[Federal Register Volume 66, Number 46 (Thursday, March 8, 2001)]
[Notices]
[Pages 13885-13890]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-5627]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-862]


Notice of Preliminary Determination of Sales at Less Than Fair 
Value: Foundry Coke From the People's Republic of China

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

EFFECTIVE DATE: March 8, 2001.

FOR FURTHER INFORMATION CONTACT: Doreen Chen, Marlene Hewitt, and Alex 
Villanueva of Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-
0408, (202) 482-0165, and (202) 482-6412, respectively.

The Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the Tariff Act of 
1930, as amended (``the Act''), are references to the provisions 
effective January 1, 1995, the effective date of the amendments made to 
the Act by the Uruguay Round Agreements Act (``URAA''). In addition, 
unless otherwise indicated, all citations to the Department's 
regulations are to the regulations codified at 19 CFR part 351 (2000).

Preliminary Determination

    We preliminarily determine that foundry coke from the People's 
Republic of China (PRC) is being, or is likely to be, sold in the 
United States at less than fair value (``LTFV''), as provided in 
section 733 of the Act. The estimated margins of sales at LTFV are 
shown in the ``Suspension of Liquidation'' section of this notice.

Case History

    This investigation was initiated on October 10, 2000. See 
Initiation of Antidumping Duty Investigation: Foundry Coke from the 
People's Republic of China, 65 FR 61303 (October 17, 2000). Since the 
initiation of this investigation the following events have occurred.
    On November 7, 2000, the Department issued section A of its 
antidumping questionnaire to the Embassy of the People's Republic of 
China, as well as courtesy copies to the following possible producers/
exporters of subject merchandise named in the petition: Shanxi Grand 
Coalchem Industrial Company\1\ (``Shanxi Grand Coalchem''), Sinochem 
International (``Sinochem''), CITIC Trading Company Ltd. (``CITIC'') 
and Minmetals Development Co. Ltd.\2\ (``Minmetals'').
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    \1\ Shanxi Grand Coalchem recently changed its name to Shanxi 
Dajin International (Group) Co. Ltd. However, in this notice, Shanxi 
Grand Coalchem will be referred to as Shanxi Grand Coalchem.
    \2\ Minmetals recently changed its name to Minmetals Townlord 
Technology Co., Ltd. However, in this notice, Minmetals will be 
referred to as Minmetals.
---------------------------------------------------------------------------

    On November 8, 2000, the Department requested comments from 
interested parties regarding the criteria to be used for defining 
products. We received no comments from interested parties on defining 
products.
    On November 28, 2000, the following companies with shipments of 
subject merchandise to the United States during the period of 
investigation (``POI'') submitted information regarding the quantity 
and value of their shipments: Shanxi Grand Coalchem, Sinochem, 
Minmetals, and CITIC.
    We received complete Section A responses from Shanxi Grand 
Coalchem, Sinochem, Minmetals, CITIC and Taiyuan Yingxian Coal 
Carbonization Company (``Taiyuan''). Taiyuan reported that it did not 
have any sales of foundry coke to the United States; therefore, in 
accordance with Department practice, we decided not to investigate 
Taiyuan for this proceeding.
    On November 14, 2000, the United States International Trade 
Commission (``ITC'') preliminarily determined that ``there is a 
reasonable indication that an industry in the United States is 
threatened with material injury by reason of imports from China of 
foundry coke.'' Foundry Coke from China, (Investigation No. 731-TA-891 
(Preliminary)), 65 FR 69573 (November 17, 2000).
    On November 28, 2000, respondents submitted their complete section 
A responses. On December 19, 2000, the Department issued section A 
supplemental questionnaires to Sinochem and Shanxi Grand Coalchem. On 
December 29, 2000, the Department issued section A supplemental 
questionnaires to CITIC and Minmetals. On January 8, 2001, respondents 
submitted their responses to the Department's supplemental section A 
questionnaire. On January 23, 2001, Minmetals submitted its response to 
section D from its supplier. On January 23, 2001, CITIC, Sinochem and 
Shanxi Grand Coalchem provided section D responses from only some of 
their suppliers. Also on January 23, 2001, we requested respondents to 
provide section D information from all companies that supplied them 
subject merchandise for sales subject to this investigation. On January 
26, 2001, we issued a second supplemental questionnaire for section A 
and supplemental section C and D questionnaires to respondents. On 
January 30, 2001, CITIC, Sinochem and Shanxi Grand Coalchem responded 
that they could not provide section D responses from all of their 
suppliers because these suppliers were shut down by the Chinese 
government for noncompliance with environmental standards. In addition, 
these respondents noted that these suppliers are unrelated to these 
respondents and

[[Page 13886]]

only supplied relatively small quantities to them. On February 8, 2001, 
respondents submitted their responses to supplemental sections C and D 
questionnaires and a second supplemental section A questionnaire.
    On January 10, 2001, we requested publicly-available information 
for valuing the factors of production and comments on surrogate country 
selection. On January 23 and 30, 2001, petitioners and respondents 
submitted comments and rebuttal comments on the surrogate country 
selection and on surrogate values, respectively.

Period of Investigation

    The period of investigation (POI) is January 1, 2000 through June 
30, 2000. This period corresponds to the two most recent fiscal 
quarters prior to the month of the filing of the petition (September 
20, 2000). 19 CFR 351.204(b)(1).

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 (as of Jan 1, 
2000) and 2704.00.00.11 (as of July 1, 2000) 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.
    On November 13, 2000, USG Interiors, Inc. (``USG Interiors'') and 
Rock Wool Manufacturing Company (``Rockwool'') submitted a written 
request for an amendment to the scope of this investigation to exclude 
foundry coke used for industrial purposes. Rockwool and USG Interiors 
argued that the scope of the investigation is over inclusive as the 
current scope definition includes industrial coke, which is not the 
intended subject merchandise for this investigation. Rockwool and USG 
Interiors explained that industrial coke results from foundry coke 
degraded during transit.
    On November 17, 2000, petitioners submitted a response in 
opposition to USG Interiors and Rockwell's scope request, arguing that 
Rockwool and USG Interiors have no standing to make a scope exclusion 
request since they are not importers and that Rockwool and USG 
Interiors have failed to demonstrate that the material used by Rockwool 
and USG Interiors is imported as foundry coke. Petitioners argue that 
Rockwool and USG Interiors have not provided any information on the 
classification at entry of the merchandise. According to petitioners, 
Rockwool and USG Interiors have not established the legal and factual 
foundation for their claims, i.e., that the degradation occurs after 
entry of the merchandise and prior to delivery.
    We agree with petitioners that Rockwool and USG Interiors have 
failed to provide any evidence substantiating their claim that Rockwool 
and USG Interiors use imported foundry coke that becomes degraded after 
entry of the merchandise and prior to delivery. Morever, in making 
their request for a scope exclusion, Rockwool and USG Interiors have 
failed to articulate a product description which distinguishes 
industrial coke from foundry coke other than by end-use. Since the 
Department determines the scope of its investigations by product 
description and not intended or actual use, we preliminary determine to 
deny this exclusion.

Nonmarket Economy Country Status

    The Department has treated the PRC as a non-market economy (NME) 
country in all past antidumping investigations (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), and Notice 
of Final Determination of Sales at Less Than Fair Value: Certain Non-
Frozen Apple Juice Concentrate from the People's Republic of China, 65 
FR 19873 (April 13, 2000). A designation as a NME remains in effect 
until it is revoked by the Department (see section 771(18)(C) of the 
Act). The respondents in this investigation have not requested a 
revocation of the PRC's NME status. We have, therefore, preliminarily 
determined to continue to treat the PRC as a NME country. When the 
Department is investigating imports from a NME, section 773(c)(1) of 
the Act directs us to base the normal value (NV) on the NME producer's 
factors of production, valued in a comparable market economy that is a 
significant producer of comparable merchandise. The sources of 
individual factor prices are discussed under the Normal Value section, 
below.
    Furthermore, no interested party has requested that the foundry 
coke industry in the PRC be treated as a market-oriented industry and 
no information has been provided that would lead to such a 
determination. Therefore, we have not treated the foundry coke industry 
in the PRC as a market-oriented industry in this investigation.

Separate Rates

    In proceedings involving NME countries, the Department begins with 
a rebuttable presumption that all companies within the country are 
subject to government control and thus should be assessed a single 
antidumping duty deposit rate. It is the Department's policy to assign 
all exporters of merchandise subject to investigation in a NME country 
this single rate, unless an exporter can demonstrate that it is 
sufficiently independent so as to be entitled to a separate rate. In 
this case, each respondent has requested a separate company-specific 
rate.
    CITIC stated that it is wholly-owned by China International Trust 
and Investment Corporation and that it has no relationship to the 
provincial or local governments, other than having to obey generally 
applicable laws regarding taxation, labor, environmental protection and 
other matters. CITIC claimed that it makes independent business 
decisions without state involvement and that there is no state 
involvement in any manner in setting prices or quantities regarding the 
sale of the subject merchandise.
    Minmetals stated that it is majority-owned by a company which is in 
turn owned by the government. Minmetals claimed that it has no 
relationship with the national, provincial or local governments, other 
than having to obey generally applicable laws regarding taxation, 
labor, environmental protection and other matters.
    Shanxi Grand Coalchem stated that its majority shareholder is the 
Bureau of Foreign Trade and Economic Cooperation Shanxi (BOFTEC), which 
is described as a provincial governmental agency. Shanxi Grand Coalchem 
claimed that it operates independently from the national and local 
governments with respect to all significant export activities. Sinochem 
stated that it is majority owned by China National Chemicals Import & 
Export Corporation, which in turn is owned by the state. Sinochem 
claimed that it operates independently from the national, provincial 
and local governments with respect to all significant export 
activities.
    Based on these claims, we considered whether each respondent is 
eligible for a separate rate. The Department's separate rate test to 
determine whether the exporters are independent from government control 
is not concerned, in general, with macroeconomic/border-type controls, 
e.g., export licenses, quotas, and minimum export prices,

[[Page 13887]]

particularly if these controls are imposed to prevent dumping. The test 
focuses, rather, on controls over the investment, pricing, and output 
decision-making process at the individual firm level. See, e.g., 
Certain Cut-to-Length Carbon Steel Plate from Ukraine: Final 
Determination of Sales at Less than Fair Value, 62 FR 61754, 61757 
(November 19, 1997); Tapered Roller Bearings and Parts Thereof, 
Finished and Unfinished, from the People's Republic of China: Final 
Results of Antidumping Duty Administrative Review, 62 FR 61276, 61279 
(November 17, 1997); and Honey from the People's Republic of China: 
Preliminary Determination of Sales at Less than Fair Value, 60 FR 
14725, 14726 (March 20, 1995).
    To establish whether a firm is sufficiently independent from 
government control of its export activities to be entitled to a 
separate rate, the Department analyzes each exporting entity under a 
test arising out of the Final Determination of Sales at Less Than Fair 
Value: Sparklers from the People's Republic of China, 56 FR 20588 (May 
6, 1991) and amplified in the Final Determination of Sales at Less Than 
Fair Value: Silicon Carbide from the People's Republic of China, 59 FR 
22585 (May 2, 1994) (``Silicon Carbide''). Under the separate rates 
criteria, the Department assigns separate rates in NME cases only if 
respondents can demonstrate the absence of both de jure and de facto 
governmental control over export activities.

1. Absence of De Jure Control

    The Department considers the following de jure criteria in 
determining whether an individual company may be granted a separate 
rate: (1) An absence of restrictive stipulations associated with an 
individual exporter's business and export licenses; (2) any legislative 
enactments decentralizing control of companies; and (3) any other 
formal measures by the government decentralizing control of companies. 
The respondents have placed on the record a number of documents to 
demonstrate absence of de jure control, including the ``Foreign Trade 
Law of the People's Republic of China'' and the ``Company Law of the 
People's Republic of China.'' In prior cases, the Department has 
analyzed these laws and found that they establish an absence of de jure 
control. See, e.g., Notice of Final Determination of Sales at Less Than 
Fair Value: Certain Partial-Extension Steel Drawer Slides with Rollers 
from the People's Republic of China, 60 FR 54472, 54474 (October 24, 
1995); see also Furfuryl Alcohol. We have no information in this 
proceeding which would cause us to reconsider this determination.
    As stated in previous cases, there is some evidence that the 
provisions of the above-cited 1988 Law and 1992 Regulations regarding 
enterprise autonomy have not been implemented uniformly among different 
sectors and/or jurisdictions in the PRC, (see ``PRC Government Findings 
on Enterprise Autonomy,'' in Foreign Broadcast Information Service-
China-93-133 (July 14,1993)). Therefore, the Department has determined 
that an analysis of de facto control is critical in determining whether 
respondents are, in fact, subject to a degree of governmental control 
which would preclude the Department from assigning separate rates.

2. Absence of De Facto Control

    The Department typically considers four factors in evaluating 
whether each respondent is subject to de facto governmental control of 
its export functions: (1) Whether the export prices are set by or are 
subject to the approval of a governmental agency; (2) whether the 
respondent has authority to negotiate and sign contracts and other 
agreements; (3) whether the respondent has autonomy from the government 
in making decisions regarding the selection of management; and (4) 
whether the respondent retains the proceeds of its export sales and 
makes independent decisions regarding disposition of profits or 
financing of losses. As stated in previous cases, there is some 
evidence that certain enactments of the PRC central government have not 
been implemented uniformly among different sectors and/or jurisdictions 
in the PRC. See Silicon Carbide and Furfuryl Alcohol. Therefore, the 
Department has determined that an analysis of de facto control is 
critical in determining whether respondents are, in fact, subject to a 
degree of governmental control which would preclude the Department from 
assigning separate rates.
    The respondents asserted the following: (1) They establish their 
own export prices; (2) they negotiate contracts without guidance from 
any governmental entities or organizations; (3) they make their own 
personnel decisions; and (4) they retain the proceeds of their export 
sales, using profits according to their business needs. Additionally, 
none of the respondents' questionnaire responses suggest pricing is 
coordinated among exporters. Furthermore, our analysis of the 
respondents' questionnaire responses reveals no other information 
indicating government control. As stated in the Silicon Carbide, 59 FR 
at 22587 and in Furfuryl Alcohol, 60 FR at 22544, ownership of the 
company by a state-owned enterprise does not require the application of 
a single rate. Based on the information provided, we preliminary 
determine that there is an absence of de facto governmental control of 
the respondents' export functions. Consequently, we preliminarily 
determine that CITIC, Minmetals, Shanxi Grand Coalchem, and Sinochem 
have met the criteria for the application of a separate rate.

Facts Available

    Section 776(a) of the Act provides that, if an interested party 
withholds information that has been requested by the Department, fails 
to provide such information in a timely manner or in the form or manner 
requested, significantly impedes a proceeding under the antidumping 
statute, or provides information which cannot be verified, the 
Department shall use, subject to sections 782(d) and (e) of the Act, 
facts otherwise available in reaching the applicable determination. 
Pursuant to section 782(e) of the Act, the Department shall not decline 
to consider submitted information if that information is necessary to 
the determination but does not meet all of the requirements established 
by the Department provided that all of the following requirements are 
met: (1) The information is submitted by the established deadline; (2) 
the information can be verified; (3) the information is not so 
incomplete that it cannot serve as a reliable basis for reaching the 
applicable determination; (4) the interested party has demonstrated 
that it acted to the best of its ability; and (5) the information can 
be used without undue difficulties. Companies that failed to respond to 
our questionnaires or reported no shipments were assigned the PRC-wide 
rate.
    The PRC-wide antidumping rate is based on the facts available. 
Section 776(a)(2)(B) of the Act requires the Department to use facts 
available when a party does not provide the Department with information 
by the established deadline or in the form and manner requested by the 
Department.
    In addition, section 776(b) of the Act provides that, if the 
Department finds that an interested party ``has failed to cooperate by 
not acting to the best of its ability to comply with a request for 
information,'' the Department may use information that is adverse to 
the interests of that party as facts otherwise available.
    As discussed above, all PRC producers/exporters that do not qualify

[[Page 13888]]

for a separate rate are treated as a single enterprise. Because some 
exporters of the single enterprise failed to respond to the 
Department's requests for information, that single enterprise is 
considered to be uncooperative. In such situations, the Department 
generally selects as total adverse facts available the higher of the 
highest margin from the petition or the highest rate calculated for a 
respondent in the proceeding. See Final Determination of Sales at Less 
Than Fair Value; Stainless Steel Sheet and Strip in Coils from Germany, 
64 FR 30710, 30714 (June 8, 1999). In the present case, the highest 
calculated margin is the rate calculated from the petition.
    Section 776(c) of the Act provides that, when the Department relies 
on secondary information (such as the petition rates) as facts 
available, it must, to the extent practicable, corroborate that 
information from independent sources that are reasonably at its 
disposal. The SAA clarifies that ``corroborate'' means that the 
Department will satisfy itself that the secondary information to be 
used has probative value (see SAA at 870). The SAA also states that 
independent sources used to corroborate may include, for example, 
published price lists, official import statistics and customs data, and 
information obtained from interested parties during the particular 
investigation. See id.
    We reviewed the adequacy and accuracy of the information in the 
petition during our pre-initiation analysis of the petition, to the 
extent appropriate information was available for this purpose. In 
accordance with section 776(c) of the Act, to the extent practicable, 
we examined the key elements of the U.S. price and normal value 
(``NV'') calculations on which the petition margin was based and 
compared the sources used in the petition to publicly available 
information, where available, and respondent data as appropriate.
    The petitioners based export price (``EP'') on import values 
declared to the U.S. Customs Service. For the normal value calculation, 
petitioners based the factors of production (``FOP'') as defined by 
section 773(c)(3) of the Act (raw materials, labor, energy, and 
representative capital costs) on the quantities of inputs used by 
petitioners. Petitioners asserted that detailed information is not 
available regarding the quantities of inputs used by the coke producers 
in China. Thus, petitioners assumed, for purposes of the petition, that 
the producers in China use the same inputs in the same quantities as a 
petitioners' most similar plants. Petitioners selected India as the 
appropriate primary surrogate country for purposes of valuing the 
factors. Petitioners valued factors of production, where possible, on 
reasonably available, public surrogate country data.
    Our review of the EP and NV calculations indicated that the 
information in the petition has probative value as certain information 
included in the margin calculation in the petition is from public 
sources, concurrent, for the most part, with the POI. With regard to 
the EP calculation in the petition, the information relied upon was 
based on publicly available sources, that is, official U.S. government 
statistics; therefore, we find that the U.S. price from the petition 
margin is sufficiently corroborated.
    With regard to NV, petitioners relied on both publicly available 
data and information obtained from a U.S. coke producer. The values for 
the factors of production were based on publicly available information 
for comparable inputs; therefore, we find that the factors of 
production values are sufficiently corroborated. We also find that with 
the exception of electricity, the usage rates based on a U.S. coke 
producer were sufficiently corroborated by information submitted by 
respondents in the course of this proceeding, as they fell within the 
range of the usage rates based data from the respondents. For factory 
overhead, SG&A expenses, and profit, we used the 1999-2000 financial 
statement from Gujarat NRE Coke, Ltd., an Indian producer of the 
subject merchandise. These are the same financial ratios we used for 
cooperating respondents.
    We could not corroborate the energy usage rates used in the 
petition because we determined that the energy rates used in the 
petition reflected an energy process from the U.S. foundry coke 
production process, which differs from the energy process used in 
foundry coke production in the PRC. We recalculated the petition margin 
using an electricity usage rate based on information reported by 
respondents. We valued this electricity using the same data as for 
cooperating respondents. For further information, see Preliminary 
Determination in the Investigation of Foundry Coke from the People's 
Republic of China--Facts Available Corroboration Memorandum from Alex 
Villanueva to James C. Doyle, dated February 27, 2001.
    Accordingly, for the preliminary determination, the PRC-wide rate 
is 214.89 percent. For the final determination, the Department will 
consider all margins on the record at that time for the purpose of 
determining the most appropriate margin.
    Minmetals fully responded to all of our requests for information 
within the established deadlines. Therefore, for Minmetals, we did not 
resort to facts available in calculating a margin for Minmetals.
    On the other hand, CITIC, Sinochem, and Shanxi Grand Coalchem did 
not fully respond to our Section D questionnaire within the established 
deadlines. Specifically, the aforementioned respondents did not comply 
with our request in the original questionnaire to provide Section D 
questionnaire responses from all of their suppliers of foundry coke.
    CITIC, Sinochem, and Shanxi Grand Coalchem initially claimed that 
they could not obtain responses from all of their suppliers because 
certain suppliers were shut down for environmental reasons. Respondents 
further clarified that those suppliers for which they were unable to 
submit section D information are unrelated to respondents and represent 
only a small percentage of the sales quantity supplied to respondent 
exporters. Subsequently, in a supplemental questionnaire dated January 
26, 2001, we asked CITIC, Sinochem, and Shanxi Grand Coalchem to 
provide evidence substantiating their claim that certain of their 
suppliers were shut down. We also requested that they provide a copy of 
the notification to the government of the company closure and to 
indicate when the company shutdown and to describe the nature of the 
shutdown. In response to these requests, CITIC, Sinochem and Shanxi 
Grand Coalchem submitted a copy of a government decree ordering the 
closure of environmentally hazardous foundry coke plants. (See February 
8, 2001 Supplemental Questionnaire response.) In addition, CITIC and 
Shanxi Grand Coalchem provided letters from some of the non-responsive 
suppliers which indicated that these suppliers expressed that they 
would not participate in this investigation.
    We preliminarily find that CITIC, Sinochem, and Shanxi Grand 
Coalchem did not act to the best of their ability in obtaining Section 
D responses from their suppliers. As for the suppliers which expressed 
a lack of interest in participating in this investigation, CITIC, 
Sinochem and Shanxi Grand Coalchem did not act to the best of their 
ability in urging these suppliers to comply with our requests for 
information. Furthermore, these suppliers are interested parties that, 
by withholding requested information, have failed to cooperate by not 
acting to

[[Page 13889]]

the best of their abilities. As for the other non-responsive suppliers 
claimed to have been shutdown, we determined the information submitted 
did not sufficiently demonstrate their suppliers were in fact shut down 
by the government since the government document did not provide names 
of the foundry coke producers subject to the governmental decree or any 
other information that would suggest that any specific company had been 
shut down.
    For the above reasons, we find that CITIC, Sinochem and Shanxi 
Grand Coalchem did not act to the best of their ability in obtaining 
section D responses from all of their suppliers; therefore, we find 
that the application of adverse facts available is warranted. As 
adverse facts available, we applied the highest calculated normal value 
for each respondent to the total volume of that respondent's 
merchandise produced by each non-responsive supplier. We then weight-
averaged these resulting normal values with the calculated normal 
values to derive each appropriate respondent's preliminary margin.
    One supplier of both Shanxi Grand Coalchem and Sinochem failed to 
provide freight information for the raw material input coking coal. 
Specifically, this supplier failed to list the number and names of the 
coking coal suppliers, distances from the supplier, and quantities 
purchased. This information was requested twice by the Department. (See 
Antidumping Questionnaire dated November 7, 2000 and Supplemental 
Questionnaire dated January 26, 2001.) Therefore, since this 
information was requested twice by the Department and not supplied, we 
have determined that Shanxi Grand Coalchem and Sinochem did not act to 
the best of their ability in obtaining freight information for coking 
coal, and, thus, adverse facts available is warranted. As adverse facts 
available, we used the highest calculated freight value for coking coal 
among the suppliers for each respondent.
    Sinochem failed to report a portion of its sales of foundry coke 
that are subject to this investigation. In our supplemental 
questionnaires dated December 20, 2000 and January 26, 2001, we 
requested Sinochem to report this sale; however, Sinochem did not 
report this sale, claiming that the amount of subject merchandise in 
this sale is minimal. As Sinochem has failed to provide any information 
regarding a sale of subject merchandise to the United States and since 
this information was requested twice by the Department, as adverse 
facts available, we applied the rate from the petition, as applied for 
the PRC-wide rate, to the total volume of the sale potentially 
representing subject merchandise. We then weight-averaged this margin 
with the calculated margin to derive Sinochem's preliminary margin.

Surrogate Country

    When investigating imports from an NME country, section 773(c)(1) 
of the Act directs the Department, in most circumstances, to base 
normal value (``NV'') on the NME producer's factors of production, 
valued in a surrogate market economy country or countries considered to 
be appropriate by the Department. In accordance with section 773(c)(4) 
of the Act, the Department, in valuing the factors of production, shall 
utilize, to the extent possible, the prices or costs of factors of 
production in one or more market economy countries that are at a level 
of economic development comparable to the NME country and are 
significant producers of comparable merchandise. The sources of the 
surrogate factor values are discussed under the NV section below.
    The Department has determined that India, Pakistan, Sri Lanka, 
Egypt, Indonesia, and the Phillippines are countries comparable to the 
PRC in terms of economic development. See Memorandum from Jeff May to 
Edward Yang: Antidumping Duty Investigation on Foundry Coke Products 
from the People's Republic of China, dated January 9, 2001. 
Customarily, we select an appropriate surrogate based on the 
availability and reliability of data from these countries. For PRC 
cases, the primary surrogate has often been India if it is a 
significant producer of comparable merchandise. In this case, we have 
found that India is a significant producer of comparable merchandise.
    We used India as the primary surrogate country and, accordingly, we 
have calculated NV using Indian prices to value the PRC producers' 
factors of production, when available and appropriate. See Surrogate 
Country Selection Memorandum to The File from James Doyle, Program 
Manager, dated February 27, 2001, (``Surrogate Country Memorandum''). 
We have obtained and relied upon publicly available information 
wherever possible. See Factor Valuation Memorandum to The File from 
Alex Villanueva and Doreen Chen, dated February 27, 2001 (``Factor 
Valuation Memorandum'').
    In accordance with section 351.301(c)(3)(i) of the Department's 
regulations, for the final determination in an antidumping 
investigation, interested parties may submit publicly available 
information to value factors of production within 40 days after the 
date of publication of this preliminary determination.

Fair Value Comparisons

    To determine whether sales of foundry coke to the United States by 
CITIC, Minmetals, Sinochem, and Shanxi Grand CoalChem were made at less 
than fair value, we compared EP to NV, as described in the ``Export 
Price'' and ``Normal Value'' sections of this notice. In accordance 
with section 777A(d)(1)(A)(i) of the Act, we calculated weighted-
average EPs.

Export Price

    In accordance with section 772(a) of the Act, we used EP because 
the subject merchandise was sold directly to unaffiliated customers in 
the United States prior to importation and because constructed export 
price was not otherwise indicated. In accordance with section 
777A(d)(1)(A)(i) of the Act, we compared POI-wide weighted-average EPs 
to the NVs. See Valuation Memorandum. We calculated EP based on prices 
to unaffiliated purchasers in the United States. We made deductions, 
where appropriate, for foreign inland freight and brokerage, billing 
adjustments and handling.

Normal Value

    Section 773(c)(1) of the Act provides that the Department shall 
determine the NV using a factors-of-production methodology if: (1) The 
merchandise is exported from an NME country; and (2) the information 
does not permit the calculation of NV using home-market prices, third-
country prices, or constructed value under section 773(a) of the Act.
    Factors of production include: (1) Hours of labor required; (2) 
quantities of raw materials employed; (3) amounts of energy and other 
utilities consumed; and (4) representative capital costs. We calculated 
NV based on factors of production reported by each respondent. For a 
further discussion, see the Analysis Memo. We valued all the input 
factors using publicly available published information as discussed in 
the ``Surrogate Country'' and ``Factor Valuations'' sections of this 
notice.

Factor Valuations

    In accordance with section 773(c) of the Act, we calculated NV 
based on factors of production reported by respondents for the POI. To 
calculate NV, the reported per-unit factor quantities were multiplied 
by publicly available Indian surrogate values. In selecting the 
surrogate values, we considered the quality, specificity, and 
contemporaneity of the data. As

[[Page 13890]]

appropriate, we adjusted input prices by including freight costs to 
make them delivered prices. We added to Indian surrogate values a 
surrogate freight cost using the shorter of the reported distance from 
the domestic supplier to the factory or the distance from the nearest 
seaport to the factory. This adjustment is in accordance with the Court 
of Appeals for the Federal Circuit's decision in Sigma Corp. v. United 
States, 117 F. 3d 1401 (Fed. Cir. 8342 1997). For those values not 
contemporaneous with the POI, we adjusted for inflation using wholesale 
price indices published in the International Monetary Fund's 
International Financial Statistics.
    We valued the factors of production as follows: to value paper, 
coking coal, supplementary coke and wood, we used the weighted-average 
unit import values derived from the Monthly Trade Statistics of Foreign 
Trade of India--Volume II--Imports (``Indian Import Statistics'') for 
the period of April 1998 through March 1999, adjusted for inflation 
through the POI. We rejected the surrogate value for coking coal 
provided by respondents since the coking coal value provided was for a 
significantly lower quality of coking coal than that which is actually 
used by foundry coke producers.
    To value electricity, we used data reported as the average Indian 
domestic prices within the category ``Electricity for Industry,'' 
published in the International Energy Agency's publication, Energy 
Prices and Taxes, Fourth Quarter, 1999.
    We used Indian transport information to value transport for raw 
materials. For domestic inland freight (truck), we used a price quote 
from an Indian trucking company, adjusted for inflation through the 
POI. For domestic inland freight (rail), we used freight rates as 
quoted from Indian Railway Conference Association price lists, adjusted 
for inflation through the POI.
    To value factory overhead, selling, general and administrative 
expenses (``SG&A''), and profit, we calculated simple average rates 
based on financial information from an Indian foundry coke producer. 
(For a further discussion of the surrogate values for overhead, SG&A 
and profit, see the Factor Valuation Memorandum.) For labor, consistent 
with section 351.408(c)(3) of the Department's regulations, we used the 
PRC regression-based wage rate at Import Administration's home page, 
Import Library, Expected Wages of Selected NME Countries, revised in 
May 2000 (see http:// ia.ita.doc.gov/wages). The source of the wage 
rate data on the Import Administration's Web site can be found in the 
1999 Year Book of Labour Statistics, International Labor Office 
(Geneva: 1999), Chapter 5B: Wages in Manufacturing.

Verification

    As provided in section 782(i)(1) of the Act, we intend to verify 
all company information relied upon in making our final determination.

Suspension of Liquidation

    In accordance with section 733(d) of the Act, we are directing the 
U.S. Customs Service to suspend liquidation of all imports of subject 
merchandise entered, or withdrawn from warehouse, for consumption on or 
after the date of publication of this notice in the Federal Register. 
We will instruct the U.S. Customs Service to require a cash deposit or 
the posting of a bond equal to the weighted-average amount by which the 
NV exceeds the EP, as indicated below. These suspension-of-liquidation 
instructions will remain in effect until further notice. The weighted-
average dumping margins are as follows:

------------------------------------------------------------------------
                                                              Weighted-
                   Exporter/manufacturer                       average
                                                                margin
------------------------------------------------------------------------
Shanxi Grand Coalchem Industrial Co., Ltd.\3\..............       147.21
Sinochem International Co., Ltd............................       211.42
Minmetals Development Co., Ltd.\4\.........................       140.18
CITIC Trading Company, Ltd.................................       136.52
PRC-Wide...................................................      214.89
------------------------------------------------------------------------
\3\ Otherwise known as Shanxi Dajin International (Group) Co. Ltd.
\4\ Otherwise known as Minmetals Townlord Technology Co., Ltd.

International Trade Commission Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of our determination of sales at LTFV. If our final determination 
is affirmative, the ITC will determine before the later of 120 days 
after the date of this preliminary determination or 45 days after our 
final determination whether the domestic industry in the United States 
is materially injured, or threatened with material injury, by reason of 
imports, or sales (or the likelihood of sales) for importation, of the 
subject merchandise.

Public Comment

    Case briefs or other written comments may be submitted to the 
Assistant Secretary for Import Administration no later than fifty days 
after the date of publication of this notice, and rebuttal briefs, 
limited to issues raised in case briefs, no later than fifty-five days 
after the date of publication of this preliminary determination. See 19 
CFR 351.309(c)(1)(i); 19 CFR 351.309(d)(1). A list of authorities used 
and an executive summary of issues should accompany any briefs 
submitted to the Department. This summary should be limited to five 
pages total, including footnotes. In accordance with section 774 of the 
Act, we will hold a public hearing, if requested, to afford interested 
parties an opportunity to comment on arguments raised in case or 
rebuttal briefs. Tentatively, any hearing will be held fifty-seven days 
after publication of this notice at the U.S. Department of Commerce, 
14th Street and Constitution Avenue, NW., Washington, DC 20230, at a 
time and location to be determined. Parties should confirm by telephone 
the date, time, and location of the hearing two days before the 
scheduled date.
    Interested parties who wish to request a hearing, or to participate 
if one is requested, must submit a written request to the Assistant 
Secretary for Import Administration, U.S. Department of Commerce, Room 
1870, within 30 days of the date of publication of this notice. See 19 
CFR 351.310(c). Requests should contain: (1) The party's name, address, 
and telephone number; (2) the number of participants; and (3) a list of 
the issues to be discussed. At the hearing, each party may make an 
affirmative presentation only on issues raised in that party's case 
brief, and may make rebuttal presentations only on arguments included 
in that party's rebuttal brief. See 19 CFR 351.310(c).
    If this investigation proceeds normally, we will make our final 
determination no later than 75 days after the date of the preliminary 
determination.
    This determination is issued and published in accordance with 
sections 733(d) and 777(i)(1) of the Act. Effective January 20, 2001, 
Bernard T. Carreau is fulfilling the duties of the Assistant Secretary 
for Import Administration.

    Dated: February 27, 2001.
Bernard T. Carreau,
Deputy Assistant Secretary, Import Administration.
[FR Doc. 01-5627 Filed 3-7-01; 8:45 am]
BILLING CODE 3510-DS-P