Notice of Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Certain Cold-Rolled Flat-Rolled Carbon-Quality Steel Products From Indonesia

Federal RegisterJan 7, 2000

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DEPARTMENT OF COMMERCE

International Trade Administration

[A-560-807]

Notice of Preliminary Determination of Sales at Less Than Fair

Value and Postponement of Final Determination: Certain Cold-Rolled

Flat-Rolled Carbon-Quality Steel Products From Indonesia

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: January 7, 2000.

FOR FURTHER INFORMATION CONTACT: Arland DiGirolamo or Gabriel Adler at

(202) 482-1278 or (202) 482-1442, respectively; Import Administration,

Room 1870, International Trade Administration, U.S. Department of

Commerce, 14th Street and Constitution Avenue, NW, Washington, DC

20230.

The Applicable Statute and Regulations

Unless otherwise indicated, all citations to the statute are

references to the provisions effective January 1, 1995, the effective

date of the amendments made to the Tariff Act of 1930 (the Act) by the

Uruguay Round Agreements Act (URAA). In addition, unless otherwise

indicated, all citations to Department of Commerce (Department)

regulations refer to the regulations codified at 19 CFR part 351 (April

1999).

Preliminary Determinations

We preliminarily determine that cold-rolled flat-rolled carbon-

quality steel products (cold-rolled steel products) from Indonesia are

being sold, or are likely to be sold, in the United States at less than

fair value (LTFV), as provided in section 733 of the Act. The estimated

margins of sales at LTFV are shown in the Suspension of Liquidation

section of this notice.

Case History

This investigation was initiated on June 21, 1999.1 See

Initiation of Antidumping Duty Investigations: Certain Cold-Rolled

Flat-Rolled Carbon-Quality Steel Products from Argentina, Brazil, the

People's Republic of China, Indonesia, Japan, the Russian Federation,

Slovakia, South Africa, Taiwan, Thailand, Turkey, and Venezuela, 64 FR

34194 (June 25, 1999) (Initiation Notice). Since the initiation of the

investigation, the following events have occurred.

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\1\ The petitioners in this investigation are Bethlehem Steel

Corporation, Gulf States Steel, the Independent Steelworkers Union,

Ispat Inland Steel, LTV Steel Company Inc., National Steel

Corporation (not a petitioner in the Japan case), Steel Dynamics,

U.S. Steel Group (a unit of USX Corporation), Weirton Steel

Corporation, and United Steelworkers of America.

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The Department issued an antidumping questionnaire to PT Krakatau,

the only known producer of cold rolled steel products in Indonesia, on

June 22, 1999 (Section A) and July 9, 1999 (Sections B through

D).2 We issued supplemental questionnaires where

appropriate. PT Krakatau submitted timely responses to the Department's

questionnaires.

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\2\ Section A of the questionnaire requests general information

concerning a company's corporate structure and business practices,

the merchandise under investigation that it sells, and the manner in

which it sells that merchandise in all of its markets. Section B

requests a complete listing of all home market sales, or, if the

home market is not viable, of sales in the most appropriate third-

country market. Section C requests a complete listing of U.S. sales.

Section D requests information on the cost of production (COP) of

the foreign like product and the constructed value (CV) of the

merchandise under investigation.

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On July 16, 1999, the United States International Trade Commission

(the ITC) preliminarily determined that there is a reasonable

indication that imports of the products under investigation are

materially injuring the United States industry. See Certain Cold-Rolled

Steel Products From Argentina, Brazil, China, Indonesia, Japan, Russia,

Slovakia, South Africa, Taiwan, Thailand, Turkey, and Venezuela:

Determinations, 64 FR 41458 (July 30, 1999).

On November 5, 1999, the Department postponed the preliminary

determination in this case for 30 days in accordance with section

733(c) of the Act and 19 CFR 351.205(b)(2). See Notice of Postponement

of Preliminary Antidumping Duty Determinations: Certain Cold-Rolled

Flat-Rolled Carbon-Quality Steel Products from Indonesia, the People's

Republic of China, Taiwan and Turkey, 64 FR 61825 (November 15, 1999).

Postponement of Final Determination and Extension of Provisional

Measures

Section 735(a)(2) of the Act provides that a final determination

may be postponed until not later than 135 days after the date of the

publication of the preliminary determination if, in the event of an

affirmative preliminary determination, a request for such postponement

is made by exporters who account for a significant proportion of

[[Page 1104]]

exports of the subject merchandise or if, in the event of a negative

preliminary determination, a request for such postponement is made by

the petitioners. The Department's regulations, at 19 CFR 351.210(e)(2),

require that requests by respondents for postponement of a final

determination be accompanied by a request for extension of provisional

measures from a four-month period to not more than six months. On

October 22, 1999, PT Krakatau filed a request for the postponement of

the final determination in the event of an affirmative preliminary

determination. On October 28, PT Krakatau filed a request for the

extension of provisional measures from a four-month period to not more

than six months in the event that the Department postpones the final

determination. Accordingly, since we have made an affirmative

preliminary determination, we have postponed the final determination

until not later than 135 days after the date of the publication of the

preliminary determination.

Period of Investigation

The period of the investigation (POI) is April 1, 1998 through

March 31, 1999. This period corresponds to the respondent's four most

recent fiscal quarters prior to the month of the filing of the petition

(i.e., June 1999).

Scope of Investigation

For purposes of this investigation, the products covered are

certain cold-rolled (cold-reduced) flat-rolled carbon-quality steel

products, neither clad, plated, nor coated with metal, but whether or

not annealed, painted, varnished, or coated with plastics or other non-

metallic substances, both in coils, 0.5 inch wide or wider, (whether or

not in successively superimposed layers and/or otherwise coiled, such

as spirally oscillated coils), and also in straight lengths, which, if

less than 4.75 mm in thickness having a width that is 0.5 inch or

greater and that measures at least 10 times the thickness; or, if of a

thickness of 4.75 mm or more, having a width exceeding 150 mm and

measuring at least twice the thickness. The products described above

may be rectangular, square, circular or other shape and include

products of either rectangular or non-rectangular cross-section where

such cross-section is achieved subsequent to the rolling process (i.e.,

products which have been ``worked after rolling'')--for example,

products which have been beveled or rounded at the edges.

Specifically included in this scope are vacuum degassed, fully

stabilized (commonly referred to as interstitial-free (IF)) steels,

high strength low alloy (HSLA) steels, and motor lamination steels. IF

steels are recognized as low carbon steels with micro-alloying levels

of elements such as titanium and/or niobium added to stabilize carbon

and nitrogen elements. HSLA steels are recognized as steels with micro-

alloying levels of elements such as chromium, copper, niobium,

titanium, vanadium, and molybdenum. Motor lamination steels contain

micro-alloying levels of elements such as silicon and aluminum.

Steel products included in the scope of this investigation,

regardless of definitions in the Harmonized Tariff Schedules of the

United States (HTSUS), are products in which: (1) Iron predominates, by

weight, over each of the other contained elements; (2) the carbon

content is 2 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

2.25 percent of silicon, or

1.00 percent of copper, or

0.50 percent of aluminum, or

1.25 percent of chromium, or

0.30 percent of cobalt, or

0.40 percent of lead, or

1.25 percent of nickel, or

0.30 percent of tungsten, or

0.10 percent of molybdenum, or

0.10 percent of niobium (also called columbium), or

0.15 percent of vanadium, or

0.15 percent of zirconium.

All products that meet the written physical description, and in

which the chemistry quantities do not exceed any one of the noted

element levels listed above, are within the scope of this investigation

unless specifically excluded. The following products, by way of

example, are outside and/or specifically excluded from the scope of

this investigation:

SAE grades (formerly also called AISI grades) above 2300;

Ball bearing steels, as defined in the HTSUS;

Tool steels, as defined in the HTSUS;

Silico-manganese steel, as defined in the HTSUS;

Silicon-electrical steels, as defined in the HTSUS, that are

grain-oriented;

Silicon-electrical steels, as defined in the HTSUS, that are

not grain-oriented and that have a silicon level exceeding 2.25

percent;

All products (proprietary or otherwise) based on an alloy ASTM

specification (sample specifications: ASTM A506, A507);

Silicon-electrical steels, as defined in the HTSUS, that are

not grain-oriented and that have a silicon level less than 2.25

percent, and (a) fully-processed, with a core loss of less than 0.14

watts/pound per mil (.001 inches), or (b) semi-processed, with core

loss of less than 0.085 watts/pound per mil (.001 inches);

Certain shadow mask steel, which is aluminum killed cold-

rolled steel coil that is open coil annealed, has an ultra-flat,

isotropic surface, and which meets the following characteristics:

Thickness: 0.001 to 0.010 inches

Width: 15 to 32 inches

Chemical Composition:

------------------------------------------------------------------------

Element................................................ C

Weight %............................................... Certain flapper valve steel, which is hardened and tempered,

surface polished, and which meets the following characteristics:

Thickness: 1.0 mm

Width: 152.4 mm

Chemical Composition:

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Element........................... C Si Mn P S

Weight %.......................... 0.90-1.05 0.15-0.35 0.30-0.50 0.03 0.006

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[[Page 1105]]

Mechanical Properties

------------------------------------------------------------------------

Tensile Strength....................... 162 Kgf/mm \2\

Hardness............................... 475 Vickers

hardness number

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Physical Properties

------------------------------------------------------------------------

Flatness............................... 0.0

Oxide Inclusion......................................... 0.0

------------------------------------------------------------------------

Compressive Stress: 10 to 40 Kgf/mm\2\.

Surface Roughness

------------------------------------------------------------------------

Roughness

Thickness (mm) (m)

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t 0.209...................................... Rz 0.5

0.209 0.310.............................. Rz 0.6

0.310 0.440.............................. Rz 0.7

0.440 0.560.............................. Rz 0.8

0.560 1.0

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Certain ultra thin gauge steel strip, which meets the

following characteristics:

Thickness: 0.100 mm +/-7%

Width: 100 to 600 mm

Chemical Composition

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Element........................ C Mn P S Al Fe

Weight %....................... 0.07 0.2-0.5 0.05 0.05 0.07 Balance

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Mechanical Properties

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Hardness............................... Full Hard (Hv 180 minimum)

Total Elongation....................... 0.3 micron

Camber (in 2.0 m)...................... 0.5 mm

Edge Burr.............................. Certain silicon steel, which meets the following

characteristics:

Thickness: 0.024 inches +/-.0015 inches

Width: 33 to 45.5 inches

Chemical Composition

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Element........................ C Mn P S Si Al

Min. Weight %.................. 0.65

Max. Weight %.................. 0.004 0.4 0.09 0.009 0.4

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Mechanical Properties

------------------------------------------------------------------------

Hardness............................... B 60-75 (AIM 65)

------------------------------------------------------------------------

[[Page 1106]]

Physical Properties

------------------------------------------------------------------------

Finish................................. Smooth (30-60 microinches).

Gamma Crown (in 5 inches).............. 0.0005 inches, start measuring

\1/4\ inch from slit edge.

Flatness............................... 20 I-UNIT max.

Coating................................ C3A-.08A max. (A2 coating

acceptable).

Camber (in any 10 feet)................ \1/16\ inch.

Coil Size I.D.......................... 20 inches.

------------------------------------------------------------------------

Magnetic Properties

------------------------------------------------------------------------

Core Loss (1.5T/60 Hz)................. 3.8 Watts/Pound max.

NAAS

Permeability (1.5T/60 Hz).............. 1700 gauss/oersted typical.

NAAS................................... 1500 minimum.

------------------------------------------------------------------------

Certain aperture mask steel, which has an ultra-flat surface

flatness and which meets the following characteristics:

Thickness: 0.025 to 0.245 mm

Width: 381-1000 mm

Chemical Composition

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Element............................. C N Al

Weight %............................ Certain tin mill black plate, annealed and temper-rolled,

continuously cast, which meets the following characteristics:

Chemical Composition

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Element...................... C Mn P S Si Al As Cu B N

Min. Weight %................ 0.02 0.20 0.03 0.003

Max. Weight %................ 0.06 0.40 0.02 0.023 0.03 0.08 0.02 0.08 0.008 (Aiming

(Aiming (Aiming 0.005)

0.018 0.05)

Max.)

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Non-metallic Inclusions: Examination with the S.E.M. shall not

reveal individual oxides >1 micron (0.000039 inches) and inclusion

groups or clusters shall not exceed 5 microns (0.000197 inches) in

length.

Surface Treatment as follows:

The surface finish shall be free of defects (digs, scratches, pits,

gouges, slivers, etc.) and suitable for nickel plating.

Surface Finish

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Roughness, RA Microinches (Micrometers)

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Aim Min. Max.

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Extra Bright........................ 5 (0.1) 0 (0) 7 (0.2)

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Certain full hard tin mill black plate, continuously cast,

which meets the following characteristics:

Chemical Composition

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Element...................... C Mn P S Si Al As Cu B N

Min. Weight %................ 0.02 0.20 .......... ........ .......... 0.03 .......... .......... .......... 0.003

Max. Weight %................ 0.06 0.40 0.02 0.023 0.03 0.08 0.02 0.08 .......... 0.008 (Aiming

(Aiming (Aiming 0.005)

0.018 0.05)

Max.)

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Non-metallic Inclusions: Examination with the S.E.M. shall not

reveal individual oxides > 1 micron (0.000039 inches) and inclusion

groups or clusters shall not exceed 5 microns (0.000197 inches) in

length.

Surface Treatment as follows:

The surface finish shall be free of defects (digs, scratches, pits,

gouges, slivers, etc.) and suitable for nickel plating.

[[Page 1107]]

Surface Finish

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Roughness, RA Microinches (Micrometers)

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Aim Min. Max.

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Stone Finish........................ .16 (0.4) 8 (0.2) 24 (0.6)

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Certain ``blued steel'' coil (also known as ``steamed blue

steel'' or ``blue oxide'') with a thickness and size of 0.38 mm x 940

mm x coil, and with a bright finish;

Certain cold-rolled steel sheet, which meets the following

characteristics:

Thickness (nominal): 0.019 inches

Width: 35 to 60 inches

Chemical Composition

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Element C O B

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Element............................. C O B

Max. Weight %....................... 0.004

Min. Weight %....................... 0.010 0.012

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Certain band saw steel, which meets the following

characteristics:

Thickness: 1.31 mm

Width: 80 mm

Chemical Composition

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Element........................ C Si Mn P S Cr Ni

Weight %....................... 1.2 to 1.3 0.15 to 0.35 0.20 to 0.35 0.03 0.007 0.3 to 0.5 0.25

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Other properties:

Carbide: fully spheroidized having > 80% of carbides, which are

0.003 mm and uniformly dispersed

Surface finish: bright finish free from pits, scratches, rust,

cracks, or seams

Smooth edges

Edge camber (in each 300 mm of length): 7 mm arc height

Cross bow (per inch of width): 0.015 mm max.

The merchandise subject to this investigation is typically

classified in the HTSUS at subheadings: 7209.15.0000, 7209.16.0030,

7209.16.0060, 7209.16.0090, 7209.17.0030, 7209.17.0060, 7209.17.0090,

7209.18.1530, 7209.18.1560, 7209.18.2550, 7209.18.6000. 7209.25.0000,

7209.26.0000, 7209.27.0000, 7209.28.0000, 7209.90.0000, 7210.70.3000,

7210.90.9000, 7211.23.1500, 7211.23.2000, 7211.23.3000, 7211.23.4500,

7211.23.6030, 7211.23.6060, 7211.23.6085, 7211.29.2030, 7211.29.2090,

7211.29.4500, 7211.29.6030, 7211.29.6080, 7211.90.0000, 7212.40.1000,

7212.40.5000, 7212.50.0000, 7225.19.0000, 7225.50.6000, 7225.50.7000,

7225.50.8010, 7225.50.8085, 7225.99.0090, 7226.19.1000, 7226.19.9000,

7226.92.5000, 7226.92.7050, 7226.92.8050, and 7226.99.0000.

Although the HTSUS subheadings are provided for convenience and

U.S. Customs Service (U.S. Customs) purposes, the written description

of the merchandise under investigation is dispositive.

The Department set aside a period for all interested parties to

raise issues regarding product coverage. From July through October

1999, the Department received responses from a number of parties

including importers, respondents, consumers, and petitioners, aimed at

clarifying the scope of the investigation. See Memorandum to Joseph A.

Spetrini (Scope Memorandum), November 1, 1999, for a list of all

persons submitting comments and a discussion of all scope comments.

There are several scope exclusion requests for products which are

currently covered by the scope of this investigation that are still

under consideration by the Department. These items are considered to be

within the scope for this preliminary determination; however, these

requests will be reconsidered for the final determination. See Scope

Memorandum.

Selection of Respondents

Section 777A(c)(1) of the Act directs the Department to calculate

individual dumping margins for each known exporter and producer of the

subject merchandise. We determined that PT Krakatau was the only known

exporter of subject merchandise and therefore chose it as the only

respondent from Indonesia. This company accounted for 100 percent of

all known exports of the subject merchandise during the POI.

Product Comparisons

In accordance with section 771(16) of the Act, all products

produced by the respondents covered by the description in the Scope of

Investigation section, above, and sold in Indonesia during the POI are

considered to be foreign like products for purposes of determining

appropriate product comparisons to U.S. sales. We have relied on 14

criteria to match U.S. sales of subject merchandise to comparison-

market sales of the foreign like product: hardening and tempering,

paint, carbon level, quality, yield strength, minimum thickness,

thickness tolerance, width, edge finish, form, temper rolling,

leveling, annealing, and surface finish. These characteristics have

been weighted by the Department where appropriate. Where there were no

sales of identical merchandise in the home market to compare to U.S.

sales, we compared U.S. sales to the next most similar foreign like

product on the basis of the characteristics listed above.

Fair Value Comparisons

To determine whether sales of cold-rolled steel products from

Indonesia were made in the United States at less than fair value, we

compared the export

[[Page 1108]]

price (EP) to the normal value (NV), as described in the Export Price

and Normal Value sections of this notice. In accordance with section

777A(d)(1)(A)(i) of the Act, we calculated weighted-average EPs for

comparison to weighted-average normal values. Indonesia experienced

high inflation during the POI, as measured by the Wholesale Price

Index, published in the June 1999 issue of International Financial

Statistics. Accordingly, to avoid distortions caused by the effects of

high inflation on prices, consistent with our practice in cases

involving high inflation, we calculated EPs and NVs on a monthly-

average basis, rather than a POI average basis.3 See Notice

of Preliminary Determination of Sales at Less Than Fair Value and

Postponement of Final Determination: Certain Pasta from Turkey, 61 FR

1351, 1354 (January 19, 1996).

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\3\ Investigations involving exports from countries with highly

inflationary economies require special methodologies for comparing

prices and calculating CV and COP. The Department generally

considers that an inflation rate in excess of 25 percent warrants

application of a calculation methodology that takes into account the

effect of high inflation on prices and costs. See Notice of

Preliminary Determination of Sales at Less Than Fair Value:

Stainless Steel Sheet and Strip in Coils from South Korea, 64 FR

137, 139 (January 4, 1999). Based on the Wholesale Price Index (WPI)

obtained from the International Monetary Fund (IMF), we determined

that Indonesia experienced inflation of approximately 40 percent

over the course of the POI. PT Krakatau has argued that the

Department should not employ a high inflation analysis because the

high inflation that occurred during the POI was isolated to the

first six months of the period. We will consider this issue further

for the final determination, and invite parties to comment.

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Export Price

In accordance with section 772 of the Act, we calculated an EP for

each sale. Section 772(a) of the Act defines EP as the price at which

the subject merchandise is first sold before the date of importation by

the exporter or producer outside the United States to an unaffiliated

purchaser in the United States or to an unaffiliated purchaser for

exportation to the United States. Consistent with this definition, we

have found that PT Krakatau made only EP sales during the POI.

We based EP on ex-factory and FOB prices to unaffiliated customers

in the United States. In accordance with section 772(c)(2) of the Act,

we made deductions from the starting price, where appropriate, for

movement expenses including foreign brokerage and inland freight from

the factory to the foreign port.

Normal Value

A. Selection of Comparison Markets

Section 773(a)(1) of the Act directs that NV be based on the price

at which the foreign like product is sold in the home market, provided

that the merchandise is sold in sufficient quantities (or value, if

quantity is inappropriate) and that there is no particular market

situation that prevents a proper comparison with the EP. The statute

contemplates that quantities (or value) will normally be considered

insufficient if they are less than five percent of the aggregate

quantity (or value) of sales of the subject merchandise to the United

States.

PT Krakatau has a viable home market of cold-rolled steel products,

and it reported home market sales data for purposes of the calculation

of NV.

In deriving NV, we made adjustments as detailed in the Calculation

of Normal Value Based on Home Market Prices and Calculation of Normal

Value Based on Constructed Value, below.

B. Cost of Production Analysis

Based on allegations made by petitioner in this case in a

submission dated September 29, 1999, and in accordance with section

773(b)(2)(A)(i) of the Act, we found reasonable grounds to believe or

suspect that sales of cold-rolled steel products made in Indonesia were

made at prices below the COP. As a result, the Department has conducted

an investigation to determine whether PT Krakatau made sales in its

home market at prices below their respective COPs during the POI within

the meaning of section 773(b) of the Act. We conducted the COP analysis

described below.

1. Calculation of COP. In accordance with section 773(b)(3) of the

Act, we calculated a weighted-average COP based on the sum of the cost

of materials and fabrication for the foreign like product, plus amounts

for the home market general and administrative (G&A) expenses, selling

expenses, commissions, packing expenses, and interest expenses. As

noted above, we determined that the Indonesian economy experienced

significant inflation during the POI. Therefore, in order to avoid the

distorting effect of inflation on our comparison of costs and prices,

we computed indexed monthly costs based on the weighted average of all

monthly costs as indexed over the POI. See, e.g., Certain Steel

Concrete Reinforcing Bar from Turkey, 64 FR 49510, 49153 (September 10,

1999).

We relied on the COP data submitted by PT Krakatau in its cost

questionnaire response, except, as noted below, in specific instances

where the submitted costs were not appropriately quantified or valued:

(a) we adjusted the reported depreciation expense to account for the

effects of inflation, (b) we computed the respondent's G&A and

financial expense ratios on a constant currency basis using monthly IMF

WPI indices, and (c) we recalculated the reported G&A and financial

expense ratios to reflect certain expenses and offsets that had not

been completely accounted for by the respondent.

2. Test of Home Market Sales Prices. We compared the adjusted

weighted-average COP to the home market sales of the foreign like

product, as required under section 773(b) of the Act, in order to

determine whether these sales had been made at prices below the COP

within an extended period of time (i.e., a period of one year) in

substantial quantities 4 and whether such prices were

sufficient to permit the recovery of all costs within a reasonable

period of time.

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\4\ In accordance with section 773(b)(2)(C)(i) of the Act, we

determined that sales made below the COP were made in substantial

quantities if the volume of such sales represented 20 percent or

more of the volume of sales under consideration for the

determination of NV.

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On a model-specific basis, we compared the revised COP to the home

market prices, less any applicable movement charges, discounts and

rebates.

3. Results of the COP Test. Pursuant to section 773(b)(2)(C) of the

Act, where less than 20 percent of a respondent's sales of a given

product were at prices less than the COP, we did not disregard any

below-cost sales of that product because we determined that the below-

cost sales were not made in ``substantial quantities.'' Where 20

percent or more of a respondent's sales of a given product during the

POI were at prices less than the COP, we determined such sales to have

been made in ``substantial quantities'' within an extended period of

time in accordance with section 773(b)(2)(B) of the Act. In such cases,

because we compared prices to (indexed) POI average costs, we also

determined that such sales were not made at prices that would permit

recovery of all costs within a reasonable period of time, in accordance

with section 773(b)(2)(D) of the Act. Therefore, we disregarded the

below-cost sales.

We found that, for certain models of cold-rolled steel products,

more than 20 percent of the home market sales by PT Krakatau were made

within an extended period of time at prices less than the COP. Further,

the prices did not provide for the recovery of costs within a

[[Page 1109]]

reasonable period of time. We therefore disregarded these below-cost

sales and used the remaining sales as the basis for determining NV, in

accordance with section 773(b)(1) of the Act. For those U.S. sales of

cold-rolled steel products for which there were no comparable home

market sales in the ordinary course of trade, we compared EPs to CV in

accordance with section 773(a)(4) of the Act. See Calculation of Normal

Value Based on Constructed Value, below.

C. Calculation of Normal Value Based on Home Market Prices

We performed price-to-price comparisons where there were sales of

comparable merchandise in the home market that did not fail the cost

test.

We calculated NV based on delivered or FOB prices and made

deductions from the starting price, where appropriate, for foreign

brokerage and handling fees, foreign inland freight from the plant to

the customer, and insurance. In addition, we made circumstance-of-sale

(COS) adjustments for direct expenses, where appropriate, in accordance

with section 773(a)(6)(C)(iii) of the Act. These expenses included

imputed credit expenses and bank charges. In accordance with sections

773(a)(6)(A) and (B) of the Act, we deducted home market packing costs

and added U.S. packing costs.

D. Calculation of Normal Value Based on Constructed Value

Section 773(a)(4) of the Act provides that, where NV cannot be

based on comparison-market sales, NV may be based on CV. Accordingly,

for those models of cold-rolled steel products for which we could not

determine the NV based on comparison-market sales, either because there

were no sales of a comparable product or all sales of the comparison

products failed the COP test, we based NV on constructed value.

Section 773(e)(1) of the Act provides that constructed value shall

be based on the sum of the cost of materials and fabrication for the

imported merchandise plus amounts for selling, general, and

administrative expenses (SG&A), profit, and U.S. packing costs. We

calculated the cost of materials and fabrication based on the

methodology described in the Calculation of COP section of this notice,

above. We based SG&A and profit on the actual amounts incurred and

realized by the respondent in connection with the production and sale

of the foreign like product in the ordinary course of trade for

consumption in the comparison market, in accordance with section

773(e)(2)(A) of the Act.

In addition, we used U.S. packing costs as described in the Export

Price section of this notice, above.

We made adjustments to CV for differences in COS in accordance with

section 773(a)(8) of the Act and 19 CFR 351.410. These involved the

deduction of direct selling expenses incurred on home market sales

from, and the addition of U.S. direct selling expenses to, constructed

value.

Level of Trade

In accordance with section 773(a)(1)(B) of the Act, to the extent

practicable, we determine NV based on sales in the comparison market at

the same level of trade (LOT) as the EP transaction. The NV LOT is that

of the starting-price sales in the comparison market or, when NV is

based on CV, that of the sales from which we derive SG&A expenses and

profit. The U.S. LOT for EP Sales is also the level of the starting-

price sale, which is usually from exporter to importer.

To determine whether NV sales are at a different LOT than EP, we

examine stages in the marketing process and selling functions along the

chain of distribution between the producer and the unaffiliated

customer. If the comparison-market sales are at a different LOT and the

difference affects price comparability, as manifested in a pattern of

consistent price differences between the sales on which NV is based and

comparison-market sales at the LOT of the export transaction, we make

an LOT adjustment under section 773(a)(7)(A) of the Act. See Notice of

Final Determination of Sales at Less Than Fair Value: Certain Cut-to-

Length Carbon Steel Plate from South Africa, 62 FR 61731 (November 19,

1997).

In implementing these principles in this investigation, we obtained

information from PT Krakatau about the marketing stages involved in the

reported U.S. and home market sales, including a description of the

selling activities performed by the respondent for each channel of

distribution. In identifying LOTs for EP and home market sales, we

considered the selling functions reflected in the starting price before

any adjustments.

In the home market, PT Krakatau sells to end-users and local

trading companies. The respondent provides extensive selling functions

to all home market customers, irrespective of the channel of

distribution. These include technical assistance and customer support.

Therefore, we find that all sales in the home market were made at a

single LOT. In the U.S. market, PT Krakatau sells to trading companies

only. In contrast to home market sales, the respondent provides no

technical assistance, customer support, or any other selling function

for U.S. sales. Therefore, we find that all sales in the U.S. market

were made at a single LOT, which is different from the home market LOT.

Since the record contains no information that would allow us to

determine the extent, if any, to which this difference in LOTs affects

price comparability, we have not made an LOT adjustment for this

preliminary determination.

Currency Conversions

We made currency conversions into U.S. dollars in accordance with

section 773A of the Act based on exchange rates in effect on the dates

of the U.S. sales. The Department's preferred source for exchange rates

is the Federal Reserve Bank. However, since the Federal Reserve Bank

does not publish exchange rates for the Indonesian rupiah, we have

relied on exchange rates obtained from the Dow Jones Service, as

published in the Wall Street Journal.

Verification

In accordance with section 782(i) of the Act, we intend to verify

all information relied upon in making our final determinations.

Suspension of Liquidation

In accordance with section 733(d) of the Act, we are directing the

Customs Service to suspend liquidation of all entries of cold-rolled

steel products from Indonesia, that are entered, or withdrawn from

warehouse, for consumption on or after the date of publication of this

notice in the Federal Register. We are also instructing the Customs

Service to require a cash deposit or the posting of a bond equal to the

weighted-average amount by which the NV exceeds the EP or CEP, as

indicated in the chart below. These instructions suspending liquidation

will remain in effect until further notice.

The weighted-average dumping margin is provided below:

------------------------------------------------------------------------

Margin

Manufacturer/exporter (percent)

------------------------------------------------------------------------

PT Krakatau................................................ 49.28

All Others................................................. 49.28

------------------------------------------------------------------------

ITC Notification

In accordance with section 733(f) of the Act, we have notified the

ITC of our determination. If our final antidumping determination is

affirmative, the ITC will determine whether the imports covered by this

determination are

[[Page 1110]]

materially injuring, or threaten material injury to, the U.S. industry.

The deadline for that ITC determination would be the later of 120 days

after the date of this preliminary determination or 45 days after the

date of our final determination.

Public Comment

Case briefs for this investigation must be submitted no later than

one week after the issuance of the verification reports. Rebuttal

briefs must be filed within five days after the deadline for submission

of case briefs. A list of authorities used, a table of contents, and an

executive summary of issues should accompany any briefs submitted to

the Department. Executive summaries should be limited to five pages

total, including footnotes.

Section 774 of the Act provides that the Department will hold a

hearing to afford interested parties an opportunity to comment on

arguments raised in case or rebuttal briefs, provided that such a

hearing is requested by any interested party. If a request for a

hearing is made in an investigation, the hearing will tentatively be

held two days after the deadline for submission of the rebuttal briefs,

at the U.S. Department of Commerce, 14th Street and Constitution

Avenue, NW, Washington, D.C. 20230. In the event that the Department

receives requests for hearings from parties to several cold-rolled

cases, the Department may schedule a single hearing to encompass all

those cases. Parties should confirm by telephone the time, date, and

place of the hearing 48 hours before the scheduled time.

Interested parties who wish to request a hearing, or to participate

if one is requested, must submit a written request within 30 days of

the publication of this notice. Requests should specify the number of

participants and provide a list of the issues to be discussed. Oral

presentations will be limited to issues raised in the briefs.

If this investigation proceeds normally, we will make our final

determination no later than 135 days after the date of publication of

this notice in the Federal Register.

This determination is published pursuant to sections 733(f) and

777(i)(1) of the Act.

Dated: December 28, 1999.

Holly A. Kuga,

Acting Assistant Secretary for Import Administration.

[FR Doc. 00-298 Filed 1-6-00; 8:45 am]

BILLING CODE 3510-DS-P

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.