[Federal Register Volume 59, Number 142 (Tuesday, July 26, 1994)] [Unknown Section] [Page 0] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 94-18170] [[Page Unknown]] [Federal Register: July 26, 1994] ----------------------------------------------------------------------- DEPARTMENT OF COMMERCE [A-357-810, A-433-805, A-475-816, A-588-835, A-580-825, A-201-817, and A-469-806] Initiation of Antidumping Duty Investigations: Oil Country Tubular Goods From Argentina, Austria, Italy, Japan, Korea, Mexico, and Spain AGENCY: Import Administration, International Trade Administration, Department of Commerce. EFFECTIVE DATE: July 26, 1994. FOR FURTHER INFORMATION CONTACT: Irene Darzenta or Cameron Werker, Office of Antidumping Investigations, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone (202) 482-6320 or 482-3874. INITIATION OF INVESTIGATIONS: The Petition On June 30, 1994, we received seven petitions filed in proper form by: Koppel Steel Corporation, USS/Kobe Steel Company, and U.S. Steel Group (a unit of USX Corporation) with respect to Austria, Argentina, and Spain; Koppel Steel Corporation and U.S. Steel Group with respect to Japan; North Star Steel Ohio (a division of North Star Steel Corporation) with respect to Italy and Mexico; and Bellville Tube Corporation, IPSCO Steel, Inc., and Maverick Tube Corporation with respect to Korea. In accordance with Section 732(b) of the Tariff Act of 1930, as amended (the Act) and 19 CFR 353.12 (1994), the petitioners allege that oil country tubular goods (OCTG) from Argentina, Austria, Italy, Japan, Korea, Mexico, and Spain 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 these imports are materially injuring, or threaten material injury to, a U.S. industry. Petitioners have stated that they have standing to file the petitions because they are interested parties, as defined under section 771(9)(C) of the Act, and because the petitions were filed on behalf of the U.S. industry producing the subject merchandise. If any interested party, as described under paragraphs (C), (D), (E), or (F) of section 771(9) of the Act, wishes to register support for, or opposition to, these petitions, it should file a written notification with the Assistant Secretary for Import Administration. Under the Department's regulations, any producer or reseller seeking exclusion from a potential antidumping duty order must submit its request for exclusion within 30 days of the date of the publication of this notice. The procedures and requirements are contained in 19 CFR 353.14. Scope of Investigations For purposes of these investigations, OCTG are hollow steel products of circular cross-section, including oil well casing, tubing, and drill pipe, of iron (other than cast iron) or steel (both carbon and alloy), whether seamless or welded, whether or not conforming to American Petroleum Institute (API) or non-API specifications, whether finished or unfinished (including green tubes and limited service OCTG products). These petitions do not cover casing, tubing, or drill pipe containing 10.5 percent or more of chromium. The OCTG subject to these investigations are currently classified in the Harmonized Tariff Schedule of the United States (HTS) under item numbers: 7304.20.10.00, 7304.20.10.10, 7304.20.10.20, 7304.20.10.30, 7304.20.10.40, 7304.20.10.50, 7304.20.10.60, 7304.20.10.80, 7304.20.20.00, 7304.20.20.10, 7304.20.20.20, 7304.20.20.30, 7304.20.20.40, 7304.20.20.50, 7304.20.20.60, 7304.20.20.80, 7304.20.30.00, 7304.20.30.10, 7304.20.30.20, 7304.20.30.30, 7304.20.30.40, 7304.20.30.50, 7304.20.30.60 7304.20.30.80, 7304.20.40.00, 7304.20.40.10, 7304.20.40.20, 7304.20.40.30, 7304.20.40.40, 7304.20.40.50, 7304.20.40.60, 7304.20.40.80, 7304.20.50.10, 7304.20.50.15, 7304.20.50.30, 7304.20.50.45, 7304.20.50.50, 7304.20.50.60, 7304.20.50.75, 7304.20.60.10, 7304.20.60.15, 7304.20.60.30, 7304.20.60.45, 7304.20.60.50, 7304.20.60.60, 7304.20.60.75, 7304.20.70.00, 7304.20.80.00, 7304.20.80.30, 7304.20.80.45, 7304.20.80.60, 7305.20.20.00, 7305.20.40.00, 7305.20.60.00, 7305.20.80.00, 7306.20.10.30, 7306.20.10.90, 7306.20.20.00, 7306.20.30.00, 7306.20.40.00, 7306.20.60.10, 7306.20.60.50, 7306.20.80.10, and 7306.20.80.50. Although the HTS subheadings are provided for convenience and customs purposes, our written description of the scope of these investigations is dispositive. United States Price and Foreign Market Value For purposes of these initiations, no adjustments to petitioners' calculations were necessary. If it becomes necessary at a later date to consider these petitions as a source of best information available (BIA), we may review all of the bases for the petitioners' estimated margins in determining BIA. Argentina Petitioners based U.S. price (USP) on a quoted transaction price of subject merchandise produced by Siderca, an OCTG producer in Argentina, and offered to a U.S. distributor for sale in the United States. The sales terms of the price quote represent a sale made prior to importation of the subject merchandise to the United States. Petitioners calculated a net USP by subtracting ocean freight and insurance, unloading and wharfage charges at the U.S. port of entry, and the applicable 7.5 percent ad valorem U.S. customs duty. Petitioners used U.S. import statistics for the month of offer to estimate the actual average ocean freight and insurance charges for subject merchandise subject to the price quote. Petitioners adjusted the USP by adding an 8.3 percent cascade turnover tax and an 18 percent value-added tax (VAT), both of which were calculated on the invoice price net of discounts. Petitioners stated that information regarding Siderca's sales to third country markets was not reasonably available and, thus, they were unable to calculate home market viability. However, petitioners assumed the home market to be viable based on a published report estimating the Argentine drilling market to be the seventh most active in the world. Accordingly, petitioners based foreign market value (FMV) on home market sales. Petitioners also based FMV on constructed value (CV). First, petitioners stated that they used a home market sales price of merchandise identical to that offered for sale in the United States. Petitioners made adjustments for differences in circumstances of sale (i.e., credit) and the home market VAT. The comparison of USP to FMV results in a negative dumping margin. Second, petitioners calculated a CV as the basis for FMV because Siderca allegedly sold the subject merchandise at a price substantially below its cost of production (COP). COP was based on the production costs of one of the U.S. producers adjusted to reflect Siderca's production costs. Petitioners calculated COP and CV in accordance with a methodology acceptable to the Department. Because petitioners do not have access to the foreign producer's proprietary data, petitioners utilized their own cost information and adjusted for all known differences between the U.S. and Argentine markets with publicly available information. When practicable, petitioners used public information specific to Siderca. Petitioners added an amount for the statutory minimum eight percent profit and their own packing costs to the estimated COP to derive the CV. The dumping margin of OCTG from Argentina based on a comparison of USP to CV alleged by petitioners is 41.60 percent. The Department is initiating a COP investigation of Siderca's home market sales. Based on our analysis of petitioners' COP allegation, we find that we have reasonable grounds to believe or suspect that home market sales are being made below the COP. In their allegation, petitioners provided company-specific information, used a reasonable methodology, and demonstrated that the products they used in their calculations were representative of the broader range of OCTG products sold by Siderca in Argentina. If, during the course of the investigation, Siderca does not become a respondent, this COP investigation will be terminated with no further action from the Department. The Department will not initiate a COP investigation for those companies/exporters where petitioners do not provide a company-specific allegation. Austria Petitioners based USP on a sale made by a U.S. trading company related to Voest-Alpine, an Austrian producer of the subject merchandise, to an unrelated U.S. customer. Petitioners deducted from USP amounts for international shipment charges calculated based on U.S. Customs data for shipments of subject merchandise during the second half of 1993, and the applicable eight percent ad valorem U.S. customs duty. Petitioners demonstrated that the home market is not viable. Specifically, petitioners illustrated that the home market shipments of Voest-Alpine expressed as a percentage of exports to third country markets is substantially less than five percent. Therefore, petitioners first based FMV on third country sales. Petitioners stated that with regards to similarity of merchandise, volume of sales, and similarity of the Russian OCTG market relative to the U.S. OCTG market, Russia is the appropriate third country market on which to calculate FMV. Petitioners first based FMV on the bid of Voest-Alpine, an Austrian producer of OCTG, to supply subject merchandise to a Russian oil production association. The Austrian producer's offering price was contemporaneous to the U.S. sales price on which petitioners based USP. To calculate an ex-factory price, petitioners deducted inland freight and made a circumstance-of-sale adjustment for the differences in credit expenses. Based on a comparison of USP to FMV, the dumping margin alleged by petitioners is 16.5 percent. Petitioners also based FMV on CV because Voest-Alpine allegedly sold the subject merchandise to Russia at prices below the COP. COP was based on the production costs of one of the U.S. producers, adjusted to reflect Voest-Alpine's production costs. Petitioners calculated COP and CV in accordance with a methodology acceptable to the Department. Because petitioners do not have access to the foreign producer's proprietary data, petitioners utilized their own cost information and adjusted for all known differences between the U.S. and Austrian markets with publicly available information. When practicable, petitioners used public information specific to Voest- Alpine. Petitioners added to the estimated manufacturing costs an amount for the statutory minimum ten percent selling, general, and administrative (SG&A) expense. Petitioners then added an amount for the statutory minimum eight percent profit and their own packing costs to the estimated COP to derive the CV. Based on a comparison of USP to CV, the dumping margin alleged by petitioners is 41.7 percent. The Department is initiating a COP investigation of Voest-Alpine's third country sales to Russia. Based on our analysis of petitioners' COP allegation, we find that we have reasonable grounds to believe or suspect that sales to Russia are being made below the COP. In their allegation, petitioners provided company-specific information, used a reasonable methodology, and demonstrated that the products used in their calculations were representative of the broader range of OCTG products sold by Voest-Alpine to Russia. This COP investigation will be terminated automatically if, during the course of the investigation, any one of the following conditions is met: Voest-Alpine does not become a respondent; the home market is determined to be viable; or Russia is determined not to be an appropriate third country market on which to base FMV. The Department will not initiate a COP investigation for those companies/exporters where petitioners do not provide a company-specific allegation. Italy Petitioner based USP on quoted transaction prices of subject merchandise produced by the Italian producer, Dalmine, and offered to U.S. distributors for sale in the United States during the first quarter of 1994. These price quotes represent sales made prior to importation of subject merchandise to the United States. Petitioner calculated a net USP by subtracting the foreign inland freight from the mill to the port of export, loading and wharfage charges at the port of export, ocean freight and insurance, U.S. terminal and handling fees, and the applicable 6.2 percent ad valorem U.S. customs duty. Petitioner used U.S. import statistics for the first quarter of 1994 to estimate the actual average ocean freight and insurance charges. Petitioner stated that it based FMV on CV because it was unable to obtain home market or third country prices. Because Dalmine's production costs were unavailable to petitioner, petitioner used the production costs of a U.S. producer, adjusted to reflect Dalmine's production costs. Petitioner calculated CV in accordance with a methodology acceptable to the Department. Because petitioner did not have access to the foreign producer's proprietary data, petitioner utilized its own cost information and adjusted for all known differences between the U.S. and Italian markets with publicly available information. When practicable, petitioner used public information specific to Dalmine. Petitioners added to the estimated manufacturing costs an amount for the statutory minimum ten percent SG&A expense. Petitioner then added an amount for the statutory minimum eight percent profit and its own packing cost to derive the CV. The range of dumping margins based on a comparison of USP to CV alleged by petitioner is 41.60 percent to 49.78 percent. Japan For Japan, petitioners based USP on two price offers for seamless OCTG tubing manufactured by two Japanese producers, Sumitomo and Nippon Steel, to unrelated parties for purchase prior to importation into the United States. Petitioners demonstrated that the products for which these offers were made, are representative of OCTG products imported into the United States from Japan in terms of type and manufacturing method. Petitioners calculated a net USP by deducting international shipment charges such as ocean freight and marine insurance; U.S. inland freight; U.S. handling charges including loading; U.S. port charges such as unloading and wharfage; and the applicable 7.5 percent ad valorem U.S. customs duty. Petitioners used the official U.S. import statistics for the period of time corresponding to the dates of the USP offers to estimate the actual ocean freight and marine insurance charges. Petitioner calculated two FMVs. First, petitioners used third country sales prices of merchandise allegedly comparable to that offered for sale in the United States. Specifically, petitioners used Japanese sales contract prices for OCTG products exported to the People's Republic of China (PRC) obtained from a Chinese trading company, adjusted to reflect differences in circumstances of sale (i.e., credit) between the PRC and U.S. markets. Before resorting to third country price data, petitioners demonstrated that the Japanese home market was not viable to serve as the basis of FMV. Specifically, petitioners compared domestic and third country OCTG shipment data for the period January through November 1993, and found that home market shipments expressed as a percentage of third country shipments is substantially less than five percent. Petitioners claimed that the PRC constituted the appropriate third country market to serve as the basis for FMV for each Japanese producer based on the similarity of the merchandise, the volume of sales and the similarity of the Chinese OCTG market relative to the U.S. OCTG market. The range of dumping margins of OCTG from Japan based on a comparison of USP to FMV alleged by petitioners is 10.4 percent to 24.8 percent. Second, petitioners calculated a CV as the basis for FMV because they claimed that the Japanese producers' third country sales are being made at prices below the COP. Because petitioners could not obtain actual production costs for Sumitomo and Nippon Steel, they used U.S. production costs, adjusted to reflect production costs in Japan. Petitioners calculated COP and CV in accordance with a methodology acceptable to the Department. Because petitioners do not have access to the foreign producers' proprietary data, petitioners utilized their own cost information and adjusted for all known differences between the U.S. and Japanese markets with publicly available information. When practicable, petitioners used public information specific to Sumitomo and Nippon Steel. Petitioners added an amount for the statutory minimum eight percent profit and their own packing costs to the estimated COP to derive the CV. The range of dumping margins of OCTG from Japan based on a comparison of USP to CV alleged by petitioners is 36.5 percent to 44.2 percent. The Department is initiating a COP investigation of Sumitomo's and Nippon Steel's third country sales to the PRC. Based on our analysis of petitioners' COP allegation, we find that we have reasonable grounds to believe or suspect that sales to the PRC are being made below the COP. In their allegation, petitioners provided company-specific information, used a reasonable methodology, and demonstrated that the products used in their calculations were representative of the broader range of OCTG products sold by Sumitomo and Nippon Steel to the PRC. This COP investigation will be terminated automatically if, during the course of the investigation, any one of the following conditions is met: Sumitomo or Nippon Steel do not become respondents; the home market is determined to be viable; and the PRC is determined not to be an appropriate third country market on which to base FMV. The Department will not initiate a COP investigation for those companies/exporters where petitioners do not provide a company-specific allegation. Korea Petitioners based USP on the sales price of two Korean-produced OCTG tubing products to a U.S. distributor for sale to end users. Petitioners made adjustments for ocean freight, port and handling charges, the 1.9 percent ad valorem U.S. Customs duty, applicable discounts and distributor mark-up, and end finishing costs. Petitioners assumed that the Korean home market was not viable as the basis for FMV. Petitioners based this assumption on a report reviewing worldwide drilling activity, which indicated that no rigs are expected to be in operation in Korea during 1994. Thus, petitioners assumed that there is no OCTG market in Korea. Petitioners selected Canada as the appropriate third country market for calculating FMV based on the volume of sales and the similarity of the Canadian market relative to the United States. Additionally, Canada was the only third country for which pricing data was available to petitioners. Specifically, petitioners based FMV on Canadian distributor prices to end-users. Petitioners made adjustments for inland freight, port and handling charges, ocean freight, Canadian import duties, distributor mark-up, and end finishing costs. The range of dumping margins of OCTG from Korea based on a comparison of USP to FMV alleged by petitioners is 2.68 percent to 12.23 percent. Mexico Petitioner based USP on two price quotes for sales of OCTG manufactured by TAMSA, a Mexican producer of OCTG, and offered for sale in the United States. Petitioner adjusted the first price quote for foreign port and loading fees, a Mexican Customs clearance fee, ocean freight and insurance, U.S. import duties, U.S. terminal and unloading fees and other movement expenses, distributor mark-up, and sales agent fees. Petitioner made adjustments to the second price quote for foreign inland freight, Mexican Customs processing fees, U.S. customs duties, U.S. terminal and unloading fees and other movement charges, and sales agent fees. Petitioner was unable to obtain home market sales information and, therefore, was unable to conduct a home market viability test. However, petitioner assumed the home market to be viable based on a published report estimating the Mexican drilling market to be one of the most active in the world given the number of drilling rigs in operation. Petitioner based FMV on CV because it stated that it was unable to obtain home market prices. Petitioner used a U.S. producer as a surrogate for the Mexican producer, TAMSA, to determine the production costs of the subject merchandise. Petitioner calculated CV in accordance with a methodology acceptable to the Department. Because petitioner did not have access to the foreign producer's proprietary data, petitioner utilized its own cost information and adjusted for all known differences between the U.S. and Mexican markets with publicly available information. When practicable, petitioner used public information specific to TAMSA. Petitioner added an amount for the statutory minimum eight percent profit and its own packing cost to derive the CV. The range of dumping margins of OCTG from Mexico based on a comparison of USP to CV alleged by petitioner is 40.44 percent to 45.22 percent. Spain Petitioners based USP on average U.S. Customs values for seamless carbon steel OCTG tubing derived from statistics published by the U.S. Census Bureau for the months of August and November 1993, claiming that actual U.S. sales price information was unobtainable. Petitioners also claimed that seamless carbon steel OCTG tubing products are representative of OCTG imports from Spain produced by Tubos Reunidos, a Spanish producer of the subject merchandise which allegedly accounted for all OCTG imports from Spain during the period April 1993 through March 1994, the most recent 12-month period for which data was available to petitioners. Petitioners calculated FMV based on CV. Prior to resorting to CV, petitioners demonstrated that the home market for Tubos Reunidos was not viable. Specifically, petitioners compared estimated Spanish consumption in 1993 and Spanish export statistics for January through August 1993, and found that home market shipments as a percentage of exports to third country markets was substantially less than five percent. Petitioners also stated that information on Tubos Reunidos' sales of OCTG products to third country markets was not reasonably available despite their efforts to obtain such information. Therefore, in the absence of a viable home market and comparable third country sales, petitioners based FMV on CV. Because petitioners could not obtain actual production costs for Tubos Reunidos, they used U.S. production costs, adjusted to reflect production costs in Spain. Petitioners calculated CV in accordance with a methodology acceptable to the Department. Because petitioners do not have access to the foreign producer's proprietary data, petitioners utilized their own cost information and adjusted for all known differences between the U.S. and Spanish markets with publicly available information. When practicable, petitioners used public information specific to Tubos Reunidos. Petitioners added an amount for the statutory minimum eight percent profit and their own packing costs to the estimated COP to derive the CV. The range of dumping margins for OCTG from Spain based on a comparison of USP to CV alleged by petitioners is 5.3 percent to 18.6 percent. Initiation of Investigations We have examined the petitions on OCTG from Argentina, Austria, Italy, Japan, Korea, Mexico, and Spain and have found that the petitions meet the requirements of section 732(b) of the Act and 19 CFR 353.12. Therefore, we are initiating antidumping duty investigations to determine whether imports of OCTG from Argentina, Austria, Italy, Japan, Korea, Mexico, and Spain are being, or are likely to be, sold in the United States at less than fair value. Preliminary Determinations by the International Trade Commission The International Trade Commission (ITC) will determine by August 15, 1994, whether there is a reasonable indication that imports of OCTG from Argentina, Austria, Italy, Japan, Korea, Mexico, and Spain are materially injuring, or threaten material injury to, a U.S. industry. Negative ITC determinations will result in the investigations being terminated; otherwise, the investigations will proceed according to statutory and regulatory time limits. This notice is published pursuant to section 732(c)(2) of the Act and 19 CFR 353.13(b). Dated: July 20, 1994. Barbara R. Stafford, Acting Assistant Secretary for Import Administration. [FR Doc. 94-18170 Filed 7-25-94; 8:45 am] BILLING CODE 3510-DS-P