(PSF) from China

192 Pages·2007·1.39 MB·English

by  Nathanael Comly

Certain Polyester Staple Fiber
From China
Investigation No. 731-TA-1104 (Final)
Publication 3922 June 2007
Washington, DC 20436
U.S. International Trade Commission
COMMISSIONERS
Daniel R. Pearson, Chairman
Shara L. Aranoff, Vice Chairman
Deanna Tanner Okun
Charlotte R. Lane
Irving A. Williamson
Dean A. Pinkert
Robert A. Rogowsky
Director of Operations
Staff assigned
Nathanael Comly, Investigator
Jeff Clark, Industry Analyst
Kelly Clark, Economist
Mary Klir, Accountant
Karl von Schriltz, Attorney
Mara Alexander, Statistician
Diane Mazur, Supervisor 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
www.usitc.gov
Certain Polyester Staple Fiber
From China
Investigation No. 731-TA-1104 (Final)
Publication 3922 June 2007

CONTENTS
Page
Determination................................................................... 1
Views of the Commission ......................................................... 3
Part I: Introduction .............................................................. I-1
Background .................................................................. I-1
Statutory criteria and organization of the report ...................................... I-1
U.S. market summary .......................................................... I-2
Summary data ................................................................ I-3
Previous and related investigations................................................ I-3
Nature and extent of sales at LTFV ............................................... I-4
The subject product ............................................................ I-6
Tariff treatment ............................................................ I-6
The product .................................................................. I-8
Physical characteristics and uses ............................................... I-8
Manufacturing process ...................................................... I-9
Interchangeability and customer and producer perceptions .......................... I-11
Channels of distribution...................................................... I-11
Price .................................................................... I-11
Domestic like product issues .................................................... I-11
Conjugate PSF ............................................................. I-12
PSF for CIPP applications .................................................... I-13
Part II: Conditions of competition in the U.S. market ................................... II-1
U.S. market segments .......................................................... II-1
Channels of distribution ........................................................ II-1
Geographic markets ......................................................... II-1
Supply and demand considerations................................................ II-2
U.S. supply ............................................................... II-2
U.S. demand .............................................................. II-5
Demand outside the United States .............................................. II-7
Substitutability issues .......................................................... II-7
Factors affecting purchasing decisions .......................................... II-8
Comparisons of domestic products, subject imports, and nonsubject imports ............ II-16
Elasticity estimates ............................................................ II-17
U.S. supply elasticity ........................................................ II-17
U.S. demand elasticity ....................................................... II-17
Substitution elasticity ....................................................... II-18
Part III: U.S. producers’ production, shipments, and employment .......................... III-1
U.S. producers ............................................................... III-1
U.S. capacity, production, and capacity utilization ................................... III-4
U.S. producers’ domestic shipments and export shipments ............................. III-7
U.S. producers imports ......................................................... III-9
U.S. producers’ inventories ..................................................... III-9
U.S. employment, wages and productivity .......................................... III-10
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CONTENTS – continued
Page
Part IV: U.S. imports, apparent consumption, and market shares........................... IV-1
U.S. importers ................................................................ IV-1
U.S. imports ................................................................. IV-3
The question of negligible imports ................................................ IV-7
Critical circumstances .......................................................... IV-7
Apparent U.S. consumption and market shares ...................................... IV-8
Ratio of subject imports to U.S. production ......................................... IV-13
Part V: Pricing and related information .............................................. V-1
Factors affecting prices ......................................................... V-1
Raw materials ............................................................. V-1
Transportation costs to the United States ........................................ V-2
U.S. inland transportation costs ................................................ V-2
Exchange rates ............................................................. V-3
Pricing practices .............................................................. V-3
Pricing methods ............................................................ V-3
Sales terms and discounts .................................................... V-4
Price data ................................................................... V-4
Price trends ............................................................... V-5
Price comparisons .......................................................... V-9
Lost sales and lost revenues ..................................................... V-10
Part VI: Financial condition of U.S. producers ......................................... VI-1
Background .................................................................. VI-1
Operations on certain PSF ...................................................... VI-1
Capital expenditures and research and development expenses ........................... VI-4
Assets and return on investment .................................................. VI-5
Capital and investment ......................................................... VI-5
Part VII: Threat considerations ..................................................... VII-1
The industry in China .......................................................... VII-2
Chinese producers’ capacity, production, shipments, and inventories ..................... VII-4
U.S. importers’ inventories ...................................................... VII-8
Product shifting and dumping in third-country markets ................................ VII-8
U.S. imports after December 31, 2006 ............................................. VII-9
Information on nonsubject sources ................................................ VII-9
“Bratsk” considerations ...................................................... VII-9
Methodology for selecting nonsubject countries and firms ........................... VII-11
Nonsubject source information ................................................ VII-11
Appendixes
A. Federal Register notices....................................................... A-1
B. Hearing witnesses ............................................................ B-1
C. Summary data............................................................... C-1
D. List of purchasers ............................................................ D-1
E. Nonsubject sources’ pricing data ................................................ E-1
F. Alleged effects of subject imports on U.S. producers’ existing development and production
efforts, growth, investment, and ability to raise capital ............................... F-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.
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UNITED STATES INTERNATIONAL TRADE COMMISSION
Investigation No. 731-TA-1104 (Final)
CERTAIN POLYESTER STAPLE FIBER FROM CHINA
DETERMINATION
On the basis of the record1 developed in the subject investigation, the United States International
Trade Commission (Commission) determines, pursuant to section 735(b) of the Tariff Act of 1930 (19
U.S.C. § 1673d(b)) (the Act), that an industry in the United States is materially injured by reason of
imports from China of certain polyester staple fiber, provided for in subheading 5503.20.00 of the
Harmonized Tariff Schedule of the United States, that have been found by the Department of Commerce
(Commerce) to be sold in the United States at less than fair value (LTFV). The Commission finds that
critical circumstances do not exist with respect to subject imports from China.
BACKGROUND
The Commission instituted this investigation effective June 23, 2006, following receipt of a
petition filed with the Commission and Commerce by DAK Americas, LLC, Charlotte, NC; Nan Ya
Plastics Corporation, America, Lake City, SC; and Wellman, Inc., Shrewsbury, NJ. The final phase of the
investigation was scheduled by the Commission following notification of a preliminary determination by
Commerce that imports of certain polyester staple fiber from China were being sold at LTFV within the
meaning of section 733(b) of the Act (19 U.S.C. § 1673b(b)). Notice of the scheduling of the final phase
of the Commission’s investigation and of a public hearing 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 on January 11, 2007 (72 FR 1341).
The hearing was held in Washington, DC, on March 13, 2007, 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)).

VIEWS OF THE COMMISSION
Based on the record in this investigation, we determine that an industry in the United States is
materially injured by reason of imports of certain polyester staple fiber (“certain PSF”) from China that
have been found by the Department of Commerce (“Commerce”) to be sold in the United States at less
than fair value (“LTFV”).1
I. BACKGROUND
The petition in this investigation was filed on June 23, 2006 by DAK Americas, LLC (“DAK”),
Nan Ya Plastics Corporation, America (“Nan Ya”), and Wellman, Inc. (“Wellman”) (together,
“petitioners”). Respondents opposing the imposition of antidumping duties are Ashley Furniture
Industries, Inc. (“Ashley”), Insituform Technologies, Inc. (“Insituform”), and Hollander Home
Furnishings Corp. (“Hollander”) (“respondents”), which are all importers and consumers of subject
merchandise.2 No subject Chinese producer has made an appearance or provided any argument in this
final investigation.
PSF is a man-made fiber that is similar in appearance to cotton or wool fiber when baled. Certain
PSF is known in the industry as “fiber for fill,” as it is primarily used as polyester fiberfill. Certain PSF is
generally used as stuffing in sleeping bags, mattresses, ski jackets, comforters, cushions, pillows, and
furniture.3 Certain PSF used for fill can be produced in many variations for purposes of quality
enhancement. For example, the subject fiber may be crimped or conjugated, giving the fiber “loft” for
stuffing purposes. It may also be coated with a finish (usually silicone or oil-based), making the fiber
smoother to the touch for certain high-end uses. The subject fiber may vary in shape and may be hollow
or solid, depending on both the preference of the manufacturer and the end use of the fiber.4
Manufacturing of certain PSF may be divided into two discrete stages. The first stage of the
process is polymer formation, a process that can vary depending on whether virgin (unprocessed
chemicals) or recycled materials are being used. Polymer formation also varies depending on whether
1 We find that critical circumstances do not exist with respect to subject imports from Far Eastern Industries
(Shanghai) Ltd. (“Far Eastern”), an exporter of subject merchandise from China, for which Commerce issued an
affirmative critical circumstances determination. We have disregarded new factual information in the Final
Comments filed by respondents, see Memorandum INV-EE-050 (May 14, 2007), pursuant to the statute and our
regulations. 19 U.S.C. § 1677m(g); 19 C.F.R. § 207.30(b).
2 Respondent Consolidated Fibers, Inc. (“Consolidated”), an importer of subject merchandise from China, filed
final comments on May 10, 2007, but did not otherwise participate in this final phase investigation.
3 Confidential Staff Report (“CR”) at I-7, Public Staff Report (“PR”) at I-6. Certain PSF is also used on a more
limited basis in the production of ***. CR at I-8 n.18; PR at I-8 n.18.
4 Certain PSF is physically distinguishable from other types of polyester staple fiber not subject to this
investigation, including carpet fiber and fine denier PSF for spinning into textile products, in terms of the product’s
denier, length, and, in some cases, finish and “crimp.” While certain PSF is 3 denier or more in thickness and from 1
to 5 inches in length, fine denier PSF for textile applications is less than 3 denier in thickness and carpet fiber ranges
from 10 to 18 denier in thickness cut into lengths of 6 to 8 inches. Unlike fine denier PSF or carpet fiber, certain
PSF used as fiberfill is seldom visible after being incorporated into the finished product, generally making its
appearance less important to purchasers than its performance in terms of loft, smoothness to the touch, and profile
(i.e., hollow or solid). See, e.g., Certain Polyester Staple Fiber From Korea and Taiwan, Inv. Nos. 731-TA-825-826
(Review), USITC Pub. 3843 (Mar. 2006).
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conjugate fiber is being produced. The second stage of the process, which is common to all certain PSF,
is fiber formation, including stretching, cutting, and baling.5
II. 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.”6 Section 771(4)(A) of the Tariff Act of 1930, as amended
(“the Act”), defines the relevant domestic industry as the “producers as a [w]hole 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.”7 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 . . . .”8
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.9 No single factor is dispositive, and the Commission
may consider other factors it deems relevant based on the facts of a particular investigation.10 The
Commission looks for clear dividing lines among possible like products and disregards minor variations.11
Although the Commission must accept the determination of Commerce as to the scope of the imported
merchandise allegedly sold at LTFV, the Commission determines what domestic product is like the
imported articles Commerce has identified.12
5 CR at I-9; PR at I-8.
6 19 U.S.C. § 1677(4)(A) (2000).
7 19 U.S.C. § 1677(4)(A).
8 19 U.S.C. § 1677(10).
9 See, e.g., 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). No single factor is dispositive, and the Commission may
consider other factors relevant to a particular investigation. The Commission looks for clear dividing lines among
possible like products, and disregards minor variations. See, e.g., S. Rep. No. 249, 96th Cong., 1st Sess. 90-91
(1979); Torrington Co., 747 F. Supp. at 748-49.
10 See, e.g., S. Rep. No. 96-249 at 90-91 (1979).
11 Nippon Steel, 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.”).
12 Hosiden Corp. v. Advanced Display Mfrs., 85 F.3d 1561, 1568 (Fed. Cir. 1996) (Commission may find single
like product corresponding to several different classes or kinds defined by Commerce); Torrington, 747 F. Supp. at
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