Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination; Class 150 Stainless Steel Threaded Pipe Fittings From Taiwan

DEPARTMENT OF COMMERCE

[A-583-822]

Preliminary Determination of Sales at Less Than Fair Value and

Postponement of Final Determination; Class 150 Stainless Steel Threaded

Pipe Fittings From Taiwan

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: March 5, 1994.

FOR FURTHER INFORMATION CONTACT: Michelle A. Frederick or David J.

Goldberger, Office of Antidumping Investigations, Import

Administration, U.S. Department of Commerce, 14th Street and

Constitution Avenue, NW., Washington, DC 20230; telephone (202) 482-

0186 or 482-4136, respectively.

Preliminary Determination

We preliminarily determine that Class 150 stainless steel threaded

pipe fittings (SST pipe fittings) from Taiwan are being, or are likely

to be, sold in the United States at less than fair value, as provided

in section 733 of the Tariff Act of 1930, as amended (the Act). The

estimated margins are shown in the ``Suspension of Liquidation''

section of this notice.

Case History

Since the initiation of this investigation on August 23, 1993 (58

FR 45482, August 30, 1993), the following events have occurred: On

September 16, 1993, the U.S. International Trade Commission (ITC)

issued an affirmative preliminary injury determination in this case.

In September and October 1993, the Department of Commerce (the

Department) presented an antidumping duty questionnaire to Enlin Steel

Corporation (Enlin), Ta Chen Stainless Pipe Co., Ltd. (Ta Chen), and

Yih Tai Industries Co., Ltd. (Yih Tai), respectively. Enlin, Ta Chen,

and Yih Tai accounted for at least 60 percent of the exports of the

subject merchandise to the United States during the period of

investigation (POI). In response to submissions regarding the reporting

of certain product characteristics, the Department issued a revised

appendix V of the antidumping duty questionnaire to the respondents in

November 1993.

Enlin, Ta Chen, and Yih Tai submitted sales questionnaire responses

in October and November 1993. The Department issued supplemental sales

questionnaires in December 1993; the responses to these supplemental

questionnaires were received in January 1994.

On December 2, 1993, petitioners in this investigation, Capital

Manufacturing Company and Alloy Stainless Products Co., Inc.

(petitioners), requested that the Department postpone the preliminary

determination in accordance with section 733(c)(1) of the Act. We

granted this request and postponed the date of the preliminary

determination until not later than March 1, 1994, in accordance with 19

CFR 353.15(c) (58 FR 65577, December 15, 1993).

On December 16, 1993, in accordance with 19 CFR 353.31(c)(1)(i),

petitioners filed a timely allegation of sales below the cost of

production (COP). At the Department's request, petitioners filed a

supplement to their COP allegation on January 12, 1994. During December

1993, and January 1994, we received comments from Enlin and Yih Tai

objecting to the information contained in the petitioners' allegation.

On February 7, 1994, the Department issued a cost of production/

constructed value (Section D) questionnaire to Enlin, Ta Chen, and Yih

Tai, as the Department had reasonable grounds to believe or suspect

that all three companies had sold SST pipe fittings in the home market

or third-country at prices which were below their respective costs of

production. On February 18, 1994, Yih Tai requested that the Department

reconsider its decision to initiate a sales-below-cost investigation of

Yih Tai's Canadian sales.

Because the Section D responses are not due until after the

preliminary determination, we will address the issue of whether

respondents were selling subject merchandise in the home market or

third-country at below cost prices in our final determination.

Standing

On January 3, 1994, in accordance with 19 CFR 353.31(c)(2), Yih Tai

filed a timely allegation that petitioners lack standing in this

investigation. Under section 732(b)(1) of the Act, in order to have

standing to file an antidumping petition, a petitioner must be an

``interested party.'' Section 771(9)(C) of the Act defines the term

``interested party,'' in relevant part, as ``a manufacturer, producer,

or wholesaler in the United States of the `like product.''' Yih Tai has

alleged that, based on the fact that petitioners only ``finish'' SST

pipe fittings which are made from castings, the petitioners' activities

are insufficient to qualify them as interested parties. However,

petitioners have far more extensive production activities with respect

to SST pipe fittings made through methods of manufacture other than

casting. Given the Department's previous decision that all SST pipe

fittings, whether finished or unfinished, and regardless of method of

manufacture, constitute one category of such or similar merchandise,

the Department concludes that petitioners qualify as interested parties

(see September 29, 1993, Memorandum from David Binder to Richard W.

Moreland). Therefore, petitioners have standing under section 732(b)(1)

of the Act. We note that the ITC has found that the value that

petitioners add to castings is sufficient to qualify them as producers

of the like product.

Postponement of Final Determination

Pursuant to section 735(a)(2)(A) of the Act, Yih Tai and Enlin

requested on February 10 and February 18, 1994, respectively, that, in

the event of an affirmative preliminary determination in this

investigation, the Department postpone the final determination to 135

days after the date of publication of the affirmative preliminary

determination. Pursuant to 19 CFR 353.20(b), if exporters who account

for a significant proportion of exports of the merchandise under

investigation request an extension in the event of an affirmative

preliminary determination, we are required, absent compelling reasons

to the contrary, to grant the request. Based on U.S. import statistics,

Yih Tai and Enlin both account for a significant portion of the POI

exports of the subject merchandise.

Therefore, we are postponing the final determination for this

investigation until the 135th day after the publication of this notice

in the Federal Register.

Scope of the Investigation

The products covered by this investigation are Class 150 SST pipe

fittings, defined as cast or forged stainless steel products used to

connect pipe sections with an ability to withstand normal pressure

service (150 pounds per square inch (psi) at 350 degrees Fahrenheit and

300 psi at -20 to 150 degrees Fahrenheit) as well as resistance to

corrosion or extreme temperatures, or prevention of metallic

contamination to materials in the system. Included in the scope of this

investigation are both finished and unfinished Class 150 SST pipe

fittings of any size. Unfinished Class 150 SST pipe fittings are

defined as those products that have been advanced after casting or

forging, but which require threading and machining to finish the

fittings; finished Class 150 SST pipe fittings are defined as those

products that have been formed in the shape of elbows, tees, reducers,

etc. and have been further advanced after casting or forging, and

require no further processing to be acceptable as a finished product to

the end user. Class 150 SST pipe fittings are composed of alloys

including, but not limited to, 304 and 316, and are manufactured in the

shape of 90-degree elbows, 45-degree elbows, street elbows, tees,

crosses, couplings, reducing couplings, half-couplings, caps, square

head plugs, hex head plugs, hex bushings, unions, locknuts, and welding

spuds. Excluded from the scope of investigation are SST pipe fittings

manufactured in the shape of nipples.

The products under investigation are currently classifiable under

subheadings 7307.19.9030, 7307.19.9060, 7307.19.9080, 7307.22.1000,

7307.22.5000, and 7307.29.0090 of the Harmonized Tariff Schedule of the

United States (HTSUS). Although the HTSUS subheadings are provided for

convenience and customs purposes, our written description of the scope

of these investigations is dispositive.

Period of Investigation

The period of investigation (POI) is January 1 through June 30,

1993.

Such or Similar Comparisons

We have determined that the products covered by this investigation

constitute a single category of such or similar merchandise. All three

respondents reported that they sold merchandise in the home market or

third-country market identical to that sold in the United States.

Accordingly, none provided difference in merchandise (difmer)

information in their sales listings. For a small number of U.S. sales

reported by Enlin, however, our examination of the questionnaire

response indicated that identical matches did not exist. Because Enlin

did not report difmer information, we were precluded from identifying

similar merchandise for comparison with these sales under section

771(16) (B) or (C) of the Act. Therefore, in accordance with section

776(c) of the Act, we applied best information available (BIA) in

determining the margins for these sales. As BIA, in accordance with

normal practice, we applied the higher of either (1) the average of all

margins alleged in the petition for the class or kind of merchandise,

or (2) the highest non-aberrational calculated margin for any other

sale of merchandise of the same class of kind made by the Department in

this investigation. (See, e.g., Final Determination of Sales at Less

Than Fair Value: Certain Hot-Rolled Carbon Steel Flat Products, Certain

Cold-Rolled Carbon Steel Flat Products, Certain Corrosion-Resistant

Carbon Steel Flat Products, and Certain Cut-to-Length Carbon Steel

Plate from France, 58 FR 37131, July 9, 1993.) We determined the

highest non-aberrational calculated margin by selecting the highest

margin, after excluding those margins which were substantially higher

than the vast majority of other margins calculated.

Fair Value Comparisons

To determine whether sales of the respondents to the United States

were made at less than fair value (LTFV), we compared the United States

price (USP) to the foreign market value (FMV), as specified in the

``United States Price'' and ``Foreign Market Value'' sections of this

notice.

United States Price

For each respondent, we based USP on purchase price, in accordance

with section 772(b) of the Act, when the subject merchandise was sold

to unrelated purchasers in the United States prior to importation. In

addition, for Ta Chen, where certain sales to the first unrelated

purchaser took place after importation into the United States, we also

based USP on exporter's sales price (ESP), in accordance with section

772(c) of the Act.

We made company-specific adjustments as follows:

A. Enlin

For Enlin, we calculated purchase price based on CIF or C&F prices

to unrelated customers in the United States. In accordance with section

772(d)(1)(B) of the Act, we increased U.S. price by the amount of

import duties imposed by Taiwan on inputs for the subject merchandise

which have not been collected by reason of the exportation of the

subject merchandise to the United States.

B. Ta Chen

For Ta Chen, we calculated purchase price based on FOB Taiwan, FOB

U.S. port or delivered prices to unrelated customers in the United

States. We calculated ESP based on delivered prices to unrelated

customers in the United States. For ESP transactions, we made

deductions, where appropriate, for the following movement charges in

accordance with section 772(e) of the Act: foreign inland freight,

ocean freight, marine insurance, foreign brokerage, U.S. customs fees,

U.S. customs broker charge, containerization expense, harbor

construction fees and U.S. inland freight. We also made deductions,

where appropriate, for credit expenses, bank charges, and indirect

selling expenses, including inventory carrying expenses and repacking

in the United States.

We made an addition to USP for value-added taxes (VAT) in

accordance with section 772(d)(1)(C) of the Act. In making our

adjustment for VAT, we followed the instructions of the United States

Court of International Trade (CIT) in Federal Mogul Corp. v. United

States, 834 F.Supp. 1391 (CIT 1993). We also deducted the amount of tax

due solely to price deductions in the original tax base. For discussion

of this adjustment see Final Results of Administrative Review: Certain

Industrial Forklifts from Japan, (59 FR 1374, January 10, 1994) and

Final Determination of Sales at Less Than Fair Value: Certain Stainless

Steel Wire Rods from France, (58 FR 68865, December 29, 1993).

C. Yih Tai

For Yih Tai, we calculated purchase price based on CIF prices to

unrelated customers in the United States. No deductions were either

claimed or made.

Foreign Market Value

In order to determine whether there was a sufficient volume of

sales in the home market to serve as a viable basis for calculating

FMV, for each respondent we compared the volume of home market sales of

the subject merchandise to the volume of third-country sales of subject

merchandise, in accordance with section 773(a)(1)(B) of the Act. We

found that the home market was not viable for sales of SST pipe

fittings made by either Enlin or Yih Tai. Based on their respective

questionnaire responses, Canada was selected as the third-country

market basis for FMV for both Enlin and Yih Tai. We found that the home

market was viable for sales of SST pipe fittings by Ta Chen.

We made company-specific adjustments as follows:

A. Enlin

We calculated FMV based on CIF or FOB prices, inclusive of packing,

to unrelated customers in Canada. Enlin reported that all Canadian

sales were made at the same level of trade as that of its U.S.

customers. Pursuant to section 773(a)(4)(B) and 19 CFR 353.56(a)(2), we

made circumstance-of-sale adjustments, where appropriate, for

differences in credit expenses and letter of credit fees. We also made

circumstance-of-sale adjustments for the following movement expenses:

Foreign inland freight, ocean freight, marine/air insurance, foreign

brokerage and handling, and harbor construction fees. We deducted home

market packing costs and added U.S. packing costs.

We added the amount of import duties imposed by Taiwan on inputs

for the subject merchandise which have not been collected by reason of

the exportation of the subject merchandise to Canada. Because Enlin did

not include the per-unit amount of these uncollected duties in its

sales listing, we added to FMV the amount reported for the U.S.

comparison sale as best information available.

For both U.S. and third-country sales, we recalculated the imputed

credit expenses for those sales that had missing payment and/or

shipment dates. These recalculations were made based on the weighted-

average difference between payment and shipment dates for those sales

which were both shipped and paid during the POI.

B. Ta Chen

We based FMV on home market, ex-factory and delivered prices,

inclusive of packing, to unrelated customers. We included in FMV the

amount of the VAT included in the home market. As discussed for USP, we

also calculated the amount of tax that was due solely to the inclusion

of price deductions in the original tax base (in this case, five

percent of the sum of any adjustments, expenses, and charges that were

deducted from the tax base). We deducted this amount from the FMV after

all other additions and deductions had been made. By making this

additional tax adjustment, we avoid a distortion that could cause the

creation of a dumping margin even where pre-tax dumping is zero.

We compared U.S. sales to home market sales made at the same level

of trade, where possible, in accordance with 19 CFR 353.58. Where we

were not able to match at the same level of trade, we made comparisons

without regard to level of trade.

For purchase price comparisons, we made deductions, where

appropriate, for discounts. Pursuant to section 773(a)(4)(B) and 19 CFR

353.56(a)(2), we made circumstance-of-sale adjustments, where

appropriate, for differences in credit expenses and bank charges. We

also made circumstance-of-sale adjustments for the following movement

expenses: Foreign inland freight, ocean freight, marine insurance,

foreign brokerage, U.S. customs fees, U.S. customs broker charge,

containerization expenses, and harbor construction fees. We deducted

home market packing costs and added U.S. packing costs.

For ESP comparisons, we made deductions, where appropriate, for

discounts and foreign inland freight. We also deducted from FMV the

weighted-average home market indirect selling expenses, including,

where appropriate, inventory carrying costs. The deduction for home

market indirect selling expenses was capped by the sum of U.S. indirect

selling expenses, in accordance with 19 CFR 353.56(b) (1) and (2).

For both U.S. and home market sales, we made the following

recalculations to circumstance-of-sale adjustments: We recalculated

credit expenses because the expenses reported in Ta Chen's sales

listing were inconsistent with the methodology explained in the

narrative portion of its submissions. We recalculated indirect selling

expenses to include selling expenses not originally included in the

sales listing. Finally, we recalculated inventory carrying expenses to

correct the price bases, interest rates, and the appropriate time in

inventory, based on information contained in Ta Chen's questionnaire

responses.

C. Yih Tai

We calculated FMV based on CIF prices, inclusive of packing, to

unrelated customers in Canada. Yih Tai reported that all Canadian sales

were made at the same level of trade as that of its U.S. customers.

Pursuant to section 773(a)(4)(B) and 19 CFR 353.56(a)(2), we made

circumstance-of-sale adjustments, where appropriate, for difference in

credit expenses, letter of credit fees, and interest revenue. We also

made circumstance-of-sale adjustments for the following movement

expenses: Foreign inland freight, foreign brokerage, ocean freight,

marine insurance, and harbor construction fees. We deducted home market

packing costs and added U.S. packing costs.

Because commissions were paid on Canadian but not on U.S. sales, in

accordance with 19 CFR 353.56(b)(1), we deducted the weighted-average

third-country commission amount from FMV. We then added to FMV as a

circumstance-of-sale adjustment the lesser of either (1) the amount of

the weighted-average commissions paid on third-country sales; or (2)

the sum of the indirect selling expenses on U.S. sales. U.S. indirect

selling expenses included inventory carrying expenses.

Currency Conversion

We made currency conversions based on the official exchange rates

in effect on the dates of the U.S. sales as certified by the Federal

Reserve Bank.

Verification

As provided in section 776(b) of the Act, we will verify all

information that we determine is acceptable for use in making our final

determination.

Suspension of Liquidation

In accordance with section 733(d)(1) of the Act, we are directing

the Customs Service to suspend liquidation of all entries of SST pipe

fittings from Taiwan, except those of Ta Chen and Yih Tai, that are

entered, or withdrawn from warehouse, for consumption on or after the

date of publication of this notice in the Federal Register. The Customs

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

estimated preliminary dumping margins, as shown below. This suspension

of liquidation will remain in effect until further notice. The LTFV

margins are as follows:

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

Weighted-average

Producer/manufacturer/exporter margin

percentage

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

Enlin Steel Corporation............................... 1.25

Ta Chen Stainless Pipe Co., Ltd....................... 0.00 (de

minimis)

Yih Tai Industries Co., Ltd........................... 0.15 (de

minimis)

All Others............................................ 1.25

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

ITC Notification

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

ITC of our determination. If our final determination is affirmative,

the ITC will determine whether these imports are materially injuring,

or threaten material injury to, the U.S. industry before the later of

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

after our final determination.

Public Comment

Interested parties who wish to request a hearing must submit a

written request to the Assistant Secretary for Import Administration,

U.S. Department of Commerce, room B-099, within ten days of the

publication of this notice. Requests should contain: (1) The party's

name, address, and telephone number; (2) the number of participants;

and (3) a list of the issues to be discussed.

A hearing, if requested, will be held on June 16, 1994, at 1 p.m.

at the U.S. Department of Commerce in room 3708. Parties should confirm

by telephone the time, date, and place of the hearing 48 hours prior to

the scheduled time. In accordance with 19 CFR 353.38, case briefs or

other written comments in at least ten copies must be submitted to the

Assistant Secretary no later than June 7, 1994, and rebuttal briefs no

later than June 14, 1994. In accordance with 19 CFR 353.38(b), oral

presentations will be limited to issues raised in the briefs.

If this investigation proceeds normally, we will make our final

determination not later than 135 days after the publication of this

notice.

This determination is published pursuant to section 733(f) of the

Act and 19 CFR 353.15(a)(4).

Dated: March 1, 1994.

Joseph A. Spetrini,

Acting Assistant Secretary for Import Administration.

[FR Doc. 94-5305 Filed 3-7-94; 8:45 am]

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