TRADE CASES HEADLINESTrade Cases
Domestic Wire Decking Producers File Cases Against China
Jun. 8, 2009 U.S. producers of wire decking have filed antidumping and countervailing duty petitions charging that dumped and subsidized imports of wire decking from P.R. China cause material injury to the domestic industry.
Petitioners also allege dumping margins ranging from 116 to 312%, with an average margin of 218%. They also allege that significant subsidies have been provided to Chinese wire decking producers by the Chinese Government.
Wire decking, also referred to as "pallet rack decking" or "bulk storage shelving," is used in commercial and industrial storage systems. It is produced from carbon or alloy steel wire that has been welded into a square or rectangular mesh pattern.
Wire decking’s open mesh design provides a low-weight, high-strength storage platform. Wire decking is designed to allow light and water to pass through for fire protection systems and, as a result, is usually mandated by insurance companies and building codes for use in commercial and storage systems.
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According to the petition, imports of wire decking from China have increased significantly since 2006 and are displacing sales and market share of U.S. producers. The import increases continued in the first quarter of 2009, despite the decline in demand, leading to a significant increase in market share for China. Imports of wire decking from China accounted for 95% of all decking imports in the United States in recent years.
According to the petitioners, Chinese imports have succeeding in increasing on the basis of low prices that undercut the prices of competing U.S. products. As a result, U.S. producers of wire decking have suffered declines in production and shipments, underutilized capacity, and deteriorating financial performance since 2006.
"The increased volumes and market shares of wire decking from China reflect significant underselling behavior by Chinese producers, accomplished through dumping practices and the receipt of unfair subsidies from the Chinese Government,” stated Kathleen W. Cannon, counsel to the domestic industry. “Wire decking is often sold in the U.S. market by Chinese producers at prices that do not even cover the cost of the raw material inputs.”
Antidumping duties are intended to offset the amount by which a product is sold at less than fair value in the United States. Because China is a non-market economy, the U.S. Department of Commerce will determine whether dumping exists by comparing the amount by which wire decking is sold by Chinese producers and exporters in the U.S. market to a constructed cost derived from the Chinese producers' actual input quantities to produce the product valued at market economy values.
Petitions further allege that Chinese producers and exporters of wire decking have been targeted at all levels of the Chinese government for preferential treatment. The U.S. International Trade Commission will determine whether such imports are a cause of material injury to the domestic industry.
As a result of the filing of the petitions, the U.S. Department of Commerce will determine whether to initiate investigations within 20 days and the USITC will reach a preliminary determination of material injury or threat of material injury within 45 days. The entire investigative process takes approximately one year, and final determinations of injury, dumping and subsidies will occur in mid-2010.
Petitioners in this case are AWP Industries, Inc. of Frankfort, Ky.; ITC Manufacturing, Inc. of Phoenix, Ariz.; J&L Wire Cloth LLC of St. Paul, Minn.; and Nashville Wire Products Mfg. Co., Inc., of Nashville, Tenn. Petitioners are represented in these actions by Kathleen W. Cannon of the law firm Kelley Drye & Warren, LLP.