Domestically produced CFSP and the subject imports tended to be sold on a different basis; while most domestically produced product is sold from the mill or a nearby warehouse on a just-in-time basis, most of the subject imports were produced to order. 105
As noted above, CFSP is sold in two principal forms: web rolls and sheets (including sheeter
rolls).106 Virtually all subject imports during the POI consisted of CFSP in sheet form,107 domestically produced CFSP is in web-roll form. 108
Chinese Respondents, Korean Respondents, and Ekman argue that because almost all subject imports are in sheet form (including sheeter rolls), the domestic industry does not face competition from subject imports in the substantial segment of the CFSP market that is devoted to CFSP in web-roll form. They argue that there are substantial differences in physical characteristics and end uses between the two forms of CFSP, and that the two products are not interchangeable because the printing presses for each type of CFSP cannot use the other type. Chinese Respondents and Korean Respondents also argue that the producers in the subject countries are not competitive with U.S. producers in the web-roll segment of the market, that they are unlikely to become so, and that it is uneconomical to transport web rolls to the United States. 109
Chinese Respondents identify several other factors that, they claim, serve to attenuate competition between subject imports and the domestic like product. These are: shorter lead times for domestic producers; the greater stiffness of the domestic product, which makes it more efficient to use; the ability of domestic producers to offer a full range of CFSP products; and the ability of domestic producers to provide better technical support to customers.110 Respondents also allege that product branding serves to attenuate competition somewhat between subject imports and the domestic product. 111
Petitioner contests Respondents’ argument that competition between subject imports and the domestic like product is attenuated. First, it argues that even if subject imports are concentrated solely in the sheet part of the market, subject imports (with a 14 percent market share in interim 2006) control almost 50 percent of this portion of the market. Petitioner also notes that, because sheet is a higher-priced product than web rolls, sales of sheet account for a larger part of the overall CFSP market on a value basis (*** percent) than on a volume basis (***). Petitioner takes issue with Respondents’ assertion that there is market segmentation between sheet and web-roll product. Petitioner maintains that there are no significant differences in the physical characteristics and applications of the two products. It notes that while some U.S. printers have only sheet-fed or web-fed presses, other printers have both types of presses in their operations. Petitioner contends that Respondents produce web-roll CFSP and that they could participate in the web-roll part of the U.S. market if they wished to do so. Petitioner speculates that the reason that Respondents do not ship significant amounts of web rolls is that respondents have first targeted the higher end of the CFSP market (the market for sheet product). Finally, Petitioner points to
105 Compare CR at III-16, PR at III-10 with Transcript at 117 (Hunley, Global Paper Solutions) and 200-201 (Morgan).
CR/PR at II-1.
CR at I-22, PR at I-15.
108 CFSP in web-roll form is estimated to account for 70-75 percent of domestic CFSP consumption on a volume basis, and somewhat less on a value basis. CR/PR at Table I-3.
109 Chinese Respondents’ Postconference Brief at 3-12; Korean Respondents’ Postconference Brief at 8-11; Ekman Postconference Brief at 6-8.
Chinese Respondents’ Postconference Brief at 10-12. CR at II-12-13, PR at II-7.