[Federal Register Volume 66, Number 86 (Thursday, May 3, 2001)]
[Notices]
[Pages 22199-22204]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-10855]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-549-817]


Notice of Preliminary Determination of Sales at Less Than Fair 
Value: Certain Hot-Rolled Carbon Steel Flat Products From Thailand

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

EFFECTIVE DATE: May 3, 2001.

FOR FURTHER INFORMATION CONTACT: Angelica Mendoza or Nancy Decker at 
(202) 482-3019 and (202) 482-0196, respectively; AD/CVD Enforcement, 
Office 8, Group III, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230.

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 of Commerce (Department) 
regulations are to the regulations at 19 CFR part 351 (April 2000).

Preliminary Determination

    We preliminarily determine that certain hot-rolled carbon steel 
flat products (HR) from Thailand are being sold, or are 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 is 
shown in the ``Suspension of Liquidation'' section of this notice.

Case History

    On December 4, 2000, the Department initiated antidumping 
investigations of HR products from Argentina, India, Indonesia, 
Kazakhstan, the Netherlands, the People's Republic of China, Romania, 
South Africa, Taiwan, Thailand, and Ukraine. See Initiation of 
Antidumping Duty Investigation: 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, 65 FR 77568 (December 12, 2000) (Initiation 
Notice). The petitioners in this investigation are Bethlehem Steel 
Corporation, LTV Steel Company, Inc., National Steel Corporation, U.S. 
Steel Group (a Unit of USX Corporation), Gallatin Steel Company, IPSCO 
Steel Inc., Nucor Corporation, Steel Dynamics, Inc., Weirton Steel 
Corporation, and Independent Steelworkers Union. Since the initiation 
of this investigation the following events have occurred.
    The Department set aside a period for all interested parties to 
raise issues regarding product coverage. See Initiation Notice at 
77569. We received no comments from any parties in this investigation. 
The Department did, nowever, receive comments regarding product 
coverage in the investigation of hot-rolled carbon steel products from 
the Netherlands. In that investigation we received comments from 
Duracell Global Business Management Group on December 11, 2000, from 
Eveready Battery Co., Inc., on December 15, 2000, from Bouffard Metal 
Goods, Inc., and Truelove & Maclean, Inc., on December 18, 2000, and 
from Corus Staal BV and Corus Steel U.S.A., Inc., and Thomas Steel 
Strip Corporation on December 27, 2000.
    On December 22, 2000, the Department issued a letter to interested 
parties in all of the concurrent HR products antidumping 
investigations, providing an opportunity to comment on the Department's 
proposed model matching characteristics and hierarchy. Comments were 
submitted by: petitioners (January 5, 2001); Corus Staal BA and Corus 
Steel USA Inc., (Corus), respondent in the Netherlands investigation 
(January 3, 2001); Iscor Limited (Iscor), respondent in the South 
Africa investigation (January 3, 2001); and Zaporizhstal, respondent in 
the Ukraine investigation (January 3, 2001). Petitioners agreed with 
the Department's proposed characteristics and hierarchy of 
characteristics. Corus suggested adding a product characteristic to 
distinguish prime merchandise from non-prime merchandise. Neither Iscor 
nor Zaporizhstal proposed any changes to either the list of product 
characteristics proposed by the Department or the hierarchy of those 
product characteristics but, rather, provided information relating to 
its own products that was not relevant in the context of determining 
what information to include in the Department's questionnaires. For 
purposes of the questionnaires subsequently issued by the Department to 
the respondents, no changes were made to the product characteristics or 
the hierarchy of those characteristics from those originally proposed 
by the Department in its December 22, 2000 letter. With respect to 
Corus' request, the additional product characteristic suggested by 
Corus, to distinguish prime from non-prime merchandise, is unnecessary. 
The Department already asks respondents to distinguish prime from non-
prime merchandise in field number 2.2 ``Prime vs. Secondary 
Merchandise.'' See the Department's Antidumping Duty Questionnaire, at 
B-7 and C-7. These fields are used in the model match program to 
prevent matches of prime merchandise to non-prime merchandise.
    On December 28, 2000, the United States International Trade 
Commission (ITC) notified the Department of its affirmative preliminary 
injury determination on imports of subject merchandise from Argentina, 
India, Indonesia, Kazakhstan, the Netherlands, the People's Republic of 
China, Romania, South Africa, Taiwan, Thailand, and Ukraine. On January 
4, 2001, the ITC published its preliminary determination that there is 
a reasonable indication that an industry in the United States is 
materially injured by reason of imports of the subject merchandise from 
Argentina, India, Indonesia, Kazakhstan, the Netherlands, the People's 
Republic of China, Romania, South Africa, Taiwan, Thailand, and 
Ukraine. See Hot-Rolled Steel Products from Argentina, India, 
Indonesia, Kazakhstan, the Netherlands, the People's Republic of China, 
Romania, South Africa, Taiwan, Thailand, and Ukraine, 66 FR 805-02 
(January 4, 2001).
    On January 4, 2001, the Department issued all sections of its 
antidumping duty questionnaire to Sahaviriya Steel Industries Public 
Co., Ltd. (SSI), Siam

[[Page 22200]]

Strip Mill Public Co., Ltd. (SSM), and Nakornthai Strip Mill Public 
Co., Ltd. (Nakornthai). Prior to issuing the antidumping duty 
questionnaire, the Department received a letter, dated December 25, 
2000, from Nakornthai indicating that its mill was not in operation and 
that it made no sales of subject merchandise during the period of 
investigation (POI). On January 16, 2001, the Department received 
Nakornthai's response to Section A of the questionnaire which further 
stated that it was not in operation during the POI and, therefore, 
should not be subject to this investigation. On January 18, 2001, 
Nakornthai submitted additional evidence regarding its non-production 
of merchandise subject to this investigation. On January 24, 2001, the 
Department issued a letter indicating that based on Nakornthai's 
response to Section A of the questionnaire that it was not currently 
required to respond to Sections B, C, and D. The Department did not 
receive a response to any section of the questionnaire from SSM. On 
January 25, 2001, the Department received SSI's response to Section A 
of the questionnaire. On February 16, 2001, petitioners filed comments 
on SSI's section A response. On March 1, 2001, the Department issued a 
supplemental questionnaire for SSI's Section A response. SSI responded 
on March 16, 2001.
    SSI filed its responses to Sections B, C, and D of the 
questionnaire on February 26, 2001. On March 5, 2001, petitioners 
submitted comments on SSI's Sections B, C, and D responses. The 
Department issued a supplemental questionnaire for responses to 
Sections B and C on March 12, 2001. The Section D supplemental 
questionnaire was issued on March 12, 2001. The Department received 
responses to the Sections B-D supplemental questionnaires on March 26, 
2001 and March 28, 2001.

Period of Investigation

    The POI is October 1, 1999 through September 30, 2000. This period 
corresponds to the four most recent fiscal quarters prior to the month 
of the filing of the petition (i.e., November 2000), and is in 
accordance with our regulations. See section 351.204(b)(1). We based 
our analysis on sales transactions made within the POI by date of sale. 
For the home market we treated the date of the final commercial invoice 
as the date of sale. For the U.S. market we treated the date of the 
final contract as the date of sale.

Scope of Investigation

    For purposes of this investigation, 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 
this investigation. Specifically included within the scope of this 
investigation 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 this investigation, 
regardless of definitions in the Harmonized Tariff Schedule of the 
United States (HTS), 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 this investigation unless 
otherwise excluded. The following products, by way of example, are 
outside or specifically excluded from the scope of this investigation: 
level exceeding 2.25 percent.
     Alloy hot-rolled steel products in which at least one of 
the chemical elements exceeds those listed above (including, e.g., ASTM 
specifications A543, A387, A514, A517, A506).
     Society of Automotive Engineers (SAE)/American Iron and 
Steel Institute (AISI) grades of series 2300 and higher.
     Ball bearings steels, as defined in the HTS.
     Tool steels, as defined in the HTS.
     Silico-manganese (as defined in the HTS) or silicon 
electrical steel with a silicon
     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 HTS.
    The merchandise subject to this investigation is classified in the 
HTS 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 flat-rolled carbon 
steel flat products covered by this investigation, 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, 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

[[Page 22201]]

7212.50.00.00. Although the HTS subheadings are provided for 
convenience and U.S. Customs purposes, the written description of the 
merchandise under investigation is dispositive.

Date of Sale

    SSI states that in the home market, customers submitted purchase 
orders and SSI issued order confirmations, but that it was not uncommon 
for both quantity and value to change between the order confirmations 
and the issuance of the commercial invoice (which occurred at the time 
of shipment for home market sales). Based upon the above information, 
we have preliminarily determined that the invoice date is the 
appropriate date of sale for home market sales.
    For U.S. sales, SSI has indicated that the appropriate date of sale 
is the date of the final commercial invoice, which is essentially the 
bill of lading date. However, due to an accounting error, SSI did not 
record the final commercial invoice dates as the bill of lading dates 
in its accounting system during the POI; instead, the final commercial 
invoice dates were recorded as the same date as the pre-shipment 
invoices. Thus, SSI has requested that the Department use the bill of 
lading date, which is the date of shipment, as a surrogate for the 
invoice date because this date most closely corresponds to the date of 
issuance of the final commercial invoice. As to whether the invoice 
date or the contract date better represents the date of sale, SSI has 
indicated that the quantity and price terms frequently change after the 
contract date, whereas the terms of sale do not change after the 
invoice date. SSI therefore concludes that the terms of sale are 
established on the date of the final commercial invoice.
    We have examined whether the final commercial invoice date or some 
other date better represents the date on which the material terms of 
sale were established. The Department has examined the information 
submitted by SSI concerning the company's initial contracts, final 
contracts, pre-shipment invoices, and final commercial invoices for its 
U.S. sales, and has found that the material terms of sale are set at 
the final contract date. Specifically, we find that the changes in 
quantity and price referred to by SSI occur after the initial contract 
date, but not after the final contract date. We note, however, that in 
some instances there were changes in quantity after the final contract 
date. We find these changes to be minimal and to have affected a 
relatively insignificant volume of subject merchandise shipped to the 
United States. Moreover, unit prices for the products did not change 
between the final contract date and invoice date. For business 
proprietary details of our analysis of the date of sale issue, see Memo 
to the File regarding Antidumping Duty Investigation on Certain Hot-
Rolled Carbon Steel Flat Products from Thailand; Preliminary 
Determination Analysis for Sahaviriya Steel Industries, Inc. (April 23, 
2001) (Analysis Memo). Moreover, we find no basis to use a surrogate 
date of sale, such as shipment date (bill of lading date), where 
another date establishes the terms of sale. Accordingly, for U.S. 
sales, we have preliminarily determined that the final contract date is 
the appropriate date of sale in this investigation because it better 
represents the date upon which the material terms of sale were 
established.

Product Comparisons

    Pursuant to section 771(16) of the Act, all products produced by 
the respondent that are within the scope of the investigation, above, 
and were sold in the comparison market during the POI, are considered 
to be foreign like products. We have relied on eleven criteria, in 
descending order of importance, to match U.S. sales of subject 
merchandise to comparison-market sales of the foreign like product: 
whether painted or not, quality, carbon content level, yield strength, 
thickness, width, whether coil or cut sheet, whether temper rolled or 
not temper rolled, whether pickled or not pickled, whether mill-edge or 
trimmed, and with or without patterns in relief. Where there were no 
sales of identical merchandise in the home market to compare to U.S. 
sales, we compared U.S. sales to the next most similar foreign like 
product, based on the characteristics and characteristic subcategories 
indicated in the Department's January 4, 2001, questionnaire.

Facts Available (FA)

SSM

    As noted above under ``Case History,'' SSM failed to respond to the 
Department's antidumping questionnaire. Section 776(a)(2)(A) of the Act 
provides that ``if any interested party or any other person--(A) 
withholds information that has been requested by the administering 
authority * * *, (B) fails to provide such information by the deadlines 
for the submission of the information or in the form and manner 
requested, subject to subsections (c)(1) and (e) of section 782, (C) 
significantly impedes a proceeding under this title, or (D) provides 
such information but the information cannot be verified as provided in 
section 782(i), the administering authority * * * shall, subject to 
section 782(d), use the facts otherwise available in reaching the 
applicable determination under this title.'' The statute requires that 
certain conditions be met before the Department may resort to the facts 
otherwise available. Where the Department determines that a response to 
a request for information does not comply with the request, section 
782(d) of the Act provides that the Department will so inform the party 
submitting the response and will, to the extent practicable, provide 
that party the opportunity to remedy or explain the deficiency. If the 
party fails to remedy the deficiency within the applicable time limits, 
the Department may, subject to 782(e), disregard all or part of the 
original and subsequent responses, as appropriate. Briefly, section 
782(e) provides that the Department ``shall not decline to consider 
information that is submitted by an interested party and is necessary 
to the determination but does not meet all the applicable requirements 
established by the administering authority'' if the information is 
timely, can be verified, is not so incomplete that it cannot be used, 
and if the interested party acted to the best of its ability in 
providing the information. Where all of these conditions are met, and 
the Department can use the information without undue difficulties, the 
statute requires it to do so.
    In this proceeding, SSM provided no response to the Department's 
antidumping questionnaire. Because SSM provided no information 
whatsoever, sections 782 (d) and (e) of the Act are not applicable, and 
the Department is required to resort to the use of facts available for 
this respondent, in accordance with 776(a)(2)(A) of the Act. Moreover, 
we note that at no time did SSM contact the Department and state it was 
having difficulty responding to the questionnaire or otherwise explain 
why it could not provide the requested information. On January 25, 
2001, we contacted counsel for SSM to inquire if SSM would be 
submitting a response to Section A of the Department's antidumping 
questionnaire. Counsel confirmed that SSM would not be filing any such 
response. See Memorandum to the File from Angelica Mendoza (January 25, 
2001). Thus, we have also determined that this respondent has not 
cooperated to the best of its ability. Therefore, pursuant to section 
776(b) of the Act, we used an adverse inference

[[Page 22202]]

in selecting a margin from the FA. As FA, the Department has applied a 
margin rate of 20.30 percent, the highest alleged margin based on our 
recalculation for Thailand in the petition. See Memorandum from Joseph 
A. Spetrini to Bernard T. Carreau, Certain Hot-Rolled Carbon Steel Flat 
Products from Thailand: Preliminary Determination of Sales at Less Than 
Fair Value--The Use of Facts Available for Siam Strip Mill Public Co. 
Ltd, and the Corroboration of Secondary Information, dated April 23, 
2001 (Facts Available Memorandum).
    Section 776(c) of the Act provides that where the Department 
selects from among the facts otherwise available and relies on 
``secondary information,'' such as the petition, the Department shall, 
to the extent practicable, corroborate that information from 
independent sources reasonably at the Department's disposal. The 
Statement of Administrative Action accompanying the URAA, H.R. Doc. No. 
103-316, (1994) (hereinafter, the SAA) states that ``corroborate'' 
means to determine that the information used has probative value. See 
SAA at 870.
    In this proceeding, we considered the petition information the most 
appropriate record information to use to establish the dumping margins 
for this uncooperative respondent because, in the absence of verifiable 
data provided by SSM, the petition information is the best 
approximation available to the Department of SSM's pricing and selling 
behavior in the U.S. market. In accordance with section 776(c) of the 
Act, we sought to corroborate the data contained in the petition.
    To corroborate the margin calculations in the petition, we examined 
the data relied upon in making those calculations. The export prices 
(EP) in the petition were based on import values compiled by the U.S. 
Customs Service. These data are from publicly available sources (i.e., 
official U.S. government statistics). Therefore, we find that the U.S. 
price from the petition margin is sufficiently corroborated.
    For the normal value (NV) calculation, petitioners relied upon 
constructed value (CV), consisting of cost of manufacture (COM), 
selling, general, administrative expenses (SG&A), interest expenses, 
and profit. Petitioners based depreciation, SG&A, interest, and profit 
on publicly available financial statements of a Thai steel producer 
(SSI, a respondent in this investigation). Therefore, because these 
data are based on publicly available financial statements, we find them 
to be sufficiently corroborated. Petitioners calculated COM based on 
their own production experience, adjusted for known differences between 
costs incurred to produce HR in the United States and Thailand using 
publicly available data. To corroborate these data, we compared it to 
the reported COM of SSI and its affiliates. Our analysis showed that 
the petitioners' reported costs were reasonably close to the data 
submitted by SSI and its affiliates. Based on this analysis, we find 
that the COM data used in the antidumping petition have probative 
value. See Facts Available Memorandum.

Fair Value Comparisons for SSI

    To determine whether sales of certain hot-rolled carbon steel flat 
products from Thailand were made in the United States at LTFV, we 
compared the EP to the 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 POI weighted-average EPs for 
comparison to POI weighted-average NVs.

Export Price

    We used EP methodology in accordance with section 772(a) of the Act 
because SSI sold the merchandise under investigation directly to an 
unaffiliated purchaser in the United States or to an unaffiliated 
purchaser for exportation to the United States prior to the date of 
importation, and because a CEP methodology was not otherwise indicated. 
We based EP on packed prices to the first unaffiliated customer. In 
accordance with section 772(c)(2), we made deductions from the starting 
price for movement expenses, including foreign inland freight and 
customs brokerage and handling.

Normal Value

A. Selection of Comparison Market

    In order to determine whether there is a sufficient volume of sales 
in the home market to serve as a viable basis for calculating NV (i.e., 
whether the aggregate quantity of the foreign like product is equal to 
or greater than five percent of the aggregate quantity of U.S. sales), 
we compared SSI's volume of home market sales of the foreign like 
product to the volume of U.S. sales of the subject merchandise, in 
accordance with section 773(a)(1) of the Act. Since SSI's aggregate 
quantity of home market sales of the foreign like product was greater 
than five percent of its aggregate quantity of U.S. sales for the 
subject merchandise, we determined that the home market was viable for 
SSI. Therefore, we have based NV on home market sales in the usual 
commercial quantities and in the ordinary course of trade.

A. Affiliate Party Transactions and Arm's Length Test

    To test whether sales to affiliated end-user customers are made at 
arm's length prices, we compare, on a model-specific basis, the prices 
of sales to affiliated customers with sales to unaffiliated customers 
net of all movement charges, billing adjustments, discounts, direct 
selling expenses, and packing. Where, for the tested models of foreign 
like product, prices to the affiliated party are on average 99.5 
percent or more of the price to unaffiliated parties, we determine that 
such sales are made at arm's length prices. See 19 CFR 351.403(c); see 
also Antidumping Duties; Countervailing Duties Final Rule, 62 FR 27355 
(May 19, 1997).
    If these affiliated party sales satisfied the arm's-length test, we 
used them in our analysis. Merchandise sold to affiliated customers in 
the home market made at non-arm's length prices were excluded from our 
analysis because we considered them to be outside the ordinary course 
of trade. See 19 CFR 351.102. Where the exclusion of such sales 
eliminated all sales of the most appropriate comparison product, we 
made a comparison to the next most similar model.

C. Cost of Production Analysis

    Based on our analysis of the cost allegations submitted by 
petitioners in the original petition, the Department found reasonable 
grounds to believe or suspect that Thai producers had made sales of HR 
in the home market at prices below the cost of producing the 
merchandise, in accordance with section 773(b)(2)(A)(i) of the Act. As 
a result, the Department initiated an investigation to determine 
whether respondents made home market sales during the POI at prices 
below their cost of production (COP) within the meaning of section 
773(b) of the Act. We conducted the COP analysis described below.
1. Calculation of COP
    In accordance with section 773(b)(3) of the Act, we calculated a 
weighted-average COP based on the sum of SSI's cost of materials and 
fabrication for the foreign like product, plus amounts for home market 
selling, general and administrative expenses (SG&A), interest expenses, 
and packing costs. The Department relied on the COP and CV data 
submitted by SSI on February 26, 2001 with the exception of the 
following: (1) SSI reported a SG&A

[[Page 22203]]

expense ratio that was derived using POI information (i.e., three-
months of 1999 and nine-months of 2000). In accordance with our 
established practice, we recalculated SSI's SG&A expense ratio using 
information from the company's audited financial statements; (2) SSI 
reported a financial expense ratio that was derived using 
unconsolidated POI information (i.e., three-months of 1999 and nine-
months of 2000). In accordance with our established practice, we 
recalculated SSI's financial expense ratio using information from its 
consolidated financial statements. See Notice of Final Determination of 
Sales at Less Than Fair Value: Certain Cut-to-Length Carbon-Quality 
Steel Plate Products from France, 64 FR 73143, 73152 (Dec. 29, 1999). 
This practice has been upheld by the Court of International Trade. See 
Gulf States Tube v. United States, 981 F. Supp. 630 (CIT 1997).
2. Test of Home Market Sales Prices
    We compared the weighted-average COP for SSI to home market sales 
of the foreign like product, as required under section 773(b) of the 
Act, in order to determine whether these sales had been made at prices 
below the COP. In determining whether to disregard home market sales 
made at prices below the COP, we examined whether such sales were made 
(1) within an extended period of time in substantial quantities, and 
(2) at prices which would not permit recovery of all costs within a 
reasonable period of time, in accordance with sections 773(b)(1)(A) and 
(B) of the Act. On a product-specific basis, we compared the COP to 
home market prices, less any applicable movement charges, discounts, 
and billing adjustments.
3. Results of the COP Test
    Pursuant to section 773(b)(2)(C) of the Act, where less than 20 
percent of SSI's sales of a given product were at prices less than the 
COP, we did not disregard any below-cost sales of that product because 
we determined that the below-cost sales were not made in substantial 
quantities. Where 20 percent or more of SSI's sales of a given product 
during the POI were at prices less than the COP, we determined such 
sales to have been made in substantial quantities, in accordance with 
section 773(b)(2)(C)(i) of the Act, within an extended period of time. 
In such cases because we compared prices to weighted-average COPs for 
the POI, we also determined that such sales were made at prices which 
would not permit recovery of all costs within a reasonable period of 
time, in accordance with section 773(b)(2)(D) of the Act. Therefore, we 
disregarded those below-cost sales.

D. Price-to-Price Comparison

    We based NV for SSI on prices of home market sales that passed the 
COP test. We made deductions for billing adjustments and discounts. We 
made deductions, where appropriate, for inland freight and inland 
insurance, pursuant to section 773(a)(6)(B) of the Act. We made 
adjustments, where appropriate, for physical differences in the 
merchandise in accordance with section 773(a)(6)(C)(ii) of the Act, and 
19 CFR 351.411. In accordance with section 773(a)(6) of the Act, we 
deducted home market packing costs and added U.S. packing costs. In 
accordance with section 773(a)(6)(C)(iii) of the Act and 19 CFR 
351.410, we made circumstances of sale (COS) adjustments for imputed 
credit expense, interest revenue, and warranties. For the calculation 
of imputed credit expense, we based credit days on the number of days 
between estimated shipment from the plant and payment date, rather than 
the number of days between shipment from the port and payment date (see 
Analysis Memo). We also re-coded all home market and U.S. sales that 
incurred warranty expenses. For further information, see Analysis Memo.

Level of Trade

    In accordance with section 773(a)(1)(B) of the Act, to the extent 
practicable, we determine NV based on sales in the comparison market at 
the same level of trade (LOT) as the EP transaction. The NV LOT is that 
of the starting-price sales in the comparison market or, when NV is 
based on constructed value (CV), that of the sales from which we derive 
SG&A expenses and profit. For EP, the U.S. LOT is also the level of the 
starting-price sale, which is usually from the exporter to the 
importer.
    To determine whether NV sales are at a different LOT than EP, we 
examine stages in the marketing process and selling functions along the 
chain of distribution between the producer and the unaffiliated 
customer. If the comparison-market sales are at a different LOT and the 
difference affects price comparability, as manifested in a pattern of 
consistent price differences between the sales on which NV is based and 
comparison-market sales at the LOT of the export transaction, we make a 
LOT adjustment pursuant to section 773(a)(7)(A) of the Act. See Notice 
of Final Determination of Sales at Less Than Fair Value; Certain Cut-
to-Length Carbon Steel Plate from South Africa, 62 FR 61731 (November 
19, 1997).
    In determining whether separate LOTs actually existed in the home 
market for the respondent, we examine whether the respondent's sales 
involved different marketing stages (or their equivalent) based on the 
channel of distribution, customer categories, and selling functions (or 
services offered) to each customer or customer category, in both 
markets.
    SSI claimed one LOT in the U.S. and two LOTs in the home market: 
LOT 1 includes direct sales to end-users, trading companies, and 
service centers; and LOT 2 includes all sales made through its 
affiliates. SSI claimed that all U.S. sales are at the same LOT as LOT 
1 in the home market. SSI reported four channels of distribution for 
home market sales made through LOT 1 and LOT 2. The first channel of 
distribution was sales made through unaffiliated trading companies with 
one customer category (i.e., end-users). The second channel of 
distribution was sales made through affiliated trading companies with 
two customer categories (i.e., end-users and service centers). The 
third channel of distribution was direct sales with one customer 
category (i.e., unaffiliated end-users). The fourth channel of 
distribution was direct sales with one customer category (i.e., end-
users/resellers).
    In analyzing SSI's selling activities for its home market and U.S. 
market, we determined that essentially the same services were provided 
for both markets. Due to the proprietary nature of the levels of these 
selling activities, for further analysis, see Analysis Memo. Therefore, 
based upon this information, we have preliminarily determined that the 
LOT for all EP sales is the same as the LOT for all sales in the home 
market. Accordingly, because we find the U.S. sales and home market 
sales to be at the same LOT, no LOT adjustment under section 
773(a)(7)(A) of the Act is warranted for SSI.

Currency Conversions

    We made currency conversions into U.S. dollars based on the 
exchange rates in effect on the dates of the U.S. sales as certified by 
the Federal Reserve Bank. Section 773A(a) of the Act directs the 
Department to use a daily exchange rate in order to convert foreign 
currencies into U.S. dollars unless the daily rate involves a 
fluctuation. It is the Department's practice to find that a fluctuation 
exists when the daily exchange rate differs from the benchmark rate by 
2.25 percent. The benchmark is defined as the moving average of rates 
for the past 40 business days. When we determine a fluctuation to have 
existed, we substitute the

[[Page 22204]]

benchmark rate for the daily rate, in accordance with established 
practice. Further, section 773A(b) of the Act directs the Department to 
allow a 60-day adjustment period when a currency has undergone a 
sustained movement. A sustained movement has occurred when the weekly 
average of actual daily rates exceeds the weekly average of benchmark 
rates by more than five percent for eight consecutive weeks. (For an 
explanation of this method, see Policy Bulletin 96-1: Currency 
Conversions (61 FR 9434, March 8, 1996).)

Verification

    In accordance with section 782(i) of the Act, we intend to verify 
information to be used in making our final determination.

All Others

    Pursuant to sections 733(d)(1)(A)(ii) and 735(c)(5)(A) of the Act, 
the estimated all-others rate is equal to the estimated weighted 
average dumping margin established for SSI, the only exporter/producer 
investigated.

Suspension of Liquidation

    In accordance with section 733(d)(2) of the Act, the Department 
will direct the U.S. Customs Service to suspend liquidation of all 
entries of HR producers from Thailand, that are 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 posting of a bond equal to the 
estimated preliminary dumping margin indicated in the chart below. This 
suspension of liquidation will remain in effect until further notice. 
The weighted-average dumping margins in the preliminary determination 
are as follows:

------------------------------------------------------------------------
                                                                Margin
                    Exporter/manufacturer                      (percent)
------------------------------------------------------------------------
SSI.........................................................        7.48
SSM.........................................................       20.30
All Others..................................................        7.48
------------------------------------------------------------------------

ITC Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of our determination. 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 these imports are materially injuring, or 
threatening material injury to, the U.S. industry.

Public Comment

    Case briefs for this investigation must be submitted no later than 
one week after the issuance of the verification reports. Rebuttal 
briefs must be filed within five days after the deadline for submission 
of case briefs. A list of authorities used, a table of contents, and an 
executive summary of issues should accompany any briefs submitted to 
the Department. Executive summaries should be limited to five pages 
total, including footnotes.
    Section 774 of the Act provides that the Department will hold a 
hearing to afford interested parties an opportunity to comment on 
arguments raised in case or rebuttal briefs, provided that such a 
hearing is requested by any interested party. If a request for a 
hearing is made in an investigation, the hearing will tentatively be 
held two days after the deadline for submission of the rebuttal briefs, 
at the U.S. Department of Commerce, 14th Street and Constitution 
Avenue, NW, Washington, DC 20230. In the event that the Department 
receives requests for hearings from parties to several HR cases, the 
Department may schedule a single hearing to encompass all those cases. 
Parties should confirm by telephone the time, date, and place of the 
hearing 48 hours before the scheduled time. Interested parties who wish 
to request a hearing, or participate if one is requested, must submit a 
written request within 30 days of the publication of this notice. 
Requests should specify the number of participants and provide a list 
of the issues to be discussed. Oral presentations will be limited to 
issues raised in the briefs. If this investigation proceeds normally, 
we will make our final determination no later than 75 days after the 
date of this preliminary determination.
    This determination is issued and published in accordance with 
sections 733(f) 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: April 23, 2001.
Bernard T. Carreau,
Deputy Assistant Secretary, Import Administration.
[FR Doc. 01-10855 Filed 5-2-01; 8:45 am]
BILLING CODE 3510-DS-P