[Federal Register Volume 65, Number 201 (Tuesday, October 17, 2000)]
[Notices]
[Pages 61303-61305]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-26654]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-862]


Initiation of Antidumping Duty Investigation: Foundry Coke 
Products From the People's Republic of China

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

EFFECTIVE DATE: October 17, 2000.

FOR FURTHER INFORMATION CONTACT: James Doyle, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW., Washington, DC 20230; telephone: 
(202) 482-0159.

Initiation of Investigation

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 (``Act'') by the 
Uruguay Round Agreements Act (``URAA''). In addition, unless otherwise 
indicated, all citations to the Department of Commerce's 
(``Department'') regulations are to 19 CFR part 351 (2000).

The Petition

    On September 20, 2000, the Department received a petition on 
imports of foundry coke products from the People's Republic of China 
(``PRC'') filed in proper form by ABC Coke, Citizens Gas and Coke 
Utility, Erie Coke, Tonawanda Coke Corporation, and United Steelworkers 
of America, AFL-CIO, hereinafter referred to as ``the petitioners.'' On 
September 25, 2000, the Department received a supplement to the 
petition. On September 27, 2000, the Department requested clarification 
of certain areas of the petition and received a response on October 2, 
2000.
    In accordance with section 732(b) of the Act, the petitioners 
allege that imports of foundry coke products from

[[Page 61304]]

the PRC 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 and threaten to injure an 
industry in the United States.
    The Department finds that the petitioners filed this petition on 
behalf of the domestic industry because they are interested parties as 
defined in section 771(9)(C) and (D) of the Act and they have 
demonstrated sufficient industry support with respect to the 
antidumping duty investigation they are requesting the Department to 
initiate (see ``Determination of Industry Support for the Petition'' 
below).

Scope of Investigation

    For purposes of this investigation, the product covered is coke 
larger than 100 mm (4 inches) in maximum diameter and at least 50 
percent of which is retained on a 100-mm (4 inch) sieve, of a kind used 
in foundries.
    The foundry coke products subject to this investigation are 
currently classifiable under subheading 2704.00.00.10 of the Harmonized 
Tariff Schedules of the United States (HTSUS). Although the HTSUS 
subheadings are provided for convenience and Customs purposes, our 
written description of the scope of this investigation is dispositive.
    During our review of the petition, we discussed the scope with the 
petitioners 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 interested parties to raise issues regarding product 
coverage. The Department encourages all interested parties to submit 
such comments within 20 calender days of publication of this notice. 
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 interested 
parties prior to the issuance of the preliminary determinations.

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 as a whole 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 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 the Department and the 
ITC must apply the same statutory definition regarding the domestic 
like product (see section 771(10) of the Act), 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 
domestic like product, such differences do not render the decision of 
either agency contrary to 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 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 title.'' 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.
    In this case, the domestic like product referred to in the petition 
is the single domestic like product defined in the ``Scope of 
Investigation'' section, above. At this time, the Department has no 
basis on the record to find the petition's definition of the domestic 
like product to be inaccurate. The Department, therefore, has adopted 
the domestic like product definition set forth in the petition.
    Moreover, the Department has determined that the petition contains 
adequate evidence of industry support; therefore, polling was not 
unnecessary (see Initiation Checklist Re: Industry Support, October 10, 
2000) (``Initiation Checklist''). To the best of the Department's 
knowledge, producers supporting the petition represent over 50 percent 
of total production of the domestic like product. Additionally, no 
person who would qualify as an interested party pursuant to section 
771(9) (A), (C), (D), (E), or (F) of the Act has expressed opposition 
to the petition.
    Accordingly, the Department determines that this 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 is a description of the allegation of sales at less 
than fair value upon which the Department based its decision to 
initiate this investigation. The sources of data for the deductions and 
adjustments relating to U.S. price and factors of production are also 
discussed in the Initiation Checklist. Should the need arise to use any 
of this information as facts available under section 776 of the Act in 
our preliminary or final determination, we may reexamine the 
information and revise the margin calculations, if appropriate.
    Based on information obtained from the ITC's section 332 study on 
the foundry coke industries in the United States and the PRC, Foundry 
Coke: A Review of the Industries in the United States and China, July 
2000 (``332 Study''), the petitioners identified the following PRC 
companies as major producers of foundry coke products in the PRC: Ying 
Xian, Top Reach (De-Rui), Ju Fu, Xiao Shan, Sanjia, Yuan Hui, Feng Yang 
Wen Feng, Ping Yao Feng Yang, Shuang Fa, Zhong Pu, Bai Zhang, Jin Yang, 
Military Farmland, Huang He, Jia Wei, Liangyu, Ping Yao Hua Feng, San 
Sheng, Tang Xin, Ying Xing, Wen Fei, Ying Dong, Fu You, Bao Wan, and 
Yao Long. Of these 25 companies the petitioners identified Ying Xian, 
Top Reach (De-Rui), Ju Fu, and Xiao Shan as the producers of a large 
quantity of foundry coke products exported to the United States.
    The petitioners based export price (``EP'') on import values 
declared to the U.S. Customs Service. In calculating import values 
declared to the U.S. Customs Service, the petitioners used the HTSUS 
category under which subject merchandise is currently classified (i.e, 
2704.00.00.10). The petitioners calculated one EP based on the average 
unit values for entries of subject merchandise during February and 
March 2000. In order to obtain ex-factory prices, the petitioners 
deducted foreign inland freight from the Customs value. According to 
the ITC's 332 study

[[Page 61305]]

on the foundry coke industries in the United States and the PRC, in the 
PRC foundry coke is transported to the port by either truck or train. 
For purposes of calculating foreign inland freight, the petitioners 
used the surrogate value for rail because of the large distances 
involved and the lower expense of shipping by rail, as compared to 
shipments by truck. For purposes of initiation we have found that this 
is a conservative estimate. We relied on the data in the petition 
except for valuing foreign inland freight. See Initiation Checklist.
    The petitioners assert that the Department considers the PRC to be 
a non-market economy country (``NME'') and, therefore, constructed 
normal value (``NV'') based on the factors of production methodology 
pursuant to section 773(c) of the Act. In previous cases, the 
Department has determined that the PRC is an NME country. See, e.g., 
Final Determination of Sales at Less Than Fair Value: Certain Cold-
Rolled Flat-Rolled Carbon-Quality Steel Products from the People's 
Republic of China (``Cold-Rolled Steel from China''), 65 FR 34660 (May 
31, 2000). In accordance with section 771(18)(c)(i) of the Act, the NME 
status remains in effect until revoked by the Department. The NME 
status of the PRC has not been revoked by the Department and, 
therefore, remains in effect for purposes of the initiation of this 
investigation. Accordingly, the NV of the product appropriately is 
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 the PRC's NME status and 
the granting of separate rates to individual exporters.
    As required by 19 CFR 351.202(b)(7)(i)(C), the petitioners provided 
a dumping margin calculation using the Department's NME methodology 
described in 19 CFR 351.408. For the NV calculation, the petitioners 
based the factors of production, as defined by section 773(c)(3) of the 
Act (raw materials, labor, energy and capital cost), for foundry coke 
products on the quantities of inputs used by one of the petitioning 
firms, Citizens Gas & Coke. See Initiation Checklist
    The petitioners selected India as their surrogate country. Citing 
the Department's recent determination in cold-rolled steel from the 
PRC, the petitioners stated that India is comparable to the PRC in its 
level of economic development and is a significant producer of foundry 
coke products. Based on the information provided by the petitioners, we 
believe that the petitioners' use of India as a surrogate country is 
appropriate for purposes of initiation of this investigation. See 
Initiation Checklist.
    In accordance with section 773(c)(4) of the Act, the petitioners 
valued factors of production for foundry coke products, where possible, 
on reasonably available, public surrogate country data. To value coal 
(the sole raw material input), the petitioners used a value for coking 
coal as reported in the Monthly Statistics of Foreign Trade of India, 
Vol. II--Imports, Directorate General of Commercial Intelligence & 
Statistics, Ministry of Commerce, Government of India, Calcutta. Labor 
was valued using the regression-based wage rate for the PRC, in 
accordance with 19 CFR 351.408(c)(3). Energy (coke oven gas) was valued 
using an Indian surrogate value for natural gas, adjusted for the 
relative difference in heating values between natural gas and coke oven 
gas. For overhead, SG&A and profit, the petitioners applied rates 
derived from the publicly available annual report of an Indian producer 
of comparable merchandise, Tata Iron and Steel Co., Ltd.
    Based on comparisons of EP to NV, calculated in accordance with 
section 773(c) of the Act, the estimated dumping margin for foundry 
coke products from the PRC is 226.38 percent.

Fair Value Comparisons

    Based on the data provided by the petitioners, there is reason to 
believe that imports of foundry coke products from the PRC are being, 
or are likely to be, sold in the United States at less than fair value.

Allegations and Evidence of Material Injury and Causation

    The petition alleges that the U.S. industry producing the domestic 
like product is being materially injured and is threatened with 
material injury, by reason of the imports of the subject merchandise 
sold at less than NV. The petitioners contend that the industry's 
injured condition is evident in the declining trends in: (1) U.S. 
market share, (2) domestic production, (3) shipments, (4) capacity 
utilization, (5) employment, and (6) profit margins.
    The allegations of injury and causation are supported by relevant 
evidence including ITC section 332 import data, lost sales, and pricing 
information. The Department assessed the allegations and supporting 
evidence regarding material injury and causation and determined that 
these allegations are supported by accurate and adequate evidence and 
meet the statutory requirements for initiation (see Attachments to 
Initiation Checklist, Re: Material Injury).

Initiation of Antidumping Investigation

    Based upon our examination of the petition on foundry coke imports 
from the PRC, we find that the petition meets the requirements of 
section 732 of the Act. Therefore, we are initiating an antidumping 
duty investigation to determine whether imports of foundry coke 
products from the PRC are being, or are likely to be, sold in the 
United States at less than fair value. Unless postponed, we will make 
our preliminary determination no later than 140 days after the date of 
this initiation.

Distribution of Copies of the Petition

    In accordance with section 732(b)(3)(A) of the Act, a copy of the 
public version of the petition has been provided to the representatives 
of the PRC. We will attempt to provide a copy of the public version of 
the petition to each exporter named in the petition, as appropriate.

International Trade Commission Notification

    We have notified the ITC of our initiation, as required by section 
732(d) of the Act.

Preliminary Determination by the ITC

    The ITC will preliminarily determine, no later than November 6, 
2000, whether there is a reasonable indication that imports of foundry 
coke products from the PRC are causing material injury, or threatening 
to cause material injury, to a U.S. industry. A negative ITC 
determination will result in this investigation being terminated; 
otherwise, this investigation will proceed according to statutory and 
regulatory time limits.
    This notice is published pursuant to section 777(i) of the Act.

    Dated: October 10, 2000.
Troy H. Cribb,
Acting Assistant Secretary for Import Administration.
[FR Doc. 00-26654 Filed 10-16-00; 8:45 am]
BILLING CODE 3510-DS-P