[Federal Register Volume 76, Number 81 (Wednesday, April 27, 2011)]
[Notices]
[Pages 23548-23554]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-10220]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-975, A-201-840]


Galvanized Steel Wire From the People's Republic of China and 
Mexico: Initiation of Antidumping Duty Investigations

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

DATES: Effective Date: April 27, 2011.

FOR FURTHER INFORMATION CONTACT: Catherine Bertrand at (202) 482-3207 
(the People's Republic of China (the ``PRC'')), AD/CVD Operations, 
Office 9; or Angelica Mendoza at (202) 482-3019 (Mexico), AD/CVD 
Operations, Office 7, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

The Petitions

    On March 31, 2011, the Department of Commerce (the ``Department'') 
received petitions concerning imports of galvanized steel wire from the 
PRC and Mexico filed in proper form on behalf of Davis Wire Corporation 
(``Davis Wire''), Johnstown Wire Technologies, Inc., Mid-South Wire 
Company, Inc., National Standard, LLC, and Oklahoma Steel & Wire 
Company, Inc., (collectively, ``Petitioners''). See Petitions for the 
Imposition of Antidumping Duties on Galvanized Steel Wire from Mexico 
and Antidumping and Countervailing Duties on Galvanized Steel Wire from 
the People's Republic of China filed on March 31, 2011 (the 
``Petitions''). On April 6, 2011, the Department issued a request for 
additional information and clarification of certain areas of the 
Petitions. Petitioners filed a response to this request on April 11, 
2011 (hereinafter, ``Supplement to the PRC Petition,'' ``Supplement to 
the Mexico Petition,'' and ``Supplement to the AD/CVD Petitions,'' 
respectively). Based on a conversation with Department officials, 
Petitioners filed a further response on April 14, 2011 (hereinafter, 
``Second Supplement to the AD/CVD Petitions''). In addition they 
provided the Department with an additional required certification on 
April 15, 2011. See Certification Letter filed April 15, 2011.
    In accordance with section 732(b) of the Tariff Act of 1930, as 
amended (the ``Act''), Petitioners allege that imports of galvanized 
steel wire from the PRC and Mexico 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 threatening material injury to, an industry in the United States.
    The Department finds that Petitioners filed the Petitions on behalf 
of the domestic industry because Petitioners are interested parties as 
defined in section 771(9)(C) of the Act and have demonstrated 
sufficient industry support with respect to the antidumping duty 
investigations that Petitioners are requesting that the Department 
initiate (see ``Determination of Industry Support for the Petitions'' 
section below).

Period of Investigation

    The period of investigation (``POI'') for the investigation 
involving the PRC is July 1, 2010, through December 31, 2010. The POI 
for the investigation involving Mexico is January 1, 2010, through 
December 31, 2010. See 19 CFR 351.204(b)(1).

Scope of Investigations

    The product covered by these investigations is galvanized steel 
wire from the PRC and Mexico. For a full description of the scope of 
the investigations, please see the ``Scope of the Investigations,'' in 
Appendix I of this notice.

Comments on Scope of Investigations

    During our review of the Petitions, we discussed the scope with 
Petitioners to ensure that it is an accurate reflection of the products 
for which the domestic industry is seeking relief. Moreover, as 
discussed in the preamble to the Department's regulations (Antidumping 
Duties; Countervailing Duties; Final Rule, 62 FR 27296, 27323 (May 19, 
1997)), we are setting aside a period for interested parties to raise 
issues regarding product coverage. The Department encourages all 
interested parties to submit such comments by May 10, 2011, twenty 
calendar days from the signature date of this notice. All comments must 
be filed on the records of the PRC and Mexico antidumping duty 
investigations as well as the PRC countervailing duty investigation. 
Comments should be addressed to Import Administration's APO/Dockets 
Unit, 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 to consult with parties prior 
to the issuance of the preliminary determinations.

Comments on Product Characteristics for Antidumping Duty Questionnaires

    We are requesting comments from interested parties regarding the 
appropriate physical characteristics of galvanized steel wire to be 
reported in response to the Department's antidumping questionnaires. 
This information will be used to identify the key physical 
characteristics of the subject merchandise in order to more accurately 
report the relevant factors and costs of production, as well as to 
develop appropriate product comparison criteria.
    Interested parties may provide any information or comments that 
they feel are relevant to the development of an accurate listing of 
physical characteristics. Specifically, they may provide comments as to 
which characteristics are appropriate to use as 1) general product 
characteristics and 2) the product comparison criteria. We note that it 
is not always appropriate to use all product characteristics as product 
comparison criteria. We base product comparison criteria on meaningful 
commercial differences among products. In other words, while there may 
be some physical product characteristics utilized by manufacturers to 
describe galvanized steel wire, it may be that only a select few 
product characteristics take into account commercially meaningful 
physical characteristics. In addition, interested parties may comment 
on the order in which the physical characteristics should be used in 
product matching. Generally, the Department attempts to list the most 
important physical characteristics first and the least important 
characteristics last.
    In order to consider the suggestions of interested parties in 
developing and

[[Page 23549]]

issuing the antidumping duty questionnaires, we must receive comments 
at the above-referenced address by May 10, 2011. Additionally, rebuttal 
comments must be received by May 17, 2011.

Determination of Industry Support for the Petitions

    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: (i) At least 
25 percent of the total production of the domestic like product; and 
(ii) 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. Moreover, 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 Department 
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 to poll the ``industry.''
    Section 771(4)(A) of the Act defines the ``industry'' as the 
producers as a whole of a domestic like product. Thus, to determine 
whether a 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 a 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 law. See USEC, Inc. v. United States, 132 F. 
Supp. 2d 1, 8 (Ct. Int'l Trade 2001), citing Algoma Steel Corp., Ltd. 
v. United States, 688 F. Supp. 639, 644 (Ct. Int'l Trade 1988), aff'd 
865 F.2d 240 (Fed. Cir. 1989), cert. denied 492 U.S. 919 (1989).
    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).
    With regard to the domestic like product, Petitioners do not offer 
a definition of domestic like product distinct from the scope of the 
investigations. Based on our analysis of the information submitted on 
the record, we have determined that galvanized steel wire constitutes a 
single domestic like product and we have analyzed industry support in 
terms of that domestic like product. For a discussion of the domestic 
like product analysis in this case, see Antidumping Duty Investigation 
Initiation Checklist: Galvanized Steel Wire from the PRC (``PRC 
Initiation Checklist'') at Attachment II, and Antidumping Duty 
Investigation Initiation Checklist: Galvanized Steel Wire from Mexico 
(``Mexico Initiation Checklist'') at Attachment II, dated concurrently 
with this notice and on file in the Central Records Unit (``CRU''), 
Room 7046 of the main Department of Commerce building.
    In determining whether Petitioners have standing under section 
732(c)(4)(A) of the Act, we considered the industry support data 
contained in the Petitions with reference to the domestic like product 
as defined in the ``Scope of the Investigations,'' in Appendix I of 
this notice. To establish industry support, Petitioners provided their 
own 2010 production of the domestic like product, and compared this to 
the estimated total production of the domestic like product for the 
entire domestic industry. See Volume I of the Petitions, at I-3 through 
I-5 and Exhibits I-1 through I-5, Supplement to the AD/CVD Petitions, 
at 1, 7, and Exhibit (Supp-I)-7, and Second Supplement to the AD/CVD 
Petitions, at (Second Supp)-2, Exhibit (Second Supp)-2, and Second 
Revised Exhibit I-1; see also PRC Initiation Checklist at Attachment II 
and Mexico Initiation Checklist at Attachment II.
    On April 14, 2011, we received an industry support challenge from a 
Mexican producer of galvanized steel wire and its U.S. affiliate. See 
Letter from Deacero, titled ``Galvanized Steel Wire from Mexico--
Comments on Industry Support,'' dated April 14, 2011.\1\ Petitioner 
responded to this submission on April 18, 2011. See Letter from 
Petitioners, titled ``Petitioners' Response to Question about U.S. 
industry,'' dated April 18, 2011. Our review of the data provided in 
the Petitions, supplemental submissions, and other information readily 
available to the Department indicates that Petitioners have established 
industry support. See PRC Initiation Checklist at Attachment II and 
Mexico Initiation Checklist at Attachment II. First, the Petitions 
established support from domestic producers (or workers) accounting for 
more than 50 percent of the total production of the domestic like 
product and, as such, the Department is not required to take further 
action in order to evaluate industry support (e.g., polling). See 
section 732(c)(4)(D) of the Act; see also PRC Initiation Checklist at 
Attachment II and Mexico Initiation Checklist at Attachment II. Second, 
the domestic producers (or workers) have met the statutory criteria for 
industry support under section 732(c)(4)(A)(i) of the Act because the 
domestic producers (or workers) who support the Petitions account for 
at least 25 percent of the total production of the domestic like 
product. See PRC Initiation Checklist at Attachment II and Mexico 
Initiation Checklist at Attachment II. Finally, the domestic producers 
(or workers) have met the statutory criteria for industry support under 
section 732(c)(4)(A)(ii) of the Act because the domestic producers (or 
workers) who support the Petitions 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 Petitions. 
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 id.
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    \1\ On April 18, 2011, the Department placed Deacero's filing on 
the records of the AD and CVD petitions concerning the PRC. See 
Memorandum to the File from Norbert Gannon, Office of Policy, 
entitled, Petitions for the Imposition of Antidumping Duties on 
Imports of Galvanized Steel Wire from the People's Republic of China 
(the PRC) and Mexico and Countervailing Duties on Imports of 
Galvanized Steel Wire from the PRC--Deacero S.A. de C.V.'s April 14, 
2011, Letter to the Department of Commerce.
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    The Department finds that Petitioners filed the Petitions on behalf 
of the domestic industry because they are interested parties as defined 
in section 771(9)(C) of the Act and they have demonstrated sufficient 
industry support with respect to the antidumping duty investigations 
that they are requesting the Department initiate. See id.

[[Page 23550]]

Allegations and Evidence of Material Injury and Causation

    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 imports of the subject merchandise 
sold at less than normal value (``NV''). In addition, Petitioners 
allege that subject imports exceed the negligibility threshold provided 
for under section 771(24)(A) of the Act.
Petitioners contend that the industry's injured condition is 
illustrated by reduced market share, lost sales and revenues, reduced 
production, reduced shipments, reduced capacity utilization rate, 
underselling and price depression and suppression, reduced workforce, 
decline in financial performance, and an increase in import 
penetration. We have assessed the allegations and supporting evidence 
regarding material injury, threat of material injury, and causation, 
and we have determined that these allegations are properly supported by 
adequate evidence and meet the statutory requirements for initiation. 
See PRC Initiation Checklist at Attachment III and Mexico Initiation 
Checklist at Attachment III.

Allegations of Sales at Less Than Fair Value

    The following is a description of the allegations of sales at less 
than fair value upon which the Department based its decision to 
initiate these investigations of imports of galvanized steel wire from 
the PRC and Mexico. The sources of data for the deductions and 
adjustments relating to the U.S. price, the factors of production 
(``FOPs'') (for the PRC) and cost of production (``COP'') (for Mexico) 
are also discussed in the country-specific initiation checklists. See 
PRC Initiation Checklist at 6-10 and Mexico Initiation Checklist at 6-
10.

Export Price

The PRC

    For the PRC, Petitioners calculated export price (``EP'') based on 
offers for sale of galvanized steel wire by certain Chinese exporters/
resellers and declarations of lost U.S. sales by U.S. producers during 
the POI, as identified in two Declarations Regarding Lost U.S. Sales 
and four Declarations Regarding U.S. Sales Offers provided by 
Petitioners. See PRC Initiation Checklist at 6; see also Volume III of 
the Petitions at Exhibit III-5. Petitioners substantiated the U.S. 
price quotes with affidavits. See Supplement to the PRC Petition at 
Exhibit (Supp-III)-5. Based on stated sales and delivery terms, 
Petitioners deducted adjustments, charges and expenses associated with 
exporting and delivering to the U.S. customer, including brokerage and 
handling, ocean freight and insurance, U.S. duties and U.S. inland 
freight charges, and distributor mark-up, where appropriate. See PRC 
Initiation Checklist at 6; see also Volume III of the Petitions at III-
5, Exhibit III-5 and Exhibit III-6, and Supplement to the PRC Petition 
at (Supp-III)-11 and Exhibit (Supp-III)-6. Petitioners made no other 
adjustments. See PRC Initiation Checklist for additional details.

Mexico

    For Mexico, Petitioners based U.S. EP on offers of sale for major 
types of galvanized steel wire for delivery to U.S. customers during 
the POI. See Mexico Initiation Checklist at 7; see also Volume II of 
the Petitions at II-6 and Exhibits II-5 and II-6. The prices were 
listed on multiple declarations which were made by a senior marketing 
executive at Davis Wire. In each offer, the Davis Wire representative 
discussed certain prices for galvanized steel wire with these customers 
regarding potential sales. See Volume II of the Petitions at Exhibit 
II-5. In certain instances, the customer sourced galvanized steel wire 
from Davis Wire, but only after Davis Wire matched the price quote from 
the Mexican producer. In other instances, rather than source galvanized 
steel wire from Davis Wire, the customers decided to purchase 
galvanized steel wire imported from Mexico at prices listed on each 
declaration, which Petitioners used as the basis for U.S. price. See 
Supplement to the Mexico Petition at Exhibit (Supp-II)-5. Based on the 
stated sales and delivery terms, Petitioners then adjusted the U.S. 
prices to account for expenses associated with exporting and delivering 
the product to these specific U.S. customers (i.e., ocean freight and 
insurance, U.S. duties and U.S. inland freight charges, and distributor 
mark-up, where appropriate). See Mexico Initiation Checklist at 7; see 
also Volume II of the Petitions at page II-6 and Exhibits II-5 and II-
6.

Normal Value

The PRC

    Petitioners state that the Department has long treated the PRC as a 
non-market economy (``NME'') country and this designation remains in 
effect today. See Volume III of the Petitions at III-1 through III-2; 
see also Drill Pipe from the People's Republic of China: Final 
Determination of Sales at Less Than Fair Value and Critical 
Circumstances, 76 FR 1966, 1968 (January 11, 2011); see also Certain 
Seamless Carbon and Alloy Steel Standard, Line, and Pressure Pipe from 
the People's Republic of China: Final Determination of Sales at Less 
Than Fair Value and Critical Circumstances, in Part, 75 FR 57449, 57452 
(September 21, 2010).
    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 the PRC investigation. Accordingly, the 
NV of the product for the PRC investigation is appropriately based on 
FOPs valued in a surrogate market-economy (``ME'') country in 
accordance with section 773(c) of the Act. In the course of the PRC 
investigation, all parties, including the public, will have the 
opportunity to provide relevant information related to the issue of the 
PRC's NME status and the granting of separate rates to individual 
exporters.
    Petitioners claim that India is an appropriate surrogate country 
under section 773(c) of the Act because it is an ME country that is at 
a comparable level of economic development to the PRC and surrogate 
values data from India are available and reliable. Petitioners believe 
that India is a significant producer of merchandise under consideration 
and is a very significant producer of related steel wire products. 
Petitioners are not aware of significant production of galvanized steel 
wire among other potential surrogate countries, such as the 
Philippines, Indonesia, Thailand, Ukraine, and Peru. See Volume III of 
the Petitions at III-2 through III-3 and Exhibit III-1. Based on the 
information provided by Petitioners, we believe that it is appropriate 
to use India as a surrogate country for initiation purposes. After 
initiation of the investigation, interested parties will have the 
opportunity to submit comments regarding surrogate country selection 
and, pursuant to 19 CFR 351.301(c)(3)(i), will be provided an 
opportunity to submit publicly available information to value FOPs 
within 40 days after the date of publication of the preliminary 
determination.
    Petitioners calculated the NV and dumping margins for the U.S. 
price, discussed above, using the Department's NME methodology as 
required by 19 CFR 351.202(b)(7)(i)(C) and 19 CFR 351.408. Petitioners 
calculated NV based on consumption rates experienced by two non-
integrated U.S. producers. Petitioners assert that, to the best of 
Petitioners' knowledge, the

[[Page 23551]]

consumption rates of these two U.S. producers are very similar, if not 
identical, to the consumption of Chinese producers. See Volume III of 
the Petitions at III-3 and Exhibit III-2, and Supplement to the PRC 
Petition at (Supp-III)-1 through (Supp-III)-2.
    Petitioners valued by-product and most FOPs based on reasonably 
available, public surrogate country data, specifically, Indian import 
statistics from the Global Trade Atlas (``GTA''). See Volume III of the 
Petitions at III-4 and Exhibit III-3. Petitioners excluded from these 
import statistics values from countries previously determined by the 
Department to be NME countries, and from Indonesia, the Republic of 
Korea and Thailand, as the Department has previously excluded prices 
from these countries because they maintain broadly available, non-
industry-specific export subsidies. Finally, imports that were labeled 
as originating from an ``unspecified'' country were excluded from the 
average value, because the Department could not be certain that they 
were not from either an NME country or a country with generally 
available export subsidies.\2\ See Volume III of the Petitions at III-4 
and Exhibit III-3. For valuing other FOPs, Petitioners used sources 
selected by the Department in recent proceedings involving the PRC. See 
Volume III of the Petitions at III-4, and Exhibit III-3. In addition, 
Petitioners made Indian Rupee/U.S. dollar (``USD'') and Thai Baht/USD 
currency conversions using average exchange rates for the POI, based on 
Federal Reserve exchange rates. See Volume III of the Petitions at III-
4 and Exhibit III-3, and Supplement to the PRC Petition at Exhibit 
(Supp-III)-3. Petitioners determined labor costs using the labor 
consumption rates derived from two U.S. Producers. See Volume III of 
the Petitions at Exhibit III-2. Petitioners valued labor costs using 
the calculated wage rate in a recent review involving steel wire nails 
from China. See Volume III of the Petitions at Exhibit III-3, and 
Supplement to the PRC Petition at (Supp-III)-6. For purposes of 
initiation, the Department determines that the surrogate values used by 
Petitioners are reasonably available and, thus, acceptable for purposes 
of initiation.
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    \2\ See, e.g., Polyethylene Terephthalate Film, Sheet, and Strip 
from the People's Republic of China: Preliminary Determination of 
Sales at Less Than Fair Value, 73 FR 24552, 24559 (May 5, 2008), 
unchanged in Polyethylene Terephthalate Film, Sheet, and Strip from 
the People's Republic of China: Final Determination of Sales at Less 
Than Fair Value, 73 FR 55039 (September 24, 2008) (``PET Film'').
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    Petitioners determined electricity costs using the electricity 
consumption rates, in kilowatt hours, derived from two U.S. producers' 
experience. See Volume III of the Petitions at Exhibit III-2. 
Petitioners valued electricity using the Indian electricity rate 
reported by the Central Electric Authority of the Government of India, 
the source used in the fifth administrative review of Certain Frozen 
Warmwater Shrimp from the PRC. See Volume III of the Petitions at 
Exhibit III-3; citing Certain Frozen Warmwater Shrimp From the People's 
Republic of China: Preliminary Results and Preliminary Partial 
Rescission of the Fifth Antidumping Duty Administrative Review, 76 FR 
8338 (February 14, 2011) (``Certain Frozen Warmwater Shrimp from the 
PRC'').
    Petitioners determined water costs using the water consumption 
derived from two U.S. producers' experience. See Volume III of the 
Petitions at Exhibit III-2. Petitioners valued water based on 
information from the Maharashtra Industrial Development Corporation, 
the source used in the fifth administrative review of Certain Frozen 
Warmwater Shrimp from the PRC. See Volume III of the Petitions at 
Exhibit III-3.
    Petitioners determined natural gas costs using the natural gas 
consumption rates derived from two U.S. producers' experience. See 
Volume III of the Petitions at Exhibit III-2. Petitioners valued 
natural gas costs using the calculation performed by the Department in 
the fifth administrative review of Pure Magnesium from the PRC and 
converted the Thai Baht \3\ value using average exchange rates for the 
POI, based on Federal Reserve exchange rates. See Volume III of the 
Petitions at III-4 and Exhibit III-3; citing Pure Magnesium from the 
People's Republic of China: Final Results of Antidumping Duty 
Administrative Review, 73 FR 76336 (December 16, 2008).
---------------------------------------------------------------------------

    \3\ Petitioners did not place an Indian value for natural gas on 
the record of this proceeding.
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    Four financial statements were placed on the record for 
consideration to value factory overhead, selling, general and 
administrative (``SG&A''), and profit. Petitioners placed the financial 
statements of Indian producers Usha Martin Limited (``Usha Martin''), 
Tata Steel (``Tata''), and Sterling Tools Limited (``Sterling'') on the 
record. The Department placed the statement of Indian producer Visakha 
Wire Ropes Limited (``Visakha'') on the record.
    The Department has determined not to use Sterling Tools Limited 
(``Sterling'') for valuation of the financial ratios because its raw 
material input is steel bar and not wire rod. Sterling does not draw 
wire; therefore, its production process is not similar to that of 
galvanized steel wire producers because drawing wire rod into wire is a 
continuous process, whereas steel bar is a cut-to-length product.
    Tata and Usha Martin do not match the level of integration of the 
production experience used for the normal value calculation in the 
Petition, and benefit from subsidies the Department has previously 
found to be countervailable.\4\ However, they both make wire from wire 
rod and produce comparable merchandise using a similar production 
process. We also find that Visakha's production process is similar to 
the production experience used for the normal value calculation in the 
Petition in that it is the same level of integration and Visakha draws 
wire from wire rod. Although, Petitioners argued that the Visakha 
statement appears to be incomplete the Department notes that it is our 
practice to only disregard incomplete financial statements as a basis 
for calculating surrogate financial ratios where the statement is 
missing key sections, such as sections of the auditor's report, that 
are vital to our analysis and calculations. See Wooden Bedroom 
Furniture from the People's Republic of China: Final Results of the 
2004-2005 Semi-Annual New Shipper Reviews, 71 FR 70739 (December 6, 
2006), and accompanying Issues and Decision Memorandum at Comment 2. 
Here, we find that the Visakha statement appears to contain all of the 
essential components of an audited financial statement, and Petitioners 
have not alleged that any specific material information is missing. We 
recognize the statements of Usha Martin, Tata and Visakha financial 
statements are not an exact match to the production experience of 
galvanized steel wire producers. However, after considering all 
available information on the record, the Department determines that the 
financial statements of Usha Martin, Tata, and Visakha are sufficiently 
representative to value the surrogate financial ratios for galvanized 
steel wire.
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    \4\ Duty Entitlement Passbook Scheme.
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    Further, the Department has a preference for using multiple 
financial statements in order to determine surrogate financial ratios 
for manufacturing overhead, SG&A expenses, and profit where no single 
source on the record has proven to be entirely representative. See 
Certain Oil Country Tubular Goods from the People's Republic of China: 
Final Determination of Sales at Less Than Fair Value, Affirmative Final

[[Page 23552]]

Determination of Critical Circumstances and Final Determination of 
Targeted Dumping, 75 FR 20335 (April 19, 2010), and accompanying Issues 
and Decision Memorandum at Comment 13 (``OCTG Final''). Accordingly, we 
are averaging the surrogate financial ratios of Usha Martin, Tata, and 
Visakha and based on a simple average of these three financial 
statements, we have revised the margins calculated by Petitioners. See 
PRC Initiation Checklist at Appendix V.

Mexico

    Petitioners calculated NV for galvanized steel wire using, 
initially, information they were able to obtain about home market 
prices. See Mexico Initiation Checklist at 8; see also Volume II of the 
Petitions at II-1 through II-2 and Exhibit II-1; see also Supplement to 
the Mexico Petition at Exhibit (Supp-II)-1. However, because 
Petitioners demonstrated that there are reasonable grounds to believe 
that these home market prices were below cost, they based NV on 
constructed value (``CV'') in accordance with section 773(e)(1) of the 
Act. See Volume II of the Petitions at II-4; see also the ``Normal 
Value Based on Constructed Value'' section of this notice.

Sales-Below-Cost Allegation

    Petitioners have provided information demonstrating reasonable 
grounds to believe or suspect that sales of galvanized steel wire in 
the Mexican 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 
Statement of Administrative Action (``SAA''), submitted to Congress in 
connection with the interpretation and application of the Uruguay Round 
Agreements Act (``URAA''), states that an allegation of sales below COP 
need not be specific to individual exporters or producers. See SAA, 
H.R. Doc. No. 103-316 at 833 (1994). The SAA, at 833, states that 
``Commerce will consider allegations of below-cost sales in the 
aggregate for a foreign country, just as Commerce currently considers 
allegations of sales at less than fair value on a country-wide basis 
for purposes of initiating an antidumping investigation.''
    Further, the SAA provides that section 773(b)(2)(A) of the Act 
retains the requirement that the Department have ``reasonable grounds 
to believe or suspect'' that below-cost sales have occurred before 
initiating such an investigation. Reasonable grounds exist when an 
interested party provides specific factual information on costs and 
prices, observed or constructed, indicating that sales in the foreign 
market in question are at below-cost prices. Id.

Cost of Production

    Pursuant to section 773(b)(3) of the Act, COP consists of the cost 
of manufacturing (``COM''); SG&A expenses; financial expenses; and 
packing expenses. Petitioners calculated raw materials, labor, energy, 
and packing costs based on the average production experience of two 
U.S. producers of galvanized steel wire adjusted for known differences 
to manufacture galvanized steel wire in Mexico using publicly available 
data. See Mexico Initiation Checklist at 8-10. For further discussion 
regarding Petitioners' calculation of raw materials, labor, energy, and 
packing, see the ``Normal Value Based on Constructed Value'' section of 
this notice. Petitioners could not find financial statements for a 
Mexican manufacturer that produced comparable merchandise which did not 
have a fully integrated manufacturing process, and therefore, reported 
zero overhead expense in calculating COP and CV. While this is a 
conservative approach for the initiation, if the Department needs to 
rely on the Petition rate as facts available during the proceeding, it 
may be necessary to calculate an overhead cost using some reasonable 
alternative in calculating COP and CV. To calculate the SG&A and 
profit, Petitioners relied on the fiscal year 2009 financial statements 
of a Mexican producer of comparable merchandise. See the ``Normal Value 
Based on Constructed Value'' section of this notice; see also Volume II 
of the Petitions at II-5 and Exhibit II-3; Second Supplement to the AD/
CVD Petitions at (Second SUPP)-3 and Revised Exhibits II-4 and II-6.
    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.

Normal Value Based on Constructed Value

    Because Petitioners alleged sales below cost, pursuant to sections 
773(a)(4), 773(b) and 773(e) of the Act, they calculated NV based on 
CV. Petitioners based CV on the average of two U.S. producers' actual 
consumption of direct materials, direct labor, energy, and general 
expenses, plus amounts for profit and packing, for several major types 
of galvanized steel wire. See Volume II of the Petitions at II-4 and 
Exhibit I-2. Believing the consumption experience of domestic U.S. 
producers to be very similar to consumption in the Mexican galvanized 
steel wire market, due to the little difference in production processes 
between Mexican and U.S. galvanized steel wire producers, Petitioners 
calculated raw materials, labor, energy, and packing costs on that 
experience. See Volume II of the Petitions at II-4 and footnote 8. 
Petitioners provided Mexican import statistics from the GTA to 
demonstrate the value of each raw material input for purposes of 
calculating direct materials. See Volume II of the Petitions at Exhibit 
II-3; see also Supplement to the Mexico Petition at Exhibit (Supp-II)-
3. Petitioners based cost of labor on expected wages in Mexico as 
recorded on the Import Administration Web site. See Volume II of the 
Petitions at II-5. As discussed in the ``Cost of Production'' section 
of this notice, Petitioners reported zero overhead expense in 
calculating COP and CV. Petitioners provided financial statements for 
the year 2009 from Ternium Mexico S.A. de C.V. (Ternium), a Mexican 
manufacturer of comparable merchandise, for the calculation of SG&A and 
profit. See Volume II of the Petitions at II-5 and Exhibit II-3; see 
also Supplement to the Mexico Petition at (Supp-II)-5 through (Supp-
II)-6; Second Supplement to the AD/CVD Petitions at (Second Supp)-3 and 
Revised Exhibits II-4 and II-6; see also Mexico Initiation Checklist.

Fair Value Comparisons

    Based on the data provided by Petitioners, there is reason to 
believe that imports of galvanized steel wire from the PRC and Mexico 
are being, or are likely to be, sold in the United States at less than 
fair value. Based on a comparison of EPs and NV calculated in 
accordance with section 773(c) of the Act, the estimated dumping 
margins for galvanized steel wire from the PRC, using the Department's 
revised financial ratios, range from 171 percent to 235 percent. See 
PRC Initiation Checklist at 10 and Appendix V. Based on a comparison of 
EPs and CV calculated in accordance with section 773(a)(4) of the Act, 
the estimated dumping margins for galvanized steel wire from Mexico 
range from 166 percent to 244 percent. See Mexico Initiation Checklist 
at 11; see also Second Supplement to the AD/CVD Petitions at Revised 
Exhibit II-6.

[[Page 23553]]

Initiation of Antidumping Investigations

    Based upon the examination of the Petitions on galvanized steel 
wire from the PRC and Mexico, the Department finds that the Petitions 
meet the requirements of section 732 of the Act. Therefore, we are 
initiating antidumping duty investigations to determine whether imports 
of galvanized steel wire from the PRC and Mexico are being, or are 
likely to be, sold in the United States at less than fair value. In 
accordance with section 733(b)(1)(A) of the Act and 19 CFR 
351.205(b)(1), unless postponed, we will make our preliminary 
determinations no later than 140 days after the date of these 
initiations.

Targeted Dumping Allegations

    On December 10, 2008, the Department issued an interim final rule 
for the purpose of withdrawing 19 CFR 351.414(f) and (g), the 
regulatory provisions governing the targeted dumping analysis in 
antidumping duty investigations, and the corresponding regulation 
governing the deadline for targeted dumping allegations, 19 CFR 
351.301(d)(5). See Withdrawal of the Regulatory Provisions Governing 
Targeted Dumping in Antidumping Duty Investigations, 73 FR 74930 
(December 10, 2008). The Department stated that ``{w{time} ithdrawal 
will allow the Department to exercise the discretion intended by the 
statute and, thereby, develop a practice that will allow interested 
parties to pursue all statutory avenues of relief in this area.'' See 
id. at 74931.
    In order to accomplish this objective, if any interested party 
wishes to make a targeted dumping allegation in either of these 
investigations pursuant to section 777A(d)(1)(B) of the Act, such 
allegations are due no later than 45 days before the scheduled date of 
the country-specific preliminary determination.

Respondent Selection

The PRC

    After considering the large number of producers and exporters of 
galvanized steel wire from the PRC identified by Petitioners, and 
considering the resources that must be utilized by the Department to 
mail quantity and value questionnaires to all 279 identified producers 
and exporters--including entering each address in a shipping handler's 
Web site, researching companies' addresses to ensure correctness, 
organizing mailings, and following up on potentially undeliverable 
mailings--the Department has thus determined that we do not have 
sufficient administrative resources to mail quantity and value 
questionnaires to all 279 identified producers and exporters. See 
Volume I of the Petitions at Exhibit I-10, and Supplement to the PRC 
Petition, at Exhibit (Supp-III)-I. Therefore, the Department has 
determined to limit the number of quantity and value questionnaires it 
will send out to exporters and producers based on U.S. Customs and 
Border Protection (``CBP'') data for U.S. imports under the Harmonized 
Tariff Schedule of the United States (``HTSUS'') numbers 7217.20.3000, 
7217.20.4510, 7217.20.4520, 7217.20.4530, 7217.20.4540, 7217.20.4550, 
7217.20.4560, 7217.20.4570, and 7217.20.4580. These are the same HTSUS 
numbers used by Petitioners to demonstrate that dumping occurred during 
the POI, and closely match the subject merchandise. See Volume I of the 
Petitions at Exhibit I-8 and Exhibit I-12; see also Appendix I of this 
notice. The Department will review the CBP data and comments from 
parties on the CBP data to determine how many quantity and value 
questionnaires we will mail to producers and exporters of galvanized 
steel wire from the PRC.
    The Department requires that the respondents submit a response to 
both the quantity and value questionnaire and the separate-rate 
application by the deadline noted below in order to receive 
consideration for separate-rate status. See Circular Welded Austenitic 
Stainless Pressure Pipe from the People's Republic of China: Initiation 
of Antidumping Duty Investigation, 73 FR 10221, 10225 (February 26, 
2008); Initiation of Antidumping Duty Investigation: Certain Artist 
Canvas From the People's Republic of China, 70 FR 21996, 21999 (April 
28, 2005). Although the Department is limiting the number of quantity 
and value questionnaires it will send out, exporters and producers of 
galvanized steel wire that do not receive quantity and value 
questionnaires that intend to submit a response can obtain a copy from 
the Import Administration Web site. The Department will post the 
quantity and value questionnaire along with the filing instructions on 
the Import Administration Web site at http://ia.ita.doc.gov/ia-highlights-and-news.html and a response to the quantity and value 
questionnaire is due no later than May 25, 2011.

Mexico

    Following standard practice in AD investigations involving ME 
countries, the Department intends to select respondents based on CBP 
data for U.S. imports under the HTSUS numbers 7217.20.30 and 
7217.20.45. We intend to release the CBP data under Administrative 
Protective Order (``APO'') to all parties with access to information 
protected by APO within five days of publication of this Federal 
Register notice and make our decision regarding respondent selection 
within 20 days of publication of this notice. The Department invites 
comments regarding the CBP data and respondent selection within seven 
days of publication of this Federal Register notice.
    Interested parties must submit applications for disclosure under 
APO in accordance with 19 CFR 351.305. Instructions for filing such 
applications may be found on the Department's Web site at http://ia.ita.doc.gov/apo.

Separate Rates

    In order to obtain separate-rate status in NME investigations, 
exporters and producers must submit a separate-rate status application. 
See Policy Bulletin 05.1: Separate-Rates Practice and Application of 
Combination Rates in Antidumping Investigations involving Non-Market 
Economy Countries (April 5, 2005) (``Separate Rates and Combination 
Rates Bulletin''), available on the Department's Web site at http://ia.ita.doc.gov/policy/bull05-1.pdf. Based on our experience in 
processing the separate-rate applications in previous antidumping duty 
investigations, we have modified the application for this investigation 
to make it more administrable and easier for applicants to complete. 
See, e.g., Initiation of Antidumping Duty Investigation: Certain New 
Pneumatic Off-the-Road Tires From the People's Republic of China, 72 FR 
43591, 43594-95 (August 6, 2007). The specific requirements for 
submitting the separate-rate application in this investigation are 
outlined in detail in the application itself, which will be available 
on the Department's Web site at http://ia.ita.doc.gov/ia-highlights-and-news.html on the date of publication of this initiation notice in 
the Federal Register. The separate-rate application will be due 60 days 
after publication of this initiation notice. For exporters and 
producers who submit a separate-rate status application and 
subsequently are selected as mandatory respondents, these exporters and 
producers will no longer be eligible for consideration for separate 
rate status unless they respond to all parts of the questionnaire as 
mandatory respondents. As noted in the ``Respondent Selection'' section 
above, the Department requires that

[[Page 23554]]

respondents submit a response to both the quantity and value 
questionnaire and the separate-rate application by the respective 
deadlines in order to receive consideration for separate-rate status. 
The quantity and value questionnaire will be available on the 
Department's Web site at http://ia.ita.doc.gov/ia-highlights-and-news.html on the date of the publication of this initiation notice in 
the Federal Register.

Use of Combination Rates in an NME Investigation

    The Department will calculate combination rates for certain 
respondents that are eligible for a separate rate in this 
investigation. The Separate Rates and Combination Rates Bulletin 
states:

{w{time} hile continuing the practice of assigning separate rates 
only to exporters, all separate rates that the Department will now 
assign in its NME investigations will be specific to those producers 
that supplied the exporter during the period of investigation. Note, 
however, that one rate is calculated for the exporter and all of the 
producers which supplied subject merchandise to it during the period 
of investigation. This practice applies both to mandatory 
respondents receiving an individually calculated separate rate as 
well as the pool of non-investigated firms receiving the weighted-
average of the individually calculated rates. This practice is 
referred to as the application of ``combination rates'' because such 
rates apply to specific combinations of exporters and one or more 
producers. The cash-deposit rate assigned to an exporter will apply 
only to merchandise both exported by the firm in question and 
produced by a firm that supplied the exporter during the period of 
investigation.

See Separate Rates and Combination Rates Bulletin, at 6 (emphasis 
added).

Distribution of Copies of the Petitions

    In accordance with section 732(b)(3)(A) of the Act and 19 CFR 
351.202(f), copies of the public versions of the Petitions have been 
provided to the representatives of the Governments of the PRC and 
Mexico. Because of the large number of producers/exporters identified 
in the Petitions, the Department considers the service of the public 
version of the Petitions to the foreign producers/exporters satisfied 
by the delivery of the public versions of the Petitions to the 
Governments of the PRC and Mexico, consistent with 19 CFR 
351.203(c)(2).

ITC 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 preliminarily determine, no later than May 16, 2011, 
whether there is a reasonable indication that imports of galvanized 
steel wire from the PRC and Mexico are materially injuring, or 
threatening material injury to a U.S. industry. A negative ITC 
determination with respect to any country will result in the 
investigation being terminated for that country; otherwise, these 
investigations will proceed according to statutory and regulatory time 
limits.

Notification to Interested Parties

    Interested parties must submit applications for disclosure under 
APO in accordance with 19 CFR 351.305. On January 22, 2008, the 
Department published Antidumping and Countervailing Duty Proceedings: 
Documents Submission Procedures; APO Procedures (73 FR 3634). Parties 
wishing to participate in these investigations should ensure that they 
meet the requirements of these procedures (e.g., the filing of letters 
of appearance as discussed at 19 CFR 351.103(d)).
    Any party submitting factual information in an AD/CVD proceeding 
must certify to the accuracy and completeness of that information. See 
section 782(b) of the Act. Parties are hereby reminded that revised 
certification requirements are in effect for company/government 
officials as well as their representatives in all segments of any AD/
CVD proceedings initiated on or after March 14, 2011. See Certification 
of Factual Information to Import Administration During Antidumping and 
Countervailing Duty Proceedings: Interim Final Rule, 76 FR 7491 
(February 10, 2011) (Interim Final Rule) amending 19 CFR 351.303(g)(1) 
& (2). The formats for the revised certifications are provided at the 
end of the Interim Final Rule. The Department intends to reject factual 
submissions in any proceeding segments initiated on or after March 14, 
2011, if the submitting party does not comply with the revised 
certification requirements.
    This notice is issued and published pursuant to section 777(i) of 
the Act.

    Dated: April 20, 2011.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.

Appendix I

Scope of the Investigations

    The scope of these investigations covers galvanized steel wire 
which is a cold-drawn carbon quality steel product in coils, of 
solid, circular cross section with an actual diameter of 0.5842 mm 
(0.0230 inch) or more, plated or coated with zinc (whether by hot-
dipping or electroplating).
    Steel products to be included in the scope of these 
investigations, regardless of Harmonized Tariff Schedule of the 
United States (``HTSUS'') definitions, are products in which: (1) 
Iron predominates, by weight, over each of the other contained 
elements; (2) the carbon content is two percent or less, by weight; 
and (3) none of the elements listed below exceeds the quantity, by 
weight, respectively indicated:
     1.80 percent of manganese, or
     1.50 percent of silicon, or
     1.00 percent of copper, or
     0.50 percent of aluminum, or
     1.25 percent of chromium, or
     0.30 percent of cobalt, or
     0.40 percent of lead, or
     1.25 percent of nickel, or
     0.30 percent of tungsten, or
     0.02 percent of boron, or
     0.10 percent of molybdenum, or
     0.10 percent of niobium, or
     0.41 percent of titanium, or
     0.15 percent of vanadium, or
     0.15 percent of zirconium.

    The products subject to these investigations are currently 
classified in subheadings 7217.20.30 and 7217.20.45 of the HTSUS 
which cover galvanized wire of all diameters and all carbon content. 
Galvanized wire is reported under statistical reporting numbers 
7217.20.3000, 7217.20.4510, 7217.20.4520, 7217.20.4530, 
7217.20.4540, 7217.20.4550, 7217.20.4560, 7217.20.4570, and 
7217.20.4580. These products may also enter under HTSUS subheadings 
7229.20.0015, 7229.90.5008, 7229.90.5016, 7229.90.5031, and 
7229.90.5051. Although the HTSUS subheadings are provided for 
convenience and Customs purposes, the written description of the 
merchandise is dispositive.

[FR Doc. 2011-10220 Filed 4-26-11; 8:45 am]
BILLING CODE 3510-DS-P