[Federal Register Volume 64, Number 50 (Tuesday, March 16, 1999)]
[Notices]
[Pages 12959-12967]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-6293]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-427-816, A-475-826, A-580-836, A-560-805, A-533-817, A-588-847, A-
894-801, A-851-801]
Initiation of Antidumping Duty Investigations: Certain Cut-To-
Length Carbon-Quality Steel Plate From the Czech Republic, France,
India, Indonesia, Italy, Japan, the Republic of Korea, and the Former
Yugoslav Republic of Macedonia
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: March 16, 1999.
FOR FURTHER INFORMATION CONTACT: James Terpstra (France, India, and the
Republic of Korea) at (202) 482-3965; Wendy Frankel (Italy, Japan) at
(202) 482-5849; David Goldberger (Indonesia) at (202) 482-4136, Irene
Darzenta Tzafolias (Former Yugoslav Republic of Macedonia) at (202)
482-6320 and James Maeder (Czech Republic) at (202) 482-3330, Import
Administration, International Trade Administration, U.S. Department of
Commerce, 14th Street and Constitution Avenue, NW, Washington, DC
20230.
Initiation of Investigations
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 the Department's regulations are references
to the provisions codified at 19 CFR part 351 (1998).
The Petitions
On February 16, 1999, the Department of Commerce (the Department)
received petitions filed in proper form by Bethlehem Steel Corporation,
Gulf States Steel, Inc., IPSCO Steel Inc., Tuscaloosa Steel
Corporation,1 the United Steelworkers of America, and the
U.S. Steel Group (a unit of USX
[[Page 12960]]
Corporation) (collectively the petitioners). The Department received
supplemental information to the petitions on February 25 and 26, 1999,
and March 1, 1999.
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\1\ Note: Tuscaloosa Steel Corporation is not a petitioner in
the investigations involving the Czech Republic, France, and Italy.
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In accordance with section 732(b) of the Act, the petitioners
allege that imports of certain cut-to-length carbon steel plate (CTL
plate) from the Czech Republic, France, India, Indonesia, Italy, Japan,
the Republic of Korea (Korea), and the Former Yugoslav Republic of
Macedonia (FYR Macedonia) 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 an industry
in the United States.
The Department finds that the petitioners filed these petitions on
behalf of the domestic industry because they are interested parties as
defined in sections 771(9)(C) and (D) of the Act, and they have
demonstrated sufficient industry support with respect to each of the
antidumping investigations that they are requesting the Department to
initiate (see Determination of Industry Support for the Petitions
below).
Scope of Investigations
The products covered by this scope are certain hot-rolled carbon-
quality steel: (1) 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 nominal or actual thickness of
not less than 4 mm, which are cut-to-length (not in coils) and without
patterns in relief), of iron or non-alloy-quality steel; and (2) flat-
rolled products, hot-rolled, of a nominal or actual thickness of 4.75
mm or more and of a width which exceeds 150 mm and measures at least
twice the thickness, and which are cut-to-length (not in coils).
Steel products to be included in this scope are of rectangular,
square, circular or other shape and of rectangular or non-rectangular
cross-section where such non-rectangular cross-section is achieved
subsequent to the rolling process (i.e., products which have been
``worked after rolling'')--for example, products which have been
beveled or rounded at the edges. Steel products that meet the noted
physical characteristics that are painted, varnished or coated with
plastic or other non-metallic substances are included within this
scope. Also, specifically included in this scope are high strength, low
alloy (HSLA) steels. HSLA steels are recognized as steels with micro-
alloying levels of elements such as chromium, copper, niobium,
titanium, vanadium, and molybdenum.
Steel products to be included in this scope, regardless of
Harmonized Tariff Schedule of the United States (HTSUS) definitions,
are products in which: (1) Iron predominates, by weight, over each of
the other contained elements, (2) the carbon content is two percent or
less, by weight, and (3) none of the elements listed below is equal to
or exceeds the quantity, by weight, respectively indicated:
1.80 percent of manganese, or
1.50 percent of silicon, or
1.00 percent of copper, or
0.50 percent of aluminum, or
1.25 percent of chromium, or
0.30 percent of cobalt, or
0.40 percent of lead, or
1.25 percent of nickel, or
0.30 percent of tungsten, or
0.10 percent of molybdenum, or
0.10 percent of niobium, or
0.41 percent of titanium, or
0.15 percent of vanadium, or
0.15 percent zirconium.
All products that meet the written physical description, and in
which the chemistry quantities do not equal or exceed any one of the
levels listed above, are within the scope of these investigations
unless otherwise specifically excluded. The following products are
specifically excluded from these investigations: (1) Products clad,
plated, or coated with metal, whether or not painted, varnished or
coated with plastic or other non-metallic substances; (2) SAE grades
(formerly AISI grades) of series 2300 and above; (3) products made to
ASTM A710 and A736 or their proprietary equivalents; (4) abrasion-
resistant steels (i.e., USS AR 400, USS AR 500); (5) products made to
ASTM A202, A225, A514 grade S, A517 grade S, or their proprietary
equivalents; (6) ball bearing steels; (7) tool steels; and (8) silicon
manganese steel or silicon electric steel.
The merchandise subject to these investigations is classified in
the HTSUS under subheadings: 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, 7225.40.3050,
7225.40.7000, 7225.50.6000, 7225.99.0090, 7226.91.5000, 7226.91.7000,
7226.91.8000, 7226.99.0000.
Although the HTSUS subheadings are provided for convenience and
Customs purposes, the written description of the merchandise under
investigation is dispositive.
During our review of the petitions, we discussed the scope with the
petitioners to ensure that the scope in the petitions accurately
reflects the merchandise for which the domestic industry is seeking
relief. Moreover, as we discussed in the preamble to the Department's
regulations (62 FR at 27323), we are setting aside a period for parties
to raise issues regarding product coverage. In particular, we seek
comments on the specific levels of alloying elements set out in the
description above, the clarity of grades and specifications excluded
from the scope, and the physical and chemical description of the
product coverage. The Department encourages all parties to submit such
comments by March 29, 1999. Comments should be addressed to Import
Administration's Central Records Unit at Room 1870, U.S. Department of
Commerce, 14th Street and Constitution Avenue, NW, Washington, DC
20230. The period of scope consultations is intended to provide the
Department with ample opportunity to consider all comments and consult
with parties prior to the issuance of the preliminary determinations.
Determination of Industry Support for the Petitions
Section 732(b)(1) of the Act requires that a petition be filed on
behalf of the domestic industry. Section 732(c)(4)(A) of the Act
provides that a petition meets this requirement 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.
Section 771(4)(A) of the Act defines the ``industry'' as the
producers of a domestic like product. Thus, to determine whether the
petition has the requisite industry support, the statute directs the
Department to look to producers and workers who produce the domestic
like product. The International Trade Commission (ITC), which is
responsible for determining whether ``the domestic industry'' has been
injured, must also determine what constitutes a domestic like product
in order to define the industry. While both the Department and the ITC
must apply the same statutory definition regarding the domestic like
product (section 771(10) of the Act), they do so for different purposes
and pursuant to separate and distinct authority. In addition, the
Department's determination is subject to limitations of
[[Page 12961]]
time and information. Although this may result in different definitions
of the like product, such differences do not render the decision of
either agency contrary to the law.2
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\2\ See Algoma Steel Corp. Ltd., v. United States, 688 F. Supp.
639, 642-44 (CIT 1988); High Information Content Flat Panel Displays
and Display Glass Therefore from Japan: Final Determination;
Rescission of Investigation and Partial Dismissal of Petition, 56 FR
32376, 32380-81 (July 16, 1991).
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Section 771(10) of the Act defines the domestic like product as ``a
product which is like, or in the absence of like, most similar in
characteristics and uses with, the article subject to an investigation
under this title.'' Thus, the reference point from which the domestic
like product analysis begins is ``the article subject to an
investigation,'' i.e., the class or kind of merchandise to be
investigated, which normally will be the scope as defined in the
petition. Moreover, the petitioners do not offer a definition of
domestic like product distinct from the scope of the investigations.
In this case, ``the article subject to investigation'' includes
certain products which have not previously been included within the
scope of investigations involving cut-to-length carbon steel products.
To this end, the Department has reviewed reasonably available
information to determine whether the products within the scope of the
investigations constitute one or more than one domestic like
product(s).
Some steel products classified as alloy steels based on the HTSUS
are recognized as carbon steels by the industry and/or the marketplace.
For example, The Book of Steel, a 1996 publication by Sollac, a flat-
rolled steel division of Usinor, one of the largest steel companies in
the world, identifies HSLA as falling within categories of plain carbon
sheet steels (see chapter 44). Also, Carbon and Alloy Steels, published
in 1996 by ASM International, a major materials society, indicates that
HSLA steels are not considered to be alloy steels, but are in fact
similar to as-rolled mild-carbon steel and are generally priced by
reference to the base price for carbon steels (see page 29). Carbon and
Alloy Steels also distinguishes between carbon-boron and alloy-boron
steels; the former may contain boron at levels which would classify it
as alloy under the HTSUS, but would not classify it as an alloy steel
commercially because, unlike the alloy-boron steels, higher levels of
other alloying elements are not specified (see e.g., pages 159 and
161).
The Department has considered that, with respect to certain steel
products, such as HSLA, the petitioners indicate that these steel
products are manufactured by similar processes, are priced from similar
bases, are marketed in comparable ways, and are used for similar
applications as carbon steels.
Further, we confirmed this description with product experts at the
Department and the ITC. Other than the fact that the AISI technically
defines alloy steels based on alloy levels comparable to those in the
HTSUS, none of the individuals cited reasons why the products in
question might be treated as distinct from cut-to-length carbon steels.
For these reasons, the Department determines that for purposes of these
investigations, the domestic like product definition is the single
domestic like product defined in the Scope of the Investigations
section above.
Based on our analysis of the information and arguments presented to
the Department and the information independently obtained and reviewed
by the Department, we have determined that there is a single domestic
like product which is defined in the Scope of Investigations section
above. Moreover, the Department has determined that the petitions (and
subsequent amendments) contain adequate evidence of industry support
and, therefore, polling is unnecessary (see Import Administration
Antidumping Investigation Initiation Checklist, Re: Industry Support,
March 3, 1999, hereinafter the IA Initiation Checklist, on file in the
Central Records Unit (CRU) of the main Department of Commerce
building). The Department received no opposition to the petitions. For
all countries, the petitioners established industry support
representing over 50 percent of total production of the domestic like
product.
Accordingly, the Department determines that these petitions are
filed on behalf of the domestic industry within the meaning of section
732(b)(1) of the Act.
Export Price and Normal Value
The following are descriptions of the allegations of sales at less
than fair value upon which our decisions to initiate these
investigations are based. A more detailed description of these
allegations is provided in the IA Initiation Checklist. Should the need
arise to use any of this information in our preliminary or final
determinations for purposes of facts available under section 776 of the
Act, we may re-examine the information and revise the margin
calculations, if appropriate.
Czech Republic
The petitioners identified Nova Hut a.s. (Nova Hut), Vitkovice a.s.
(Vitkovice), and ZDB a.s. (ZDB) as possible exporters of CTL plate from
the Czech Republic. The petitioners further identified Nova Hut and
Vitkovice as the primary producers of subject merchandise in the Czech
Republic, and Vitkovice as the primary exporter of the subject
merchandise to the United States.
The petitioners based export price (EP) on a U.S. price offering
for CTL plate produced by Vitkovice. The petitioners made deductions
from EP for U.S. port charges (from a U.S. port tariff schedule); CIF
charges, including ocean freight and insurance (from official U.S.
import statistics); and duties (from the HTSUS).
The petitioners note that the Department has never had occasion to
determine whether the Czech Republic is a non-market economy country
(NME) to the extent that sales or offers for sale of such or similar
merchandise in the Czech Republic do not permit calculation of normal
value (NV) under 19 CFR 351.404. In previous investigations, however,
the Department has determined that Czechoslovakia, the predecessor of
both the Czech Republic and the Slovak Republic, was a NME. See e.g.,
Final Determination of Sales at Less Than Fair Value: Carbon Steel Wire
Rod from Czechoslovakia, 49 FR 19370 (May 7, 1984). 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 the Czech Republic has not been revoked by the Department
and, therefore, remains in effect for purposes of the initiation of
this investigation. Accordingly, the NV of the product appropriately is
based on factors of production valued in a surrogate market economy
country, in accordance with section 773(c) of the Act. The petitioners
constructed a NV based on the factors of production methodology
pursuant to 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 the Czech Republic'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).
With respect to NV, the 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 the quantities of
[[Page 12962]]
inputs used by a production facility of one of the petitioners,
adjusted for known differences in production efficiencies on the basis
of available information. The petitioners selected this particular
facility claiming that its production process was similar to that of
Vitkovice. The petitioners asserted that detailed information is not
available regarding the quantities of inputs used by Vitkovice. Thus,
they have assumed, for purposes of the petition, that Vitcovice uses
the same inputs in the same quantities as the petitioners, except where
a variance from their cost model can be justified on the basis of
available information. Based on the information provided by the
petitioners, we believe that their use of adjusted factors of
production of one of their own facilities represents information
reasonably available to the petitioners and is appropriate for purposes
of the initiation of this investigation.
The petitioners selected Brazil as the primary surrogate, stating
that the per-capita Gross National Product (GNP) of Brazil is similar
to that of the Czech Republic.3 Moreover, of the five
countries that are most similar to the Czech Republic with regard to
per-capita GNP, Brazil is the most significant producer of CTL plate.
Brazil has two CTL plate producers with a combined annual production
capacity of nearly two million metric tons. The only other surrogate
candidate that produces CTL plate is Chile. The petitioners claim that
Chile has one plate mill, but they do not know its annual capacity.
However, the petitioners note that Chile's total 1997 hot-rolled flat
steel production was 457,000 metric tons, only a portion of which was
CTL plate. Thus, the petitioners maintain that Brazil is the most
suitable surrogate among the potential surrogates, because, pursuant to
section 773(c)(4) of the Act, it is at a comparable level of economic
development and it is the most significant producer of comparable
merchandise of any other potential surrogate. Based on the information
provided by the petitioners, we believe that the petitioners' use of
Brazil as a surrogate country is appropriate for purposes of the
initiation of this investigation.
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\3\ The petitioners acknowledge that the Department's
regulations indicate that GDP is the appropriate basis for
determining comparability but argue that GNP is reasonable as a
basis for initiating.
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In accordance with section 773(c)(4) of the Act, the petitioners
valued factors of production, where possible, using reasonably
available, public surrogate country data. Specifically:
Coal was valued based on Brazilian import values reported
in U.S. dollars, as published in the October 1998 Brazilian edition of
the World Trade Atlas.
Iron ore was valued using the public price information of
a Brazilian iron ore producer.
Scrap was valued based on a July 3, 1997, report by Credit
Suisse First Boston Corporation.
Labor was valued using the regression-based wage rate for
the Czech Republic provided by the Department, in accordance with 19
CFR 351.408(c)(3).
Electricity and natural gas were valued using the rate for
Brazil published in a quarterly report of the OECD's International
Energy Agency from the third quarter of 1998.
Underfiring fuels and repair and maintenance materials
were valued using the costs of the petitioner whose production process
is similar to Vitkovice's, because the petitioners were unable to find
Brazilian values for them.
For selling, general, and administrative (SG&A) expenses,
financial expenses, and profit, the petitioners applied rates derived
from the 1997 public financial statements of the two Brazilian
producers of the subject merchandise, COSIPA and USIMINAS.
Depreciation was valued using the product-specific
depreciation rate of the petitioner whose production process is similar
to Vitkovice's, explaining that the rate they could derive from the
Brazilian producers' information would not be product specific.
Based on the information provided by the petitioners, we believe that
their surrogate values represent information reasonably available to
them and are acceptable for purposes of the initiation of this
investigation.
Based on comparisons of EP to NV, the petitioners estimated the
dumping margin for CTL plate from the Czech Republic to be 76.38
percent.
France
The petitioners identified Creusot Loire Industrie (CLI) and GTS
Industries as possible exporters of CTL plate from France. The
petitioners further identified these exporters as the primary producers
of subject merchandise in France. The petitioners based EP on a U.S.
price offering to an unaffiliated U.S. purchaser for two products. The
petitioners made deductions from EP for CIF charges, including ocean
freight and insurance (from official U.S. import statistics); and
duties (from the HTSUS).
In addition, the petitioners provided, as a second basis for EP,
the average unit value (AUV) for three of the HTSUS categories
accounting for the largest volume of imports from France during the
first eleven months of 1998, the most current data available. The
petitioners maintain that the products within these categories, while
representing a range of sizes, are nevertheless indicative of average
pricing because the products within these categories represent the
largest volume commercial products. The petitioners also maintain that
the values for CTL plate in the IM-145 approximate the FOB price of the
merchandise, packaged and ready for delivery at the foreign port (see
19 USC section 1401a and 19 CFR 152.101).
With respect to NV, the petitioners provided home market prices for
common grades and sizes of CTL plate obtained from foreign market
research. These products are comparable to the products exported to the
United States, which serve as the basis for EP. The price used in the
calculation of NV was an ex-factory price, exclusive of taxes.
In addition, the petitioners provided information demonstrating
reasonable grounds to believe or suspect that sales of CTL plate in the
home market were made at prices below the cost of production (COP),
within the meaning of section 773(b) of the Act, and requested that the
Department conduct a country-wide sales-below-cost investigation.
Pursuant to section 773(b)(3) of the Act, COP consists of the cost
of manufacturing (COM), SG&A expenses, and packing expenses. To
calculate COM, the petitioners relied upon their own production
experience, adjusted for known differences between costs incurred to
produce CTL plate in the United States and in France using publicly
available data.
To calculate SG&A and financial expenses, the petitioners relied
upon the 1997 financial statements of a French steel producer. Based
upon the comparison of the adjusted price of the foreign like product
in the home market to the calculated COP of the product, we find
reasonable grounds to believe or suspect that sales of the foreign like
product were made below the COP, within the meaning of section
773(b)(2)(A)(i) of the Act. Accordingly, the Department is initiating a
country-wide cost investigation.
Pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act, the
petitioners also based NV for sales in France on constructed value
(CV). The petitioners calculated CV using the same COM, SG&A and
financial expense figures
[[Page 12963]]
used to compute French home market costs. Consistent with section
773(e)(2) of the Act, the petitioners also added to CV an amount for
profit. Profit was based upon the aforementioned French steel company's
1997 financial statements.
The petitioners provided estimated dumping margins in two ways: (1)
CV compared to U.S. price offers (7.99 to 30.06 percent); and (2) CV
compared to AUV (11.37 to 42.50 percent).
India
The petitioners identified Steel Authority of India Ltd. (SAIL) as
an exporter of CTL plate from India. According to the petitioners, SAIL
accounted for a large percentage of the subject merchandise exported to
the United States during the January-November 1998 time period. The
petitioners based EP on a U.S. price offering to unaffiliated
purchasers. The petitioners made deductions from EP for CIF charges,
including ocean freight and insurance (from official U.S. import
statistics); and duties (from the HTSUS).
With respect to NV, the petitioners provided home market prices for
common grades and sizes of CTL plate obtained from foreign market
research. These products are comparable to the products exported to the
United States which serve as the basis for EP. The price used in the
calculation of NV was an ex-factory price, exclusive of taxes.
In addition, the petitioners provided information demonstrating
reasonable grounds to believe or suspect that sales of certain CTL
plate in the home market were made at prices below the COP, within the
meaning of section 773(b) of the Act, and requested that the Department
conduct a country-wide sales-below-cost investigation.
Pursuant to section 773(b)(3) of the Act, COP consists of the COM,
SG&A expenses, and packing expenses. To calculate COM, the petitioners
relied upon their own production experience, adjusted for known
differences between costs incurred to produce CTL plate in the United
States and in India using market research and publicly available data.
To calculate SG&A and financial expenses, the petitioners relied
upon the 1997 financial statements of an Indian steel producer. Based
upon the comparison of the adjusted prices of the foreign like product
in the home market to the calculated COP of the product, we find
reasonable grounds to believe or suspect that sales of the foreign like
product were made below the COP, within the meaning of section
773(b)(2)(A)(i) of the Act. Accordingly, the Department is initiating a
country-wide cost investigation.
Pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act, the
petitioners also based NV for sales in India on CV. The petitioners
calculated CV using the same COM, SG&A and financial expense figures
used to compute Indian home market costs. Consistent with section
773(e)(2) of the Act, the petitioners also added to CV an amount for
profit. Profit was based on the aforementioned Indian steel company's
1997 financial statements.
The petitioners provided estimated dumping margins in two ways: (1)
HMP compared to U.S. price offers (44.51 percent); and (2) CV compared
to U.S. price offers (72.49 percent).
Indonesia
The petitioners identified PT Gunawan Dianjaya Steel (Gunawan), PT
Jaya Pari Steel Corp., Ltd., Tbk.(Jaya Pari), and PT Krakatau Steel
(Krakatau) as possible exporters of CTL plate from Indonesia. The
petitioners based EP on a U.S. price offer for several products
manufactured by Gunawan and sold to an unaffiliated U.S. purchaser. The
petitioners made deductions from EP for foreign inland freight (based
on foreign market research), U.S. port charges (from a U.S. port tariff
schedule); CIF charges, including ocean freight and insurance (from
official U.S. import statistics); duties (from the HTSUS); and U.S.
movement expenses, including inland freight, based on the petitioners'
experience.
With respect to NV, the petitioners used a delivered home market
price, exclusive of taxes, for a common grade and size of CTL plate
produced by Gunawan, obtained from foreign market research. This
product is comparable to one of the products exported to the United
States, which serves as the basis for EP. The petitioners deducted
inland freight expenses based on information from foreign market
research. The petitioners made a circumstance-of-sale adjustment for
credit expenses based on information from foreign market research.
In addition, the petitioners provided information demonstrating
reasonable grounds to believe or suspect that sales of CTL plate in the
home market were made at prices below the COP, within the meaning of
section 773(b) of the Act, and requested that the Department conduct a
country-wide sales-below-cost investigation.
Pursuant to section 773(b)(3) of the Act, COP consists of the COM,
SG&A expenses, and packing expenses. To calculate COM, the petitioners
relied upon their own production experience, adjusted for known
differences between costs incurred to produce CTL plate in the United
States and in Indonesia using publicly available data.
To calculate SG&A and financial expenses, the petitioners relied
upon the 1997 financial statements of an Indonesian steel producer.
Based upon the comparison of the adjusted price of the foreign like
product in the home market to the calculated COP of the product, we
find reasonable grounds to believe or suspect that sales of the foreign
like product were made below the COP, within the meaning of section
773(b)(2)(A)(i) of the Act. Accordingly, the Department is initiating a
country-wide cost investigation.
Pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act, the
petitioners also based NV for sales in Indonesia on CV. The petitioners
calculated CV using the same COM, SG&A and financial expense figures
used to compute Indonesian home market costs. Consistent with section
773(e)(2) of the Act, the petitioners also added to CV an amount for
profit. Profit was based upon an Indonesian steel producer's 1997
financial statements.
The petitioners provided estimated dumping margins in two ways: (1)
HMP compared to U.S. price offers (17.59 percent); and (2) CV compared
to U.S. price offers (52.42 percent).
Italy
The petitioners identified Ilva Laminati Piani SpA (ILP), Palini &
Bertoli SpA (PB), Siderurgica Villalvernia SpA (SV), and Ferriera
Siderscal SpA (FS) as possible exporters of CTL plate from Italy. The
petitioners further identified these exporters as the primary producers
of subject merchandise in Italy. The petitioners based EP on a U.S.
price offering to an unaffiliated U.S. purchaser for two products. The
delivery terms were FOB duty paid and Ex-Dock duty paid. The
petitioners made deductions from EP for CIF charges, including ocean
freight and insurance (from official U.S. import statistics).
In addition, the petitioners provided, as a second basis for EP,
the AUV for the three HTSUS categories accounting for the largest
volume of imports from Italy during the first eleven months of 1998.
The petitioners maintain that the products within these categories,
while representing a range of sizes, are nevertheless indicative of
average pricing because the products within these categories represent
the largest volume commercial products. The petitioners maintain that
the values for CTL plate in the IM-145 approximate the FOB price of the
merchandise,
[[Page 12964]]
packaged and ready for delivery at the foreign port (see 19 USC section
1401a and 19 CFR 152.101).
With respect to NV, the petitioners used an ex-factory home market
price, exclusive of taxes, for a common grade and size of CTL plate
obtained from foreign market research. This product is comparable to
the products exported to the United States which serve as the basis for
EP.
In addition, the petitioners provided information demonstrating
reasonable grounds to believe or suspect that sales of CTL plate in the
home market were made at prices below the COP, within the meaning of
section 773(b) of the Act, and requested that the Department conduct a
country-wide sales-below-cost investigation.
Pursuant to section 773(b)(3) of the Act, COP consists of the COM,
SG&A expenses, and packing expenses. To calculate COM, the petitioners
relied upon their own production experience, adjusted for known
differences between costs incurred to produce CTL plate in the United
States and in Italy using market research and publicly available data.
To calculate SG&A and financial expenses, the petitioners relied
upon the 1997 financial statements of an Italian steel producer. Based
upon the comparison of the adjusted price of the foreign like product
in the home market to the calculated COP of the product, we find
reasonable grounds to believe or suspect that sales of the foreign like
product were made below the COP, within the meaning of section
773(b)(2)(A)(i) of the Act. Accordingly, the Department is initiating a
country-wide cost investigation.
Pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act, the
petitioners also based NV for sales in Italy on CV. The petitioners
calculated CV using the same COM, SG&A and financial expense figures
used to compute Italian home market costs. Consistent with section
773(e)(2) of the Act, the petitioners also added to CV an amount for
profit. Profit was based upon the aforementioned Italian producer's
1997 financial statements.
The petitioners provided estimated dumping margins in two ways: (1)
CV compared to U.S. price offers (39.55 to 93.30 percent); and (2) CV
compared to AUV (30.75 to 89.72 percent).
Japan
The petitioners identified Kawasaki Steel Corporation (Kawasaki),
Kobe Steel, Ltd. (Kobe Steel), Nippon Steel Corporation (Nippon Steel),
NKK Corporation (NKK), and Sumitomo Metal Industries, Ltd. (Sumitomo)
as exporters of CTL plate from Japan. The petitioners further
identified these exporters as the only Japanese producers known to the
petitioners to have exported the subject merchandise from Japan. The
petitioners based EP on a price offering to unaffiliated purchasers in
the United States. The petitioners made deductions from EP for U.S.
port charges (from a U.S. freight forwarder); CIF charges, including
ocean freight and insurance (from official U.S. import statistics);
duties (from the HTSUS), foreign movement charges (from foreign market
research), and a Japanese trading company mark-up (from foreign market
research).
With respect to NV, the petitioners obtained, from foreign market
research, home market delivered prices from Nippon Steel, NKK,
Kawasaki, and Sumitomo for a product similar to that for which the U.S.
price quote was obtained. Based on the terms of the home market sales,
the petitioners deducted foreign movement charges (obtained from
foreign market research) from the home market prices. The petitioners
also adjusted home market prices for differences in packing and credit
expenses in the U.S. and Japanese markets (obtained from foreign market
research), and for differences in the merchandise for which the U.S.
and Japanese price quotes were obtained, based on their own production
experience, adjusted for known differences between costs incurred to
produce CTL plate in the United States and in Japan (obtained from
market research and publicly available data).
In addition, the petitioners provided information demonstrating
reasonable grounds to believe or suspect that sales of CTL plate in the
home market were made at prices below the COP, within the meaning of
section 773(b) of the Act, and requested that the Department conduct a
country-wide sales-below-cost investigation.
Pursuant to section 773(b)(3) of the Act, COP consists of the COM,
SG&A expenses, and packing expenses. To calculate COM, the petitioners
relied upon their own production experience, adjusted for known
differences between costs incurred to produce CTL plate in the United
States and in Japan using market research and publicly available data.
To calculate SG&A and financial expenses, the petitioners relied
upon the 1997/1998 financial statements of the Japanese steel
producers. Based upon the comparison of the adjusted prices of the
foreign like product in the home market to the calculated COP of the
product, we find reasonable grounds to believe or suspect that sales of
the foreign like product were made below the COP, within the meaning of
section 773(b)(2)(A)(i) of the Act. Accordingly, the Department is
initiating a country-wide cost investigation.
Pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act, the
petitioners also based NV for sales in Japan on CV. The petitioners
calculated CV using the same COM, SG&A and financial expense figures
used to compute Japanese home market costs. Consistent with section
773(e)(2) of the Act, the petitioners also added to CV an amount for
profit. Profit was based upon the aforementioned Japanese producers'
1997/1998 financial statements.
The petitioners provided estimated dumping margins in two ways: (1)
HMP compared to U.S. price offers (3.06 to 3.44 percent); and (2) CV
compared to U.S. price (56.24 to 59.12 percent).
Republic of Korea
The petitioners identified Daekyung Corporation, Dongkuk Steel Mill
Co., Ltd., Korea Iron & Steel (KISCO), and Pohang Iron and Steel Co
Ltd. (POSCO) as possible exporters of CTL plate from Korea. The
petitioners based EP on U.S. price offerings for the subject
merchandise in the United States. The petitioners made deductions from
EP for CIF charges, including ocean freight and insurance (from
official U.S. import statistics); and duties (from the HTSUS).
In addition, the petitioners provided, as a second basis for EP,
the AUV for three of the HTSUS categories accounting for the largest
volume of imports from Korea during the first eleven months of 1998,
the most current data available. The petitioners maintain that the
products within these categories, while representing a range of sizes,
are nevertheless indicative of average pricing because the products
within these categories represent the largest volume commercial
products. The petitioners also maintain that the values for CTL plate
in the IM-145 approximate the FOB price of the merchandise, packaged
and ready for delivery at the foreign port (see 19 USC section 1401a
and 19 CFR 152.101).
With respect to NV, the petitioners provided home market prices for
common grades and sizes of CTL plate obtained from foreign market
research. These products are comparable to the products exported to the
United States which serve as the basis for EP.
In addition, the petitioners provided information demonstrating
reasonable grounds to believe or suspect that sales of CTL plate in the
home market were made at prices below the COP, within the meaning of
section 773(b) of the Act, and requested that the Department
[[Page 12965]]
conduct a country-wide sales-below-cost investigation.
Pursuant to section 773(b)(3) of the Act, COP consists of the COM,
SG&A expenses, and packing. To calculate COM, the petitioners relied
upon their own production experience, adjusted for known differences
between costs incurred to produce CTL plate in the United States and in
Korea using publicly available data.
To calculate SG&A and financial expenses, the petitioners relied
upon the 1997 audited financial statements of a Korean steel producer.
Based upon the comparison of the adjusted prices of the foreign like
product in the home market to the calculated COP of the product, we
find reasonable grounds to believe or suspect that sales of the foreign
like product were made below the COP, within the meaning of section
773(b)(2)(A)(i) of the Act. Accordingly, the Department is initiating a
country-wide cost investigation.
Pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act, the
petitioners also based NV for sales in Korea on CV. The petitioners
calculated CV using the same COM, SG&A and financial expense figures
used to compute Korean home market costs. Consistent with section
773(e)(2) of the Act, the petitioners also added to CV an amount for
profit. Profit was based upon the aforementioned Korean producer's 1997
financial statements.
The petitioners provided estimated dumping margins in two ways: (1)
CV to U.S. price offers (14.57 to 63.00 percent); and (2) CV to AUV
(1.26 to 34.91 percent).
The Former Yugoslav Republic of Macedonia
The petitioners identified Rudnici i Zelezara Skopje (Makstil) as
the sole CTL plate producer in FYR Macedonia. The petitioners based EP
on U.S. price offerings for the sale of the subject merchandise in the
United States. The petitioners made deductions from EP for CIF charges,
including ocean freight and insurance (from official U.S. import
statistics); and duties (from official U.S. import statistics).
In addition, the petitioners provided, as a second basis for EP,
the AUV for two of the HTSUS categories accounting for all imports of
CTL plate from FYR Macedonia during the first eleven months of 1998,
the most current data available. The petitioners maintain that the
products within these categories, while representing a range of sizes,
are nevertheless indicative of average pricing because the products
within these categories represent the largest volume commercial
products. The petitioners also maintain that the values for CTL plate
in the IM-145 approximate the FOB price of the merchandise, packaged
and ready for delivery at the foreign port (see 19 USC section 1401a
and 19 CFR 152.101).
With respect to NV, the petitioners stated that despite significant
efforts, they were unable to obtain any home market or third country
market prices for sales of Macedonian CTL plate. The petitioners
instead calculated the weighted-average CIF export price of CTL plate
from FYR Macedonia to Germany, France and Italy, for the period January
through August 1998, based on publicly available data. The petitioners
identified these three European countries as likely to represent
significant export markets for Macedonian CTL plate because they are
three large, steel-consuming markets that are geographically proximate
to FYR Macedonia. Because the petitioners had no information pertaining
to international freight and insurance charges within Europe, no
adjustment was made to the CIF export price for those charges.
In addition, the petitioners provided information demonstrating
reasonable grounds to believe or suspect that sales of Macedonian CTL
plate in the above-specified third-country markets were made at prices
below the COP, within the meaning of section 773(b) of the Act, and
requested that the Department conduct a country-wide sales-below-cost
investigation. Pursuant to section 773(b)(3) of the Act, COP consists
of COM, SG&A, and packing expenses. To calculate COM, the petitioners
relied upon their own production experience during the period January
through September 1998, adjusted for known differences between the
costs incurred to produce CTL plate in the United States and in FYR
Macedonia using publicly available data.
To calculate SG&A and financial expenses, the petitioners stated
that they conducted extensive research efforts to obtain the financial
statements of the Macedonian CTL producer or any other steel-related
producer in FYR Macedonia without success. Therefore, they relied upon
their own experience during 1998 to calculate these expenses. While it
is the Department's practice, under section 773(e)(2)(A) of the Act, to
calculate general expenses (and profit) in connection with the
production and sale of a foreign like product, in the ordinary course
of trade, for consumption in the foreign country (i.e., country of
manufacture), such information was not reasonably available to the
petitioners or to the Department in this case. Therefore, we have
accepted the petitioners' calculation methodology for purposes of
initiating this investigation.
Based upon the comparison of the weighted-average export price of
the foreign like product in third countries to the calculated COP of
the product, we find reasonable grounds to believe or suspect that
sales of the foreign like product were made below the COP, within the
meaning of section 773(b)(2)(A)(i) of the Act. We also note that in
this case, making no adjustment to COP for general expenses would still
result in sales below cost. Accordingly, the Department is initiating a
country-wide cost investigation.
Because the third-country export price used in the petition was
below the calculated COP, pursuant to sections 773(a)(4), 773(b), and
773(e) of the Act, the petitioners based NV on CV. The petitioners
calculated CV using the same methodology as that described above for
third country COP. Consistent with section 773(e)(2) of the Act, the
petitioners also added to CV an amount for profit which they based on
their own experience. As noted above, while it is the Department's
practice, under section 773(e)(2)(A) of the Act, to calculate general
expenses and profit in connection with the production and sale of a
foreign like product, in the ordinary course of trade, for consumption
in the foreign country (i.e., country of manufacture), such information
was not reasonably available to the petitioners or to the Department in
this case. Therefore, we have accepted the petitioners' calculation
methodology for purposes of initiating this investigation. We also note
that in this case, making no adjustment to CV for general expenses and
profit would still result in significant margins when CV is compared to
EP.
The petitioners provided estimated dumping margins in two ways: (1)
CV compared to U.S. price offers (44.24 to 119.42 percent); and (2) CV
compared to AUV (22.95 to 34.97 percent).
Initiation of Cost Investigations
Pursuant to section 773(b) of the Act, the petitioners provided
information demonstrating reasonable grounds to believe or suspect that
sales in the home markets of France, India, Indonesia, Italy, Japan,
Korea, and sales in third countries for FYR Macedonia were made at
prices below the fully allocated COP and, accordingly, requested that
the Department conduct country-wide sales-below-COP investigations in
connection with the requested antidumping investigations in France,
India, Indonesia, Italy, Japan, Korea, and FYR Macedonia. The Statement
of
[[Page 12966]]
Administrative Action (SAA), submitted to the Congress in connection
with the interpretation and application of the URAA, states that an
allegation of sales below COP need not be specific to individual
exporters or producers. SAA, H.R. Doc. No. 316 at 833 (1994). The SAA,
at 833, states that ``Commerce will consider allegations of below-cost
sales in the aggregate for a foreign country, just as Commerce
currently considers allegations of sales at less than fair value on a
country-wide basis for purposes of initiating an antidumping
investigation.''
Further, the SAA provides that ``new section 773(b)(2)(A) retains
the current requirement that Commerce have `reasonable grounds to
believe or suspect' that below cost sales have occurred before
initiating such an investigation. `Reasonable grounds' . . . exist when
an interested party provides specific factual information on costs and
prices, observed or constructed, indicating that sales in the foreign
market in question are at below-cost prices.'' Id. Based upon the
comparison of the adjusted prices from the petitions for the
representative foreign like products to their costs of production, we
find the existence of ``reasonable grounds to believe or suspect'' that
sales of these foreign like products in France, India, Indonesia,
Italy, Japan, Korea, and FYR Macedonia were made below their respective
COPs within the meaning of section 773(b)(2)(A)(i) of the Act.
Accordingly, the Department is initiating the requested country-wide
cost investigations (see country-specific sections above).
Fair Value Comparisons
Based on the data provided by the petitioners, there is reason to
believe that imports of CTL plate from the Czech Republic, France,
India, Indonesia, Italy, Japan, Korea, and FYR Macedonia are being, or
are likely to be, sold at less than fair value.
Critical Circumstances
The petitioners have alleged that critical circumstances exist with
respect to imports of subject merchandise from the Czech Republic,
Indonesia, Japan, and FYR Macedonia. The petitioners have supported
their allegations with the following information. For the Czech
Republic and FYR Macedonia, the petitioners state that there is a
history of injurious dumping because Canada has imposed antidumping
measures on CTL plate from these countries. For Indonesia and Japan,
the petitioners made alternative claims that the importers knew, or
should have known, that CTL plate was being sold at less than normal
value and that there was likely to be material injury by reason of such
sales. Specifically, for both countries, the petitioners allege that
the margins calculated in the petitions exceed the 25 percent threshold
used by the Department to impute importer knowledge of dumping and the
likelihood of material injury due to that dumping.
The petitioners also have alleged that imports from the Czech
Republic, Indonesia, Japan, and FYR Macedonia have been massive over a
relatively short period. The petitioners allege that there was
sufficient pre-filing notice of these antidumping petitions and that
the Department should compare imports during June-August 1998 (base
period) to imports during September-November 1998 (comparison period)
for purposes of this determination. According to the import statistics
contained in the petitions, for the periods June-August 1998 and
September-November 1998, imports of CTL plate from the Czech Republic
increased by 154 percent, imports from Indonesia increased by 15
percent, imports from Japan increased by 294 percent, and imports from
FYR Macedonia increased by 129 percent. Taking into consideration the
foregoing, we find that the petitioners have alleged the elements of
critical circumstances and supported them with information reasonably
available.
For these reasons, we are initiating critical circumstances
investigations for the above-specified countries and will make
preliminary determinations based on available information at the
appropriate time, in accordance with section 733(e)(1) of the Act.
Allegations and Evidence of Material Injury and Causation
The petitioners allege that the U.S. industry producing the
domestic like product is being materially injured, and is threatened
with material injury, by reason of the individual and cumulated imports
of the subject merchandise sold at less than NV. The petitioners
explained that the industry's injured condition is evident in the
declining trends in net operating profits, net sales volumes, profit-
to-sales ratios, and capacity utilization. The allegations of injury
and causation are supported by relevant evidence including U.S. Customs
import data, lost sales, and pricing information. The Department
assessed the allegations and supporting evidence regarding material
injury and causation and determined that these allegations are
supported by accurate and adequate evidence and meet the statutory
requirements for initiation (see IA Initiation Checklist).
Initiation of Antidumping Investigations
Based upon our examination of the petitions on certain cut-to-
length carbon-quality steel plate and the petitioners' responses to our
supplemental questionnaires clarifying the petitions, as well as our
discussion with the authors of the foreign market research reports
supporting the petitions on France, India, Indonesia, Italy, Japan, and
Korea, and other measures undertaken to confirm the information
contained in these reports (see IA Initiation Checklist), we have found
that the petitions meet the requirements of section 732 of the Act.
Therefore, we are initiating antidumping duty investigations to
determine whether imports of certain cut-to-length carbon-quality steel
plate products from the Czech Republic, France, India, Indonesia,
Italy, Japan, Korea, and FYR Macedonia are being, or are likely to be,
sold in the United States at less than fair value. Unless this deadline
is extended, we will make our preliminary determinations no later than
140 days after the date of this notice.
Distribution of Copies of the Petitions
In accordance with section 732(b)(3)(A) of the Act, a copy of the
public version of each petition has been provided to the
representatives of the Czech Republic, France, India, Indonesia, Italy,
Japan, Korea, and FYR Macedonia. We will attempt to provide a copy of
the public version of each petition to each exporter named in the
petition (as appropriate).
International Trade Commission Notification
We have notified the ITC of our initiations, as required by section
732(d) of the Act.
Preliminary Determinations by the ITC
The ITC will determine, by April 2, 1999, whether there is a
reasonable indication that imports of certain cut-to-length carbon-
quality steel plate from the Czech Republic, France, India, Indonesia,
Italy, Japan, Korea, and FYR Macedonia are causing material injury, or
threatening to cause material injury, to a U.S. industry. A negative
ITC determination for any country will result in the investigation
being terminated with respect to that country; otherwise, these
investigations will proceed according to statutory and regulatory time
limits.
This notice is published pursuant to section 777(i) of the Act.
[[Page 12967]]
Dated: March 8, 1999.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 99-6293 Filed 3-15-99; 8:45 am]
BILLING CODE 3510-DS-P
