[Federal Register Volume 65, Number 239 (Tuesday, December 12, 2000)]
[Notices]
[Pages 77568-77578]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-31635]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-357-814, A-570-865, A-533-820, A-560-812, A-834-806, A-421-807, A-
485-806, A-791-809, A-583-835, A-549-817, A-823-811]


Notice of Initiation of Antidumping Duty Investigations: Certain 
Hot-Rolled Carbon Steel Flat Products From Argentina, India, Indonesia, 
Kazakhstan, the Netherlands, the People's Republic of China, Romania, 
South Africa, Taiwan, Thailand, and Ukraine

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

ACTION: Initiation of antidumping duty investigations.

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EFFECTIVE DATE: December 12, 2000.

FOR FURTHER INFORMATION CONTACT: Rick Johnson or Charles Riggle at 
(202) 482-3818 and (202) 482-0650, 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 November 13, 2000, the Department of Commerce (the Department) 
received petitions filed in proper form by the following parties: 
Bethlehem Steel Corporation, Gallatin Steel Company, IPSCO Steel Inc., 
LTV Steel Company, Inc., National Steel Corporation, Nucor Corporation, 
Steel Dynamics, Inc., U.S. Steel Group (a unit of USX Corporation), 
Weirton Steel Corporation, and the Independent Steelworkers Union 
(collectively the petitioners). \1\ The United Steelworkers of America 
notified the Department that it also is a petitioning party in these 
investigations on November 16, 2000. The Department received from the 
petitioners information supplementing

[[Page 77569]]

the petitions throughout the 20-day initiation period.
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    \1\ Weirton Steel Corporation is not a petitioner in the 
investigation involving the Netherlands.
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    In accordance with section 732(b) of the Act, the petitioners 
allege that imports of certain hot-rolled carbon steel flat products 
(hereafter referred to as hot-rolled steel) from Argentina, India, 
Indonesia, Kazakhstan, the Netherlands, the People's Republic of China 
(the PRC), Romania, South Africa, Taiwan, Thailand, and Ukraine 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 petitioners filed these petitions on 
behalf of the domestic industry because they are interested parties as 
defined in sections 771(9)(C) and 771(9)(D) of the Act and have 
demonstrated sufficient industry support with respect to each of the 
antidumping investigations that they are requesting the Department to 
initiate (see the Determination of Industry Support for the Petitions 
section below).

Scope of Investigations

    For purposes of these investigations, the products covered are 
certain hot-rolled carbon steel flat products of a rectangular shape, 
of a width of 0.5 inch or greater, neither clad, plated, nor coated 
with metal and whether or not painted, varnished, or coated with 
plastics or other non-metallic substances, in coils (whether or not in 
successively superimposed layers), regardless of thickness, and in 
straight lengths, of a thickness of less than 4.75 mm and of a width 
measuring at least 10 times the thickness. Universal mill plate (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 4.0 mm, not in coils and without patterns in relief) 
of a thickness not less than 4.0 mm is not included within the scope of 
these investigations.
    Specifically included within the scope of these investigations are 
vacuum degassed, fully stabilized (commonly referred to as 
interstitial-free (IF)) steels, high strength low alloy (HSLA) steels, 
and the substrate for motor lamination steels. IF steels are recognized 
as low carbon steels with micro-alloying levels of elements such as 
titanium or niobium (also commonly referred to as columbium), or both, 
added to stabilize carbon and nitrogen elements. HSLA steels are 
recognized as steels with micro-alloying levels of elements such as 
chromium, copper, niobium, vanadium, and molybdenum. The substrate for 
motor lamination steels contains micro-alloying levels of elements such 
as silicon and aluminum.
    Steel products to be included in the scope of these investigations, 
regardless of definitions in the Harmonized Tariff Schedule of the 
United States (HTSUS), are products in which: (i) Iron predominates, by 
weight, over each of the other contained elements; (ii) the carbon 
content is 2 percent or less, by weight; and (iii) none of the elements 
listed below exceeds the quantity, by weight, respectively indicated:

1.80 percent of manganese, or
2.25 percent of silicon, or
1.00 percent of copper, or
0.50 percent of aluminum, or
1.25 percent of chromium, or
0.30 percent of cobalt, or
0.40 percent of lead, or
1.25 percent of nickel, or
0.30 percent of tungsten, or
0.10 percent of molybdenum, or
0.10 percent of niobium, or
0.15 percent of vanadium, or
0.15 percent of zirconium.

    All products that meet the physical and chemical description 
provided above are within the scope of these investigations unless 
otherwise excluded. The following products, by way of example, are 
outside or specifically excluded from the scope of these 
investigations:
     Alloy hot-rolled steel products in which at least one of 
the chemical elements exceeds those listed above (including, e.g., 
American Society for Testing and Materials (ASTM) specifications A543, 
A387, A514, A517, A506).
     Society of Automotive Engineers (SAE)/American Iron & 
Steel Institute (AISI) grades of series 2300 and higher.
     Ball bearing steels, as defined in the HTSUS.
     Tool steels, as defined in the HTSUS.
     Silico-manganese (as defined in the HTSUS) or silicon 
electrical steel with a silicon level exceeding 2.25 percent.
     ASTM specifications A710 and A736.
     USS abrasion-resistant steels (USS AR 400, USS AR 500).
     All products (proprietary or otherwise) based on an alloy 
ASTM specification (sample specifications: ASTM A506, A507).
     Non-rectangular shapes, not in coils, which are the result 
of having been processed by cutting or stamping and which have assumed 
the character of articles or products classified outside chapter 72 of 
the HTSUS.
    The merchandise subject to these investigations is classified in 
the HTSUS at subheadings: 7208.10.15.00, 7208.10.30.00, 7208.10.60.00, 
7208.25.30.00, 7208.25.60.00, 7208.26.00.30, 7208.26.00.60, 
7208.27.00.30, 7208.27.00.60, 7208.36.00.30, 7208.36.00.60, 
7208.37.00.30, 7208.37.00.60, 7208.38.00.15, 7208.38.00.30, 
7208.38.00.90, 7208.39.00.15, 7208.39.00.30, 7208.39.00.90, 
7208.40.60.30, 7208.40.60.60, 7208.53.00.00, 7208.54.00.00, 
7208.90.00.00, 7211.14.00.90, 7211.19.15.00, 7211.19.20.00, 
7211.19.30.00, 7211.19.45.00, 7211.19.60.00, 7211.19.75.30, 
7211.19.75.60, and 7211.19.75.90. Certain hot-rolled carbon steel flat 
products covered by these investigations, including: vacuum degassed 
fully stabilized; high strength low alloy; and the substrate for motor 
lamination steel may also enter under the following tariff numbers: 
7225.11.00.00, 7225.19.00.00, 7225.30.30.50, 7225.30.70.00, 
7225.40.70.00, 7225.99.00.90, 7226.11.10.00, 7226.11.90.30, 
7226.11.90.60, 7226.19.10.00, 7226.19.90.00, 7226.91.50.00, 
7226.91.70.00, 7226.91.80.00, and 7226.99.00.00. Subject merchandise 
may also enter under 7210.70.30.00, 7210.90.90.00, 7211.14.00.30, 
7212.40.10.00, 7212.40.50.00, and 7212.50.00.00. Although the HTSUS 
subheadings are provided for convenience and U.S. Customs purposes, the 
written description of the merchandise under investigation 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 
December 26, 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.

Determination of Industry Support for the Petitions

    Section 771(4)(A) of the Act defines the ``industry'' as the 
producers of a domestic like product. Thus, to

[[Page 77570]]

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 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 
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.\2\
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    \2\ 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 Therefore 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. Moreover, the petitioners do not offer a definition of 
domestic like product distinct from the scope of the investigation.
    In this case, ``the article subject to investigation'' is 
substantially similar to the scope of the Department's investigations 
involving hot-rolled carbon steel products initiated in 1998. See 
Initiation of Antidumping Duty Investigations: Certain Hot-Rolled Flat-
Rolled Carbon-Quality Steel Products From Brazil, Japan, and the 
Russian Federation, 63 FR 56607 (October 22, 1998). The only 
differences are as follows: (1) A 2.25 percent silicon maximum content 
level (as opposed to 1.50 percent in the 1998 case); (2) the omission 
of maximum content levels for boron and titanium; and (3) the 
itemization of two additional examples of products specifically 
excluded from the scope, i.e., all products (proprietary or otherwise) 
based on an alloy ASTM specification (sample specifications: ASTM A506, 
A507), and non-rectangular shapes, not in coils, which are the result 
of having been processed by cutting or stamping and which have assumed 
the character of articles or products classified outside chapter 72 of 
the HTSUS. The Department has reviewed reasonably available information 
to determine whether the products within the scope of the 
investigations constitute one or more than one domestic like product.
    Some steel products classified as alloy steels based on the HTSUS 
are recognized as carbon steels by the industry and/or the marketplace. 
For example, The Book of Steel, a 1996 publication by Sollac, a flat-
rolled steel division of Usinor, one of the largest steel companies in 
the world, identifies HSLA, IF, and motor lamination steels as falling 
within categories of plain carbon sheet steels (see chapters 44, 45 and 
52). Also, Carbon and Alloy Steels, published in 1996 by ASM 
International, a major materials society, indicates that HSLA steels 
are not considered to be alloy steels, but are in fact similar to as-
rolled mild-carbon steel and are generally priced by reference to the 
base price for carbon steels (see page 29). Carbon and Alloy Steels 
also distinguishes between carbon-boron and alloy-boron steels; the 
former may contain boron at levels which would classify it as alloy 
under the HTSUS, but would not classify it as an alloy steel 
commercially because, unlike the alloy-boron steels, higher levels of 
other alloying elements are not specified (see, e.g., pages 159 and 
161).
    We noted that, in 1998 hot-rolled steel investigations, we 
discussed these issues with representatives of the ITC and the 
International Trade Administration's (ITA's) Office of Trade 
Development. Other than the fact that the AISI technically defines 
alloy steels based on alloy levels comparable to those in the HTSUS, 
none of the agency representatives cited reasons why the products in 
question might be treated as distinct from hot-rolled carbon steels. In 
addition to the research discussed above, the Department determined in 
the 1998 hot-rolled steel investigations that, with respect to certain 
steel products, such as high-strength low-alloy steel, industry sources 
indicated that these steel products are manufactured by similar 
processes, are priced from similar bases, are marketed in comparable 
ways, and are used for similar applications. See Certain Hot-Rolled 
Flat-Rolled Carbon-Quality Steel Products From Brazil, Japan, and the 
Russian Federation: Attachment to the Initiation Checklist, Re: 
Industry Support, October 15, 1998 (which is on file and publically 
available in the Central Records Unit (CRU) of the Main Commerce 
Department building). We are unaware of any factual differences between 
the present case and the initiation of the 1998 hot-rolled steel 
investigations. Thus, based on our analysis of the information 
presented to the Department above and the information obtained and 
reviewed independently by the Department, we have determined that there 
is a single domestic like product which is defined in the Scope of 
Investigations section above, and have analyzed industry support in 
terms of this domestic like product.
    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. Finally, Section 732(c)(4)(D) of the Act 
provides that if the petition does not establish support of domestic 
producers or workers accounting for more than 50 percent of the total 
production of the domestic like product, the administering agency 
shall: (i) Poll the industry or rely on other information in order to 
determine if there is support for the petition as required by 
subparagraph (A), or (ii) determine industry support using a 
statistically valid sampling method.
    In order to estimate production for the domestic industry as 
defined for purposes of this case, the Department has relied upon not 
only the petition and amendments thereto, but also upon ``other 
information'' it obtained through research and which is attached to the 
Initiation Checklist (See Import Administration AD Investigation 
Initiation Checklist (Initiation Checklist), Attachment Re: Industry 
Support, December 4, 2000). Based on information from these sources, 
the Department determined, pursuant to Section 732(c)(4)(D), that there 
is support for the petition as required by subparagraph (A). 
Specifically, the Department made the following determinations. For 
Argentina, India, Indonesia, Kazakhstan, the Netherlands, the PRC, 
Romania, South Africa, Taiwan, Thailand, and Ukraine, the petitioners 
established industry support representing over 50 percent of total 
production of the domestic like product. Therefore, the domestic 
producers or workers who support the petition

[[Page 77571]]

account for at least 25 percent of the total production of the domestic 
like product, and the requirements of Section 732(c)(4)(A)(i) are met. 
Furthermore, because the Department received no opposition to the 
petition, the domestic producers or workers who support the petition 
account for 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. Thus, the requirements of Section 
732(c)(4)(A)(ii) are also met.
    Accordingly, the Department determines that the petitions were 
filed on behalf of the domestic industry within the meaning of section 
732(b)(1) of the Act. See the Initiation Checklist.

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, constructed 
value (CV) and factors of production (FOP) are detailed in the 
Initiation Checklist. Where the petitioners 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. See Memorandum to the File, Telephone Conversation with 
Source of Market Research used in Antidumping Petition to Support 
Certain Factual Information, dated December 4, 2000. 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. The period of investigation (POI) for market economy 
countries is October 1, 1999, through September 30, 2000, while the POI 
for non-market economies (NME) is April 1, 2000, through September 30, 
2000.
    Regarding the investigations involving 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 
all NME exporters in the given country. See, e.g., Final Determination 
of Sales at Less Than Fair Value: Silicon Carbide from the PRC, 59 FR 
22585 (May 2, 1994). 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.
    Lastly, in the petitioners' calculation of the estimated margins in 
the cases involving NME countries (except the PRC) and certain market 
economy countries, the petitioners, in submissions dated November 22, 
2000, based export prices on import statistics covering certain months 
and ports of entry. For initiation purposes, we have recalculated the 
estimated margins for these countries using POI-wide and nation-wide 
averages of the appropriate import values. For the remaining market 
economy countries, we based export price (EP) on price quotes obtained 
by the petitioners from foreign producers to unaffiliated U.S. 
purchasers.
    We note that, on December 4, 2000, the petitioners calculated EP 
based on import statistics covering the entire POI (i.e., 12 months for 
market economies, 6 months for NME countries) through the port of New 
Orleans, which the petitioners note ranks first among all U.S. ports 
for imports of hot-rolled steel from the countries against which the 
petitions were filed. The petitioners maintain that such a methodology 
is appropriate because the ``precipitous decline in import prices of 
hot-rolled steel which has continued since May of this year is not yet 
fully reflected in the IM-145 Census data, due to the time lag in 
reporting of this data.'' The petitioners note that this is because, 
for sales which are made pursuant to a contract, a significant number 
of months often transpire between agreement on price and entry into the 
United States. To resolve these timing differences, the petitioners 
suggest that the use of New Orleans import statistics is more 
appropriate, to the extent that imports through this port include 
substantial volumes of hot-rolled steel sold on a ``spot'' basis. 
Specifically, the petitioners note that AUVs based primarily on 
``spot'' sales would likely be more sensitive to and, therefore, likely 
more reflective of, recent price declines in the market than would be 
the case with national averages. The margins calculated using this 
methodology are as follows: Indonesia 80.57 percent, Kazakhstan 166.93 
to 168.89 percent, the Netherlands 28.10 percent, Romania 77.23 to 
100.46 percent, South Africa 6.35 percent, Taiwan 16.06 to 50.48 
percent, Thailand 18.53 to 19.85 percent, and Ukraine 85.20 to 86.68 
percent.
    Because the Department received these recalculations from the 
petitioners at a very late date, we did not have adequate time to 
analyze these arguments. However, since the use of POI-wide, country-
wide import statistics to calculate estimated margins is sufficient for 
purposes of initiation, it is not necessary to address those arguments 
at this time. To the extent necessary, we will consider the 
appropriateness of the petitioners' alternative methodology during the 
course of this proceeding. However, we have initiated these 
investigations based on the POI-wide, country-wide import statistics.

Argentina

Export Price

    The petitioners based EP on price quotes from an Argentine steel 
producer to an unaffiliated U.S. purchaser for different grades and 
sizes of subject merchandise, and calculated a net U.S. price by 
deducting international freight and duties.

Normal Value

    With respect to normal value (NV), the petitioners provided a home 
market price that was obtained from foreign market research for a grade 
and size of hot-rolled steel that is comparable to those of the 
products exported to the United States which serve as the basis for EP. 
The petitioners state that the home market price quotation was FOB mill 
and did not make any deductions from this price.
    Although the petitioners provided information on home market 
prices, they also provided information demonstrating reasonable grounds 
to believe or suspect that sales of hot-rolled steel in the home market 
were made at prices below the fully absorbed cost of production (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 cost of 
manufacture (COM), selling, general and administrative (SG&A) expenses, 
and packing. The petitioners calculated COM based on their own 
production experience, adjusted for known differences between costs 
incurred to produce hot-rolled steel in the United States and Argentina 
using publicly available data. To calculate depreciation and SG&A 
expenses the petitioners relied upon amounts reported in an Argentine 
steel producer's unconsolidated 2000 financial statements. For interest 
expense, the petitioners used the Argentine steel producer's 
consolidated 2000 financial statements. Based upon a comparison of the 
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 at

[[Page 77572]]

prices 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 
petitioners based NV for sales in Argentina on CV. The petitioners 
calculated CV using the same COM, depreciation, SG&A expenses, and 
interest expense figures used to compute Argentine home market costs. 
Consistent with 773(e)(2) of the Act, the petitioners included in CV an 
amount for profit. For profit, the petitioners relied upon amounts 
reported in an Argentine steel producer's unconsolidated 2000 financial 
statements.
    Based upon the comparison of EP to CV, the petitioners calculated 
estimated dumping margins ranging from 36.61 to 44.59 percent.

India

Export Price

    The petitioners based EP on a price quote from the Steel Authority 
of India, Ltd., (SAIL) to an unaffiliated U.S. purchaser for different 
grades and sizes of hot-rolled steel, and calculated a net U.S. price 
by deducting a foreign trading company's mark-up, foreign inland 
freight, international freight, U.S. port charges, and custom duties. 
Although, the submitted price does not specify whether it was based 
upon FOB or CIF prices, the Department notes that the adjustments to 
price are those incurred on shipments irrespective of the terms of 
sale.

Normal Value

    With respect to NV, the petitioners provided a home market price 
that was obtained from foreign market research for a grade and size of 
hot-rolled steel that is comparable to those of the products exported 
to the United States which serve as the basis for EP. The petitioners 
state that the home market price quotation was FOB mill and did not 
make any deductions for movement expenses from this price. Because the 
home market sales are made on a 30-day credit basis, the petitioners 
made a deduction for imputed credit expense.
    Although the petitioners provided information on home market 
prices, they also provided information demonstrating reasonable grounds 
to believe or suspect that sales of hot-rolled steel 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 refers to the total 
cost of producing the foreign-like product which includes COM, SG&A 
expenses, and packing expenses. The petitioners calculated COM based on 
their own production experience, adjusted for known differences between 
costs incurred to produce hot-rolled steel in the United States and 
India using publicly available data. The petitioners noted that the 
Indian manufacturers produce a variety of steel products besides hot-
rolled steel. Under these circumstances, the petitioners submitted the 
best estimate of depreciation cost by utilizing the product-specific 
depreciation based on the U.S. producer's experience. To calculate SG&A 
and financing expenses, we relied upon amounts reported in an Indian 
steel producers unconsolidated 2000 financial statements. 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 at prices 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 Initiation of Cost 
Investigations section below.
    Pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act, the 
petitioners based NV for sales in India on CV. The petitioners 
calculated CV using the same COM, depreciation, SG&A expenses, and 
interest expense figures used to compute Indian home market costs. 
Consistent with section 773(e)(2) of the Act, the petitioners included 
in CV an amount for profit. The petitioners calculated a profit amount 
from the unconsolidated 2000 financial statements for an Indian steel 
producer.
    Based upon the comparison of EP to CV, the petitioners calculated 
estimated dumping margins ranging from 11.12 to 51.99 percent.

Indonesia

Export Price

    The petitioners identified PT Krakatau Steel as the only producer 
of subject merchandise in Indonesia. The petitioners were unable to 
obtain specific sales or offers for sale of subject merchandise in the 
United States. Therefore, the petitioners based EP on the average per-
unit customs import values (AUV) for the two ten-digit categories of 
the HTSUS accounting for a significant percentage of in-scope imports 
from Indonesia during the period November 1999 through August 2000. For 
each of the two HTSUS categories under examination, the petitioners 
calculated the import AUVs using the reported quantity and customs 
value for imports as recorded in the U.S. Census Bureau's official IM-
145 import statistics. In their calculation of an estimated margin, 
petitioners based EP on import statistics covering only a portion of 
the POI. As noted above, for initiation purposes, we have recalculated 
the estimated margin for Indonesia using POI-wide and nation-wide 
averages of the appropriate import values. The petitioners presumed 
that the customs values used to calculate the AUV for each HTSUS 
category are identical to the free alongside ship (FAS) export value of 
the subject merchandise being shipped by PT Krakatau Steel. The 
petitioners made no adjustments to EP. We note that this is a 
conservative methodology that still results in a dumping margin above 
de minimis.

Normal Value

    With respect to NV, the petitioners provided home market prices 
that were obtained from foreign market research for a grade and size of 
hot-rolled steel that is comparable to those of the products exported 
to the United States which serve as the basis for EP. The petitioners 
state that the home market price quotations were ex-mill and did not 
make any deductions from this price.
    Although the petitioners provided information on home market 
prices, they also provided information demonstrating reasonable grounds 
to believe or suspect that sales of hot-rolled steel 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 expenses and packing. The petitioners calculated COM based on 
their own production experience, adjusted for known differences between 
costs incurred to produce hot-rolled steel in the United States and 
Indonesia. To calculate SG&A expenses and interest expense, the 
petitioners relied upon amounts reported in an Indonesian steel 
producer's 1999 financial statements. 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 at prices 
below the COP,

[[Page 77573]]

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 
petitioners based NV for sales in Indonesia on CV. The petitioners 
calculated CV using the same COM, depreciation, SG&A expenses and 
interest expense figures used to compute Indonesian home market costs. 
Consistent with section 773(e)(2) of the Act, the petitioners included 
in CV an amount for profit. Profit was calculated based on an 
Indonesian steel producer's 1999 financial statements.
    Based upon the comparison of EP to CV, we recalculated an estimated 
weighted-average dumping margin of 59.25 percent.

Kazakhstan

Export Price

    The petitioners identified Ispat Karmet JSC (Ispat) as the only 
producer of subject merchandise in Kazakhstan. The petitioners were 
unable to obtain specific sales or offers for sale of subject 
merchandise in the United States. Therefore, the petitioners based EP 
on the AUV for the three ten-digit categories of the HTSUS accounting 
for a significant percentage of in-scope imports from Kazakhstan which 
entered through a specific customs port during a specific month of the 
POI. For each of the three HTSUS categories under examination, the 
petitioners calculated the import AUVs using the reported quantity and 
customs value for imports as recorded in the U.S. Census Bureau's 
official IM-145 import statistics. In their calculation of estimated 
dumping margins, the petitioners based EP on import statistics covering 
only a portion of the POI. As noted above, for initiation purposes, we 
have recalculated the estimated margin for Kazakhstan using POI-wide 
and nation-wide averages of the appropriate import values. We note that 
customs import value as defined by Technical Documentation for US 
Exports and Imports of Merchandise on CD-ROM excludes U.S. import 
duties, freight, insurance and other charges incurred in bringing the 
merchandise to the United States. The petitioners calculated a net U.S. 
price by deducting from EP foreign inland freight. In order to 
calculate foreign inland freight, the petitioners first determined the 
distance by rail between Temirtau and Novorossiysk, the port which the 
petitioners determined to be the most appropriate port of embarkation 
for inter-continental shipment of goods originating in Kazakhstan, and 
then applied an Indonesian rail rate as a surrogate.

Normal Value

    The petitioners allege that Kazakhstan is an NME country, and in 
all previous investigations, the Department has determined that 
Kazakhstan is an NME. See, e.g., Notice of Final Determination of Sales 
at Less Than Fair Value: Beryllium Metal and High Beryllium Alloys from 
the Republic of Kazakhstan, 62 FR 2648, 2649 (January 17, 1997). 
Kazakhstan 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 
Kazakhstan's status as an NME remains in effect, the petitioners 
determined the dumping margin using an FOP analysis.
    For NV, the petitioners based the FOP, as defined by section 
773(c)(3) of the Act, on the consumption rates of one U.S. hot-rolled 
steel producer, adjusted for known differences in production 
efficiencies on the basis of available information. The petitioners 
assert that information regarding Ispat's consumption rates is not 
available, and have therefore assumed, for purposes of the petition, 
that producers in Kazakhstan use the same inputs in the same quantities 
as the petitioners use, except where a variance from the petitioners' 
cost model can be justified on the basis of available information. The 
petitioners argue that the use of the petitioners' factors is 
conservative because the U.S. steel industry is more efficient than the 
Kazakh steel industry. Based on the information provided by the 
petitioners, we believe that the petitioners' FOP methodology 
represents information reasonably available to the petitioners and is 
appropriate for purposes of initiating this investigation.
    The petitioners assert that Indonesia is the most appropriate 
surrogate country for Kazakhstan, claiming that Indonesia is: (1) A 
market economy; (2) a significant producer of comparable merchandise; 
and (3) at a level of economic development comparable to Kazakhstan in 
terms of per capita GNP. Based on the information provided by the 
petitioners, we believe that the petitioners' 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 petitioners 
valued FOP, where possible, on reasonably available, public surrogate 
data from Indonesia. The materials were primarily valued based on 
Indonesian import values, as published in the UN Trade Commodity 
Statistics. However, for coal used in coke-making, the petitioners used 
an Indian import value based on their assertion that no Indonesian 
value was available. Labor was valued using the regression-based wage 
rate for Kazakhstan provided by the Department, in accordance with 19 
CFR 351.408(c)(3). Electricity was valued using the rate for Indonesia 
published in a quarterly report of the OECD's International Energy 
Agency. For overhead, SG&A expenses and profit, the petitioners applied 
rates derived from the public annual report of an Indonesian producer 
of subject merchandise, PT Krakatau Steel. All surrogate values which 
fell outside the POI were adjusted for inflation based on the currency 
in which the source data were reported. The Indonesian consumer price 
index or the PPI, as published by the International Monetary Fund's 
International Financial Statistics, was used for these adjustments. 
Based on the information provided by the petitioners, we believe that 
their surrogate values represent information reasonably available to 
the petitioners and are acceptable for purposes of initiation of this 
investigation.
    Based upon a comparison of EP to CV, we recalculated estimated 
dumping margins ranging from 143.71 to 167.24 percent.

The Netherlands

Export Price

    The petitioners identified the Corus Group as the only Dutch 
producer of subject merchandise. The petitioners were unable to obtain 
prices for specific sales or offers for sale for the subject 
merchandise in the United States. Therefore, the petitioners based EP 
on the AUV for the ten-digit category of the HTSUS accounting for a 
significant percentage of in-scope imports from the Netherlands during 
the period November 1999 through August 2000. For the HTSUS category 
under examination, the petitioners calculated the import AUVs using the 
reported quantity and customs value for imports as recorded in the U.S. 
Census Bureau's official IM-145 import statistics. In their calculation 
of an estimated margin, the petitioners based EP on import statistics 
covering only a portion of the POI. As noted above, for initiation 
purposes, we have recalculated the estimated margins for the 
Netherlands using POI-wide and nation-wide averages of the appropriate 
import values. The petitioners presumed that the customs values used to 
calculate the AUV for the HTSUS category are equivalent to the FAS

[[Page 77574]]

export value of the merchandise being shipped by Dutch mills. The 
petitioners made no adjustments to EP. We note that this is a 
conservative methodology that still results in a dumping margin above 
de minimis.

Normal Value

    With respect to NV, the petitioners provided a home market price 
that was obtained from foreign market research for a grade and size of 
hot-rolled steel products that is comparable to those of the products 
exported to the United States which serve as the basis for EP. The 
petitioners state that the home market price quotation was FOB mill and 
did not make any deductions from this price.
    Although the petitioners provided information on home market 
prices, they also provided information demonstrating reasonable grounds 
to believe or suspect that sales of hot-rolled steel 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 expenses, financial expense, and packing. The petitioners 
calculated COM based on their own production experience, adjusted for 
known differences between costs incurred to produce hot-rolled steel in 
the United States and the Netherlands using publicly available data. 
The petitioners' calculated SG&A expenses based on the financial 
statements of a Dutch equipment manufacturer, because the financial 
statements of the Dutch steel producer did not allow for the 
calculation of SG&A expenses. 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 
petitioners based NV for sales in the Netherlands on CV. The 
petitioners calculated CV using the same COM, depreciation, SG&A 
expenses, and interest expense figures used to compute the home market 
costs. Consistent with section 773(e)(2) of the Act, the petitioners 
included in CV an amount for profit which was based on the profit of a 
surrogate Dutch equipment manufacturer.
    Based upon the comparison of EP to CV, we recalculated an estimated 
dumping margin of 19.36 percent.

The PRC

Export Price

    The petitioners identified the following companies as possible 
producers and/or exporters of hot-rolled steel from the PRC: Anshan 
Iron & Steel (Group) Co. (Anshan), Shanghai Baosteel Group Corp., 
Anyang Iron and Steel Group, Wuhan Iron and Steel Group Co., Benxi Iron 
and Steel Group Co., and Laiwu Iron and Steel Group. The petitioners 
based EP on a price offering for the first sale of a range of hot-
rolled products from Anshan to an unaffiliated U.S. purchaser. The 
petitioners calculated a net U.S. price by deducting foreign inland 
freight, international shipping charges, U.S. port charges, U.S. 
customs duties, and a trading company mark-up.
    In order to calculate foreign inland freight expense, the 
petitioners first determined the distance by rail between Anshan and 
Dalian, the port from which Anshan-manufactured hot-rolled steel is 
exported. Since the PRC is an NME country (see the discussion of NV 
below), the petitioners then applied Indian rail rates as a surrogate. 
We relied on the petitioners' calculation of EP except with respect to 
their deduction for marine insurance charges (included in the 
international shipping charges figure). However, because the terms of 
sale (which are proprietary information) of the offer are exclusive of 
insurance charges, we do not find that it is appropriate to make a 
deduction for these charges. Therefore, we have added to U.S. price an 
amount for marine insurance charges, based on a marine insurance rate 
recently used in the preliminary determination of the antidumping 
investigation of steel wire rope from the PRC. See Antidumping 
Investigation of Steel Wire Rope from the People's Republic of China: 
Factors of Production Valuation for the Preliminary Determination, 
dated September 25, 2000, which is contained in the Initiation 
Checklist. For our recalculation of EP, see the Initiation Checklist.

Normal Value

    The petitioners assert that the PRC is an NME country, and note 
that in all previous investigations the Department has determined that 
the PRC is an NME. See, e.g., Notice of Final Determination of Sales at 
Less Than Fair Value: Bulk Aspirin From the People's Republic of China, 
65 FR 33805 (May 25, 2000). 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 
petitioners estimated the dumping margin using an NME analysis.
    For NV, the petitioners based the FOP, as defined by section 
773(c)(3) of the Act, on the consumption rates of one U.S. hot-rolled 
steel producer. The petitioners assert that information regarding 
Chinese producers' consumption rates is not available, and that the 
U.S. producer employs a production process which is similar to the 
production processes employed by the two largest producers of hot-
rolled steel in the PRC. Thus, the petitioners have assumed, for 
purposes of the petition, that producers in the PRC use the same inputs 
in the same quantities as the petitioners use. Based on the information 
provided by the petitioners, we believe that the petitioners' FOP 
methodology represents information reasonably available to the 
petitioners and is appropriate for purposes of initiating this 
investigation.
    The petitioners assert that India is the most appropriate surrogate 
country for the PRC, claiming that India is: (1) A market economy; (2) 
a significant producer of comparable merchandise; and (3) at a level of 
economic development comparable to the PRC in terms of per capita GNP. 
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 initiating this investigation.
    In accordance with section 773(c)(4) of the Act, the petitioners 
valued FOP, where possible, on reasonably available, public surrogate 
data from India. Materials, with the exception of tar, sulphate, 
petroleum coke, and granular slag, were valued based on Indian import 
values, as published in the 1998 and 1999 Monthly Statistics of Foreign 
Trade of India, and inflated based on the Indian Wholesale Price Index. 
Because the Indian import values for tar and sulphate were claimed to 
be many times higher than the price paid by the U.S. producer, these 
inputs were valued based on Indian export data, as published by UN 
Import Statistics (1998), and inflated based on the U.S. Producer Price 
Index (PPI). Also, because India did not import petroleum coke during 
the period for which data are available, the petitioners valued 
petroleum coke using UN Import Statistics (1998), and inflated the 
value based on the U.S. PPI. Finally, the petitioners valued granular 
slag using a

[[Page 77575]]

U.S. price for iron slag, as reported by the U.S. Geological Survey. 
The Department previously used this value in the antidumping 
investigation of certain cold-rolled flat-rolled carbon-quality steel 
products from the PRC. See Preliminary Determination of Sales at Less 
Than Fair Value and Postponement of Final Determination: Certain Cold-
Rolled Flat-Rolled Carbon-Quality Steel Products from the People's 
Republic of China, 65 FR 1117, 1126 (January 7, 2000). Labor was valued 
using the regression-based wage rate for the PRC provided by the 
Department, in accordance with 19 CFR 351.408(c)(3). Electricity was 
valued using Energy Prices and Taxes, Second Quarter 2000, published by 
the OECD International Energy Agency, and natural gas was valued using 
a current price for natural gas in India from the second quarter 
earnings statements of EOG Resources Inc., a large publicly-traded oil 
and gas company.
    For overhead, depreciation, SG&A expenses, and profit, the 
petitioners applied rates derived from the financial statements of SAIL 
and TATA, India's two largest integrated producers of hot-rolled steel 
products. The petitioners calculated simple averages of the factory 
overhead expense ratio, depreciation expense ratio and SG&A expense 
ratio based on each company's 1999-2000 unconsolidated statements. 
Because SAIL did not earn a pre-tax profit, the petitioners based 
profit on net profit before taxes found in TATA's 1999-2000 income 
statement. Based on the information provided by the petitioners, we 
believe that the surrogate values represent information reasonably 
available to the petitioners and are acceptable for purposes of 
initiating this investigation.
    Based upon comparisons of EP to CV, we recalculated estimated 
dumping margins ranging from 34.34 to 38.97 percent.

Romania

Export Price 

    The petitioners identified Sidex SA Galati and Gavazzi Steel SA as 
the principal Romanian producers of subject merchandise. The 
petitioners were unable to obtain specific sales or offers for sale of 
subject merchandise in the United States. Therefore, the petitioners 
based EP on the AUV for three ten-digit categories of the HTSUS 
accounting for a significant percentage of in-scope imports from 
Romania which entered through a specific customs port during a specific 
month of the period of POI. For each of the three HTSUS categories 
under examination, the petitioners calculated the import AUVs using the 
reported quantity and customs value for imports as recorded in the U.S. 
Census Bureau's official IM-145 import statistics. In their calculation 
of an estimated margin, the petitioners based EP on import statistics 
covering only a portion of the POI. As noted above, for initiation 
purposes, we have recalculated the estimated margin for Romania using 
POI-wide and nation-wide averages of the appropriate import values. We 
note that customs import value as defined by Technical Documentation 
for US Exports and Imports of Merchandise on CD-ROM excludes U.S. 
import duties, freight, insurance and other charges incurred in 
bringing the merchandise to the United States. The petitioners 
calculated a net U.S. price by deducting from EP foreign inland 
freight. In order to calculate foreign inland freight, the petitioners 
first determined the distance by rail between Galati and Constanta, the 
port which the petitioners determined to be the most appropriate port 
of embarkation for inter-continental shipment of goods originating in 
Romania, as a conservative estimate of the distance for both producers, 
and then applied to this distance an Indonesian rail rate as a 
surrogate.

Normal Value 

    The petitioners allege that Romania is an NME country, and in all 
previous investigations, the Department has determined that Romania is 
an NME. See, e.g., Notice of Final Determination of Sales at Less Than 
Fair Value: Certain Small Diameter Carbon and Alloy Seamless Standard, 
Line and Pressure Pipe From Romania, 65 FR 39125 (June 23, 2000). 
Romania 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 
Romania's status as an NME remains in effect, the petitioner determined 
the dumping margin using an FOP analysis.
    Given that information regarding the respondents' consumption rates 
is not available, the petitioners calculated NV using the same 
methodology described above for Kazakhstan. Further, the petitioners 
used Indonesia as the surrogate country. We believe that Indonesia is 
an appropriate surrogate for purposes of initiating this case with 
respect to Romania for the same reasons as discussed above with respect 
to Kazakhstan. Lastly, the petitioners valued Romania's FOP with the 
same surrogate values as used with respect to Kazakhstan, with the only 
exception being that coal was valued with the cost of one of the 
petitioners because no appropriate Indonesian value was available.
    Based upon the comparison of EP to CV, we recalculated estimated 
dumping margins ranging from 75.38 to 88.62 percent.

South Africa

Export Price 

    The petitioners identified Highveld Steel and Vanadium Corporation 
Limited, Saldanha Steel Limited, and Iscor Limited as the principal 
South African producers of subject merchandise. The petitioners were 
unable to obtain specific sales or offers for sale of subject 
merchandise in the United States. Therefore, the petitioners based EP 
on the AUV for a ten-digit category of the HTSUS accounting for a 
significant percentage of in-scope imports from South Africa during the 
period November 1999 through August 2000. For the HTSUS category under 
examination, the petitioners calculated the import AUV using the 
reported quantity and customs value for imports as recorded in the U.S. 
Census Bureau's official IM-145 import statistics. In their calculation 
of an estimated margin, the petitioners based EP on import statistics 
covering only a portion of the POI. As noted above, for initiation 
purposes, we have recalculated the estimated margin for South Africa 
using POI-wide and nation-wide averages of the appropriate import 
values. The petitioners presumed that the customs values used to 
calculate the AUV for the HTSUS category are identical to the FAS 
export value of the merchandise being shipped by South African mills. 
The petitioners made no adjustments to EP. We note that this is a 
conservative methodology that still results in a dumping margin above 
de minimis.

Normal Value 

    With respect to NV, the petitioners provided home market prices 
that were obtained from foreign market research for a grade and size of 
hot-rolled steel that is comparable to those of the products exported 
to the United States which serve as the basis for EP. The petitioners 
state that the home market price quotations were ex-mill and did not 
make any deductions from this price.
    Although the petitioners provided information on home market 
prices, they also provided information demonstrating reasonable grounds 
to believe or suspect that sales of hot-rolled steel 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

[[Page 77576]]

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 expenses, and packing. The petitioners calculated COM based on 
their own production experience, adjusted for known differences between 
costs incurred to produce hot-rolled steel in the United States and 
South Africa. To calculate SG&A expenses, the petitioners relied upon 
amounts reported in a South African steel producer's unconsolidated 
financial statements for the fiscal year ending June 30, 2000. To 
determine financial expenses, the petitioners relied on the South 
African steel producer's consolidated financial statements for the 
fiscal year ending June 30, 2000. Based upon the comparison of the 
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 at prices 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 
petitioners based NV for sales in South Africa on CV. The petitioners 
calculated CV using the same COM, depreciation, SG&A expenses, and 
interest expense figures used to compute South African home market 
costs. Consistent with section 773(e)(2) of the Act, the petitioner 
included in CV an amount for profit. The petitioners calculated a 
profit amount based on the financial data of a South African processor 
and seller of steel products. However, we revised the profit amount to 
be included in CV by using a profit ratio based on the June 30, 2000, 
unconsolidated financial statements of the same South African steel 
producer used to compute the SG&A expenses.
    Based upon the comparison of EP to CV, we recalculated an estimated 
dumping margin of 9.28 percent.

Taiwan

Export Price

    The petitioners identified An Feng Steel Co., Ltd., China Steel 
Corporation, and Yieh Loong Enterprise Co., Ltd., as the principal 
Taiwanese producers of subject merchandise. The petitioners were unable 
to obtain prices for specific sales or offers for sale for subject 
merchandise in the United States. Therefore, in their initial 
submission, the petitioners based EP on the AUVs for three ten-digit 
categories of the HTSUS accounting for a significant percentage of in-
scope imports from Taiwan during the period September 1999 through 
August 2000. In their supplemental submission, the petitioners revised 
their methodology and based EP on import statistics covering a limited 
number of months and U.S. ports of entry. For each of the three HTSUS 
categories under examination, the petitioners calculated the import 
AUVs using the reported quantity and customs value for imports as 
recorded in the U.S. Census Bureau's official IM-145 import statistics. 
In both their calculations of an estimated margin, the petitioners 
based EP on import statistics covering only a portion of the POI. As 
noted above, for initiation purposes, we have recalculated the 
estimated margins for Taiwan using POI-wide and nation-wide averages of 
the appropriate import values. Petitioners presume that the customs 
values used to calculate the AUV for each HTSUS category reflect the 
actual transaction value of the merchandise being shipped by Taiwan's 
mills. The petitioners calculated a net U.S. price by deducting from EP 
foreign inland freight and foreign brokerage and handling. These values 
were based upon China Steel Corporation's August 30, 1999, Section C 
questionnaire response in the investigation of certain cold-rolled 
flat-rolled carbon-quality steel products. See Notice of Preliminary 
Determination of Sales at Less Than Fair Value and Postponement of 
Final Determination: Certain Cold-Rolled Flat-Rolled Carbon-Quality 
Steel Products From Taiwan, 65 FR 1095 (January 7, 2000).

Normal Value

    With respect to NV, the petitioners provided a home market price 
that was obtained from foreign market research for a grade and size of 
hot-rolled steel that is comparable to the products exported to the 
United States. The petitioners state that the home market price 
quotation was on an FOB-mill basis and, therefore, made no deductions 
from this price.
    Although the petitioners provided information on home market 
prices, they also provided information demonstrating reasonable grounds 
to believe or suspect that sales of hot-rolled steel 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 COM, SG&A 
expenses, and packing. The petitioners calculated COM based on their 
own production experience, adjusted for known differences between costs 
incurred to produce hot-rolled steel in the United States and Taiwan 
using publicly available data. To calculate depreciation, SG&A 
expenses, and interest expense, the petitioners relied upon amounts 
reported in a Taiwanese steel producer's 1999 financial statements. 
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 at prices 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 
petitioners based NV for sales in Taiwan on CV. The petitioners 
calculated CV using the same COM, depreciation, SG&A expenses, and 
interest expense figures used to compute COP. Consistent with section 
773(3)(2) of the Act, the petitioners also included in CV an amount for 
profit. For profit, the petitioners relied upon the amounts reported in 
a Taiwanese steel producer's 1999 audited financial statements.
    Based upon the comparison of EP to CV, we recalculated estimated 
dumping margins ranging from 15.18 percent to 29.14 percent.

Thailand

Export Price

    The petitioners identified Siam Strip Mill Public Co. Ltd., 
Saharviriya Steel Industries Public Co. Ltd., and Nakornthai Strip Mill 
Public Co. Ltd., as the principal Thai producers of subject 
merchandise. The petitioners were unable to obtain specific sales or 
offers for sale of subject merchandise in the United States. Therefore, 
in their initial submission, the petitioners based EP on the AUVs for 
two ten-digit categories of the HTSUS accounting for a significant 
percentage of in-scope imports from Taiwan during the period September 
1999 through August 2000. In their supplemental submission, the 
petitioners revised their methodology and based EP on import statistics 
covering a limited number of months and U.S. ports of entry. For the 
HTSUS categories under examination, the petitioners calculated the 
import AUVs using the reported quantity and customs value for imports 
as recorded in the U.S. Census Bureau's official IM-145 import

[[Page 77577]]

statistics. In both their calculations of an estimated margin, the 
petitioners based EP on import statistics covering only a portion of 
the POI. As noted above, for initiation purposes, we have recalculated 
the estimated margins for Thailand using POI-wide and nation-wide 
averages of the appropriate import values. Petitioners presume that the 
customs values used to calculate the AUV for each HTSUS category 
reflect the actual transaction value of the merchandise being shipped 
by Thailand's mills. The petitioners made no adjustments to EP. We note 
that this is a conservative methodology that still results in a dumping 
margin above de minimis.

Normal Value

    With respect to NV, the petitioners provided home market prices 
that were obtained from foreign market research for a grade and size of 
hot-rolled steel that is comparable to the products exported to the 
United States which serve as the basis for EP. The home market price 
employed in the petitioners' dumping analysis was the average of the 
range of Thailand's transaction prices. The petitioners state that the 
home market price quotation was FOB mill and did not make any 
deductions from this price.
    Although the petitioners provided information on home market 
prices, they also provided information demonstrating reasonable grounds 
to believe or suspect that sales of hot-rolled steel 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 COM, SG&A 
expenses, and packing. The petitioners calculated COM based on their 
own production experience, adjusted for known differences between costs 
incurred to produce hot-rolled steel in the United States and Thailand 
using publicly available data. We revised the petitioners' calculation 
of depreciation and SG&A expenses using ratios, provided by the 
petitioners, which were derived from amounts reported in a Thai steel 
producer's 1999 audited, unconsolidated financial statements. For 
interest expense, the petitioners used a Thai steel producer's 1999 
audited consolidated financial statements. 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 at 
prices below the COP, within the meaning of section 773(b)(2)(A)(i) of 
the Act. Accordingly, the Department is initiating a country-wide 
sales-below-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 
petitioners based NV for sales in Thailand on CV. The petitioners 
calculated CV using the same COM, depreciation, SG&A expenses, and 
interest expense figures used to compute Thai home market costs. 
Consistent with section 773(e)(2) of the Act, the petitioners included 
in CV an amount for profit. We revised the petitioners calculation of 
this profit amount using a profit ratio, provided by the petitioners, 
based on a Thai steel producer's 1999 audited unconsolidated financial 
statements.
    Based upon the comparison of EP to CV, we recalculated estimated 
dumping margins ranging from 10.35 to 20.30 percent.

Ukraine

Export Price

    The petitioners identified Dnepropetrovsk Comintern Steel Works, 
Ilyich Iron & Steel Works, Mariupol, Krivoi Rog State Mining 
(Krivorozhstal), and Zaporozhstal Iron & Steel Works as the principal 
Ukrainian producers of subject merchandise. The petitioners were unable 
to obtain specific sales or offers for sale of subject merchandise in 
the United States. Therefore, the petitioners based EP on the AUV for 
three ten-digit categories of the HTSUS accounting for a significant 
percentage of in-scope imports from Ukraine which entered through a 
specific customs port during a specific month of the period of POI. For 
each of the three HTSUS categories under examination, the petitioners 
calculated the import AUVs using the reported quantity and customs 
value for imports as recorded in the U.S. Census Bureau's official IM-
145 import statistics. In their calculation of an estimated margin, the 
petitioners based EP on import statistics covering only a portion of 
the POI. As noted above, for initiation purposes, we have recalculated 
the estimated margin for Ukraine using POI-wide and nation-wide 
averages of the appropriate import values. We note that customs import 
value as defined by Technical Documentation for US Exports and Imports 
of Merchandise on CD-ROM excludes U.S. import duties, freight, 
insurance and other charges incurred in bringing the merchandise to the 
United States. The petitioners made no adjustments to EP. We note that 
this is a conservative methodology that still results in a dumping 
margin above de minimis.

Normal Value

    The petitioners allege 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 
petitioners determined the dumping margin using an FOP analysis.
    Given that information regarding the Ukrainian mills' consumption 
rates is not available, the petitioners calculated NV using the same 
methodology described above for Kazakhstan. Further, the petitioners 
used Indonesia 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 as discussed above with respect 
to Kazakhstan. Lastly, the petitioners valued the Ukrainian mills' FOP 
with the same surrogate values as those used with respect to 
Kazakhstan, with the only exception being that coke was valued with 
Indonesian import statistics, because public information indicated that 
Ilyich Iron and Steel Works does not possess coke batteries.
    Based upon the comparison of EP to CV, we recalculated estimated 
dumping margins ranging from 89.13 to 89.49 percent.

Initiation of Cost Investigations

    As noted above, pursuant to section 773(b) of the Act, the 
petitioners provided information demonstrating reasonable grounds to 
believe or suspect that sales in the home markets of Argentina, India, 
Indonesia, the Netherlands, South Africa, Taiwan, and Thailand 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. Doc. 103-316, 
Vol. 1, 103d Cong., 2d Session, at 833(1994). The SAA, at 833, states 
that ``Commerce will consider

[[Page 77578]]

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 the markets of Argentina, India, 
Indonesia, the Netherlands, South Africa, Taiwan, and Thailand were 
made at prices 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 the petitioners, there is reason to 
believe that imports of hot-rolled steel from Argentina, India, 
Indonesia, Kazakhstan, the Netherlands, the PRC, Romania, South Africa, 
Taiwan, Thailand, and Ukraine 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 petitioners contend 
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 II 
Re: Material Injury).

Initiation of Antidumping Investigations

    Based upon our examination of the petitions on hot-rolled steel, 
and the petitioners' responses to our supplemental questionnaire 
clarifying the petitions, as well as our conversation with the foreign 
market researcher who provided information concerning various aspects 
of the petitions, we have found that they meet the requirements of 
section 732 of the Act. See Memorandum to the File, Telephone 
Conversation with Source of Market Research used in Antidumping 
Petition to Support Certain Factual Information, dated December 4, 
2000. Therefore, we are initiating antidumping duty investigations to 
determine whether imports of hot-rolled steel from Argentina, India, 
Indonesia, Kazakhstan, the Netherlands, the PRC, Romania, South Africa, 
Taiwan, Thailand, and Ukraine 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 Argentina, India, Indonesia, 
Kazakhstan, the Netherlands, the PRC, Romania, South Africa, Taiwan, 
Thailand, and Ukraine. 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 December 28, 2000, whether 
there is a reasonable indication that imports of certain hot-rolled 
steel products from Argentina, India, Indonesia, Kazakhstan, the 
Netherlands, the PRC, Romania, South Africa, Taiwan, Thailand, and 
Ukraine 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: December 4, 2000.
Troy H. Cribb,
Assistant Secretary for Import Administration.
[FR Doc. 00-31635 Filed 12-11-00; 8:45 am]
BILLING CODE 3510-DS-P