[Federal Register Volume 65, Number 143 (Tuesday, July 25, 2000)]
[Notices]
[Pages 45754-45761]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-18809]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-433-808, A-822-804, A-570-860, A-560-811, A-588-855, A-580-844, A-
449-804, A-841-804, A-455-803, A-821-812, A-823-809, A-307-819]
Initiation of Antidumping Duty Investigations: Steel Concrete
Reinforcing Bars From Austria, Belarus, Indonesia, Japan, Latvia,
Moldova, the People's Republic of China, Poland, the Republic of Korea,
the Russian Federation, Ukraine, and Venezuela
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Initiation of Antidumping Duty Investigations.
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EFFECTIVE DATE: July 25, 2000.
FOR FURTHER INFORMATION CONTACT: Charles Riggle or Tom Futtner at (202)
482-0650 and (202) 482-3814, respectively; Import Administration,
International Trade Administration, U.S. Department of Commerce, 14th
Street and Constitution Avenue, NW, 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 references
to the provisions codified at 19 CFR Part 351 (2000).
The Petitions
On June 28, 2000, the Department of Commerce (the Department)
received petitions filed in proper form by the Rebar Trade Action
Coalition (RTAC), as well as its individual members \1\ (hereinafter
collectively, the petitioner). RTAC is an ad hoc trade association, the
members of which are producers of the domestic like product in the
alleged region. The Department received from RTAC information
supplementing the petitions throughout the 20-day initiation period.
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\1\ AmeriSteel; Auburn Steel Co., Inc.; Birmingham Steel Corp.;
Border Steel, Inc.; Marion Steel Company; Riverview Steel; Nucor
Steel and CMC Steel Group. Auburn Steel Co. is not a petitioner in
the investigations involving rebar from Japan and Indonesia.
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In accordance with section 732(b) of the Act, the petitioner
alleges that imports of steel concrete reinforcing bars (rebar) from
Austria, Belarus, Indonesia, Japan, the Republic of Korea (Korea),
Latvia, Moldova, the People's Republic of China (the PRC), Poland, the
Russian Federation (Russia), Ukraine, 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 the petitioner filed these petitions on
behalf of the domestic industry because it is an interested party as
defined in section 771(9)(C) of the Act and has demonstrated sufficient
industry support with respect to each of the antidumping investigations
that it is requesting the Department to initiate (see the following
section below).
Determination of Industry Support for the Petitions
The petitioner alleges that there is a regional industry for the
domestic like product and included data for both factors required by
section 771(4)(C) of the Act: (1) The producers within such market sell
all or almost all of their production of the like product in question
in the regional market; and (2) the demand in the regional market is
not supplied, to any substantial degree, by producers located elsewhere
in the United States.\2\ Moreover, the petitioner included data
supporting its allegation that there is a concentration of dumped
[[Page 45755]]
imports from the subject countries in the region, pursuant to section
771(4)(C) of the Act.\3\ We have examined the accuracy and adequacy of
the information supporting the regional industry claim to determine
whether the petitioner provided evidence, reasonably available to it,
sufficient to justify initiation based on a regional industry analysis.
We determined the accuracy and adequacy of the petitioner's data by
comparing the petition information with publicly available data. On
this basis, we have determined that the petitioner satisfied the
statutory requirements for initiation purposes. See Initiation
Checklist, dated July 18, 2000 (Initiation Checklist), which is on file
in Import Administration's Central Records Unit.
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\2\ The region identified by the petitioner consists of Alabama,
Arkansas, Connecticut, Delaware, the District of Columbia, Florida,
Georgia, Illinois, Indiana, Kentucky, Louisiana, Maine, Maryland,
Massachusetts, Michigan, Mississippi, Missouri, New Jersey, New
York, North Carolina, Ohio, Pennsylvania, Puerto Rico, Rhode Island,
South Carolina, Tennessee, Texas, Vermont, Virginia, West Virginia,
and Wisconsin.
\3\ To date, the International Trade Commission has not
considered the issue of whether to cumulatively assess the volume
and effect of imports under section 771(7)(G)(i) of the Act in a
regional industry case, where the petition alleges dumping of
imports from more than one country. As a result, this case presents
a novel question of whether to reach the cumulation issue before
determining whether the subject imports were sufficiently
concentrated within the alleged region, or whether to consider the
concentration issue for each individual country, pursuant to section
771(4)(C) of the Act. Either method is a plausible interpretation of
the statute. For purposes of these initiations, in our analysis of
whether subject imports were sufficiently concentrated under section
771(4)(C) of the Act, we will accept the petitioner's allegation of
injury based on the cumulative assessment of the volume and value of
imports under section 771(7)(G)(i) of the Act.
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If the petitioner alleges that the industry is a regional industry,
the Department, on the basis of production in the region, shall
determine whether the petition has been filed on behalf of the domestic
industry by applying the requirements enunciated in section
732(c)(4)(A) of the Act. This section of the Act provides that the
Department's industry support determination, which is to be made before
the initiation of the investigation, be based on whether a minimum
percentage of the relevant regional industry supports the petition. 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 in the region; and (2)
more than 50 percent of the production of the domestic like product in
the region 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 produce the domestic
like product. The U.S. 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.
While both the Department and the ITC must apply the same statutory
definition regarding the domestic like product (section 771(10) of the
Act), they do so for different purposes and pursuant to separate and
distinct authorities. 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.\4\
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\4\ 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 from Japan: Final Determination; Rescission of
Investigation and Partial Dismissal of Petition, 56 FR 32376, 32380-
81 (July 16, 1991).
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Section 771(10) of the Act defines the domestic like product as ``a
product which is like, or in the absence of like, most similar in
characteristics and uses with, the article subject to an investigation
under this subtitle.'' Thus, the reference point from which the
domestic 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 domestic like product referred to in the petitions is the
single domestic like product defined in the ``Scope of Investigations''
section, below. No party has commented on the petitions' definition of
the domestic like product, and there is nothing on the record to
indicate that this definition is inaccurate. The Department, therefore,
has adopted the domestic like product definition set forth in the
petitions.
Moreover, the Department has determined that the petitions contain
adequate evidence of industry support; therefore, polling is
unnecessary (see Initiation Checklist). For each petition filed, the
petitioner established industry support representing over 50 percent of
total production of the domestic like product in the region.
Accordingly, the Department determines that these petitions are filed
on behalf of the regional domestic industry within the meaning of
section 732(b)(1) of the Act.\5\
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\5\ We note that, even if the petitions did not allege a
regional market for the subject merchandise, industry support for
these petitions represents more than 50 percent of national
production of the domestic like product.
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Scope of Investigations
For purposes of these investigations, the product covered is all
steel concrete reinforcing bars (rebar) sold in straight lengths,
currently classifiable in the Harmonized Tariff Schedule of the United
States (HTSUS) under item number 7214.20.00 or any other tariff item
number. Specifically excluded are plain rounds (i.e., non-deformed or
smooth bars) and rebar that has been further processed through bending
or coating. HTSUS subheadings are provided for convenience and Customs
purposes. The written description of the scope of this proceeding is
dispositive.
During our review of the petitions, we discussed the scope with the
petitioner to ensure that it accurately reflects the product for which
the domestic industry is seeking relief. Moreover, as discussed in the
preamble to the Department's regulations (62 FR 27323), we are setting
aside a period for parties to raise issues regarding product coverage.
The Department encourages all parties to submit such comments by August
18, 2000. Comments should be addressed to Import Administration's
Central Records Unit at Room 1870, U.S. Department of Commerce, 14th
Street and Constitution Avenue, NW, Washington, DC 20230. The period of
scope consultations is intended to provide the Department with ample
opportunity to consider all comments and consult with parties prior to
the issuance of the preliminary determinations.
Export Price and Normal Value
The following are descriptions of the allegations of sales at less
than fair value upon which the Department based its decision to
initiate these investigations. The sources of data for the deductions
and adjustments relating to home market price, U.S. price, and factors
of production (FOP) are detailed in the Initiation Checklist. Where the
petitioner obtained data from foreign market research, we spoke to the
researcher to establish that person's credentials and to confirm the
validity of the information being provided. Should the need arise to
use any of this information as facts available under section 776 of the
Act in our preliminary or final determinations, we may re-examine the
information and revise the margin calculations, if appropriate.
Regarding the investigations involving non-market economies (NME),
the Department presumes, based on the extent of central government
control in an NME, that a single dumping margin, should there be one,
is appropriate for
[[Page 45756]]
all NME exporters in the given country. In the course of these
investigations, all parties will have the opportunity to provide
relevant information related to the issues of a country'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).
Austria
Export Price
The petitioner based export price (EP) on the March 2000 unit value
reported in the Bureau of the Census IM-145 data and calculated a net
U.S. price by deducting from this value international freight, U.S.
port charges, and customs duties paid.
Normal Value
The petitioner based normal value (NV) on two methodologies. First,
the petitioner provided an Austrian domestic price of high yield rebar
obtained from an industry publication. However, because of the lack of
specificity of the terms of sale associated with this price, we have
not considered this value as a basis for NV. The petitioner also based
NV on constructed value (CV), consisting of cost of manufacturing
(COM), selling, general and administrative expenses (SG&A), profit,
interest expense, depreciation, and packing. COM was calculated based
on the average consumption rates of two U.S. rebar producers. The
petitioner adjusted COM for known cost differences of the producers in
the United States and Austria. To calculate SG&A and interest expense,
the petitioner relied upon its own data because the Austrian producer's
financial statements did not disclose these expenses. The petitioner
derived profit based upon an Austrian rebar producer's 1998 financial
statements.
Based upon the comparison of CV to EP, the petitioner calculated an
estimated dumping margin of 104.05 percent.
Belarus
Export Price
The petitioner based EP on price quotes from Byelorussian Steel
Works (BSW) to an unaffiliated U.S. purchaser for different sizes of
rebar of the same grade and calculated a net U.S. price by deducting
international freight and U.S. port charges.
Normal Value
The petitioner alleges that Belarus is an NME country, and
calculated NV based on the FOP methodology pursuant to section 773(c)
of the Act. In accordance with section 771(18)(C) of the Act, any
determination that a foreign country has at one time been considered an
NME shall remain in effect until revoked. This status covers the
geographic area of the former U.S.S.R., each part of which retains the
NME status of the former U.S.S.R. Therefore, Belarus will be treated as
an NME unless and until its NME status is revoked (see Preliminary
Determination of Sales at Less Than Fair Value: Uranium from
Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Ukraine, and Uzbekistan, 57
FR 23380 (June 3, 1992)).
For NV, the petitioner based the FOP, as defined by section
773(c)(3) of the Act, on the consumption rates of two U.S. rebar
producers. The petitioner asserts that information regarding BSW's
consumption rates is not available, and that the consumption rates of
the two U.S. producers are typical of the global steel industry. Based
on the information provided by the petitioner, we believe that the
petitioner's FOP methodology represents information reasonably
available to the petitioner and is appropriate for purposes of
initiating this investigation.
The petitioner asserts that Thailand is the most appropriate
surrogate country for Belarus, claiming that Thailand is: (1) A market
economy; (2) a significant producer of comparable merchandise; and (3)
at a level of economic development comparable to Belarus in terms of
per capita GNP. Based on the information provided by the petitioner, we
believe that the petitioner's use of Thailand as a surrogate country is
appropriate for purposes of initiating this investigation.
In accordance with section 773(c)(4) of the Act, the petitioner
valued FOP, where possible, on reasonably available, public surrogate
country data from Thailand. Values for scrap steel and the scrap offset
were based on Thai import prices listed in TradStat Import/Exports
Report for the period October 1999 through March 2000. The value for
electricity was obtained from the International Energy Agency's Energy
Prices & Taxes, Fourth Quarter 1999. The natural gas value was taken
from Coal and Natural Gas Competition in APEC Economies, August 1999.
Labor was valued using the Department's regression-based wage rate for
Belarus, in accordance with 19 CFR 351.408(c)(3).
The petitioner valued other production costs, for which no Thai
surrogate values were available, with values from the two U.S.
producers. All surrogate values that fell outside the anticipated
period of investigation (POI), which in the NME cases was October 1,
1999 through March 31, 2000, were adjusted for inflation. For
electricity, we recalculated the inflator using the wholesale price
index. To determine depreciation, SG&A, interest expenses, and profit,
the petitioner relied on the data from a 1999 annual report of
Sahaviriya Steel Industries Public Company Limited, a Thai steel
producer. Based on the information provided by the petitioner, we
believe that the surrogate values represent information reasonably
available to the petitioner and are acceptable for purposes of
initiating this investigation.
Based on comparisons of EP to NV, the petitioner calculated
estimated dumping margins ranging from 49.06 to 56.48 percent.
Indonesia
Export Price
The petitioner based EP on price quotes from PT Jakarta Kyoei Steel
Works Ltd. (Jakarta Kyoei) to an unaffiliated U.S. purchaser for
different grades and sizes of rebar, and calculated a net U.S. price by
deducting foreign inland frieght, international freight, and Indonesian
and U.S. port charges.
Normal Value
With respect to NV, the petitioner provided a home market price
that was obtained from foreign market research for a grade and size of
rebar that is comparable to those of the products exported to the
United States which serve as the basis for EP. The petitioner states
that the home market price quotation was FOB mill and did not make any
deductions from this price.
Although the petitioner provided a margin based on a price-to-price
comparison, it also provided information demonstrating reasonable
grounds to believe or suspect that sales of rebar in the home market
were made at prices below the fully absorbed COP, within the meaning of
section 773(b) of the Act, and requested that the Department conduct a
country-wide sales-below-cost investigation.
Pursuant to section 773(b)(3) of the Act, COP consists of the COM,
SG&A, and packing. The petitioner calculated COM based on the
consumption rates of a U.S. rebar producer. The petitioner adjusted COM
for known differences in the production process used by producers in
the United States and Indonesia. To calculate depreciation and SG&A,
the petitioner relied upon amounts reported in Jakarta Kyoei's 1998
financial statements. For interest
[[Page 45757]]
expense, the petitioner used Jakarta Kyoei's 1997 financial statements,
explaining that the 1998 interest expenses were unreasonably high as a
result of the financial crisis.
Based upon the comparison of the adjusted prices of the foreign
like product in the home market to the calculated COP of the product,
we find reasonable grounds to believe or suspect that sales of the
foreign like product were made below the COP, within the meaning of
section 773(b)(2)(A)(i) of the Act. Accordingly, the Department is
initiating a country-wide cost investigation. See the Initiation of
Cost Investigations section below.
Pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act, the
petitioner also based NV for sales in Indonesia on CV. The petitioner
calculated CV using the same COM, depreciation, SG&A, and interest
expense figures used to compute Indonesian home market costs.
Consistent with section 773(e)(2) of the Act, the petitioner included
in CV an amount for profit. However, the profit amounted to zero
because Jakarta Kyoei reported a loss on its 1998 financial statements.
See, e.g., Initiation of Antidumping Duty Investigations: Certain Cold-
Rolled Flat-Rolled Carbon-Quality Steel Products From Argentina,
Brazil, the People's Republic of China, Indonesia, Japan, the Russian
Federation, Slovakia, South Africa, Taiwan, Thailand, Turkey, and
Venezuela, 64 FR 34194, 34202 (June 25, 1999) (Petitioners added to CV
no amount for profit, because the Thai steel producer reported a loss
in its 1998 financial statements).
Based upon the comparison of CV to EP, the petitioner has
calculated an estimated dumping margin of 71.01 percent.
Japan
Export Price
The petitioner based EP on a price quote from Kyoei Steel Ltd.
(Kyoei), to an unaffiliated U.S. purchaser for two grades and sizes of
rebar, and calculated a net U.S. price by deducting foreign inland
freight, international freight, U.S. port charges, and customs duties
paid.
Normal Value
With respect to NV, the petitioner provided a home market price
that was obtained from foreign market research for grades and sizes of
rebar that are comparable to the products exported to the United States
which serve as the basis for EP. The petitioner calculated an ex-
factory NV by deducting from the quoted home market price foreign
inland freight and home market credit expense.
Although the petitioner provided a margin based on a price-to-price
comparison, it also provided information demonstrating reasonable
grounds to believe or suspect that sales of rebar in the home market
were made at prices below the fully absorbed COP, within the meaning of
section 773(b) of the Act, and requested that the Department conduct a
country-wide sales-below-cost investigation.
Pursuant to section 773(b)(3) of the Act, COP consists of the COM,
SG&A, interest expenses, and packing. The petitioner calculated COM
based on the consumption rates of a U.S. rebar producer. The petitioner
adjusted COM for known differences in the production process used by
producers in the United States and Japan. To calculate depreciation,
SG&A, and interest expenses, the petitioner relied upon the 1999
financial statements of Tokyo Steel Manufacturing Company (Tokyo Steel)
because it was unable to locate public financial statements for Kyoei.
Based upon the comparison of the price of the foreign like product in
the home market to the calculated COP of the product, we find
reasonable grounds to believe or suspect that sales of the foreign like
product were made below the COP, within the meaning of section
773(b)(2)(A)(i) of the Act. Accordingly, the Department is initiating a
country-wide cost investigation. See the Initiation of Cost
Investigations section below.
Pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act, the
petitioner also based NV for sales in Japan on CV. The petitioner
calculated CV using the same COM, depreciation, SG&A, and interest
expense figures used to compute Japanese home market costs. Pursuant to
section 773(e)(2) of the Act, the petitioner included in CV an amount
for profit. However, the profit amounted to zero because Tokyo Steel
reported a loss on its 1998 financial statement.
Based upon the comparison of CV to EP, the petitioner has
calculated an estimated dumping margin of 188.79 percent.
Latvia
Export Price
The petitioner based EP on a price quote from Liepaja Metalurgs
(Liepaja) to an unaffiliated U.S. purchaser for different grades and
sizes of rebar, and calculated a net U.S. price by deducting
international freight and Latvian and U.S. port charges.
Normal Value
The petitioner alleges that Latvia is an NME country, and
calculated NV based on the FOP methodology pursuant to section 773(c)
of the Act. For the reasons described above for Belarus, Latvia will be
treated as an NME unless and until its NME status is revoked.
Given that information regarding Liepaja's consumption rates is not
available, NV was calculated using the same methodology described above
for Belarus. Further, Thailand was used as the surrogate country. We
believe that Thailand is an appropriate surrogate for purposes of
initiating this case with respect to Latvia for the same reasons as
discussed above with respect to Belarus.
Based on comparisons of EP to NV, the petitioner calculated
estimated dumping margins ranging from 45.52 to 58.40 percent.
Moldova
Export Price
The petitioner based EP on a price quote from Moldova Steel Works
(MSW) to an unaffiliated U.S. purchaser for different grades and sizes
of rebar, and calculated a net U.S. price by deducting foreign inland
freight, international freight, and U.S. port charges.
Normal Value
The petitioner alleges that Moldova is an NME country, and
constructed NV based on the FOP methodology pursuant to section 773(c)
of the Act. For the reasons described above for Belarus, Moldova will
be treated as an NME unless and until its NME status is revoked.
Given that information regarding MSW's consumption rates is not
available, NV was calculated using the same methodology described above
for Belarus, except that Indonesia, rather than Thailand, was used as
the surrogate country for valuing the FOP. The petitioners assert that
Indonesia is the most appropriate surrogate country for Moldova because
Indonesia is: (1) A market economy country; (2) a significant producer
of comparable merchandise; and (3) at a level of economic development
comparable to Moldova in terms of per capita GNP. Based on the
information provided by the petitioner, we believe that the
petitioner's use of Indonesia as a surrogate country is appropriate for
purposes of initiating this investigation.
In accordance with section 773(c)(4) of the Act, the petitioner
valued FOP, where possible, on reasonably available, public surrogate
country data from Indonesia. Values for scrap steel and the scrap
offset were based on Indonesian
[[Page 45758]]
import prices listed in TradStat Import/Exports Report for the period
October 1999 through March 2000. The values for electricity and gas
were obtained from the International Energy Agency's Energy Prices &
Taxes, Fourth Quarter 1999. Labor was valued using the Department's
regression-based wage rate for Moldova, in accordance with 19 CFR
351.408(c)(3).
The petitioner valued other production costs, for which no
Indonesian surrogate values were available, using values from the two
U.S. producers. All surrogate values which fall outside the POI were
adjusted for inflation. To determine depreciation and SG&A, the
petitioner applied rates derived from the 1998 financial statements of
Jakarta Kyoei, an Indonesian producer of the subject merchandise. For
interest expense, the petitioner used Jakarta Kyoei's 1997 financial
statements, explaining that the 1998 interest expenses were
unreasonably high as a result of the financial crisis. The amount for
profit was reported as zero because Jakarta Kyoei reported a loss on
its 1998 financial statements. Based on the information provided by the
petitioner, we believe that the surrogate values represent information
reasonably available to the petitioner and are acceptable for purposes
of initiating this investigation.
Based on comparisons of EP to NV, the petitioner calculated an
estimated dumping margin of 49.07 percent.
The People's Republic of China
Export Price
The petitioner based EP on a price quote from Laiwu Steel Group
Limited (Laiwu) to an unaffiliated U.S. purchaser for different grades
and sizes of rebar, and calculated a net U.S. price by deducting
international freight, U.S. port charges, and customs duties paid.
Normal Value
The petitioner asserts that the PRC is an NME country, and that in
all previous investigations the Department has determined that the PRC
is an NME. See, e.g., Natural Bristle Paintbrushes and Brush Heads From
the People's Republic of China, 65 FR 13944, 13946 (March 15, 2000)
(preliminary determination). The PRC will be treated as an NME unless
and until its NME status is revoked. Pursuant to section 771(18)(C)(i)
of the Act, because the PRC's status as an NME remains in effect, the
petitioner determined the dumping margin using an NME analysis.
Given that information regarding Laiwu's consumption rates is not
available, NV was calculated using the same methodology described above
for Moldova. Further, Indonesia was used as the surrogate country. We
believe that Indonesia is an appropriate surrogate for purposes of
initiating this case with respect to the PRC for the same reasons as
discussed above with respect to Moldova.
Based on comparisons of EP to NV, the petitioner calculated an
estimated dumping margin of 59.98 percent.
Poland
Export Price
The petitioner based EP on a price quote from Huta Ostrowiec to an
unaffiliated U.S. purchaser for different grades and sizes of rebar,
and calculated a net U.S. price by deducting foreign inland freight,
international freight, and U.S. port charges.
Normal Value
With respect to NV, the petitioner provided a home market price
that was obtained from foreign market research for a grade and size of
rebar that is comparable to those of the products exported to the
United States which serve as the basis for EP. The petitioner states
that the home market price quotation was FOB mill and did not make any
deductions from this price.
Although the petitioner provided a margin based on a price-to-price
comparison, it also provided information demonstrating reasonable
grounds to believe or suspect that sales of rebar in the home market
were made at prices below the fully absorbed COP, within the meaning of
section 773(b) of the Act, and requested that the Department conduct a
country-wide sales-below-cost investigation.
Pursuant to section 773(b)(3) of the Act, COP consists of the COM,
SG&A, interest expenses, and packing. The petitioner calculated COM
based on the average consumption rates of two U.S. rebar producers. The
petitioner adjusted COM for known differences in the production process
used by producers in the United States and Poland. To calculate
depreciation, SG&A, and interest expenses, the petitioner also relied
upon its own data because it was unable to locate public financial
statements for Huta Ostrowiec. Based upon the comparison of the
adjusted prices of the foreign like product in the home market to the
calculated COP of the product, we find reasonable grounds to believe or
suspect that sales of the foreign like product were made below the COP,
within the meaning of section 773(b)(2)(A)(i) of the Act. Accordingly,
the Department is initiating a country-wide cost investigation. See the
Initiation of Cost Investigations section below.
Pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act, the
petitioner also based NV for sales in Poland on CV. The petitioner
calculated CV using the same COM, depreciation, SG&A and interest
expense figures used to compute Polish home market costs. Consistent
with section 773(e)(2) of the Act, the petitioner also added to CV an
amount for profit. Petitioner derived profit based upon its own data.
Based upon the comparison of CV to EP, the petitioner calculated an
estimated dumping margin of 53.54 percent.
Republic of Korea
Export Price
The petitioner determined EP based on price quotes from Hanbo Iron
and Steel Co. Ltd. (Hanbo) and the former Kangwon Industries Ltd.
(Kangwon), which has recently been acquired by Inchon Iron & Steel Co.
Ltd. (Inchon), to unaffiliated U.S. purchasers for different grades and
sizes of rebar. The petitioner calculated a net U.S. price by deducting
foreign inland freight, international freight charges, Korean and U.S.
port charges, and customs duties paid.
Normal Value
With respect to NV, the petitioner provided home market prices that
were obtained from foreign market research for grades and sizes of
rebar that are comparable to the products exported to the United States
which serve as the basis for EP. The petitioner calculated an ex-
factory NV by deducting from the quoted home market prices foreign
inland freight.
Although the petitioner provided a margin based on a price-to-price
comparison, it also provided information demonstrating reasonable
grounds to believe or suspect that sales of rebar in the home market
were made at prices below the fully absorbed COP, within the meaning of
section 773(b) of the Act, and requested that the Department conduct a
country-wide sales-below-cost investigation.
Pursuant to section 773(b)(3) of the Act, COP consists of the COM,
SG&A, interest expenses, and packing. The petitioner calculated COM
based on the average consumption rates of two U.S. rebar producers. The
petitioner adjusted COM for known differences in the production process
used by producers in the United States and Korea. To calculate
depreciation, SG&A, and
[[Page 45759]]
interest expenses the petitioner relied upon the 1998 unconsolidated
annual report for Kangwon. Based upon the comparison of the adjusted
prices of the foreign like product in the home market to the calculated
COP of the product, we find reasonable grounds to believe or suspect
that sales of the foreign like product were made below the COP, within
the meaning of section 773(b)(2)(A)(i) of the Act. Accordingly, the
Department is initiating a country-wide cost investigation. See the
Initiation of Cost Investigations section below.
Pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act, the
petitioner also based NV for sales in Korea on CV. The petitioner
calculated CV using the same COM, depreciation, SG&A and interest
expense figures used to compute Korean home market costs. Consistent
with section 773(e)(2) of the Act, the petitioner also added to CV an
amount for profit, using data from Inchon's 1998 financial statements
because Kangwon had no profit in 1998.
Based upon the comparison of CV to EP, the petitioner calculated
estimated dumping margins of 86.69 percent and 102.28 percent.
The Russian Federation
Export Price
The petitioner based EP on a price quote from Kuznetskiy Met
Kombinat (KMK) to an unaffiliated U.S. purchaser for different grades
and sizes of rebar, and given that the terms of this price quote were
FOB mill, no deductions to the price quotation were made.
Normal Value
The petitioner asserts that the Russia is an NME country, and that
in all previous investigations the Department has determined that
Russia is an NME. See, e.g., Notice of Final Determination of Sales at
Less Than Fair Value; Solid Fertilizer Grade Ammonium Nitrate from the
Russian Federation, 65 FR 42669, 42670-71 (July 11, 2000) (final
determination). Russia will be treated as an NME unless and until its
NME status is revoked. Pursuant to section 771(18)(C)(i) of the Act,
because Russia's status as an NME remains in effect, the petitioner
determined the dumping margin using an NME analysis.
Given that information regarding KMK's consumption rates is not
available, NV was calculated using the same methodology described above
for Belarus. Further, Thailand was used as the surrogate country. We
believe that Thailand is an appropriate surrogate for purposes of
initiating this case with respect to Russia for the same reasons as
discussed above with respect to Belarus.
Based on comparisons of EP to NV, the petitioner calculated an
estimated dumping margin of 68.87 percent.
Ukraine
Export Price
The petitioner based EP on a price quote from Krivoi Rog State
Mining & Metal Works (Krivoi Rog) to an unaffiliated U.S. purchaser for
different grades and sizes of rebar, and calculated a net U.S. price by
deducting foreign inland freight, international freight, U.S. port
costs, and customs duties paid.
Normal Value
The petitioner alleges that Ukraine is an NME country, and in all
previous investigations, the Department has determined that Ukraine is
an NME. See, e.g., Notice of Final Determination of Sales at Less Than
Fair Value: Certain Cut-to-Length Carbon Steel Plate From Ukraine, 62
FR 61754 (November 19, 1997)). Ukraine will be treated as an NME unless
and until its NME status is revoked. Pursuant to section 771(18)(C)(i)
of the Act, because Ukraine's status as an NME remains in effect, the
petitioner determined the dumping margin using an NME analysis.
Given that information regarding Krivoi Rog's consumption rates is
not available, NV was calculated using the same methodology described
above for Moldova. Further, Indonesia was used as the surrogate
country. We believe that Indonesia is an appropriate surrogate for
purposes of initiating this case with respect to Ukraine for the same
reasons discussed above with respect to Moldova.
Based on comparisons of EP to NV, the petitioner calculated an
estimated dumping margin of 41.69 percent.
Venezuela
Export Price
The petitioner based EP on a price quote from Siderurgica del
Turbio SA (Sidetur) to an unaffiliated U.S. purchaser for different
grades and sizes of rebar, and calculated a net U.S. price by deducting
foreign inland freight, international freight, and Venezuelan and U.S.
port charges.
Normal Value
With respect to NV, the petitioner provided a home market price
obtained from foreign market research for grades and sizes of rebar
comparable to the products exported to the United States which serve as
the basis for EP. The petitioner calculated an ex-factory NV by
deducting from the quoted home market price movement related charges
associated with delivering the merchandise to the Venezuelan customers.
Based upon the comparison of NV to EP, the petitioner calculated an
estimated dumping margin of 125.49 percent.
Initiation of Cost Investigations
As noted above, pursuant to section 773(b) of the Act, the
petitioner provided information demonstrating reasonable grounds to
believe or suspect that sales in the home markets of Indonesia, Japan,
Korea, and Poland were made at prices below the fully absorbed COP and,
accordingly, requested that the Department conduct country-wide sales-
below-COP investigations in connection with the requested antidumping
investigations for these countries. The Statement of Administrative
Action (SAA), submitted to the U.S. Congress in connection with the
interpretation and application of the URAA, states that an allegation
of sales below COP need not be specific to individual exporters or
producers. SAA, H.R. Doc. No. 316 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 for the
representative foreign like products to their COPs, we find the
existence of ``reasonable grounds to believe or suspect'' that sales of
these foreign like products in markets of Indonesia, Japan, Korea, and
Poland 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.
Critical Circumstances
The petitioner has alleged that the Department should make an
expedited
[[Page 45760]]
finding that critical circumstances exist with regard to imports of
rebar from the PRC, Korea, Latvia, and Poland, and has supported its
allegations with the following information.
First, the petitioner claims that the importers knew, or should
have known, that the rebar was being sold at less than NV.
Specifically, the petitioner alleges that the margins calculated in the
petition for each of the four countries exceed the 25 percent threshold
used by the Department to impute importer knowledge of dumping.
Moreover, with regard to Korea and Latvia, the petitioner notes that
exports of rebar from these countries have been subject to recent
antidumping duties imposed by countries other than the United States.
The petitioner also has alleged that imports from these four
countries have been massive over a relatively short period. Alleging
that there was sufficient pre-filing notice of these antidumping
petitions, the petitioner contends that for purposes of this
determination, the Department should compare imports during September
to December 1999 to imports during January to April 2000.\6\ As
explained in section 351.206(i) of our regulations, ``the Secretary
normally will consider a ``relatively short period'' as the period
beginning on the date the proceeding begins and ending at least three
months later. However, if the Secretary finds that importers, or
exporters or producers, had reason to believe, at some time prior to
the beginning of the proceeding, that a proceeding was likely, then the
Secretary may consider a period of not less than three months from that
earlier time.''
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\6\ For the PRC, the petitioner compared imports from the five-
month period of August to December 1999, and January to May 2000, in
order to include a significant May shipment of rebar in its
analysis.
---------------------------------------------------------------------------
The petitioner supported its claim that an earlier comparison
period should be used with citations from a December 7, 1999, news
article discussing the formation of a U.S. industry coalition and the
likelihood of filing of antidumping petitions against producers of
rebar. Additionally, in a petition amendment/supplement filed July 13,
2000, the petitioner provided several additional articles published
prior to the petition filing that specifically referenced the volume of
rebar exports from these four countries.
In the past, the Department concluded that a high level of press
coverage provided foreign producers of rebar with prior knowledge of
pending antidumping investigations. See e.g., Initiation of Antidumping
Duty Investigations: Certain Cold-Rolled Flat-Rolled Carbon-Quality
Steel Products From Argentina, Brazil, the People's Republic of China,
Indonesia, Japan, the Russian Federation, Slovakia, South Africa,
Taiwan, Thailand, Turkey, and Venezuela, 63 FR 34194, 34203 (June 25,
1999). Therefore, the Department considered import statistics contained
in the petition for the periods September-December 1999 and January-
April 2000 for Korea, Latvia and Poland, and the periods of August-
December 1999 and January-May 2000 for the PRC. Based on this
comparison, imports of rebar from the PRC increased by 130 percent,
imports from Korea increased by 17 percent, imports from Latvia
increased by 42.4 percent, and imports from Poland increased from zero
imports to over forty thousand metric tons, an unquantifiable
percentage.\7\
The Department also considers the extent of the increase in the
volume of imports of the subject merchandise as one indicator of
whether a reasonable basis exists to impute knowledge that material
injury was likely. In the cases involving the PRC, Korea, Latvia and
Poland, the increases in imports were in excess of fifteen percent, the
amount considered ``massive'' by the Department. Taking into
consideration the foregoing, we find that the petitioner has supported
its claim of critical circumstances with information reasonably
available for purposes of initiating a critical circumstances inquiry.
For these reasons, we will investigate this matter further and will
make a preliminary determination at the appropriate time, in accordance
with section 735(e)(1) of the Act and the Department's practice (see
Policy Bulletin 98/4 (63 FR 55364, October 15, 1998)).
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\7\ In the period of September to December 1999, there were no
imports of rebar from Poland.
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Fair Value Comparisons
Based on the data provided by the petitioner, there is reason to
believe that imports of rebar from Austria, Belarus, Indonesia, Japan,
Korea, Latvia, Moldova, the PRC, Poland, Russia, Ukraine, and Venezuela
are being, or are likely to be, sold at less than fair value.
Allegations and Evidence of Material Injury and Causation
The petitions allege that the U.S. industry producing the domestic
like product is being materially injured, or is threatened with
material injury, by reason of the individual and cumulated imports of
the subject merchandise sold at less than NV. The petitioner contends
that the industry's injured condition is evident in the declining
trends in net operating profits, net sales volumes, profit to sales
ratios, and capacity utilization. The allegations of injury and
causation are supported by relevant evidence including U.S. Customs
import data, lost sales, and pricing information. We have assessed the
allegations and supporting evidence regarding material injury and
causation, and have determined that these allegations are properly
supported by accurate and adequate evidence and meet the statutory
requirements for initiation (see Initiation Checklist at Attachment Re:
Material Injury).
Initiation of Antidumping Investigations
Based upon our examination of the petitions on rebar, and the
petitioner's responses to our supplemental questionnaire clarifying the
petitions, as well as our conversations with foreign market researchers
and other experts who provided information concerning various aspects
of the petitions, we have found that they meet the requirements of
section 732 of the Act. Therefore, we are initiating antidumping duty
investigations to determine whether imports of rebar from Austria,
Belarus, Indonesia, Japan, Korea, Latvia, Moldova, the PRC, Poland,
Russia, Ukraine, and Venezuela are being, or are likely to be, sold in
the United States at less than fair value. Unless this deadline is
extended, we will make our preliminary determinations no later than 140
days after the date of this initiation.
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 Austria, Belarus, Indonesia,
Japan, Korea, Latvia, Moldova, the PRC, Poland, Russia, Ukraine, 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, no later than August 14, 2000, whether
there is a reasonable indication that imports of certain rebar products
from Austria, Belarus, Indonesia, Japan, Korea, Latvia, Moldova, the
PRC, Poland, Russia,
[[Page 45761]]
Ukraine, and Venezuela are causing material injury, or threatening to
cause material injury, to a U.S. industry. A negative ITC determination
for any country will result in the investigation being terminated with
respect to that country; otherwise, these investigations will proceed
according to statutory and regulatory time limits.
This notice is issued and published pursuant to section 777(i) of
the Act.
Dated: July 18, 2000.
Troy H. Cribb,
Acting Assistant Secretary for Import Administration.
[FR Doc. 00-18809 Filed 7-24-00; 8:45 am]
BILLING CODE 3510-DS-P