[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