[Federal Register Volume 61, Number 233 (Tuesday, December 3, 1996)]
[Notices]
[Pages 64051-64055]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-30756]
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DEPARTMENT OF COMMERCE
[A-570-849, A-823-808, A-821-808, and A-791-804]
Initiation of Antidumping Duty Investigations: Certain Cut-to-
Length Carbon Steel Plate From the People's Republic of China, Ukraine,
the Russian Federation, and the Republic of South Africa
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: December 3, 1996.
FOR FURTHER INFORMATION CONTACT: Robin Gray at (202) 482-0196 and
Elizabeth Patience at (202) 482-0195, Import Administration,
International Trade Administration, U.S. Department of Commerce, 14th
Street and Constitution Avenue, NW., Washington, DC 20230.
Initiation of Investigation
The Applicable Statute
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 the Department's regulations are
to
[[Page 64052]]
the current regulations, as amended by the interim regulations
published in the Federal Register on May 11, 1995 (60 FR 25130).
The Petitions
On November 5, 1996, the Department of Commerce (``the
Department'') received petitions filed in proper form from Geneva Steel
Company (Geneva) and Gulf States Steel, Inc. (Gulf States)
(``petitioners''), domestic producers of certain cut-to-length carbon
steel plate (CTL plate). The Department received amended petitions on
November 14 and 15, 1996.
In accordance with section 732(b) of the Act, petitioners alleged
that imports of CTL plate from the People's Republic of China (China),
Ukraine, the Russian Federation (Russia), and the Republic of South
Africa (South Africa) are being, or are likely to be, sold in the
United States at less than fair value within the meaning of section 731
of the Act, and that such imports are materially injuring, or
threatening material injury to a U.S. industry.
The Department finds that petitioners have standing to file the
petitions because they are interested parties, as defined under section
771(9)(C) of the Act.
Determination of Industry Support for the Petitions
Section 732(c)(4)(A) of the Act requires the Department to
determine, prior to the initiation of an investigation, that a minimum
percentage of the domestic industry supports an antidumping petition. A
petition meets these minimum requirements if the domestic producers or
workers who support the petition account for: (1) At least 25 percent
of the total production of the domestic like product; and (2) more than
50 percent of the production of the domestic like product produced by
that portion of the industry expressing support for, or opposition to,
the petition.
We received submissions from two importers, Ranger Steel Supply
Corporation (Ranger) and Klockner Steel Trade (Klockner), alleging that
these petitions were not filed on behalf of the domestic carbon steel
plate industry. Moreover, Klockner, in filing its notice of appearance
in the Chinese, Russian and Ukrainian proceedings, contended that there
are 38 domestic firms that may have produced plate in 1992. Therefore,
the importer questions whether petitioners identified all domestic
plate producers in the petitions. Klockner's support for this assertion
is based on a list of companies, prepared by the International Trade
Commission for the 1992 carbon flat-rolled steel investigations, that
produce, in general, carbon flat-rolled steel products which, depending
on the producer, may or may not include plate. Independent sources
readily available to the Department indicate that the domestic
producers originally identified in the petition are the only producers
of carbon steel plate in the United States. See Metal Bulletin Books,
Iron and Steel Works of the World (11th ed., 1994).
On November 18, 1996, counsel for Ranger submitted additional
arguments on all four petitions contending that the petitions do not
have industry support. Ranger argues that petitioners failed to
demonstrate on the face of the petitions that Geneva and Gulf States
account for more than 50 percent of total domestic production. Ranger
also contends that the Department must determine through polling that
domestic producers supporting the petitions account for more than 50
percent of the production of CTL plate produced by that portion of the
industry expressing a view on the petitions.
On November 14, 1996, petitioners submitted amended petitions for
the four countries with letters of support for the petitions from
Bethlehem Steel Corporation and U.S. Steel Group, a unit of USX
Corporation. Letters of support were also submitted to the Department
by the United Steelworkers of America on November 13, 1996. Based on
the production data we collected from domestic steel-producing
companies, Geneva, Gulf States, Bethlehem and USX account for
significantly more than 50 percent of total production of the domestic
like product. Because the amended petitions now establish sufficient
support of domestic producers within the meaning of 732(c)(4)(D), the
Department is not required to poll or rely on other information to
determine if there is support for the petition. The Department received
no expressions of opposition to the petitions from any U.S. producers
or workers. Accordingly, the Department determines that the petitions
have been filed on behalf of the domestic industry in accordance with
sections 732(c)(4)(A) and 732(c)(4)(D) of the Act.
Scope of the Investigation
The scope of these investigations includes hot-rolled iron and non-
alloy steel universal mill plates (i.e., flat-rolled products rolled on
four faces or in a closed box pass, of a width exceeding 150 mm but not
exceeding 1250 mm and of a thickness of not less than 4 mm, not in
coils and without patterns in relief), of rectangular shape, neither
clad, plated nor coated with metal, whether or not painted, varnished,
or coated with plastics or other nonmetallic substances; and certain
iron and non-alloy steel flat-rolled products not in coils, of
rectangular shape, hot-rolled, neither clad, plated, nor coated with
metal, whether or not painted, varnished, or coated with plastics or
other nonmetallic substances, 4.75 mm or more in thickness and of a
width which exceeds 150 mm and measures at least twice the thickness.
Included as subject merchandise in this petition are flat-rolled
products of nonrectangular cross-section where such cross-section is
achieved subsequent to the rolling process (i.e., products which have
been ``worked after rolling'')--for example, products which have been
bevelled or rounded at the edges. This merchandise is currently
classifiable in the Harmonized Tariff Schedule of the United States
(HTS) under item numbers 7208.40.3030, 7208.40.3060, 7208.51.0030,
7208.51.0045, 7208.51.0060, 7208.52.0000, 7208.53.0000, 7208.90.0000,
7210.70.3000, 7210.90.9000, 7211.13.0000, 7211.14.0030, 7211.14.0045,
7211.90.0000, 7212.40.1000, 7212.40.5000, 7212.50.0000. Excluded from
subject merchandise within the scope of this petition is grade X-70
plate. Although the HTS subheadings are provided for convenience and
customs purposes, our written description of the scope of this
investigation is dispositive.
South Africa
Export Price and Normal Value
The petitioners based export price on the customs values derived
from the IM-145 monthly import statistics for HTS subheading
7208.51.0060 and 7208.52.0000, published by the U.S. Department of
Commerce, for the month of July 1996. These customs values correspond
to the month the available home market price lists were in effect. The
customs values, which represent the f.o.b. South Africa price of the
subject CTL plate, were adjusted for foreign inland freight, based on
the freight charges by one South African producer. We find the customs
values a reasonable basis for export prices because (1) the HTS
subheadings contain only CTL plate and no other products, and (2) the
customs values reported for IM-145 are based on the transaction value
of the merchandise.
The petitioners based normal value on July 1996 prices between a
South African producer and its customers obtained from a market
researcher. The gross home market prices were adjusted
[[Page 64053]]
downward for discounts and value-added tax. The petitioners converted
the unit prices in South African rand to U.S. dollars using the
exchange rates that were in effect on or about the time the home market
sales occurred.
Based on comparisons of export price to normal value, the estimated
dumping margins for certain CTL plate from South Africa range from 6.66
percent to 33.87 percent.
China
Export Price
Petitioners based export price on two methods: 1) the import values
declared to the U.S. Customs Service; and 2) actual U.S. selling prices
obtained by Geneva. Petitioners used the HTS categories which contained
only subject merchandise, as follows: 7208.51.0060, 7208.52.0000,
7208.40.3030, and 7208.53.0000. Petitioners deducted foreign inland
freight from the FAS customs values in order to obtain ex-factory
prices. In order to calculate foreign inland freight, petitioners used
Chilean rail rates. Petitioners explained that the only reasonably-
available public rates were from Chile and the United States. Because
Chile's GNP is closer to China's, Chile's transport rates were used in
petitioners' calculations. Based on the information presented by
petitioners, we believe that their use of Chilean rail rates is
acceptable for purposes of initiation of this investigation.
Normal Value
Petitioners asserted that China is a non-market economy country
(NME) to the extent that sales or offers for sale of such or similar
merchandise in China or to third countries do not permit calculation of
normal value under 19 C.F.R. 353.46, 353.49 or 353.53. Petitioners,
therefore, constructed a normal value based on the factors of
production methodology pursuant to 19 U.S.C. 1677b(c). In previous
investigations, the Department has determined that China is an NME.
See, e.g., Final Determination of Sales at Less than Fair Value:
Bicycles From the People's Republic of China, 61 FR 19026 (April 30,
1996). In accordance with section 771(18)(C)(i) of the Act, the
presumption of NME status remains in effect until revoked by the
Department. The presumption of NME status for China has not been
revoked by the Department and, therefore, remains in effect for
purposes of the initiation of this investigation. Accordingly, the
normal value of the product was appropriately based on the producers'
factors of production, valued in a surrogate market economy country in
accordance with section 773(c) of the Act.
In the course of this investigation, all parties will have the
opportunity to provide relevant information related to the issues of
China's NME status and the granting of separate rates to individual
exporters. See, e.g., Final Determination of Sales at Less Than Fair
Value: Silicon Carbide from the PRC, 59 FR 22585 (May 2, 1994).
For their normal value calculation, petitioners based the factors
of production, as defined by section 773(c)(3) of the Act (raw
materials, labor, energy and capital cost), for CTL plate on
petitioners' own usage inputs and amounts, adjusted for known
differences in production efficiencies on the basis of available
information. Petitioners asserted that no detailed information is
available regarding the quantities of inputs used by plate producers in
China. Thus, they have assumed, for purposes of the petition, that
producers in China use the same inputs in the same quantities as
petitioners, except where a variance from petitioners' cost model can
be justified on the basis of available information. Petitioners argued
that the use of their own factors is conservative because the U.S.
steel industry is more efficient and technologically-advanced than the
Chinese steel industry. Petitioners cited four different sources to
support this contention. Based on the information provided by
petitioners, we believe that petitioners' use of its own adjusted
factors of production is appropriate for purposes of initiation of this
investigation. See, Initiation of the Antidumping Duty Investigations
of Melamine Institutional Dinner Products from Indonesia, Taiwan, and
the People's Republic of China, 61 FR 8039 (March 31, 1996).
In accordance with section 773(c)(4) of the Act, petitioners then
valued the factors of production, where possible, on reasonably
available surrogate country data. Petitioners selected Indonesia as the
primary surrogate. Petitioners argued that Indonesia is an acceptable
surrogate country because its level of economic development is
comparable to that of China and it is a significant producer of
comparable merchandise (in accordance with 773(c)(4) of the Act). See,
Final Determination of Sales at Less-Than-Fair-Value: Disposable Pocket
Lighters from the People's Republic of China 60 FR 22359 (May 5, 1996).
Petitioners stated that because the per-capita gross national product
(GNP) of Indonesia and China are relatively close, the two countries
may be considered economically comparable. Based on the information
provided by petitioners, we believe that petitioners' use of Indonesia
as a surrogate country is appropriate for purposes of initiation of
this investigation.
Petitioners were unable to obtain port unloading charges for
Indonesia and, therefore, chose the lowest charge applicable in Brazil
based on a publicly-available news article. Petitioners chose Brazilian
values because they were the only reasonably available figures for a
country with a per-capita GNP similar to China's. Petitioners were also
unable to find data on factory overhead, selling, general &
administrative (SG&A) expenses, and profit from Indonesia. Therefore,
petitioners used overhead, SG&A and profit percentages used by the
Department in a recent results of review (Preliminary Results of
Review: Sebacic Acid from the People's Republic of China, 61 FR 46440
(September 3, 1996)) where India was the surrogate country in order to
value these factors. Based on the information provided by petitioners,
we believe that their use of the noted Brazilian and Indian surrogate
values are acceptable for purposes of initiation of this investigation.
Based on comparisons of export price to the factors of production,
the calculated dumping margins for CTL plate from China ranged from
10.01-45.84 percent.
Russia
Export Price
Petitioners based export price on two methods: (1) The import
values declared to the U.S. Customs Service; and (2) actual U.S.
selling prices known to petitioners. In order to ensure a fair
comparison, petitioners used the HTS categories which contained only
subject merchandise, as follows: 7208.51.0060, 7208.52.0000,
7208.40.3030, and 7208.53.0000. Petitioners deducted foreign inland
freight from the customs values in order to obtain ex-factory prices.
In order to calculate foreign inland freight, petitioners used U.S.
barge rates and Chilean rail rates because they were the only
appropriate public figures reasonably available to the petitioners.
Petitioners explained that they could only find barge rates for the
United States that revealed the distances needed to permit calculation
of a rate in dollars-per-ton. Further, they could only find data on
rail rates from Chile and the United States which would permit the
calculation of rail freight costs in such terms. They used the Chilean
rail rate because Chilean per-capita GNP is much closer to Russia's
than is the United States'.
[[Page 64054]]
Based on the information presented by petitioners, we believe that
their use of U.S. barge and Chilean rail rates is acceptable for
purposes of initiation of this investigation.
Normal Value
Petitioners asserted that Russia is a non-market economy country
(NME) to the extent that sales or offers for sale of such or similar
merchandise in Russia or to third countries do not permit calculation
of normal value under 19 CFR 353.46, 353.49 or 353.53. Petitioners,
therefore, constructed a normal value based on the factors of
production methodology pursuant to 19 U.S.C. 1677b(c). In previous
investigations, the Department has determined that Russia is an NME.
See, e.g., Pure Magnesium and Alloy Magnesium from the Russian
Federation, 60 FR 16440 (March 30, 1995). In accordance with section
771(18)(C)(i) of the Act, the presumption of NME status remains in
effect until revoked by the Department. The presumption of NME status
for Russia has not been revoked by the Department and, therefore,
remains in effect for purposes of the initiation of this investigation.
Accordingly, the normal value of the product is appropriately based on
factors of production, valued in a surrogate market economy country in
accordance with section 773(c) of the Act.
In the course of this investigation, all parties will have the
opportunity to provide relevant information related to the issues of
Russia's NME status and the granting of separate rates to individual
exporters. See, e.g., Final Determination of Sales at Less Than Fair
Value: Silicon Carbide from the PRC, 59 FR 22585 (May 2, 1994).
For the normal value calculation, petitioners based the factors of
production, as defined by section 773(c)(3) of the Act (raw materials,
labor, energy and capital cost), for CTL plate on petitioners' own
usage inputs and amounts, adjusted for known differences in production
efficiencies on the basis of available information. Petitioners
asserted that no detailed information is available regarding the
quantities of inputs used by plate producers in Russia. Thus, they have
assumed, for purposes of the petition, that producers in Russia use the
same inputs in the same quantities as petitioners, except where a
variance from petitioners' cost model can be justified on the basis of
available information. Petitioners argued that the use of their own
factors is conservative because the U.S. steel industry is more
efficient and technologically-advanced than the Russian steel industry.
Petitioners cited three different sources to support this contention.
Based on the information provided by petitioners, we believe that
petitioners' use of its own adjusted factors of production is
appropriate for purposes of initiation of this investigation.
In accordance with section 773(c)(4) of the Act, petitioners valued
these factors, where possible, on reasonably available, published
surrogate country data. Petitioners selected Turkey as their primary
surrogate. Petitioners stated that the per-capita GNP of Turkey differs
only slightly from Russia's and, thus, maintain that Turkey is the most
suitable surrogate, amongst the potential surrogates, because it is at
a level of comparable economic development and is also a significant
producer of comparable merchandise (in accordance with section
773(c)(4) of the Act). See, Final Determination of Sales at Less-than-
Fair-Value of Ferrovanadium and Nitrided Vanadiam From the Russian
Federation, 60 FR 27957 (May 26, 1996). Based on the information
provided by petitioners, we believe that petitioners' use of Turkey as
a surrogate country is appropriate for purposes of initiation of this
investigation.
Petitioners state that they were unable to find publicly-available
information on port unloading charges in Turkey and, therefore, chose
the lowest charge applicable in Brazil as a surrogate value, based on a
published news article. Petitioners were also unable to find a
published source for the number of man-hours used to produce a ton of
any steel product in Russia or Turkey, and, therefore, used a labor-
per-ton figure for Mexico, based on a published news article, as the
surrogate value. Petitioners chose values from Brazil and Mexico,
respectively, as surrogates because the information was reasonably
available and the per-capita GNPs of these countries were most
comparable to Russia's. Finally, petitioners valued Russian consumption
rates for fuel, energy, and raw materials at 20 percent above
petitioners' based on a publicly-available news article. Based on the
information provided by petitioners, we believe that their use of the
noted surrogate values is acceptable for purposes of initiation of this
investigation.
Based on comparisons of export price to the factors of production,
the calculated dumping margins for CTL plate from Russia ranged from
139.97-230.38 percent.
Ukraine
Export Price
Petitioners based export price on two methods: (1) The import
values declared to the U.S. Customs Service; and (2) actual U.S.
selling prices known to petitioners. In order to ensure a fair
comparison, petitioners used the HTS categories which contained only
subject merchandise, as follows: 7208.51.0060, 7208.52.0000,
7208.40.3030, and 7208.53.0000. Petitioners deducted foreign inland
freight from the customs values in order to obtain ex-factory prices.
In order to calculate foreign inland freight, petitioners used U.S.
barge rates and Chilean rail rates because they were the only
appropriate, public figures reasonably available to the petitioners.
Petitioners explained that they could only find barge rates for the
United States that revealed the distances needed to permit calculation
of a rate in dollars-per-ton. Further, they could only find data on
rail rates from Chile and the United States which would permit the
calculation of rail freight costs in such terms. They used the Chilean
rail rate because Chilean per-capita GNP is much closer to Ukraine's
than is the United States'. Based on the information presented by
petitioners, we believe that their use of U.S. barge and Chilean rail
rates is acceptable for purposes of initiation of this investigation.
Normal Value
Petitioners alleged that Ukraine is an NME to the extent that sales
or offers for sale of such or similar merchandise in Ukraine or to
third countries does not permit calculation of normal value under 19
CFR 353.46, 353.49 or 353.53. Petitioners, therefore, constructed a
normal value based on the factors of production methodology pursuant to
19 U.S.C. 1677b(c). In previous investigations, the Department has
determined that Ukraine is an NME. See, e.g., Final Determinations of
Sales at Less Than Fair Value: Ferrosilicon from Kazakhstan and
Ukraine; and Postponement of Final Determination; Ferrosilicon from the
Russian Federation, 58 FR 13050 (March 9, 1993). In accordance with
section 771(18)(C)(i) of the Act, the presumption of NME status remains
in effect until revoked by the Department. The presumption of NME
status for Ukraine has not been revoked by the Department and,
therefore, remains in effect for purposes of the initiation of this
investigation. Accordingly, the normal value of the product is
appropriately based on the producers' factors of production valued in a
[[Page 64055]]
surrogate market economy country in accordance with section 773(c) of
the Act.
In the course of this investigation, all parties will have the
opportunity to provide relevant information related to the issues of
Ukraine's NME status and the granting of separate rates to individual
exporters. See, e.g., Final Determination of Sales at Less Than Fair
Value: Silicon Carbide from the PRC, 59 FR 22585 (May 2, 1994).
For the normal value calculation, petitioners based the factors of
production, as defined by section 773(c)(3) of the Act (raw materials,
labor, energy, and capital costs), for CTL plate on petitioners' own
usage amounts, adjusted for known differences in production
efficiencies on the basis of available information. Petitioners
asserted that no detailed information is available regarding the
quantities of inputs used by plate producers in Ukraine. Thus, they
have assumed, for purposes of the petition, that producers in Ukraine
use the same inputs in the same quantities as petitioners, except where
a variance from petitioners' cost model can be justified on the basis
of available information. Petitioners argued that the use of their own
data is conservative because the U.S. steel industry is more efficient
and technologically-advanced than the Ukrainian steel industry.
Petitioners cited two different sources to support this contention.
Based on the information provided by petitioners, we believe that
petitioners' use of its own adjusted factors of production is
appropriate for purposes of initiation of this investigation.
In accordance with section 773(c)(4) of the Act, petitioners valued
these factors, where possible, on reasonably available, published
surrogate country data. Petitioners selected Peru as their primary
surrogate. Petitioners argued that Peru is an acceptable surrogate
country because its level of economic development is comparable to that
of Ukraine and it is a significant producer of comparable merchandise
(in accordance with 773(c)(4) of the Act). See, Preliminary
Determination of Sales at Less-than-Fair-Value and Postponement of
Final Determination of Silicomanganese From Ukraine 59 FR 31201 (June
17, 1996). Petitioners stated that because the per-capita GNP of Peru
and Ukraine are relatively close, the two countries may be considered
economically comparable. Based on the information provided by
petitioners, we believe that petitioners' use of Peru as a surrogate
country is appropriate for purposes of initiation of this
investigation.
Petitioners were unable to obtain port unloading charges for Peru
and, therefore, chose the lowest charge applicable in Brazil based on a
published news article. Petitioners were also unable to find a
published source for the number of man-hours used to produce a ton of
any steel product in Ukraine or Peru, and, therefore, used a labor-per-
ton figure for Mexico based on a news article, as the surrogate value.
Petitioners chose values from Brazil and Mexico, respectively, as
surrogates because the information was reasonably available and the
per-capita GNPs of these countries were most comparable to Ukraine's.
Based on the information provided by petitioners, we believe that their
use of the noted Brazilian and Mexican surrogate values is acceptable
for purposes of initiation of this investigation.
Petitioners were also unable to find values for natural gas rates,
factory overhead, selling, general & administrative (SG&A) expenses,
and profit from Peru. Therefore, petitioners used surrogate natural gas
rates from Indonesia and Turkish values for factory overhead, SG&A, and
profit. Values from Indonesia and Turkey were selected on the basis
that these countries were closer to Ukraine in per-capita GNP than were
other countries from which values could be ascertained by petitioners.
Based on the information provided by petitioners, we believe that their
use of the noted Indonesian and Turkish surrogate values is acceptable
for purposes of initiation of this investigation.
Based on comparisons of export price to the factors of production,
the calculated dumping margins for CTL plate from Ukraine ranged from
201.61-274.82 percent.
Fair Value Comparisons
Based on the data provided by petitioners, there is reason to
believe that imports of CTL plate from China, Ukraine, Russia and South
Africa are being, or are likely to be, sold at less than fair value. If
it becomes necessary at a later date to consider these petitions as a
source of facts available, under section 776 of the Act, we may further
review the calculations.
Initiation of Investigations
We have examined the petitions on CTL plate from China, Ukraine,
Russia and South Africa and have found that they meet the requirements
of section 732 of the Act, including the requirements concerning
allegations of material injury or threat of material injury to the
domestic producers of a domestic like product by reason of the
complained-of imports, allegedly sold at less than fair value. In
reaching this determination, we have examined the accuracy and adequacy
of the evidence provided in the petitions based on information readily
available to us, as required by section 732(c)(1)(A)(i). Therefore, we
are initiating antidumping duty investigations to determine whether
imports of CTL plate from China, Ukraine, Russia and South Africa are
being, or are likely to be, sold in the United States at less than fair
value. Unless extended, we will make our preliminary determination by
April 14, 1997.
Distribution of Copies of the Petitions
In accordance with section 732(b)(3)(A) of the Act, copies of the
public version of the petitions have been provided to the
representatives of the governments of China, Ukraine, Russia and South
Africa. We will attempt to provide copies of the public versions of the
petitions to the exporters named in the petitions.
International Trade Commission (ITC) Notification
We have notified the ITC of our initiations, as required by section
732(d) of the Act.
Preliminary Determination by the ITC
The ITC will determine by December 20, 1996, whether there is a
reasonable indication that imports of CTL plate from China, Ukraine,
Russia and South Africa are causing material injury, or threatening to
cause material injury, to a U.S. industry. A negative ITC determination
in any of these investigations will result in the respective
investigation being terminated; otherwise, these investigations will
proceed according to statutory and regulatory time limits.
Dated: November 25, 1996.
Robert S. LaRussa
Acting Assistant Secretary of Import Administration
[FR Doc. 96-30756 Filed 12-2-96; 8:45 am]
BILLING CODE 3510-DS-P
