Notice of Preliminary Determination of Sales at Less Than Fair Value: Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from Brazil

DEPARTMENT OF COMMERCE

International Trade Administration

[A-351-828]

Notice of Preliminary Determination of Sales at Less Than Fair

Value: Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from Brazil

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: February 19, 1999.

FOR FURTHER INFORMATION CONTACT: Maureen McPhillips (Companhia

Siderurgica Nacional or ``CSN''), Barbara Chaves or Samantha Denenberg

(Usinas Siderurgicas de Minas Gerais and Companhia Siderurgica Paulista

or ``USIMINAS/COSIPA''), or Linda Ludwig, Import Administration,

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

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

(202) 482-0193, (202) 482-0414, (202) 482-1386, and (202) 482-3833,

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 (1998).

Preliminary Determination

The Department preliminarily determines that hot-rolled flat-rolled

carbon-quality steel products (``hot-rolled steel'') from Brazil are

being, or are 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 of sales at LTFV are shown in the ``Suspension of Liquidation''

section of this notice.

Period of Investigation

The period of investigation (POI) is July 1, 1997 through June 30,

1998.

Case History

On October 15, 1998, the Department initiated antidumping duty

[[Page 8300]]

investigations of imports of hot-rolled steel from Brazil, Japan, and

the Russian Federation. See Initiation of Antidumping Duty

Investigations: Certain Hot-Rolled Flat-Rolled Carbon-Quality Steel

Products from Brazil, Japan, and the Russian Federation (Initiation),

63 FR 56607, (October 22, 1998). Since the initiation of this

investigation the following events have occurred:

On October 22, 1998, the Department requested comments from

petitioners (Bethlehem Steel Corporation, U.S. Steel Group, a unit of

USX Corporation, Ispat Inland Steel, LTV Steel Company, Inc., National

Steel Corporation, California Steel Industries, Gallatin Steel Company,

Geneva Steel, Gulf States Steel, Inc., IPSCO Steel Inc., Steel

Dynamics, Weirton Steel Corporation, the Independent Steelworkers

Union, and the United Steelworkers of America) and respondents

regarding the criteria to be used for model matching purposes. On

October 22 and 27, 1998, petitioners and respondents (CSN, USIMINAS,

COSIPA, Nippon Steel Corporation, NKK Corporation, Kawasaki Steel,

Sumitomo Metal Industries, Ltd., and Kobe Steel Ltd.), submitted

comments on our proposed model matching criteria.

On October 19, 1998, the Department issued Section A of the

antidumping questionnaire to Companhia Acos Expeciais Itabira

(``ACESITA''). On October 20, 1998, the Department issued Section A of

the antidumping questionnaire to CSN, USIMINAS, and COSIPA. These four

companies are the only known producers of the subject merchandise from

Brazil. On October 30, 1998, the Department issued Sections B-D of the

antidumping questionnaire to COSIPA, USIMINAS, and CSN.

On October 27, 1998, ACESITA submitted a letter stating that it had

not exported subject merchandise to the United States during the POI.

Section 351.204(c)(1) allows the Department to not examine a particular

exporter or producer if that exporter or producer and the petitioners

agree. On November 2, 1998, having reviewed ACESITA's submission,

petitioners agreed that the Department need not examine ACESITA in this

proceeding. Consequently, ACESITA was not selected as a mandatory

respondent in this investigation. See Respondent Selection Memorandum,

(November 3, 1998). Thus, on November 3, 1998, the Department

terminated the investigation of ACESITA.

The Department set aside a period for all interested parties to

raise issues regarding product coverage. Throughout the month of

November, the Department received numerous filings from respondents and

other interested parties proposing amendments to the scope of these

investigations. On January 6 and 27, 1999, petitioners filed letters

agreeing to amend the scope of these investigations to exclude those

products for which Itochu International Inc., Nippon Steel Corporation,

and others had requested exclusion. See Scope Memorandum to Joseph A.

Spetrini, (February 12, 1999).

On November 16, 1998, the United States International Trade

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

preliminary finding of threat of material injury in this case.

Additionally, on November 25, 1998, the ITC published its preliminary

determination that there is a reasonable indication that an industry in

the United States is threatened with material injury by reason of

imports of the subject merchandise from Brazil (63 FR 65221).

On November 16, 1998, the Department received the Section A

questionnaire responses from CSN, USIMINAS, and COSIPA. Petitioners

filed comments on CSN's, USIMINAS' and COSIPA's Section A questionnaire

responses on November 30, 1998 and December 1, 1998. The Department

issued supplemental questionnaires for Section A to CSN, USIMINAS, and

COSIPA on December 4, 1998.

On December 21, 1998, the Department received responses to Sections

B, C, and D of the questionnaire from CSN, USIMINAS, and COSIPA. On

December 22, 1998, the Department issued a decision memorandum

collapsing USIMINAS and COSIPA for purposes of this investigation. See

the Affiliated Respondents section below. Petitioners filed comments on

CSN's and USIMINAS/COSIPA's Section B-D questionnaire responses on

December 28, 1998. The Department issued supplemental questionnaires

for Sections B, C and D to CSN and USIMINAS/COSIPA on January 4, 1999.

The Department received responses to the Section A supplemental

questionnaires on January 19, 1999 and responses to the Section B-D

supplemental questionnaires on January 25, 1999. Respondents submitted

additional data on February 2, 1999, February 3, 1999, and February 9,

1999.

In their petition filed on September 30, 1998, petitioners alleged

that there is a reasonable basis to believe or suspect that critical

circumstances exist with respect to imports of hot-rolled steel from

Brazil. While the Department preliminarily found critical circumstances

to exist in concurrent hot-rolled steel investigations of Japan and the

Russian Federation (see 63 FR 65750, November 30, 1998), we did not

issue a determination with respect to Brazil at that time. See the

Critical Circumstances section below.

Scope of Investigation

For purposes of this investigation, the products covered are

certain hot-rolled flat-rolled carbon-quality steel products of a

rectangular shape, of a width of 0.5 inch or greater, neither clad,

plated, nor coated with metal and whether or not painted, varnished, or

coated with plastics or other non-metallic substances, in coils

(whether or not in successively superimposed layers) regardless of

thickness, and in straight lengths, of a thickness less than 4.75 mm

and of a width measuring at least 10 times the thickness. Universal

mill plate (i.e., flat-rolled products rolled on four faces or in a

closed box pass, of a width exceeding 150 mm but not exceeding 1250 mm

and of a thickness of not less than 4 mm, not in coils and without

patterns in relief) of a thickness not less than 4.0 mm is not included

within the scope of these investigations.

Specifically included in this scope are vacuum degassed, fully

stabilized (commonly referred to as interstitial-free (``IF'')) steels,

high strength low alloy (``HSLA'') steels, and the substrate for motor

lamination steels. IF steels are recognized as low carbon steels with

micro-alloying levels of elements such as titanium and/or niobium added

to stabilize carbon and nitrogen elements. HSLA steels are recognized

as steels with micro-alloying levels of elements such as chromium,

copper, niobium, titanium, vanadium, and molybdenum. The substrate for

motor lamination steels contains micro-alloying levels of elements such

as silicon and aluminum.

Steel products to be included in the scope of this investigation,

regardless of HTSUS definitions, are products in which: (1) iron

predominates, by weight, over each of the other contained elements; (2)

the carbon content is 2 percent or less, by weight; and (3) none of the

elements listed below exceeds the quantity, by weight, respectively

indicated:

1.80 percent of manganese, or

1.50 percent of silicon, or

1.00 percent of copper, or

0.50 percent of aluminum, or

1.25 percent of chromium, or

0.30 percent of cobalt, or

0.40 percent of lead, or

1.25 percent of nickel, or

0.30 percent of tungsten, or

0.012 percent of boron, or

0.10 percent of molybdenum, or

[[Page 8301]]

0.10 percent of niobium, or

0.41 percent of titanium, or

0.15 percent of vanadium, or

0.15 percent of zirconium.

All products that meet the physical and chemical description

provided above are within the scope of this investigation unless

otherwise excluded. The following products, by way of example, are

outside and/or specifically excluded from the scope of this

investigation:

Alloy hot-rolled steel products in which at least one of

the chemical elements exceeds those listed above (including e.g., ASTM

specifications A543, A387, A514, A517, and A506).

SAE/AISI grades of series 2300 and higher.

Ball bearing steels, as defined in the HTSUS.

Tool steels, as defined in the HTSUS.

Silico-manganese (as defined in the HTSUS) or silicon

electrical steel with a silicon level exceeding 1.50 percent.

ASTM specifications A710 and A736.

USS Abrasion-resistant steels (USS AR 400, USS AR 500).

Hot-rolled steel coil which meets the following chemical,

physical and mechanical specifications:

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

C Mn P S Si Cr Cu Ni

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

0.10--0.14%.................. 0.90% Max....... 0.025% Max...... 0.005% Max...... 0.30--0.50%.... 0.50--0.70%.... 0.20--0.40%.... 0.20% Max.

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

Width = 44.80 inches maximum; Thickness = 0.063--0.198 inches;

Yield Strength = 50,000 ksi minimum; Tensile Strength = 70,000--88,000

psi.

Hot-rolled steel coil which meets the following chemical,

physical and mechanical specifications:

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

C Mn P S Si Cr Cu Ni

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

0.10--0.16%.................. 0.70--0.90%..... 0.025% Max...... 0.006% Max...... 0.30--0.50%.... 0.50--0.70%.... 0.25% Max...... 0.20% Max.

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

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

Mo

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

0.21% Max.................... ............... ............... ............... .............. .............. .............. ...............

...

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

Width = 44.80 inches maximum; Thickness = 0.350 inches maximum;

Yield Strength = 80,000 ksi minimum; Tensile Strength = 105,000 psi

Aim.

Hot-rolled steel coil which meets the following chemical,

physical and mechanical specifications:

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

C Mn P S Si Cr Cu Ni

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

0.10--0.14%.................. 1.30--1.80%..... 0.025% Max...... 0.005% Max...... 0.30--0.50%.... 0.50--0.70%.... 0.20--0.40%.... 0.20% Max.

V(wt.)....................... Cb

0.10 Max..................... 0.08% Max.

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

Width = 44.80 inches maximum; Thickness = 0.350 inches maximum;

Yield Strength = 80,000 ksi minimum; Tensile Strength = 105,000 psi

Aim.

Hot-rolled steel coil which meets the following chemical,

physical and mechanical specifications:

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

C Mn P S Si Cr Cu Ni

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

0.15% Max.................... 1.40% Max....... 0.025% Max...... 0.010% Max...... 0.50% Max...... 1.00% Max...... 0.50% Max...... 0.20% Max.

Nb........................... Ca.............. Al..............

0.005% Min................... Treated......... 0.01--0.07%.....

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

Width = 39.37 inches; Thickness = 0.181 inches maximum; Yield

Strength = 70,000 psi minimum for thicknesses 0.148 inches

and 65,000 psi minimum for thicknesses > 0.148 inches; Tensile Strength

= 80,000 psi minimum.

Hot-rolled dual phase steel, phase-hardened, primarily

with a ferritic-martensitic microstructure, contains 0.9 percent up to

and including 1.5 percent silicon by weight, further characterized by

either: (i) Tensile strength between 540 N/mm\2\ and 640 N/mm\2\ and an

elongation percentage 26 percent for thicknesses of 2 mm

and above, or (ii) a tensile strength between 590 N/mm\2\ and 690 N/

mm\2\ and an elongation percentage 25 percent for

thicknesses of 2mm and above.

Hot-rolled bearing quality steel, SAE grade 1050, in

coils, with an inclusion rating of 1.0 maximum per ASTM E 45, Method A,

with excellent surface quality and chemistry restrictions as follows:

0.012 percent maximum phosphorus, 0.015 percent maximum sulfur, and

0.20 percent maximum residuals including 0.15 percent maximum chromium.

The merchandise subject to these investigations is classified in

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

subheadings: 7208.10.15.00, 7208.10.30.00, 7208.10.60.00,

7208.25.30.00, 7208.25.60.00, 7208.26.00.30, 7208.26.00.60,

7208.27.00.30, 7208.27.00.60, 7208.36.00.30, 7208.36.00.60,

7208.37.00.30, 7208.37.00.60, 7208.38.00.15, 7208.38.00.30,

7208.38.00.90, 7208.39.00.15, 7208.39.00.30, 7208.39.00.90,

7208.40.60.30, 7208.40.60.60, 7208.53.00.00, 7208.54.00.00,

7208.90.00.00, 7210.70.30.00, 7210.90.90.00, 7211.14.00.30,

7211.14.00.90, 7211.19.15.00,

[[Page 8302]]

7211.19.20.00, 7211.19.30.00, 7211.19.45.00, 7211.19.60.00,

7211.19.75.30, 7211.19.75.60, 7211.19.75.90, 7212.40.10.00,

7212.40.50.00, 7212.50.00.00. Certain hot-rolled flat-rolled carbon-

quality steel covered by this investigation, including: vacuum

degassed, fully stabilized; high strength low alloy; and the substrate

for motor lamination steel may also enter under the following tariff

numbers: 7225.11.00.00, 7225.19.00.00, 7225.30.30.50, 7225.30.70.00,

7225.40.70.00, 7225.99.00.90, 7226.11.10.00, 7226.11.90.30,

7226.11.90.60, 7226.19.10.00, 7226.19.90.00, 7226.91.50.00,

7226.91.70.00, 7226.91.80.00, and 7226.99.00.00. Although the HTSUS

subheadings are provided for convenience and Customs purposes, the

written description of the merchandise under investigation is

dispositive.

Product Comparisons

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

produced by the respondents covered by the description in the ``Scope

of Investigation'' section above and sold in Brazil during the POI are

considered to be foreign like products for purposes of determining

appropriate product comparisons to U.S. sales. The Department has

relied on eleven characteristics to match U.S. sales of subject

merchandise to comparison market sales of the foreign like product:

paint, quality, carbon content, strength, thickness, width, coiled or

non-coiled, whether or not temper rolled, whether or not pickled, edge

trim, and whether or not with patterns in relief. The Department

assigned weights to each characteristic. Where there were no sales of

identical merchandise in the home market to compare to U.S. sales, the

Department compared U.S. sales to the next most similar foreign like

product on the basis of the characteristics listed in the antidumping

questionnaire and reporting instructions. The Department compared prime

merchandise to prime merchandise, consistent with our practice.

Affiliated Respondents

Under section 771(33)(E) of the Act, if one party owns, directly or

indirectly, five percent or more of the other they are affiliated.

Since USIMINAS owns 49.79% of COSIPA, the Department determined that

USIMINAS and COSIPA are affiliated. See Collapsing Memorandum to Joseph

A. Spetrini, (December 22, 1998).

Furthermore, it is the Department's practice to collapse affiliated

producers for purposes of calculating a margin when they have

production facilities for similar or identical products that would not

require substantial retooling in order to restructure manufacturing

priorities and the facts demonstrate that there is significant

potential for manipulation of pricing or production. In accordance with

Sec. 351.401(f) of the Antidumping Regulations, the Department

concluded that both companies are fully integrated producers currently

offering a similar range of products, including hot-rolled products

that would not require substantial retooling to restructure

manufacturing priorities. Furthermore, in light of USIMINAS's high

level of ownership of COSIPA, common directors, and the fact that

COSIPA is consolidated on USIMINAS's financial statements, there is a

significant possibility of price or production manipulation between the

two companies. For these reasons, the Department collapsed USIMINAS and

COSIPA into one entity for the purpose of this investigation. See Id.

While it also appears that there may be links between the collapsed

entity, USIMINAS/COSIPA, and CSN, there is insufficient information on

the record at this time to consider all three companies to be

affiliated and to collapse CSN with USIMINAS/COSIPA. Therefore, we

preliminarily do not find CSN to be affiliated with USIMINAS/COSIPA and

we preliminarily are not collapsing CSN with USIMINAS/COSIPA.

The Department notes that affiliation and collapsing are very

complex and difficult issues. Therefore, the Department invites parties

to submit information and comment on these issues to ensure that our

decision is based on a complete and thorough record. The Department

intends to examine these issues carefully for the final determination

of this investigation. Any new information that parties wish to provide

the Department must be submitted no later than March 1, 1999. All

information or arguments parties provide will be fully analyzed in

making our final determination.

Level of Trade

In accordance with section 773(a)(1)(B)(i) of the Act, to the

extent practicable, the Department determines Normal Value (``NV'')

based on sales in the comparison market at the same level of trade

(``LOT'') as the Export Price (``EP'') or Constructed Export Price

(``CEP'') transaction. The NV LOT is that of the starting price of

sales in the comparison market or, when NV is based on Constructed

Value (``CV''), that of the sales from which the Department derives

selling, general, and administrative expenses (``SG&A'') and profit.

For EP, the LOT is also the level of the starting price sale, which is

usually from the exporter to the 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

sales, the Department examines 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, the Department makes a LOT adjustment in

accordance with section 773(a)(7)(A) of the Act. 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 differences in the levels

between NV and CEP sales affects price comparability, the Department

adjusts 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).

CSN

CSN sells to trading companies in the U.S. market and service

centers/distributors and end-users in the home market. CSN states that

it provides warranties, technical assistance, and freight arrangements

equally to service centers/distributors and end-users. Thus, the

selling functions provided to different classes of home market

customers do not vary significantly. CSN provides the same selling

functions for U.S. sales except for technical assistance. Technical

assistance is only provided with respect to home market sales. However,

CSN notes that this assistance is mainly provided in connection with

warranty claims which are available to all customers. We find that

technical assistance does not constitute a significant difference

between the services provided to home market and U.S. customers.

Consequently, the Department preliminarily determines that there is

only one LOT in the home market and that it is at the same level as the

single LOT in the U.S. market.

USIMINAS/COSIPA

In the home market, USIMINAS/COSIPA made sales to end-users,

[[Page 8303]]

affiliated distributors, and unaffiliated distributors. USIMINAS/COSIPA

claim four channels of distribution with respect to these sales: (1)

Direct sales to end users; (2) sales through affiliated distributors to

end-users; (3) sales to unaffiliated distributors; and (4) sales to

end-users for which an affiliated distributor was contracted to further

process the merchandise for USIMINAS.

USIMINAS/COSIPA claim that there is a significant difference

between prices charged to end-users and prices charged to distributors.

USIMINAS/COSIPA further claim that prices charged to distributors and

to end-users differ significantly from prices charged by affiliated

distributors to their downstream customers.

In determining whether separate levels of trade actually existed in

the home market, the Department first examined available information on

the record about the company's selling functions for each channel of

distribution. USIMINAS/COSIPA indicated that the selling functions

performed by the affiliated distributors in the second channel of

distribution (downstream sales) are much more significant than those

performed by USIMINAS/COSIPA in any of the other home market channels

of distribution (mill direct sales). The following are examples of

selling functions provided for downstream sales but not mill direct

sales: inventory maintenance, faster delivery times because of higher

inventory maintenance, more flexible credit terms, special warehousing,

technical services, and more extensive delivery services. Additionally,

downstream sales involve much smaller volume purchases than mill direct

sales. For mill direct sales, USIMINAS/COSIPA provide only limited

after-sales services/warranties, freight and delivery arrangements and

technical advice. Thus, we determined that the downstream sales by

affiliates were made at a different LOT than other HM sales.

While the USIMINAS/COSIPA mill direct sales to end-users (whether

or not further processed) and mill direct sales to unaffiliated

distributors involve different channels of distribution, these sales do

not involve significant differences in selling functions. As noted

above, all mill direct sales involve limited after-sales services/

warranties, freight and delivery arrangements and technical advice, and

there are no significant differences in selling functions. Therefore,

the Department does not consider these channels to represent different

levels of trade. Thus, we preliminarily determine that downstream sales

and mill direct sales represent two different home market LOTs.

In the U.S. market, USIMINAS/COSIPA claim that all sales were made

at one level of trade, through one channel of distribution. USIMINAS/

COSIPA state that all U.S. sales were made to unaffiliated trading

companies. USIMINAS/COSIPA state that these sales are made at the same

level of trade as USIMINAS/COSIPA's direct home market sales to

unaffiliated distributors (Home Market Channel 3). However, as noted

above, the Department finds the selling functions of all home market

mill direct sales to be quite similar to each other, constituting a

single LOT. The Department additionally finds the selling functions for

mill direct sales to be similar to U.S. sales. The only selling

functions associated with U.S. sales are after-sales service/warranties

and freight and delivery arrangements. As noted above, these services

are also provided to home market mill direct customers. The only other

selling function offered for home market mill direct sales is a limited

amount of technical advice. Both home market mill direct sales and U.S.

sales involve sales to large customers, including service centers/

distributors that resell steel. (U.S. sales are only made to

resellers.) Therefore, based on our analysis of selling functions, the

Department finds U.S. sales to be at the same LOT as home market mill

direct sales.

To the extent possible, we compared sales made in the U.S. to mill

direct sales in the home market, which are at the same level of trade

as the U.S. sales. To the extent that we were unable to match U.S.

sales to identical home market sales at the same LOT, we used facts

available as the basis of NV because we do not have complete data on

downstream sales (i.e., sales at the other home market LOT). See the

Fair Value Comparisons section below.

Date of Sale

As stated in 19 CFR 351.401(i), the Department will use invoice

date as the date of sale unless another date better reflects the date

on which the exporter or producer establishes the material terms of

sale. Both CSN and USIMINAS/COSIPA reported the date of the nota fiscal

(i.e., the date the product leaves the factory) as the home market date

of sale, and the date of the commercial invoice (i.e., the invoice

issued on the date of shipment from the port) as the date of the U.S.

sale.

CSN maintains that it uses the date of the nota fiscal for home

market sales in its accounting records because this is the date on

which material terms of sale are finalized. Moreover, CSN notes that it

adds estimated freight and insurance expenses to each invoice, which

are not confirmed in writing until the date of the nota fiscal. For its

U.S. sales, CSN reported the date of the commercial invoice, stating

that it is the date on which the material terms of sale are finalized

and recorded in its accounting records.

USIMINAS and COSIPA maintain that for their home market sales, the

nota fiscal is the date on which the material terms of sale are first

finalized. The nota fiscal is also used by both companies' accounting

systems to register home market sales. In response to another inquiry,

COSIPA noted that it cannot provide order confirmation data since it

does not keep records of this documentation. For their U.S. sales,

USIMINAS and COSIPA claim that the actual quantity produced can and

does change five to 20 percent from the time of order confirmation to

the nota fiscal or commercial invoice. Therefore, they do not believe

that order confirmation is the appropriate date of sale. USIMINAS and

COSIPA both reported the date of the commercial invoice as the date of

sale. USIMINAS claims it chose to report commercial invoice (instead of

nota fiscal when the terms are first finalized) because it is the date

to which all U.S. sales are tied in its accounting system. COSIPA

claims that it reported commercial invoice because the mill's location

at a port ensures that the nota fiscal and the commercial invoice leave

the mill on the same date.

Petitioners claim that the sales documentation provided by

respondents indicates that the order confirmation date, not the date of

the commercial invoice or nota fiscal, appears to be the date when the

material terms of sale are set for a majority of the respondents' home

market and U.S. sales of hot-rolled steel. Given the relevance of

petitioners' comments and the nature of marketing these types of made-

to-order products, the Department determined that petitioners' claims

have some merit. Consequently, on December 4, 1998, and January 4,

1999, the Department requested that respondents provide additional

information concerning the nature and frequency of price and quantity

changes occurring between order confirmation date and invoice date. The

Department also asked respondents to report the order date for all home

market and U.S. sales and to ensure that the entire universe of sales

with order or invoice dates within the POI were properly reported.

USIMINAS and COSIPA subsequently reported in their supplemental

responses U.S. sales based both on commercial invoice (as previously

[[Page 8304]]

reported) and U.S. sales based on order confirmation date (as requested

by the Department). USIMINAS and COSIPA stated, however, that they were

unable to provide complete data based on order confirmation dates due

to the limited time available to them, but that they would supply

complete data as soon as practicable. COSIPA reported the order

confirmation dates of the U.S. sales by manually tracing these dates,

as these records are not maintained on its computer system. Because of

COSIPA's location at a port, its reported nota fiscal or commercial

invoice date (the names in this case are interchangeable) also serves

as an ex-factory date of shipment. This is not the case for USIMINAS.

For home market sales, USIMINAS reported order confirmation dates

corresponding to nota fiscal dates in the POI.

In its supplemental response, CSN reported those home market and

U.S. order confirmation dates that were accessible from its database.

However, the data was not complete as CSN states that the order

confirmation date is not reliably maintained in its database. CSN also

reported the date of the nota fiscal (i.e., the ex-factory shipment

date) of its U.S. sales.

For this preliminary determination, the Department is using the

dates reported by respondents as the date of sale since there is

insufficient information on the record at this time to determine which

date of sale is most appropriate. Thus, for home market sales, the

Department is using the nota fiscal date as the date of sale, and for

U.S. sales, the commercial invoice date. However, in most cases, the

U.S. date of sale reported by respondents is after the date of shipment

of the product from the factory. Because it is the Department's

practice to use shipment date as the latest date of sale, the

Department is using the ex-factory shipment date as the date of sale

for U.S. sales in those cases in which the commercial invoice date is

later. While CSN reported its ex-factory shipment dates, USIMINAS did

not provide specific ex-factory shipment dates. USIMINAS did, however,

state in its Section A response that commercial invoices are normally

issued within two weeks after the merchandise leaves the factory.

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

(A) withholds information that has been requested by the Department;

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

or manner requested; (C) significantly impedes a proceeding under the

antidumping statute; or (D) provides such information but the

information cannot be verified, as provided in section 782(i), the

Department shall, subject to subsections 782(d), use facts otherwise

available in reaching the applicable determination.

Because USIMINAS did not provide specific ex-factory shipment

dates, the Department resorted to facts available. As facts available,

the Department is estimating USIMINAS's ex-factory shipment date by

subtracting 14 days from the reported date of sale. See USIMINAS/COSIPA

Analysis Memorandum, February 12, 1999.

The Department intends to fully examine the date of sale issue

during verification and will incorporate our findings, as appropriate,

in our analysis for the final determination. If the Department

determines that the order confirmation date is the most appropriate

date of sale, we may resort to facts available for the final

determination to the extent that respondents have failed to report

order confirmation date or relevant sales. Due to the complexity of

this issue, the Department invites all interested parties to submit

comments in accordance with the schedule set forth in this notice.

Fair Value Comparisons

To determine whether sales of hot-rolled steel from Brazil to the

United States were made at less than fair value, the Department

compared the EP to the NV, as described in the ``Export Price'' and

``Normal Value'' sections of this notice below. In accordance with

section 777A(d)(1)(A)(i) of the Act, the Department calculated

weighted-average EPs for comparison to weighted-average NVs.

However, in the case of USIMINAS/COSIPA, the Department used facts

available as the basis of NV if there were no identical matches at the

same LOT. As explained in the ``Transactions Reviewed'' section below,

the respondent did not provide useable downstream sales data.

Additionally, the respondent did not provide complete cost data to

enable us to calculate difference of merchandise adjustments. If there

were no identical matches at the same LOT (mill direct sales), we were

thus unable to determine if the best match would be to downstream

sales. Nor could we calculate a difference in merchandise adjustment

for comparisons to similar products. Therefore, we matched only

identical product sales at the same LOT and used facts available for

all other sales.

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

used when an interested party has failed to cooperate by not acting to

the best of its ability to comply with the Department's requests for

information. See also, Statement of Administrative Action (SAA)

accompanying the URAA, H.R. Rep. No. 316, 103d Cong., 2d Sess. 870

(1994). As adverse facts available, we used the highest calculated

margin for U.S. sales that fell within the mainstream of USIMINAS/

COSIPA's transactions. We selected a margin for sales that could be

considered indicative of USIMINAS/COSIPA's customary selling practices

and rationally related to the transactions to which the adverse facts

available are being applied. In selecting the adverse margin, the

Department sought a margin that is sufficiently adverse to effectuate

the statutory purpose of adverse facts available, which is to induce

respondents to provide the Department with complete information in a

timely manner. See Final Determination of Sales at Less Than Fair

Value: Stainless Steel Wire Rod from Italy, 63 FR 40422, 40428, (July

29, 1998). See USIMINAS/COSIPA Analysis Memorandum, February 12, 1999.

Transactions Reviewed

CSN

On November 12, 1998, CSN submitted a letter informing the

Department that its home market sales to affiliated resellers were

limited to two service centers/distributors. Furthermore, CSN claimed

that these sales represented less than five percent of its home market

sales of hot-rolled steel. Pursuant to section 351.403(d) of the

Department's regulations, on December 16, 1998, the Department informed

CSN that based on the information presently on the record, we would not

require CSN to report the home market sales of its related resellers.

However, CSN's claims regarding these sales to affiliates will be

subject to verification. See Downstream Sales Reporting Request letter

to CSN, (December 15, 1998).

USIMINAS/COSIPA

On November 25, 1998, USIMINAS/COSIPA submitted a request that they

not be required to report their home market sales by affiliated

resellers (``downstream sales''). USIMINAS/COSIPA claimed that these

sales accounted for a small percentage of their home market sales, that

the sales were made at a different level of trade from the U.S. sales,

and that the merchandise was physically different from U.S. sales.

USIMINAS/COSIPA identified three affiliated resellers. On December 15,

1998, the Department informed USIMINAS/COSIPA that they must report

their downstream sales because they exceeded five percent of the total

[[Page 8305]]

quantity of USIMINAS/COSIPA's sales. See Downstream Sales Reporting

Request letter to USIMINAS/COSIPA, (December 15, 1998).

While USIMINAS/COSIPA provided some information regarding its

downstream sales in its January 25, 1999, submission, this information

was incomplete. In particular, most product characteristics were not

fully reported. As a result, we were unable to determine whether these

sales matched to U.S. sales. We have requested respondent to provide

complete information with respect to its downstream sales, but we will

not receive this additional information in time for this preliminary

determination. Therefore, we are not using submitted downstream sales

data for this preliminary determination. See the Fair Value Comparisons

section above.

Export Price

The Department based its calculations on EP, in accordance with

section 772(a) of the Act, because the subject merchandise was sold by

the producer or exporter directly to the first unaffiliated purchaser

in the United States prior to importation. Furthermore, the Department

calculated EP based on packed prices charged to the first unaffiliated

customer in the United States.

The Department made company-specific adjustments as follows.

CSN

The Department made deductions from the starting price, where

appropriate, for inland freight, and brokerage and handling incurred by

CSN on its U.S. sales, in accordance with section 772(c)(2)(A) of the

Act. The Department added an amount to the USP for the duty paid on

imported coke, for which CSN received a duty drawback upon exportation

of the merchandise. U.S. foreign inland freight was not reported for

certain sales. As adverse facts available for these sales, we used the

highest reported inland freight on any U.S. sale. No other adjustments

were claimed or allowed.

USIMINAS/COSIPA

The Department made deductions from the starting price, where

appropriate, for the following movement expenses, in accordance with

section 772(c)(2)(A) of the Act: foreign inland freight, international

freight, and foreign brokerage and handling expenses. No other

adjustments were claimed or allowed.

Normal Value

After testing home market viability and whether home market sales

were at below-cost prices, the Department calculated NV as noted in the

``Price-to-Price Comparisons'' and ``Price-to-CV Comparison'' sections

of this notice.

Home Market Viability

In order to determine whether there is a sufficient volume of sales

in the home market to serve as a viable basis for calculating NV (i.e.,

the aggregate volume of home market sales of the foreign like product

is equal to or greater than five percent of the aggregate volume of

U.S. sales), the Department compared each of the respondents' volume of

home market sales of the foreign like product to the volume of U.S.

sales of the subject merchandise, in accordance with section

773(a)(1)(C) of the Act. Since each of the respondents' aggregate

volume of home market sales of the foreign like product was greater

than five percent of its aggregate volume of U.S. sales for the subject

merchandise, the Department determined that the home market was viable

for all respondents. Therefore, the Department has based NV on home

market sales in the usual commercial quantities and in the ordinary

course of trade.

Arm's Length Test

Sales to affiliated customers in the home market not made at arm's

length prices (if any) were excluded from our analysis because the

Department considered them to be outside the ordinary course of trade.

See 19 CFR 351.102. To test whether these sales were made at arm's

length prices, the Department compared, on a model-specific basis, the

prices of sales to affiliated and unaffiliated customers net of all

movement charges, direct selling expenses, and packing. Where, for the

tested models of subject merchandise, prices to the affiliated party

were on average 99.5 percent or more of the price to unaffiliated

parties, the Department determined that sales made to the affiliated

party were at arm's length. See 19 CFR 351.403(c). In instances where

no price ratio could be constructed for an affiliated customer because

identical merchandise was not sold to unaffiliated customers, the

Department was unable to determine that these sales were made at arm's

length prices and, therefore, excluded them from our LTFV analysis. See

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

Cold-Rolled Carbon Steel Flat Products from Argentina, 58 FR 37062,

37077 (July 9, 1993). Where the exclusion of such sales eliminated all

sales of the most appropriate comparison product, the Department made a

comparison to the next most similar product.

Cost of Production (COP) Analysis

Based on the cost allegation submitted by petitioners in the

original petition, the Department found reasonable grounds to believe

or suspect that respondents had made sales in the home market at prices

below the cost of producing the merchandise, in accordance with section

773(b)(2)(A)(i) of the Act. As a result, the Department initiated an

investigation to determine whether respondents made home market sales

during the POI at prices below their respective COPs within the meaning

of section 773(b) of the Act. See Initiation Notice, 63 FR 56607,

(October 22, 1998).

The Department conducted the COP analysis described below.

A. Calculation of COP

In accordance with section 773(b)(3) of the Act, the Department

calculated COP for hot-rolled steel based on the sum of the cost of

materials and fabrication for the foreign like product, plus amounts

for home market SG&A, interest expenses, and packing costs. The

Department relied on the COP data submitted by each respondent in its

cost questionnaire response, except, as discussed below, in specific

instances where the submitted costs were not appropriately quantified

or valued.

CSN

The Department relied on CSN's COP and CV data submitted on January

25, 1999, except in the following instances: (1) we revised the general

and administrative expense rate to include amortization of goodwill;

(2) we recalculated CSN's financial expense rate to correct a

mathematical error in its computation; and (3) we adjusted CSN's total

cost of manufacture by a factor which restates electricity purchases

from an affiliated party to the supplier's cost of production rather

than the transfer price. See Cost Calculation Memorandum, February 12,

1999. Additionally, CSN failed to report costs for certain products.

See the Price-to-Price Comparisons section below.

USIMINAS/COSIPA

The Department relied on USIMINAS/COSIPA's COP and CV data

submitted on February 2 and 3, 1999 except in the following instances:

(1) we revised financial expense based on the consolidated expense of

the companies; and (2) we revised their submitted

[[Page 8306]]

SG&A expenses to include severance payments and profit sharing and to

exclude net miscellaneous sales, dividend income and gains on

investments, as well as several other smaller items. See Cost

Calculation Memorandum, February 12, 1999. Because USIMINAS/COSIPA

submitted multiple costs for many product control numbers (``CONNUMs'')

and did not provide separate production quantities, we were unable to

weight average the multiple costs. Therefore, as facts available, we

used the highest of the reported COPs or CVs for each CONNUM. See

Preliminary Results of Antidumping Duty Administrative Review: Extruded

Rubber Thread from Malaysia, 63 FR 60295, 60297, (November 9, 1998).

See Cost Calculation Memorandum, February 12, 1999. Additionally,

USIMINAS/COSIPA failed to report costs for certain products. See the

Price-to-Price Comparisons section below.

B. Test of Home Market Prices

The Department compared the weighted-average COP for each

respondent, adjusted where appropriate (see above), to home market

sales prices of the foreign like product as required under section

773(b) of the Act. In determining whether to disregard home market

sales made at prices less than the COP, the Department examined whether

(1) within an extended period of time, such sales were made in

substantial quantities; and (2) such sales were made at prices which

permitted the recovery of all costs within a reasonable period of time.

On a product-specific basis, the Department compared the COP to home

market prices, less any applicable movement charges, taxes, billing

adjustment, and discounts and rebates.

C. Results of the COP Test

Pursuant to section 773(b)(2)(C) of the Act, where less than 20

percent of respondent's sales of a given product were at prices less

than the COP, the Department did not disregard any below-cost sales of

that product because we determined that the below-cost sales were not

made in ``substantial quantities.'' Where 20 percent or more of a

respondent's sales of a given product during the POI were at prices

less than the COP, the Department determined such sales to have been

made in ``substantial quantities,'' in accordance with 773(b)(2)(C)(i),

within an extended period of time, in accordance with section

773(b)(2)(B) of the Act. In such cases, because the Department compared

prices to weighted-average COPs for the POI , the Department also

determined that such sales were not made at prices which would permit

recovery of all costs within a reasonable period of time, in accordance

with section 773(b)(2)(D) of the Act. Therefore, the Department

disregarded the below-cost sales. Where all sales of a specific product

were at prices below the COP, the Department disregarded all sales of

that product.

Price-to-Price Comparisons

The Department performed price-to-price comparisons where there

were sales of comparable merchandise in the home market that did not

fail the cost test. The Department made adjustments, where appropriate,

for physical differences in the merchandise in accordance with section

773(a)(6)(C) of the Act. (As noted above, we only compared identical

sales for USIMINAS/COSIPA. Thus, adjustments for physical differences

in merchandise were not made.) In accordance with Section 773(a)(6),

the Department deducted home market packing costs and added U.S.

packing costs.

Brazilian Taxes

Consistent with past practice, the Department adjusted NV for the

full amount of IPI and ICMS taxes collected on the subject merchandise

because these are VAT taxes that have a basis for deduction according

to Section 773 (a)(6)(B)(iii) of the Act. The Department did not deduct

the Brazilian PIS and COFINS taxes as suggested by respondents in

calculating NV. Since these taxes are levied on total revenues, the

taxes are not imposed directly on the product or its components.

Accordingly, there is no basis to deduct them in the calculation of NV

under Section 773 (a)(6)(B)(iii) of the Act. See Final Results of

Antidumping Duty Administrative Review: Certain Cut-To-Length Carbon

Steel Plate from Brazil, 63 FR 12744, 12746 (March 16, 1998).

In addition, respondents argue that the IPI and ICMS tax credits

received on inputs used to manufacture export products should be

deducted from the home market NV. The Department disagrees. Since these

tax credits partially offset respondents' liability for taxes collected

on sales, such a deduction would double count for taxes for which we

have already made an adjustment. Therefore, the Department did not make

a further tax deduction in determining NV.

CSN

CSN did not provide COP data for all home market CONNUMs. Section

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

withholds information that has been requested by the Department; (B)

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

manner requested; (C) significantly impedes a proceeding under the

antidumping statute; or (D) provides such information but the

information cannot be verified, as provided in section 782(i), the

Department shall, subject to subsection 782(d), use facts otherwise

available in reaching the applicable determination.

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

used when an interested party has failed to cooperate by not acting to

the best of its ability to comply with the Department's requests for

information. See also, Statement of Administrative Action (SAA)

accompanying the URAA, H.R. Rep. No. 316, 103d Cong., 2d Sess. 870

(1994). In the instant case, because CSN failed to provide COP data for

all home market CONNUMS, the Department applied adverse facts available

in determining the margin for all U.S. sales matching to home market

sales for which COP data was not provided. We also applied adverse

facts available in determining the margin for all U.S. sales matches

for which information to calculate difference in merchandise

adjustments was not provided. As adverse facts available, we used the

highest margin calculated for any individual product (i.e., CONNUM).

The highest margin was based on sales that fell within the mainstream

of CSN's transactions. We considered these sales indicative of CSN's

customary selling practices and rationally related to the transaction

to which the adverse facts available are being applied. In selecting

the adverse margin, the Department sought a margin that is sufficiently

adverse to effectuate the statutory purpose of adverse facts available,

which is to induce respondents to provide the Department with complete

information in a timely manner.

For CSN, the Department based NV on prices of home market sales

that passed the cost test. The Department made deductions for foreign

inland freight and taxes. The Department notes that the deduction for

inland freight should be net of VAT taxes. While we have requested this

information, we did not receive it in time for this preliminary

determination. Consequently, as facts available, the Department has

estimated an amount for VAT taxes paid on inland freight, and deducted

this from the reported amounts. In addition, the Department made

circumstance-of-sale (COS) adjustments for differences in credit,

warranty expenses, and bank charges, where appropriate. On a few sales

CSN incurred a bank fee that was charged upon the customer's payment.

[[Page 8307]]

CSN adjusted its accounts receivable accordingly, and the Department

included this adjustment in its calculations. For U.S. sales by CSN,

the Department recalculated credit to take into account the difference

between ex-factory and ex-port date of shipment. See CSN Analysis

Memorandum, February 12, 1999. For home market sales, the Department

recalculated home market credit and used a price net of VAT taxes for

the basis of the recalculation. See Final Determination of Antidumping

Administrative Review: Certain Cut-To-Length Carbon Steel Plate from

Brazil, 62 FR 18486 , 18487 (April 15, 1997). The Department

recalculated both home market and U.S. credit expenses for those sales

with missing payment dates. As facts available, the Department used the

date of the respondent's supplemental submission of January 25, 1999,

as the date of payment for sales missing payment dates. Because it is

CSN's standard practice to charge late payment fees, we imputed home

market interest revenue for sales with unreported payment dates. Where

appropriate, we adjusted the home market starting price for billing

adjustments. The Department also made adjustments for home market

inventory carrying costs and indirect selling expenses to offset the

U.S. commissions.

USIMINAS/COSIPA

On February 9, 1999, the respondent indicated that there were

clerical errors in one of its sales databases previously submitted to

the Department and submitted replacement data. Because these errors

were clerical in nature and did not change the universe of sales

reported, we used the revised data for this preliminary determination.

For USIMINAS/COSIPA, the Department based NV on prices of home

market sales that passed the cost test. The Department made deductions

for billing adjustments and discounts. The Department made deductions,

where appropriate, for inland freight, inland insurance and

warehousing. See USIMINAS/COSIPA Analysis Memorandum, February 12,

1999. The Department notes that the deduction for inland freight should

be net of VAT taxes. However, while we have requested this information,

we did not receive it in time for this preliminary determination.

Consequently, as facts available, the Department has estimated an

amount for VAT taxes paid on inland freight, and deducted this from the

reported amounts. We made COS adjustments for imputed credit expense

and warranties. Since USIMINAS/COSIPA did not properly calculate home

market interest, the Department recalculated home market credit using a

published Brazilian prime rate. See USIMINAS/COSIPA Analysis

Memorandum, February 12, 1999. For U.S. sales by USIMINAS/COSIPA, the

Department recalculated credit to take into account the difference

between ex-factory and ex-port date of shipment. As facts available,

the Department used the date of the respondents' supplemental

submission of January 25, 1999, as the date of payment for sales

missing payment dates. See USIMINAS/COSIPA Analysis Memorandum,

February 12, 1999. For home market sales, the Department recalculated

home market credit and used a price net of VAT taxes for the basis of

the recalculation. See Final Determination of Antidumping

Administrative Review: Certain Cut-To-Length Carbon Steel Plate from

Brazil, 62 FR 18486 , 18487 (April 15, 1997). Because it is the

standard practice for the respondents to charge late payment fees, the

Department imputed interest revenue for sales with unreported payment

dates.

USIMINAS/COSIPA did not provide COP data for all home market

CONNUMs. In the instant case, the Department determined that USIMINAS/

COSIPA's failure to provide COP data for all home market CONNUMS

satisfies the requirements of section 776(a)(2)(A), (B), and (C) of the

Act. Therefore, for all U.S. sales matching to home market sales for

which COP data was not provided, the Department applied adverse facts

available equal to the highest calculated margin. The highest margin

was based on sales that fell within the mainstream of USIMINAS/COSIPA's

transactions. We considered these sales indicative of their customary

selling practices and rationally related to the transaction to which

the adverse facts available are being applied. In selecting the adverse

margin, the Department sought a margin that is sufficiently adverse to

effectuate the statutory purpose of adverse facts available, which is

to induce respondents to provide the Department with complete

information in a timely manner.

Currency Conversion

The Department made currency conversions into U.S. dollars based on

the exchange rates in effect on the dates of the U.S. sales, as

certified by the Federal Reserve Bank, in accordance with section

773A(a) of the Act.

Critical Circumstances

On October 30, 1998, petitioners alleged that there is a reasonable

basis to believe or suspect that critical circumstances exist with

respect to imports of hot-rolled steel from Brazil. In accordance with

19 CFR 351.206(c)(2)(i), since this allegation was filed at least 20

days prior to the preliminary determination, the Department must issue

its preliminary critical circumstances determination no later than the

preliminary determination.

Section 733(e)(1) of the Act provides that if a petitioner alleges

critical circumstances, the Department will determine whether there is

a reasonable basis to believe or suspect that:

(A)(i) There is a history of dumping and material injury by reason

of dumped imports in the United States or elsewhere of the subject

merchandise, or (ii) the person by whom, or for whose account, the

merchandise was imported knew or should have known that the exporter

was selling the subject merchandise at less than its fair value and

that there was likely to be material injury by reason of such sales,

and (B) there have been massive imports of the subject merchandise over

a relatively short period.

1. History of Dumping or Importer Knowledge of Dumping

To determine whether there is a history of dumping of the subject

merchandise, the Department normally considers evidence of an existing

antidumping duty order in the United States or elsewhere to be

sufficient. The Department found that there is an antidumping duty

order on hot-rolled steel from Brazil in Mexico, and therefore

determined that there is a history of dumping and material injury by

reason of dumped imports of the subject merchandise.

2. Massive Imports

Since the first prong of the critical circumstances test has been

met, the Department must examine whether there have been massive

imports over a relatively short period of time. To determine whether

imports were massive over a relatively short time period, the

Department typically compares the import volume of the subject

merchandise for the three months immediately preceding and following

the filing of the petition. See 19 CFR 351.206(i). Pursuant to 19 CFR

351.206(h)(2), the Department will consider an increase of 15 percent

or more in the imports of the subject merchandise over the relevant

period to be massive. According to official U.S. Customs Bureau

statistics for the first two months of the comparison period (October

and November) and according to preliminary Customs Bureau statistics

[[Page 8308]]

for the third month (December), there was less than a 15 percent

increase in imports from the level of the preceding three months.

Therefore, there have not been massive imports over the examined

period, and the Department preliminarily does not find that critical

circumstances exist for CSN or USIMINAS/COSIPA. See CSN and USIMINAS/

COSIPA Analysis Memorandums, February 12, 1999. The Department notes

that it has requested company specific shipment information from CSN,

USIMINAS, and COSIPA but that we have not received it in time for this

preliminary determination. We invite interested parties to comment on

the issue of critical circumstances, and we will consider these

comments and the company specific data in making our final

determination.

Verification

As provided in section 782(i) of the Act, the Department will

verify all information relied upon in making our final determination.

Suspension of Liquidation

In accordance with section 733(d) of the Act, the Department is

directing the U.S. 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. The Department will instruct the U.S.

Customs Service to require a cash deposit or the posting of a bond

equal to the weighted-average amount by which the NV exceeds the export

price, as indicated below. These suspension-of-liquidation instructions

will remain in effect until further notice. The weighted-average

dumping margins are as follows:

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

Weighted-

Exporter/manufacturer average

margin

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

CSN........................................................ 50.66

USIMINAS/COSIPA............................................ 71.02

All Others................................................. 58.76

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

International Trade Commission Notification

In accordance with section 733(f) of the Act, the Department has

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 imports of hot-rolled steel are materially

injuring, or threaten material injury to the U.S. industry.

Public Comment

Case briefs or other written comments may be submitted to the

Assistant Secretary for Import Administration no later than fifty days

after the date of publication of this notice, and rebuttal briefs,

limited to issues raised in case briefs, no later than fifty-five days

after the date of publication of this preliminary determination. A list

of authorities used and an executive summary of issues should accompany

any briefs submitted to the Department. This summary should be limited

to five pages total, including footnotes. In accordance with section

774 of the Act, the Department will hold a public hearing, if

requested, to afford interested parties an opportunity to comment on

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

will be held fifty-seven days after publication of this notice at the

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

Washington, D.C. 20230, at a time and location to be determined.

Parties should confirm by telephone the date, time, and location 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 30 days of the date of 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. At the hearing, each party may make an affirmative

presentation only on issues raised in that party's case brief, and may

make rebuttal presentations only on arguments included in that party's

rebuttal brief. See 19 CFR 351.310(c). If this investigation proceeds

normally, we will make our final determination no later than April 28,

1999.

This determination is issued and published in accordance with

sections 733(d) and 777(i)(1) of the Act.

Dated: February 12, 1999.

Richard W. Moreland,

Acting Assistant Secretary for Import Administration.

[FR Doc. 99-4197 Filed 2-18-99; 8:45 am]

BILLING CODE 3510-DS-P