[Federal Register Volume 66, Number 120 (Thursday, June 21, 2001)]
[Notices]
[Pages 33227-33232]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-15650]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-870, A-560-814, A-557-811, A-485-807, and A-791-812]


Notice of Initiation of Antidumping Duty Investigations: Certain 
Circular Welded Carbon-Quality Steel Pipe From China, Indonesia, 
Malaysia, Romania, and South Africa

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

ACTION: Initiation of antidumping duty investigations.

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EFFECTIVE DATE: June 21, 2001.

FOR FURTHER INFORMATION CONTACT: James Doyle (China), Steve Bezirganian 
(Indonesia), Robert James (Romania), and Sally Gannon (Malaysia and 
South Africa) at (202) 482-0159, (202) 482-1131, (202) 482-0649, and 
(202) 482-0162, 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, as amended (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 Petition

    On May 24, 2001, the Department of Commerce (the Department) 
received a petition filed in proper form by the following parties: 
Allied Tube & Conduit Corporation, Century Tube Corporation, IPSCO 
Tubulars, Inc., Laclede Steel, LTV Copperweld, Maverick Tube 
Corporation, Northwest Pipe Company, Sharon Tube Company,

[[Page 33228]]

Western Tube & Conduit Corp., Wheatland Tube Co., and United 
Steelworkers of America, AFL-CIO (collectively, the petitioners). The 
Department received information supplementing the petition from the 
petitioners throughout the 20-day initiation period.
    In accordance with section 732(b) of the Act, the petitioners 
allege that imports of certain circular welded carbon-quality steel 
pipe from China, Indonesia, Malaysia, Romania, and South Africa 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, or are threatening to materially 
injure, an industry in the United States.
    The Department finds that the petitioners filed this petition on 
behalf of the domestic industry because they are interested parties as 
defined in 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 Petition 
section below.)

Scope of Investigations

    The scope of these investigations covers certain welded carbon 
quality steel pipes and tubes, of circular cross-section, with an 
outside diameter of 0.372 inches (9.45 mm) or more, but not more than 
16 inches (406.4 mm), regardless of wall thickness, surface finish 
(black, galvanized, or painted), end finish (plain end, beveled end, 
grooved, threaded, or threaded and coupled), or industry specification 
(ASTM, proprietary, or other), generally known as standard pipe and 
structural pipe.
    Standard pipes and tubes are intended for the low-pressure 
conveyance of water, steam, natural gas, air, and other liquids and 
gases in plumbing and heating systems, air conditioning units, 
automatic sprinkler systems, and other related uses. Standard pipe may 
carry liquids at elevated temperatures but may not be subject to the 
application of external heat. It may also be used for light load-
bearing and mechanical applications, such as for fence tubing, and for 
protection of electrical wiring, such as conduit shells, and for 
structural applications in general construction. It primarily is made 
to American Society for Testing and Materials (ASTM) A-53, A-135, and 
A-795 specifications, but can also be made to the British Standard 
(BS)-1387 specification.
    Structural pipe is intended for use in the construction of bridges 
and buildings, and general structural applications. It also can be used 
for making steel scaffolding and for piling applications. It primarily 
is made to ASTM A-500 and A-252 specifications.
    Hence, specifically included within the scope of these petitions 
are products stenciled to the ASTM standards A-53, A-135 A-795, A-120, 
A-500, A-252, or their equivalents. Standard and structural pipe 
products may also be produced to proprietary specifications rather than 
to industry standard. This is often the case with fence tubing, for 
example.
    The scope does not include boiler tubes, pressure tubing, 
mechanical tubing, finished conduit, oil country tubular goods (OCTG), 
and line pipe. However, with regard to these excluded products, if 
petitioners or other interested parties provide to the Department 
reasonable grounds to believe or suspect that the products are being 
used in a standard or structural application, the Department may 
instruct the U.S. Customs Service (Customs) to require end-use 
certifications. In addition, line pipe meeting the American Petroleum 
Institute (API) line pipe specification is excluded from the scope of 
these investigations, and any resultant antidumping duty orders, if 
covered by the scope of another antidumping duty order from the same 
country.
    The pipe products that are the subject of these investigations are 
currently classifiable in the Harmonized Tariff Schedule of the United 
States (HTSUS) subheadings 7306.30.10 and 7306.30.50. This petition 
also covers dual-certified A-53/API or single certified pipe that 
enters the United States if it is used in, or intended for use in, 
standard pipe or structural pipe applications. Such certified pipe may 
include API-5L or API-5L X-42 pipe. Although the HTSUS subheadings are 
provided for convenience and Customs purposes, the written description 
of the merchandise under investigation is dispositive.
    During our review of the petition, we discussed the scope with the 
petitioners to ensure that it accurately reflects the product for which 
the domestic industry is seeking relief. Moreover, as discussed in the 
preamble to the Department's regulations (62 FR 27323), we are setting 
aside a period for parties to raise issues regarding product coverage. 
The Department encourages all parties to submit such comments by July 
3, 2001. 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 Petition

    Section 771(4)(A) of the Act defines the ``industry'' as the 
producers of a domestic like product. Thus, to determine whether the 
petition has the requisite industry support, the statute directs the 
Department to look to producers and workers who produce the domestic 
like product. The 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 (see section 771(10) of the Act), they do so for different 
purposes and pursuant to separate and distinct authority. In addition, 
the Department's determination is subject to limitations of time and 
information. Although this may result in different definitions of the 
like product, such differences do not render the decision of either 
agency contrary to the law.\1\
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    \1\ See Algoma Steel Corp. Ltd., v. United States, 688 F. Supp. 
639, 642-44 (CIT 1988); High Information Content Flat Panel Displays 
and Display Glass 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 investigations.
    In this case, ``the article subject to investigation'' also is 
substantially similar to the scope of the Department's antidumping duty 
administrative review involving circular welded non-alloy steel pipe 
published in 2001. See Circular Welded Non-Alloy Steel Pipe From 
Mexico: Final Results of

[[Page 33229]]

Antidumping Duty Administrative Review, 66 FR 21311 (April 30, 2001). 
Thus, based on our analysis of the information presented to the 
Department above, 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. Ten U.S. producers of the domestic like 
product, and the trade union which represents its workers, are 
petitioners in this case. Petitioners assert that they represent 79.1 
percent of the domestic industry production of the noted pipe, based on 
the appropriate AISI final data for 2000, in addition to their own 
production data. (See Amendment to the Petition at 10 and Exhibits 9 
and 10 (June 6, 2001).) Furthermore, the Department received no 
opposition to the petition. Therefore, the requirements of section 
732(c)(4)(A)(i) are met. In addition, we conclude that 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 Import Administration AD Investigation 
Checklist, June 13, 2001 (Initiation Checklist) (public version on file 
in the Central Records Unit of the Department of Commerce, Room B-099).

Export Price and Normal Value

    The following are descriptions of the allegations of sales at less 
than fair value upon which the Department has 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 contacted the researcher to establish its 
credentials and to confirm the validity of the information being 
provided. See Memorandum to the File from Sally C. Gannon, Contacts 
with Source of Market Research for Antidumping Petition Regarding 
Imports of Certain Circular Welded Carbon-Quality Steel Pipe from 
Malaysia and South Africa (June 13, 2001) (Market Research for Malaysia 
and South Africa), and Memorandum to the File from Helen M. Kramer 
through Steve Bezirganian, Telephone Conversation with Market 
Researcher (June 13, 2001) (Market Research for Indonesia). 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 anticipated period of investigation (POI) for the market 
economy countries is April 1, 2000, through March 31, 2001, while the 
anticipated POI for China and Romania, the non-market economy (NME) 
countries, is October 1, 2000, through March 31, 2001.
    Regarding an investigation involving an 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 China's and Romania's NME status and the granting of 
separate rates to individual exporters.
    Lastly, export price (EP) for four of the subject countries was 
based on the Customs value data published by the Department's Bureau of 
the Census (IM-145 data). Specifically, the petitioners calculated the 
average unit values (AUVs) of certain circular welded carbon-quality 
steel pipe entering the United States from China, Indonesia, Romania, 
and South Africa during the respective POIs, and made the applicable 
adjustments to the AUVs. For Malaysia, petitioners obtained a price 
quote for EP based on foreign market research. The margins calculated 
using these methodologies are as follows: China, 105.32 to 134.12 
percent; Indonesia, 3.32 to 29.38 percent; Malaysia, 20.2 percent; 
Romania, 122.12 to 149.63 percent; and South Africa, 81.7 percent.
    Because the Department considers the country-wide import statistics 
for the POI through March 2001 and price quotes based on market 
research used to calculate the estimated margins for the subject 
countries to be sufficient for purposes of initiation, we are 
initiating these investigations on these bases, as discussed below and 
in the Initiation Checklist.

China

Export Price

    Petitioners based export price (EP) on import values declared to 
Customs (IM-145 data). In calculating the AUVs, the petitioners used 
the HTSUS categories corresponding to the four-inch black plain end 
pipe (BPE) and four-inch galvanized plain end pipe (GPE) subject to 
their petition, and also used the average AUV for the POI. Petitioners 
have used the free alongside ship (F.A.S.) Customs values as the F.O.B. 
price of the merchandise, packaged and ready for delivery at the 
foreign port. To approximate ex-factory prices, petitioners deducted 
foreign inland freight from the Customs value. Petitioners calculated 
average foreign inland freight charges using estimated atlas distances 
and Indian freight rates as a surrogate value. For purposes of 
initiation we have found this to be a reasonable estimate.

Normal Value

    The petitioners asserted that the PRC is a non-market economy (NME) 
and no determination to the contrary has yet been made by the 
Department. In previous investigations, the Department has determined 
that the PRC is an NME. See, e.g., Certain Hot-Rolled Carbon Steel Flat 
Products from the People's Republic of China; Notice of Preliminary 
Results of Antidumping Duty Administrative Review (Hot-Rolled from 
China), 66 FR 22183 (May 31, 2001), Steel Wire Rope from the People's 
Republic of China; Notice of Final Determination of Sales at Less Than 
Fair Value (Steel Wire Rope from China), 66 FR 12759 (February 28, 
2001). In accordance with section 771(18)(C)(i) of the Act, the 
presumption of NME status remains in effect until revoked by the 
Department. The presumption of NME status for the PRC has not been 
revoked by the Department and, therefore, remains in effect for 
purposes of the initiation of this investigation.
    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

[[Page 33230]]

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 producers of certain circular 
welded carbon-quality steel pipe 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 U.S. producer in question 
uses. 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 natural gas, 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. Surrogate value data from India for 
natural gas was not available; petitioners instead used an Indonesian 
surrogate value for national gas. 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 
Organization for Economic Cooperation and Development (OECD) 
International Energy Agency.
    For overhead, depreciation, SG&A expenses, and profit, the 
petitioners applied rates derived from the financial statements of 
TATA, an Indian steel producer that produces pipe, as part of its 
operations. The petitioners calculated the factory overhead expense 
ratio, depreciation expense ratio and SG&A expense ratio based on 
TATA's 1999-2000 consolidated statement. Petitioners based profit on 
net profit before taxes from 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 105.32 to 134.12 percent.\2\
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    \2\ Due to a mathematical error in the margin calculation in the 
original petition, the margin has decreased by less than one 
percent.
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Indonesia

Export Price

    Petitioners used import values declared to Customs (IM-145 data) to 
determine average import value during April 2000 to March 2001 (the 
POI) for four-inch BPE and four-inch GPE, which fall under the headings 
of HTSUS 7306.30.50.55 and 7306.30.50.32, respectively. Petitioners 
disregarded the foreign inland freight to the port because the steel 
company is close to the export port. Petitioners could not obtain 
information on foreign brokerage, port charges and the Indonesian 
trading company's markup, and therefore these expenses were not 
deducted from the Customs values when calculating the estimated dumping 
margin.

Normal Value

    Petitioners obtained a price quote offered by an Indonesian 
producer to an unaffiliated home market customer in the ordinary course 
of business and within the POI. The quote was for BPE and GPE. The 
prices were on a delivered basis, and thus include freight. Petitioners 
were unable to obtain current actual freight charges and used publicly 
available information from past antidumping investigations on the 
Department's web site. They adjusted the 1993 freight rate for 
inflation using the Indonesian Wholesale Price Index and converted it 
to U.S. dollars using the average exchange rate for the POI. Normal 
value was calculated by subtracting the estimated freight charge from 
the price quotes.
    Petitioners also calculated CV for four-inch BPE and four-inch GPE. 
They used publicly available financial information for PT Bakrie & 
Brothers, the parent of a major producer of the subject merchandise for 
which no financial information is available. Petitioners used the 
depreciation expenses reported in the Statement of Cash Flow to 
calculate the depreciation rate and derived SG&A and net financial 
expenses from the consolidated income statement. However, as 
insufficient information was available to calculate the overhead rate, 
petitioners omitted it. The financial statements did not report any 
profit, and none was included in the calculation of CV.
    Because the Indonesian producer's costs are unavailable, 
petitioners obtained the factors usage by a U.S. surrogate for 
producing a short ton of four-inch BPE and GPE during the period 
October 2000 through March 2001. For the primary input material, hot-
rolled coil, petitioners used the ranged home market price in Indonesia 
reported in the Petition on Certain Hot-Rolled Carbon Steel Flat 
Products from Indonesia filed on November 13, 2000, which was within 
ten percent of the actual price. For other direct materials inputs, 
petitioners used the AUVs in U.S. dollars for Indonesian imports in 
1998 reported in the U.N. Commodity Trade Statistics, the latest 
available. These values were adjusted to March 2001 levels using the 
U.S. Producer Price Index. The cost of manufacture was reduced by the 
value of by-products. Petitioners used the cost of electricity for 
medium industrial service effective since April 1, 2000, as published 
on the Indonesian Electricity Co. Ltd. East Java Distribution website. 
The natural gas price for 1998 was obtained from the OECD International 
Energy Agency publication, Energy Prices and Taxes, adjusted for 
inflation and converted into dollars. Labor cost was calculated using 
the September 2000 average wage in the basic metals industry in 
Indonesia from the Statistics Indonesia web site. Petitioners 
calculated CV by adding cost of production and interest expenses from 
PT Bakrie & Brothers' consolidated financial statement.
    The estimated dumping margins for Indonesia based on a comparison 
between EP and home market price range between 24.99 and 29.38 percent. 
Based upon the comparison of EP to CV, the petitioners calculated 
estimated dumping margins ranging between 3.32 and 22.16 percent.

Malaysia

Export Price

    The petitioners based EP on a U.S. price quote of steel pipe 
imported from Malaysia which is potentially classifiable under HTSUS 
subheadings 7306.30.50.32 or 7306.10.00. Since 93 percent of the volume 
of imports potentially classifiable under these two HTSUS subheadings 
entered the United States under HTSUS number 7306.30.50.32, for 
purposes of calculating the EP, petitioners assumed that imports of 
this product from Malaysia would be classified under HTSUS 
7306.30.50.32. The product for which petitioners obtained the U.S.

[[Page 33231]]

price quote corresponds to the merchandise in the home market price 
quote. (See Normal Value section below.) This U.S. price quote reflects 
an F.O.B. price in U.S. dollars. Petitioners obtained information on 
ocean freight and insurance, normal customs duty, trading company mark-
ups and port handling charges and deducted these expenses from the 
F.O.B. value. Petitioners did not deduct foreign inland transportation 
since no information was available concerning the delivery distance 
between the mills and the ports from where the exports embarked.

Normal Value

    Petitioners used a price quote obtained by a foreign market 
researcher for the home market price. The quote represents a selling 
price (exclusive of taxes and after necessary conversions) in U.S. 
dollars per net ton during the latter half of March 2001 for the same 
product for which the U.S. price quote was obtained. While terms of 
sale were delivered, petitioners did not deduct any amount for inland 
freight because no information was available concerning the delivery 
distance between the mill and the customer. As stated above, 
petitioners did not deduct inland freight from EP, so, according to 
petitioners, there is no effect on the margin. See Initiation 
Checklist.
    The estimated dumping margin for Malaysia based on a comparison 
between EP and home market price is 20.2 percent.

Romania

Export Price

    Petitioners identified Tepro S.A. Iasi as the major Romanian 
producer/exporter of subject merchandise to the United States. 
Petitioners based EP on the import values declared to Customs (IM-145 
data) for the HTSUS numbers corresponding to the BPE and GPE pipes 
subject to the petition. Petitioners subtracted estimated domestic 
inland freight costs incurred to transport the subject merchandise from 
the factory to the port of export. They based the estimated cost on an 
Egyptian shipment value that the Department used as the surrogate value 
for shipping in the investigation of certain hot-rolled carbon steel 
flat products from Romania.

Normal Value

    With respect to NV, petitioners asserted that Romania is an NME 
country. In previous investigations the Department has determined that 
Romania is an NME country. (See Preliminary Determination of Sales at 
Less Than Fair Value: Certain Hot-Rolled Carbon Steel Flat Products 
from Romania, 66 FR 22194, 22197 (May 3, 2001) (Hot-Rolled Steel from 
Romania); 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, 39126 (June 23, 2000).) Pursuant to 
section 771(18)(C)(i) of the Act, the Department's determination of NME 
status remains in effect until a contrary determination is made. The 
Department has not done so with respect to Romania. Petitioners 
therefore provided factors of production for constructed value (CV) 
pursuant to section 773(c) of the Act.
    The antidumping statute requires that NV for NME producers be 
determined by valuing the NME factors of production at their cost in 
the market economy country chosen as a surrogate. (See 19 CFR 
351.408(a).) The Department is required to use, to the extent possible, 
the prices of costs of factors of production from a surrogate country 
that is at a level of economic development comparable to that of 
Romania, and is also a significant producer of comparable merchandise.
    Petitioners selected Egypt as the primary surrogate country for the 
calculation of the CV, and Jordan as the secondary surrogate country 
when Egyptian information was not available because both of these 
countries met the statutory requirements described above. Furthermore, 
the Department had used Egypt as the surrogate country in the 
antidumping investigation of hot-rolled steel from Romania. (See Hot-
Rolled Steel from Romania at 22197.) For the calculation of one factor, 
the overhead ratio, it used the financial statement of an Indonesian 
producer because there was no financial statement from either an 
Egyptian or Jordanian producer that would permit calculation of 
overhead as a separate element and because the Department had used 
Indonesia as the surrogate country for Romania in two recent 
antidumping proceedings. (See Preliminary Determination of Sales at 
Less Than Fair Value: Certain Small Diameter Carbon and Alloy Seamless 
Standard, Line and Pressure Pipe from Romania, 65 FR 5594, 5598 
(February 4, 2000) (Carbon and Alloy Pipe from Romania Preliminary 
Results) and Preliminary Results of Antidumping Duty Administrative 
Review and Final Partial Recission of Review: Cut-to-Length Carbon 
Steel Plate from Romania, 65 FR 54208, 54210 (September 7, 2000) (Plate 
from Romania Preliminary Results).) As necessary, petitioners inflated 
non-contemporaneous surrogate values to the POI using IMF International 
Financial Statistics. It did not make any currency conversions because 
all values used were denominated in U.S. dollars in the original 
sources.
    Petitioners reported that input quantity information for Romanian 
producers of certain circular welded carbon quality steel pipe is not 
readily available. Therefore, they assumed that Romanian producers 
employed a production process similar to that utilized by domestic 
producers, and based input quantities on the experience of a U.S. 
domestic producer.
    Petitioners valued hot-rolled coil, lacquer coating, natural gas, 
and zinc (both input and offset) using 1998 U.N. Commodity Trade 
Statistics. They valued electricity using an Egyptian value found in a 
development review report published by the World Bank. They valued 
labor using the labor rates found on the Department's website. Selling, 
general, and administrative (SG&A) expenses, financial expenses, 
profit, and depreciation were valued using data from the financial 
statement of the Egyptian steel manufacturer Alexandria National Iron & 
Steel Co. (Alexandria Steel). They valued overhead using data from the 
financial statement of the Indonesian steel manufacturer Krakatau Steel 
Co., Ltd. (Krakatau).\3\ Petitioners also added a cost for packing 
labor based on the labor rates on the Department's website. They did 
not add a value for packing materials because they were unable to 
obtain information on such materials.
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    \3\ Petitioners used Krakatau's financial statement rather than 
that of Alexandria Steel to value overhead because the publicly 
available financial statements of Alexandria Steel do not contain 
information to separately calculate the overhead ratio. Furthermore, 
the Department had used Krakatau's financial statement in the 
investigation of certain small diameter carbon and alloy seamless 
standard, line and pressure pipe from Romania and in the 1998-99 
administrative review of cut-to-length carbon steel plate from 
Romania. See Carbon and Alloy Steel Pipe from Romania Preliminary 
Results at 5598 and Plate from Romania Preliminary Results at 54210.
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    The estimated dumping margins, based on a comparison between U.S. 
price and constructed NV are 122.12 percent and 149.63 percent.

South Africa

Export Price

    The petitioners based EP on the AUV of steel pipe imported from 
South Africa under the HTSUS subheading 7306.30.50.55 (which 
corresponds to the merchandise for the home market price quote) for 
April 2000 through March 2001 (the POI), based on the import values 
declared to Customs (IM-145 data). Petitioners could not obtain

[[Page 33232]]

information on South African inland freight, brokerage, port charges, 
or South African trading company mark-ups, so these expenses were not 
deducted from the Customs values. According to petitioners, the 
resulting dumping margin is therefore understated.

Normal Value

    Petitioners used data obtained from a foreign market researcher to 
determine the price charged in the home market. The price quote 
obtained by the researcher represents a selling price (exclusive of 
taxes) in U.S. dollars per net ton. The quote uses rand per linear 
meter as the unit of sale. Petitioners converted the home market price 
into U.S. dollars per net ton equivalent. Terms of sale were delivered. 
Petitioners did not deduct any amount for inland freight because it was 
unclear if the quoted price already included inland freight. According 
to petitioners, even if the quoted price included inland freight, 
petitioners had no information regarding delivery distance, so an 
accurate calculation would be impossible. Petitioners did not deduct 
inland freight from EP, so there should be no material effect on the 
margin. Petitioners' consultant found that the producer offers a 
standard ten percent discount from the list price, and a further 2.5 
percent discount for accounts settled in less than 30 days. Petitioners 
calculated the NV for the product as price per net ton, less the two 
aforementioned discounts. See Initiation Checklist.
    The estimated dumping margin for South Africa based on a comparison 
between EP and home market price is 81.7 percent.

Fair Value Comparisons

    Based on the data provided by the petitioners, there is reason to 
believe that imports of certain circular welded carbon-quality steel 
pipe from China, Indonesia, Malaysia, Romania, and South Africa are 
being, or are likely to be, sold at less than fair value.

Allegations and Evidence of Material Injury and Causation

    The petitioners 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. While the volume of 
imports from China, using the latest available data, exceeded the 
statutory threshold of seven percent for a negligibility exclusion, the 
individual volumes of imports from Indonesia, Malaysia, Romania, and 
South Africa did not; however, when cumulated, the volumes for these 
four countries do exceed the threshold. (See section 771(24)(A)(ii) of 
the Act.) 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.

Initiation of Antidumping Investigations

    Based upon our examination of the petitions on certain circular 
welded carbon-quality steel pipe, and the petitioners' responses to our 
supplemental questionnaire clarifying the petitions, as well as our 
conversations with the foreign market researchers who provided 
information concerning various aspects of the petition, we have found 
that it meets the requirements of section 732 of the Act. See 
Initiation Checklist, Market Research for Malaysia and South Africa, 
and Market Research for Indonesia. Therefore, we are initiating 
antidumping duty investigations to determine whether imports of certain 
circular welded carbon-quality steel pipe from China, Indonesia, 
Malaysia, Romania, and South Africa 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 the petition has been provided to the representatives 
of the governments of China, Indonesia, Malaysia, Romania, and South 
Africa. We will attempt to provide a copy of the public version of the 
petition to each exporter named in the petition, as appropriate.

International Trade Commission Notification

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

Preliminary Determinations by the ITC

    The ITC will determine, no later than July 9, 2001, whether there 
is a reasonable indication that imports of certain circular welded 
carbon-quality steel pipe from China, Indonesia, Malaysia, Romania, and 
South Africa 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: June 13, 2001.
Faryar Shirzad,
Assistant Secretary for Import Administration.
[FR Doc. 01-15650 Filed 6-20-01; 8:45 am]
BILLING CODE 3510-DS-P