Initiation of Antidumping Investigations: Stainless Steel Wire Rod From Germany, Italy, Japan, Korea, Spain, Sweden, and Taiwan

DEPARTMENT OF COMMERCE

International Trade Administration

[A-428-824, A-475-820, A-588-843, A-580-829, A-469-807, A-401-806, and

A-583-828]

Initiation of Antidumping Investigations: Stainless Steel Wire

Rod From Germany, Italy, Japan, Korea, Spain, Sweden, and Taiwan

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: August 26, 1997.

FOR FURTHER INFORMATION CONTACT: James Maeder, at (202) 482-3330; James

Terpstra, at (202) 482-3965; or Erik Warga, at (202) 482-0922, Import

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

Commerce, 14th Street and Constitution Avenue, N.W., Washington, DC

20230.

Initiation of Investigations

The Applicable Statute and Regulations

Unless otherwise indicated, all citations to the statute are

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

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

the Uruguay Round Agreements Act (``URAA''). In addition, unless

otherwise indicated, all citations to the Department's regulations are

to the current regulations, as amended by the regulations published in

the Federal Register on May 19, 1997 (62 FR 27296).

The Petition

On July 30, 1997, the Department of Commerce (``the Department'')

received a petition filed in proper form by AL Tech Specialty Steel

Corp., Carpenter Technology Corp., Republic Engineered Steels, Talley

Metals Technology, Inc., and United Steelworkers of America

(``petitioners''). The Department received supplemental information to

the petition on August 6 and 14, 1997.

In accordance with section 732(b) of the Act, petitioners allege

that imports of stainless steel wire rod from Germany, Italy, Japan,

Korea, Spain, Sweden, and Taiwan 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

an industry in the United States.

The Department finds that petitioners have standing to file the

petition because they are interested parties as defined in section

771(9)(C) and (D) of the Act and they have demonstrated sufficient

industry support (see discussion below).

Scope of Investigations

For purposes of these investigations, certain stainless steel wire

rod (``SSWR'') comprises products that are hot-rolled or hot-rolled

annealed and/or pickled and/or descaled rounds, squares, octagons,

hexagons or other shapes, in coils, that may also be coated with a

lubricant containing copper, lime or oxalate. SSWR is made of alloy

steels containing, by weight, 1.2 percent or less of carbon and 10.5

percent or more of chromium, with or without other elements. These

products are manufactured only by hot-rolling or hot-rolling,

annealing, and/or pickling and/or descaling, and are normally sold in

coiled form, and are of solid cross-section. The majority of SSWR sold

in the United States is round in cross-sectional shape, annealed and

pickled, and later cold-finished into stainless steel wire or small-

diameter bar.

The most common size for such products is 5.5 millimeters or 0.217

inches in diameter, which represents the smallest size that normally is

produced on a rolling mill and is the size that most wire drawing

machines are set up to draw. The range of SSWR sizes normally sold in

the United States is between 0.20 inches and 1.312 inches diameter. Two

stainless steel grades SF20T and K-M35FL are excluded from the scope of

the investigation. The chemical makeup for the excluded grades are as

follows:

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

SF20T

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

Carbon............................... 0.05 max............... Chromium............... 19.00/21.00.

Manganese............................ 2.00 max............... Molybdenum............. 1.50/2.50.

Phosphorous.......................... 0.05 max............... Lead................... added (0.10/0.30).

Sulfur............................... 0.15 max............... Tellurium.............. added (0.03 min).

Silicon.............................. 1.00 max...............

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K-M35FL

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

Carbon............................... 0.015 max.............. Nickel................. 0.30 max.

Silicon.............................. 0.70/1.00.............. Chromium............... 12.50/14.00.

Manganese............................ 0.40 max............... Lead................... 0.10/0.30.

[[Page 45225]]

Phosphorous.......................... 0.04 max............... Aluminum............... 0.20/0.35.

Sulfur............................... 0.03 max...............

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

The products under investigation are currently classifiable under

subheadings 7221.00.0005, 7221.00.0015, 7221.00.0030, 7221.00.0045, and

7221.00.0075 of the Harmonized Tariff Schedule of the United States

(HTSUS). Although the HTSUS subheadings are provided for convenience

and customs purposes, the written description of the scope of these

investigations is dispositive.

As we discussed in the preamble to the new regulations (62 FR at

27323), 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 September 15, 1997.

Comments should be addressed to Import Administration's Central Records

Unit at Room 1874, U.S. Department of Commerce, Pennsylvania Avenue and

14th Street, N.W., Washington, D.C. 20230. This period of scope

consultation is intended to provide the Department with ample

opportunity to consider all comments and consult with parties prior to

the issuance of the preliminary determination.

Determination of Industry Support for the Petition

Section 732(b)(1) of the Act requires that a petition be filed on

behalf of the domestic industry. Section 732(c)(4)(A) of the Act

provides that a petition meets this requirement if the domestic

producers or workers who support the petition account for: (1) At least

25 percent of the total production of the domestic like product; and

(2) more than 50 percent of the production of the domestic like product

produced by that portion of the industry expressing support for, or

opposition to, the petition.

Section 771(4)(A) of the Act defines the ``industry'' as the

producers of a domestic like product. Thus, to determine whether the

petition has the requisite industry support, the statute directs the

Department to look to producers and workers who account for production

of 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 provision

regarding the domestic like product (section 771(10) of the Act), they

do so for different purposes and pursuant to separate and distinct

authority. In addition, the Department's determination is subject to

limitations of time and information. Although this may result in

different definitions of the domestic like product, such differences do

not render the decision of either agency contrary to the

law.1

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\1\ See Algoma Steel Corp., Ltd. v. United States, 688 F. Supp.

639, 642-44 (CIT 1988); High Information Content Flat Panel Displays

and Display Glass Therefor from Japan: Final Determination;

Rescission of Investigation and Partial Dismissal of Petition, 56 FR

32376, 32380-81 (July 16, 1991).

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Section 771(10) of the Act defines 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.

The petition refers to the single domestic like product defined in

the ``Scope of Investigation'' section, above. The Department has no

basis on the record to find the petition's definition of the domestic

like product to be inaccurate. In this regard, we have found no basis

on which to reject petitioners' representations that there are clear

dividing lines, in terms of characteristics and uses, between the

product under investigation and other coiled steel products. The

Department has, therefore, adopted the domestic like product definition

set forth in the petition. In this case, petitioners established

industry support substantially above the statutory requirement.

Accordingly, the Department determines that the petition is filed on

behalf of the domestic industry within the meaning of section 732(b)(1)

of the Act.

Export Price and Normal Value

The following are descriptions of the allegations of sales at less

than fair value upon which our decisions to initiate these

investigations are based. Should the need arise to use any of this

information in our preliminary or final determinations for purposes of

facts available under section 776 of the Act, we may re-examine the

information and revise the margin calculations, if appropriate.

Germany

Petitioners identified Krupp Edelstahlprofile (``Krupp'') as the

sole exporter and producer of SSWR from Germany. Petitioners based

export price on recent U.S. sales by Krupp during June 1997 for the

SSWR grades most commonly exported to the United States from Germany.

Petitioners calculated net U.S. prices by subtracting an estimate of

the costs incurred to transport the SSWR rod from the factory to the

U.S. port. Petitioners did not subtract costs incurred to transport the

SSWR from the U.S. port to the customer's location in the United

States.

Petitioners calculated the cost of international freight based upon

the average difference in the CIF values and the U.S. Customs values

reported in the official U.S. import statistics. Petitioners subtracted

amounts for U.S. import duties based on the 1997 import duty rate.

Petitioners also subtracted amounts for the U.S. harbor maintenance fee

and for the U.S. merchandise processing fee.

With respect to normal value (``NV''), petitioners obtained prices

for recent sales of SSWR by Krupp to customers in Germany from foreign

market research. Petitioners calculated net home market prices for

sales made in Germany by subtracting an amount for delivery costs as

obtained through foreign market research from the reported gross home

market sales prices.

In addition, the petitioners provided information demonstrating

reasonable grounds to believe or suspect that sales of SSWR in the home

market were made at prices below the fully allocated cost of production

(``COP''), within the meaning of section 773(b) of the Act, and

requested that the Department conduct a country-wide sales below cost

investigation.

Pursuant to section 773(b)(3) of the Act, COP consists of the cost

of manufacturing (``COM''), selling, general, and administrative

expenses (``SG&A''), and packing. To calculate COP, petitioners based

COM, with the exception of depreciation, on their own production

experience, adjusted for known differences between costs incurred to

produce SSWR in the United States and costs incurred for producing the

merchandise in Germany.

[[Page 45226]]

To calculate depreciation, petitioners relied upon Krupp's 1996

consolidated financial statements. To derive the direct materials,

energy, direct labor and factory overhead costs, petitioners obtained

cost data from two U.S. producers and relied upon the average costs of

those producers. One of the U.S. producers manufactures its own billets

while the other purchases all billets consumed. The foreign market

research obtained by the petitioner indicated that Krupp produces its

own billets. Therefore, we recalculated the submitted COM based on the

cost data of the U.S. company that produces its own billets.

To calculate SG&A, petitioners relied upon expense rates of

nineteen German companies, only one of which appears to be involved in

the metal manufacturing industry. We recalculated SG&A using the

reported rate for the company that appears to be in an industry similar

to that which manufactures steel products. Petitioners calculated

financing expenses using Krupp's 1996 consolidated audited financial

statements. Petitioners added the average packing costs reported by the

U.S. producers to COP. Based upon the comparison of the adjusted prices

of the foreign like product in the home market to the calculated COP,

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 (see Initiation Checklist, dated

August 19, 1997). Accordingly, with respect to the German case, the

Department is initiating a county-wide cost investigation.

Pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act,

petitioners also based NV for sales in Germany on constructed value

(``CV''). For purposes of this initiation, we accepted CV as the

appropriate basis for NV. Petitioners calculated CV using the same COM,

SG&A, and interest expense figures used to compute German home market

costs. We adjusted the CV as noted above in the discussion of COP.

Consistent with section 773(e)(2) of the Act, petitioners also added to

CV an amount for profit. Profit was based upon Krupp's 1996

consolidated audited financial statements.

The revised average dumping margins in the petition, based on the

comparisons between Krupp's U.S. prices and the revised constructed

values, range from 17.17 percent to 21.28 percent.

Italy

Petitioners identified four exporters and producers of SSWR: Cogne

Acciai Speciali SrL (``Cogne''); Rodacciai; Acciaierie Valbruna SrL

(``Valbruna''); and Acciaierie di Bolzano (``Bolzano''). Petitioners

based export price on actual U.S. sales by Cogne and by Valbruna/

Bolzano during November 1996 for the SSWR grades most commonly exported

to the United States from Italy. Petitioners calculated net U.S. prices

by subtracting an estimate of the costs incurred to transport the

stainless wire rod from the factory to the customer's location in the

United States.

Petitioners calculated the cost of international freight based upon

the average difference in the CIF values and the U.S. Customs values

reported in the official U.S. import statistics. Petitioners estimated

U.S. inland freight costs based on the distance from the U.S. port of

entry to the U.S. customer's location. Petitioners subtracted amounts

for U.S. import duties and customs user fees. Petitioners also

subtracted amounts for the U.S. harbor maintenance fee and for the U.S.

merchandise processing fee. Petitioners added duty drawback to the U.S.

prices for comparisons that involved grades of SSWR that include

molybdenum or titanium based on information obtained from foreign

market research.

With respect to NV, petitioners obtained home market prices through

foreign market research. Petitioners calculated net home market prices

for sales in Italy by subtracting the estimated delivery costs reported

in the foreign market research. Petitioners converted home market

prices quoted in lire per kilogram to U.S. dollars per pound by using a

conversion ratio of one kilogram equals 2.2046 pounds and the Italian

lire/U.S. dollar exchange rate in effect during the period in which the

U.S. sales occurred. The exchange rates used to make currency

conversions were the rates published in the International Financial

Statistics for November 1996, the month of the U.S. sales.

Petitioners made a circumstance of sale adjustment for imputed

credit expenses by subtracting home market credit expenses and by

adding U.S. imputed credit expenses to the net home market prices

calculated in the petition. Petitioners calculated home market imputed

credit expenses based on the average payment period, reported in the

foreign market research, of 90 days, and the average lending rate in

Italy published by the International Financial Statistics for the

fourth quarter of 1996. Petitioners calculated U.S. imputed credit

expenses based on payment terms reported in the foreign market research

of 60 days and the average lending rate in the United States published

in the International Financial Statistics. Petitioners did not adjust

the reported prices for differences in packing costs because

petitioners assumed that packing costs were the same for home market

sales and for U.S. sales.

According to the foreign market research, Italian producers impose

a surcharge per kilogram for wire rod with a diameter of 6 millimeters

to 13 millimeters. Petitioners subtracted this amount from NV as a

difference-in-merchandise adjustment when the price comparisons

involved a U.S. sale of wire rod with a diameter of less than 6

millimeters and wire rod sold in Italy with a diameter between 6

millimeters and 13 millimeters.

Comparison of NV and net U.S. prices for sales of SSWR from Italy

results in estimated dumping margins that range from 33.29 percent to

46.79 percent.

Japan

Petitioners identified four exporters and producers of SSWR: Aichi

Steel Works Ltd.; Daido Steel Co. Ltd. (``Daido''); Nippon Steel Corp.

(``Nippon''); and Sumitomo Metal Industries Ltd. Petitioners based

export prices on actual, port-of-export, prices for U.S. sales made by

Nippon and Daido to unaffiliated Japanese trading companies during the

fourth quarter of 1996 for the SSWR grades most commonly exported to

the United States from Japan. Petitioners calculated net U.S. prices by

subtracting amounts to deliver the subject merchandise from the factory

to the port of export. This information was obtained from foreign

market research.

Petitioners did not calculate imputed credit expenses for the U.S.

sales because the foreign market research indicated letter of credit

payments terms for U.S. sales. Petitioners converted U.S. prices quoted

in yen per metric ton to U.S. dollars per metric ton based on the

average exchange rate published in the International Financial

Statistics for the fourth quarter of 1996, the period in which U.S.

sales occurred.

With respect to NV, petitioners obtained from the foreign market

research home market price quotations for actual sales from Nippon and

Daido to unrelated distributors in Japan. These prices were quoted in

Japanese yen on a delivered basis. Petitioners calculated net home

market prices by subtracting an amount for average delivery costs

incurred by Nippon and Daido. Petitioners converted home market prices

quoted in yen per metric ton to U.S. dollars per metric ton based on

the average exchange rate published in the International Financial

Statistics for the

[[Page 45227]]

fourth quarter of 1996, the period in which U.S. sales occurred.

Petitioners made a circumstance of sale adjustment for imputed

credit expenses by subtracting home market credit expenses from the

reported home market prices. Petitioners did not add U.S. imputed

credit expenses to the net home market prices since the foreign market

research showed letter of credit payment terms for U.S. sales.

Petitioners calculated home market imputed credit expenses based on the

average payment period reported in the foreign market research of 115

days, and the average annual lending rate in Japan for the first

quarter of 1996, the most current annual lending rate published by the

International Financial Statistics for Japan. Petitioners also adjusted

the reported prices for differences in packing costs by subtracting

home market packing costs and by adding packing costs incurred for U.S.

sales to the reported net home market sales price.

Comparison of NV and net U.S. prices for sales of SSWR from Japan

results in estimated dumping margins that range from 14.53 percent to

29.49 percent.

Korea

Petitioners identified three Korean exporters and producers of

SSWR: Pohang Iron & Steel Co. Ltd. (``Posco''); Dongbang Special Steel

Co. Ltd. (``Dongbang''); and Sammi Steel Co. Ltd. (``Sammi'').

Petitioners based export price on actual, port-of-export, prices

for U.S. sales made by Posco to unaffiliated trading companies during

the fourth quarter of 1996, for the stainless steel wire rod grades

most commonly exported to the United States from Korea, which they

obtained from foreign market research. In addition, petitioners

calculated net U.S. prices by subtracting from export prices amounts to

deliver the subject merchandise from the factory to the port of export

based on information obtained from foreign market research. Petitioners

added to these prices amounts for duty drawback. Petitioners also

converted the reported U.S. prices from Korean won per metric ton to

U.S. dollars per metric ton based on the average exchange rate

published in the International Financial Statistics for the fourth

quarter of 1996, the period in which the U.S. sales occurred.

With respect to NV, the petitioners obtained actual, delivered home

market prices for Posco from the foreign market research. Petitioners

calculated net home market prices for sales made in Korea by

subtracting amounts for discounts and rebates and delivery costs as

obtained through foreign market research, and by subtracting imputed

credit expenses from the reported gross home market sales prices.

Petitioners calculated imputed credit expenses based on the average

payment period reported in the foreign market research of 75 days, and

the average lending rate in Korea published by the International

Financial Statistics for the fourth quarter of 1996. Petitioners also

adjusted the reported prices for differences in packing costs by

subtracting home market packing costs from the reported home market

prices and by adding packing costs incurred for U.S. sales to the

reported home market prices. Petitioners converted home market prices

from Korean won per metric ton to U.S. dollars per metric ton by using

the Korean won/U.S. dollar exchange rate in effect during the period in

which the U.S. sales occurred. The exchange rates used to make currency

conversions were the rates published in the International Financial

Statistics for the fourth quarter 1996.

Comparison of NV and net U.S. prices for sales of SSWR from Korea

results in estimated dumping margins that range from 23.81 percent to

28.44 percent (see Initiation Checklist, dated August 19, 1997).

Spain

Petitioners identified Roldan, S.A. (``Roldan'') as the sole

exporter and producer of SSWR from Spain. Petitioners based export

price on information obtained through foreign market research for

recent sales by Roldan for the SSWR grades most commonly exported to

the United States from Spain. Petitioners calculated net U.S. prices by

subtracting estimated costs for ocean freight and insurance and for

U.S. duties and fees from reported U.S. prices. Petitioners did not

subtract costs incurred to transport the stainless steel wire rod from

the factory to the port of export and from the U.S. port to the

customer's location in the United States.

Petitioners calculated the cost of international freight based upon

the average difference in the CIF values and the U.S. Customs values

reported in the official U.S. import statistics. Petitioners subtracted

amounts for U.S. import duties and customs user fees. Petitioners also

subtracted amounts for the U.S. harbor maintenance fee and for the U.S.

merchandise processing fee. Petitioners did not calculate imputed

credit expenses for Roldan's U.S. sales because petitioners did not

have information concerning the payment terms for these sales.

With respect to NV, petitioners obtained home market prices through

foreign market research. Petitioners calculated net home market prices

for sales made in Spain by subtracting an amount for delivery costs as

obtained through foreign market research from the reported gross home

market sales prices.

In addition, the petitioners provided information demonstrating

reasonable grounds to believe or suspect that sales of SSWR in the home

market were made at prices below the fully allocated COP, within the

meaning of section 773(b) of the Act, and requested that the Department

conduct a country-wide sales below cost investigation.

Pursuant to section 773(b)(3) of the Act, COP consists of the COM,

SG&A, and packing. To calculate COP, petitioners based COM, with the

exception of depreciation, on their own production experience, adjusted

for known differences between costs incurred to produce SSWR in the

United States and costs incurred for producing the merchandise in

Spain. To calculate depreciation the petitioner relied upon the 1996

consolidated financial statement from Roldan's parent company Acerinox.

To calculate Roldan's SG&A and financing expenses petitioners also

relied upon the 1996 consolidated financial statements from Acerinox.

Petitioners maintain that they relied upon Acerinox's consolidated

financial statements because they were unable to obtain Roldan's

financial statements. Since steel production appears to be the primary

business activity of the consolidated Acerinox Group, we considered it

reasonable to rely on its financial data for determining these costs

for purposes of the petition. Petitioners added to the COP the average

packing costs reported by the U.S. producers. Based upon the comparison

of the adjusted prices of the foreign like product in the home market

to the calculated COP, 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, with

respect to the Spanish case, the Department is initiating a country-

wide cost investigation.

Pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act,

petitioners also based NV on CV. For purposes of this initiation, we

are accepting CV as the appropriate basis for NV. Petitioners

calculated CV using the same COM, SG&A, and interest expense figures

used to compute Spain's home market costs. Consistent with section

773(e)(2) of the Act, petitioners also added to CV an amount for

profit. Profit was based upon

[[Page 45228]]

the consolidated audited financial statements of Acerinox.

Comparison between Roldan's U.S. prices and the constructed values

results in dumping margins that range from 31.00 to 63.39 percent.

Sweden

Petitioners identified Fagersta Stainless AB (``Fagersta'') as the

sole exporter and producer of SSWR from Sweden. Fagersta is a joint

venture company formed by the two of the largest steel producing

companies in Sweden: Avesta Sheffield AB and Sandvik Steel. Petitioners

based export price on U.S. sales by Avesta Sheffield AB during November

1996 of the SSWR most commonly exported to the United States from

Sweden. Petitioners calculated net U.S. prices by subtracting from

export prices an estimate of the costs incurred to transport the SSWR

from the factory to the customer's location in the United States.

Petitioners estimated the cost of international freight based upon

the weighted average difference for certain U.S. ports between the CIF

values and the FOB values reported in the official U.S. import

statistics for November 1996 for imports from Sweden. Petitioners

estimated U.S. inland freight costs based on the distance from the U.S.

port of entry to the U.S. customer's location. Petitioners subtracted

amounts for U.S. import duties, for the U.S. harbor maintenance fee,

and for the U.S. merchandise processing fee. Petitioners added duty

drawback to the U.S. prices for comparisons that involved grades of

SSWR that include molybdenum or titanium based on an amount obtained

through foreign market research.

With respect to NV, petitioners obtained home market prices from

foreign market research. The foreign market research provided

information on the base prices, surcharges, discounts, payment terms

and estimated sale-by-sale delivery costs for each of the home market

sales. Petitioners added the surcharges to the reported base prices,

and subtracted the discounts and estimated sale-by-sale delivery costs.

Petitioners converted home market prices quoted in Swedish kronor per

kilogram to U.S. dollars per pound by using a conversion ratio of one

kilogram to 2.2046 pounds and the Swedish kronor/U.S. dollar exchange

rate in effect during the month in which the U.S. sales occurred. The

exchange rates used to make currency conversions were the rates

published in the International Financial Statistics for November 1996,

the month in which of the U.S. sales occurred.

Petitioners made a circumstance of sale adjustment for imputed

credit expenses by subtracting home market credit expenses and by

adding U.S. imputed credit expenses to the net home market prices

calculated in the petition. Petitioners calculated home market imputed

credit expenses based on the average payment period reported in the

foreign market research, and the average lending rate in Sweden

published in the International Financial Statistics for the fourth

quarter of 1996. Petitioners calculated U.S. imputed credit expenses

based on payment terms included in the foreign market research, of 60

days and the average lending rate in the United States published in the

International Financial Statistics. Petitioners did not adjust for

differences in packing costs because petitioners assumed that packing

costs were the same for home market and U.S. sales.

Comparison of NV and net U.S. prices for sales of SSWR from Sweden

results in estimated dumping margins that range from 21.17 percent to

22.74 percent.

Taiwan

Petitioners identified three Taiwan exporters and producers of

SSWR: Walsin-CarTech Specialty Steel Corp.; Yieh Hsing; and Yieh United

Steel Corp.

Most of the domestic production of SSWR is sold to unaffiliated

end-users and includes delivery charges to the customer. Petitioners

obtained prices for U.S. sales by Yieh Hsing during November 1996 for

the grades of SSWR that are most commonly exported to the United States

from Taiwan. Petitioners used export prices as the basis for U.S.

prices because the SSWR was sold prior to the date of importation and

to an unaffiliated U.S. distributor. Petitioners provided port of

export prices for Yieh Hsing's U.S. sales. Petitioners subtracted

foreign inland freight from the reported U.S. prices. Petitioners did

not calculate imputed credit expenses for the U.S. sales since letter

of credit payment terms were available for these sales.

Petitioners provided information showing that the volume of the

home market sales is sufficient to form a basis for NV and provided

prices for actual recent sales from the SSWR producers to unaffiliated

customers in Taiwan.

Petitioners calculated net NV by subtracting amounts for delivery

costs and imputed credit expenses from the reported gross home market

price. Petitioners based credit expenses on the average payment period

of 85 days and the average borrowing rate reported in the foreign

market research. Additionally, petitioners adjusted NV for differences

in packing costs between the U.S. and domestic sales. Finally,

petitioners converted home market prices in New Taiwan dollars per

metric ton to U.S. dollars per metric ton by using the New Taiwan

dollar/U.S. dollar exchange rate in effect during the month in which

the U.S. sales occurred. For conversion purposes, petitioners used the

monthly average exchange rates published by the Federal Reserve rather

than the monthly average exchange rates published by the International

Monetary Fund (IMF) because Taiwan is not a member country of the IMF;

thus, there are no IMF-published exchange rates for Taiwan.

In addition, petitioners provided information demonstrating

reasonable grounds to believe or suspect that sales of SSWR in the home

market were made at prices below the fully allocated COP, within the

meaning of section 773(b) of the Act, and requested that the Department

conduct a Taiwan-wide sales below cost investigation.

Pursuant to section 773(b)(3) of the Act, COP consists of the COM,

SG&A, and packing. To calculate COP, the petitioners calculated COM

primarily using foreign market research.

To calculate SG&A and finance expenses petitioners relied on

amounts reported in Yieh Hsing's 1996 financial statements and other

financial data. We recalculated Yieh Hsing's SG&A and finance expenses

to reflect the amounts reported in its 1996 financial statements.

Petitioner based packing costs on data obtained from foreign market

research. Based upon the comparison of the adjusted prices of the

foreign like product in the home market to the calculated COP, 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 (see Initiation Checklist, dated August 19,

1997). Accordingly, the Department is initiating a Taiwan-wide cost

investigation.

Pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act,

petitioners also based NV for sales in Taiwan on CV. For this

initiation, we are accepting CV as an appropriate basis for NV.

Petitioners calculated CV using the same COM, SG&A, and interest

expense figures used to compute Taiwan home market costs. Consistent

with section 773(e)(2) of the Act, petitioners also added to CV an

amount for profit. Profit was based upon Yieh Hsing's 1996 consolidated

audited financial statements.

Comparison of NV and net U.S. price of SSWR from Taiwan results in

an estimated dumping margin of 16.74 percent. Comparisons between Yieh

Hsing's U.S. prices and the constructed

[[Page 45229]]

values result in dumping margins that range from 9.61 percent to 10.05

percent.

Fair Value Comparisons

Based on the data provided by petitioners, there is reason to

believe that imports of SSWR from Germany, Italy, Japan, Korea, Spain,

Sweden, and Taiwan are being, or are likely to be, sold at less than

fair value.

Initiation of Antidumping Investigations

We have examined the petition on SSWR and have found that it meets

the requirements of section 732 of the Act, including the requirements

concerning allegations of the material injury or threat of material

injury to the domestic producers of a domestic like product by reason

of the subject imports, allegedly sold at less than fair value.

Therefore, we are initiating antidumping duty investigations to

determine whether imports of SSWR from Germany, Italy, Japan, Korea,

Spain, Sweden, and Taiwan are being, or are likely to be, sold in the

United States at less than fair value. Unless extended, we will make

our preliminary determinations for the antidumping duty investigations

by January 6, 1998.

Distribution of Copies of the Petitions

In accordance with section 732(b)(3)(A) of the Act, a copy of the

public version of each petition has been provided to the

representatives of the governments of Germany, Italy, Japan, Korea,

Spain, Sweden, and Taiwan. We will attempt to provide a copy of the

public version of each petition to each exporter named in the petition

(as appropriate).

International Trade Commission Notification

We have notified the ITC of our initiations, as required by section

732(d) of the Act.

Preliminary Determinations by the ITC

The ITC will determine by September 15, 1997, whether there is a

reasonable indication that imports of SSWR from Germany, Italy, Japan,

Korea, Spain, Sweden, and Taiwan are causing material injury, or

threatening to cause material injury, to a U.S. industry. Any negative

ITC determination will result in the particular investigation being

terminated; otherwise, the investigations will proceed according to

statutory and regulatory time limits.

Dated: August 19, 1997.

Robert S. LaRussa,

Assistant Secretary for Import Administration.

[FR Doc. 97-22690 Filed 8-25-97; 8:45 am]

BILLING CODE 3510-DS-P