Certain Stainless Steel Wire Rod From India; Preliminary Results of Antidumping Duty Administrative and New Shipper Reviews

DEPARTMENT OF COMMERCE

International Trade Administration

[A-533-808]

Certain Stainless Steel Wire Rod From India; Preliminary Results

of Antidumping Duty Administrative and New Shipper Reviews

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of preliminary results of antidumping duty

administrative and new shipper reviews.

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SUMMARY: In response to a request by Mukand, Ltd. (``Mukand''),

respondent, the Department of Commerce (``the Department'') is

conducting an administrative review of the antidumping duty order on

stainless steel wire rod (``SSWR'') from India. In addition, new

shipper reviews were requested by respondents Viraj Group (``Viraj'')

and Panchmahal Steel Ltd. (``Panchmahal''). The period of review (POR)

is December 1, 1996, through November 30, 1997. At the request of both

Viraj and Panchmahal (May 11, 1998), the schedules for the new shipper

reviews have been aligned to those of the administrative review of

Mukand. See Letter to Mr. Peter Koenig of Ablondi, Foster, Sobin &

Davidow (May 12, 1998).

We have preliminarily determined that respondents Mukand, Viraj,

and Panchmahal have not sold subject merchandise at less than normal

value (NV) during the POR. If these preliminary results are adopted in

our final results of this administrative review and new shipper

reviews, we will instruct U.S. Customs not to assess antidumping

duties.

We invite interested parties to comment on these preliminary

results. Parties who submit arguments in this proceeding should also

submit with the argument (1) a statement of the issue, and (2) a brief

summary of the argument.

EFFECTIVE DATE: September 9, 1998.

FOR FURTHER INFORMATION CONTACT: Maria Dybczak (Mukand), Carrie Blozy

(Viraj), N. Gerard Zapiain (Panchmahal) or Rick Johnson, AD/CVD

Enforcement Group III, Office 9, Import Administration, International

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

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

1398 (Dybczak), (202) 482-0165 (Blozy), (202) 482-1395 (Zapiain), or

(202) 482-3818 (Johnson).

SUPPLEMENTARY INFORMATION:

The Applicable Statute

Unless otherwise indicated, all citations to the Tariff Act of

1930, as amended (the Act) are references to the provisions effective

January 1, 1995, the effective date of the amendments made by the

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

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

regulations codified at 19 CFR Part 351 (62 FR 27296; May 19, 1997).

Background

On October 20, 1993, the Department published in the Federal

Register the antidumping duty order on certain stainless steel wire

rods from India (58 FR 54110). On December 5, 1997, the Department

published in the Federal Register a notice of opportunity to request an

administrative review of this antidumping duty order (62 FR 64353). On

December 22, respondent Mukand requested that we conduct an

administrative review in accordance with 19 CFR 351.213(b). We

published the notice of initiation of this antidumping duty

administrative review

[[Page 48185]]

on January 26, 1998 (62 FR 3702). On December 24, 1997, and December

31, 1997, Panchmahal and Viraj, respectively, submitted requests for

new shipper administrative reviews. On February 5, 1998, the notice of

initiation of these new shipper administrative reviews was published in

the Federal Register (63 FR 5930).

The Department is conducting these reviews in accordance with

section 751 of the Act.

Scope of the Review

Imports covered by this review are shipments of SSWR from India.

SSWR are products which are hot-rolled or hot-rolled annealed and/or

pickled rounds, squares, octagons, hexagons or other shapes, in coils.

SSWR are 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 only manufactured by hot-rolling and

are normally sold in coiled form, and are of solid cross-section. The

majority of SSWR sold in the United States are round in cross-section

shape, annealed and pickled. The most common size is 5.5 millimeters in

diameter.

The SSWR subject to this review are currently classifiable under

subheadings 7221.00.0005, 7221.00.0015, 7221.00.0020, 7221.00.0030,

7221.00.0040, 7221.00.045, 7221.00.0060, 7221.00.0075, and 7221.00.0080

of the Harmonized Tariff Schedule of the United States (``HTSUS'').

Although the HTSUS subheading is provided for convenience and customs

purposes, the written description of the merchandise under review is

dispositive.

The administrative review covers one company, Mukand, while both

Viraj and Panchmahal are reviewed as new shippers. The period of review

for all three companies is December 1, 1996 through November 30, 1997.

Fair Value Comparisons

To determine whether sales of subject merchandise to the United

States were made at less than fair value, we compared the Export Price

(``EP'') to the NV, as described in the ``Export Price'' and ``Normal

Value'' sections of this notice. In accordance with section 777A(d)(2)

of the Act, we calculated monthly weighted-average prices for NV and

compared these to individual U.S. transactions.

Product Comparisons

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

products covered by the Scope of the Review, which were produced and

sold by the respondent in the home market or a third country market

during the POR, to be foreign like products for purposes of product

comparisons to U.S. sales. For all U.S. sales of Mukand, Viraj, and

Panchmahal, there were identical sales in the home or third market on

which to make a comparison.

Export Price

Mukand

For Mukand, we used EP as defined in section 772(a) of the Act

because the subject merchandise was first sold by Mukand to an

unaffiliated purchaser in the United States before the date of

importation and CEP treatment was not otherwise indicated. We

calculated EP based on packed, delivered prices to the first

unaffiliated purchaser in the United States. We made deductions to the

starting price for movement expenses (Indian and U.S. inland freight,

ocean freight, insurance, brokerage and handling) pursuant to section

772(c)(2) of the Act. Additionally, we added to the U.S. price an

amount for duty drawback pursuant to section 772 (c)(1)(B) of the Act.

For a further discussion of this issue, see Memorandum to the File:

Analysis Memo for the Preliminary Results of Review for Mukand, Ltd.,

pp. 2-3, September 2, 1998. We used Mukand's date of invoice as the

date of sale for the U.S. in accordance with 19 CFR 351.401(i).

Viraj

For calculation of the price to the United States, we used EP, in

accordance with section 772(a) of the Act because the subject

merchandise was first sold by Viraj to an unaffiliated purchaser in the

United States prior to importation and CEP treatment was not otherwise

indicated. The Department calculated EP for Viraj based on packed,

delivered prices to customers in the United States. We made deductions

to the starting price for movement expenses (Indian inland freight,

ocean freight, insurance, and brokerage and handling) in accordance

with section 772(c)(2) of the Act. Additionally, we added to the U.S.

price an amount for duty drawback pursuant to section 772 (c)(1)(B) of

the Act. For a further discussion of this issue, see Memorandum to the

File: Analysis Memorandum for the Preliminary Results of Review for

Viraj, pp. 3-5, September 2, 1998. We used Viraj's date of invoice as

the date of sale for the U.S. in accordance with 19 CFR 351.401(i).

Panchmahal

For Panchmahal, we used EP as defined in section 772(a) of the Act

because the subject merchandise was first sold by Panchmahal to an

unaffiliated purchaser in the United States prior to the date of

importation and CEP treatment was not otherwise indicated. We

calculated EP based on packed, delivered prices to the first

unaffiliated purchaser in the United States. We made deductions to the

starting price for movement expenses (foreign inland freight,

international freight, and marine insurance) pursuant to section

772(c)(2) of the Act. We denied Panchmahal's claim for a duty drawback

adjustment, as Panchmahal failed to provide evidence that illustrated

either a claim for the rebate or actual payment of the rebate on the

exported product. For a further discussion of this issue, see

Memorandum to the File: Analysis Memorandum for the Preliminary Results

of Review for Panchmahal, pp. 3-4, September 2, 1998. We used

Panchmahal's date of invoice as the date of sale for its U.S. sale of

subject merchandise in accordance with 19 CFR 351.401(i).

Normal Value

Mukand

We compared the aggregate volume of Mukand's home market sales of

the foreign like product and U.S. sales of the subject merchandise to

determine whether the volume of the foreign like product Mukand sold in

India was sufficient, pursuant to section 773(a)(1)(C) of the Act, to

form a basis for NV. Because Mukand's volume of home-market sales of

foreign like product was greater than five percent of its U.S. sales of

subject merchandise, in accordance with section 773(a)(1)(B)(i) of the

Act, we based NV on the prices at which the foreign like products were

first sold for consumption in India.

We based home-market prices on the packed, delivered prices to

unaffiliated purchasers in the home market. We made adjustments for

discounts and rebates. Where applicable, we made adjustments for

packing and movement expenses in accordance with section 773(a)(6)(B)

of the Act. In accordance with section 773(a)(6)(C)(iii) of the Act and

19 CFR 351.410, if appropriate, we made circumstance of sale

adjustments by deducting home market direct selling expenses and adding

U.S. direct selling expenses (credit). We offset home market

commissions by the amount of indirect selling expenses incurred on the

U.S. sale, up to the amount of the home market commission.

[[Page 48186]]

Viraj

Because Viraj had no sales of the subject merchandise in the home

market during the POR, we compared the aggregate volume of sales of the

foreign like product to Turkey (the only other market outside the U.S.

to which Viraj sold) and U.S. sales of the subject merchandise to

determine whether the volume of the foreign like product Viraj sold in

Turkey was sufficient, pursuant to section 773(a)(1)(B)(ii)(II) of the

Act, to form a basis for NV. Because Viraj's volume of third country

market sales of foreign like product was greater than five percent of

its U.S. sales of subject merchandise, in accordance with section

773(a)(1)(B)(ii) of the Act, we based NV on the prices at which the

foreign like products were first sold for consumption in Turkey.

We based third country market prices on the packed, delivered

prices to unaffiliated purchasers in the third country market. Where

applicable, we made adjustments for packing and movement expenses in

accordance with section 773(a)(6)(B) of the Act. Additionally, we added

to the third country market price an amount for duty drawback. For a

further discussion of this issue, see Memorandum to the File: Analysis

Memorandum for the Preliminary Results of Review for Viraj, pp. 3-5,

September 2, 1998. In accordance with section 773(a)(6)(C)(iii) of the

Act and 19 CFR 351.410, if appropriate, we made circumstance of sale

adjustments by deducting third country direct selling expenses and

adding U.S. direct selling expenses.

Panchmahal

For Panchmahal we compared the aggregate volume of the company's

comparison market sales of the foreign like product and U.S. sales of

the subject merchandise to determine whether the volume of the foreign

like product Panchmahal sold in India was sufficient, pursuant to

section 773(a)(1)(C) of the Act, to form a basis for NV. Because

Panchmahal's volume of comparison market sales of foreign like product

was greater than five percent of its U.S. sales of subject merchandise,

in accordance with section 773(a)(1)(B)(i) of the Act, we based NV on

the prices at which the foreign like products were first sold for

consumption in India.

We based comparison market prices on the packed, delivered prices

to unaffiliated purchasers in the comparison market. Where applicable,

we made adjustments for packing and movement expenses in accordance

with section 773(a)(6)(B) of the Act. In accordance with section

773(a)(6)(C)(iii) of the Act and 19 CFR 351.410, if appropriate, we

made circumstance of sale adjustments by deducting comparison market

direct selling expenses and adding U.S. direct selling expenses (credit

and other direct selling expenses). We offset home market commissions

by the amount of indirect selling expenses incurred on the U.S. sales,

up to the amount of the home market commission.

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 or CEP transaction. The NV

LOT is that of the starting-price sales in the comparison market or,

when NV is based on constructed value (``CV''), that of the sales from

which we derive selling, general and administrative (``SG&A'') expenses

and profit. For EP, the U.S. LOT is also the level of the starting-

price sale, which is usually from exporter to importer. For CEP, it is

the level of the constructed sale from the exporter to the importer.

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

CEP, 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. Finally, for CEP sales, if the NV level is

more remote from the factory than the CEP level and there is no basis

for determining whether the difference in the levels between NV and CEP

affects price comparability, we adjust NV under section 773(a)(7)(B) of

the Act (the CEP offset provision). 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 the present review, none of the respondents requested a level of

trade (LOT) adjustment. To ensure that no such adjustment was

necessary, in accordance with the principles discussed above, we

examined information regarding the distribution systems in both the

United States and Indian markets, including the selling functions,

classes of customer, and selling expenses for each respondent.

Mukand

In both the home market and the United States, Mukand reported two

levels of trade: sales made directly to end-users and sales made

through agents/resellers. Agents/resellers are further distinguished

between consignment agents and marketing/``Del Credre'' agents.

Consignment agents hold stock of Mukand's products, can make and accept

offers, conduct negotiations, make arrangements for shipping, and

collect payments for Mukand. A marketing agent markets and books orders

only, while a ``Del Credre'' agent is defined as a marketing agent that

also collects customer payments for Mukand. We examined the selling

functions performed at each claimed level and found that there was a

significant difference in selling functions offered between sales to

end-users and sales made through agents/resellers. We noted that both

quantitatively and qualitatively, the selling functions performed for

sales to end-user customers in both the U.S. and the home market

involve significantly greater resources and thus represent a distinct

stage of marketing. Specifically, of the nine selling functions

reported, Mukand claims regularly to have performed negotiations,

shipping arrangements, and accounts receivable collections (and in some

cases, made offers) for sales to end users, but not for sales involving

agents/resellers. Therefore, given these differences, we preliminarily

conclude that end-users and agents/resellers constitute separate levels

of trade. However, there was not a significant difference in selling

functions between sales made through consignment agents and marketing/

``Del Credre'' agents, and as such we have made no level of trade

distinction between sales made through agents.

Although two levels of trade exist, all home market sales that

matched to the U.S. sale were made to end-users, the same level of

trade as the U.S. sale used to determine export price. Thus, because

there is no difference in LOT, no level of trade adjustment was

necessary.

For a further discussion of the Department's LOT analysis with

respect to Mukand, see Memorandum to the File: Analysis Memorandum for

the Preliminary Results of Review for Mukand, pp. 1-2, September 2,

1998.

Viraj

In both the third country comparison market and the United States,

Viraj reported one LOT and one distribution system with one class of

customer (distributors). Viraj stated that it

[[Page 48187]]

manufactures the merchandise after receipt of a final confirmed order

and sells directly to its customers in the comparison market and in the

United States on a CIF basis. Viraj reported that it performs identical

selling functions in both the third country comparison market and the

United States. These selling functions include soliciting inquiries

from customers, negotiating with customers, and procurement of export

orders. Further, Viraj reported that it did not provide other sales-

related services on any of its sales, such as inventory maintenance,

technical advice, warranty services, or advertising. Therefore, we

preliminarily conclude that Viraj performs identical selling functions

in the comparison market and the United States and that a LOT

adjustment is not warranted.

For a further discussion of the Department's LOT analysis with

respect to Viraj, see Memorandum to the File: Analysis Memorandum for

the Preliminary Results of Review for Viraj, pp. 1-2, September 2,

1998.

Panchmahal

In both the home market and the United States, Panchmahal reported

one level of trade. Panchmahal reported that in the home market, it

made sales from its plant directly to end users and to retailers. The

company also stated that it made sales in the home market through

consignment agents and branch offices to end users and retailers. Its

sole sale to the United States was to a reseller. Panchmahal stated

that it sells directly to its buyers in the comparison market and in

the United States on a CIF basis on the receipt of a confirmed order.

We examined the company's selling functions and saw that it did not

provide any sales-related services on any of its sales, other than

transporting the merchandise to the Indian port. Because there are no

differences between the selling functions on sales made to either end

users or retailers in the home market, sales to both of these customer

categories represent a similar stage of marketing. Therefore, we

preliminarily conclude that end users and retailers constitute one

level of trade in the home market. Furthermore, because Panchmahal's

sale to the United States involved the identical selling functions as

those in the comparison market, we consider it to be made at the same

level of trade. Therefore, no LOT adjustment for Panchmahal is

appropriate. For a further discussion of the Department's LOT analysis

with respect to Panchmahal, see Memorandum to the File: Analysis

Memorandum for the Preliminary Results of Review for Panchmahal, pg. 2,

September 2, 1998.

Preliminary Results of Review

As a result of our review, we preliminarily determine that the

following weighted-average dumping margins exist for the period

December 1, 1996, through November 30, 1997:

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

Margin

Manufacturer/exporter (percent)

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

Mukand, Ltd................................................ 0.00

Viraj...................................................... 0.00

Panchmahal................................................. 0.00

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

The Department will disclose calculations performed in connection

with this preliminary determination within five days of the date of

publication of this notice. Any interested party may request a hearing

within 30 days of publication. Any hearing, if requested, will be held

2 days after the scheduled date for submission of rebuttal briefs.

Issues raised in the hearing will be limited to those raised in the

case briefs. Case briefs from interested parties may be submitted not

later than 30 days after the date of publication of this notice in the

Federal Register; rebuttal briefs may be submitted not later than five

days thereafter. The Department will publish the final results of this

administrative review, including its analysis of issues raised in any

written comments or at a hearing, not later than 120 days after the

date of publication of this notice.

Upon issuance of the final results of this review, the Department

shall determine, and the U.S. Customs Service shall assess, antidumping

duties on all appropriate entries. If these preliminary results are

adopted in our final results, we will instruct the Customs Service not

to assess antidumping duties on the merchandise subject to review. Upon

completion of this review, the Department will issue appraisement

instructions directly to the Customs Service. If applicable, we will

calculate an importer-specific ad valorem duty assessment rate based on

the ratio of the total amount of antidumping duties calculated for the

examined sales made during the POR to the total customs value of the

sales used to calculate those duties. This rate will be assessed

uniformly on all entries of that particular importer made during the

POR. This is equivalent to dividing the total amount of antidumping

duties, which are calculated by taking the difference between statutory

NV and statutory EP, by the total statutory EP value of the sales

compared, and adjusting the result by the average difference between EP

and customs value for all merchandise examined during the POR.

Furthermore, the following deposit requirements will be effective

for all shipments of the subject merchandise entered, or withdrawn from

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

final results of these administrative reviews, as provided by section

751(a)(1) of the Act: (1) for Mukand, Viraj, and Panchmahal, no deposit

will be required; (2) if the exporter is not a firm covered in this

review, a prior review, or the original investigation, but the

manufacturer is, the cash deposit rate will be the rate established for

the most recent period for the manufacturer of the merchandise; and (3)

the cash deposit rate for all other manufacturers or exporters will

continue to be 48.80 percent, the ``All Others'' rate made effective by

the original investigation.

These deposit requirements, when imposed, shall remain in effect

until publication of the final results of the next administrative

review.

This notice also serves as a preliminary reminder to importers of

their responsibility under 19 CFR 351.402(f)(2) to file a certificate

regarding the reimbursement of antidumping duties prior to liquidation

of the relevant entries during this review period. Failure to comply

with this requirement could result in the Secretary's presumption that

reimbursement of antidumping duties occurred and the subsequent

assessment of double antidumping duties.

This determination is issued and published in accordance with

sections 751(a)(1) and 777(i)(1) of the Act.

Date: August 28, 1998.

Joseph A. Spetrini,

Acting Assistant Secretary for Import Administration.

[FR Doc. 98-24168 Filed 9-8-98; 8:45 am]

BILLING CODE 3510-DS-P