Hardwood Floors E-News: Dec. 6, 2010

By HWF Editors
December 2010

Preliminary Investigation Affirms Chinese Dumping Allegations

On Friday the U.S. International Trade Commission issued a unanimous affirmative determination in its preliminary investigation into allegations of dumping of engineered flooring by Chinese manufacturers. The commission, an independent federal agency, determined that there is “a reasonable indication that a U.S. industry is materially injured by reason of imports of multilayered wood flooring from China that are allegedly subsidized and sold in the United States at less than fair value.”

As a result of the vote, the U.S. Department of Commerce will conduct a detailed investigation into the pricing practices of Chinese engineered wood flooring manufacturers and exporters, as well as subsidies provided to those companies. Its preliminary countervailing duty determination is due on or about Jan. 14, 2011, and its preliminary antidumping duty determination is due on or about March 30, 2011.

“The fact that today’s vote was unanimous, we believe, is a reflection of the weight of the extensive evidence reviewed by the commission, and the seriousness with which the agency viewed the concerns detailed by the domestic industry,” said Jeff Levin, counsel for the Coalition for American Hardwood Parity, which filed a petition for the investigation in late October. The coalition consists of Anderson Hardwood Floors LLC, Award Hardwood Floors, Baker’s Creek Wood Floors Inc., From the Forest, Howell Hardwood Flooring, Mannington Mills Inc., Nydree Flooring, Forest, and Shaw Industries Group Inc.

Copies of the report from the ITC are expected to be available after Jan. 3, 2011, by e-mailing pubrequest@usitc.gov, calling 202/205-2000, or writing to the Office of the Secretary, 500 E St. S.W., Washington, DC 20436. Requests may also be faxed to 202/205-2104. The press release from the ITC is available here.

Commerce Dept. Opens Probe of Chinese Flooring

The U.S. Department of Commerce (DOC) on Nov. 10 initiated antidumping duty and countervailing duty investigations of engineered wood flooring exported from China and imported to the U.S., according to a department release.

On Oct. 21 the Coalition for American Hardwood Parity (CAHP), an ad hoc group of U.S. engineered wood flooring manufacturers, petitioned the Commerce Department to initiate the investigation. The group alleges that companies that manufacture engineered wood flooring in China dumped products in the U.S. at margins of 194.49 to 280.6 percent. (See the related story involving Armstrong World Industries’ potential adverse effects from the investigation.) This “dumping margin” is the amount by which a product’s normal market value exceeds the export price. Citing a study by Catalina Research Inc.(Boca Raton, Fla.), DOC said imports of engineered wood flooring from China increased 76 percent by quantity from 2007 to 2009. In 2009, imports of multilayered wood flooring were valued at an estimated $119.7 million.

An antidumping investigation hinges on determining whether an imported product is being sold by a foreign manufacturer into the U.S. market at less than fair value; a countervailing duty investigation determines whether a foreign manufacturer is gaining an unfair competitive advantage through government subsidies. Both DOC and the U.S. International Trade Commission(ITC) play roles in the investigations. ITC expects to make preliminary determinations on both investigations around Dec. 6. If ITC finds no reason to carry on the investigation during this preliminary determination, the investigations will be terminated.

Import Duties Could Affect Armstrong’s Stock Price

Armstrong World Industries (Lancaster, Pa.) has told investors that it could be subject to “material” import duties—significant costs that could affect its stock price—if an adverse ruling is reached by federal investigators in a probe of unfair trade allegations directed at engineered flooring manufacturers in China.

Armstrong owns an engineered flooring manufacturing plant in China, and it also imports engineered flooring to the U.S. from suppliers in China. The company disclosed the risk in its latest 10-Q filing with the U.S. Securities and Exchange Commission (SEC). Armstrong tells its investors that under U.S. law, “a U.S. importer may be responsible for the payment of any antidumping and countervailing duties.” The Coalition for American Hardwood Parity (CAHP), a group of U.S. manufacturers of engineered wood flooring, filed petition with the U.S. Department of Commerce (DOC) and the International Trade Commission (ITC) on Oct. 21 seeking the duties.

“The Department of Commerce and the International Trade Commission have only just commenced their investigations,” according to the filing, “and the outcome of the cases are uncertain. As a result, at this time we cannot say whether an adverse ruling is probable or estimable.”

Wood flooring manufacturers in CAHP include: Anderson Hardwood Floors (Clinton, S.C), Award Hardwood Floors LLP(Wausau, Wis.), Baker’s Creek (Jackson, Miss.), From the Forest LLC (Weston, Wis.), Howell Hardwood Flooring(Dothan, Ala.), Mannington Wood Floors (Salem, N.J.), Nydree Flooring (Forest, Va.) and Shaw Industries Inc. (Dalton, Ga.).

Advertisements