[Federal Register Volume 62, Number 56 (Monday, March 24, 1997)]
[Notices]
[Pages 13854-13857]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-7357]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-122-826, A-428-822, A-274-802, and A-307-813]
Initiation of Antidumping Duty Investigations: Steel Wire Rod
From Canada, Germany, Trinidad and Tobago, and Venezuela
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: March 24, 1997.
FOR FURTHER INFORMATION CONTACT: James Doyle (Canada and Trinidad and
Tobago), at (202) 482-0172; Edward Easton (Germany), at (202) 482-1777;
or David Goldberger (Venezuela), at (202) 482-4136, Import
Administration, International Trade Administration, U.S. Department of
Commerce, 14th Street and Constitution Avenue, N.W., 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
to the current regulations, as amended by the interim regulations
published in the Federal Register on May 11, 1995 (60 FR 25130).
The Petition
On February 26, 1997, the Department of Commerce (``the
Department'') received a petition filed in proper form by Connecticut
Steel Corp., Co-Steel Raritan, GS Industries, Inc., Keystone Steel &
Wire Co., North Star Steel Texas, Inc., and Northwestern Steel & Wire
Co. (``petitioners''). The Department received supplemental information
to the petition on March 11, 1997.
In accordance with section 732(b) of the Act, petitioners allege
that imports of steel wire rod (``SWR'') from Canada, Germany, Trinidad
& Tobago, and Venezuela 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 petitioners have standing to file the
petition because they are interested parties as defined in section
771(9)(C) of the Act.
Scope of Investigations
The products covered by these investigations are certain hot-rolled
carbon steel and alloy steel products, in coils, of approximately round
cross section, between 5.00 mm (0.20 inch) and 19.0 mm (0.75 inch),
inclusive, in solid cross-sectional diameter. Specifically excluded are
steel products possessing the above noted physical characteristics and
meeting the Harmonized Tariff Schedule of the United States (HTSUS)
definitions for (a) stainless steel; (b) tool steel; (c) high nickel
steel; (d) ball bearing steel; (e) free machining steel that contains
by weight 0.03 percent or more of lead, 0.05 percent or more of
bismuth, 0.08 percent or more of sulfur, more than 0.4 percent of
phosphorus, more than 0.05 percent of selenium, and/or more than 0.01
percent of tellurium; or f) concrete reinforcing bars and rods.
The following products are also excluded from the scope of these
investigations:
Coiled products 5.50 mm or less in true diameter with an
average partial decarburization per coil of no more than 70 microns in
depth, no inclusions greater than 20 microns, containing by weight the
following: carbon greater than or equal to 0.68 percent; aluminum less
than or equal to 0.005 percent; phosphorous plus sulfur less than or
equal to 0.040 percent; maximum combined copper, nickel and chromium
content of 0.13 percent; and nitrogen less than or equal to 0.006
percent. This product is commonly referred to as ``Tire Cord Wire
Rod.''
Coiled products 7.9 to 18 mm in diameter, with a partial
decarburization of 75 microns or less in depth and seams no more than
75 microns in depth; containing 0.48 to 0.73 percent carbon by weight.
This product is commonly referred to as ``Valve Spring Quality Wire
Rod.''
The products under investigation are currently classifiable under
subheadings 7213.91.3000, 7213.91.4500, 7213.91.6000, 7213.99.0030,
7213.99.0090, 7227.20.0000, and 7227.90.6050 of the HTSUS. Although the
HTSUS subheadings are provided
[[Page 13855]]
for convenience and customs purposes, our written description of the
scope of these investigations is dispositive.
Determination of Industry Support for the Petition
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 account for production
of 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. However, while
both the Department and the ITC must apply the same statutory
definition of domestic like product, they do so for different purposes
and pursuant to separate and distinct authority. In addition, the
Department's determination is subject to limitations of 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.1
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\1\ 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 Therefor from Japan: Final Determination;
Rescission of Investigation and Partial Dismissal of Petition, 56
Fed. Reg. 32376, 32380-81 (July 16, 1991).
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Section 771(10) of the Act defines domestic like product as ``a
product that 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 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.
The petition refers to the single domestic like product defined in
the ``Scope of Investigation'' section, above. The Department has no
basis on the record to find the petition's definition of the domestic
like product clearly inaccurate. In this regard, we have found no basis
on which to reject petitioners' representations that there are clear
dividing lines, in terms of characteristics or uses, between the
product under investigation on the one hand and, on the other hand,
other carbon and alloy coiled steel products. The Department has,
therefore, adopted the like product definition set forth in the
petition. In this case, petitioners established industry support
representing approximately 75 percent of the production of the domestic
like product.
On March 13, 1997, Stelco Inc. (``Stelco''), a producer of wire rod
in Canada, alleged that the petition covering imports from Canada did
not contain information concerning support from domestic coiled bar
producers. Stelco argued that domestic bar producers' support was
necessary because petitioners' March 4, 1997, submission specifically
included ``other coiled products known in the industry as `bar.'''
Accordingly, Stelco argued that the Department should poll the industry
in order to evaluate the question of industry support.
The Department has determined that the petition contained adequate
evidence of sufficient industry support and that polling is therefore
unnecessary. Petitioners established industry support representing
approximately 75 percent of the production of the domestic like
product, which percentage includes the coiled bar. Stelco did not
allege and has not demonstrated that coiled bar is a separate domestic
like product requiring a separate determination as to industry support.
Further, we note that both the American Iron and Steel Institute and
HTSUS statistics treat coiled bars and coiled rods as one category.
Because it is reasonable to find a single domestic like product for
purposes of evaluating industry support in these circumstances,
petitioners are well within the statutory requirements for industry
support--both among all producers and among producers expressing an
opinion--for the single like product covered by the petition. Finally,
the Department notes that the inclusion or exclusion in industry
support calculations of ``tire cord'' wire rod--which is excluded from
the scope of these proceedings--does not materially affect petitioners'
approximate support level of 75 percent (see Initiation Checklist,
dated March 18, 1997, and found in the official file in Room B-099).
Accordingly, the Department determines that the petition is 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. 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 will re-examine the
information and revise the margin calculations, if appropriate.
Canada
Petitioners identified three Canadian exporters and producers of
SWR: Ivaco, Inc. (``Ivaco''), Sidbec-Dosco, Inc. (``Sidbec-Dosco''),
and Stelco, Inc. (``Stelco''). Petitioners based export price on price
quotations (FOB-customer's location) to U.S. purchasers for carbon wire
rod products manufactured by Sidbec-Dosco and Ivaco in Canada. The
quoted prices were for three grades of rod during the months of March
and April and the fourth quarter of 1996; they also were export prices
(i.e., prices to unrelated U.S. customers for purchase prior to
export).
Petitioners made deductions for inland freight from the Canadian
steel plants to the place of delivery to the U.S. purchaser, brokerage
fees and customs duties paid upon entry of the merchandise into the
United States. Petitioners obtained freight and brokerage fee
quotations from a freight company offering trucking service in both
Canada and the United States. Petitioners calculated customs duty
charges based on the customs value for each U.S. product.
With respect to normal value, petitioners obtained home market FOB
price quotations for carbon wire rod manufactured by Sidbec-Dosco and
Ivaco in Canada. The prices were quoted in Canadian dollars on a
delivered basis, for delivery in the fourth quarter of 1996.
Petitioners made deductions for inland freight from the Canadian
steel plants to the home market customer, and for the credit costs.
Petitioners obtained freight and brokerage fee quotations from a
freight company offering trucking services in Canada and the United
States. Petitioners based the home market credit expense calculation on
thirty day credit terms, which were supported by the affidavit of the
regional manager of a U.S. manufacturer of wire rod, and the 1996
fourth quarter average of the monthly stated prime rate
[[Page 13856]]
reported in the Canadian Economic Observer. Petitioners noted that
prices do not include any Goods and Service Tax, and that they did not
make an adjustment for differences in physical characteristics of this
merchandise, although the grades used for one of the price comparisons
were different.
In addition, the petitioners provided information demonstrating
reasonable grounds to believe or suspect that sales of SWR in the home
market were made at prices below the fully allocated COP, within the
meaning of section 773(b) of the Act, and requested that the Department
conduct a country-wide sales below cost investigation. Therefore,
pursuant to sections 773(a)(4) and 773(e) of the Act, petitioners based
normal value for sales in Canada on constructed value (``CV'').
Pursuant to section 773(e) of the Act, CV consists of the cost of
manufacture (``COM''), selling, general, and administrative (``SG&A'')
expenses, and profit. Petitioners calculated COM based on their own
production experience, adjusted for known differences between costs
incurred to produce SWR in the United States and costs incurred for
producing the subject merchandise in Canada. To calculate SG&A and
financing expenses, the petitioners relied on the most recent company-
specific and/or country-specific data for the steel industry available
to the public. To calculate CV profit, the petitioners used the most
recent profitability data for Canadian steel manufacturers available to
the public.
The average dumping margins in the petition based on price-to-price
comparisons range from 14.59 percent to 17.89 percent. After certain
adjustments we made to the CV data listed in the petition, average
dumping margins based on price-to-CV comparisons range from 27.91
percent to 40.55 percent.
Germany
Petitioners identified four exporters and producers of SWR:
Brandenburg Elektrostahlwerk GmbH (``Brandenburg''), Ispat Hamburger
Stahlwerke GmbH, Saarstahl AG (``Saarstahl''), and Thyssen Stahl AG.
Petitioners obtained price quotes for two grades of SWR products
manufactured by Brandenburg and by Saarstahl and offered for sale to
unaffiliated purchasers in the United States. From these quoted prices,
petitioners deducted foreign inland freight from the mill to the port,
foreign port and loading fees, ocean freight and insurance, U.S. port
and unloading fees, U.S. customs duties, and U.S. inland freight.
With respect to normal value, petitioners obtained two price quotes
for Brandenburg and Saarstahl for SWR products offered for sale to
customers in Germany which are either identical or similar to those
sold to the United States. Petitioners adjusted these prices for
estimated inland transportation and credit expenses. Petitioners did
not make an adjustment for differences in physical characteristics of
the merchandise used for a price comparison in the two markets, even
though the grades used in the comparison were different.
In addition, the petitioners alleged that sales in the home market
were made at prices below the fully allocated COP, and requested that
the Department conduct a country-wide sales below COP investigation.
Therefore, petitioners constructed a normal value for sales in Germany.
To calculate CV, petitioners based COM on their own production
experience, adjusted for known differences between costs incurred to
produce SWR in the United States and costs incurred for producing the
merchandise in Germany. To calculate SG&A and financing expenses,
petitioners relied on the most recent company-specific and/or country
specific data for the steel industry available to the public. To
calculate CV profit, petitioners used the most recent profitability
data for German steel manufacturers available to the public.
The dumping margins based on price-to-price comparisons range from
19.95 percent to 36.68 percent. After certain adjustments we made to
the CV data listed in the petition, average dumping margins based on
price-to-CV comparisons range from 80.30 percent to 153.10 percent.
Trinidad and Tobago
Petitioners identified Caribbean Ispat, Ltd. (``CIL'') as the sole
exporter and producer of SWR from Trinidad and Tobago. Petitioners
based export price on FOB-customer's location prices to U.S. purchasers
for carbon wire rod products manufactured by CIL in Trinidad and
Tobago. The quoted prices were for two grades of rod during the month
of June and the first quarter of 1996; they also were export prices
(i.e., prices to unrelated customers for purchase prior to export).
Petitioners made deductions for Trinidad and Tobago cargo handling
fees, ocean freight, U.S. port and handling fees, and inland freight
charges from the U.S. port to the U.S. purchaser location. Petitioners
used the published port rates by the Point Lisas Industrial Port
Development Corp., Ltd. Petitioners based their estimate of ocean
freight and insurance costs by deducting the 1996 unit customs value of
wire rod imports from Trinidad and Tobago, entered through the
Louisiana port, by the CIF value of the same product. Petitioners did
not adjust for duties because the merchandise enters duty free under
the Caribbean Basin Initiative.
For normal value, petitioners stated that the Trinidad and Tobago
prices were quoted on an FOB plant basis, so there was no need to
adjust for inland freight; quoted prices were net of value added tax,
so there was no need for a tax adjustment; payment terms specify cash
on delivery, so there were no home market credit expenses.
In addition, the petitioners alleged that sales in the home market
were made at prices below the fully allocated COP and requested that
the Department conduct a sales below cost investigation. Therefore,
petitioners constructed a normal value for sales in Trinidad and
Tobago. To calculate CV, petitioners based COM for CIL based on
publicly available data and their own production experience, adjusted
for known differences between costs incurred to produce SWR in the
United States and costs incurred for production of the subject
merchandise in Trinidad and Tobago. To calculate SG&A and financing
expenses, petitioners relied on the most recent company-specific data
available to the public. To calculate profit for CV, the petitioners
relied on an average profit figure for a U.S. surrogate manufacturer.
We recalculated profit, using data supplied by the U.S. Embassy in
Trinidad and Tobago.
The dumping margins based on price-to-price comparisons range from
40.07 percent to 40.88 percent. After certain adjustments we made to
the CV data listed in the petition, average dumping margins based on
price-to-CV comparisons range from 77.88 percent to 78.94 percent.
Venezuela
Petitioners identified two Venezuelan exporters and producers of
SWR: CVG Siderurgica Del Orinoco C.A. (``SIDOR'') and Sidetur-
Siderugica del Turbio SA. Petitioners obtained FOB-delivered price
quotations to U.S. purchasers for SWR products manufactured by SIDOR in
Venezuela. Petitioners deducted ocean freight, customs duties, port
charges, and inland freight from the port of entry to the customer
site.
With regard to normal value, petitioners relied upon market
research to obtain FOB-plant price quotes from SIDOR. Petitioners made
a circumstance-of-sale adjustment to
[[Page 13857]]
account for differences in credit expenses associated with the U.S. and
home market sales.
In addition, the petitioners alleged that sales in the home market
were made at prices below the fully allocated COP and requested that
the Department conduct a sales below cost investigation. Therefore, the
petitioners constructed a normal value for sales in Venezuela. To
calculate CV, petitioners based COM for SIDOR based on publicly
available data and their own production experience, adjusted for known
differences between costs incurred to produce SWR in the United States
and costs incurred for producing the subject merchandise in Venezuela.
To calculate SG&A and financing expenses, the petitioners relied on the
most recent company-specific data available to the public. To calculate
profit for CV, the petitioners relied on the most recent profitability
data for a Venezuelan steel manufacturer available to the public.
The dumping margins in the petition based on price-to-price
comparisons range from 15.46 percent to 34.06 percent. The dumping
margins in the petition based on price-to-CV comparisons range from
40.99 percent to 66.75 percent.
Initiation of Cost Investigations
Pursuant to section 773(b) of the Act, petitioners alleged that
sales in the home markets of Canada, Germany, Trinidad and Tobago, and
Venezuela were made at prices below the fully allocated COP and,
accordingly, requested that the Department conduct a country-wide sales
below COP investigation in each of these petitioned-for antidumping
investigations. The Statement of Administrative Action (``SAA''),
submitted to the Congress in connection with the interpretation and
application of the Uruguay Round Agreements, states that an allegation
of sales below COP need not be specific to individual exporters or
producers. SAA, H.R. Doc. No. 316, 103d Cong., 2d Sess., 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 petition of the foreign like
products in their respective home markets to their costs of production,
we find the existence of ``reasonable grounds to believe or suspect''
that sales of these foreign like products 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.
Fair Value Comparisons
Based on the data provided by petitioners, there is reason to
believe that imports of SWR from Canada, Germany, Trinidad and Tobago,
and Venezuela are being, or are likely to be, sold at less than fair
value.
Initiation of Antidumping Investigations
We have examined the petition on SWR and have found that it meets
the requirements of section 732 of the Act, including the requirements
concerning allegations of the material injury or threat of material
injury to the domestic producers of a domestic like product by reason
of the subject imports, allegedly sold at less than fair value.
Therefore, we are initiating antidumping duty investigations to
determine whether imports of SWR from Canada, Germany, Trinidad and
Tobago, and Venezuela are being, or are likely to be, sold in the
United States at less than fair value. Unless extended, we will make
our preliminary determinations by August 5, 1997.
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 governments of Canada, Germany, Trinidad and
Tobago, and Venezuela. 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 14, 1997, whether there is a
reasonable indication that imports of SWR from Canada, Germany,
Trinidad and Tobago, and Venezuela are causing material injury, or
threatening to cause material injury, to a U.S. industry. Negative ITC
determinations will result in the particular investigations being
terminated; otherwise, the investigations will proceed according to
statutory and regulatory time limits.
Dated: March 18, 1997.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 97-7357 Filed 3-21-97; 8:45 am]
BILLING CODE 3510-DS-P
