 1 11 4.5-22.7 1 2.2-2.2
Product 2 7 2.6-10.6 5 1.9-16.5
Product 3 11 1.1-45.5 1 3.6-3.6
Product 4 1 17.8 5 18.4-39.7
Product 5 4 3.9-20.4 4 0.0-43.7
Product 6 12 59.6-83.3 - -
Total 46 1.1-83.3 16 0.0-43.7
Source: Compiled from data submitted in response to Commission questionnaires.

LOST SALES AND LOST REVENUES

The Commission requested U.S. producers to report any instances of lost sales or revenues they
experienced due to competition from imports from UAE during 2008-10. Of the eight responding U.S.
producers, three reported that they had to either reduce prices or roll back announced price increases. The
296 lost sales allegations totaled $44 million and involved 40,670 short tons of steel nails and the 239 lost
revenues allegations totaled $256,231 and involved 4,747 tons. Staff attempted to contact all of the
purchasers listed in tables V-9 and V-10. Sixteen purchasers accounting for 207 of the allegations
responded and a summary of the information obtained follows.

Table V-9
Steel nails: U.S. producers’ lost sales allegations

* * * * * * *

Table V-10
Steel nails: U.S. producers’ lost revenue allegations

* * * * * * *

V-5
 Purchasers responding to the lost sales and lost revenue allegations were also asked if they had
switched from purchasing from U.S. producers to suppliers of UAE product. Four of 16 responding
purchasers reported that they had switched since 2008, and three of these purchasers reported that price
was the reason.5 One purchaser reported that its supplier shifted production overseas, that the mill in the
UAE seemed cheapest, and that in order to be competitive it has sourced about half of its nails from the
UAE during 2009 and 2010. One purchaser reported that it had not switched purchases to the UAE since
2008 because it was already purchasing from them in 2008.
Eight of 11 responding purchasers reported that U.S. producers had reduced prices because of
competition from imported product from the UAE. One purchaser stated that in addition to import price
competition, raw material costs declines also contributed to price decreases while another purchaser stated
that Mid-Continental has kept it competitive in the last several years by working at little or no margins at
both the manufacturer and distributor levels. Another purchaser reported that price changes were not
caused by import competition from UAE product, but by changes in material and shipping costs.

5
A third firm reported indicated both “yes” and “no,” reporting “Price is not the only reason for the switch.
Because of the volume of nails we sell, one supplier cannot meet our demands for product. We never buy from just
one supplier.”

V-6
 PART VI: FINANCIAL EXPERIENCE OF THE U.S. PRODUCERS

BACKGROUND

Nine U.S. firms provided financial data on their operations on steel nails.1 These data are
believed to account for the great majority of U.S. operations on steel nails since 2008. No firms reported
internal consumption, although *** reported transfers to related firms. Because these intercompany
transfers accounted for *** of total net sales during the period for which data were collected, they are not
shown separately in this section of the report. All firms reported a fiscal year end of December 31 except
***.
In the past three years, the U.S. steel nail industry has experienced notable consolidation. Six
U.S. producers of steel nails have exited the industry – Air Nail, Atlas Steel & Wire, Phoenix Nail,
Stanley Fastening, Treasure Coast, and Wheeling-LaBelle.2 Further, Mid Continent purchased some or
all of the steel nail production assets of ***.3

OPERATIONS ON STEEL NAILS

Income-and-loss data for U.S. firms on their operations on steel nails are presented in table VI-1,
while selected financial data, by firm, are presented in table VI-2. The domestic industry experienced a
continuous decline in operating income from 2008 to 2010, with both total net sales quantity and value
decreasing throughout this time frame. Net sales value declined to a greater extent than net sales quantity,
thus the per-unit net sales value decreased from 2008 to 2010. The per-unit cost of goods sold (“COGS”)
also decreased from 2008 to 2010 due primarily to reduced raw material costs; however, per-unit COGS
declined less than per-unit revenue, which led to an overall decline in gross and operating income during
this time.
Although per-unit revenue, costs, gross income, and operating income were lower in 2010 as
compared to 2008, from 2008 to 2009, per-unit gross profit increased as per-unit COGS declined more
than per-unit revenue; however, per-unit SG&A expenses increased as volume declined, which led to a
slight decline in per-unit operating income from 2008 to 2009.
While the aforementioned trends reflect the overall results for the nine U.S. producers that
provided questionnaire responses for the preliminary phase of this investigation, there was some variation
among the reporting firms. All nine firms reported lower net sales quantities in 2010 as compared to
2008; however, several firms (***) reported increases in net sales quantities from 2008 to 2009 followed
by declines from 2009 to 2010, and several firms (***) reported decreases in net sales quantities from
2008 to 2009 followed by increases from 2009 to 2010.
In terms of per-unit revenue, six of the nine firms reported lower per-unit revenue in 2010 as
compared to 2008, with ***.4 From 2008 to 2009, five of the nine firms reported a decline in per-unit
revenue, while *** reported increases in per-unit revenue during this time. From 2009 to 2010, four of
the nine firms reported a decline in per-unit revenue, with *** reporting increases in per-unit revenue
during this time.

1
The U.S. firms are Davis Wire, ITW, Maze Nails, Mid Continent, Pneufast, Specialty Fastening, Stanley
Fastening, Tree Island, and Wheeling-LaBelle.
2
Conference transcript, pp. 12-13 (Gordon).
3
Mid Continent’s U.S. producer questionnaire, pp. 5-6.
4
***. E-mail correspondence from ***, May 4, 2011.

VI-1
Table VI-1
Steel nails: Results of operations of U.S. producers, 2008-10
Fiscal year
Item 2008 2009 2010
Quantity (short tons)
Total net sales 122,495 97,544 93,006
Value ($1,000)
Total net sales 220,887 172,626 150,824
COGS 179,500 136,605 123,503
Gross profit/(loss) 41,387 36,021 27,321
SG&A expenses 22,999 21,527 16,693
Operating income/(loss) 18,388 14,493 10,628
Interest expense 664 351 347
Other income/(expense) (4,814) (3,692) (1,908)
Net income/(loss) 12,910 10,451 8,372
Depreciation 8,778 6,864 7,775
Cash flow 21,688 17,315 16,147
Ratio to net sales (percent)
COGS:
Raw materials 53.5 51.6 48.2
Direct labor 6.1 5.8 6.1
Other factory costs 21.7 21.7 27.6
Total COGS 81.3 79.1 81.9
Gross profit/(loss) 18.7 20.9 18.1
SG&A expenses 10.4 12.5 11.1
Operating income/(loss) 8.3 8.4 7.0
Net income/(loss) 5.8 6.1 5.6
Unit value (per short ton)
Total net sales $1,803 $1,770 $1,622
COGS:
Raw materials 964 913 781
Direct labor 110 102 98
Other factory costs 391 385 448
Total COGS 1,465 1,400 1,328
Gross profit/(loss) 338 369 294
SG&A expenses 188 221 179
Operating income/(loss) 150 149 114
Net income/(loss) 105 107 90
Number of firms reporting
Operating losses 3 5 5
Data 9 9 9
Source: Compiled from data submitted in response to Commission questionnaires.

VI-2
Table VI-2
Steel nails: Results of operations of U.S. producers, by firm, 2008-10

* * * * * * *

In terms of operating income, seven of the nine firms reported lower operating income or
deepening operating losses in 2010 as compared to 2008, while *** reporting some improvement in their
financial performance during this time. From 2008 to 2009, seven of the nine firms reported a decline in
operating income, while *** reported improved operating income during this time. From 2009 to 2010,
three of the nine firms (***) reported a decline in operating income or deepening losses, while all other
firms reported stable or improved financial performance during this time.5 6

Variance Analysis

A variance analysis for steel nails is presented in table VI-3.7 The information for the variance
analysis is derived from table VI-1. The analysis shows that the decrease in operating income from 2008
to 2010 is primarily attributable to an unfavorable price variance that more than offset a favorable net
cost/expense variance (that is, prices declined to a greater extent than costs/expenses).

5
Respondents Dubai Wire and Itochu state that the Commission should exclude *** from the domestic industry
because of their primary interest as importers of steel nails. Postconference brief of Dubai Wire and Itochu,
pp. 17-18. ***.
6
The Petitioner stated in its postconference brief that ***’s operating income is “materially overstated.”
Petitioner’s Postconference Brief, p. 35. ***.
7
A variance analysis is calculated in three parts, sales variance, cost of sales variance, and SG&A expense
variance. Each part consists of a price variance (in the case of the sales variance) or a cost variance (in the case of
the cost of sales and SG&A expense variance) and a volume variance. The sales or cost variance is calculated as the
change in unit price times the new volume, while the volume variance is calculated as the change in volume times
the old unit price. Summarized at the bottom of the table, the price variance is from sales; the cost/expense variance
is the sum of those items from COGS and SG&A variances, respectively; and the volume variance is the sum of the
volume variance lines under price and cost/expense variance.

VI-3
Table VI-3
Steel nails: Variance analysis on operations of U.S. producers, 2008-10
Between fiscal years
Item 2008-10 2008-09 2009-10
Value ($1,000)
Total net sales:
Price variance (16,887) (3,269) (13,770)
Volume variance (53,176) (44,993) (8,031)
Total net sales variance (70,063) (48,262) (21,801)
Cost of sales:
Cost variance 12,785 6,333 6,746
Volume variance 43,212 36,562 6,355
Total cost variance 55,997 42,895 13,102
Gross profit variance (14,066) (5,366) (8,700)
SG&A expenses:
Expense variance 769 (3,213) 3,833
Volume variance 5,537 4,685 1,002
Total SG&A variance 6,306 1,472 4,834
Operating income variance (7,760) (3,894) (3,866)
Summarized as:
Price variance (16,887) (3,269) (13,770)
Net cost/expense variance 13,554 3,120 10,579
Net volume variance (4,427) (3,745) (674)
Note.-- Unfavorable variances are shown in parentheses; all others are favorable.

Source: Compiled from data submitted in response to Commission questionnaires.

Capital Expenditures and Research and Development Expenses

The responding firms’ aggregate data on capital expenditures and research and development
(“R&D”) expenses are shown in table VI-4. Five firms provided capital expenditure data, while only two
firms provided data on R&D expenses. Capital expenditures for steel nails increased irregularly from
2008 to 2010. Mid Continent accounted for *** percent of total capital expenditures during the period for
which data were requested, which was ***, while ITW accounted for *** reported R&D expenses during
this same time. According to Mid Continent, capital expenditures primarily reflect ***.8 According to
ITW, R&D expenses include ***.9

8
Petitioner’s Postconference Brief, exhibit 1, p.9.
9
E-mail correspondence from ***, April 29, 2011.

VI-4
Table VI-4
Steel nails: Capital expenditures and research and development expenses of U.S. producers,
2008-10

* * * * * * *

Assets and Return on Investment

The Commission’s questionnaire requested data on assets used in the production, warehousing,
and sale of steel nails to compute return on investment (“ROI”). Data on the U.S. producers’ total assets
and their ROI are presented in table VI-5. From 2008 to 2010, the total assets for certain steel nails
declined from $89.1 million in 2008 to $71.7 million in 2010. The ROI declined by 5.8 percentage points
during the period for which data were requested.

Table VI-5
Steel nails: Asset values and return on investment of U.S. producers, 2008-10
Fiscal year
Item 2008 2009 2010
Assets: Value ($1,000)

Total assets, net 89,065 72,571 71,687

Operating income or (loss) 18,388 14,493 10,628

Share (percent)
Return on investment 20.6 20.0 14.8
Source: Compiled from data submitted in response to Commission questionnaires.

CAPITAL AND INVESTMENT

The Commission requested U.S. producers of steel nails to describe any actual or potential
negative effects of imports of steel nails from the UAE on their firms’ growth, investment, ability to raise
capital, development and production efforts, or the scale of capital investments. Their responses follow.

Actual Negative Effects

* * * * * * *

Anticipated Negative Effects

* * * * * * *

VI-5
 PART VII: THREAT CONSIDERATIONS AND INFORMATION ON
NONSUBJECT COUNTRIES
The Commission analyzes a number of factors in making threat determinations (see 19 U.S.C. §
1677(7)(F)(i)). Information on the nature of the alleged subsidies was presented earlier in this report;
information on the volume and pricing of imports of the subject merchandise is presented in Parts IV and
V; and information on the effects of imports of the subject merchandise on U.S. producers’ existing
development and production efforts is presented in Part VI. Information on inventories of the subject
merchandise; foreign producers’ operations, including the potential for “product-shifting;” any other
threat indicators, if applicable; and any dumping in third-country markets, follows. Also presented in this
section of the report is information obtained for consideration by the Commission on nonsubject
countries.

THE INDUSTRY IN THE UNITED ARAB EMIRATES1

The petition identified four alleged producers of steel nails in the UAE: Dubai Wire FZE
(“Dubai Wire”),2 Dubai, UAE; Millennium Steel & Wire LLC (“Millennium”),3 Dubai, UAE; Samrat
Wire Industry, LLC (“Samrat Wire”),4 Dubai, UAE; and Steel Racks Factory (“Steel Racks”),5 Ajman,
UAE. In addition, Precision Fasteners LLC (“Precision Fasteners”)6 was identified and supplied data on
its operations in the UAE.
Dubai Wire’s capacity *** through 2012. Production followed a similar trend and is projected to
***.7 The company also indicated that *** other products on the same equipment and machinery used in

1
Samrat Wire Industry, LLC and Steel Racks Factory did not respond to the Commission’s questionnaire request
(they did not in the 2008 case either). According to Dubai Wire, . . “they are small companies which produce only
for the local market and do not export.” Dubai Wire contacted these companies in the 2007 - 2008 investigations
and they said they were not interested in participating. Conference transcript, p. 75 (Ved).
2
Dubai Wire estimates that it produces *** percent of total steel nails produced in the UAE in 2010 as well as
*** percent of total exports to the United States in 2010.
3
Millennium ceased production of nails in 2009 and according to its questionnaire response (question II-5),
“***.”
4
Samrat Wire was established in 1999 as the successor to Wire & Wire Products Industries; the parent company
is M/s Samarat Group of Companies. Samrat Wire “has planned to produce 12,000 metric tons of wire and wire
products per year. The range of wire products to be manufactured includes the following: wire nails (sinker nails,
common box, finish, casting, panel pin, roofing nails, tile nails, blued nails, wire collated nails, E.G. nails, spike &
hot dip galvanized nails); cable armored wire; black annealed wire; galvanized binding wire; A.C.S.R. wire; fish
cage wire; and spring wire.” [Link] retrieved April 14, 2011.
5
Steel Racks’ web site shows that it produces “all sizes of mild steel wire nails” (common nails, roofing nails,
twisted nails (brand “super nails”), screws and bolts, and accessories for shop display fittings).
[Link] retrieved April 14, 2011.
6
Precision Fasteners LLC was incorporated in 2008 and started commercial operations and shipment of certain
steel nails into the United States in 2008. It produces roofing nails using the same machinery and equipment as well
as production employees. In 2010, its sales of subject steel nails accounted for *** percent of total sales,
*** percent of sales is accounted for by nonsubject nails with the remaining *** percent related to trading activities
unrelated to nails.
7
Dubai Wire estimates that the subject steel nails account for *** percent of its total sales.

VII-1
the production of steel nails.8 Dubai Wire indicated in its questionnaire response that ***.9 Dubai Wire’s
home market sales ***.10 Shipments to the United States ***. Additionally, in 2010 exports to all other
markets made up approximately *** percent of their total shipments. Precision Fasteners’s capacity ***
through 2012.11 Production followed a similar trend and is projected to ***. Its home market sales and
exports to countries other than the United States ***. Shipments to the United States ***. Information
for Dubai Wire and Precision Fastener are presented in table VII-1.

Table VII-1
Steel nails: Reported operations in the UAE, 2008-10, and projected 2011-12

* * * * * * *

U.S. IMPORTERS’ INVENTORIES

Inventories of U.S. imports as reported are presented in table VII-2. Inventories of UAE steel
nails increased from 2008 to 2010, as did the ratios of inventories to imports although the ratio to U.S.
shipments of imports dropped by ***. Inventories from all other sources declined, however, the ratios of
inventories to nonsubject imports and inventories to U.S. shipments of nonsubject imports in 2010 were
generally comparable to those in 2008.

Table VII-2
Steel nails: U.S. importers’ end-of-period inventories of imports, by source, 2008-10

* * * * * * *

U.S. IMPORTERS’ CURRENT ORDERS

Twelve U.S. importers reported that they had already placed orders for steel nails from the UAE
(42,165 short tons or nearly one-third of 2010 total imports) scheduled for entry into the United States in
2011.

ANTIDUMPING AND COUNTERVAILING DUTY ORDERS

IN THIRD-COUNTRY MARKETS

No producer, importer, or foreign producer reported any countervailing or antidumping duty

orders on steel nails from the UAE in third-country markets.

8
In its questionnaire response to question II-4 (Same equipment, machinery, and workers) Dubai Wire provided
the following statement: “***.”
9
In its questionnaire response to question II-2 (Change in operations) Dubai Wire provided the following
statement: “***.”
10
Mr. Ved (Dubai Wire) stated at the Commission’s conference, “There’s no wooden construction, so it’s very
limited on the nail business. So we have a substantial -- the share is there, but the volumes do not exist.”
Conference transcript, p. 90 (Ved).
11
“***.”

VII-2
 INFORMATION ON NONSUBJECT COUNTRIES

Steel nails are produced in a number of countries. Table VII-3 presents global export data for the
world for HTS heading 7317, which includes all nails and staples, including nonsubject roofing nails and
other nonsubject products. Except for roofing nails, nonsubject product in the data is believed to be
minimal. In the case of the UAE and Canada, for which export data are not available from the same
source, partner country import data (called “mirror exports”) are provided. In addition to the UAE, the
top fourteen 2010 exporting countries are also listed. In 2010, the UAE accounted for 11.0 percent of
world exports of nails and staples. The next fourteen largest exporting countries totaled 82.6 percent of
world exports in 2010; China alone accounted for 53.9 percent.

Table VII-3
Nails and staples: Reporting countries’ export statistics 2008-10
Calendar year
Source 2008 2009 2010
Quantity (short tons)
United Arab Emirates1 78,539 103,341 192,902
China 1,272,896 891,703 944,897
Taiwan 92,001 81,195 74,108
Poland 61,895 52,924 64,298
Korea 64,132 30,451 41,051
Germany 46,222 30,642 31,298
United States 39,983 26,935 30,533
Czech Republic 23,842 24,848 29,459
Belgium 31,136 24,569 27,936
Lithuania 25,754 23,586 27,014
Turkey 12,898 18,191 24,942
Russia 17,480 24,904 23,879
Malaysia 23,836 25,296 23,645
Ukraine 29,983 29,883 22,141
2
Canada 31,423 18,433 18,236
Subtotal 1,852,019 1,406,901 1,576,339
Other sources 259,862 266,913 195,253
Total 2,111,881 1,673,814 1,771,591
1
Estimated from official Commerce statistics and Global Trade Atlas.
2
Mirror exports (imports from source reported by all reporting countries).

Source: Compiled from Global Trade Atlas.

VII-3
 APPENDIX A

FEDERAL REGISTER NOTICES

A-1
 19124 Federal Register / Vol. 76, No. 66 / Wednesday, April 6, 2011 / Notices

INTERNATIONAL BOUNDARY AND INTERNATIONAL TRADE Commission may also be obtained by

WATER COMMISSION, UNITED COMMISSION accessing its Internet server (http://
STATES AND MEXICO [Link]). The public record for
[Investigation No. 731–TA–1185
this investigation may be viewed on the
(Preliminary)]
United States Section, Notice of Commission’s electronic docket (EDIS)
Availability of a Draft Supplemental Certain Steel Nails From the United at [Link]
Environmental Assessment and Arab Emirates SUPPLEMENTARY INFORMATION:
Finding of No Significant Impact for Background.—This investigation is
Improvements to the Mission Levee AGENCY: United States International being instituted in response to a petition
Protective System in Hidalgo County, Trade Commission. filed on March 31, 2011, by Mid
Texas ACTION: Institution of antidumping Continent Nail Corporation, Poplar
AGENCY: United States Section, investigation and scheduling of a Bluff, Missouri.
International Boundary and Water preliminary phase investigation. Participation in the investigation and
Commission, United States and Mexico public service list.—Persons (other than
SUMMARY: The Commission hereby gives petitioners) wishing to participate in the
(USIBWC). notice of the institution of an
ACTION: Notice of Availability of Draft investigation as parties must file an
investigation and commencement of entry of appearance with the Secretary
Supplemental Environmental preliminary phase antidumping
Assessment (SEA) and Finding of No to the Commission, as provided in
investigation No. 731–TA–1185 sections 201.11 and 207.10 of the
Significant Impact (FONSI). (Preliminary) under section 733(a) of the Commission’s rules, not later than seven
SUMMARY: Pursuant to Section 102(2)(c) Tariff Act of 1930 (19 U.S.C. 1673b(a)) days after publication of this notice in
of the National Environmental Policy (the Act) to determine whether there is the Federal Register. Industrial users
Act (NEPA) of 1969, the Council on a reasonable indication that an industry and (if the merchandise under
Environmental Quality Final in the United States is materially investigation is sold at the retail level)
Regulations (40 CFR parts 1500 through injured or threatened with material representative consumer organizations
1508), and the United States Section’s injury, or the establishment of an have the right to appear as parties in
Operational Procedures for industry in the United States is Commission antidumping
Implementing Section 102 of NEPA, materially retarded, by reason of investigations. The Secretary will
published in the Federal Register imports from The United Arab Emirates prepare a public service list containing
September 2, 1981 (46 FR 44083); the of certain steel nails, provided for in the names and addresses of all persons,
USIBWC hereby gives notice of subheadings 7317.00.55, 7317.00.65 and or their representatives, who are parties
availability of the Draft Supplemental 7317.00.75 of the Harmonized Tariff to this investigation upon the expiration
Environmental Assessment and FONSI Schedule of the United States, that are of the period for filing entries of
for Improvements to the Mission Levee alleged to be sold in the United States appearance.
Protective System located in Hidalgo at less than fair value. Unless the Limited disclosure of business
County, Texas. An environmental Department of Commerce extends the proprietary information (BPI) under an
impact statement will not be prepared time for initiation pursuant to section administrative protective order (APO)
unless additional information which 732(c)(1)(B) of the Act (19 U.S.C. and BPI service list.—Pursuant to
may affect this decision is brought to 1673a(c)(1)(B)), the Commission must section 207.7(a) of the Commission’s
our attention within 30-days from the reach a preliminary determination in rules, the Secretary will make BPI
date of this notice. antidumping investigations in 45 days, gathered in this investigation available
or in this case by May 16, 2011. The to authorized applicants representing
FOR FURTHER INFORMATION CONTACT:
Commission’s views are due at interested parties (as defined in 19
Daniel Borunda, Natural Resources
Commerce within five business days U.S.C. 1677(9)) who are parties to the
Specialist, Environmental Management
thereafter, or by May 23, 2011. investigation under the APO issued in
Division, United States Section,
For further information concerning the investigation, provided that the
International Boundary and Water
the conduct of this investigation and application is made not later than seven
Commission; 4171 N. Mesa, C–100; El
rules of general application, consult the days after the publication of this notice
Paso, Texas 79902. Telephone: (915)
Commission’s Rules of Practice and in the Federal Register. A separate
832–4767; e-mail:
Procedure, part 201, subparts A through service list will be maintained by the
[Link]@[Link].
E (19 CFR part 201), and part 207, Secretary for those parties authorized to
DATES: Comments on the Draft SEA and subparts A and B (19 CFR part 207).
Draft FONSI will be accepted through receive BPI under the APO.
DATES: Effective Date: March 31, 2011. Conference.—The Commission’s
May 6, 2011.
Availability: Single hard copies of the FOR FURTHER INFORMATION CONTACT: Fred Director of Investigations has scheduled
Draft Supplemental Environmental Ruggles (202–205–3187, a conference in connection with this
Assessment and Finding of No [Link]@[Link]), Office of investigation for 8:45 a.m. on April 21,
Significant Impact are available by Investigations, U.S. International Trade 2011, at the U.S. International Trade
request at the above address. Electronic Commission, 500 E Street SW., Commission Building, 500 E Street SW.,
copies are available from the USIBWC Washington, DC 20436. Hearing- Washington, DC. Parties wishing to
homepage at [Link] impaired persons can obtain participate in the conference should
mstockstill on DSKH9S0YB1PROD with NOTICES

Organization/Environmental/EIS_EA_ information on this matter by contacting contact in writing the Secretary to the
Public_Comment.html. the Commission’s TDD terminal on 202– Commission not later than April 19,
205–1810. Persons with mobility 2011, to arrange for their appearance.
Dated: March 31, 2011. impairments who will need special Parties in support of the imposition of
Pamela Barber, assistance in gaining access to the antidumping duties in this investigation
Attorney/Advisor. Commission should contact the Office and parties in opposition to the
[FR Doc. 2011–8132 Filed 4–5–11; 8:45 am] of the Secretary at 202–205–2000. imposition of such duties will each be
BILLING CODE 7010–01–P General information concerning the collectively allocated one hour within

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 Federal Register / Vol. 76, No. 66 / Wednesday, April 6, 2011 / Notices 19125

which to make an oral presentation at ACTION: Institution of antidumping and SUPPLEMENTARY INFORMATION:
the conference. A nonparty who has countervailing duty investigations and Background.—These investigations
testimony that may aid the scheduling of preliminary phase are being instituted in response to a
Commission’s deliberations may request investigations. petition filed on March 30, 2011, by
permission to present a short statement Whirlpool Corporation, Benton Harbor,
at the conference. SUMMARY: The Commission hereby gives MI.
Written submissions.—As provided in notice of the institution of investigations Participation in the investigations and
sections 201.8 and 207.15 of the and commencement of preliminary public service list.—Persons (other than
Commission’s rules, any person may phase antidumping and countervailing petitioners) wishing to participate in the
submit to the Commission on or before duty Investigation Nos. 701–TA–477 investigations as parties must file an
April 26, 2011, a written brief and 731–TA–1180–1181 (Preliminary) entry of appearance with the Secretary
containing information and arguments under sections 703(a) and 733(a) of the to the Commission, as provided in
pertinent to the subject matter of the Tariff Act of 1930 (the Act) (19 U.S.C. sections 201.11 and 207.10 of the
investigation. Parties may file written 1671b(a) and 1673b(a)) to determine Commission’s rules, not later than seven
whether there is a reasonable indication days after publication of this notice in
testimony in connection with their
that an industry in the United States is the Federal Register. Industrial users
presentation at the conference no later
materially injured or threatened with and (if the merchandise under
than three days before the conference. If
material injury, or the establishment of investigation is sold at the retail level)
briefs or written testimony contain BPI,
an industry in the United States is representative consumer organizations
they must conform with the
materially retarded, by reason of have the right to appear as parties in
requirements of sections 201.6, 207.3,
imports of bottom mount combination Commission antidumping and
and 207.7 of the Commission’s rules.
refrigerator-freezers from Korea and countervailing duty investigations. The
The Commission’s rules do not
Mexico, provided for in subheadings Secretary will prepare a public service
authorize filing of submissions with the
8418.10.00, 8418.21.00, 8418.99.40, and list containing the names and addresses
Secretary by facsimile or electronic 8418.99.80 of the Harmonized Tariff
means, except to the extent permitted by of all persons, or their representatives,
Schedule of the United States, that are who are parties to these investigations
section 201.8 of the Commission’s rules, alleged to be sold in the United States
as amended, 67 FR 68036 (November 8, upon the expiration of the period for
at less than fair value and alleged to be filing entries of appearance.
2002). Even where electronic filing of a subsidized by the Government of Korea. Limited disclosure of business
document is permitted, certain Unless the Department of Commerce proprietary information (BPI) under an
documents must also be filed in paper extends the time for initiation pursuant administrative protective order (APO)
form, as specified in II (C) of the to sections 702(c)(1)(B) or 732(c)(1)(B) of and BPI service list.—Pursuant to
Commission’s Handbook on Electronic the Act (19 U.S.C. 1671a(c)(1)(B) or section 207.7(a) of the Commission’s
Filing Procedures, 67 FR 68168, 68173 1673a(c)(1)(B)), the Commission must rules, the Secretary will make BPI
(November 8, 2002). reach a preliminary determination in gathered in these investigations
In accordance with sections 201.16(c) antidumping and countervailing duty available to authorized applicants
and 207.3 of the rules, each document investigations in 45 days, or in this case representing interested parties (as
filed by a party to the investigation must by May 16, 2011. The Commission’s defined in 19 U.S.C. 1677(9)) who are
be served on all other parties to the views are due at Commerce within five parties to the investigations under the
investigation (as identified by either the business days thereafter, or by May 23, APO issued in the investigations,
public or BPI service list), and a 2011. provided that the application is made
certificate of service must be timely For further information concerning not later than seven days after the
filed. The Secretary will not accept a the conduct of these investigations and publication of this notice in the Federal
document for filing without a certificate rules of general application, consult the Register. A separate service list will be
of service. Commission’s Rules of Practice and maintained by the Secretary for those
Authority: This investigation is being Procedure, part 201, subparts A through parties authorized to receive BPI under
conducted under authority of title VII of the E (19 CFR part 201), and part 207, the APO.
Tariff Act of 1930; this notice is published subparts A and B (19 CFR part 207). Conference.—The Commission’s
pursuant to section 207.12 of the DATES: EFFECTIVE DATE: March 30, 2011. Director of Investigations has scheduled
Commission’s rules. a conference in connection with these
FOR FURTHER INFORMATION CONTACT:
By order of the Commission. Christopher Cassise (202–708–5408), investigations for 1 p.m. on April 20,
Issued: March 31, 2011. Office of Investigations, U.S. 2011, at the U.S. International Trade
James R. Holbein, International Trade Commission, 500 E Commission Building, 500 E Street,
Acting Secretary to the Commission. Street, SW., Washington, DC 20436. SW., Washington, DC. Requests to
[FR Doc. 2011–8155 Filed 4–5–11; 8:45 am] Hearing-impaired persons can obtain appear at the conference should be filed
information on this matter by contacting in writing with the Secretary to the
BILLING CODE P
the Commission’s TDD terminal on 202– Commission on or before April 18, 2011.
205–1810. Persons with mobility Parties in support of the imposition of
INTERNATIONAL TRADE impairments who will need special antidumping and countervailing duties
COMMISSION assistance in gaining access to the in these investigations and parties in
Commission should contact the Office opposition to the imposition of such
[Investigation Nos. 701–TA–477 and 731–
mstockstill on DSKH9S0YB1PROD with NOTICES

of the Secretary at 202–205–2000. duties will each be collectively

TA–1180–1181 (Preliminary)] allocated one hour within which to
General information concerning the
Bottom Mount Combination Commission may also be obtained by make an oral presentation at the
Refrigerator-Freezers From Korea and accessing its Internet server (http:// conference. A nonparty who has
Mexico [Link]). The public record for testimony that may aid the
these investigations may be viewed on Commission’s deliberations may request
AGENCY: United States International the Commission’s electronic docket permission to present a short statement
Trade Commission. (EDIS) at [Link] at the conference.

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 Federal Register / Vol. 76, No. 81 / Wednesday, April 27, 2011 / Notices 23559

processing the separate-rate applications See Separate Rates and Combination Rule), amending 19 CFR 351.303(g)(1)
in previous AD investigations, we have Rates Bulletin at 6 (emphasis added). and (2). The formats for the revised
modified the application for this certifications are provided at the end of
Distribution of Copies of the Petitions
investigation to make it more the Interim Final Rule. The Department
administrable and easier for applicants In accordance with section intends to reject factual submissions in
to complete. See, e.g., Initiation of 732(b)(3)(A) of the Act and 19 CFR any proceeding segments initiated on or
Antidumping Duty Investigation: 351.202(f), copies of the public version after March 14, 2011, if the submitting
Certain New Pneumatic Off-the-Road of the Petitions have been provided to party does not comply with the revised
Tires From the People’s Republic of the Government of the PRC and Taiwan certification requirements.
China, 72 FR 43591, 43594–95 (August authorities. Because of the large number This notice is issued and published
6, 2007). The specific requirements for of producers/exporters identified in the pursuant to section 777(i) of the Act.
submitting the separate-rate application Petitions, the Department considers the Dated: April 20, 2011.
in the NME investigation are outlined in service of the public version of the
Ronald K. Lorentzen,
detail in the application itself, which Petitions to the foreign producers/
Deputy Assistant Secretary for Import
will be available on the Department’s exporters satisfied by the delivery of the
Administration.
Web site at [Link] public version to the Government of the
[Link] on the date of PRC and Taiwan authorities, consistent Appendix I
publication of this initiation notice in with 19 CFR 351.203(c)(2). Scope of the Investigations
the Federal Register. The separate-rate ITC Notification The certain stilbenic optical brightening
application will be due 60 days after agents (‘‘OBA’’) covered by these
publication of this initiation notice. For We have notified the ITC of our
investigations are all forms (whether free acid
exporters and producers who submit a initiation, as required by section 732(d) or salt) of compounds known as
separate-rate status application and of the Act. triazinylaminostilbenes (i.e., all derivatives
subsequently are selected as mandatory Preliminary Determinations by the ITC of 4,4′-bis [1,3,5- triazin-2-yl] amino-2,2′-
respondents, these exporters and stilbenedisulfonic acid), except for
The ITC will preliminarily determine compounds listed in the following paragraph.
producers will no longer be eligible for
no later than May 16, 2011, whether The certain stilbenic OBAs covered by these
consideration for separate-rate status investigations include final stilbenic OBA
there is a reasonable indication that
unless they respond to all parts of the products, as well as intermediate products
imports of stilbenic OBAs from the PRC
questionnaire as mandatory that are themselves triazinylaminostilbenes
and Taiwan are materially injuring or
respondents. As explained in the produced during the synthesis of final
threatening material injury to a U.S.
‘‘Respondent Selection’’ section above, stilbenic OBA products.
industry. A negative ITC determination Excluded from these investigations are all
the Department requires that
for any country will result in the forms of 4,4′-bis[4-anilino-6-morpholino-
respondents submit a response to both
investigation being terminated with 1,3,5-triazin-2-yl] amino-2,2′-
the quantity and value questionnaire
respect to that country; otherwise, these stilbenedisulfonic acid, C40H40N12O8S2
and the separate-rate application by the
investigations will proceed according to (‘‘Fluorescent Brightener 71’’). These
respective deadlines in order to receive investigations cover the above-described
statutory and regulatory time limits.
consideration for separate-rate status. compounds in any state (including but not
Notification to Interested Parties limited to powder, slurry, or solution), of any
Use of Combination Rates in an NME
Interested parties must submit concentrations of active certain stilbenic
Investigation OBA ingredient, as well as any compositions
applications for disclosure under APO
regardless of additives (i.e., mixtures or
The Department will calculate in accordance with 19 CFR 351.305. On blends, whether of certain stilbenic OBAs
combination rates for certain January 22, 2008, the Department with each other, or of certain stilbenic OBAs
respondents that are eligible for a published Antidumping and with additives that are not certain stilbenic
separate rate in this investigation. The Countervailing Duty Proceedings: OBAs), and in any type of packaging.
Separate Rates and Combination Rates Documents Submission Procedures; These stilbenic OBAs are classifiable under
Bulletin states: APO Procedures (73 FR 3634). Parties subheading 3204.20.8000 of the Harmonized
wishing to participate in this Tariff Schedule of the United States
{w}hile continuing the practice of
investigation should ensure that they (‘‘HTSUS’’), but they may also enter under
assigning separate rates only to exporters, all subheadings 2933.69.6050, 2921.59.4000 and
separate rates that the Department will now meet the requirements of these
2921.59.8090. Although the HTSUS
assign in its NME investigations will be procedures (e.g., the filing of letters of subheadings are provided for convenience
specific to those producers that supplied the appearance as discussed at 19 CFR and customs purposes, the written
exporter during the period of investigation. 351.103(d)). description of the merchandise is dispositive.
Note, however, that one rate is calculated for Any party submitting factual
[FR Doc. 2011–10188 Filed 4–26–11; 8:45 am]
the exporter and all of the producers which information in an AD or countervailing
BILLING CODE 3510–DS–P
supplied subject merchandise to it during the duty (CVD) proceeding must certify to
period of investigation. This practice applies the accuracy and completeness of that
both to mandatory respondents receiving an information. See section 782(b) of the
individually calculated separate rate as well DEPARTMENT OF COMMERCE
Act. Parties are hereby reminded that
as the pool of non-investigated firms revised certification requirements are in
receiving the weighted-average of the International Trade Administration
effect for company/government officials
WReier-Aviles on DSKGBLS3C1PROD with NOTICES

individually calculated rates. This practice is [A–520–804]

as well as their representatives in all
referred to as the application of ‘‘combination
rates’’ because such rates apply to specific
segments of any AD/CVD proceedings
Certain Steel Nails From the United
combinations of exporters and one or more initiated on or after March 14, 2011. See
Arab Emirates: Initiation of
producers. The cash-deposit rate assigned to Certification of Factual Information to
Antidumping Duty Investigation
an exporter will apply only to merchandise Import Administration During
both exported by the firm in question and Antidumping and Countervailing Duty AGENCY: Import Administration,
produced by a firm that supplied the exporter Proceedings: Interim Final Rule, 76 FR International Trade Administration,
during the period of investigation. 7491 (February 10, 2011) (Interim Final Department of Commerce.

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 23560 Federal Register / Vol. 76, No. 81 / Wednesday, April 27, 2011 / Notices

DATES: Effective Date: April 27, 2011. Scope of Investigation product characteristics as product-
FOR FURTHER INFORMATION CONTACT: The products covered by this comparison criteria. We base product-
Dmitry Vladimirov or Minoo Hatten, investigation are certain steel nails from comparison criteria on meaningful
AD/CVD Operations, Office 5, Import the UAE. For a full description of the commercial differences among products.
Administration, International Trade scope of the investigation, please see the In other words, while there may be
Administration, U.S. Department of ‘‘Scope of the Investigation’’ in some physical product characteristics
Commerce, 14th Street and Constitution Appendix I of this notice.1 utilized by manufacturers to describe
Avenue, NW., Washington, DC 20230; certain steel nails, it may be that only
telephone: (202) 482–0665 or (202) 482– Comments on Scope of Investigation a select few product characteristics take
1690, respectively. We reviewed the scope in the Petition into account commercially meaningful
SUPPLEMENTARY INFORMATION: to ensure that it is an accurate reflection physical characteristics. In addition,
of the products for which the domestic interested parties may comment on the
The Petition industry is seeking relief. Moreover, as order in which the physical
On March 31, 2011, the Department of discussed in the preamble to the characteristics should be used in
Commerce (the Department) received regulations (Antidumping Duties; matching products. Generally, the
the petition concerning imports of Countervailing Duties; Final Rule, 62 FR Department attempts to list the most
certain steel nails from the United Arab 27296, 27323 (May 19, 1997)), we are important physical characteristics first
Emirates (UAE) filed in proper form by setting aside a period for interested and the least important characteristics
Mid Continent Nail Corporation (the parties to raise issues regarding product last.
petitioner). See Petition for the coverage. The Department encourages In order to consider the suggestions of
Imposition of Antidumping Duties: all interested parties to submit such interested parties in developing and
Certain Steel Nails from the United Arab comments by May 10, 2011, twenty issuing the antidumping questionnaire,
Emirates, dated March 31, 2011 (the calendar days from the signature date of limited to those issues addressed in the
Petition). Based on the Department’s this notice. Comments should be comments, we must receive comments
request concerning certain business addressed to Import Administration’s at the above address by May 10, 2011.
proprietary information in the Petition, APO/Dockets Unit, Room 1870, U.S. Additionally, rebuttal comments,
the petitioner filed additional Department of Commerce, 14th Street limited to those issues addressed in the
information on April 4, 2011. On April and Constitution Avenue, NW., comments, must be received by May 17,
6, 2011, the Department issued a request Washington, DC 20230. The period of 2011.
for additional information and scope consultations is intended to Determination of Industry Support for
clarification of certain areas in the provide the Department with ample the Petition
Petition. The petitioner filed a response opportunity to consider all comments
to the Department’s request for Section 732(b)(1) of the Act requires
and to consult with parties prior to the
information on April 11, 2011 that a petition be filed on behalf of the
issuance of the preliminary
(hereinafter, Supplement to the domestic industry. Section 732(c)(4)(A)
determination.
Petition). The petitioner filed two of the Act provides that a petition meets
addenda to the Petition on April 14, Comments on Product Characteristics this requirement if the domestic
2011, one of which requested a country- for Antidumping Questionnaire producers or workers who support the
wide sales-below-cost investigation The Department requests comments petition account for (i) at least 25
(hereinafter, Second Supplement to the from interested parties regarding the percent of the total production of the
Petition). appropriate physical characteristics of domestic like product and (ii) more than
In accordance with section 732(b) of certain steel nails to be reported in 50 percent of the production of the
the Tariff Act of 1930, as amended (the response to the Department’s domestic like product produced by that
Act), the petitioner alleges that imports antidumping questionnaire. This portion of the industry expressing
of certain steel nails from the UAE are information will be used to identify the support for, or opposition to, the
being, or are likely to be, sold in the key physical characteristics of the petition. Moreover, section 732(c)(4)(D)
United States at less than fair value, subject merchandise in order to report of the Act provides that, if the petition
within the meaning of section 731 of the the relevant costs of production does not establish support of domestic
Act, and that such imports are producers or workers accounting for
accurately as well as to develop
materially injuring, or threatening more than 50 percent of the total
appropriate product-comparison
material injury to, an industry in the production of the domestic like product,
criteria.
United States. Interested parties may provide any the Department shall (i) poll the
The Department finds that the information or comments that they feel industry or rely on other information in
petitioner filed the Petition on behalf of are relevant to the development of an order to determine if there is support for
the domestic industry because the accurate list of physical characteristics. the petition as required by subparagraph
petitioner is an interested party as Specifically, they may provide (A) or (ii) determine industry support
defined in section 771(9)(C) of the Act comments as to which characteristics using a statistically valid sampling
and has demonstrated sufficient are appropriate to use as general method to poll the industry.
industry support with respect to the Section 771(4)(A) of the Act defines
product characteristics and the product-
antidumping duty investigation that the the ‘‘industry’’ as the producers as a
comparison criteria. We find that it is
whole of a domestic like product. Thus,
WReier-Aviles on DSKGBLS3C1PROD with NOTICES

petitioner is requesting that the not always appropriate to use all

Department initiate (see ‘‘Determination to determine whether a petition has the
of Industry Support for the Petition’’ 1 The Department is conducting a changed- requisite industry support, the statute
section below). circumstances review concerning the antidumping directs the Department to look to
duty order on certain steel nails from the People’s producers and workers who produce the
Period of Investigation Republic of China that addresses the exclusion of domestic like product. The International
roofing nails. See Certain Steel Nails from the
The period of investigation (POI) is People’s Republic of China: Initiation and
Trade Commission (ITC), which is
January 1, 2010, through December 31, Preliminary Results of Antidumping Duty Changed responsible for determining whether
2010. See 19 CFR 351.204(b)(1). Circumstances Review (signed April 14, 2011). ‘‘the domestic industry’’ has been

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 Federal Register / Vol. 76, No. 81 / Wednesday, April 27, 2011 / Notices 23561

injured, must also determine what of the Petition to the estimated total 771(9)(C) of the Act and it has
constitutes a domestic like product in production of the domestic like product demonstrated sufficient industry
order to define the industry. While both for the entire domestic industry. See support with respect to the antidumping
the Department and the ITC must apply Volume I of the Petition at 5 and duty investigation that it is requesting
the same statutory definition regarding Exhibits IN–1 and IN–5, and the Department to initiate. See id.
the domestic like product (see section Supplement to the Petition at 4–7. The
Allegations and Evidence of Material
771(10) of the Act), they do so for petitioner estimated 2010 production of
Injury and Causation
different purposes and pursuant to a the domestic like product by non-
separate and distinct authority. In petitioning companies based on its The petitioner alleges that the U.S.
addition, the Department’s knowledge of the certain steel nail industry producing the domestic like
determination is subject to limitations of production capabilities and their product is being materially injured, or is
time and information. Although this relative proportion of total domestic threatened with material injury, by
may result in different definitions of the sales. See Volume I of the Petition at reason of the imports of the subject
like product, such differences do not Exhibit IN–5 and Supplement to the merchandise sold at less than fair value.
render the decision of either agency Petition at 5–6. We have relied upon In addition, the petitioner alleges that
contrary to law. See USEC, Inc. v. data the petitioner provided for subject imports exceed the negligibility
United States, 132 F. Supp. 2d 1, 8 (CIT purposes of measuring industry support. threshold provided for under section
2001), citing Algoma Steel Corp., Ltd. v. For further discussion, see Initiation 771(24)(A) of the Act.
United States, 688 F. Supp. 639, 644 Checklist at Attachment II. The petitioner contends that the
(CIT 1988), aff’d 865 F.2d 240 (Fed. Cir. On April 5, 2011, we received an industry’s injured condition is
1989), cert. denied 492 U.S. 919 (1989). industry support challenge from an illustrated by reduced market share,
Section 771(10) of the Act defines the importer of certain steel nails from the reduced production, reduced
domestic like product as ‘‘a product UAE. The petitioner responded to this shipments, reduced capacity and
which is like, or in the absence of like, submission in its Supplement to the capacity utilization, underselling and
most similar in characteristics and uses Petition. See Supplement to the Petition price depression or suppression,
with, the article subject to an at 6 and Initiation Checklist at reduced employment, decline in
investigation under this title.’’ Thus, the Attachment II. The Department’s review financial performance, lost sales and
reference point from which the of the data provided in the Petition, revenue, and increase in import volume
domestic like product analysis begins is supplemental submissions, and other and penetration. See Volume I of the
‘‘the article subject to an investigation’’ information readily available to the Petition at 14–41, Exhibits IN–1, IN–4–
(i.e., the class or kind of merchandise to Department indicates that the petitioner 13, and IN–16–20, and Supplement to
be investigated, which normally will be has established industry support. First, the Petition at 8. We have assessed the
the scope as defined in the petition). the Petition established support from allegations and supporting evidence
With regard to the domestic like domestic producers (or workers) regarding material injury, threat of
product, the petitioner does not offer a accounting for more than 50 percent of material injury, and causation, and we
definition of the domestic like product the total production of the domestic like have determined that these allegations
distinct from the scope of the product and, as such, the Department is are supported by adequate evidence and
investigation. Based on our analysis of not required to take further action in meet the statutory requirements for
the information submitted on the order to evaluate industry support (e.g., initiation. See Initiation Checklist at
record, we have determined that certain polling). See section 732(c)(4)(D) of the Attachment III, Analysis of Allegations
steel nails constitute a single domestic Act and Initiation Checklist at and Evidence of Material Injury and
like product and we have analyzed Attachment II. Second, the domestic Causation for the Petition Covering
industry support in terms of that producers (or workers) have met the Certain Steel Nails from the United Arab
domestic like product. For a discussion statutory criteria for industry support Emirates.
of the domestic-like-product analysis in under section 732(c)(4)(A)(i) of the Act
this case, see Antidumping Duty because the domestic producers (or Allegations of Sales at Less Than Fair
Investigation Initiation Checklist: workers) who support the Petition Value
Certain Steel Nails from the United Arab account for at least 25 percent of the The following is a description of the
Emirates (Initiation Checklist) at total production of the domestic like allegations of sales at less than fair value
Attachment II, Analysis of Industry product. See Initiation Checklist at upon which the Department based its
Support for the Petition Covering Attachment II. Finally, the domestic decision to initiate this investigation of
Certain Steel Nails, on file in the Central producers (or workers) have met the imports of certain steel nails from the
Records Unit (CRU), Room 7046 of the statutory criteria for industry support UAE. The sources of data for the
main Department of Commerce under section 732(c)(4)(A)(ii) of the Act deductions and adjustments relating to
building. because the domestic producers (or the U.S. prices and cost of production
In determining whether the petitioner workers) who support the Petition are also discussed in the initiation
has standing under section 732(c)(4)(A) account for more than 50 percent of the checklist. See Initiation Checklist.
of the Act, we considered the industry- production of the domestic like product
support data contained in the Petition Export Price
produced by that portion of the industry
with reference to the domestic like expressing support for, or opposition to, The petitioner based U.S. prices on
product as defined in the ‘‘Scope of price quotes from the U.S. distributors/
WReier-Aviles on DSKGBLS3C1PROD with NOTICES

the Petition. Accordingly, the

Investigation’’ section above. To Department determines that the Petition trading companies for sale offers of
establish industry support, the was filed on behalf of the domestic certain steel nails in the United States
petitioner provided its production industry within the meaning of section produced in and exported from the UAE
volume of the domestic like product in 732(b)(1) of the Act. See id. by Dubai Wire FZE (DWE) and
2010 as well as the 2010 production The Department finds that the Millennium Steel and Wire (MSW), the
volume of companies that support the petitioner filed the Petition on behalf of two largest UAE producers/exporters of
Petition. The petitioner compared the the domestic industry because it is an certain steel nails. See Initiation
total production of itself and supporters interested party as defined in section Checklist at 6; see also Volume I of the

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 23562 Federal Register / Vol. 76, No. 81 / Wednesday, April 27, 2011 / Notices

Petition at 42–46, Exhibit IN–17, and see also Volume I of the Petition at 68– Cost of Production
Volume II of the Petition at Exhibits 69, Volume II of the Petition at Exhibits Pursuant to section 773(b)(3) of the
AD–1 and AD–2. The petitioner AD–4, AD–24, and AD–25, and Act, the petitioner calculated COP based
substantiated the U.S. prices with Supplement to the Petition at 14–15, on costs of manufacturing (COM),
declarations from persons who obtained Exhibits Supp. 7 and Supp. 10. selling, general, and administrative
and received the information. See The petitioner also made a
expenses (SG&A), and packing
Volume II of the Petition at Exhibits circumstances-of-sale adjustment to
expenses. The petitioner did not include
AD–1 and Supplement to the Petition at normal value for U.S. credit expenses
pursuant to 19 CFR 351.410(c). See an amount for financial expense. See
Exhibit Supp. 5. The petitioner asserts
Initiation Checklist at 9; see also Initiation Checklist at 9–11.
that the quoted sale offers are typical of
Volume I of the Petition at 53, Volume The petitioner calculated raw
sales of certain steel nails produced in
II of the Petition at Exhibits AD–2, AD– materials, labor, energy, and packing
the UAE and sold in the United States.
14, and Supplement to the Petition at based on the production experience of
Id. With respect to all price quotes, the
13–14 and Exhibits Supp. 6, Supp. 7, a U.S. producer of certain steel nails,
petitioner was able to obtain product
and Supp. 9. adjusted for known differences to
descriptions, prices per box, and the
manufacture certain steel nails in the
specific sale, payment, and delivery Sales-Below-Cost Allegation UAE using publically available data. See
terms. The petitioner made adjustments
The petitioner provided information Initiation Checklist for details of the
for foreign inland freight, foreign port
demonstrating reasonable grounds to calculation of raw materials, labor,
expenses, ocean freight, U.S. port
believe or suspect that sales of certain energy, and packing. To calculate the
expenses, U.S. harbor maintenance tax
steel nails from the UAE were made at factory overhead and SG&A, the
and merchandise processing fees, U.S.
prices below the fully absorbed cost of petitioner relied on the cost data from
inland freight, the distributor’s markup,
production (COP), within the meaning a steel-fabricating company in the UAE.
and early-payment discount. See
of section 773(b) of the Act, and See Initiation Checklist at 9–11. We
Initiation Checklist at 6–8; see also
requested that the Department conduct adjusted the petitioner’s calculation of
Volume I of the Petition at 46–54,
a country-wide sales-below-cost COP in order to avoid the double
Exhibits AD–1, AD–2, AD–5 through
investigation. See Second Supplement counting of energy expenses. See
AD–13, and Supplement to the Petition
to the Petition.2 The Statement of Initiation Checklist.
at 8–15, Exhibits Supp. 5–9. See
Administrative Action (SAA) submitted Based upon a comparison of the net
Initiation Checklist for additional
to the Congress in connection with the price of the foreign like product in the
details.
interpretation and application of the comparison market to the COP
Normal Value Uruguay Round Agreements Act states calculated for the product, we find
that an allegation of sales below COP reasonable grounds to believe or suspect
DWE
need not be specific to individual that sales of the foreign like product in
The petitioner provided information exporters or producers. See SAA, H.R. the comparison market were made at
that the UAE home market may be Doc. No. 103–316 at 833 (1994). The prices below the COP within the
viable with respect to DWE. See SAA states, at 833, that ‘‘Commerce will meaning of section 773(b)(2)(A)(i) of the
Initiation Checklist at 9; see also consider allegations of below-cost sales Act. Accordingly, the Department is
Volume I of the Petition at 55 and in the aggregate for a foreign country, initiating a country-wide cost
Volume II of the Petition at Exhibit AD– just as Commerce currently considers investigation.
6. Through market research, the allegations of sales at less than fair value
petitioner obtained a quoted transaction Normal Value Based on Constructed
on a country-wide basis for purposes of
price for certain steel nails produced by initiating an antidumping Value
DWE and sold or offered for sale to investigation.’’ Because the petitioner alleged sales
customers in the UAE. Id. The petitioner Further, the SAA provides that below cost, and pursuant to sections
substantiated the home market price section 773(b)(2)(A) of the Act retains 773(a)(4), 773(b) and 773(e) of the Act,
with a declaration from the person who the requirement that the Department we calculated normal value based on
obtained the information. Id. The must have ‘‘reasonable grounds to CV. We calculated CV using the same
petitioner asserts that, aside from believe or suspect’’ that below-cost sales average COM, SG&A, financial and
dimensions, the product subject to the have occurred before initiating such an packing figures used to compute the
quoted transaction price is substantially investigation. Reasonable grounds exist COP. We added the average profit rate
identical to subject merchandise sold by when an interested party provides based on the most recent financial
DWE in the United States. See Initiation specific factual information on costs and statements of a company in the same
Checklist at 9 and Volume I of the prices, observed or constructed, general industry in the UAE as the
Petition at 56. The petitioner made an indicating that sales in the foreign producers of certain steel nails. See
adjustment to the starting price for market in question are at below-cost Initiation Checklist at 9–11. We also
foreign inland freight. See Initiation prices. Id. made a circumstance-of-sale adjustment
Checklist at 9 and Volume II of the to normal value for U.S. credit expenses
Petition at Exhibits AD–9 and AD–15. 2 In the Second Supplement to the Petition, the
pursuant to 19 CFR 351.410(c). See
petitioner alleged that producers of steel nails in the
Because the quoted U.S. prices for nails UAE sold subject merchandise in their home market Initiation Checklist at 7–8, 12–13; see
produced and/or exported by DWE were
WReier-Aviles on DSKGBLS3C1PROD with NOTICES

at less than the COP, consistent with section 773(b) Volume I of the Petition at 53 and
for a product having dimensions of the Act. In the Second Supplement to the Volume II of the Petition at Exhibits
different from the dimensions of the Petition at 5, the petitioner demonstrated that AD–2, AD–14; see Supplement to the
DWE’s price was below cost by comparing the
product sold or offered for sale as home-market price for DWE to constructed value Petition at 13–14 and Exhibits Supp. 6,
reflected in the quoted UAE transaction, (CV) rather than to COP (according to section 773(e) Supp. 7, and Supp. 9.
the petitioner made a downward of the Act constructed value consists of COP plus
difference-in-merchandise adjustment to an amount for profit). We compared the home- MSW
market price to the revised COP and found that the
normal value pursuant to 19 CFR price was below the COP. See Initiation Checklist The petitioner asserts that it was
351.411. See Initiation Checklist at 9; at Attachment V. unable to obtain home market pricing

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 Federal Register / Vol. 76, No. 81 / Wednesday, April 27, 2011 / Notices 23563

data for products that were identical or section 733(b)(1)(A) of the Act and 19 Distribution of Copies of the Petitions
similar to the products MSW offered for CFR 351.205(b)(1), unless postponed, In accordance with section
sale to the United States. Further, the we will make our preliminary 732(b)(3)(A) of the Act and 19 CFR
petitioner provided information determination no later than 140 days 351.202(f), copies of the public versions
indicating that MSW may not have a after the date of this initiation. of the Petition have been provided to
viable home market or third-country the representatives of the Government of
market. See Initiation Checklist at 9; see Targeted Dumping Allegations
the UAE. We will attempt to provide a
also Volume I of the Petition at 58 and On December 10, 2008, the copy of the public version of the
Volume II of the Petition at AD–6. Petition to the foreign producers/
Department issued an interim final rule
Because the petitioner has alleged that exporters, consistent with 19 CFR
for the purpose of withdrawing 19 CFR
all sales to countries other than the 351.203(c)(2).
351.414(f) and (g), the regulatory
United States constitute less than the
five-percent threshold provided for in provisions governing the targeted ITC Notification
section 773(a)(1)(B)(ii)(II) of the Act, the dumping analysis in antidumping duty
We have notified the ITC of our
petitioner based normal value on CV for investigations, and the corresponding
initiation, as required by section 732(d)
MSW. Id. See Initiation Checklist for regulation governing the deadline for
of the Act.
additional details. targeted-dumping allegations, 19 CFR
351.301(d)(5). See Withdrawal of the Preliminary Determinations by the ITC
Normal Value Based on Constructed Regulatory Provisions Governing The ITC will preliminarily determine,
Value Targeted Dumping in Antidumping no later than May 16, 2011, whether
Pursuant to section 773(e) of the Act, Duty Investigations, 73 FR 74930 there is a reasonable indication that
the petitioner calculated CV based on (December 10, 2008). The Department imports of certain steel nails from the
COM, SG&A, packing expenses, and stated that ‘‘{w}ithdrawal will allow the UAE are materially injuring, or
profit using the same methodology as Department to exercise the discretion threatening material injury to a U.S.
described with respect to DWE. The intended by the statute and, thereby, industry. A negative ITC determination
petitioner also made a circumstance-of- develop a practice that will allow will result in the investigation being
sale adjustment to normal value for U.S. interested parties to pursue all statutory terminated; otherwise, this investigation
credit expenses pursuant to 19 CFR avenues of relief in this area.’’ See id. at will proceed according to statutory and
351.410(c). See Initiation Checklist at 7– 74931. regulatory time limits.
8, 12–13; see also Volume I of the
In order to accomplish this objective, Notification to Interested Parties
Petition at 53, Volume II of the Petition
if any interested party wishes to make Interested parties must submit
at Exhibits AD–2, AD–14, and
a targeted dumping allegation in this applications for disclosure under APO
Supplement to the Petition at 13–14 and
investigation pursuant to section in accordance with 19 CFR 351.305. On
Exhibits Supp. 6, Supp. 7, and Supp. 9.
777A(d)(1)(B) of the Act, such January 22, 2008, the Department
Fair Value Comparisons allegations are due no later than 45 days published Antidumping and
Based on the data provided by the before the scheduled date of the Countervailing Duty Proceedings:
petitioner, there is reason to believe that preliminary determination. Documents Submission Procedures;
imports of certain steel nails are being, Respondent Selection APO Procedures (73 FR 3634). Parties
or are likely to be, sold in the United wishing to participate in this
States at less than fair value. Based on For this investigation, the Department investigation should ensure that they
a comparison of respective net export intends to select respondents based on meet the requirements of these
prices and normal value calculated in U.S. Customs and Border Protection procedures (e.g., the filing of letters of
accordance with section 773(a)(1) of the (CBP) data for U.S. imports under the appearance as discussed at 19 CFR
Act, the estimated dumping margins for Harmonized Tariff Schedule of the 351.103(d)).
certain steel nails from the UAE range United States (HTSUS) numbers Any party submitting factual
from 61.54 to 81.82 percent for DWE. 7317.00.55, 7317.00.65, and 7317.00.75, information in an antidumping or
Based on a comparison of respective net the three HTSUS categories most countervailing duty proceeding must
export prices and normal value based on specific to the subject merchandise, for certify to the accuracy and completeness
CV calculated in accordance with of that information. See section 782(b)
entries made during the POI. We intend
section 773(a)(4) of the Act, the of the Act. Parties are hereby reminded
to release the CBP data under
estimated dumping margins for certain that revised certification requirements
Administrative Protective Order (APO)
steel nails from the UAE range from are in effect for company/government
to all parties with access to information
152.37 to 184.41 percent for DWE and officials as well as their representatives
protected by APO within five days of
from 150.13 to 154.26 percent for MSW. in all segments of any antidumping or
publication of this Federal Register countervailing duty proceeding initiated
See Initiation Checklist at 14 and notice and make our decision regarding
Attachments VI and VII. on or after March 14, 2011. See
respondent selection within 20 days of Certification of Factual Information to
Initiation of Antidumping Investigation publication of this notice. The Import Administration During
Based upon the examination of the Department invites comments regarding Antidumping and Countervailing Duty
Petition on certain steel nails from UAE, the CBP data and respondent selection Proceedings: Interim Final Rule, 76 FR
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the Department finds that the Petition within 10 days of publication of this 7491 (February 10, 2011) (Interim Final
meets the requirements of section 732 of Federal Register notice. Rule), amending 19 CFR 351.303(g)(1)
the Act. Therefore, we are initiating an Interested parties must submit and (2). The formats for the revised
antidumping duty investigation to applications for disclosure under APO certifications are provided at the end of
determine whether imports of certain in accordance with 19 CFR 351.305. the Interim Final Rule. The Department
steel nails from UAE are being, or are Instructions for filing such applications intends to reject factual submissions in
likely to be, sold in the United States at may be found on the Department’s any proceeding segments initiated on or
less than fair value. In accordance with website at [Link] after March 14, 2011, if the submitting

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 23564 Federal Register / Vol. 76, No. 81 / Wednesday, April 27, 2011 / Notices

party does not comply with the revised galvanized finish, a smooth, barbed or DEPARTMENT OF COMMERCE
certification requirements. ringed shank, an actual length of 0.500″
This notice is issued and published to 4″, inclusive; an actual shank International Trade Administration
pursuant to section 777(i) of the Act. diameter of 0.1015″ to 0.166″, inclusive; [C–570–976]
Dated: April 20, 2011. and an actual head diameter of 0.3375″
Ronald K. Lorentzen, to 0.500″, inclusive, and whose Galvanized Steel Wire From the
Deputy Assistant Secretary for Import packaging and packaging marking are People’s Republic of China: Initiation
Administration. clearly and prominently labeled of Countervailing Duty Investigation
Appendix I—Scope of the Investigation ‘‘Roofing’’ or ‘‘Roof’’ nails; AGENCY: Import Administration,
The merchandise covered by this • Wire collated steel nails, in coils, International Trade Administration,
investigation includes certain steel nails having a galvanized finish, a smooth, Department of Commerce.
having a shaft length up to 12 inches. barbed or ringed shank, an actual length DATES: Effective Date: April 27, 2011.
Certain steel nails include, but are not of 0.500″ to 1.75″, inclusive; an actual FOR FURTHER INFORMATION CONTACT:
limited to, nails made of round wire and shank diameter of 0.116″ to 0.166″, Nicholas Czajkowski or David Lindgren,
nails that are cut. Certain steel nails may inclusive; and an actual head diameter AD/CVD Operations, Office 6, Import
be of one piece construction or of 0.3375″ to 0.500″, inclusive, and Administration, International Trade
constructed of two or more pieces. whose packaging and packaging Administration, U.S. Department of
Certain steel nails may be produced marking are clearly and prominently Commerce, 14th Street, and
from any type of steel, and have a labeled ‘‘Roofing’’ or ‘‘Roof’’ nails; Constitution Avenue, NW., Washington,
variety of finishes, heads, shanks, point • Non-collated (i.e., hand-drive or DC 20230; telephone: (202) 482–1395 or
types, shaft lengths and shaft diameters. bulk), steel nails having a convex head (202) 482–3870, respectively.
Finishes include, but are not limited to, SUPPLEMENTARY INFORMATION:
(commonly known as an umbrella
coating in vinyl, zinc (galvanized,
whether by electroplating or hot- head), a smooth or spiral shank, a The Petition
dipping one or more times), phosphate galvanized finish, an actual length of
1.75″ to 3″, inclusive; an actual shank On March 31, 2011, the Department of
cement, and paint. Head styles include, Commerce (the Department) received a
but are not limited to, flat, projection, diameter of 0.131″ to 0.152″, inclusive;
and an actual head diameter of 0.450″ to countervailing duty (CVD) petition
cupped, oval, brad, headless, double, concerning imports of galvanized steel
countersunk, and sinker. Shank styles 0.813″, inclusive, and whose packaging
wire from the People’s Republic of
include, but are not limited to, smooth, and packaging marking are clearly and
China (PRC) filed in proper form by
barbed, screw threaded, ring shank and prominently labeled ‘‘Roofing’’ or ‘‘Roof’’
Davis Wire Corporation, Johnstown
fluted shank styles. Screw-threaded nails; Wire Technologies, Inc., Mid-South
nails subject to this investigation are • Corrugated nails. A corrugated nail Wire Company, Inc., National Standard,
driven using direct force and not by is made of a small strip of corrugated LLC, and Oklahoma Steel & Wire
turning the fastener using a tool that steel with sharp points on one side; Company, Inc. (Petitioners), domestic
engages with the head. Point styles producers of galvanized steel wire. See
include, but are not limited to, • Thumb tacks, which are currently
classified under HTSUS 7317.00.10.00; ‘‘Petition for the Imposition of
diamond, blunt, needle, chisel and no Countervailing Duties on Galvanized
point. Certain steel nails may be sold in • Fasteners suitable for use in Steel Wire from the People’s Republic of
bulk, or they may be collated into strips powder-actuated hand tools, not China’’ (CVD Petition). On April 6, 2011,
or coils using materials such as plastic, threaded and threaded, which are the Department requested additional
paper, or wire. currently classified under HTSUS
Certain steel nails subject to this information and clarification of certain
7317.00.20 and 7317.00.30; areas of the CVD Petition involving the
investigation are currently classified
under the Harmonized Tariff Schedule • Certain steel nails that are equal to subsidy allegations. On the same day we
of the United States (HTSUS) or less than 0.0720 inches in shank issued a separate set of requests for
subheadings 7317.00.55, 7317.00.65, diameter, round or rectangular in cross information regarding the scope,
and 7317.00.75. section, between 0.375 inches and 2.5 industry support, and injury sections of
Excluded from the scope of this inches in length, and that are collated the CVD Petition and the accompanying
investigation are steel nails specifically with adhesive or polyester film tape antidumping petitions for Mexico and
enumerated and identified in ASTM backed with a heat seal adhesive; and the PRC. Petitioners filed timely,
Standard F 1667 (2005 revision) as Type separate responses to these
• Fasteners having a case hardness questionnaires on April 11, 2011 (First
I, Style 20 nails, whether collated or in
greater than or equal to 50 HRC, a Supplement to the CVD Petition and
bulk, and whether or not galvanized.
Also excluded from the scope of this carbon content greater than or equal to Supplement to the AD/CVD Petitions,
investigation are the following products: 0.5 percent, a round head, a secondary respectively). On April 12, 2011, the
• Non-collated (i.e., hand-drive or reduced-diameter raised head section, a Department issued a second set of
bulk), two-piece steel nails having centered shank, and a smooth questions regarding general issues,
plastic or steel washers (‘‘caps’’) already symmetrical point, suitable for use in injury information and antidumping-
gas-actuated hand tools. specific topics. On April 14, 2011,
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assembled to the nail, having a bright or

galvanized finish, a ring, fluted or spiral While the HTSUS subheadings are Petitioners filed timely responses to the
shank, an actual length of 0.500″ to 8″, provided for convenience and customs April 12, 2011 questionnaires (Second
inclusive; an actual shank diameter of purposes, the written description of the Supplement to the AD/CVD Petitions).
0.1015″ to 0.166″, inclusive; and an scope of this investigation is dispositive. On April 12, 2011, the Department
actual washer or cap diameter of 0.900″ requested additional information
[FR Doc. 2011–10187 Filed 4–26–11; 8:45 am]
to 1.10″, inclusive; regarding the CVD Petition. See Memo
• Non-collated (i.e., hand-drive or BILLING CODE 3510–DS–P to the File from Mark E. Hoadley,
bulk), steel nails having a bright or Program Manager, AD/CVD Operations,

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 APPENDIX B

CONFERENCE WITNESSES

B-1
 CALENDAR OF PUBLIC CONFERENCE

Those listed below appeared as witnesses at the United States International Trade Commission’s
conference:

Subject: Certain Steel Nails from the United Arab Emirates

Inv. No.: 731-TA-1185 (Preliminary)
Date and Time: April 21, 2011 - 8:45 a.m.

Sessions were held in connection with this preliminary investigation in the Main Hearing Room
(room 101), 500 E Street, S.W., Washington, D.C.

In Support of the Imposition of

Antidumping Duty Order:

Wiley Rein LLP

Washington, D.C.
on behalf of

Mid Continent Nail Corporation

David W. Libla, President, Mid Continent Nail

Corporation

George J. Skarich, Executive Vice President of Sales

& Marketing, Mid Continent Nail Corporation

Chris M. Pratt, Director of Internal Audit & Reporting

Systems, Mid Continent Nail Corporation

Adam H. Gordon )
– OF COUNSEL
Robert E. DeFrancesco, III )

B-3
In Opposition to the Imposition of
Antidumping Duty Order:

Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP

Washington, D.C.
on behalf of

Dubai Wire FZE

Itochu Building Products Co., Inc.

Rupak Ved, President, Dubai Wire FZE

Harish Waghela, Nominate Director, Dubai

Wire FZE

Mona Zinman, President, Itochu Building Products

Co., Inc.; and Co-CEO, Prime Source Building
Products, Inc.

John Hurwitz, Vice President of Operations, Northeast

Wholesale Nail and Fastener Supply Co.

Donald Veth, Vice President, Auxiliary Service & Hardware

Ned H. Marshak )
– OF COUNSEL
Andrew T. Schutz )

Arent Fox LLP

Washington, D.C.
on behalf of

Precision Fasteners LLC

John M. Gurley ) – OF COUNSEL

B-4
 APPENDIX C

SUMMARY DATA

C-1
Table C-1
Steel nails: Summary data concerning the U.S. market, 2008-10

(Quantity=short tons, value=1,000 dollars, unit values, unit labor costs, and unit expenses are per short ton;
period changes=percent, except where noted)
Reported data Period changes

Item 2008 2009 2010 2008-10 2008-09 2009-10

U.S. consumption quantity:

Amount . . . . . . . . . . . . . . . . . . . . 661,518 440,947 526,467 -20.4 -33.3 19.4
Producers' share (1) . . . . . . . . . 18.6 22.0 17.8 -0.8 3.4 -4.2
Importers' share (1):
UAE . . . . . . . . . . . . . . . . . . . . . 7.3 14.4 22.5 15.2 7.1 8.1
All other sources . . . . . . . . . . . 74.1 63.6 59.7 -14.4 -10.5 -3.9
Total imports . . . . . . . . . . . . . 81.4 78.0 82.2 0.8 -3.4 4.2

U.S. consumption value:

Amount . . . . . . . . . . . . . . . . . . . . 978,104 563,903 658,057 -32.7 -42.3 16.7
Producers' share (1) . . . . . . . . . 22.6 30.2 23.0 0.3 7.6 -7.3
Importers' share (1):
UAE . . . . . . . . . . . . . . . . . . . . . 7.2 10.0 17.0 9.8 2.8 6.9
All other sources . . . . . . . . . . . 70.1 59.7 60.1 -10.1 -10.4 0.3
Total imports . . . . . . . . . . . . . 77.4 69.8 77.0 -0.3 -7.6 7.3

U.S. imports from:

UAE:
Quantity . . . . . . . . . . . . . . . . . . 48,256 63,494 118,558 145.7 31.6 86.7
Value . . . . . . . . . . . . . . . . . . . . 70,517 56,662 111,764 58.5 -19.6 97.2
Unit value . . . . . . . . . . . . . . . . . $1,461 $892 $943 -35.5 -38.9 5.6
Ending inventory quantity . . . . *** *** *** *** *** ***
All other sources:
Quantity . . . . . . . . . . . . . . . . . . 490,428 280,537 314,296 -35.9 -42.8 12.0
Value . . . . . . . . . . . . . . . . . . . . 686,105 336,747 395,266 -42.4 -50.9 17.4
Unit value . . . . . . . . . . . . . . . . . $1,399 $1,200 $1,258 -10.1 -14.2 4.8
Ending inventory quantity . . . . *** *** *** *** *** ***
All sources:
Quantity . . . . . . . . . . . . . . . . . . 538,684 344,031 432,854 -19.6 -36.1 25.8
Value . . . . . . . . . . . . . . . . . . . . 756,623 393,409 507,030 -33.0 -48.0 28.9
Unit value . . . . . . . . . . . . . . . . . $1,405 $1,144 $1,171 -16.6 -18.6 2.4
Ending inventory quantity . . . . 70,310 52,653 58,443 -16.9 -25.1 11.0

Table continued on next page.

C-3
Table C-1--Continued
Steel nails: Summary data concerning the U.S. market, 2008-10

(Quantity=short tons, value=1,000 dollars, unit values, unit labor costs, and unit expenses are per short ton;
period changes=percent, except where noted)
Reported data Period changes

Item 2008 2009 2010 2008-10 2008-09 2009-10

U.S. producers':
Average capacity quantity . . . . . 304,064 337,287 347,372 14.2 10.9 3.0
Production quantity . . . . . . . . . . 122,391 90,023 93,379 -23.7 -26.4 3.7
Capacity utilization (1) . . . . . . . . 40.3 26.7 26.9 -13.4 -13.6 0.2
U.S. shipments:
Quantity . . . . . . . . . . . . . . . . . . 122,834 96,916 93,613 -23.8 -21.1 -3.4
Value . . . . . . . . . . . . . . . . . . . . 221,481 170,494 151,027 -31.8 -23.0 -11.4
Unit value . . . . . . . . . . . . . . . . . $1,803 $1,759 $1,613 -10.5 -2.4 -8.3
Export shipments:
Quantity . . . . . . . . . . . . . . . . . . *** *** *** *** *** ***
Value . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** ***
Unit value . . . . . . . . . . . . . . . . . *** *** *** *** *** ***
Ending inventory quantity . . . . . 16,397 9,416 9,105 -44.5 -42.6 -3.3
Inventories/total shipments (1) . . 13.3 9.7 9.7 -3.6 -3.6 0.0
Production workers . . . . . . . . . . 737 575 590 -19.9 -22.0 2.6
Hours worked (1,000s) . . . . . . . . 1,551 1,232 1,192 -23.2 -20.5 -3.3
Wages paid ($1,000s) . . . . . . . . 26,529 21,359 18,591 -29.9 -19.5 -13.0
Hourly wages . . . . . . . . . . . . . . . $17.11 $17.33 $15.60 -8.8 1.3 -10.0
Productivity (tons/1,000 hours) . 78.9 73.1 78.4 -0.7 -7.4 7.3
Unit labor costs . . . . . . . . . . . . . $216.76 $237.27 $199.09 -8.2 9.5 -16.1
Net sales:
Quantity . . . . . . . . . . . . . . . . . . 122,495 97,544 93,006 -24.1 -20.4 -4.7
Value . . . . . . . . . . . . . . . . . . . . 220,887 172,626 150,824 -31.7 -21.8 -12.6
Unit value . . . . . . . . . . . . . . . . . $1,803 $1,770 $1,622 -10.1 -1.9 -8.4
Cost of goods sold (COGS) . . . . 179,500 136,605 123,503 -31.2 -23.9 -9.6
Gross profit or (loss) . . . . . . . . . 41,387 36,021 27,321 -34.0 -13.0 -24.2
SG&A expenses . . . . . . . . . . . . . 22,999 21,527 16,693 -27.4 -6.4 -22.5
Operating income or (loss) . . . . 18,388 14,493 10,628 -42.2 -21.2 -26.7
Capital expenditures . . . . . . . . . *** *** *** *** *** ***
Unit COGS . . . . . . . . . . . . . . . . . $1,465 $1,400 $1,328 -9.4 -4.4 -5.2
Unit SG&A expenses . . . . . . . . . $188 $221 $179 -4.4 17.5 -18.7
Unit operating income or (loss) . $150 $149 $114 -23.9 -1.0 -23.1
COGS/sales (1) . . . . . . . . . . . . . 81.3 79.1 81.9 0.6 -2.1 2.8
Operating income or (loss)/
sales (1) . . . . . . . . . . . . . . . . . . 8.3 8.4 7.0 -1.3 0.1 -1.3

(1) "Reported data" are in percent and "period changes" are in percentage points.

Note.--Financial data are reported on a fiscal year basis and may not necessarily be comparable to data reported
on a calendar year basis. Because of rounding, figures may not add to the totals shown. Unit values and shares
are calculated from the unrounded figures.

Source: Compiled from data submitted in response to Commission questionnaires and from official Commerce statistics.

C-4
 APPENDIX D

NONSUBJECT COUNTRY PRICE DATA

D-1
 Nonsubject Price Comparisons

Table D-1 compares quarterly weighted-average prices of nonsubject imports with U.S. producer
prices and UAE prices for products 1-6 during 2008-10. Figure D-1 presents domestic and import prices
for each of the specified price items individually. Prices of imports from individual nonsubject countries
were generally lower than U.S. producer prices in the majority of comparisons, with the exception of
Taiwan. Prices of imports from individual nonsubject countries were generally higher than prices of
imports from the UAE for Korea, Malaysia, Mexico, and Taiwan, but were lower than UAE prices in the
majority of comparisons for China, and for all comparisons for Poland.

Table D-1
Steel nails: Number of quarterly price comparisons of imported nonsubject and U.S. products 1, 2,
3, 4, 5, and 6 and imported nonsubject and UAE products 1, 2, 3, 4,5, and 6
Nonsubject United States UAE
Countries
Higher1 Lower Higher1 Lower

China 21 45 27 40

Korea 19 42 33 24

Malaysia 0 5 4 1

Mexico 4 20 15 5

Poland 0 7 0 7

Taiwan 32 34 60 5

Total 77 153 140 82

1
“Higher” signifies that the price of the nonsubject country’s product was higher than the U.S. or UAE price.

Source: Compiled from data submitted in response to Commission questionnaires.

Figure D-1
Steel nails: Weighted-average prices and quantities of domestic and imported product, by
quarters, January 2008-December 2010

* * * * * * *

D-3