98-30857. Notice of Preliminary Determinations of Sales at Less Than Fair Value and Postponement of Final DeterminationsStainless Steel Round Wire From Canada, India, Japan, Spain, and Taiwan; Preliminary Determination of Sales at Not Less Than Fair ...  

  • [Federal Register Volume 63, Number 222 (Wednesday, November 18, 1998)]
    [Notices]
    [Pages 64042-64049]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 98-30857]
    
    
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    DEPARTMENT OF COMMERCE
    
    International Trade Administration
    [A-122-829, A-533-814, A-588-844, A-580-830, A-469-808, A-583-829]
    
    
    Notice of Preliminary Determinations of Sales at Less Than Fair 
    Value and Postponement of Final Determinations--Stainless Steel Round 
    Wire From Canada, India, Japan, Spain, and Taiwan; Preliminary 
    Determination of Sales at Not Less Than Fair Value and Postponement of 
    Final Determination--Stainless Steel Round Wire From Korea
    
    AGENCY: Import Administration, International Trade Administration, 
    Department of Commerce.
    
    EFFECTIVE DATE: November 18, 1998.
    
    FOR FURTHER INFORMATION CONTACT: Thomas Schauer (Canada, Spain) at 
    (202) 482-4852; Diane Krawczun (India) at (202) 482-0198; Jarrod 
    Goldfeder (Japan), at (202) 482-1784; or Gabriel Adler (the Republic of 
    Korea, Taiwan) at (202) 482-1442, Import Administration, Room 1870, 
    International Trade Administration, U.S. Department of Commerce, 14th 
    Street and Constitution Avenue, N.W., Washington, DC 20230.
    
    The Applicable Statute and Regulations
    
        Unless otherwise indicated, all citations to the statute are 
    references to the provisions effective January 1, 1995, the effective 
    date of the amendments made to the Tariff Act of 1930 (the Act) by the 
    Uruguay Round Agreements Act (URAA). In addition, unless otherwise 
    indicated, all citations to Department of Commerce (Department) 
    regulations refer to the regulations codified at 19 CFR part 351 (April 
    1998).
    
    Preliminary Determinations
    
        We preliminarily determine that stainless steel round wire from 
    Canada, India, Japan, Spain, and Taiwan is being sold, or is likely to 
    be sold, in the United States at less than fair value (LTFV), as 
    provided in section 733 of the Act. We also preliminarily determine 
    that stainless steel round wire from the Republic of Korea (Korea) is 
    not being sold, or is not likely to be sold, in the United States at 
    less than fair value. The estimated margins are shown in the Suspension 
    of Liquidation section of this notice.
    
    Case History
    
        These investigations were initiated on May 6, 1998. See Initiation 
    of Antidumping Duty Investigations: Stainless Steel Round Wire from 
    Canada, India, Japan, the Republic of Korea, Spain, and Taiwan, 63 FR 
    26150
    
    [[Page 64043]]
    
    (May 12, 1998) (Initiation Notice). Since the initiation of the 
    investigations, the following events have occurred:
        On May 19, 1998, the Department invited interested parties to 
    submit comments regarding model matching.
        On June 5, 1998, the United States International Trade Commission 
    (the ITC) preliminarily determined that there is a reasonable 
    indication that imports of the products under these investigations are 
    materially injuring the United States industry.
        On June 12, 1998, the Department selected the following companies 
    as respondents in these investigations: Central Wire Industries Ltd. 
    (Central Wire) and Greening Donald Co. Ltd. (Greening Donald) in the 
    Canada proceeding; Raajratna Metal Industries Limited (Raajratna) in 
    the India proceeding; Suzuki Metal Industries Co., Ltd. (Suzuki) and 
    Nippon Seisen Co., Ltd. (Nippon Seisen), in the Japan proceeding; Korea 
    Sangsa in the Korea proceeding; Inoxfil S.A. in the Spain proceeding; 
    and Tien Tai and Rodex in the Taiwan proceeding (collectively 
    ``respondents''). See Selection of Respondents, below. On June 15, 
    1998, the Department issued an antidumping questionnaire to each of the 
    selected respondents.
        The respondents submitted their initial responses to that 
    questionnaire in July and August 1998. After analyzing these responses, 
    we issued supplemental questionnaires to the respondents to clarify or 
    correct the initial questionnaire responses. We also determined to 
    treat Tien Tai and its affiliated producer Kuang Tai Metal Industrial 
    Co., Ltd. (Kuang Tai), as a single entity (i.e., to collapse the two 
    producers) for purposes of the investigation of wire from Taiwan. See 
    Memorandum to Richard W. Moreland, dated August 11, 1998. In addition, 
    we determined to collapse Korea Sangsa with its affiliated producer 
    Korea Welding Electrode Co., Ltd. (Koweld). See Memorandum to Richard 
    W. Moreland, dated September 24, 1998. The Department required that 
    both Tien Tai and Korea Sangsa resubmit their questionnaire responses, 
    consolidating their sales and cost data with that of their respective 
    affiliated parties.1
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        \1\ Unless otherwise specified, any references below to Tien Tai 
    or Korea Sangsa should be understood to refer to the collapsed 
    entities of Tien Tai/Kuang Tai and Korea Sangsa/Koweld, 
    respectively.
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        On August 24, 1998, the petitioners filed a timely request for a 
    50-day postponement of the preliminary determinations. We granted the 
    request. See Notice of Postponement of Preliminary Antidumping 
    Determinations: Stainless Steel Round Wire from Canada, India, Japan, 
    the Republic of Korea, Spain, and Taiwan, 63 FR 46999 (September 3, 
    1998).
    
    Postponement of Final Determinations and Extension of Provisional 
    Measures
    
        Section 735(a)(2) of the Act provides that a final determination 
    may be postponed until not later than 135 days after the date of the 
    publication of the preliminary determination if, in the event of an 
    affirmative preliminary determination, a request for such postponement 
    is made by exporters who account for a significant proportion of 
    exports of the subject merchandise or, if in the event of a negative 
    preliminary determination, a request for such postponement is made by 
    the petitioners. The Department's regulations, at 19 CFR 351.210(e)(2), 
    require that requests by respondents for postponement of a final 
    determination be accompanied by a request for extension of provisional 
    measures from a four-month period to not more than six months.
        We received requests from respondents for postponement of the final 
    determinations in the Canada, India, Japan, Korea, Spain and Taiwan 
    investigations. In their requests for an extension of the deadline for 
    the final determinations, the respondents consented to the extension of 
    provisional measures to no longer than six months. Because the 
    preliminary determinations with respect to the Canada, India, Japan, 
    Spain, and Taiwan investigations are affirmative, the respondents 
    filing the requests account for a significant proportion of exports of 
    the subject merchandise in their respective cases, and there is no 
    compelling reason to deny the respondents' requests, we have extended 
    the deadline for issuance of the final determinations for these cases 
    until the 135th day after the date of publication of these preliminary 
    determinations in the Federal Register.
        We also received a request from the petitioners for a postponement 
    of the final determination in the Korea investigation. Because the 
    preliminary determination with respect to that investigation is 
    negative and there is no compelling reason to deny the petitioners' 
    request, we have extended the deadline for issuance of the final 
    determination for this case until the 135th day after the date of 
    publication of this preliminary determination in the Federal Register.
    
    Period of Investigations
    
        The period of the investigations (POI) is January 1, 1997 through 
    December 31, 1997. This period corresponds to each respondent's four 
    most recent fiscal quarters prior to the month of the filing of the 
    petition (i.e., March 1998).
    
    Scope of Investigation
    
        The scope of these investigations covers stainless steel round wire 
    (SSRW). SSRW is any cold-formed (i.e., cold-drawn, cold-rolled) 
    stainless steel product of a cylindrical contour, sold in coils or 
    spools, and not over 0.703 inch (18 mm) in maximum solid cross-
    sectional dimension. SSRW is made of iron-based alloys containing, by 
    weight, 1.2 percent or less of carbon and 10.5 percent or more of 
    chromium, with or without other elements. Metallic coatings, such as 
    nickel and copper coatings, may be applied.
        The merchandise subject to these investigations is classifiable 
    under subheadings 7223.00.1015, 7223.00.1030, 7223.00.1045, 
    7223.00.1060, and 7223.00.1075 of the Harmonized Tariff Schedule of the 
    United States (HTSUS). Although the HTSUS subheadings are provided for 
    convenience and customs purposes, the written description of the 
    merchandise under investigation is dispositive.
        On June 1, 1998, two Canadian producers of SSRW, Greening Donald 
    and Central Wire, submitted comments on the scope of the investigation 
    of stainless steel round wire from Canada in response to our 
    solicitation of such comments in the Initiation Notice. These 
    respondents argued in their submission that, because the stainless 
    steel wire rod input used in producing the SSRW is not produced in 
    Canada and because cold-drawing does not constitute ``substantial 
    transformation'' of the wire rod, the SSRW is not ``from Canada'' and 
    should not be the subject of an antidumping investigation. On June 5, 
    1998, the petitioners submitted rebuttal comments to the Canadian 
    producers' argument. We have analyzed the two Canadian producers' 
    comments and concluded that the product in question is within the scope 
    of this investigation. See Memorandum to Richard W. Moreland, dated 
    November 12, 1998, for a full discussion and analysis of this issue.
    
    Selection of Respondents
    
        Section 777A(c)(1) of the Act directs the Department to calculate 
    individual dumping margins for each known exporter and producer of the 
    subject merchandise. However, section 777A(c)(2) of the Act gives the 
    Department discretion, when faced with a large number of exporters/
    producers, to limit its examination to a reasonable number of such 
    companies if it is not
    
    [[Page 64044]]
    
    practicable to examine all companies. Where it is not practicable to 
    examine all known producers/exporters of subject merchandise, this 
    provision permits the Department to investigate either: (1) a sample of 
    exporters, producers, or types of products that is statistically valid 
    based on the information available at the time of selection, or (2) 
    exporters and producers accounting for the largest volume of the 
    subject merchandise that can reasonably be examined.
        After consideration of the complexities expected to arise in these 
    proceedings (including issues of model matching) and the resources 
    available to the Department, we determined that it was not practicable 
    in these investigations to examine all known producers/exporters of 
    subject merchandise. Instead, we found that, given our resources, we 
    would be able to investigate the nine producers/exporters with the 
    greatest export volume, as identified above. These companies accounted 
    more than 50 percent of all known exports of the subject merchandise 
    during the POI from their respective countries. For a more detailed 
    discussion of respondent selection in these investigations, see 
    Respondent Selection Memorandum dated June 12, 1998.
    
    Facts Available
    
        Suzuki (Japan), Nippon Seisen (Japan), and Inoxfil (Spain) failed 
    to respond to our questionnaire. Section 776(a)(2) of the Act provides 
    that, if an interested party (A) withholds information that has been 
    requested by the Department; (B) fails to provide such information in a 
    timely manner or in the form or manner requested subject to section 
    782(c)(1) and (e) of the Act; (C) significantly impedes a proceeding 
    under the antidumping statute; or (D) provides such information but the 
    information cannot be verified, the Department shall, subject to 
    subsection 782(d) of the Act, use facts otherwise available in reaching 
    the applicable determination. Because these firms failed to respond to 
    our questionnaire and because the relevant subsections of section 782 
    of the Act do not apply, we must use facts otherwise available to 
    calculate the dumping margins for these companies.
        Section 776(b) of the Act provides that adverse inferences may be 
    used against a party that has failed to cooperate by not acting to the 
    best of its ability to comply with the Department's requests for 
    information. See also Statement of Administrative Action accompanying 
    the URAA, H.R. Rep. No. 316, Vol.1, 103d Cong., 2d Sess. 870 (1994) 
    (SAA). The lack of response by Suzuki, Nippon Seisen, and Inoxfil to 
    the Department's antidumping questionnaire constitutes a failure by 
    these respondents to act to the best of their ability to comply with a 
    request for information, within the meaning of section 776 of the Act. 
    Thus, the Department has determined that, in selecting among the facts 
    otherwise available, an adverse inference is warranted.
        Because we were unable to calculate margins for the respondents in 
    the Japan or Spain investigations, we assigned these respondents the 
    highest margins in the respective petitions (recalculated by the 
    Department, as appropriate). This approach is consistent with 
    Department practice. See Notice of Preliminary Determination of Sales 
    at Less Than Fair Value: Stainless Steel Wire Rod from Germany, 63 FR 
    10847 (March 5, 1998). The highest petition margins are 29.56 percent 
    in the Japan investigation, and 35.80 percent in the Spain 
    investigation.2
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        \2\ We note that, at the time of initiation, we did not accept 
    the U.S. and home market packing data set forth in the petition with 
    respect to the Japan case, and we revised the dumping margins in 
    that petition so as to not reflect any adjustment for packing. In 
    reviewing the petition margin calculations for the preliminary 
    determination in the Japan case, we noted that the denominator for 
    the margins was erroneously based on home market price, rather than 
    U.S. price. We have revised the margins accordingly. See memorandum 
    from Jarrod Goldfeder to the file, dated November 12, 1998.
        With respect to the Spain investigation, we note that, at the 
    time of initiation, we revised petition margins based on price-to-
    price comparisons because the petitioners had not provided 
    sufficient support for the home market freight figures used in their 
    calculations. We made no additional revisions to the petition 
    margins in reviewing those calculations for the preliminary 
    determination in the Spanish case.
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        Section 776(b) states that an adverse inference may include 
    reliance on information derived from the petition or any other 
    information placed on the record. See also SAA at 829-831. Section 
    776(c) of the Act provides that, when the Department relies on 
    secondary information (such as the petition) in using the facts 
    otherwise available, it must, to the extent practicable, corroborate 
    that information from independent sources that are reasonably at its 
    disposal.
        During our pre-initiation analysis of the petition, we reviewed the 
    adequacy and accuracy of the secondary information in the petition from 
    which the margins were calculated, to the extent that appropriate 
    information was available for this purpose. See Initiation Notice at 
    26151. However, with respect to certain data included in the margin 
    calculations included in the petition (e.g., gross U.S. and home market 
    unit prices), the Department was provided no information by the 
    respondents or other interested parties, and is aware of no other 
    independent sources of information, that would enable it to further 
    corroborate the remaining components of the margin calculation in the 
    petition. The implementing regulation to section 776 of the Act, at 19 
    CFR 351.308(c), states ``[t]he fact that corroboration may not be 
    practicable in a given circumstance will not prevent the Secretary from 
    applying an adverse inference as appropriate and using the secondary 
    information in question.'' Additionally, we note that the SAA at 870 
    specifically states that, where ``corroboration may not be practicable 
    in a given circumstance'', the Department may nevertheless apply an 
    adverse inference. We note further that the Department has used as the 
    facts available margins developed in the petition that are based in 
    part on foreign market research in other cases. See, e.g., Stainless 
    Steel Wire Rod From Germany, and Notice of Preliminary Determination of 
    Sales at Less Than Fair Value and Postponement of Final Determination: 
    Melamine Institutional Dinnerware Products From Indonesia, 61 FR 43333 
    (August 22, 1996). Finally, we note that the margins calculated for 
    respondents in the other round wire investigations are in many 
    instances of the same order of magnitude as the margins in the 
    corresponding petitions, suggesting that the information contained in 
    the round wire petitions is generally reliable.
    
    Product Comparisons
    
        We have relied on five criteria to match U.S. sales of subject 
    merchandise to comparison-market sales of the foreign like product: 
    grade, thickness, tensile strength, coating, and surface finish. A 
    detailed description of the matching criteria, as well as our matching 
    methodology, is contained in the Preliminary Determination Memorandum, 
    dated November 12, 1998 (Preliminary Determination Memorandum).
    
    Fair Value Comparisons
    
        To determine whether sales of stainless steel round wire from 
    Canada, India, the Republic of Korea, and Taiwan 3 were made 
    in the United States at less than fair value, we compared the export 
    price (EP) or constructed export
    
    [[Page 64045]]
    
    price (CEP) to the normal value, as described in the Export Price and 
    Constructed Export Price and Normal Value sections of this notice. In 
    accordance with section 777A(d)(1)(A)(i) of the Act, we calculated 
    weighted-average EPs and CEPs for comparison to weighted-average normal 
    values.
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        \3\ As stated above, because the respondents in the Japan and 
    Spain proceedings did not respond to our requests for information, 
    we based the margins for these respondents on total adverse facts 
    available. See Facts Available above. Thus, the discussion of price 
    adjustments in this section does not apply to the respondents in 
    those proceedings.
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    Export Price and Constructed Export Price
    
        In accordance with section 772 of the Act, we calculated either an 
    EP or a CEP, depending on the nature of each sale. Section 772(a) of 
    the Act defines EP as the price at which the subject merchandise is 
    first sold before the date of importation by the exporter or producer 
    outside the United States to an unaffiliated purchaser in the United 
    States or to an unaffiliated purchaser for exportation to the United 
    States. Section 772(b) of the Act defines CEP as the price at which the 
    subject merchandise is first sold in the United States before or after 
    the date of importation, by or for the account of the producer or 
    exporter of the merchandise or by a seller affiliated with the producer 
    or exporter, to an unaffiliated purchaser, as adjusted under sections 
    772(c) and (d) of the Act.
        Consistent with these definitions, we have found that Central Wire, 
    Greening Donald, Raajratna, Korea Sangsa, Rodex, and Tien Tai made EP 
    sales during the POI. These sales are properly classified as EP sales 
    because they were made by the exporter or producer outside the United 
    States to unaffiliated customers in the United States prior to the date 
    of importation.
        We also found that Central Wire and Korea Sangsa made CEP sales 
    during the POI because they made sales through an affiliated reseller 
    in the United States after the date of importation.
        For all respondents, we calculated EP and CEP, as appropriate, 
    based on packed prices charged to the first unaffiliated customer in 
    the United States. (Where sales were made through consignment sellers, 
    we did not consider the consignment seller to be the customer; rather, 
    the relevant customer was the consignment seller's customer.) For all 
    respondents except Rodex, we based the date of sale on the date of the 
    invoice issued to the U.S. customer. For Rodex, we based the date of 
    sale on the date of Rodex's sales confirmation to its U.S. customer, 
    because the terms of U.S. sales were firmly set on this date.
        In accordance with section 772(c)(2) of the Act, we reduced the EP 
    and CEP by movement expenses and export taxes and duties, where 
    appropriate. Section 772(d)(1) of the Act provides for additional 
    adjustments to the CEP. Generally, where sales were made through an 
    unaffiliated consignment seller for the account of the exporter, we 
    deducted commissions from the CEP. Where sales were made through an 
    affiliated reseller, we deducted direct and indirect selling expenses 
    that related to commercial activity in the United States, in lieu of 
    the commission paid to the affiliated reseller.
        Section 772(d)(3) of the Act requires that the CEP be adjusted for 
    the profit allocated to the selling expenses of a producer/exporter's 
    affiliated reseller. For Central Wire and Korea Sangsa, which made 
    sales through affiliated resellers, we calculated a CEP-profit ratio 
    following the methodology set forth in section 772(f) of the Act.
        We made company-specific adjustments as follows:
    Central Wire (Canada)
        We based EP and CEP on delivered and FOB prices to unaffiliated 
    customers in the United States. For both EP and CEP sales, we made 
    deductions from the starting price, where appropriate, for movement 
    expenses, including foreign inland freight from the factory to the 
    customer or to the U.S. affiliate, U.S. brokerage and handling fees, 
    and Customs duties. We also made deductions for post-sale price 
    adjustments corresponding to claims and billing errors.
        In addition, for CEP sales, we made deductions for U.S. inland 
    freight to the customer, imputed credit, commissions, indirect selling 
    expenses and inventory carrying costs associated with commercial 
    activity in the United States, U.S. repacking costs, and the cost of 
    further processing the merchandise in the United States.
    Greening Donald (Canada)
        We based EP sales on delivered prices to unaffiliated customers in 
    the United States. We made deductions from the starting price, where 
    appropriate, for movement expenses including foreign inland freight 
    from factory to the customer, Customs duties, and U.S. brokerage and 
    handling fees. We also increased the starting price by the amount of 
    reported freight revenue.
    Raajratna (India)
        We based EP on delivered prices to unaffiliated customers in the 
    United States. We made deductions from the starting price, where 
    appropriate, for movement expenses including foreign inland freight 
    from the factory to the customer, domestic brokerage and handling fees, 
    international freight, and marine insurance. Although Raajratna 
    reported duty drawback for its U.S. sales, we did not make an addition 
    to EP for duty drawback because Raajratna failed to meet our two-
    pronged test for making such an adjustment.4 See Raajratna 
    Analysis Memorandum, dated November 12, 1998, for a full discussion of 
    this issue.
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        \4\ Section 772(c)(1)(B) of the Act provides for an upward 
    adjustment to U.S. price for duty drawback on import duties which 
    have been rebated (or which have not been collected) by reason of 
    the exportation of the subject merchandise to the United States. The 
    Department applies a two-pronged test to determine whether a 
    respondent has fulfilled the statutory requirements for a duty 
    drawback adjustment. See Steel Wire Rope from the Republic of Korea; 
    Final Results of Antidumping Duty Administrative Review, 61 FR 
    55965, 55968 (October 30, 1996). In accordance with this test, the 
    Department grants a duty drawback adjustment if it finds that:
        (1) import duties and rebates are directly linked to and are 
    dependent upon one another, and
        (2) the company claiming the adjustment can demonstrate that 
    there are sufficient imports of raw materials to account for the 
    duty drawback received on exports of the manufactured product.
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    Korea Sangsa (Korea)
        We based EP and CEP on delivered and FOB prices to unaffiliated 
    customers in the United States. For both EP and CEP sales, we made 
    deductions from the starting price, where appropriate, for movement 
    expenses including foreign brokerage and inland freight from the 
    factory to the foreign port, and international freight. We also made 
    adjustments for billing errors and early payment discounts, and we 
    increased the starting price by the amount of duty drawback because it 
    met our two-pronged test described above.
        In addition, for CEP sales, we made deductions for U.S. movement 
    expenses, including U.S. inland freight to the customer, U.S. 
    warehousing, U.S. brokerage and handling fees, and Customs duties. We 
    also made deductions for direct and indirect selling expenses 
    associated with commercial activity in the United States, including 
    imputed credit, warranty expenses, miscellaneous other direct selling 
    expenses (such as bank charges), indirect selling expenses, and 
    inventory carrying costs.
    Rodex (Taiwan)
        We based EP on delivered prices to unaffiliated customers in the 
    United States. We made deductions from the starting price, where 
    appropriate, for movement expenses including foreign inland freight 
    from the factory to the customer, domestic brokerage and handling fees, 
    international freight, and marine insurance. We also increased the 
    starting price by the amount of duty drawback because it met our two-
    pronged test described above.
    
    [[Page 64046]]
    
    Tien Tai (Taiwan)
        We based EP on delivered prices to unaffiliated customers in the 
    United States. We made deductions from the starting price, where 
    appropriate, for movement expenses including foreign inland freight 
    from the factory to the customer, domestic brokerage and handling fees, 
    international freight, and marine insurance.
    
    Normal Value
    
    A. Selection of Comparison Markets
    
        Section 773(a)(1) of the Act directs that normal value be based on 
    the price at which the foreign like product is sold in the home market, 
    provided that the merchandise is sold in sufficient quantities (or 
    value, if quantity is inappropriate) and that there is no particular 
    market situation that prevents a proper comparison with the EP or CEP. 
    The statute contemplates that quantities (or value) will normally be 
    considered insufficient if they are less than five percent of the 
    aggregate quantity (or value) of sales of the subject merchandise to 
    the United States.
        All respondents had viable home markets of stainless steel round 
    wire, and they reported home market sales data for purposes of the 
    calculation of normal value. Although Raajratna reported its home 
    market sales, it claimed that normal value should be based on third-
    country sales because, according to Raajratna, the merchandise sold to 
    the United States is more similar to merchandise sold to third 
    countries rather than merchandise sold in the home market. We disagreed 
    with Raajratna because the merchandise sold in the home market provided 
    an adequate basis for comparison, and, as discussed above, the Act 
    directs us to base normal value on home market sales when possible. 
    Therefore, we based normal value for Raajratna on home market sales. 
    See Preliminary Determination Memorandum at 5.
        Adjustments we made in deriving the normal values for each company 
    are described in detail in Calculation of Normal Value Based on Home-
    Market Prices and Calculation of Normal Value Based on Constructed 
    Value, below.
    
    B. Cost of Production Analysis
    
        Based on allegations contained in the petitions, and in accordance 
    with section 773(b)(2)(A)(i) of the Act, we found reasonable grounds to 
    believe or suspect that sales of stainless steel round wire made in 
    Canada, India, the Republic of Korea, and Taiwan were made at prices 
    below the cost of production (COP). See Initiation Notice, 63 FR at 
    26150, and Memorandum to Richard Moreland, dated May 6, 1998 
    (Initiation Checklist) at 7-14. As a result, the Department has 
    conducted investigations to determine whether the respondents made 
    sales in their respective home markets at prices below their respective 
    COPs during the POI within the meaning of section 773(b) of the Act. We 
    conducted the COP analysis described below.
    1. Calculation of COP
        In accordance with section 773(b)(3) of the Act, we calculated a 
    weighted-average COP for stainless steel round wire, based on the sum 
    of the cost of materials and fabrication for the foreign like product, 
    plus amounts for the home-market general and administrative (G&A) 
    expenses and packing costs. We relied on the COP data submitted by each 
    respondent in its cost questionnaire response, except, as discussed 
    below, in specific instances where the submitted costs were not 
    appropriately quantified or valued.
    Greening Donald
        We disallowed certain offsets Greening Donald had made to its 
    reported variable overhead expenses. We revised Greening Donald's fixed 
    overhead expense to be on the same basis as its reported direct 
    materials and variable overhead expenses. See Greening Donald 
    Preliminary Determination Analysis Memorandum, dated November 12, 1998, 
    for a more complete description of these changes.
    Korea Sangsa
        We revised the reported G&A by excluding dividend income, rental 
    income, other miscellaneous income, and certain foreign exchange gains 
    and losses. We also revised the reported net financing expense ratio to 
    include net foreign exchange losses related to cash and borrowing.
    Rodex
        We increased Rodex's reported direct material costs (which are 
    comprised exclusively of purchases of wire rod) to account for net 
    foreign exchange losses during the POI. We made two adjustments to 
    overhead costs: we increased Rodex's reported direct labor and fixed 
    and variable overhead costs to account for a year-end auditor's 
    adjustment, and we reclassified certain costs reported as variable 
    overhead to fixed overhead, consistent with our examination of these 
    costs at verification. We also increased the average per-kg. packing 
    cost to account for an overstatement in the denominator (total weight 
    of packed merchandise) used in the calculation of those costs.
    Tien Tai
        During the POI, respondent Kuang Tai (the collapsed affiliate of 
    Tien Tai) became affiliated by virtue of stock ownership with a 
    supplier of a major input in the production of round wire (i.e., wire 
    rod). In calculating cost of production, the respondent relied on the 
    transfer price of the major input for all POI purchases. For purchases 
    of wire rod from this supplier after the date on which Kuang Tai became 
    an affiliate, we applied the major-input rule set forth in section 
    773(f)(3) of the Act and 19 CFR 351.407(b), and we relied on the 
    greater of cost of production, transfer price, or market value.
        In addition, we increased Tien Tai's reported G&A ratio to account 
    for stock bonuses to employees.
    2. Test of Home-Market Sales Prices
        We compared the adjusted weighted-average COP for each respondent 
    to the home market sales of the foreign like product, as required under 
    section 773(b) of the Act, in order to determine whether these sales 
    had been made at prices below the COP within an extended period of time 
    (i.e., a period of one year) in substantial quantities 5 and 
    whether such prices were sufficient to permit the recovery of all costs 
    within a reasonable period of time.
    ---------------------------------------------------------------------------
    
        \5\ In accordance with section 773(b)(2)(C)(i) of the Act, we 
    determined that sales made below the COP were made in substantial 
    quantities if the volume of such sales represented 20 percent or 
    more of the volume of sales under consideration for the 
    determination of normal value.
    ---------------------------------------------------------------------------
    
        On a model-specific basis, we compared the revised COP to the home 
    market prices, less any applicable movement charges, taxes, rebates, 
    commissions and other direct and indirect selling expenses.
    3. Results of the COP Test
        Pursuant to section 773(b)(2)(C) of the Act, where less than 20 
    percent of a respondent's sales of a given product were at prices less 
    than the COP, we did not disregard any below-cost sales of that product 
    because we determined that the below-cost sales were not made in 
    ``substantial quantities.'' Where 20 percent or more of a respondent's 
    sales of a given product during the POI were at prices less than the 
    COP, we determined such sales to have been made in ``substantial 
    quantities'' within an extended period of time in accordance with 
    section 773(b)(2)(B) or the Act. In such cases, we also determined that 
    such sales were not made at prices which would permit recovery of all 
    costs within a reasonable period of time, in accordance with section 
    773(b)(2)(D) of the Act.
    
    [[Page 64047]]
    
    Therefore, we disregarded the below-cost sales. Where all sales of a 
    specific product were at prices below the COP, we disregarded all sales 
    of that product.
        We found that, for certain models of SSRW, more than 20 percent of 
    the home-market sales of Central Wire, Greening Donald, Raajratna, 
    Korea Sangsa, Tien Tai, and Rodex were made within an extended period 
    of time at prices less than the COP. Further, the prices did not 
    provide for the recovery of costs within a reasonable period of time. 
    We therefore disregarded the below-cost sales and used the remaining 
    above-cost sales as the basis for determining NV, in accordance with 
    section 773(b)(1) of the Act. For those U.S. sales of SSRW for which 
    there were no comparable home-market sales in the ordinary course of 
    trade, we compared EPs or CEPs to CV in accordance with section 
    773(a)(4) of the Act. See Calculation of Normal Value Based on 
    Constructed Value, below.
    
    C. Calculation of Normal Value Based on Home-Market Prices
    
        We performed price-to-price comparisons where there were sales of 
    comparable merchandise in the home market that did not fail the cost 
    test.
    Central Wire
        We calculated normal value based on delivered or FOB prices and 
    made deductions from the starting price, where appropriate, for 
    movement expenses including inland freight and insurance. We also 
    adjusted the starting price for claims and billing errors. In addition, 
    we made circumstance-of-sale (COS) adjustments for direct expenses, 
    where appropriate, in accordance with section 773(a)(6)(C)(iii) of the 
    Act. These included imputed credit expenses. In accordance with 
    sections 773(a)(6)(A) and (B) of the Act, we deducted home market 
    packing costs and added U.S. packing costs.
        Central Wire claimed that a number of its sales were outside the 
    ordinary course of trade and therefore not an appropriate basis for 
    normal value. We examined Central Wire's claims and agreed that some of 
    the home market sales were outside the ordinary course of trade. We 
    therefore excluded these sales from our analysis. A full discussion of 
    this issue requires reference to business-proprietary information; see 
    Central Wire Preliminary Analysis Memorandum, dated November 12, 1998.
        As discussed in the Level of Trade/CEP Offset section of this 
    notice below, we preliminarily determined that it was appropriate to 
    make a CEP offset to normal value.
        In a letter dated October 27, 1998, Central Wire argued that the 
    Department should treat ``quantity bands'' as a matching criterion and, 
    when comparing sales involving non-identical quantity bands, make a 
    quantity adjustment. This proposal for an entirely new model-match 
    criterion and quantity adjustment came too late in our preparations for 
    these preliminary determinations. We may consider Central Wire's 
    proposal in preparing our final determinations in these investigations.
    Greening Donald
        We calculated normal value based on delivered or FOB prices and 
    made deductions from the starting price, where appropriate, for 
    movement expenses including freight and freight revenue. We also 
    adjusted the starting price for claims and billing errors. In addition, 
    we made COS adjustments for direct expenses, where appropriate, in 
    accordance with section 773(a)(6)(C)(iii) of the Act. These included 
    imputed credit expenses. In accordance with sections 773(a)(6)(A) and 
    (B) of the Act, we deducted home market packing costs and added U.S. 
    packing costs.
        Greening Donald claimed that a number of its sales were outside the 
    ordinary course of trade and therefore not an appropriate basis for 
    normal value. We examined Greening Donald's claims and agreed that 
    certain home market sales were outside the ordinary course of trade. We 
    therefore excluded these sales from our analysis. A full discussion of 
    this issue requires reference to business-proprietary information; see 
    Greening Donald Preliminary Analysis Memorandum, dated November 12, 
    1998.
    Raajratna
        We calculated normal value based on delivered, FOB or ex-factory 
    prices and made deductions from the starting price, where appropriate, 
    for inland freight. In addition, we made COS adjustments for direct 
    expenses, where appropriate, in accordance with section 
    773(a)(6)(C)(iii) of the Act. These expenses included credit-insurance 
    expenses and imputed credit expenses. In accordance with sections 
    773(a)(6)(A) and (B) of the Act, we deducted home market packing costs 
    and added U.S. packing costs.
    Korea Sangsa
        We calculated normal value based on delivered or FOB prices, and we 
    made deductions from the starting price, where appropriate, for 
    movement expenses including inland freight and insurance. In addition, 
    we made COS adjustments for direct expenses, where appropriate, in 
    accordance with section 773(a)(6)(C)(iii) of the Act. These included 
    bank charges, processing fees, and imputed credit expenses. In 
    accordance with sections 773(a)(6)(A) and (B) of the Act, we deducted 
    home market packing costs and added U.S. packing costs.
        As discussed in the Level of Trade/CEP Offset section of this 
    notice below, we preliminarily determined that it was appropriate to 
    make a CEP offset to normal value.
    Rodex
        We calculated normal value based on delivered prices. We made 
    deductions from the starting price, where appropriate, for movement 
    expenses including inland freight. We also adjusted the starting price 
    for claims and billing errors. In addition, we made COS adjustments for 
    direct expenses, where appropriate, in accordance with section 
    773(a)(6)(C)(iii) of the Act. These included imputed credit, bank 
    charge, and warranty expenses. In accordance with sections 773(a)(6)(A) 
    and (B) of the Act, we deducted home market packing costs and added 
    U.S. packing costs.
    Tien Tai
        We calculated normal value based on delivered and FOB prices. We 
    made deductions from the starting price, where appropriate, for 
    movement expenses including inland freight and warehousing. We also 
    adjusted the starting price for early payment discounts. In addition, 
    we made COS adjustments for direct expenses, where appropriate, in 
    accordance with section 773(a)(6)(C)(iii) of the Act. These included 
    imputed credit expenses. In accordance with sections 773(a)(6)(A) and 
    (B) of the Act, we deducted home market packing costs and added U.S. 
    packing costs.
    
    D. Calculation of Normal Value Based on Constructed Value
    
        Section 773(a)(4) of the Act provides that, where normal value 
    cannot be based on comparison-market sales, normal value may be based 
    on constructed value. Accordingly, for those models of SSRW for which 
    we could not determine the normal value based on comparison-market 
    sales, either because there were no sales of a comparable product or 
    all sales of the comparison products failed the COP test, we based 
    normal value on constructed value.
        Section 773(e)(1) of the Act provides that constructed value shall 
    be based on the sum of the cost of materials and fabrication for the 
    imported merchandise plus amounts for selling,
    
    [[Page 64048]]
    
    general, and administrative expenses (SG&A), profit, and U.S. packing 
    costs. With the exception of Raajratna, we calculated the cost of 
    materials and fabrication based on the methodology described in the 
    Calculation of COP section of this notice, above. We based SG&A and 
    profit for every respondent on the actual amounts incurred and realized 
    by the respondent in connection with the production and sale of the 
    foreign like product in the ordinary course of trade for consumption in 
    the comparison market, in accordance with section 773(e)(2)(A) of the 
    Act.
        Raajratna's direct materials costs reported on its constructed-
    value database did not correspond with its supporting documents 
    included in Raajratna's response. Therefore, we revised Raajratna's 
    reported direct materials costs for constructed value to agree with its 
    supporting documentation. As a result, we also revised the cost of 
    manufacture, general and administrative expenses, and interest expenses 
    accordingly. These revisions are described in further detail in 
    Raajratna's Preliminary Analysis Memorandum, dated November 12, 1998.
        In addition, for each respondent we used U.S. packing costs as 
    described in the Export Price and Constructed Export Price section of 
    this notice, above.
        We made adjustments to constructed value for differences in COS in 
    accordance with section 773(a)(8) of the Act and 19 CFR 351.410. For 
    comparisons to EP, we made COS adjustments by deducting direct selling 
    expenses incurred on home market sales from and adding U.S. direct 
    selling expenses to constructed value. For comparisons to CEP, we made 
    COS adjustments by deducting direct selling expenses incurred on home 
    market sales from constructed value.
    
    Level of Trade/CEP Offset
    
        In accordance with section 773(a)(1)(B) of the Act, to the extent 
    practicable, we determine normal value based on sales in the comparison 
    market at the same level of trade as the EP or CEP transaction. The 
    normal-value level of trade is that of the starting-price sales in the 
    comparison market or, when normal value is based on constructed value, 
    that of the sales from which we derive SG&A expenses and profit. For 
    EP, the U.S. level of trade is also the level of the starting-price 
    sale, which is usually from exporter to importer. For CEP, it is the 
    level of the constructed sale from the exporter to the importer.
        To determine whether normal-value sales are at a different level of 
    trade than EP or CEP, we examine stages in the marketing process and 
    selling functions along the chain of distribution between the producer 
    and the unaffiliated customer. If the comparison-market sales are at a 
    different level of trade and the difference affects price 
    comparability, as manifested in a pattern of consistent price 
    differences between the sales on which normal value is based and 
    comparison-market sales at the level of trade of the export 
    transaction, we make a level-of-trade adjustment under section 
    773(a)(7)(A) of the Act. For CEP sales, if the normal-value level is 
    more remote from the factory than the CEP level and there is no basis 
    for determining whether the difference in the levels between normal 
    value and CEP affects price comparability, we adjust normal value under 
    section 773(a)(7)(B) of the Act (the CEP-offset provision). See Notice 
    of Final Determination of Sales at Less Than Fair Value: Certain Cut-
    to-Length Carbon Steel Plate from South Africa, 62 FR 61731 (November 
    19, 1997).
        In implementing these principles in these investigations, we 
    obtained information from each respondent about the marketing stages 
    involved in the reported U.S. and home market sales, including a 
    description of the selling activities performed by the respondents for 
    each channel of distribution. In identifying levels of trade for EP and 
    home market sales we considered the selling functions reflected in the 
    starting price before any adjustments. For CEP sales, we considered 
    only the selling activities reflected in the price after the deduction 
    of expenses and profit under section 772(d) of the Act.
        With respect to each respondent's EP sales, in these investigations 
    we found a single level of trade in the United States, and a single, 
    identical level of trade in the home market. It was thus unnecessary to 
    make any level-of-trade adjustment for comparison of EP and home market 
    prices. Two respondents, Central Wire and Korea Sangsa, also made CEP 
    sales. For Central Wire, we found that (1) the adjusted CEP level of 
    trade was significantly less advanced than the single home market level 
    of trade, (2) a level-of-trade adjustment could not be quantified, and 
    (3) a CEP offset was appropriate. For Korea Sangsa, we found that the 
    adjusted CEP level of trade was essentially the same as that of the 
    single home market level of trade, such that no level-of-trade 
    adjustment or CEP offset was necessary. For a detailed level-of-trade 
    analysis with respect to each respondent, see Preliminary Determination 
    Memorandum, dated November 12, 1998.
    
    Currency Conversions
    
        We made currency conversions in accordance with section 773A of the 
    Act. The Department's preferred source for daily exchange rates is the 
    Federal Reserve Bank.
        Section 773A(a) of the Act directs the Department to use a daily 
    exchange rate in order to convert foreign currencies into U.S. dollars 
    unless the daily rate involves a fluctuation. It is the Department's 
    practice to find that a fluctuation exists when the daily exchange rate 
    differs from the benchmark rate by 2.25 percent. The benchmark is 
    defined as the moving average of rates for the past 40 business days. 
    When we determine a fluctuation to have existed, we generally 
    substitute the benchmark rate for the daily rate, in accordance with 
    established practice. (An exception to this rule is described below.) 
    Further, section 773A(b) of the Act directs the Department to allow a 
    60-day adjustment period when a currency has undergone a sustained 
    movement. A sustained movement is deemed to occur when the weekly 
    average of actual daily rates exceeds the weekly average of benchmark 
    rates by more than five percent for eight consecutive weeks. (For an 
    explanation of this method, see Policy Bulletin 96-1: Currency 
    Conversions (61 FR 9434, March 8, 1996).) Such an adjustment period is 
    required only when a foreign currency is appreciating against the U.S. 
    dollar. Since the Korean won did not appreciate against the U.S. dollar 
    in a sustained manner during the POI, no such adjustment period was 
    required.
        Our preliminary analysis of Federal Reserve U.S. dollar-Korean won 
    exchange rate data shows that the won declined rapidly at the end of 
    1997, losing over 40% of its value between the beginning of November 
    and the end of December. The decline was, in both speed and magnitude, 
    many times more severe than any change in the dollar-won exchange rate 
    during the previous eight years. Had the won rebounded quickly enough 
    to recover all or almost all of the initial loss, the Department might 
    have considered the won's decline at the end of 1997 as nothing more 
    than a sudden but only momentary drop, despite the magnitude of that 
    drop. As it was, however, there was no significant rebound. Therefore, 
    we have preliminarily determined that the decline in the won at the end 
    of 1997 was so precipitous and large that the dollar-won exchange rate 
    cannot reasonably be viewed as having simply fluctuated during this 
    time, i.e., as having experienced only a momentary drop in value. 
    Therefore, in making this
    
    [[Page 64049]]
    
    preliminary determination, the Department used daily rates exclusively 
    for currency-conversion purposes for home market sales matched to U.S. 
    sales occurring between November 1, 1997, and December 31, 1997.
        The Department welcomes comments from interested parties on all 
    aspects of the above methodology. For the purposes of the final 
    determination, we will also analyze the implications, if any, of the 
    decline in the won during 1997 for price averaging and whether multiple 
    averages are warranted. The Department is also considering this issue 
    in the LTFV investigation on Mushrooms from Indonesia. See Notice of 
    Preliminary Determination of Sales at Less Than Fair Value and 
    Postponement of Final Determination: Certain Preserved Mushrooms from 
    Indonesia, 63 FR 41783 (August 5, 1998).
    
    Verification
    
        In accordance with section 782(i) of the Act, we intend to verify 
    all information relied upon in making our final 
    determinations.6
    ---------------------------------------------------------------------------
    
        \6\ We were able to conduct sales and cost verifications of 
    Rodex prior to the issuance of this preliminary determination. Our 
    findings of verification with respect to Rodex are reflected in this 
    determination.
    ---------------------------------------------------------------------------
    
    Suspension of Liquidation
    
        In accordance with section 733(d) of the Act, we are directing the 
    Customs Service to suspend liquidation of all entries of stainless 
    steel round wire from Canada, India, Japan, Spain, and Taiwan, except 
    for subject merchandise produced and exported by Tien Tai (which has a 
    de minimis weighted-average margin), that are entered, or withdrawn 
    from warehouse, for consumption on or after the date of publication of 
    this notice in the Federal Register. We are also instructing the 
    Customs Service to require a cash deposit or the posting of a bond 
    equal to the weighted-average amount by which the normal value exceeds 
    the EP or CEP, as indicated in the chart below. These instructions 
    suspending liquidation will remain in effect until further notice.
        The weighted-average dumping margins are provided below. We note 
    that, while the margin for Korea Sangsa is included in this list, that 
    margin is de minimis, and we are not suspending liquidation of entries 
    of stainless steel round wire from Korea:
    
    ------------------------------------------------------------------------
                                                                  Weighted- 
                                                                   average  
                       Exporter/Manufacturer                        margin  
                                                                  percentage
    ------------------------------------------------------------------------
    Canada:                                                                 
      Central Wire.............................................        11.89
      Greening Donald..........................................         5.30
      All Others...............................................        10.23
    India:                                                                  
      Raajratna................................................        18.97
      All Others...............................................        18.97
    Japan:                                                                  
      Nippon Seisen............................................        29.56
      Suzuki...................................................        29.56
      All Others...............................................        15.20
    Korea:                                                                  
      Korea Sangsa.............................................     \1\ 1.33
      All Others...............................................         0.00
    Spain:                                                                  
      Inoxfil..................................................        35.80
      All Others...............................................        24.40
    Taiwan:                                                                 
      Rodex....................................................         3.95
      Tien Tai.................................................     \1\ 1.83
      All Others...............................................         3.95
    ------------------------------------------------------------------------
    \1\ De Minimis.                                                         
    
        Section 733(b)(3) of the Act directs the Department to exclude all 
    zero and de minimis weighted-average dumping margins, as well as 
    dumping margins determined entirely under facts available under section 
    776 of the Act, from the calculation of the ``all others'' rate. 
    Accordingly, we have excluded the de minimis dumping margin for Tien 
    Tai from the calculation of the ``all others'' rate for the Taiwan 
    investigation.
        Section 735(c)(5)(B) of the Act provides that, where the estimated 
    weighted-average dumping margins established for all exporters and 
    producers individually investigated are zero or de minimis margins or 
    are determined entirely under section 776 of the Act, the Department 
    may use any reasonable method to establish the estimated all-others 
    rate for exporters and producers not individually investigated. This 
    provision contemplates that we weight-average the facts-available 
    margins to establish the all-others rate. Where the data do not permit 
    weight-averaging of the facts-available rates, the SAA, at 873, 
    provides that we may use other reasonable methods. Inasmuch as we do 
    not have the data necessary to weight-average the respondents' facts-
    available rates, we have based the all-others rates for Japan and Spain 
    on a simple average of the margins in the respective petitions, as we 
    revised at the time of initiation of these investigations.
    
    ITC Notification
    
        In accordance with section 733(f) of the Act, we have notified the 
    ITC of our determinations. If our final antidumping determinations are 
    affirmative, the ITC will determine whether these imports are 
    materially injuring, or threaten material injury to, the U.S. industry. 
    The deadline for that ITC determination would be the later of 120 days 
    after the date of these preliminary determinations or 45 days after the 
    date of our final determinations.
    
    Public Comment   
    
        For all round wire investigations, case briefs must be submitted no 
    later than 110 days after the publication of this notice in the Federal 
    Register. Rebuttal briefs must be filed within five days after the 
    deadline for submission of case briefs. A list of authorities used, a 
    table of contents, and an executive summary of issues should accompany 
    any briefs submitted to the Department. Executive summaries should be 
    limited to five pages total, including footnotes.
        Section 774 of the Act provides that the Department will hold a 
    hearing to afford interested parties an opportunity to comment on 
    arguments raised in case or rebuttal briefs, provided that such a 
    hearing is requested by any interested party. If a request for a 
    hearing is made in an investigation, the hearing will tentatively be 
    held two days after the deadline for submission of the rebuttal briefs, 
    at the U.S. Department of Commerce, 14th Street and Constitution 
    Avenue, N.W., Washington, DC 20230. In the event that the Department 
    receives requests for hearings from parties to several round wire 
    cases, the Department may schedule a single hearing to encompass all 
    those cases. Parties should confirm by telephone the time, date, and 
    place of the hearing 48 hours before the scheduled time.
        Interested parties who wish to request a hearing, or to participate 
    if one is requested, must submit a written request within 30 days of 
    the publication of this notice. Requests should specify the number of 
    participants and provide a list of the issues to be discussed. Oral 
    presentations will be limited to issues raised in the briefs.
        If these investigations proceed normally, we will make our final 
    determinations of these investigations no later than 135 days after the 
    date of publication of this notice in the Federal Register.
        These determinations are published pursuant to sections 733(f) and 
    777(i)(I) of the Act.
    
        Dated: November 12, 1998.
    Robert S. LaRussa,
    Assistant Secretary for Import Administration.
    [FR Doc. 98-30857 Filed 11-17-98; 8:45 am]
    BILLING CODE 3510-DS-P
    
    
    

Document Information

Effective Date:
11/18/1998
Published:
11/18/1998
Department:
International Trade Administration
Entry Type:
Notice
Document Number:
98-30857
Dates:
November 18, 1998.
Pages:
64042-64049 (8 pages)
Docket Numbers:
A-122-829, A-533-814, A-588-844, A-580-830, A-469-808, A-583-829
PDF File:
98-30857.pdf