[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]


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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