Initiation of Antidumping Duty Investigations: Oil Country Tubular Goods From Argentina, Austria, Italy, Japan, Korea, Mexico, and Spain

DEPARTMENT OF COMMERCE

[A-357-810, A-433-805, A-475-816, A-588-835, A-580-825, A-201-817, and

A-469-806]

Initiation of Antidumping Duty Investigations: Oil Country

Tubular Goods From Argentina, Austria, Italy, Japan, Korea, Mexico, and

Spain

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: July 26, 1994.

FOR FURTHER INFORMATION CONTACT: Irene Darzenta or Cameron Werker,

Office of Antidumping Investigations, Import Administration,

International Trade Administration, U.S. Department of Commerce, 14th

Street and Constitution Avenue, NW., Washington, DC 20230; telephone

(202) 482-6320 or 482-3874.

INITIATION OF INVESTIGATIONS:

The Petition

On June 30, 1994, we received seven petitions filed in proper form

by: Koppel Steel Corporation, USS/Kobe Steel Company, and U.S. Steel

Group (a unit of USX Corporation) with respect to Austria, Argentina,

and Spain; Koppel Steel Corporation and U.S. Steel Group with respect

to Japan; North Star Steel Ohio (a division of North Star Steel

Corporation) with respect to Italy and Mexico; and Bellville Tube

Corporation, IPSCO Steel, Inc., and Maverick Tube Corporation with

respect to Korea. In accordance with Section 732(b) of the Tariff Act

of 1930, as amended (the Act) and 19 CFR 353.12 (1994), the petitioners

allege that oil country tubular goods (OCTG) from Argentina, Austria,

Italy, Japan, Korea, Mexico, and Spain 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 these imports are materially injuring,

or threaten material injury to, a U.S. industry.

Petitioners have stated that they have standing to file the

petitions because they are interested parties, as defined under section

771(9)(C) of the Act, and because the petitions were filed on behalf of

the U.S. industry producing the subject merchandise. If any interested

party, as described under paragraphs (C), (D), (E), or (F) of section

771(9) of the Act, wishes to register support for, or opposition to,

these petitions, it should file a written notification with the

Assistant Secretary for Import Administration.

Under the Department's regulations, any producer or reseller

seeking exclusion from a potential antidumping duty order must submit

its request for exclusion within 30 days of the date of the publication

of this notice. The procedures and requirements are contained in 19 CFR

353.14.

Scope of Investigations

For purposes of these investigations, OCTG are hollow steel

products of circular cross-section, including oil well casing, tubing,

and drill pipe, of iron (other than cast iron) or steel (both carbon

and alloy), whether seamless or welded, whether or not conforming to

American Petroleum Institute (API) or non-API specifications, whether

finished or unfinished (including green tubes and limited service OCTG

products). These petitions do not cover casing, tubing, or drill pipe

containing 10.5 percent or more of chromium. The OCTG subject to these

investigations are currently classified in the Harmonized Tariff

Schedule of the United States (HTS) under item numbers:

7304.20.10.00, 7304.20.10.10, 7304.20.10.20, 7304.20.10.30,

7304.20.10.40, 7304.20.10.50, 7304.20.10.60, 7304.20.10.80,

7304.20.20.00, 7304.20.20.10, 7304.20.20.20, 7304.20.20.30,

7304.20.20.40, 7304.20.20.50, 7304.20.20.60, 7304.20.20.80,

7304.20.30.00, 7304.20.30.10, 7304.20.30.20, 7304.20.30.30,

7304.20.30.40, 7304.20.30.50, 7304.20.30.60 7304.20.30.80,

7304.20.40.00, 7304.20.40.10, 7304.20.40.20, 7304.20.40.30,

7304.20.40.40, 7304.20.40.50, 7304.20.40.60, 7304.20.40.80,

7304.20.50.10, 7304.20.50.15, 7304.20.50.30, 7304.20.50.45,

7304.20.50.50, 7304.20.50.60, 7304.20.50.75, 7304.20.60.10,

7304.20.60.15, 7304.20.60.30, 7304.20.60.45, 7304.20.60.50,

7304.20.60.60, 7304.20.60.75, 7304.20.70.00, 7304.20.80.00,

7304.20.80.30, 7304.20.80.45, 7304.20.80.60, 7305.20.20.00,

7305.20.40.00, 7305.20.60.00, 7305.20.80.00, 7306.20.10.30,

7306.20.10.90, 7306.20.20.00, 7306.20.30.00, 7306.20.40.00,

7306.20.60.10, 7306.20.60.50, 7306.20.80.10, and 7306.20.80.50.

Although the HTS subheadings are provided for convenience and

customs purposes, our written description of the scope of these

investigations is dispositive.

United States Price and Foreign Market Value

For purposes of these initiations, no adjustments to petitioners'

calculations were necessary. If it becomes necessary at a later date to

consider these petitions as a source of best information available

(BIA), we may review all of the bases for the petitioners' estimated

margins in determining BIA.

Argentina

Petitioners based U.S. price (USP) on a quoted transaction price of

subject merchandise produced by Siderca, an OCTG producer in Argentina,

and offered to a U.S. distributor for sale in the United States. The

sales terms of the price quote represent a sale made prior to

importation of the subject merchandise to the United States.

Petitioners calculated a net USP by subtracting ocean freight and

insurance, unloading and wharfage charges at the U.S. port of entry,

and the applicable 7.5 percent ad valorem U.S. customs duty.

Petitioners used U.S. import statistics for the month of offer to

estimate the actual average ocean freight and insurance charges for

subject merchandise subject to the price quote. Petitioners adjusted

the USP by adding an 8.3 percent cascade turnover tax and an 18 percent

value-added tax (VAT), both of which were calculated on the invoice

price net of discounts.

Petitioners stated that information regarding Siderca's sales to

third country markets was not reasonably available and, thus, they were

unable to calculate home market viability. However, petitioners assumed

the home market to be viable based on a published report estimating the

Argentine drilling market to be the seventh most active in the world.

Accordingly, petitioners based foreign market value (FMV) on home

market sales. Petitioners also based FMV on constructed value (CV).

First, petitioners stated that they used a home market sales price

of merchandise identical to that offered for sale in the United States.

Petitioners made adjustments for differences in circumstances of sale

(i.e., credit) and the home market VAT. The comparison of USP to FMV

results in a negative dumping margin.

Second, petitioners calculated a CV as the basis for FMV because

Siderca allegedly sold the subject merchandise at a price substantially

below its cost of production (COP). COP was based on the production

costs of one of the U.S. producers adjusted to reflect Siderca's

production costs.

Petitioners calculated COP and CV in accordance with a methodology

acceptable to the Department. Because petitioners do not have access to

the foreign producer's proprietary data, petitioners utilized their own

cost information and adjusted for all known differences between the

U.S. and Argentine markets with publicly available information. When

practicable, petitioners used public information specific to Siderca.

Petitioners added an amount for the statutory minimum eight percent

profit and their own packing costs to the estimated COP to derive the

CV. The dumping margin of OCTG from Argentina based on a comparison of

USP to CV alleged by petitioners is 41.60 percent.

The Department is initiating a COP investigation of Siderca's home

market sales. Based on our analysis of petitioners' COP allegation, we

find that we have reasonable grounds to believe or suspect that home

market sales are being made below the COP. In their allegation,

petitioners provided company-specific information, used a reasonable

methodology, and demonstrated that the products they used in their

calculations were representative of the broader range of OCTG products

sold by Siderca in Argentina. If, during the course of the

investigation, Siderca does not become a respondent, this COP

investigation will be terminated with no further action from the

Department.

The Department will not initiate a COP investigation for those

companies/exporters where petitioners do not provide a company-specific

allegation.

Austria

Petitioners based USP on a sale made by a U.S. trading company

related to Voest-Alpine, an Austrian producer of the subject

merchandise, to an unrelated U.S. customer. Petitioners deducted from

USP amounts for international shipment charges calculated based on U.S.

Customs data for shipments of subject merchandise during the second

half of 1993, and the applicable eight percent ad valorem U.S. customs

duty.

Petitioners demonstrated that the home market is not viable.

Specifically, petitioners illustrated that the home market shipments of

Voest-Alpine expressed as a percentage of exports to third country

markets is substantially less than five percent. Therefore, petitioners

first based FMV on third country sales. Petitioners stated that with

regards to similarity of merchandise, volume of sales, and similarity

of the Russian OCTG market relative to the U.S. OCTG market, Russia is

the appropriate third country market on which to calculate FMV.

Petitioners first based FMV on the bid of Voest-Alpine, an Austrian

producer of OCTG, to supply subject merchandise to a Russian oil

production association. The Austrian producer's offering price was

contemporaneous to the U.S. sales price on which petitioners based USP.

To calculate an ex-factory price, petitioners deducted inland freight

and made a circumstance-of-sale adjustment for the differences in

credit expenses. Based on a comparison of USP to FMV, the dumping

margin alleged by petitioners is 16.5 percent.

Petitioners also based FMV on CV because Voest-Alpine allegedly

sold the subject merchandise to Russia at prices below the COP. COP was

based on the production costs of one of the U.S. producers, adjusted to

reflect Voest-Alpine's production costs.

Petitioners calculated COP and CV in accordance with a methodology

acceptable to the Department. Because petitioners do not have access to

the foreign producer's proprietary data, petitioners utilized their own

cost information and adjusted for all known differences between the

U.S. and Austrian markets with publicly available information. When

practicable, petitioners used public information specific to Voest-

Alpine. Petitioners added to the estimated manufacturing costs an

amount for the statutory minimum ten percent selling, general, and

administrative (SG&A) expense. Petitioners then added an amount for the

statutory minimum eight percent profit and their own packing costs to

the estimated COP to derive the CV. Based on a comparison of USP to CV,

the dumping margin alleged by petitioners is 41.7 percent.

The Department is initiating a COP investigation of Voest-Alpine's

third country sales to Russia. Based on our analysis of petitioners'

COP allegation, we find that we have reasonable grounds to believe or

suspect that sales to Russia are being made below the COP. In their

allegation, petitioners provided company-specific information, used a

reasonable methodology, and demonstrated that the products used in

their calculations were representative of the broader range of OCTG

products sold by Voest-Alpine to Russia. This COP investigation will be

terminated automatically if, during the course of the investigation,

any one of the following conditions is met: Voest-Alpine does not

become a respondent; the home market is determined to be viable; or

Russia is determined not to be an appropriate third country market on

which to base FMV.

The Department will not initiate a COP investigation for those

companies/exporters where petitioners do not provide a company-specific

allegation.

Italy

Petitioner based USP on quoted transaction prices of subject

merchandise produced by the Italian producer, Dalmine, and offered to

U.S. distributors for sale in the United States during the first

quarter of 1994. These price quotes represent sales made prior to

importation of subject merchandise to the United States. Petitioner

calculated a net USP by subtracting the foreign inland freight from the

mill to the port of export, loading and wharfage charges at the port of

export, ocean freight and insurance, U.S. terminal and handling fees,

and the applicable 6.2 percent ad valorem U.S. customs duty. Petitioner

used U.S. import statistics for the first quarter of 1994 to estimate

the actual average ocean freight and insurance charges.

Petitioner stated that it based FMV on CV because it was unable to

obtain home market or third country prices. Because Dalmine's

production costs were unavailable to petitioner, petitioner used the

production costs of a U.S. producer, adjusted to reflect Dalmine's

production costs.

Petitioner calculated CV in accordance with a methodology

acceptable to the Department. Because petitioner did not have access to

the foreign producer's proprietary data, petitioner utilized its own

cost information and adjusted for all known differences between the

U.S. and Italian markets with publicly available information. When

practicable, petitioner used public information specific to Dalmine.

Petitioners added to the estimated manufacturing costs an amount for

the statutory minimum ten percent SG&A expense. Petitioner then added

an amount for the statutory minimum eight percent profit and its own

packing cost to derive the CV. The range of dumping margins based on a

comparison of USP to CV alleged by petitioner is 41.60 percent to 49.78

percent.

Japan

For Japan, petitioners based USP on two price offers for seamless

OCTG tubing manufactured by two Japanese producers, Sumitomo and Nippon

Steel, to unrelated parties for purchase prior to importation into the

United States. Petitioners demonstrated that the products for which

these offers were made, are representative of OCTG products imported

into the United States from Japan in terms of type and manufacturing

method.

Petitioners calculated a net USP by deducting international

shipment charges such as ocean freight and marine insurance; U.S.

inland freight; U.S. handling charges including loading; U.S. port

charges such as unloading and wharfage; and the applicable 7.5 percent

ad valorem U.S. customs duty. Petitioners used the official U.S. import

statistics for the period of time corresponding to the dates of the USP

offers to estimate the actual ocean freight and marine insurance

charges.

Petitioner calculated two FMVs. First, petitioners used third

country sales prices of merchandise allegedly comparable to that

offered for sale in the United States. Specifically, petitioners used

Japanese sales contract prices for OCTG products exported to the

People's Republic of China (PRC) obtained from a Chinese trading

company, adjusted to reflect differences in circumstances of sale

(i.e., credit) between the PRC and U.S. markets.

Before resorting to third country price data, petitioners

demonstrated that the Japanese home market was not viable to serve as

the basis of FMV. Specifically, petitioners compared domestic and third

country OCTG shipment data for the period January through November

1993, and found that home market shipments expressed as a percentage of

third country shipments is substantially less than five percent.

Petitioners claimed that the PRC constituted the appropriate third

country market to serve as the basis for FMV for each Japanese producer

based on the similarity of the merchandise, the volume of sales and the

similarity of the Chinese OCTG market relative to the U.S. OCTG market.

The range of dumping margins of OCTG from Japan based on a comparison

of USP to FMV alleged by petitioners is 10.4 percent to 24.8 percent.

Second, petitioners calculated a CV as the basis for FMV because

they claimed that the Japanese producers' third country sales are being

made at prices below the COP. Because petitioners could not obtain

actual production costs for Sumitomo and Nippon Steel, they used U.S.

production costs, adjusted to reflect production costs in Japan.

Petitioners calculated COP and CV in accordance with a methodology

acceptable to the Department. Because petitioners do not have access to

the foreign producers' proprietary data, petitioners utilized their own

cost information and adjusted for all known differences between the

U.S. and Japanese markets with publicly available information. When

practicable, petitioners used public information specific to Sumitomo

and Nippon Steel. Petitioners added an amount for the statutory minimum

eight percent profit and their own packing costs to the estimated COP

to derive the CV. The range of dumping margins of OCTG from Japan based

on a comparison of USP to CV alleged by petitioners is 36.5 percent to

44.2 percent.

The Department is initiating a COP investigation of Sumitomo's and

Nippon Steel's third country sales to the PRC. Based on our analysis of

petitioners' COP allegation, we find that we have reasonable grounds to

believe or suspect that sales to the PRC are being made below the COP.

In their allegation, petitioners provided company-specific information,

used a reasonable methodology, and demonstrated that the products used

in their calculations were representative of the broader range of OCTG

products sold by Sumitomo and Nippon Steel to the PRC. This COP

investigation will be terminated automatically if, during the course of

the investigation, any one of the following conditions is met: Sumitomo

or Nippon Steel do not become respondents; the home market is

determined to be viable; and the PRC is determined not to be an

appropriate third country market on which to base FMV.

The Department will not initiate a COP investigation for those

companies/exporters where petitioners do not provide a company-specific

allegation.

Korea

Petitioners based USP on the sales price of two Korean-produced

OCTG tubing products to a U.S. distributor for sale to end users.

Petitioners made adjustments for ocean freight, port and handling

charges, the 1.9 percent ad valorem U.S. Customs duty, applicable

discounts and distributor mark-up, and end finishing costs.

Petitioners assumed that the Korean home market was not viable as

the basis for FMV. Petitioners based this assumption on a report

reviewing worldwide drilling activity, which indicated that no rigs are

expected to be in operation in Korea during 1994. Thus, petitioners

assumed that there is no OCTG market in Korea.

Petitioners selected Canada as the appropriate third country market

for calculating FMV based on the volume of sales and the similarity of

the Canadian market relative to the United States. Additionally, Canada

was the only third country for which pricing data was available to

petitioners. Specifically, petitioners based FMV on Canadian

distributor prices to end-users. Petitioners made adjustments for

inland freight, port and handling charges, ocean freight, Canadian

import duties, distributor mark-up, and end finishing costs.

The range of dumping margins of OCTG from Korea based on a

comparison of USP to FMV alleged by petitioners is 2.68 percent to

12.23 percent.

Mexico

Petitioner based USP on two price quotes for sales of OCTG

manufactured by TAMSA, a Mexican producer of OCTG, and offered for sale

in the United States. Petitioner adjusted the first price quote for

foreign port and loading fees, a Mexican Customs clearance fee, ocean

freight and insurance, U.S. import duties, U.S. terminal and unloading

fees and other movement expenses, distributor mark-up, and sales agent

fees. Petitioner made adjustments to the second price quote for foreign

inland freight, Mexican Customs processing fees, U.S. customs duties,

U.S. terminal and unloading fees and other movement charges, and sales

agent fees.

Petitioner was unable to obtain home market sales information and,

therefore, was unable to conduct a home market viability test. However,

petitioner assumed the home market to be viable based on a published

report estimating the Mexican drilling market to be one of the most

active in the world given the number of drilling rigs in operation.

Petitioner based FMV on CV because it stated that it was unable to

obtain home market prices. Petitioner used a U.S. producer as a

surrogate for the Mexican producer, TAMSA, to determine the production

costs of the subject merchandise.

Petitioner calculated CV in accordance with a methodology

acceptable to the Department. Because petitioner did not have access to

the foreign producer's proprietary data, petitioner utilized its own

cost information and adjusted for all known differences between the

U.S. and Mexican markets with publicly available information. When

practicable, petitioner used public information specific to TAMSA.

Petitioner added an amount for the statutory minimum eight percent

profit and its own packing cost to derive the CV.

The range of dumping margins of OCTG from Mexico based on a

comparison of USP to CV alleged by petitioner is 40.44 percent to 45.22

percent.

Spain

Petitioners based USP on average U.S. Customs values for seamless

carbon steel OCTG tubing derived from statistics published by the U.S.

Census Bureau for the months of August and November 1993, claiming that

actual U.S. sales price information was unobtainable. Petitioners also

claimed that seamless carbon steel OCTG tubing products are

representative of OCTG imports from Spain produced by Tubos Reunidos, a

Spanish producer of the subject merchandise which allegedly accounted

for all OCTG imports from Spain during the period April 1993 through

March 1994, the most recent 12-month period for which data was

available to petitioners.

Petitioners calculated FMV based on CV. Prior to resorting to CV,

petitioners demonstrated that the home market for Tubos Reunidos was

not viable. Specifically, petitioners compared estimated Spanish

consumption in 1993 and Spanish export statistics for January through

August 1993, and found that home market shipments as a percentage of

exports to third country markets was substantially less than five

percent. Petitioners also stated that information on Tubos Reunidos'

sales of OCTG products to third country markets was not reasonably

available despite their efforts to obtain such information.

Therefore, in the absence of a viable home market and comparable

third country sales, petitioners based FMV on CV. Because petitioners

could not obtain actual production costs for Tubos Reunidos, they used

U.S. production costs, adjusted to reflect production costs in Spain.

Petitioners calculated CV in accordance with a methodology

acceptable to the Department. Because petitioners do not have access to

the foreign producer's proprietary data, petitioners utilized their own

cost information and adjusted for all known differences between the

U.S. and Spanish markets with publicly available information. When

practicable, petitioners used public information specific to Tubos

Reunidos. Petitioners added an amount for the statutory minimum eight

percent profit and their own packing costs to the estimated COP to

derive the CV.

The range of dumping margins for OCTG from Spain based on a

comparison of USP to CV alleged by petitioners is 5.3 percent to 18.6

percent.

Initiation of Investigations

We have examined the petitions on OCTG from Argentina, Austria,

Italy, Japan, Korea, Mexico, and Spain and have found that the

petitions meet the requirements of section 732(b) of the Act and 19 CFR

353.12. Therefore, we are initiating antidumping duty investigations to

determine whether imports of OCTG from Argentina, Austria, Italy,

Japan, Korea, Mexico, and Spain are being, or are likely to be, sold in

the United States at less than fair value.

Preliminary Determinations by the International Trade Commission

The International Trade Commission (ITC) will determine by August

15, 1994, whether there is a reasonable indication that imports of OCTG

from Argentina, Austria, Italy, Japan, Korea, Mexico, and Spain are

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

Negative ITC determinations will result in the investigations being

terminated; otherwise, the investigations will proceed according to

statutory and regulatory time limits.

This notice is published pursuant to section 732(c)(2) of the Act

and 19 CFR 353.13(b).

Dated: July 20, 1994.

Barbara R. Stafford,

Acting Assistant Secretary for Import Administration.

[FR Doc. 94-18170 Filed 7-25-94; 8:45 am]

BILLING CODE 3510-DS-P