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Notice of Initiation of antidumping duty investigations: Prestressed Concrete Steel Wire Strand From Brazil, India, the Republic of Korea, Mexico, and Thailand

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Start Preamble

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Initiation of antidumping duty investigations.

EFFECTIVE DATE:

February 27, 2003.

Start Further Info

FOR FURTHER INFORMATION CONTACT:

Magd Zalok (Brazil and Republic of Korea) at (202) 482-4162, Victoria Schepker (India and Thailand) at (202) 482-1756, and David Layton (Mexico) at (202) 482-0371, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230.

Initiation of Investigations

The Petitions

On January 31, 2003, the Department received petitions filed in proper form by American Spring Wire Corp., Insteel Wire Products Company, and Sumiden Wire Products Corp. (collectively, the petitioners). The Department received supplemental information to the petitions from February 4 through February 14, 2003.

In accordance with section 732(b)(1) of the Tariff Act of 1930, as amended (the Act), the petitioners allege that imports of prestressed concrete steel wire strand (PC strand) from Brazil, India, the Republic of Korea (Korea), Mexico, and Thailand are, 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 imports from Brazil, India, Korea, Mexico, and Thailand are materially injuring, or are threatening to materially injure 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) 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 infra, “Determination of Industry Support for the Petitions.”

Period of Investigation

The anticipated period of investigation (POI) for Brazil, India, Korea, Mexico, and Thailand is January 1, 2002, through December 31, 2002.

Scope of Investigations

For purposes of these investigations, prestressed concrete steel wire (PC strand) is steel strand produced from wire of non-stainless, non-galvanized steel, which is suitable for use in prestressed concrete (both pretensioned and post-tensioned) applications. The product definition encompasses covered and uncovered strand and all types, grades, and diameters of PC strand.

The merchandise under these investigations is currently classifiable under subheadings 7312.10.3010 and 7312.10.3012 of the Harmonized Tariff Schedule of the United States (HTSUS). Although the HTSUS subheadings are provided for convenience and Customs purposes, the written description of the merchandise under investigation is dispositive.

As discussed in the preamble to the Department's regulations (Antidumping Duties; Countervailing Duties; Final Rule, 62 FR 27296, 27323 (May 19, 1997)), we are setting aside a period for parties to raise issues regarding product coverage. The Department encourages all parties to submit such comments within 20 calendar days of publication of this notice. Comments should be addressed to Import Administration's Central Records Unit, 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 Start Printed Page 9051and 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 the Department's industry support determination, which is to be made before the initiation of the investigation, be based on whether a minimum percentage of the relevant industry supports the petition. 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. Moreover, section 732(c)(4)(D) of the Act provides that, if the petition does not establish support of domestic producers or workers accounting for more than 50 percent of the total production of the domestic like product, the Department shall either poll the industry or rely on other information in order to determine if there is support for the petition.

Section 771(4)(A) of the Act defines the “industry” as the producers of a domestic like product. Thus, to determine whether a petition has the requisite industry support, the statute directs the Department to look to producers and workers who produce the domestic like product. The U.S. 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 a separate and distinct authority. In addition, the Department's determination is subject to limitations of time and information. Although this may result in different definitions of the like product, such differences do not render the decision of either agency contrary to the law.[1]

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.

The petitions cover PC strand as defined in the Scope of Investigations section, above, a single class or kind of merchandise. The Department has no basis on the record to find the petitioners' definition of the domestic like product to be inaccurate. The Department, therefore, has adopted the domestic like product definition set forth in the petitions.

Finally, the Department has determined that, pursuant to section 732(c)(4)(A) of the Act, the petitions contain adequate evidence of industry support and, therefore, polling is unnecessary. See Import Administration Antidumping Investigations Initiation Checklist: Prestressed Concrete Steel Wire Strand from Brazil, India, Korea, Mexico, and Thailand, Industry Support section, February 20, 2003 (the Initiation Checklist), on file in the Central Records Unit, Room B-099 of the main Department of Commerce building.

For each country, we determined, based on information provided in the petition, that the petitioners have demonstrated industry support representing over 50 percent of total production of the domestic like product. Therefore, the domestic producers or workers who support the petitions account for at least 25 percent of the total production of the domestic like product, and the requirements of section 732(c)(4)(A)(i) of the Act are met. Furthermore, because the Department received no opposition to the petitions, the domestic producers or workers who support the petitions account for 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 petitions. Thus, the requirements of section 732(c)(4)(A)(ii) are also met. Accordingly, we determine that these petitions are filed on behalf of the domestic industry within the meaning of section 732(b)(1) of the Act. See the Injury Allegation section in the Initiation Checklist.

Initiation Standard for 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 India, Korea, Mexico, and Thailand were made at prices below the cost of production (COP) and, accordingly, requested that the Department conduct country-wide sales-below-COP investigations in connection with these investigations. The Statement of Administrative Action (SAA), submitted to the Congress in connection with the interpretation and application of the Uruguay Round Agreements Act (URAA), states that an allegation of sales below COP need not be specific to individual exporters or producers. The SAA 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.” SAA, H.R. Doc. No. 103-316 at 833 (1994).

Further, the SAA provides that section 773(b)(2)(A) of the Act retains the requirement that the Department 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. We have analyzed the country-specific allegations as described below for India, Korea, Mexico, and Thailand. Based on our analysis, we found reasonable grounds to believe or suspect that sales of PC strand in the above-referenced countries were made at prices below cost. See the Normal Value sections below.

Export Price and Normal Value

The following are descriptions of the allegations of sales at less than fair value upon which the Department based its decision to initiate these investigations. The sources of data for the deductions and adjustments relating to U.S. and home market prices, and constructed value (CV) are discussed in greater detail in the Initiation Checklist. Should the need arise to use any of this information as facts available under section 776 of the Act in our preliminary or final determinations, we may re-examine the information and revise the margin calculations, if appropriate. Start Printed Page 9052

Brazil

Constructed Export Price

The petitioners based constructed export price (CEP) on prices for sales of low-relaxation PC strand from a Brazilian producer, through its U.S. affiliate, to an unaffiliated U.S. purchaser. The petitioners calculated a single average U.S. gross unit price and deducted from it estimated costs for international freight and insurance charges, U.S. inland freight charges, harbor maintenance and merchandise processing fees, and imputed credit expenses to arrive at an average net U.S. price. Information regarding U.S. warehousing expenses, indirect selling expenses, inventory carrying expenses, and CEP profit was not reasonably available to petitioners; therefore, the petitioners did not deduct these items from the average gross unit price. Instead, as a conservative estimate of these expenses, the petitioners subtracted from the U.S. price an amount for the prevailing commission rate for PC strand sold in the United States via unaffiliated agents to foreign producers' unaffiliated U.S. customers.

Normal Value

With respect to the normal value (NV), the petitioners provided a home market price for low-relaxation PC strand that was obtained from a foreign market researcher familiar with Brazilian sales. See Memorandum to the File from Magd Zalok, Case Analyst, concerning Telephone Conversation with Market Researcher Regarding the Petitions for Imposition of Antidumping: Prestressed Concrete Steel Wire Strand from Brazil (February 12, 2003). To calculate the NV, the petitioners adjusted the gross unit price for home market credit expenses and inland freight.

The estimated dumping margin for Brazil, based on a comparison of CEP and home market price, is 118.75 percent.

India

Constructed Export Price

The petitioners based CEP on prices for low-relaxation PC strand from an Indian producer, through its U.S. affiliate, to unaffiliated U.S. purchasers. The petitioners calculated a single average gross unit price and deducted estimated costs for international freight and insurance charges, U.S. inland freight charges, harbor maintenance and merchandise processing fees, and imputed credit expenses to calculate an average net U.S. price. Information regarding U.S. warehousing expenses, indirect selling expenses, inventory carrying expenses, and CEP profit were not reasonably available to the petitioners; therefore, the petitioners did not deduct these items from the average gross unit price. Instead, as a conservative estimate of these expenses, the petitioners subtracted from the U.S. price an amount for the prevailing commission rate for PC strand sold in the United States via unaffiliated agents to foreign producers' unaffiliated U.S. customers.

Normal Value

With respect to NV, the petitioners provided home market prices for low-relaxation PC strand produced that was obtained from a foreign market researcher familiar with Indian sales. See Memorandum to the File from Victoria Schepker, Case Analyst, concerning Telephone Conversation with Market Researcher Regarding the Petitions for Imposition of Antidumping: Prestressed Concrete Steel Wire Strand from India (February 7, 2003). The petitioners calculated an average gross unit price and adjusted the average price for home market credit expenses and inland freight.

The petitioners also provided information demonstrating reasonable grounds to believe or suspect that sales of PC strand in the home market were made at prices below the fully absorbed 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 cost of manufacture (COM); selling, general and administrative (SG&A) expenses; financial expenses; and packing expenses. The petitioners calculated COM based on their own production experience, adjusted for known differences between costs incurred to produce PC strand in the United States and in India using publicly available data. For initiation purposes, we have recalculated the labor and electricity costs by first indexing the costs in the foreign denominated currency and then converting the costs to U.S. Dollars based on the prevailing exchange rate for the comparison period. To calculate SG&A, the petitioners relied on amounts reported in the financial statements, for the fiscal year ending March 31, 2002, of Tata SSL Ltd., an Indian PC strand producer. To calculate financial expenses, the petitioners relied on amounts reported in the consolidated financial statements, for the fiscal year ending March 31, 2002, of Tata Iron & Steel Company Ltd., an Indian PC strand producer. Based upon a comparison of the 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 India on CV. The petitioners calculated CV using the same COM, SG&A, and interest expense figures used to compute the Indian home market costs. Consistent with section 773(e)(2) of the Act, the petitioners included in CV an amount for profit based upon amounts reported by an Indian PC strand producer's financial statements for the year ended March 31, 2002.

The estimated dumping margin for India, based on a comparison of CEP and home market price, is 65.23 percent. The estimated dumping margin based on a comparison between CEP and CV is 102.07 percent.

Korea

Export Price

The petitioners based export price (EP) on prices within the POI for sales of low-relaxation PC strand produced by two Korean companies and offered for sale to an unaffiliated U.S. customer. The petitioners averaged the gross prices, by company, and deducted from the average prices international freight and insurance expenses, U.S. customs duties, U.S. harbor maintenance and merchandise processing fees, and the U.S. inland freight expenses.

Normal Value

With respect to NV, the petitioners provided home market prices based on prices within the POI for sales of PC strand produced by two Korean companies and offered for sale to an unaffiliated customer. The price quotes are based on information gathered by a market researcher familiar with the Korean sales. See Memorandum to the File from Magd Zalok, Case Analyst, concerning Telephone Conversation with Market Researcher Regarding the Petitions for Imposition of Antidumping: Prestressed Concrete Steel Wire Strand from Korea (February 11, 2003). To calculate the NV, the petitioners deducted inland freight from the home market prices, and, consistent with our statutory EP circumstances-of-sale calculation methodology, adjusted the home market prices for imputed credit and commissions by deducting Start Printed Page 9053home market credit expenses from the home market prices and adding the U.S. imputed credit and U.S. commission expenses to these prices.

The petitioners also provided information demonstrating reasonable grounds to believe or suspect that sales of PC strand in the home market were made at prices below the fully absorbed 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 expenses, financial expenses, and packing expenses. The petitioners calculated COM based on their own production experience, adjusted for known differences between costs incurred to produce PC strand products in the United States and Korea using publicly available data. For initiation purposes, we have recalculated the labor and electricity costs by first indexing the costs in the foreign denominated currency and then converting the costs to U.S. Dollars based on the prevailing exchange rate for the comparison period. To calculate SG&A and interest expenses, the petitioners relied upon amounts reported in the 2001 financial statements of Kiswire—Koryo Steel Company (Kiswire) and Dong il—Dong-il Steel Manufacturing Co. Inc., two Korean producers of PC strand. Based upon a comparison of the 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 Korea on CV. The petitioners calculated CV using the same COM, SG&A and interest expense figures used to compute the Korean home market costs. Consistent with 773(e)(2) of the Act, the petitioners included in CV an amount for profit. For profit, the petitioners relied upon amounts reported in Kiswire's 2001 financial statements.

The estimated dumping margin for Korea, based on a comparison of EP and home market prices, ranges from 18.67 to 27.06 percent. The estimated dumping margin, based on a comparison between EP and CV, ranges from 42.62 to 54.19 percent.

Mexico

Export Price

The petitioners based EP on prices within the POI for sales of low-relaxation PC strand manufactured by a Mexican producer and offered for sale directly to an unaffiliated U.S. customer. The petitioners averaged the gross prices for the individual prices and deducted U.S. import duties, freight and insurance to the U.S. port of entry, and U.S. inland freight from the average price. The petitioners did not deduct U.S. harbor maintenance and merchandise processing fees, based on the conservative assumption that the Mexican products were shipped over land.

Normal Value

With respect to NV, the petitioners provided a home market price that was obtained from an invoice for an actual sale in Mexico to an unaffiliated customer. The petitioners state that the invoice price reported was a delivered price. To calculate the NV, the petitioners deducted inland freight from the home market price, and, consistent with our statutory EP circumstances-of-sale calculation methodology, adjusted the home market price for imputed credit and commissions by deducting home market credit expenses from the home market prices and adding the U.S. imputed credit and U.S. commission expenses to this price.

The petitioners have provided information demonstrating reasonable grounds to believe or suspect that sales of PC strand in the home market were made at prices below the fully absorbed 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, financial expenses, and packing expenses. The petitioners calculated COM based on their own production experience, adjusted for known differences between costs incurred to produce PC Strand in the United States and in Mexico using publicly available data. For initiation purposes, we have recalculated the labor, electricity and natural gas costs by first indexing the costs in the foreign-denominated currency and then converting the costs to U.S. Dollars based on the prevailing exchange rate for the comparison period. To calculate SG&A and financial expenses, the petitioners relied upon amounts reported in the 2001 financial statements of Aceros Camesa, S.A. de C.V. (Camesa), a Mexican producer of PC strand. Based upon a comparison of the 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 Mexico on CV. The petitioners calculated CV using the same COM, SG&A, and financial expense figures used to compute home market costs. Consistent with 773(e)(2) of the Act, the petitioners included in CV an amount for profit. For profit, the petitioners relied upon amounts reported in Camesa's 2001 financial statements.

The estimated dumping margin in the petition for Mexico based on a comparison of EP and home market price is 50.16 percent. The estimated dumping margin based on a comparison between EP and CV is 77.20 percent.

Thailand

Export Price

The petitioners based EP on a price for sales of low-relaxation PC strand produced by a Thai company and offered for sale to an unaffiliated U.S. purchaser. The petitioners calculated a net U.S. price by deducting estimated costs for international freight, insurance charges, and harbor maintenance and merchandise processing fees.

Normal Value

With respect to NV, the petitioners provided a home market price for low-relaxation PC strand produced by a Thai company and offered for sale to an unaffiliated Thai purchaser. The price quotes are based on information gathered by a market researcher familiar with the Thai sales. See Memorandum to the File from Victoria Schepker, Case Analyst, concerning Telephone Conversation with Market Researcher Regarding the Petitions for Imposition of Antidumping: Prestressed Concrete Steel Wire Strand from Thailand (February 10, 2003). To calculate the NV, the petitioners deducted inland freight from the home market price, and, consistent with our statutory EP circumstances-of-sale calculation methodology, added the U.S. imputed credit and U.S. commission expenses to this price.

The petitioners have provided information demonstrating reasonable grounds to believe or suspect that sales of PC strand in the home market were Start Printed Page 9054made at prices below the fully absorbed 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, financial expenses, and packing expenses. The petitioners calculated COM based on their own production experience, adjusted for known differences between costs incurred to produce PC Strand in the United States and in Thailand using publicly available data. For initiation purposes, we have recalculated the labor and electricity costs by first indexing the costs in the foreign-denominated currency and then converting the costs to U.S. Dollars based on the prevailing exchange rate for the comparison period. To calculate SG&A and financial expenses, the petitioners relied upon amounts reported in the 2001 financial statements of Siam Wire. Based upon a comparison of the 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 Thailand on CV. The petitioners calculated CV using the same COM, SG&A, and financial expense figures used to compute the Thai home market costs. Consistent with 773(e)(2) of the Act, the petitioners included in CV an amount for profit. For profit, the petitioners relied upon amounts reported in the Siam Wire's 2001 financial statements.

The estimated dumping margin for Thailand, based on a comparison of EP and home market price is 13.53 percent. The estimated dumping margin based on a comparison between EP and CV is 29.68 percent.

Fair Value Comparisons

Based on the data provided by the petitioners, there is reason to believe that imports of PC strand from Brazil, India, Korea, Mexico, and Thailand are being, or are likely to be, sold at less than fair value.

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, or is threatened with material injury, by reason of the cumulated imports from Brazil, India, Korea, Mexico, and Thailand of the subject merchandise sold at less than NV.

The petitioners contend that the industry's injured condition is evident in the declining trends in net operating profits, net sales volumes, domestic prices, revenue, profit-to-sales ratios, production employment, capacity utilization, and domestic market share. The allegations of injury and causation are supported by relevant evidence including U.S. Customs import data, lost sales, and pricing information. We have assessed the allegations and supporting evidence regarding material injury and causation, and we have determined that these allegations are properly supported by adequate evidence and meet the statutory requirements for initiation. See the Initiation Checklist.

Initiation of Antidumping Investigations

Based upon our examination of the petitions on PC strand, we have found that they meet the requirements of section 732 of the Act. See the Initiation Checklist. Therefore, we are initiating antidumping duty investigations to determine whether imports of PC strand from Brazil, India, Korea, Mexico, and Thailand 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 initiation.

Distribution of Copies of the Petitions

In accordance with section 732(b)(3)(A) of the Act, a copy of the public version of each petition has been provided to the representatives of the governments of Brazil, India, Korea, Mexico, and Thailand. We will attempt to provide a copy of the public version of each petition to each exporter named in the petitions, as provided for under 19 CFR 351.203(c)(2).

ITC 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 no later than March 17, 2003, whether there is a reasonable indication that imports of PC strand from Brazil, India, Korea, Mexico, and Thailand 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 issued and published pursuant to section 777(i) of the Act.

Start Signature

Dated: February 20, 2003.

Faryar Shirzad,

Assistant Secretary for Import Administration.

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Footnotes

1.  See Algoma Steel Corp. Ltd, v. United States, 688 F. Supp. 639, 642-44 (CIT 1988); High Information Content Flat Panel Displays and Display Glass from Japan: Final Determination; Rescission of Investigation and Partial Dismissal of Petition, 56 FR 32376, 32380-81 (July 16, 1991).

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[FR Doc. 03-4652 Filed 2-26-03; 8:45 am]

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