Initiation of Antidumping Duty Investigations: Certain Cut-To- Length Carbon-Quality Steel Plate From the Czech Republic, France, India, Indonesia, Italy, Japan, the Republic of Korea, and the Former Yugoslav Republic of Macedonia

DEPARTMENT OF COMMERCE

International Trade Administration

[A-427-816, A-475-826, A-580-836, A-560-805, A-533-817, A-588-847, A-

894-801, A-851-801]

Initiation of Antidumping Duty Investigations: Certain Cut-To-

Length Carbon-Quality Steel Plate From the Czech Republic, France,

India, Indonesia, Italy, Japan, the Republic of Korea, and the Former

Yugoslav Republic of Macedonia

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: March 16, 1999.

FOR FURTHER INFORMATION CONTACT: James Terpstra (France, India, and the

Republic of Korea) at (202) 482-3965; Wendy Frankel (Italy, Japan) at

(202) 482-5849; David Goldberger (Indonesia) at (202) 482-4136, Irene

Darzenta Tzafolias (Former Yugoslav Republic of Macedonia) at (202)

482-6320 and James Maeder (Czech Republic) at (202) 482-3330, Import

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

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

20230.

Initiation of Investigations

The Applicable Statute and Regulations

Unless otherwise indicated, all citations to the statute are

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

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

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

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

to the provisions codified at 19 CFR part 351 (1998).

The Petitions

On February 16, 1999, the Department of Commerce (the Department)

received petitions filed in proper form by Bethlehem Steel Corporation,

Gulf States Steel, Inc., IPSCO Steel Inc., Tuscaloosa Steel

Corporation,1 the United Steelworkers of America, and the

U.S. Steel Group (a unit of USX

[[Page 12960]]

Corporation) (collectively the petitioners). The Department received

supplemental information to the petitions on February 25 and 26, 1999,

and March 1, 1999.

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\1\ Note: Tuscaloosa Steel Corporation is not a petitioner in

the investigations involving the Czech Republic, France, and Italy.

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

allege that imports of certain cut-to-length carbon steel plate (CTL

plate) from the Czech Republic, France, India, Indonesia, Italy, Japan,

the Republic of Korea (Korea), and the Former Yugoslav Republic of

Macedonia (FYR Macedonia) are being, or are likely to be, sold in the

United States at less than fair value within the meaning of section 731

of the Act, and that such imports are materially injuring an industry

in the United States.

The Department finds that the petitioners filed these petitions on

behalf of the domestic industry because they are interested parties as

defined in sections 771(9)(C) and (D) of the Act, and they have

demonstrated sufficient industry support with respect to each of the

antidumping investigations that they are requesting the Department to

initiate (see Determination of Industry Support for the Petitions

below).

Scope of Investigations

The products covered by this scope are certain hot-rolled carbon-

quality steel: (1) Universal mill plates (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 nominal or actual thickness of

not less than 4 mm, which are cut-to-length (not in coils) and without

patterns in relief), of iron or non-alloy-quality steel; and (2) flat-

rolled products, hot-rolled, of a nominal or actual thickness of 4.75

mm or more and of a width which exceeds 150 mm and measures at least

twice the thickness, and which are cut-to-length (not in coils).

Steel products to be included in this scope are of rectangular,

square, circular or other shape and of rectangular or non-rectangular

cross-section where such non-rectangular cross-section is achieved

subsequent to the rolling process (i.e., products which have been

``worked after rolling'')--for example, products which have been

beveled or rounded at the edges. Steel products that meet the noted

physical characteristics that are painted, varnished or coated with

plastic or other non-metallic substances are included within this

scope. Also, specifically included in this scope are high strength, low

alloy (HSLA) steels. HSLA steels are recognized as steels with micro-

alloying levels of elements such as chromium, copper, niobium,

titanium, vanadium, and molybdenum.

Steel products to be included in this scope, regardless of

Harmonized Tariff Schedule of the United States (HTSUS) definitions,

are products in which: (1) Iron predominates, by weight, over each of

the other contained elements, (2) the carbon content is two percent or

less, by weight, and (3) none of the elements listed below is equal to

or 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

0.10 percent of molybdenum, or

0.10 percent of niobium, or

0.41 percent of titanium, or

0.15 percent of vanadium, or

0.15 percent zirconium.

All products that meet the written physical description, and in

which the chemistry quantities do not equal or exceed any one of the

levels listed above, are within the scope of these investigations

unless otherwise specifically excluded. The following products are

specifically excluded from these investigations: (1) Products clad,

plated, or coated with metal, whether or not painted, varnished or

coated with plastic or other non-metallic substances; (2) SAE grades

(formerly AISI grades) of series 2300 and above; (3) products made to

ASTM A710 and A736 or their proprietary equivalents; (4) abrasion-

resistant steels (i.e., USS AR 400, USS AR 500); (5) products made to

ASTM A202, A225, A514 grade S, A517 grade S, or their proprietary

equivalents; (6) ball bearing steels; (7) tool steels; and (8) silicon

manganese steel or silicon electric steel.

The merchandise subject to these investigations is classified in

the HTSUS under subheadings: 7208.40.3030, 7208.40.3060, 7208.51.0030,

7208.51.0045, 7208.51.0060, 7208.52.0000, 7208.53.0000, 7208.90.0000,

7210.70.3000, 7210.90.9000, 7211.13.0000, 7211.14.0030, 7211.14.0045,

7211.90.0000, 7212.40.1000, 7212.40.5000, 7212.50.0000, 7225.40.3050,

7225.40.7000, 7225.50.6000, 7225.99.0090, 7226.91.5000, 7226.91.7000,

7226.91.8000, 7226.99.0000.

Although the HTSUS subheadings are provided for convenience and

Customs purposes, the written description of the merchandise under

investigation is dispositive.

During our review of the petitions, we discussed the scope with the

petitioners to ensure that the scope in the petitions accurately

reflects the merchandise for which the domestic industry is seeking

relief. Moreover, as we discussed in the preamble to the Department's

regulations (62 FR at 27323), we are setting aside a period for parties

to raise issues regarding product coverage. In particular, we seek

comments on the specific levels of alloying elements set out in the

description above, the clarity of grades and specifications excluded

from the scope, and the physical and chemical description of the

product coverage. The Department encourages all parties to submit such

comments by March 29, 1999. Comments should be addressed to Import

Administration's Central Records Unit at Room 1870, U.S. Department of

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

20230. The period of scope consultations is intended to provide the

Department with ample opportunity to consider all comments and consult

with parties prior to the issuance of the preliminary determinations.

Determination of Industry Support for the Petitions

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

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

provides that a petition meets this requirement if the domestic

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

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

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

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

opposition to, the petition.

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

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

petition has the requisite industry support, the statute directs the

Department to look to producers and workers who produce the domestic

like product. The International Trade Commission (ITC), which is

responsible for determining whether ``the domestic industry'' has been

injured, must also determine what constitutes a domestic like product

in order to define the industry. While both the Department and the ITC

must apply the same statutory definition regarding the domestic like

product (section 771(10) of the Act), they do so for different purposes

and pursuant to separate and distinct authority. In addition, the

Department's determination is subject to limitations of

[[Page 12961]]

time and information. Although this may result in different definitions

of the like product, such differences do not render the decision of

either agency contrary to the law.2

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\2\ See Algoma Steel Corp. Ltd., v. United States, 688 F. Supp.

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

and Display Glass Therefore from Japan: Final Determination;

Rescission of Investigation and Partial Dismissal of Petition, 56 FR

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

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Section 771(10) of the Act defines the domestic like product as ``a

product which is like, or in the absence of like, most similar in

characteristics and uses with, the article subject to an investigation

under this title.'' Thus, the reference point from which the domestic

like product analysis begins is ``the article subject to an

investigation,'' i.e., the class or kind of merchandise to be

investigated, which normally will be the scope as defined in the

petition. Moreover, the petitioners do not offer a definition of

domestic like product distinct from the scope of the investigations.

In this case, ``the article subject to investigation'' includes

certain products which have not previously been included within the

scope of investigations involving cut-to-length carbon steel products.

To this end, the Department has reviewed reasonably available

information to determine whether the products within the scope of the

investigations constitute one or more than one domestic like

product(s).

Some steel products classified as alloy steels based on the HTSUS

are recognized as carbon steels by the industry and/or the marketplace.

For example, The Book of Steel, a 1996 publication by Sollac, a flat-

rolled steel division of Usinor, one of the largest steel companies in

the world, identifies HSLA as falling within categories of plain carbon

sheet steels (see chapter 44). Also, Carbon and Alloy Steels, published

in 1996 by ASM International, a major materials society, indicates that

HSLA steels are not considered to be alloy steels, but are in fact

similar to as-rolled mild-carbon steel and are generally priced by

reference to the base price for carbon steels (see page 29). Carbon and

Alloy Steels also distinguishes between carbon-boron and alloy-boron

steels; the former may contain boron at levels which would classify it

as alloy under the HTSUS, but would not classify it as an alloy steel

commercially because, unlike the alloy-boron steels, higher levels of

other alloying elements are not specified (see e.g., pages 159 and

161).

The Department has considered that, with respect to certain steel

products, such as HSLA, the petitioners indicate that these steel

products are manufactured by similar processes, are priced from similar

bases, are marketed in comparable ways, and are used for similar

applications as carbon steels.

Further, we confirmed this description with product experts at the

Department and the ITC. Other than the fact that the AISI technically

defines alloy steels based on alloy levels comparable to those in the

HTSUS, none of the individuals cited reasons why the products in

question might be treated as distinct from cut-to-length carbon steels.

For these reasons, the Department determines that for purposes of these

investigations, the domestic like product definition is the single

domestic like product defined in the Scope of the Investigations

section above.

Based on our analysis of the information and arguments presented to

the Department and the information independently obtained and reviewed

by the Department, we have determined that there is a single domestic

like product which is defined in the Scope of Investigations section

above. Moreover, the Department has determined that the petitions (and

subsequent amendments) contain adequate evidence of industry support

and, therefore, polling is unnecessary (see Import Administration

Antidumping Investigation Initiation Checklist, Re: Industry Support,

March 3, 1999, hereinafter the IA Initiation Checklist, on file in the

Central Records Unit (CRU) of the main Department of Commerce

building). The Department received no opposition to the petitions. For

all countries, the petitioners established industry support

representing over 50 percent of total production of the domestic like

product.

Accordingly, the Department determines that these petitions are

filed on behalf of the domestic industry within the meaning of section

732(b)(1) of the Act.

Export Price and Normal Value

The following are descriptions of the allegations of sales at less

than fair value upon which our decisions to initiate these

investigations are based. A more detailed description of these

allegations is provided in the IA Initiation Checklist. Should the need

arise to use any of this information in our preliminary or final

determinations for purposes of facts available under section 776 of the

Act, we may re-examine the information and revise the margin

calculations, if appropriate.

Czech Republic

The petitioners identified Nova Hut a.s. (Nova Hut), Vitkovice a.s.

(Vitkovice), and ZDB a.s. (ZDB) as possible exporters of CTL plate from

the Czech Republic. The petitioners further identified Nova Hut and

Vitkovice as the primary producers of subject merchandise in the Czech

Republic, and Vitkovice as the primary exporter of the subject

merchandise to the United States.

The petitioners based export price (EP) on a U.S. price offering

for CTL plate produced by Vitkovice. The petitioners made deductions

from EP for U.S. port charges (from a U.S. port tariff schedule); CIF

charges, including ocean freight and insurance (from official U.S.

import statistics); and duties (from the HTSUS).

The petitioners note that the Department has never had occasion to

determine whether the Czech Republic is a non-market economy country

(NME) to the extent that sales or offers for sale of such or similar

merchandise in the Czech Republic do not permit calculation of normal

value (NV) under 19 CFR 351.404. In previous investigations, however,

the Department has determined that Czechoslovakia, the predecessor of

both the Czech Republic and the Slovak Republic, was a NME. See e.g.,

Final Determination of Sales at Less Than Fair Value: Carbon Steel Wire

Rod from Czechoslovakia, 49 FR 19370 (May 7, 1984). In accordance with

section 771(18)(C)(i) of the Act, the presumption of NME status remains

in effect until revoked by the Department. The presumption of NME

status for the Czech Republic has not been revoked by the Department

and, therefore, remains in effect for purposes of the initiation of

this investigation. Accordingly, the NV of the product appropriately is

based on factors of production valued in a surrogate market economy

country, in accordance with section 773(c) of the Act. The petitioners

constructed a NV based on the factors of production methodology

pursuant to section 773(c) of the Act. In the course of this

investigation, all parties will have the opportunity to provide

relevant information related to the issues of the Czech Republic's NME

status and the granting of separate rates to individual exporters. See

e.g., Final Determination of Sales at Less Than Fair Value: Silicon

Carbide from the PRC, 59 FR 22585 (May 2, 1994).

With respect to NV, the petitioners based the factors of

production, as defined by section 773(c)(3) of the Act (raw materials,

labor, energy and capital cost), for CTL plate on the quantities of

[[Page 12962]]

inputs used by a production facility of one of the petitioners,

adjusted for known differences in production efficiencies on the basis

of available information. The petitioners selected this particular

facility claiming that its production process was similar to that of

Vitkovice. The petitioners asserted that detailed information is not

available regarding the quantities of inputs used by Vitkovice. Thus,

they have assumed, for purposes of the petition, that Vitcovice uses

the same inputs in the same quantities as the petitioners, except where

a variance from their cost model can be justified on the basis of

available information. Based on the information provided by the

petitioners, we believe that their use of adjusted factors of

production of one of their own facilities represents information

reasonably available to the petitioners and is appropriate for purposes

of the initiation of this investigation.

The petitioners selected Brazil as the primary surrogate, stating

that the per-capita Gross National Product (GNP) of Brazil is similar

to that of the Czech Republic.3 Moreover, of the five

countries that are most similar to the Czech Republic with regard to

per-capita GNP, Brazil is the most significant producer of CTL plate.

Brazil has two CTL plate producers with a combined annual production

capacity of nearly two million metric tons. The only other surrogate

candidate that produces CTL plate is Chile. The petitioners claim that

Chile has one plate mill, but they do not know its annual capacity.

However, the petitioners note that Chile's total 1997 hot-rolled flat

steel production was 457,000 metric tons, only a portion of which was

CTL plate. Thus, the petitioners maintain that Brazil is the most

suitable surrogate among the potential surrogates, because, pursuant to

section 773(c)(4) of the Act, it is at a comparable level of economic

development and it is the most significant producer of comparable

merchandise of any other potential surrogate. Based on the information

provided by the petitioners, we believe that the petitioners' use of

Brazil as a surrogate country is appropriate for purposes of the

initiation of this investigation.

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\3\ The petitioners acknowledge that the Department's

regulations indicate that GDP is the appropriate basis for

determining comparability but argue that GNP is reasonable as a

basis for initiating.

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In accordance with section 773(c)(4) of the Act, the petitioners

valued factors of production, where possible, using reasonably

available, public surrogate country data. Specifically:

Coal was valued based on Brazilian import values reported

in U.S. dollars, as published in the October 1998 Brazilian edition of

the World Trade Atlas.

Iron ore was valued using the public price information of

a Brazilian iron ore producer.

Scrap was valued based on a July 3, 1997, report by Credit

Suisse First Boston Corporation.

Labor was valued using the regression-based wage rate for

the Czech Republic provided by the Department, in accordance with 19

CFR 351.408(c)(3).

Electricity and natural gas were valued using the rate for

Brazil published in a quarterly report of the OECD's International

Energy Agency from the third quarter of 1998.

Underfiring fuels and repair and maintenance materials

were valued using the costs of the petitioner whose production process

is similar to Vitkovice's, because the petitioners were unable to find

Brazilian values for them.

For selling, general, and administrative (SG&A) expenses,

financial expenses, and profit, the petitioners applied rates derived

from the 1997 public financial statements of the two Brazilian

producers of the subject merchandise, COSIPA and USIMINAS.

Depreciation was valued using the product-specific

depreciation rate of the petitioner whose production process is similar

to Vitkovice's, explaining that the rate they could derive from the

Brazilian producers' information would not be product specific.

Based on the information provided by the petitioners, we believe that

their surrogate values represent information reasonably available to

them and are acceptable for purposes of the initiation of this

investigation.

Based on comparisons of EP to NV, the petitioners estimated the

dumping margin for CTL plate from the Czech Republic to be 76.38

percent.

France

The petitioners identified Creusot Loire Industrie (CLI) and GTS

Industries as possible exporters of CTL plate from France. The

petitioners further identified these exporters as the primary producers

of subject merchandise in France. The petitioners based EP on a U.S.

price offering to an unaffiliated U.S. purchaser for two products. The

petitioners made deductions from EP for CIF charges, including ocean

freight and insurance (from official U.S. import statistics); and

duties (from the HTSUS).

In addition, the petitioners provided, as a second basis for EP,

the average unit value (AUV) for three of the HTSUS categories

accounting for the largest volume of imports from France during the

first eleven months of 1998, the most current data available. The

petitioners maintain that the products within these categories, while

representing a range of sizes, are nevertheless indicative of average

pricing because the products within these categories represent the

largest volume commercial products. The petitioners also maintain that

the values for CTL plate in the IM-145 approximate the FOB price of the

merchandise, packaged and ready for delivery at the foreign port (see

19 USC section 1401a and 19 CFR 152.101).

With respect to NV, the petitioners provided home market prices for

common grades and sizes of CTL plate obtained from foreign market

research. These products are comparable to the products exported to the

United States, which serve as the basis for EP. The price used in the

calculation of NV was an ex-factory price, exclusive of taxes.

In addition, the petitioners provided information demonstrating

reasonable grounds to believe or suspect that sales of CTL plate in the

home market were made at prices below the cost of production (COP),

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

Department conduct a country-wide sales-below-cost investigation.

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

of manufacturing (COM), SG&A expenses, and packing expenses. To

calculate COM, the petitioners relied upon their own production

experience, adjusted for known differences between costs incurred to

produce CTL plate in the United States and in France using publicly

available data.

To calculate SG&A and financial expenses, the petitioners relied

upon the 1997 financial statements of a French steel producer. Based

upon the comparison of the adjusted price of the foreign like product

in the home market to the calculated COP of the product, we find

reasonable grounds to believe or suspect that sales of the foreign like

product were made below the COP, within the meaning of section

773(b)(2)(A)(i) of the Act. Accordingly, the Department is initiating a

country-wide cost investigation.

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

petitioners also based NV for sales in France on constructed value

(CV). The petitioners calculated CV using the same COM, SG&A and

financial expense figures

[[Page 12963]]

used to compute French home market costs. Consistent with section

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

profit. Profit was based upon the aforementioned French steel company's

1997 financial statements.

The petitioners provided estimated dumping margins in two ways: (1)

CV compared to U.S. price offers (7.99 to 30.06 percent); and (2) CV

compared to AUV (11.37 to 42.50 percent).

India

The petitioners identified Steel Authority of India Ltd. (SAIL) as

an exporter of CTL plate from India. According to the petitioners, SAIL

accounted for a large percentage of the subject merchandise exported to

the United States during the January-November 1998 time period. The

petitioners based EP on a U.S. price offering to unaffiliated

purchasers. The petitioners made deductions from EP for CIF charges,

including ocean freight and insurance (from official U.S. import

statistics); and duties (from the HTSUS).

With respect to NV, the petitioners provided home market prices for

common grades and sizes of CTL plate obtained from foreign market

research. These products are comparable to the products exported to the

United States which serve as the basis for EP. The price used in the

calculation of NV was an ex-factory price, exclusive of taxes.

In addition, the petitioners provided information demonstrating

reasonable grounds to believe or suspect that sales of certain CTL

plate in the home market were made at prices below the COP, within the

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

conduct a country-wide sales-below-cost investigation.

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

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

relied upon their own production experience, adjusted for known

differences between costs incurred to produce CTL plate in the United

States and in India using market research and publicly available data.

To calculate SG&A and financial expenses, the petitioners relied

upon the 1997 financial statements of an Indian steel producer. Based

upon the comparison of the adjusted prices of the foreign like product

in the home market to the calculated COP of the product, we find

reasonable grounds to believe or suspect that sales of the foreign like

product were made below the COP, within the meaning of section

773(b)(2)(A)(i) of the Act. Accordingly, the Department is initiating a

country-wide cost investigation.

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

petitioners also based NV for sales in India on CV. The petitioners

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

used to compute Indian home market costs. Consistent with section

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

profit. Profit was based on the aforementioned Indian steel company's

1997 financial statements.

The petitioners provided estimated dumping margins in two ways: (1)

HMP compared to U.S. price offers (44.51 percent); and (2) CV compared

to U.S. price offers (72.49 percent).

Indonesia

The petitioners identified PT Gunawan Dianjaya Steel (Gunawan), PT

Jaya Pari Steel Corp., Ltd., Tbk.(Jaya Pari), and PT Krakatau Steel

(Krakatau) as possible exporters of CTL plate from Indonesia. The

petitioners based EP on a U.S. price offer for several products

manufactured by Gunawan and sold to an unaffiliated U.S. purchaser. The

petitioners made deductions from EP for foreign inland freight (based

on foreign market research), U.S. port charges (from a U.S. port tariff

schedule); CIF charges, including ocean freight and insurance (from

official U.S. import statistics); duties (from the HTSUS); and U.S.

movement expenses, including inland freight, based on the petitioners'

experience.

With respect to NV, the petitioners used a delivered home market

price, exclusive of taxes, for a common grade and size of CTL plate

produced by Gunawan, obtained from foreign market research. This

product is comparable to one of the products exported to the United

States, which serves as the basis for EP. The petitioners deducted

inland freight expenses based on information from foreign market

research. The petitioners made a circumstance-of-sale adjustment for

credit expenses based on information from foreign market research.

In addition, the petitioners provided information demonstrating

reasonable grounds to believe or suspect that sales of CTL plate in the

home market were made at prices below the COP, within the meaning of

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

country-wide sales-below-cost investigation.

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

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

relied upon their own production experience, adjusted for known

differences between costs incurred to produce CTL plate in the United

States and in Indonesia using publicly available data.

To calculate SG&A and financial expenses, the petitioners relied

upon the 1997 financial statements of an Indonesian steel producer.

Based upon the comparison of the adjusted price of the foreign like

product in the home market to the calculated COP of the product, we

find reasonable grounds to believe or suspect that sales of the foreign

like product were made below the COP, within the meaning of section

773(b)(2)(A)(i) of the Act. Accordingly, the Department is initiating a

country-wide cost investigation.

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

petitioners also based NV for sales in Indonesia on CV. The petitioners

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

used to compute Indonesian home market costs. Consistent with section

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

profit. Profit was based upon an Indonesian steel producer's 1997

financial statements.

The petitioners provided estimated dumping margins in two ways: (1)

HMP compared to U.S. price offers (17.59 percent); and (2) CV compared

to U.S. price offers (52.42 percent).

Italy

The petitioners identified Ilva Laminati Piani SpA (ILP), Palini &

Bertoli SpA (PB), Siderurgica Villalvernia SpA (SV), and Ferriera

Siderscal SpA (FS) as possible exporters of CTL plate from Italy. The

petitioners further identified these exporters as the primary producers

of subject merchandise in Italy. The petitioners based EP on a U.S.

price offering to an unaffiliated U.S. purchaser for two products. The

delivery terms were FOB duty paid and Ex-Dock duty paid. The

petitioners made deductions from EP for CIF charges, including ocean

freight and insurance (from official U.S. import statistics).

In addition, the petitioners provided, as a second basis for EP,

the AUV for the three HTSUS categories accounting for the largest

volume of imports from Italy during the first eleven months of 1998.

The petitioners maintain that the products within these categories,

while representing a range of sizes, are nevertheless indicative of

average pricing because the products within these categories represent

the largest volume commercial products. The petitioners maintain that

the values for CTL plate in the IM-145 approximate the FOB price of the

merchandise,

[[Page 12964]]

packaged and ready for delivery at the foreign port (see 19 USC section

1401a and 19 CFR 152.101).

With respect to NV, the petitioners used an ex-factory home market

price, exclusive of taxes, for a common grade and size of CTL plate

obtained from foreign market research. This product is comparable to

the products exported to the United States which serve as the basis for

EP.

In addition, the petitioners provided information demonstrating

reasonable grounds to believe or suspect that sales of CTL plate in the

home market were made at prices below the COP, within the meaning of

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

country-wide sales-below-cost investigation.

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

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

relied upon their own production experience, adjusted for known

differences between costs incurred to produce CTL plate in the United

States and in Italy using market research and publicly available data.

To calculate SG&A and financial expenses, the petitioners relied

upon the 1997 financial statements of an Italian steel producer. Based

upon the comparison of the adjusted price of the foreign like product

in the home market to the calculated COP of the product, we find

reasonable grounds to believe or suspect that sales of the foreign like

product were made below the COP, within the meaning of section

773(b)(2)(A)(i) of the Act. Accordingly, the Department is initiating a

country-wide cost investigation.

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

petitioners also based NV for sales in Italy on CV. The petitioners

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

used to compute Italian home market costs. Consistent with section

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

profit. Profit was based upon the aforementioned Italian producer's

1997 financial statements.

The petitioners provided estimated dumping margins in two ways: (1)

CV compared to U.S. price offers (39.55 to 93.30 percent); and (2) CV

compared to AUV (30.75 to 89.72 percent).

Japan

The petitioners identified Kawasaki Steel Corporation (Kawasaki),

Kobe Steel, Ltd. (Kobe Steel), Nippon Steel Corporation (Nippon Steel),

NKK Corporation (NKK), and Sumitomo Metal Industries, Ltd. (Sumitomo)

as exporters of CTL plate from Japan. The petitioners further

identified these exporters as the only Japanese producers known to the

petitioners to have exported the subject merchandise from Japan. The

petitioners based EP on a price offering to unaffiliated purchasers in

the United States. The petitioners made deductions from EP for U.S.

port charges (from a U.S. freight forwarder); CIF charges, including

ocean freight and insurance (from official U.S. import statistics);

duties (from the HTSUS), foreign movement charges (from foreign market

research), and a Japanese trading company mark-up (from foreign market

research).

With respect to NV, the petitioners obtained, from foreign market

research, home market delivered prices from Nippon Steel, NKK,

Kawasaki, and Sumitomo for a product similar to that for which the U.S.

price quote was obtained. Based on the terms of the home market sales,

the petitioners deducted foreign movement charges (obtained from

foreign market research) from the home market prices. The petitioners

also adjusted home market prices for differences in packing and credit

expenses in the U.S. and Japanese markets (obtained from foreign market

research), and for differences in the merchandise for which the U.S.

and Japanese price quotes were obtained, based on their own production

experience, adjusted for known differences between costs incurred to

produce CTL plate in the United States and in Japan (obtained from

market research and publicly available data).

In addition, the petitioners provided information demonstrating

reasonable grounds to believe or suspect that sales of CTL plate in the

home market were made at prices below the COP, within the meaning of

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

country-wide sales-below-cost investigation.

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

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

relied upon their own production experience, adjusted for known

differences between costs incurred to produce CTL plate in the United

States and in Japan using market research and publicly available data.

To calculate SG&A and financial expenses, the petitioners relied

upon the 1997/1998 financial statements of the Japanese steel

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

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

product, we find reasonable grounds to believe or suspect that sales of

the foreign like product were made below the COP, within the meaning of

section 773(b)(2)(A)(i) of the Act. Accordingly, the Department is

initiating a country-wide cost investigation.

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

petitioners also based NV for sales in Japan on CV. The petitioners

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

used to compute Japanese home market costs. Consistent with section

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

profit. Profit was based upon the aforementioned Japanese producers'

1997/1998 financial statements.

The petitioners provided estimated dumping margins in two ways: (1)

HMP compared to U.S. price offers (3.06 to 3.44 percent); and (2) CV

compared to U.S. price (56.24 to 59.12 percent).

Republic of Korea

The petitioners identified Daekyung Corporation, Dongkuk Steel Mill

Co., Ltd., Korea Iron & Steel (KISCO), and Pohang Iron and Steel Co

Ltd. (POSCO) as possible exporters of CTL plate from Korea. The

petitioners based EP on U.S. price offerings for the subject

merchandise in the United States. The petitioners made deductions from

EP for CIF charges, including ocean freight and insurance (from

official U.S. import statistics); and duties (from the HTSUS).

In addition, the petitioners provided, as a second basis for EP,

the AUV for three of the HTSUS categories accounting for the largest

volume of imports from Korea during the first eleven months of 1998,

the most current data available. The petitioners maintain that the

products within these categories, while representing a range of sizes,

are nevertheless indicative of average pricing because the products

within these categories represent the largest volume commercial

products. The petitioners also maintain that the values for CTL plate

in the IM-145 approximate the FOB price of the merchandise, packaged

and ready for delivery at the foreign port (see 19 USC section 1401a

and 19 CFR 152.101).

With respect to NV, the petitioners provided home market prices for

common grades and sizes of CTL plate obtained from foreign market

research. These products are comparable to the products exported to the

United States which serve as the basis for EP.

In addition, the petitioners provided information demonstrating

reasonable grounds to believe or suspect that sales of CTL plate in the

home market were made at prices below the COP, within the meaning of

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

[[Page 12965]]

conduct a country-wide sales-below-cost investigation.

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

SG&A expenses, and packing. To calculate COM, the petitioners relied

upon their own production experience, adjusted for known differences

between costs incurred to produce CTL plate in the United States and in

Korea using publicly available data.

To calculate SG&A and financial expenses, the petitioners relied

upon the 1997 audited financial statements of a Korean steel producer.

Based upon the comparison of the adjusted prices of the foreign like

product in the home market to the calculated COP of the product, we

find reasonable grounds to believe or suspect that sales of the foreign

like product were made below the COP, within the meaning of section

773(b)(2)(A)(i) of the Act. Accordingly, the Department is initiating a

country-wide cost investigation.

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

petitioners also based NV for sales in Korea on CV. The petitioners

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

used to compute Korean home market costs. Consistent with section

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

profit. Profit was based upon the aforementioned Korean producer's 1997

financial statements.

The petitioners provided estimated dumping margins in two ways: (1)

CV to U.S. price offers (14.57 to 63.00 percent); and (2) CV to AUV

(1.26 to 34.91 percent).

The Former Yugoslav Republic of Macedonia

The petitioners identified Rudnici i Zelezara Skopje (Makstil) as

the sole CTL plate producer in FYR Macedonia. The petitioners based EP

on U.S. price offerings for the sale of the subject merchandise in the

United States. The petitioners made deductions from EP for CIF charges,

including ocean freight and insurance (from official U.S. import

statistics); and duties (from official U.S. import statistics).

In addition, the petitioners provided, as a second basis for EP,

the AUV for two of the HTSUS categories accounting for all imports of

CTL plate from FYR Macedonia during the first eleven months of 1998,

the most current data available. The petitioners maintain that the

products within these categories, while representing a range of sizes,

are nevertheless indicative of average pricing because the products

within these categories represent the largest volume commercial

products. The petitioners also maintain that the values for CTL plate

in the IM-145 approximate the FOB price of the merchandise, packaged

and ready for delivery at the foreign port (see 19 USC section 1401a

and 19 CFR 152.101).

With respect to NV, the petitioners stated that despite significant

efforts, they were unable to obtain any home market or third country

market prices for sales of Macedonian CTL plate. The petitioners

instead calculated the weighted-average CIF export price of CTL plate

from FYR Macedonia to Germany, France and Italy, for the period January

through August 1998, based on publicly available data. The petitioners

identified these three European countries as likely to represent

significant export markets for Macedonian CTL plate because they are

three large, steel-consuming markets that are geographically proximate

to FYR Macedonia. Because the petitioners had no information pertaining

to international freight and insurance charges within Europe, no

adjustment was made to the CIF export price for those charges.

In addition, the petitioners provided information demonstrating

reasonable grounds to believe or suspect that sales of Macedonian CTL

plate in the above-specified third-country markets were made at prices

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

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

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

of COM, SG&A, and packing expenses. To calculate COM, the petitioners

relied upon their own production experience during the period January

through September 1998, adjusted for known differences between the

costs incurred to produce CTL plate in the United States and in FYR

Macedonia using publicly available data.

To calculate SG&A and financial expenses, the petitioners stated

that they conducted extensive research efforts to obtain the financial

statements of the Macedonian CTL producer or any other steel-related

producer in FYR Macedonia without success. Therefore, they relied upon

their own experience during 1998 to calculate these expenses. While it

is the Department's practice, under section 773(e)(2)(A) of the Act, to

calculate general expenses (and profit) in connection with the

production and sale of a foreign like product, in the ordinary course

of trade, for consumption in the foreign country (i.e., country of

manufacture), such information was not reasonably available to the

petitioners or to the Department in this case. Therefore, we have

accepted the petitioners' calculation methodology for purposes of

initiating this investigation.

Based upon the comparison of the weighted-average export price of

the foreign like product in third countries to the calculated COP of

the product, we find reasonable grounds to believe or suspect that

sales of the foreign like product were made below the COP, within the

meaning of section 773(b)(2)(A)(i) of the Act. We also note that in

this case, making no adjustment to COP for general expenses would still

result in sales below cost. Accordingly, the Department is initiating a

country-wide cost investigation.

Because the third-country export price used in the petition was

below the calculated COP, pursuant to sections 773(a)(4), 773(b), and

773(e) of the Act, the petitioners based NV on CV. The petitioners

calculated CV using the same methodology as that described above for

third country COP. Consistent with section 773(e)(2) of the Act, the

petitioners also added to CV an amount for profit which they based on

their own experience. As noted above, while it is the Department's

practice, under section 773(e)(2)(A) of the Act, to calculate general

expenses and profit in connection with the production and sale of a

foreign like product, in the ordinary course of trade, for consumption

in the foreign country (i.e., country of manufacture), such information

was not reasonably available to the petitioners or to the Department in

this case. Therefore, we have accepted the petitioners' calculation

methodology for purposes of initiating this investigation. We also note

that in this case, making no adjustment to CV for general expenses and

profit would still result in significant margins when CV is compared to

EP.

The petitioners provided estimated dumping margins in two ways: (1)

CV compared to U.S. price offers (44.24 to 119.42 percent); and (2) CV

compared to AUV (22.95 to 34.97 percent).

Initiation of Cost Investigations

Pursuant to section 773(b) of the Act, the petitioners provided

information demonstrating reasonable grounds to believe or suspect that

sales in the home markets of France, India, Indonesia, Italy, Japan,

Korea, and sales in third countries for FYR Macedonia were made at

prices below the fully allocated COP and, accordingly, requested that

the Department conduct country-wide sales-below-COP investigations in

connection with the requested antidumping investigations in France,

India, Indonesia, Italy, Japan, Korea, and FYR Macedonia. The Statement

of

[[Page 12966]]

Administrative Action (SAA), submitted to the Congress in connection

with the interpretation and application of the URAA, states that an

allegation of sales below COP need not be specific to individual

exporters or producers. SAA, H.R. Doc. No. 316 at 833 (1994). The SAA,

at 833, states that ``Commerce will consider allegations of below-cost

sales in the aggregate for a foreign country, just as Commerce

currently considers allegations of sales at less than fair value on a

country-wide basis for purposes of initiating an antidumping

investigation.''

Further, the SAA provides that ``new section 773(b)(2)(A) retains

the current requirement that Commerce have `reasonable grounds to

believe or suspect' that below cost sales have occurred before

initiating such an investigation. `Reasonable grounds' . . . exist when

an interested party provides specific factual information on costs and

prices, observed or constructed, indicating that sales in the foreign

market in question are at below-cost prices.'' Id. Based upon the

comparison of the adjusted prices from the petitions for the

representative foreign like products to their costs of production, we

find the existence of ``reasonable grounds to believe or suspect'' that

sales of these foreign like products in France, India, Indonesia,

Italy, Japan, Korea, and FYR Macedonia were made below their respective

COPs within the meaning of section 773(b)(2)(A)(i) of the Act.

Accordingly, the Department is initiating the requested country-wide

cost investigations (see country-specific sections above).

Fair Value Comparisons

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

believe that imports of CTL plate from the Czech Republic, France,

India, Indonesia, Italy, Japan, Korea, and FYR Macedonia are being, or

are likely to be, sold at less than fair value.

Critical Circumstances

The petitioners have alleged that critical circumstances exist with

respect to imports of subject merchandise from the Czech Republic,

Indonesia, Japan, and FYR Macedonia. The petitioners have supported

their allegations with the following information. For the Czech

Republic and FYR Macedonia, the petitioners state that there is a

history of injurious dumping because Canada has imposed antidumping

measures on CTL plate from these countries. For Indonesia and Japan,

the petitioners made alternative claims that the importers knew, or

should have known, that CTL plate was being sold at less than normal

value and that there was likely to be material injury by reason of such

sales. Specifically, for both countries, the petitioners allege that

the margins calculated in the petitions exceed the 25 percent threshold

used by the Department to impute importer knowledge of dumping and the

likelihood of material injury due to that dumping.

The petitioners also have alleged that imports from the Czech

Republic, Indonesia, Japan, and FYR Macedonia have been massive over a

relatively short period. The petitioners allege that there was

sufficient pre-filing notice of these antidumping petitions and that

the Department should compare imports during June-August 1998 (base

period) to imports during September-November 1998 (comparison period)

for purposes of this determination. According to the import statistics

contained in the petitions, for the periods June-August 1998 and

September-November 1998, imports of CTL plate from the Czech Republic

increased by 154 percent, imports from Indonesia increased by 15

percent, imports from Japan increased by 294 percent, and imports from

FYR Macedonia increased by 129 percent. Taking into consideration the

foregoing, we find that the petitioners have alleged the elements of

critical circumstances and supported them with information reasonably

available.

For these reasons, we are initiating critical circumstances

investigations for the above-specified countries and will make

preliminary determinations based on available information at the

appropriate time, in accordance with section 733(e)(1) of the Act.

Allegations and Evidence of Material Injury and Causation

The petitioners allege that the U.S. industry producing the

domestic like product is being materially injured, and is threatened

with material injury, by reason of the individual and cumulated imports

of the subject merchandise sold at less than NV. The petitioners

explained that the industry's injured condition is evident in the

declining trends in net operating profits, net sales volumes, profit-

to-sales ratios, and capacity utilization. The allegations of injury

and causation are supported by relevant evidence including U.S. Customs

import data, lost sales, and pricing information. The Department

assessed the allegations and supporting evidence regarding material

injury and causation and determined that these allegations are

supported by accurate and adequate evidence and meet the statutory

requirements for initiation (see IA Initiation Checklist).

Initiation of Antidumping Investigations

Based upon our examination of the petitions on certain cut-to-

length carbon-quality steel plate and the petitioners' responses to our

supplemental questionnaires clarifying the petitions, as well as our

discussion with the authors of the foreign market research reports

supporting the petitions on France, India, Indonesia, Italy, Japan, and

Korea, and other measures undertaken to confirm the information

contained in these reports (see IA Initiation Checklist), we have found

that the petitions meet the requirements of section 732 of the Act.

Therefore, we are initiating antidumping duty investigations to

determine whether imports of certain cut-to-length carbon-quality steel

plate products from the Czech Republic, France, India, Indonesia,

Italy, Japan, Korea, and FYR Macedonia are being, or are likely to be,

sold in the United States at less than fair value. Unless this deadline

is extended, we will make our preliminary determinations no later than

140 days after the date of this notice.

Distribution of Copies of the Petitions

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

public version of each petition has been provided to the

representatives of the Czech Republic, France, India, Indonesia, Italy,

Japan, Korea, and FYR Macedonia. We will attempt to provide a copy of

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

petition (as appropriate).

International Trade Commission Notification

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

732(d) of the Act.

Preliminary Determinations by the ITC

The ITC will determine, by April 2, 1999, whether there is a

reasonable indication that imports of certain cut-to-length carbon-

quality steel plate from the Czech Republic, France, India, Indonesia,

Italy, Japan, Korea, and FYR Macedonia are causing material injury, or

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

ITC determination for any country will result in the investigation

being terminated with respect to that country; otherwise, these

investigations will proceed according to statutory and regulatory time

limits.

This notice is published pursuant to section 777(i) of the Act.

[[Page 12967]]

Dated: March 8, 1999.

Robert S. LaRussa,

Assistant Secretary for Import Administration.

[FR Doc. 99-6293 Filed 3-15-99; 8:45 am]

BILLING CODE 3510-DS-P