[Federal Register Volume 66, Number 191 (Tuesday, October 2, 2001)]
[Notices]
[Pages 50164-50173]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-24621]


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 Notices
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 This section of the FEDERAL REGISTER contains documents other than rules 
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  Federal Register / Vol. 66, No. 191 / Tuesday, October 2, 2001 / 
Notices  

[[Page 50164]]



DEPARTMENT OF COMMERCE

International Trade Administration

[A-351-831, A-122-840, A-729-802, A-428-832, A-560-815, A-201-830, A-
841-805, A-791-813, A-274-804, A-823-812, A-307-821]


Notice of Initiation of Antidumping Duty Investigations: Carbon 
and Certain Alloy Steel Wire Rod From Brazil, Canada, Egypt, Germany, 
Indonesia, Mexico, Moldova, South Africa, Trinidad and Tobago, Ukraine, 
and Venezuela

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

ACTION: Initiation of antidumping duty investigations.

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EFFECTIVE DATE: October 2, 2001.

FOR FURTHER INFORMATION CONTACT: Charles Riggle (Brazil, Canada, 
Mexico, South Africa, Trinidad and Tobago, and Venezuela), Robert James 
(Germany), Steve Bezirganian ( Indonesia), Abdelali Elouaradia (Egypt 
and Moldova), and James Doyle (Ukraine) at (202) 482-0650, (202) 482-
0649, (202) 482-1131, (202) 482-1374, and (202) 482-0159, 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 (2001).

The Petition

    On August 31, 2001, the Department of Commerce (the Department) 
received a petition filed in proper form by the following parties: Co-
Steel Raritan, Inc., GS Industries, Keystone Consolidated Industries, 
Inc., and North Star Steel Texas, Inc. (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 carbon and certain alloy steel wire rod (CASWR) 
from Brazil, Canada, Egypt, Germany, Indonesia, Mexico, Moldova, South 
Africa, Trinidad and Tobago, Ukraine, and Venezuela 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 merchandise covered by these investigations is certain hot-
rolled products of carbon steel and alloy steel, in coils, of 
approximately round cross section, 5.00 mm or more, but less than 19.00 
mm, in solid cross-sectional diameter.
    Specifically excluded are steel products possessing the above-noted 
physical characteristics and meeting the Harmonized Tariff Schedule of 
the United States (HTSUS) definitions for (a) stainless steel; (b) tool 
steel; (c) high nickel steel; (d) ball bearing steel; and (e) concrete 
reinforcing bars and rods. Also excluded are (f) free machining steel 
products (i.e., products that contain by weight one or more of the 
following elements: 0.03 percent or more of lead, 0.05 percent or more 
of bismuth, 0.08 percent or more of sulfur, more than 0.04 percent of 
phosphorus, more than 0.05 percent of selenium, or more than 0.01 
percent of tellurium). All products meeting the physical description of 
subject merchandise that are not specifically excluded are included in 
this scope.
    The products under investigation are currently classifiable under 
subheadings 7213.91.3010, 7213.91.3090, 7213.91.4510, 7213.91.4590, 
7213.91.6010, 7213.91.6090, 7213.99.0031, 7213.99.0038, 7213.99.0090, 
7227.20.0010, 7227.20.0090, 7227.90.6051 and 7227.90.6058 of the HTSUS. 
Although the HTSUS subheadings are provided for convenience and customs 
purposes, the written description of the scope of this proceeding is 
dispositive.

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, when determining the degree 
of industry support, the statute directs the Department to look to 
producers and workers who produce the domestic like product. The 
International Trade Commission (ITC), which is responsible for 
determining whether ``the domestic industry'' has been injured, must 
also determine what constitutes a domestic like product in order to 
define the industry. While both the Department and the ITC must apply 
the same statutory definition regarding the domestic like product 
(section 771(10) of the Act), they do so for different purposes and 
pursuant to separate and distinct authority. In addition, the 
Department's determination is subject to limitations of time and 
information. Although this may result in different definitions of the 
like product, such differences do not render the decision of either 
agency contrary to the law.\1\
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    \1\ See Algoma Steel Corp. Ltd., v. United States, 688 F. Supp. 
639, 642-44 (CIT 1988); High Information Content Flat Panel Displays 
and Display Glass from Japan: Final Determination; Rescission of 
Investigation and Partial Dismissal of Petition, 56 FR 32376, 32380-
81 (July 16, 1991).
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    Section 771(10) of the Act defines the domestic like product as ``a 
product which is like, or in the absence of like, most similar in 
characteristics and uses with, the article subject to an investigation 
under this subtitle.'' Thus, the reference point from which the 
domestic like product analysis begins is ``the article subject to an 
investigation,''

[[Page 50165]]

i.e., the class or kind of merchandise to be investigated, which 
normally will be the scope as defined in the petition. Moreover, the 
petitioners do not offer a definition of domestic like product distinct 
from the scope of the investigation.
    The petition covers carbon and certain steel wire rod as defined in 
the Scope of the Investigation section, above, a single class or kind 
of merchandise. The Department has no basis on the record to find the 
petitioners' definition of the domestic like product to be inaccurate. 
The Department, therefore, has adopted the domestic like product 
definition set forth in the petition.
    Section 732(b)(1) of the Act requires that a petition be filed on 
behalf of the domestic industry. Section 732(c)(4)(A) of the Act 
provides that a petition meets this requirement if the domestic 
producers or workers who support the petition account for: (1) At least 
25 percent of the total production of the domestic like product; and 
(2) more than 50 percent of the production of the domestic like product 
produced by that portion of the industry expressing support for, or 
opposition to, the petition. Finally, section 732(c)(4)(D) of the Act 
provides that if the petition does not establish support of domestic 
producers or workers accounting for more than 50 percent of the total 
production of the domestic like product, the administering agency 
shall: (i) Poll the industry or rely on other information in order to 
determine if there is support for the petition as required by 
subparagraph (A), or (ii) determine industry support using a 
statistically valid sampling method.
    In this case, the Department has determined that the petition (and 
subsequent amendments) contain adequate evidence of industry support; 
therefore, polling is unnecessary. See Attachment I to AD Investigation 
Initiation Checklist: Carbon and Certain Alloy Steel Wire Rod From 
Brazil, Canada, Egypt, Germany, Indonesia, Mexico, Moldova, South 
Africa, Trinidad and Tobago, Ukraine, and Venezuela (September 24, 
2001) (Initiation Checklist). To estimate total domestic production of 
steel wire rod, the petitioners relied on data compiled by the ITC,\2\ 
adjusted upward by five percent to include an estimate of production of 
products excluded from Presidential Proclamation 7273. In a letter 
dated September 7, 2001, the petitioners provided support for the five 
percent adjustment in the form of an affidavit from an industry 
representative familiar with the excluded products.
---------------------------------------------------------------------------

    \2\ Certain Steel Wire Rod, Inv. No. TA-204-06, Final Staff 
Report dated August 2, 2001, Table II-2 at II-4.
---------------------------------------------------------------------------

    On September 14, 2001, the Department received comments regarding 
industry support from Ispat-Sidbec Inc., a Canadian producer of steel 
wire rod. The petitioners responded to these comments in a letter to 
the Department dated September 18, 2001. Further, on September 21, 
2001, the petitioners submitted a letter adding the support of Nucor 
Corp., a domestic producer of steel wire rod, for the petitions.
    The Department has reviewed the comments of Ispat-Sidbec Inc., and 
the petitioners. In order to estimate production for the domestic 
industry as defined for purposes of this case, the Department has 
relied upon not only the petition and amendments thereto, but also upon 
``other information'' it obtained through research and described in 
Attachment 1 of the Initiation Checklist. Based on information from 
these sources, the Department determined, pursuant to section 
732(c)(4)(D), that there is support for the petition as required by 
subparagraph (A). Specifically, the Department made the following 
determinations. For Brazil, Canada, Egypt, Germany, Indonesia, Mexico, 
Moldova, South Africa, Trinidad and Tobago, Ukraine, and Venezuela, the 
petitioners established industry support representing over 50 percent 
of total production of the domestic like product. Therefore, the 
domestic producers or workers who support the petition account for at 
least 25 percent of the total production of the domestic like product, 
and the requirements of section 732(c)(4)(A)(i) are met. Furthermore, 
because the Department received no opposition to the petition, the 
domestic producers or workers who support the petition account for more 
than 50 percent of the production of the domestic like product produced 
by that portion of the industry expressing support for or opposition to 
the petition. Thus, the requirements of section 732(c)(4)(A)(ii) are 
also met. Accordingly, the Department determines that the petitions 
were filed on behalf of the domestic industry within the meaning of 
section 732(b)(1) of the Act. See the Initiation Checklist.

Export Price and Normal Value

    The following are descriptions of the allegations of sales at less 
than fair value upon which the Department 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 researchers to establish their 
credentials and to confirm the validity of the information being 
provided. See e.g., Memorandum to the File from Mike Strollo: Contacts 
with Source of Market Research for Antidumping Petition Regarding 
Imports of CASWR from Egypt (September 24, 2001) (Market Research for 
Egypt). 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 margins calculated using these methodologies are as follows: 
Brazil, 53.97 to 94.73 percent; Canada, 3.72 to 15.91 percent; Egypt, 
14.95 to 59.64 percent; Germany, 37.79 to 99.32 percent; Indonesia, 
72.96 to 122.57 percent; Mexico, 29.63 to 40.52 percent; Moldova, 
172.89 percent; South Africa, 13.32 percent; Trinidad and Tobago, 60.12 
to 87.27 percent; Ukraine 101.92 percent; Venezuela, 12.68 to 21.02 
percent.
    Because the Department considers the country-wide import statistics 
for the anticipated period of investigation (POI) 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.

Period of Investigation

    The anticipated POI for the market economy countries is July 1, 
2000, through June 30, 2001, while the anticipated POI for Moldova and 
Ukraine, the non-market economy (NME) countries, is January 1, 2001, 
through June 30, 2001.

Non-Market Economies

    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, Notice of Final 
Determination of Sales at Less Than Fair Value: Steel Concrete 
Reinforcing Bars from Moldova (Rebar from Moldova), 66 FR 33525 (June 
22, 2001) and Notice of Final Determination of Sales at Less Than Fair 
Value: Solid Agricultural Ammonium Nitrate from Ukraine (Nitrate from 
Ukraine), 66 FR 38632 (July 25, 2001). In the course of

[[Page 50166]]

these investigations, all parties will have the opportunity to provide 
relevant information related to the issues of Moldova's and Ukraine's 
NME status and the granting of separate rates to individual exporters.

Brazil

Export Price

    The petitioners based export price (EP) on price quotes from 
Brazilian producers to an unaffiliated U.S. purchaser for different 
grades and sizes of subject merchandise and calculated a net U.S. price 
by deducting international freight, customs fees, and U.S. credit 
expenses.

Normal Value

    With respect to normal value (NV), the petitioners provided home 
market prices that were obtained from foreign market research for 
grades and sizes of steel wire rod comparable to the products exported 
to the United States which serve as the basis for EP. The petitioners 
state that the home market price quotation was FOB plant and they only 
made an adjustment for home market credit expenses.
    The petitioners have provided information demonstrating reasonable 
grounds to believe or suspect that sales of steel wire rod in the home 
market were made at prices below the fully absorbed cost of production 
(COP), within the meaning of section 773(b) of the Act, and requested 
that the Department conduct a country-wide sales-below-cost 
investigation.
    The August 31, 2001, petitions included factors to adjust labor 
costs. These factors were based on the differences in labor costs 
between the U.S. and the country in question, reflecting data that are 
recent and contemporaneous, but for periods prior to 2000 (including 
U.S. data from IA's website). In subsequent filings, petitioners 
calculated revised factors in an effort to account for inflation 
through 2000. We have used the factors from the August 31, 2001 
petitions. The petitions also included factors used to adjust natural 
gas and electricity costs. These factors were based on differences in 
costs between the United States and the country in question, reflecting 
recent, but pre-2000, annual data. In subsequent filings, petitioners 
calculated revised factors through use of consumer price indexes 
applied to the pre-2000 costs. Because these indexes are not specific 
to the factors in question, and do not account for other relevant 
variables (e.g., changes in exchange rates), we have used the factors 
as presented in the August 31, 2001 petitions.
    Pursuant to section 773(b)(3) of the Act, COP consists of the cost 
of manufacturing (COM); selling, general, and administrative expenses 
(SG&A); and packing expenses. The petitioners calculated COM based on 
their own production experience, adjusted for known differences between 
costs incurred to produce steel wire rod in the United States and in 
Brazil. To calculate SG&A and financial expenses, petitioners relied 
upon amounts reported in the 2000 consolidated income statements of 
Gerdau S.A. and Companhia Siderurgica Belgo Minieras, two Brazilian 
CASWR producers. Based upon a comparison of the prices of the foreign 
like product in the home market to the calculated COP of the product, 
we find reasonable grounds to believe or suspect that sales of the 
foreign like product were made below the COP, within the meaning of 
section 773(b)(2)(A)(i) of the Act. Accordingly, the Department is 
initiating a country-wide cost investigation.
    The estimated dumping margin for Brazil based on a comparison 
between EP and home market price is in the range of 53.97 to 92.53 
percent. Based upon the comparison of EP to CV, we calculated an 
estimated dumping margin in the range of 59.29 to 94.73 percent for 
Brazil.

Canada

Export Price

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

Normal Value

    With respect to NV, the petitioners provided home market prices 
that were obtained from foreign market research for grades and sizes of 
steel wire rod comparable to the products exported to the United States 
which serve as the basis for EP. The petitioners state that the home 
market price quotation was FOB plant and they only made an adjustment 
for home market credit expenses.
    The petitioners have provided information demonstrating reasonable 
grounds to believe or suspect that sales of steel wire rod in the home 
market were made at prices below the fully absorbed cost of production, 
within the meaning of section 773(b) of the Act, and requested that the 
Department conduct a country-wide sales-below-cost investigation.
    The August 31, 2001 petitions included factors used to adjust 
natural gas and electricity costs. These factors were based on 
differences in costs between the United States and the country in 
question, reflecting recent, but pre-2000, annual data. In subsequent 
filings, petitioners calculated revised factors through use of consumer 
price indexes applied to the pre-2000 costs. Because these indexes are 
not specific to the factors in question, and do not account for other 
relevant variables (e.g., changes in exchange rates), we have used the 
factors as presented in the August 31, 2001 petitions. As the factors 
for labor rates have not changed from the August 31, 2001 petition, we 
have not needed to adjust labor rates.
    Pursuant to section 773(b)(3) of the Act, COP consists of COM, 
SG&A, and packing expenses. The petitioners calculated COM based on 
their own production experience, adjusted for known differences between 
costs incurred to produce steel wire rod in the United States and in 
Canada. To calculate SG&A and financial expenses, petitioners relied 
upon amounts reported in the 2000 consolidated income statements of 
Sidbec-Dosco (Ispat) Inc., a Canadian CASWR producer. Based upon a 
comparison of the prices of the foreign like product in the home market 
to the calculated COP of the product, we find reasonable grounds to 
believe or suspect that sales of the foreign like product were made 
below the COP, within the meaning of section 773(b)(2)(A)(i) of the 
Act. Accordingly, the Department is initiating a country-wide cost 
investigation.
    The estimated dumping margins for Canada based on a comparison 
between EP and home market price range from 3.72 to 15.91 percent. 
Based upon the comparison of EP to CV, we calculated an estimated 
dumping margin of 9.45 percent.

Egypt

Export Price

    To calculate export price (EP), petitioners obtained a price quote 
for CASWR produced in Egypt by Alexandria National Iron & Steel Company 
(Alexandria) for sale to the United States. The price quote obtained 
was in U.S. dollars per hundred-weight ($/CWT). The terms of sale for 
the price quotation obtained by petitioners were ex-works.

[[Page 50167]]

Normal Value

    To calculate NV, petitioners obtained a price quote for CASWR 
produced by Alexandria with similar specifications as the U.S. quote. 
The price quote is on an ex-works basis and therefore does not include 
transportation charges. The petitioners adjusted this price by 
subtracting home market credit expenses and adding U.S. credit 
expenses. Petitioners calculated credit expense using the number of 
days payment was outstanding based on the payment terms, and the most 
recently available monthly interest rate reported in the June 2001 
edition of the International Financial Statistics as published by the 
International Monetary Fund.
    Although the petitioners provided information on home market 
prices, they also provided information demonstrating reasonable grounds 
to believe or suspect that sales of carbon and certain alloy steel wire 
rod in the home market were made at prices below the fully absorbed 
COP, within the meaning of section 773(b) of the Act, and requested 
that the Department conduct a country-wide sales-below-cost 
investigation.
    Pursuant to section 773(b)(3) of the Act, COP refers to the total 
cost of producing the foreign like product which includes the COM, 
SG&A, interest expense, and packing expenses. Because the Egyptian 
producer's costs are unavailable, petitioners obtained the factors 
usage by a U.S. surrogate for producing a net ton of grade 1006, 5.5 
millimeter in diameter, Industrial Quality CASWR during the POI, 
adjusted for known differences between the U.S. and Egyptian markets. 
The adjustment for labor costs was based on International Labor 
Organization statistics for 1999. The August 31, 2001 petitions 
included factors to adjust labor costs. These factors were based on the 
differences in labor costs between the U.S. and the country in 
question, reflecting data that are recent and contemporaneous, but for 
periods prior to 2000 (including U.S. data from IA's website). In 
subsequent filings, petitioners calculated revised factors in an effort 
to account for inflation through 2000. We have used the factors from 
the August 31, 2001 petitions. The adjustment for energy costs was 
based on International Energy Agency statistics. The August 31, 2001 
petitions included factors used to adjust natural gas and electricity 
costs. These factors were based on differences in costs between the 
United States and the country in question, reflecting recent, but pre-
2000, annual data. In subsequent filings, petitioners calculated 
revised factors through use of consumer price indexes applied to the 
pre-2000 costs. Because these indexes are not specific to the factors 
in question, and do not account for other relevant variables (e.g., 
changes in exchange rates), we have used the factors as presented in 
the August 31, 2001 petitions. To calculate SG&A and interest expenses, 
petitioners relied upon the most recent year-end financial statements 
of Alexandria (December 31, 1998). The SG&A and interest expense ratios 
were calculated by dividing total SG&A and net financial expenses 
(interest expense less short-term interest income) by the cost of goods 
sold reported in Alexandria's income statement. Based upon the 
comparison of the prices of the foreign like product in the home market 
to the calculated COP of the product, we find reasonable grounds to 
believe or suspect that sales of the foreign like product were made at 
prices below the COP, within the meaning of section 773(b)(2)(A)(i) of 
the Act. Accordingly, the Department is initiating a country-wide cost 
investigation.
    Given the evidence of below-cost sales, petitioners also based NV 
on CV pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act. The 
petitioners calculated CV using the same COM and SG&A used to compute 
Egyptian home market costs. Consistent with section 773(e)(2) of the 
Act, petitioners included in CV an amount for profit. The petitioners 
calculated a profit ratio based on the 1998 income statements for 
Alexandria.
    The estimated dumping margin for Egypt based on a comparison 
between EP and home market price is 14.95 percent. Based upon the 
comparison of EP to CV, we calculated an estimated dumping margin of 
59.64 percent.

Germany

Export Price

    Petitioners obtained a price quote for CASWR from a German producer 
offered through a reseller to a U.S. customer. The terms of sale were 
FOB. The price quote was obtained in U.S. dollars per CWT. The U.S. net 
price was calculated by taking the price from the quote from the German 
producer of CASWR and subtracting the following: international freight 
and insurance, U.S. import duty, U.S. merchandise processing fees, U.S. 
harbor maintenance fees, and U.S. inland freight. Petitioners made 
adjustments for imputed U.S. credit expenses and commissions.

Normal Value

    From a market researcher petitioners obtained home market prices 
based upon a price quote for CASWR within the scope from a German 
manufacturer of CASWR to an unaffiliated purchaser. The terms of sale 
were delivered to customer and payment terms were 60 days. The quoted 
price was given in Deutschmarks per metric ton. Petitioners deducted 
freight costs and home market credit expenses. Freight costs were as 
stated in the given quote. Home market credit expenses were based on 
published IMF statistics for short-term lending in Germany during the 
specified month within the POI during which petitioners obtained the 
price quote. Petitioners also added an amount for estimated commission 
on the U.S. quote and for imputed U.S. credit expenses. U.S. credit 
expenses were based on published IMF statistics for short-term lending 
in Germany during the month in which petitioners obtained the quote.
    Petitioners state that they have reason to believe that CASWR is 
sold in Germany at prices less than COP. To determine COM, petitioners 
used a U.S. producer's cost of producing CASWR as a surrogate, adjusted 
for known differences between the U.S. and German markets. The 
adjustment for labor costs was based on International Labor 
Organization statistics for 1999. The August 31, 2001 petitions 
included factors to adjust labor costs. These factors were based on the 
differences in labor costs between the U.S. and the country in 
question, reflecting data that are recent and contemporaneous, but for 
periods prior to 2000 (including U.S. data from IA's website). In 
subsequent filings, petitioners calculated revised factors in an effort 
to account for inflation through 2000. We have used the factors from 
the August 31, 2001 petitions. The adjustment for energy costs was 
based on International Energy Agency statistics. The August 31, 2001 
petitions included factors used to adjust natural gas and electricity 
costs. These factors were based on differences in costs between the 
United States and the country in question, reflecting recent, but pre-
2000, annual data. In subsequent filings, petitioners calculated 
revised factors through use of consumer price indexes applied to the 
pre-2000 costs. Because these indexes are not specific to the factors 
in question, and do not account for other relevant variables (e.g., 
changes in exchange rates), we have used the factors as presented in 
the August 31, 2001 petitions. No adjustment was made for raw material 
costs, believed to be

[[Page 50168]]

comparable between Germany and the U.S. because of the worldwide 
commodity nature of the raw materials. U.S. producers' overhead costs 
were used to establish the German COM, SG&A, and interest expense 
ratios were based on the consolidated income statement of a surrogate 
German CASWR producer which petitioners believe to be representative of 
CASWR producers in Germany. The total SG&A expenses and the net 
financial expenses were divided by the cost of goods sold in order to 
derive these ratios. Petitioners' comparisons of net home market prices 
to their calculated COP did not deduct inland freight expenses from the 
home market gross price; the Department did so. For CV, a profit ratio 
was derived from the surrogate German CASWR producer's 2000 income 
statement, which was applied to the COP to determine CV. A 
circumstance-of-sale adjustment was made to CV for credit expenses.
    For Germany, petitioners converted the cost of production and the 
constructed value, both calculated in U.S. dollars, to marks. For the 
cost test, petitioners compared the resulting cost of production in 
marks to the home market price in marks; for the constructed value-
based margin calculation, petitioners then converted the constructed 
value in marks back to U.S. dollars, and compared it to U.S. price. We 
instead used the original cost of production and constructed value in 
U.S. dollars, and for the cost test converted the home market price 
into U.S. dollars. Based upon the comparison of the adjusted prices of 
foreign like product in the home market to the calculated COP of the 
product, we find reasonable grounds to believe or suspect that sales of 
the foreign like product were made below the COP within the meaning of 
section 773(b)(2)(A)(I) of the Act. Accordingly, the Department is 
initiating a country-wide cost investigation.
    The price-to-price comparison produced an estimated dumping margin 
of 37.79 percent. The price-to-CV comparison produced a dumping margin 
of 99.32 percent.

Indonesia

Export Price

    Petitioners provided a price quote for CASWR from a wire rod 
producer in Indonesia. The price quote reflects the price for new 
orders and the price that the U.S. customer currently pays for 
deliveries. The export price is the price quote, minus ocean freight 
and insurance, minus import duties, minus import charges, and minus 
U.S. inland freight. Petitioners based U.S. inland freight on the 
experience of U.S. purchaser of domestic and imported steel wire rod.

Normal Value

    Petitioners obtained a price quote for CASWR offered during the POI 
by an Indonesian producer to an unaffiliated home market customer for 
wire rod. The price quote sale terms are FOB mill. Petitioners added 
U.S. imputed credit expenses to normal value to account for differences 
in imputed credit expenses. Petitioners subtracted ocean freight and 
insurance, duties, import charges, U.S. inland freight, and commissions 
to calculate normal value.
    Petitioners stated that they have reason to believe that CASWR is 
sold in Indonesia at prices less than COP. To determine cost of 
manufacturing, petitioners used a U.S. producer's cost of manufacturing 
CASWR as a surrogate, adjusted for known differences between the U.S. 
and Indonesian markets. Production cost data are for the period 
beginning July 1, 2000 through March 31, 2001. Petitioners state that 
the quantity of input materials, the cost of raw materials and alloys, 
and the quantities and values of labor, natural gas, and electricity 
are based on petitioners' experience. Petitioners stated that they 
calculated alloy costs by taking the period costs for alloys, divided 
by the tons rolled. The figure was adjusted to account for the 1006 and 
1008 carbon grade costs used in the constructed value calculation. To 
calculate the scrap offset, petitioners divided the total scrap credit 
(for all carbon and certain alloy steel wire rod) by the total tons 
rolled (for all CASWR).
    Petitioners calculated a factor to adjust for known cost 
differences between the Indonesian and the U.S. markets for energy 
using statistics from the International Energy Agency. The August 31, 
2001 petitions included these factors used to adjust natural gas and 
electricity costs. These factors were based on differences in costs 
between the United States and the country in question, reflecting 
recent, but pre-2000, annual data. In subsequent filings, petitioners 
calculated revised factors through use of consumer price indexes 
applied to the pre-2000 costs. Because these indexes are not specific 
to the factors in question, and do not account for other relevant 
variables (e.g., changes in exchange rates), we have used the factors 
as presented in the August 31, 2001 petitions. Petitioners calculated 
factors to adjust for known cost differences between the Indonesian and 
the U.S. markets for labor based on data from the International Labor 
Organization and the World Bank. The August 31, 2001 petitions included 
factors to adjust labor costs. These factors were based on the 
differences in labor costs between the U.S. and the country in 
question, reflecting data that are recent and contemporaneous, but for 
periods prior to 2000 (including U.S. data from IA's website). In 
subsequent filings, petitioners calculated revised factors in an effort 
to account for inflation through 2000. We have used the factors from 
the August 31, 2001 petitions. Petitioners applied the factory overhead 
ratios, based on petitioners' experience to the total cost of 
manufacturing, labor and energy. Petitioners calculated SG&A expenses, 
interest expenses, and profit using PT Jakarta Kyoei Steel Works 
Limited (PT Jakarta) 1999 financial statements. Petitioners noted that 
2000 financial statements for PT Jakarta are not available, and that 
2000 financial statements for other Indonesian producers with 
sufficient detail for financial expenses are also not publicly 
available. The Department re-calculated the SG&A ratio and the interest 
expenses ratio with PT Jakarta's cost of goods sold rather than the 
total cost of manufacturing calculated by petitioners. Based upon the 
comparison of the adjusted prices of foreign like product in the home 
market to the calculated COP of the product, we find reasonable grounds 
to believe or suspect that sales of the foreign like product were made 
below the COP within the meaning of section 773(b)(2)(A)(I) of the Act. 
Accordingly, the Department is initiating a country-wide cost 
investigation.
    The estimated dumping margins for Indonesia based on a comparison 
between EP and home market price (NV) is 72.96 percent. Based on the 
comparison of EP to CV, the petitioners calculated the estimated 
dumping margin to be 122.57 percent.

Mexico

Export Price/Constructed Export Price

    The petitioners based EP on affidavits of U.S. price offerings for 
carbon and certain steel wire rod manufactured by Siderurgica Lazaro 
Cardenas Las Truchas SA (Sicartsa) from July 1, 2000 to March 31, 2001. 
In the absence of more definitive information, petitioners refer to the 
date of the offer as the date of sale. The affidavits with the sales 
price offers reflect the price offered to an unaffiliated customer 
prior to the date of importation.
    The petitioners calculated a net U.S. price by subtracting 
estimated costs for international freight and insurance, U.S.

[[Page 50169]]

import duty, U.S. merchandise processing and harbor maintenance fees, 
and where applicable, U.S. inland freight from the port to the first 
unaffiliated U.S. customer, from the sales price.

Normal Value

    Petitioners based NV on CV, alleging pursuant to section 773(b) of 
the Act that sales in the home market were made at prices below the 
fully absorbed COP, and requested that the Department conduct a 
country-wide sales-below-cost investigation.
    The petitioners provided information that demonstrated reasonable 
grounds to believe or suspect that sales of carbon and steel wire rod 
products in the home market were made at prices below the fully 
absorbed COP. COP in the antidumping law refers to the total cost of 
producing the foreign like product. Pursuant to section 773(b)(3) of 
the Act, it includes the COM, SG&A expenses and packing expenses.
    The petitioners calculated COM based on their own production 
experience, adjusted for known differences between costs incurred to 
produce carbon and steel wire rod in the United States and in Mexico 
using market research and publicly available data. The adjustment for 
labor costs was based on International Labor Organization statistics 
for 1998. To calculate SG&A and financial expenses, petitioners relied 
upon Altos Hornos De Mexico S.A.'s (AHMSA's) consolidated income 
statement for the period ending December 31, 1999. Based upon the 
comparison of the adjusted prices of the foreign like product in the 
home market to the calculated COP of the product, we find reasonable 
grounds to believe or suspect that sales of the foreign like product 
were made below the COP within the meaning of section 773(b)(2)(A)(I) 
of the Act. Accordingly, the Department is initiating a country-wide 
cost investigation.
    In light of their allegations that home market prices were below 
cost, petitioners based NV on CV. The COP portion of CV was calculated 
based on U.S. producer's cost of producing carbon and steel wire rod, 
adjusted for known differences between the Mexican and U.S. markets. 
The profit ratio was based on the income statement from AHMSA for 1997, 
the most recent year in which AHMSA earned a profit.
    The August 31, 2001 petitions included factors used to adjust 
labor, natural gas and electricity costs. These factors were based on 
differences in costs between the United States and the country in 
question, reflecting recent, but pre-2000, annual data. In subsequent 
filings, petitioners calculated revised factors through use of consumer 
price indexes applied to the pre-2000 costs. Because these indexes are 
not specific to the factors in question, and do not account for other 
relevant variables (e.g., changes in exchange rates), we have used the 
factors as presented in the August 31, 2001 petitions.
    The estimated dumping margins for Mexico based on comparisons 
between EP and home market prices are 29.63 percent and 31.95 percent. 
Based upon the comparison of EP to CV, we calculated estimated dumping 
margins of 38.04 percent and 40.52 percent.

Moldova

Export Price

    Petitioners identified Moldova Steel Works (MSW) as the only known 
Moldovan producer/exporter of subject merchandise to the United States. 
To calculate EP, petitioners obtained a price quote for grade 1008, 5.5 
millimeters in diameter, industrial quality CASWR produced in Moldova 
by MSW for sale to the United States. The price quote obtained was in 
U.S. dollars per hundred-weight ($/CWT). The terms of sale were 
delivered to U.S. customer. As such, the price includes foreign inland 
freight, ocean freight and insurance, foreign brokerage and handling, 
U.S. import duties and fees, and U.S. inland freight.
    Petitioners calculated ocean freight and insurance based on the 
average import charges for subject merchandise entered during the POI. 
Petitioners used import values declared to Customs (IM-145 data) to 
determine these import charges. Foreign brokerage and handling costs 
were calculated using publicly available information previously used by 
the Department in Steel Concrete Reinforcing Bars from Moldova: Final 
Determination of Sales at Less Than Fair Value (Rebar from Moldova), 66 
FR 33525 (June 22, 2001). U.S. import duties are based on the general 
rate of duty on merchandise imported into the United States during the 
POI as described in the Harmonized Tariff Schedule of the United States 
(2001). U.S. import fees (i.e., harbor maintenance and merchandise 
processing fees) are based on the U.S. Customs Service Regulations as 
codified under 19 C.F.R. 24.24(b)(1). U.S. inland freight costs are 
based on petitioners' experience in the industry. Although the price 
quote is on a delivered basis and includes foreign port fees and 
transportation charges within Moldova, no amount for inland freight was 
deducted in calculating EP because petitioners have no information 
regarding these charges. However, according to petitioners, since the 
omission of these costs increases export price and correspondingly 
reduces any dumping margin, this margin, therefore, is a conservative 
estimate.

Normal Value

    With respect to NV, petitioners asserted that Moldova is an NME 
country. In previous investigations, the Department determined that 
Moldova is an NME country. See Rebar from Moldova. 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 
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. Petitioners, therefore, provided 
factors of production for constructed value (CV) pursuant to section 
773(c) of the Act.
    For NV, the petitioners based the factors of production, as defined 
by section 773(c)(3) of the Act, on the consumption rates of one U.S. 
CASWR producer. The petitioners asserted that information regarding 
Moldovan producers' consumption rates was not available, and that the 
U.S. producer employs a production process which is similar to the 
production process employed by the Moldovan producer of CASWR in 
Moldova. Thus, the petitioners have assumed, for purposes of the 
petition, that the producer in Moldova uses the same inputs in the same 
quantities as the U.S. producer in question. Based on the information 
provided by petitioners, we believe that the petitioners' factors of 
production methodology represents information reasonably available to 
the petitioners and is appropriate for purposes of initiating this 
investigation.
    The petitioners asserted that India was the most appropriate 
surrogate country for Moldova, 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 factors of production, where possible, on reasonably available, 
public surrogate data from India. Materials, with the exception of 
natural gas and alloys, and

[[Page 50170]]

fluxes, 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. Petitioners valued 
natural gas based on the value calculated in the Notice of Final 
Determination of Sales at Less Than Fair Value; Polyvinyl Alcohol from 
the People's Republic of China, 61 FR 14057 (March 29, 1996). 
Additionally, petitioners submitted a U.S. price for alloys, additives 
and fluxes raw material inputs. On September 7, 2001, petitioners 
stated that these inputs were world commodities and the prices don't 
vary from country to country. On September 21, 2001, petitioners 
submitted consumption ratios for alloys, additives, and fluxes, but 
failed to provide surrogate values for these inputs. Since the 
petitioners did not submit additional surrogate prices to value alloys, 
additives, and fluxes in accordance with section 351.408 of the 
Department's regulations, the Department rejected the U.S. prices used 
by petitioners. Instead, the Department valued alloys, additives and 
fluxes using imports of limestone into India during 1998 obtained from 
the United Nations Commodity Trade Statistics as a surrogate value. The 
Department notes that this methodology was used in the recent hot-
rolled steel investigation from the People's Republic of China. See 
Factors Valuation Memo: Preliminary Determination of Sales at Less Than 
Fair Value: Certain Hot-Rolled Carbon Steel Flat Products from China, 
dated April 23, 2001. 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, 
First Quarter 2001, 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. The petitioners calculated the factory 
overhead, depreciation, and SG&A expense ratios based on TATA's 1999-
2000 consolidated income statement. Petitioners calculated a profit 
ratio based on TATA's earnings before interest and taxes also from its 
1999-2000 income statement. Petitioners did not add a value for packing 
because they were unable to obtain information on such materials.
    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. Therefore, based upon comparisons of EP to CV, we 
calculated an estimated dumping margin of 172.89 percent.

South Africa

Export Price

    The petitioners based EP on an affidavit of U.S. price offerings 
for products manufactured by Iscor during January through March 2001. 
The petitioners selected a steel wire rod product with specifications 
commonly exported to the United States. In the absence of more 
definitive information, petitioners refer to the date of the offer as 
the date of sale. The affidavit with the sales price offer reflects the 
price offered to an unaffiliated customer.
    The petitioners calculated a net U.S. price by subtracting 
estimated costs for international freight (from the U.S. Census 
Bureau), harbor maintenance, and merchandise processing fees (from 
International Financial Statistics).

Normal Value

    The petitioners based NV on domestic prices of steel wire rod in 
effect during a month within the period for which the U.S. offer was in 
effect. The petitioners used prices for a recent offer for sale by 
Iscor to unaffiliated customers in South Africa as the starting point 
in calculating NV. The petitioners adjusted this price by subtracting 
home market movement charges and home market credit expenses and adding 
U.S. credit expenses. Domestic prices were based on findings contained 
in the market research report. Credit expenses were calculated based on 
both findings contained in the market research report as well as short-
term lending rates contained in International Financial Statistics.
    In addition, the petitioners alleged pursuant to section 773(b) of 
Act that sales in the home market were made at prices below the fully 
absorbed COP, and requested that the Department conduct a country-wide 
sales-below-cost investigation. Therefore, pursuant to sections 
773(a)(4) and 773(e) of the Act the petitioners calculated a normal 
value for sales in South Africa based on CV. The petitioners calculated 
CV for South African producers based on petitioner's own production 
experience, adjusted for known differences between costs incurred to 
produce steel wire rod in the United States and in South Africa.
    The petitioners calculated COM based on their own production 
experience, adjusted for known differences between costs incurred to 
produce steel wire rod in the United States and in South Africa using 
market research and publicly available data. The adjustment for labor 
costs was based on IMF statistics for 1999. The August 31, 2001 
petitions included factors to adjust labor costs. These factors were 
based on the differences in labor costs between the U.S. and the 
country in question, reflecting data that are recent and 
contemporaneous, but for periods prior to 2000 (including U.S. data 
from IA's website). In subsequent filings, petitioners calculated 
revised factors in an effort to account for inflation through 2000. We 
have used the factors from the August 31, 2001 petitions. The 
adjustment for energy costs was based on International Energy Agency 
statistics. The August 31, 2001 petitions included factors used to 
adjust natural gas and electricity costs. These factors were based on 
differences in costs between the United States and the countries in 
question, reflecting recent, but pre-2000, annual data. In subsequent 
filings, petitioners calculated revised factors through use of consumer 
price indexes applied to the pre-2000 costs. Because these indexes are 
not specific to the factors in question, and do not account for other 
relevant variables (e.g., changes in exchange rates), we have used the 
factors as presented in the August 31, 2001 petitions. The petitioners 
based depreciation and other factory overhead on the actual experience 
of one U.S. CASWR producer. To calculate SG&A and financial expenses, 
petitioners relied upon the fiscal year 2000 audited financial 
statements of South African producer, Iscor Ltd. Based upon the 
comparison of the adjusted prices of the foreign like product in the 
home market to the calculated COP of the product, as revised by the 
Department, we do not find reasonable grounds to believe or suspect 
that sales of the foreign like product were made below the COP within 
the meaning of section 773(b)(2)(A)(I) of the Act. Accordingly, the 
Department is not initiating a country-wide cost investigation.
    The estimated dumping margin for South Africa based on a comparison 
between EP and home market price is 13.32 percent.

Trinidad and Tobago

Export Price

    The petitioners determined EP based on an offer for sale from the 
producer in Trinidad and Tobago, Caribbean Ispat, to an unaffiliated 
U.S. purchaser for one grade with a range of sizes. The sales 
information was obtained from

[[Page 50171]]

industry sources in the United States and supported by an affidavit in 
the petitioner's supplemental submission of September 6, 2001. The 
petitioners calculated a net U.S. price by deducting ocean freight 
charges from the Trinidad and Tobago mill to the U.S. port, U.S. 
duties, U.S. port charges and U.S. inland freight charges from the port 
to the first unaffiliated U.S. customer.

Normal Value

    With respect to NV, the petitioners provided a home market price 
that was obtained from foreign market research, applicable to two 
grades and range of sizes of CASWR which are comparable to the product 
exported to the United States and serves as the basis for EP. The 
petitioners state that the home market price quotation was FOB mill and 
therefore no freight adjustments were made. Petitioners stated that 
they did not impute credit expenses from the reported home market price 
because the terms of sale for the home market sales used were for 
advance cash payment. Therefore, in their calculation of normal value, 
petitioners adjusted for differences in imputed credit expenses by 
simply adding the U.S. credit expense. The petitioners stated that no 
adjustments were made for differences in packing costs.
    In addition, the petitioners provided information demonstrating 
reasonable grounds to believe or suspect that sales of CASWR in the 
home market were made at prices below the fully absorbed COP, within 
the meaning of section 773(b) of the Act, and requested that the 
Department conduct a country-wide sales-below-cost investigation.
    Pursuant to section 773(b)(3) of the Act, COP consists of the COM, 
SG&A expenses, and packing. The petitioners calculated COM based on the 
average consumption rates of one U.S. CASWR producer. The petitioners 
adjusted COM for known differences in the production process used in 
the United States and Trinidad and Tobago. The adjustment for labor 
costs was based on International Labor Organization statistics for 
1999. The August 31, 2001 petitions included factors to adjust labor 
costs. These factors were based on the differences in labor costs 
between the U.S. and the country in question, reflecting data that are 
recent and contemporaneous, but for periods prior to 2000 (including 
U.S. data from IA's website). In subsequent filings, petitioners 
calculated revised factors in an effort to account for inflation 
through 2000. We have used the factors from the August 31, 2001 
petitions. The adjustment for energy costs was based on International 
Energy Agency statistics. The August 31, 2001 petitions included 
factors used to adjust natural gas and electricity costs. These factors 
were based on differences in costs between the United States and the 
country in question, reflecting recent, but pre-2000, annual data. In 
subsequent filings, petitioners calculated revised factors through use 
of consumer price indexes applied to the pre-2000 costs. Because these 
indexes are not specific to the factors in question, and do not account 
for other relevant variables (e.g., changes in exchange rates), we have 
used the factors as presented in the August 31, 2001 petitions. The 
petitioners based depreciation and other factory overhead on the actual 
experience of one U.S. CASWR producer. The petitioners derived SG&A 
from a discussion of Ispat Caribbean's operating income ratio in the 
notes of the annual report of its parent company, Ispat International. 
The petitioners relied on the consolidated interest expense for all of 
Ispat International's operating segments, as reported in the 
consolidated income statement, to calculate the net financial expense 
of the Trinidad and Tobago producer. Based upon the comparison of the 
adjusted prices of the foreign like product in the home market to the 
calculated COP of the product, we find reasonable grounds to believe or 
suspect that sales of the foreign like product were made below the COP, 
within the meaning of section 773(b)(2)(A)(i) of the Act. Accordingly, 
the Department is initiating a country-wide cost investigation.
    Pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act, the 
petitioners also based NV for sales in Trinidad and Tobago on CV. The 
petitioners calculated CV using the same COM, SG&A, financial expense 
figures and overhead used to compute Trinidad and Tobago home market 
costs. Consistent with section 773(e)(2) of the Act, the petitioners 
included in CV, an amount for profit. The profit was based on the 
consolidated net income before taxes for all of Ispat International's 
operating segments taken from Ispat International's consolidated income 
statement.
    The estimated dumping margin for Trinidad and Tobago based on a 
comparison between EP and home market price is 60.12 percent. Based 
upon the comparison of EP to CV, we calculated an estimated dumping 
margin of 87.27 percent.

Ukraine

Export Price

    To calculate EP, petitioners obtained U.S. pricing data from a 
Ukrainian wire rod producer. The price submitted was contemporaneous 
with the POI and was a price quote for Grade 1008 5.5 mm industrial 
quality steel wire rod. This price quote was an FOB price of 
merchandise.
    Petitioners deducted estimated inland freight and brokerage and 
handling costs from the U.S. price to arrive at an estimated ex-factory 
price for use in the comparison of EP and normal values for Ukraine.

Normal Value

    Petitioners assert that Ukraine is an NME and no determination to 
the contrary has yet been made by the Department. See Notice of Final 
Determination of Sales at Less Than Fair Value: Solid Agricultural 
Ammonium Nitrate from Ukraine, 66 FR 38632 (July 25, 2001). Ukraine 
will be treated as an NME unless and until its NME status is revoked. 
Pursuant to section 771(18)(C)(i) of the Act, because Ukraine's status 
as an NME remains in effect, the petitioners determined the dumping 
margin using an FOP analysis.
    Petitioners based the FOP, as defined by section 773(c)(3) of the 
Act, on the consumption rates of one U.S. wire rod producer. The 
petitioners assert that information regarding the Ukrainian mills' 
consumption rates is not available. The U.S. producer uses an electric 
arc furnace mill (minimill), that produces CASWR of varying sizes, 
while the Ukrainian producer uses open-hearth furnaces to produce 
CASWR. See Iron and Steel Works of the World at 497. The use of 
electric furnaces is an efficient method of wire rod production and is 
generally less capital and labor intensive than the use of open-hearth 
furnaces. According to petitioners, the derivation of consumption rates 
from a minimill likely understates the normal value cost of production, 
and therefore provides a conservative estimate on the production costs 
in Ukraine.
    The petitioners assert that Indonesia is the most appropriate 
surrogate country for Ukraine, claiming that Indonesia is: (1) a market 
economy; (2) a significant producer of comparable merchandise; and (3) 
at a level of economic development comparable to Ukraine in terms of 
per capita GNP. Based on the information provided by the petitioners, 
we believe that the petitioners' use of Indonesia as a surrogate 
country is appropriate for purposes of initiating this investigation.

[[Page 50172]]

    For the major input, scrap steel, petitioners used a surrogate 
value from Indonesia published in the (UNCTS) (1998), which was also 
used by the Department in a recent anti-dumping duty investigation on 
line pipe from Romania. See Factors Valuation Memo: Preliminary 
Determination of Sales at Less Than Fair Value, Certain Small Diameter 
Carbon and Alloy Seamless Standard, Line and Pressure Pipe from 
Romania, dated January 28, 2000.
    Petitioners assert that a certain amount of molten steel is lost 
during the melting and casting process in the production of wire rod. 
According to petitioners, minimills offset the yield loss by recovering 
the scrap and processing it into a usable form for internal use. 
Therefore, petitioners have offset the total scrap usage by deducting 
the recovered amount of scrap in the normal value calculation using the 
same surrogate value from UNCTS from 1998 for scrap steel.
    Since the petitioners did not submit additional surrogate prices to 
value alloys, additives, and fluxes in accordance with section 351.408 
of the Department's regulations, the Department rejected the U.S. price 
used by petitioners. Instead, the Department valued alloys, additives 
and fluxes using a limestone surrogate value from UNCTS (1998). The 
Department notes that this methodology was used in the recent hot-
rolled steel investigation from the People's Republic of China. See 
Factors Valuation Memo: Preliminary Determination of Sales at Less Than 
Fair Value: Certain Hot-Rolled Carbon Steel Flat Products from China, 
dated April 23, 2001. Accordingly, we adjusted the price using the WPI 
from IFS. Accordingly, we adjusted the price using the appropriate 
inflator from IFS. See Initiation Checklist at Attachment I.
    Electricity was valued using Energy Prices and Taxes, First Quarter 
2001, published by the Organization for Economic Cooperation and 
Development (OECD) International Energy Agency. Petitioners valued 
natural gas using a surrogate value for industrial gas costs in 
Indonesia from the first quarter 2000 Gulf Indonesia Quarterly Report. 
For overhead, SG&A expenses and profit, the petitioners applied rates 
derived from the 1997 public annual reports of an Indonesian producer 
of subject merchandise, PT Krakatau Steel. These same financial ratios 
were used in the two recent antidumping investigations. See Notice of 
Preliminary Determination of Sales at Less Than Fair Value: Certain 
Hot-Rolled Carbon Steel Flat Products from Ukraine, 66 FR 22152 (May 3, 
2001) and Notice of Final Determination of Sales at Less Than Fair 
Value: Certain Small Diameter Carbon Alloy Seamless Standard, Line and 
Pressure Pipe from Romania, 65 FR 39125 (June 23, 2000).
    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. Therefore, based upon comparisons of EP to CV, we 
calculated an estimated dumping margin for Ukraine of 101.92 percent.

Venezuela

Export Price

    The petitioners based EP on an affidavit containing an offering 
price for products manufactured by CVG Siderurgica Del Orinoco C.A. 
(Sidor) during April through June of 2001. The petitioners selected a 
steel wire rod product with specifications commonly exported to the 
United States. See Petition Exhibit 3. In the absence of more 
definitive information, petitioners refer to the date of the offer as 
the date of sale. The affidavit with the sales price offer reflects the 
price offered to an unaffiliated customer. The petitioners deducted 
international freight and insurance, U.S. import duty and U.S. 
merchandise and processing fees to obtain a net U.S. price.

Normal Value

    With respect to NV, the petitioners provided home market prices 
that were obtained from foreign market research for grades and sizes of 
steel wire rod comparable to the products exported to the United States 
which serve as the basis for EP. The petitioners state that the home 
market price quotation was FOB plant and they only made an adjustment 
for home market credit expenses.
    The petitioners have provided information demonstrating reasonable 
grounds to believe or suspect that sales of steel wire rod steel in the 
home market were made at prices below the fully absorbed COP, within 
the meaning of section 773(b) of the Act, and requested that the 
Department conduct a country-wide sales-below-cost investigation.
    The August 31, 2001, petitions included factors to adjust labor 
costs. These factors were based on the differences in labor costs 
between the U.S. and the country in question, reflecting data that are 
recent and contemporaneous, but for periods prior to 2000 (including 
U.S. data from IA's website). In subsequent filings, petitioners 
calculated revised factors in an effort to account for inflation 
through 2000. We have used the factors from the August 31, 2001 
petitions. The petitions also included factors used to adjust natural 
gas and electricity costs. These factors were based on differences in 
costs between the United States and the country in question, reflecting 
recent, but pre-2000, annual data. In subsequent filings, petitioners 
calculated revised factors through use of consumer price indexes 
applied to the pre-2000 costs. Because these indexes are not specific 
to the factors in question, and do not account for other relevant 
variables (e.g., changes in exchange rates), we have used the factors 
as presented in the August 31, 2001 petitions.
    Pursuant to section 773(b)(3) of the Act, COP consists of COM, 
SG&A, and packing expenses. The petitioners calculated COM based on 
their own production experience, adjusted for known differences between 
costs incurred to produce steel wire rod in the United States and in 
Venezuela. To calculate SG&A and financial expenses, petitioners relied 
upon amounts reported in the 2000 consolidated income statement of 
Siderurgica Venezolana, a Venezuelan CASWR producer. Based upon a 
comparison of the prices of the foreign like product in the home market 
to the calculated COP of the product, we find reasonable grounds to 
believe or suspect that sales of the foreign like product were made 
below the COP, within the meaning of section 773(b)(2)(A)(i) of the 
Act. Accordingly, the Department is initiating a country-wide cost 
investigation.
    The estimated dumping margin for Venezuela based on a comparison 
between EP and home market price is 12.68 percent. Based upon the 
comparison of EP to CV, we calculated estimated dumping margins between 
19.37 percent and 21.02 percent.

Fair Value Comparisons

    Based on the data provided by the petitioners, there is reason to 
believe that imports of carbon and certain alloy steel wire rod from 
Brazil, Canada, Egypt, Germany, Indonesia, Mexico, Moldova, South 
Africa, Trinidad and Tobago, Ukraine, and Venezuela are being, or are 
likely to be, sold at less than fair value.

Allegations and Evidence of Material Injury and Causation

    The petitions allege that the U.S. industry producing the domestic 
like product is being materially injured, or is threatened with 
material injury, by reason of the individual and cumulated

[[Page 50173]]

imports of the subject merchandise sold at less than NV. The 
petitioners contend that the industry's injured condition is evident in 
the stagnation of U.S. producers' sales volumes and profits, the 
decline of their capacity utilization, the increase of U.S. inventories 
and closures of U.S. production facilities. 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, Material Injury 
section). In accordance with section 771(7)(G)(ii)(III) of the Act, 
which provides an exception to the mandatory cumulation provision for 
imports from any country designated as a beneficiary country under the 
Caribbean Basin Economic Recovery Act, we have considered the 
petitioners' allegation of injury with respect to Trinidad and Tobago 
independent of the allegations for each of the remaining countries 
named in the petition and found that the information provided satisfies 
the requirements (see Initiation Checklist, Material Injury section).

Initiation of Antidumping Investigations

    Based upon our examination of the petitions on carbon and certain 
alloy steel wire rod, and the petitioners' responses to our 
supplemental questionnaires 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 they meet the requirements of section 732 of the Act. See 
Initiation Checklist. Therefore, we are initiating antidumping duty 
investigations to determine whether imports of carbon and certain alloy 
steel wire rod from Brazil, Canada, Egypt, Germany, Indonesia, Mexico, 
Moldova, South Africa, Trinidad and Tobago, Ukraine, and Venezuela are 
being, or are likely to be, sold in the United States at less than fair 
value. Unless this deadline is postponed, 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 versions of the petition have been provided to the 
representatives of the governments of Brazil, Canada, Egypt, Germany, 
Indonesia, Mexico, Moldova, South Africa, Trinidad and Tobago, Ukraine, 
and Venezuela. 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 October 15, 2001, whether 
there is a reasonable indication that imports of carbon and certain 
alloy steel wire rod from Brazil, Canada, Egypt, Germany, Indonesia, 
Mexico, Moldova, South Africa, Trinidad and Tobago, Ukraine, and 
Venezuela 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: September 24, 2001.
Faryar Shirzad,
Assistant Secretary for Import Administration.
[FR Doc. 01-24621 Filed 10-1-01; 8:45 am]
BILLING CODE 3510-DS-P