Notice of Preliminary Determination of Sales at Less Than Fair Value: Stainless Steel Wire Rod From Germany

DEPARTMENT OF COMMERCE

International Trade Administration

[A-428-824]

Notice of Preliminary Determination of Sales at Less Than Fair

Value: Stainless Steel Wire Rod From Germany

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: March 5, 1998.

FOR FURTHER INFORMATION CONTACT: Sunkyu Kim or Everett Kelly, Import

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

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

20230; telephone: (202) 482-2613 or (202) 482-4194, respectively.

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 to

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

unless otherwise indicated, all citations to the Department's

regulations are to the regulations at 19 CFR part 351 (62 FR 27296, May

19, 1997).

Preliminary Determination

We preliminarily determine that stainless steel wire rod (``SSWR'')

from Germany is being, or is likely to be, sold in the United States at

less than fair value (``LTFV''), as provided in section 733 of the Act.

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

section of this notice.

Case History

Since the initiation of this investigation on August 19, 1997 (see

Notice of Initiation of Antidumping Duty Investigations: Stainless

Steel Wire Rod from Germany, Italy, Japan, Korea, Spain, Sweden and

Taiwan (62 FR 45224, August 26, 1997) (``Notice of Initiation'')), the

following events have occurred:

On September 15, 1997, the United States International Trade

Commission (``ITC'') notified the Department of its affirmative

preliminary injury determination in this case (see ITC Investigation

No. 731-TA-770).

In September 1997, the Department obtained information from the

U.S. Embassy in Germany identifying Krupp Edelstahlprofile and BGH

Edelstahl Freital GmbH as the potential producers and/or exporters of

the subject merchandise to the United States. Based on this

information, on September 19, 1997, the Department issued the

antidumping duty questionnaire to the following producers/exporters of

SSWR to the United States: Krupp Edelstahlprofile GmbH and Krupp Hoesch

Steel Products (collectively ``Krupp'') and BGH Edelstahl Freital GmbH

(``BGH Edelstahl'').

On October 23, 1997, BGH Edelstahl informed the Department, via

facsimile message, that it would not respond to the Department's

antidumping questionnaire.

On October 24, 1997, Krupp submitted its response to Section A of

the questionnaire. Subsequently, on October 27, 1997, Krupp informed

the Department that it would not respond to Sections B, C, and D of the

Department's antidumping questionnaire.

On December 11, 1997, petitioners made a timely request that the

Department postpone the preliminary determination in this investigation

and the companion investigations of SSWR from Italy, Japan, Korea,

Spain, Sweden, and Taiwan to February 25, 1998. We did so on December

16, 1997, in accordance with section 733(c)(1) of the Act (see Notice

of Postponement of Preliminary Antidumping Duty Determinations: Steel

Wire Rod from Germany, Italy, Japan, Korea, Spain, Sweden, and Taiwan,

62 FR 66849, 66850 (December 22, 1997)).

Scope of Investigation

For purposes of this investigation, 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, 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 in diameter.

Two stainless steel grades, SF20T and K-M35FL, are excluded from the

scope of the investigation. The chemical makeup for the excluded grades

is as follows:

[[Page 10848]]

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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.

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, our written description of the scope

is dispositive.

Period of Investigation

The period of investigation (``POI'') is July 1, 1996, through June

30, 1997.

Fair Value Comparisons

To determine whether sales of SSWR by Krupp and BGH Edelstahl to

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

export price or constructed export price to the normal value. Because

Krupp responded to our questionnaire only in part (i.e., Section A) and

BGH Edelstahl did not respond to the questionnaire at all, we were

unable to calculate LTFV margins for this preliminary determination

using information submitted by the respective companies. Therefore, in

accordance with section 776 of the Act, our results are based on facts

otherwise available.

Facts Available

Section 776(a)(2) of the Act provides that, if an interested party

(1) Withholds information that has been requested by the Department,

(2) fails to provide such information in a timely manner or in the form

or manner requested, (3) significantly impedes a determination under

the antidumping statute, or (4) provides such information but the

information cannot be verified, the Department shall use facts

otherwise available in reaching the applicable determination (subject

to subsections 782(d) and (e)). As discussed above, both Krupp and BGH

Edelstahl failed to respond to the Department's questionnaires.

Accordingly, we have determined that use of facts available is

appropriate for both respondents. With respect to Krupp, we note that

we cannot perform an antidumping analysis with the Section A response

that Krupp did provide. This limited information is so incomplete that

it cannot, for purposes of section 782(e)(3), ``serve as a reliable

basis for reaching the applicable determination.''

Section 776(b) of the Act further provides that adverse inferences

may be used for a party that has failed to cooperate by not acting to

the best of its ability to comply with requests for information (see

also the Statement of Administrative Action (``SAA''), accompanying the

URAA, H.R. Rep. No. 316, 103rd Cong., 2d Sess. 870). Given their

statements of refusal to comply with the Department's requests for

information, Krupp and BGH Edelstahl have clearly failed to cooperate

to the best of their ability in this investigation. Therefore, the

Department has determined that an adverse inference is warranted with

respect to both companies.

Consistent with our practice in cases where respondents' refusal to

participate precludes us from conducting our LTFV analysis, as facts

otherwise available, we are basing Krupp's and BGH Edelstahl's margins

on information in the petition. Section 776(c) provides that, when the

Department relies on secondary information (e.g., the petition) as the

facts otherwise available, it must, to the extent practicable,

corroborate that information from independent sources that are

reasonably at its disposal. We reviewed the adequacy and accuracy of

the information in the petition during our pre-initiation analysis of

the petition, to the extent appropriate information was available for

this purpose (e.g., import statistics, foreign market research reports,

and data from U.S. producers). See Notice of Initiation and August 19,

1997, ``Import Administration AD Investigation Initiation Checklist

(``Initiation Checklist'').

For purposes of the preliminary determination, we were only able to

corroborate part of the information in the petition. We reexamined the

export price data provided in the petition in light of information

obtained during the investigation and, to the extent that it could be

corroborated, found that it continues to be of probative value.

However, the Department was provided no useful information by the

respondents or other interested parties, and is aware of no other

independent sources of information, that would enable it to further

corroborate the remaining components of the margin calculation in the

petition (as adjusted by the Department). See the February 11, 1998,

Memorandum to the File. We note that the SAA at 870 specifically states

that, where ``corroboration may not be practicable in a given

circumstance,'' the Department may nevertheless apply an adverse

inference.

A. Krupp and BGH Edelstahl

Consistent with Department practice, as facts otherwise available,

the Department is assigning to Krupp and BGH Edelstahl the highest

margin alleged in the petition for any German producer (as adjusted by

the Department), which is 21.28 percent (see Initiation Checklist and

the Notice of Initiation for a discussion of the margin calculations in

the petition and the Department's recalculations).

B. The All-Others Rate

All foreign manufacturers/exporters in this investigation are being

assigned dumping margins on the basis of facts otherwise available.

Section 735(c)(5) of the Act provides that, where the dumping margins

established for all exporters and producers individually investigated

are determined entirely under section 776, the Department may use any

reasonable method to establish the estimated all-others rate for

exporters and producers not individually investigated, including

averaging the estimated weighted-

[[Page 10849]]

average dumping margins determined for the exporters and producers

individually investigated. This provision contemplates that we weight

average the facts-available margins to establish the all-others rate.

Where the data is not available to weight average the facts-available

rates, the SAA, at 873, provides that we may use other reasonable

methods.

Inasmuch as we do not have the data necessary to weight average the

respondents' facts available margins, we are basing the all-others rate

on a simple average of the margins in the petition (as adjusted by the

Department). As a result the all-others rate is 19.45 percent.

Suspension of Liquidation

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

Customs Service to suspend liquidation of all imports of subject

merchandise that are entered, or withdrawn from warehouse, for

consumption on or after the date of publication of this notice in the

Federal Register. We will instruct the Customs Service to require a

cash deposit or the posting of a bond equal to the amount by which the

NV exceeds the export price, as indicated in the chart below. These

suspension-of-liquidation instructions will remain in effect until

further notice. The dumping margins are as follows:

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

Margin

Exporter/manufacturer percentage

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

Krupp Edelstahl profile GmbH, Krupp Hoesch Steel Products. 21.28

BGH Edelstahl Freital GmbH................................ 21.28

All-Others................................................ 19.45

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

The all-others rate, which we derived from the average of the margins

calculated in the petition, applies to all entries of subject

merchandise other than those exported by the named respondents.

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 before the later of 120 days after the date of

this preliminary determination or 45 days after our final determination

whether these imports are materially injuring, or threaten material

injury to, the U.S. industry.

Public Comment

Case briefs or other written comments in at least ten copies must

be submitted to the Assistant Secretary for Import Administration no

later than April 9, 1998, and rebuttal briefs, no later than April 16,

1998. A list of authorities used and an executive summary of issues

should accompany any briefs submitted to the Department. Such summary

should be limited to five pages total, including footnotes. In

accordance with section 774 of the Act, we will hold a public hearing,

if requested, to afford interested parties an opportunity to comment on

arguments raised in case or rebuttal briefs. Tentatively, the hearing

will be held on April 20, 1998, time and room to be determined, at the

U.S. Department of Commerce, 14th Street and Constitution Avenue, NW,

Washington, DC 20230. Parties should confirm by telephone the time,

date, and place of the hearing 48 hours before the scheduled time.

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

if one is requested, must submit a written request to the Assistant

Secretary for Import Administration, U.S. Department of Commerce, Room

1870, within thirty 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. 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 May 11, 1998.

This determination is published pursuant to section 777(i) of the

Act.

Dated: February 25, 1998.

Robert S. LaRussa,

Assistant Secretary for Import Administration.

[FR Doc. 98-5602 Filed 3-4-98; 8:45 am]

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