[Federal Register Volume 61, Number 233 (Tuesday, December 3, 1996)] [Notices] [Pages 64051-64055] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 96-30756] ----------------------------------------------------------------------- DEPARTMENT OF COMMERCE [A-570-849, A-823-808, A-821-808, and A-791-804] Initiation of Antidumping Duty Investigations: Certain Cut-to- Length Carbon Steel Plate From the People's Republic of China, Ukraine, the Russian Federation, and the Republic of South Africa AGENCY: Import Administration, International Trade Administration, Department of Commerce. EFFECTIVE DATE: December 3, 1996. FOR FURTHER INFORMATION CONTACT: Robin Gray at (202) 482-0196 and Elizabeth Patience at (202) 482-0195, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230. Initiation of Investigation The Applicable Statute Unless otherwise indicated, all citations to the statute are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Tariff Act of 1930 (``the Act'') by the Uruguay Round Agreements Act (``URAA''). In addition, unless otherwise indicated, all citations to the Department's regulations are to [[Page 64052]] the current regulations, as amended by the interim regulations published in the Federal Register on May 11, 1995 (60 FR 25130). The Petitions On November 5, 1996, the Department of Commerce (``the Department'') received petitions filed in proper form from Geneva Steel Company (Geneva) and Gulf States Steel, Inc. (Gulf States) (``petitioners''), domestic producers of certain cut-to-length carbon steel plate (CTL plate). The Department received amended petitions on November 14 and 15, 1996. In accordance with section 732(b) of the Act, petitioners alleged that imports of CTL plate from the People's Republic of China (China), Ukraine, the Russian Federation (Russia), and the Republic of South Africa (South Africa) are being, or are likely to be, sold in the United States at less than fair value within the meaning of section 731 of the Act, and that such imports are materially injuring, or threatening material injury to a U.S. industry. The Department finds that petitioners have standing to file the petitions because they are interested parties, as defined under section 771(9)(C) of the Act. Determination of Industry Support for the Petitions Section 732(c)(4)(A) of the Act requires the Department to determine, prior to the initiation of an investigation, that a minimum percentage of the domestic industry supports an antidumping petition. A petition meets these minimum requirements if the domestic producers or workers who support the petition account for: (1) At least 25 percent of the total production of the domestic like product; and (2) more than 50 percent of the production of the domestic like product produced by that portion of the industry expressing support for, or opposition to, the petition. We received submissions from two importers, Ranger Steel Supply Corporation (Ranger) and Klockner Steel Trade (Klockner), alleging that these petitions were not filed on behalf of the domestic carbon steel plate industry. Moreover, Klockner, in filing its notice of appearance in the Chinese, Russian and Ukrainian proceedings, contended that there are 38 domestic firms that may have produced plate in 1992. Therefore, the importer questions whether petitioners identified all domestic plate producers in the petitions. Klockner's support for this assertion is based on a list of companies, prepared by the International Trade Commission for the 1992 carbon flat-rolled steel investigations, that produce, in general, carbon flat-rolled steel products which, depending on the producer, may or may not include plate. Independent sources readily available to the Department indicate that the domestic producers originally identified in the petition are the only producers of carbon steel plate in the United States. See Metal Bulletin Books, Iron and Steel Works of the World (11th ed., 1994). On November 18, 1996, counsel for Ranger submitted additional arguments on all four petitions contending that the petitions do not have industry support. Ranger argues that petitioners failed to demonstrate on the face of the petitions that Geneva and Gulf States account for more than 50 percent of total domestic production. Ranger also contends that the Department must determine through polling that domestic producers supporting the petitions account for more than 50 percent of the production of CTL plate produced by that portion of the industry expressing a view on the petitions. On November 14, 1996, petitioners submitted amended petitions for the four countries with letters of support for the petitions from Bethlehem Steel Corporation and U.S. Steel Group, a unit of USX Corporation. Letters of support were also submitted to the Department by the United Steelworkers of America on November 13, 1996. Based on the production data we collected from domestic steel-producing companies, Geneva, Gulf States, Bethlehem and USX account for significantly more than 50 percent of total production of the domestic like product. Because the amended petitions now establish sufficient support of domestic producers within the meaning of 732(c)(4)(D), the Department is not required to poll or rely on other information to determine if there is support for the petition. The Department received no expressions of opposition to the petitions from any U.S. producers or workers. Accordingly, the Department determines that the petitions have been filed on behalf of the domestic industry in accordance with sections 732(c)(4)(A) and 732(c)(4)(D) of the Act. Scope of the Investigation The scope of these investigations includes hot-rolled iron and non- alloy steel universal mill plates (i.e., flat-rolled products rolled on four faces or in a closed box pass, of a width exceeding 150 mm but not exceeding 1250 mm and of a thickness of not less than 4 mm, not in coils and without patterns in relief), of rectangular shape, neither clad, plated nor coated with metal, whether or not painted, varnished, or coated with plastics or other nonmetallic substances; and certain iron and non-alloy steel flat-rolled products not in coils, of rectangular shape, hot-rolled, neither clad, plated, nor coated with metal, whether or not painted, varnished, or coated with plastics or other nonmetallic substances, 4.75 mm or more in thickness and of a width which exceeds 150 mm and measures at least twice the thickness. Included as subject merchandise in this petition are flat-rolled products of nonrectangular cross-section where such cross-section is achieved subsequent to the rolling process (i.e., products which have been ``worked after rolling'')--for example, products which have been bevelled or rounded at the edges. This merchandise is currently classifiable in the Harmonized Tariff Schedule of the United States (HTS) under item numbers 7208.40.3030, 7208.40.3060, 7208.51.0030, 7208.51.0045, 7208.51.0060, 7208.52.0000, 7208.53.0000, 7208.90.0000, 7210.70.3000, 7210.90.9000, 7211.13.0000, 7211.14.0030, 7211.14.0045, 7211.90.0000, 7212.40.1000, 7212.40.5000, 7212.50.0000. Excluded from subject merchandise within the scope of this petition is grade X-70 plate. Although the HTS subheadings are provided for convenience and customs purposes, our written description of the scope of this investigation is dispositive. South Africa Export Price and Normal Value The petitioners based export price on the customs values derived from the IM-145 monthly import statistics for HTS subheading 7208.51.0060 and 7208.52.0000, published by the U.S. Department of Commerce, for the month of July 1996. These customs values correspond to the month the available home market price lists were in effect. The customs values, which represent the f.o.b. South Africa price of the subject CTL plate, were adjusted for foreign inland freight, based on the freight charges by one South African producer. We find the customs values a reasonable basis for export prices because (1) the HTS subheadings contain only CTL plate and no other products, and (2) the customs values reported for IM-145 are based on the transaction value of the merchandise. The petitioners based normal value on July 1996 prices between a South African producer and its customers obtained from a market researcher. The gross home market prices were adjusted [[Page 64053]] downward for discounts and value-added tax. The petitioners converted the unit prices in South African rand to U.S. dollars using the exchange rates that were in effect on or about the time the home market sales occurred. Based on comparisons of export price to normal value, the estimated dumping margins for certain CTL plate from South Africa range from 6.66 percent to 33.87 percent. China Export Price Petitioners based export price on two methods: 1) the import values declared to the U.S. Customs Service; and 2) actual U.S. selling prices obtained by Geneva. Petitioners used the HTS categories which contained only subject merchandise, as follows: 7208.51.0060, 7208.52.0000, 7208.40.3030, and 7208.53.0000. Petitioners deducted foreign inland freight from the FAS customs values in order to obtain ex-factory prices. In order to calculate foreign inland freight, petitioners used Chilean rail rates. Petitioners explained that the only reasonably- available public rates were from Chile and the United States. Because Chile's GNP is closer to China's, Chile's transport rates were used in petitioners' calculations. Based on the information presented by petitioners, we believe that their use of Chilean rail rates is acceptable for purposes of initiation of this investigation. Normal Value Petitioners asserted that China is a non-market economy country (NME) to the extent that sales or offers for sale of such or similar merchandise in China or to third countries do not permit calculation of normal value under 19 C.F.R. 353.46, 353.49 or 353.53. Petitioners, therefore, constructed a normal value based on the factors of production methodology pursuant to 19 U.S.C. 1677b(c). In previous investigations, the Department has determined that China is an NME. See, e.g., Final Determination of Sales at Less than Fair Value: Bicycles From the People's Republic of China, 61 FR 19026 (April 30, 1996). In accordance with section 771(18)(C)(i) of the Act, the presumption of NME status remains in effect until revoked by the Department. The presumption of NME status for China has not been revoked by the Department and, therefore, remains in effect for purposes of the initiation of this investigation. Accordingly, the normal value of the product was appropriately based on the producers' factors of production, valued in a surrogate market economy country in accordance with section 773(c) of the Act. In the course of this investigation, all parties will have the opportunity to provide relevant information related to the issues of China's NME status and the granting of separate rates to individual exporters. See, e.g., Final Determination of Sales at Less Than Fair Value: Silicon Carbide from the PRC, 59 FR 22585 (May 2, 1994). For their normal value calculation, petitioners based the factors of production, as defined by section 773(c)(3) of the Act (raw materials, labor, energy and capital cost), for CTL plate on petitioners' own usage inputs and amounts, adjusted for known differences in production efficiencies on the basis of available information. Petitioners asserted that no detailed information is available regarding the quantities of inputs used by plate producers in China. Thus, they have assumed, for purposes of the petition, that producers in China use the same inputs in the same quantities as petitioners, except where a variance from petitioners' cost model can be justified on the basis of available information. Petitioners argued that the use of their own factors is conservative because the U.S. steel industry is more efficient and technologically-advanced than the Chinese steel industry. Petitioners cited four different sources to support this contention. Based on the information provided by petitioners, we believe that petitioners' use of its own adjusted factors of production is appropriate for purposes of initiation of this investigation. See, Initiation of the Antidumping Duty Investigations of Melamine Institutional Dinner Products from Indonesia, Taiwan, and the People's Republic of China, 61 FR 8039 (March 31, 1996). In accordance with section 773(c)(4) of the Act, petitioners then valued the factors of production, where possible, on reasonably available surrogate country data. Petitioners selected Indonesia as the primary surrogate. Petitioners argued that Indonesia is an acceptable surrogate country because its level of economic development is comparable to that of China and it is a significant producer of comparable merchandise (in accordance with 773(c)(4) of the Act). See, Final Determination of Sales at Less-Than-Fair-Value: Disposable Pocket Lighters from the People's Republic of China 60 FR 22359 (May 5, 1996). Petitioners stated that because the per-capita gross national product (GNP) of Indonesia and China are relatively close, the two countries may be considered economically comparable. Based on the information provided by petitioners, we believe that petitioners' use of Indonesia as a surrogate country is appropriate for purposes of initiation of this investigation. Petitioners were unable to obtain port unloading charges for Indonesia and, therefore, chose the lowest charge applicable in Brazil based on a publicly-available news article. Petitioners chose Brazilian values because they were the only reasonably available figures for a country with a per-capita GNP similar to China's. Petitioners were also unable to find data on factory overhead, selling, general & administrative (SG&A) expenses, and profit from Indonesia. Therefore, petitioners used overhead, SG&A and profit percentages used by the Department in a recent results of review (Preliminary Results of Review: Sebacic Acid from the People's Republic of China, 61 FR 46440 (September 3, 1996)) where India was the surrogate country in order to value these factors. Based on the information provided by petitioners, we believe that their use of the noted Brazilian and Indian surrogate values are acceptable for purposes of initiation of this investigation. Based on comparisons of export price to the factors of production, the calculated dumping margins for CTL plate from China ranged from 10.01-45.84 percent. Russia Export Price Petitioners based export price on two methods: (1) The import values declared to the U.S. Customs Service; and (2) actual U.S. selling prices known to petitioners. In order to ensure a fair comparison, petitioners used the HTS categories which contained only subject merchandise, as follows: 7208.51.0060, 7208.52.0000, 7208.40.3030, and 7208.53.0000. Petitioners deducted foreign inland freight from the customs values in order to obtain ex-factory prices. In order to calculate foreign inland freight, petitioners used U.S. barge rates and Chilean rail rates because they were the only appropriate public figures reasonably available to the petitioners. Petitioners explained that they could only find barge rates for the United States that revealed the distances needed to permit calculation of a rate in dollars-per-ton. Further, they could only find data on rail rates from Chile and the United States which would permit the calculation of rail freight costs in such terms. They used the Chilean rail rate because Chilean per-capita GNP is much closer to Russia's than is the United States'. [[Page 64054]] Based on the information presented by petitioners, we believe that their use of U.S. barge and Chilean rail rates is acceptable for purposes of initiation of this investigation. Normal Value Petitioners asserted that Russia is a non-market economy country (NME) to the extent that sales or offers for sale of such or similar merchandise in Russia or to third countries do not permit calculation of normal value under 19 CFR 353.46, 353.49 or 353.53. Petitioners, therefore, constructed a normal value based on the factors of production methodology pursuant to 19 U.S.C. 1677b(c). In previous investigations, the Department has determined that Russia is an NME. See, e.g., Pure Magnesium and Alloy Magnesium from the Russian Federation, 60 FR 16440 (March 30, 1995). In accordance with section 771(18)(C)(i) of the Act, the presumption of NME status remains in effect until revoked by the Department. The presumption of NME status for Russia has not been revoked by the Department and, therefore, remains in effect for purposes of the initiation of this investigation. Accordingly, the normal value of the product is appropriately based on factors of production, valued in a surrogate market economy country in accordance with section 773(c) of the Act. In the course of this investigation, all parties will have the opportunity to provide relevant information related to the issues of Russia's NME status and the granting of separate rates to individual exporters. See, e.g., Final Determination of Sales at Less Than Fair Value: Silicon Carbide from the PRC, 59 FR 22585 (May 2, 1994). For the normal value calculation, petitioners based the factors of production, as defined by section 773(c)(3) of the Act (raw materials, labor, energy and capital cost), for CTL plate on petitioners' own usage inputs and amounts, adjusted for known differences in production efficiencies on the basis of available information. Petitioners asserted that no detailed information is available regarding the quantities of inputs used by plate producers in Russia. Thus, they have assumed, for purposes of the petition, that producers in Russia use the same inputs in the same quantities as petitioners, except where a variance from petitioners' cost model can be justified on the basis of available information. Petitioners argued that the use of their own factors is conservative because the U.S. steel industry is more efficient and technologically-advanced than the Russian steel industry. Petitioners cited three different sources to support this contention. Based on the information provided by petitioners, we believe that petitioners' use of its own adjusted factors of production is appropriate for purposes of initiation of this investigation. In accordance with section 773(c)(4) of the Act, petitioners valued these factors, where possible, on reasonably available, published surrogate country data. Petitioners selected Turkey as their primary surrogate. Petitioners stated that the per-capita GNP of Turkey differs only slightly from Russia's and, thus, maintain that Turkey is the most suitable surrogate, amongst the potential surrogates, because it is at a level of comparable economic development and is also a significant producer of comparable merchandise (in accordance with section 773(c)(4) of the Act). See, Final Determination of Sales at Less-than- Fair-Value of Ferrovanadium and Nitrided Vanadiam From the Russian Federation, 60 FR 27957 (May 26, 1996). Based on the information provided by petitioners, we believe that petitioners' use of Turkey as a surrogate country is appropriate for purposes of initiation of this investigation. Petitioners state that they were unable to find publicly-available information on port unloading charges in Turkey and, therefore, chose the lowest charge applicable in Brazil as a surrogate value, based on a published news article. Petitioners were also unable to find a published source for the number of man-hours used to produce a ton of any steel product in Russia or Turkey, and, therefore, used a labor- per-ton figure for Mexico, based on a published news article, as the surrogate value. Petitioners chose values from Brazil and Mexico, respectively, as surrogates because the information was reasonably available and the per-capita GNPs of these countries were most comparable to Russia's. Finally, petitioners valued Russian consumption rates for fuel, energy, and raw materials at 20 percent above petitioners' based on a publicly-available news article. Based on the information provided by petitioners, we believe that their use of the noted surrogate values is acceptable for purposes of initiation of this investigation. Based on comparisons of export price to the factors of production, the calculated dumping margins for CTL plate from Russia ranged from 139.97-230.38 percent. Ukraine Export Price Petitioners based export price on two methods: (1) The import values declared to the U.S. Customs Service; and (2) actual U.S. selling prices known to petitioners. In order to ensure a fair comparison, petitioners used the HTS categories which contained only subject merchandise, as follows: 7208.51.0060, 7208.52.0000, 7208.40.3030, and 7208.53.0000. Petitioners deducted foreign inland freight from the customs values in order to obtain ex-factory prices. In order to calculate foreign inland freight, petitioners used U.S. barge rates and Chilean rail rates because they were the only appropriate, public figures reasonably available to the petitioners. Petitioners explained that they could only find barge rates for the United States that revealed the distances needed to permit calculation of a rate in dollars-per-ton. Further, they could only find data on rail rates from Chile and the United States which would permit the calculation of rail freight costs in such terms. They used the Chilean rail rate because Chilean per-capita GNP is much closer to Ukraine's than is the United States'. Based on the information presented by petitioners, we believe that their use of U.S. barge and Chilean rail rates is acceptable for purposes of initiation of this investigation. Normal Value Petitioners alleged that Ukraine is an NME to the extent that sales or offers for sale of such or similar merchandise in Ukraine or to third countries does not permit calculation of normal value under 19 CFR 353.46, 353.49 or 353.53. Petitioners, therefore, constructed a normal value based on the factors of production methodology pursuant to 19 U.S.C. 1677b(c). In previous investigations, the Department has determined that Ukraine is an NME. See, e.g., Final Determinations of Sales at Less Than Fair Value: Ferrosilicon from Kazakhstan and Ukraine; and Postponement of Final Determination; Ferrosilicon from the Russian Federation, 58 FR 13050 (March 9, 1993). In accordance with section 771(18)(C)(i) of the Act, the presumption of NME status remains in effect until revoked by the Department. The presumption of NME status for Ukraine has not been revoked by the Department and, therefore, remains in effect for purposes of the initiation of this investigation. Accordingly, the normal value of the product is appropriately based on the producers' factors of production valued in a [[Page 64055]] surrogate market economy country in accordance with section 773(c) of the Act. In the course of this investigation, all parties will have the opportunity to provide relevant information related to the issues of Ukraine's NME status and the granting of separate rates to individual exporters. See, e.g., Final Determination of Sales at Less Than Fair Value: Silicon Carbide from the PRC, 59 FR 22585 (May 2, 1994). For the normal value calculation, petitioners based the factors of production, as defined by section 773(c)(3) of the Act (raw materials, labor, energy, and capital costs), for CTL plate on petitioners' own usage amounts, adjusted for known differences in production efficiencies on the basis of available information. Petitioners asserted that no detailed information is available regarding the quantities of inputs used by plate producers in Ukraine. Thus, they have assumed, for purposes of the petition, that producers in Ukraine use the same inputs in the same quantities as petitioners, except where a variance from petitioners' cost model can be justified on the basis of available information. Petitioners argued that the use of their own data is conservative because the U.S. steel industry is more efficient and technologically-advanced than the Ukrainian steel industry. Petitioners cited two different sources to support this contention. Based on the information provided by petitioners, we believe that petitioners' use of its own adjusted factors of production is appropriate for purposes of initiation of this investigation. In accordance with section 773(c)(4) of the Act, petitioners valued these factors, where possible, on reasonably available, published surrogate country data. Petitioners selected Peru as their primary surrogate. Petitioners argued that Peru is an acceptable surrogate country because its level of economic development is comparable to that of Ukraine and it is a significant producer of comparable merchandise (in accordance with 773(c)(4) of the Act). See, Preliminary Determination of Sales at Less-than-Fair-Value and Postponement of Final Determination of Silicomanganese From Ukraine 59 FR 31201 (June 17, 1996). Petitioners stated that because the per-capita GNP of Peru and Ukraine are relatively close, the two countries may be considered economically comparable. Based on the information provided by petitioners, we believe that petitioners' use of Peru as a surrogate country is appropriate for purposes of initiation of this investigation. Petitioners were unable to obtain port unloading charges for Peru and, therefore, chose the lowest charge applicable in Brazil based on a published news article. Petitioners were also unable to find a published source for the number of man-hours used to produce a ton of any steel product in Ukraine or Peru, and, therefore, used a labor-per- ton figure for Mexico based on a news article, as the surrogate value. Petitioners chose values from Brazil and Mexico, respectively, as surrogates because the information was reasonably available and the per-capita GNPs of these countries were most comparable to Ukraine's. Based on the information provided by petitioners, we believe that their use of the noted Brazilian and Mexican surrogate values is acceptable for purposes of initiation of this investigation. Petitioners were also unable to find values for natural gas rates, factory overhead, selling, general & administrative (SG&A) expenses, and profit from Peru. Therefore, petitioners used surrogate natural gas rates from Indonesia and Turkish values for factory overhead, SG&A, and profit. Values from Indonesia and Turkey were selected on the basis that these countries were closer to Ukraine in per-capita GNP than were other countries from which values could be ascertained by petitioners. Based on the information provided by petitioners, we believe that their use of the noted Indonesian and Turkish surrogate values is acceptable for purposes of initiation of this investigation. Based on comparisons of export price to the factors of production, the calculated dumping margins for CTL plate from Ukraine ranged from 201.61-274.82 percent. Fair Value Comparisons Based on the data provided by petitioners, there is reason to believe that imports of CTL plate from China, Ukraine, Russia and South Africa are being, or are likely to be, sold at less than fair value. If it becomes necessary at a later date to consider these petitions as a source of facts available, under section 776 of the Act, we may further review the calculations. Initiation of Investigations We have examined the petitions on CTL plate from China, Ukraine, Russia and South Africa and have found that they meet the requirements of section 732 of the Act, including the requirements concerning allegations of material injury or threat of material injury to the domestic producers of a domestic like product by reason of the complained-of imports, allegedly sold at less than fair value. In reaching this determination, we have examined the accuracy and adequacy of the evidence provided in the petitions based on information readily available to us, as required by section 732(c)(1)(A)(i). Therefore, we are initiating antidumping duty investigations to determine whether imports of CTL plate from China, Ukraine, Russia and South Africa are being, or are likely to be, sold in the United States at less than fair value. Unless extended, we will make our preliminary determination by April 14, 1997. Distribution of Copies of the Petitions In accordance with section 732(b)(3)(A) of the Act, copies of the public version of the petitions have been provided to the representatives of the governments of China, Ukraine, Russia and South Africa. We will attempt to provide copies of the public versions of the petitions to the exporters named in the petitions. International Trade Commission (ITC) Notification We have notified the ITC of our initiations, as required by section 732(d) of the Act. Preliminary Determination by the ITC The ITC will determine by December 20, 1996, whether there is a reasonable indication that imports of CTL plate from China, Ukraine, Russia and South Africa are causing material injury, or threatening to cause material injury, to a U.S. industry. A negative ITC determination in any of these investigations will result in the respective investigation being terminated; otherwise, these investigations will proceed according to statutory and regulatory time limits. Dated: November 25, 1996. Robert S. LaRussa Acting Assistant Secretary of Import Administration [FR Doc. 96-30756 Filed 12-2-96; 8:45 am] BILLING CODE 3510-DS-P