[Federal Register Volume 62, Number 165 (Tuesday, August 26, 1997)]
[Notices]
[Pages 45224-45229]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-22690]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-428-824, A-475-820, A-588-843, A-580-829, A-469-807, A-401-806, and 
A-583-828]


Initiation of Antidumping Investigations: Stainless Steel Wire 
Rod From Germany, Italy, Japan, Korea, Spain, Sweden, and Taiwan

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

EFFECTIVE DATE: August 26, 1997.

FOR FURTHER INFORMATION CONTACT: James Maeder, at (202) 482-3330; James 
Terpstra, at (202) 482-3965; or Erik Warga, at (202) 482-0922, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, N.W., 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 
to the current regulations, as amended by the regulations published in 
the Federal Register on May 19, 1997 (62 FR 27296).

The Petition

    On July 30, 1997, the Department of Commerce (``the Department'') 
received a petition filed in proper form by AL Tech Specialty Steel 
Corp., Carpenter Technology Corp., Republic Engineered Steels, Talley 
Metals Technology, Inc., and United Steelworkers of America 
(``petitioners''). The Department received supplemental information to 
the petition on August 6 and 14, 1997.
    In accordance with section 732(b) of the Act, petitioners allege 
that imports of stainless steel wire rod from Germany, Italy, Japan, 
Korea, Spain, Sweden, and Taiwan 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 petitioners have standing to file the 
petition because they are interested parties as defined in section 
771(9)(C) and (D) of the Act and they have demonstrated sufficient 
industry support (see discussion below).

Scope of Investigations

    For purposes of these investigations, certain stainless steel wire 
rod (``SSWR'') comprises products that are hot-rolled or hot-rolled 
annealed and/or pickled and/or descaled rounds, squares, octagons, 
hexagons or other shapes, in coils, that may also be coated with a 
lubricant containing copper, lime or oxalate. SSWR is made of alloy 
steels containing, by weight, 1.2 percent or less of carbon and 10.5 
percent or more of chromium, with or without other elements. These 
products are manufactured only by hot-rolling or hot-rolling, 
annealing, and/or pickling and/or descaling, and are normally sold in 
coiled form, and are of solid cross-section. The majority of SSWR sold 
in the United States is round in cross-sectional shape, annealed and 
pickled, and later cold-finished into stainless steel wire or small-
diameter bar.
    The most common size for such products is 5.5 millimeters or 0.217 
inches in diameter, which represents the smallest size that normally is 
produced on a rolling mill and is the size that most wire drawing 
machines are set up to draw. The range of SSWR sizes normally sold in 
the United States is between 0.20 inches and 1.312 inches diameter. Two 
stainless steel grades SF20T and K-M35FL are excluded from the scope of 
the investigation. The chemical makeup for the excluded grades are as 
follows:

                                                                                                                
----------------------------------------------------------------------------------------------------------------
                                                                                                                
----------------------------------------------------------------------------------------------------------------
                                                      SF20T                                                     
----------------------------------------------------------------------------------------------------------------
Carbon...............................  0.05 max...............  Chromium...............  19.00/21.00.           
Manganese............................  2.00 max...............  Molybdenum.............  1.50/2.50.             
Phosphorous..........................  0.05 max...............  Lead...................  added (0.10/0.30).     
Sulfur...............................  0.15 max...............  Tellurium..............  added (0.03 min).      
Silicon..............................  1.00 max...............                                                  
----------------------------------------------------------------------------------------------------------------
                                                     K-M35FL                                                    
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Carbon...............................  0.015 max..............  Nickel.................  0.30 max.              
Silicon..............................  0.70/1.00..............  Chromium...............  12.50/14.00.           
Manganese............................  0.40 max...............  Lead...................  0.10/0.30.             

[[Page 45225]]

                                                                                                                
Phosphorous..........................  0.04 max...............  Aluminum...............  0.20/0.35.             
Sulfur...............................  0.03 max...............                                                  
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    The products under investigation are currently classifiable under 
subheadings 7221.00.0005, 7221.00.0015, 7221.00.0030, 7221.00.0045, and 
7221.00.0075 of the Harmonized Tariff Schedule of the United States 
(HTSUS). Although the HTSUS subheadings are provided for convenience 
and customs purposes, the written description of the scope of these 
investigations is dispositive.
    As we discussed in the preamble to the new regulations (62 FR at 
27323), we are setting aside a period for interested parties to raise 
issues regarding product coverage. The Department encourages all 
interested parties to submit such comments by September 15, 1997. 
Comments should be addressed to Import Administration's Central Records 
Unit at Room 1874, U.S. Department of Commerce, Pennsylvania Avenue and 
14th Street, N.W., Washington, D.C. 20230. This period of scope 
consultation is intended to provide the Department with ample 
opportunity to consider all comments and consult with parties prior to 
the issuance of the preliminary determination.

Determination of Industry Support for the Petition

    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 account for production 
of 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 provision 
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 time and information. Although this may result in 
different definitions of the domestic like product, such differences do 
not render the decision of either agency contrary to the 
law.<SUP>1</SUP>
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    \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 Therefor 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 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 petition refers to the single domestic like product defined in 
the ``Scope of Investigation'' section, above. The Department has no 
basis on the record to find the petition's definition of the domestic 
like product to be inaccurate. In this regard, we have found no basis 
on which to reject petitioners' representations that there are clear 
dividing lines, in terms of characteristics and uses, between the 
product under investigation and other coiled steel products. The 
Department has, therefore, adopted the domestic like product definition 
set forth in the petition. In this case, petitioners established 
industry support substantially above the statutory requirement. 
Accordingly, the Department determines that the petition is 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. 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.
Germany
    Petitioners identified Krupp Edelstahlprofile (``Krupp'') as the 
sole exporter and producer of SSWR from Germany. Petitioners based 
export price on recent U.S. sales by Krupp during June 1997 for the 
SSWR grades most commonly exported to the United States from Germany. 
Petitioners calculated net U.S. prices by subtracting an estimate of 
the costs incurred to transport the SSWR rod from the factory to the 
U.S. port. Petitioners did not subtract costs incurred to transport the 
SSWR from the U.S. port to the customer's location in the United 
States.
    Petitioners calculated the cost of international freight based upon 
the average difference in the CIF values and the U.S. Customs values 
reported in the official U.S. import statistics. Petitioners subtracted 
amounts for U.S. import duties based on the 1997 import duty rate. 
Petitioners also subtracted amounts for the U.S. harbor maintenance fee 
and for the U.S. merchandise processing fee.
    With respect to normal value (``NV''), petitioners obtained prices 
for recent sales of SSWR by Krupp to customers in Germany from foreign 
market research. Petitioners calculated net home market prices for 
sales made in Germany by subtracting an amount for delivery costs as 
obtained through foreign market research from the reported gross home 
market sales prices.
    In addition, the petitioners provided information demonstrating 
reasonable grounds to believe or suspect that sales of SSWR in the home 
market were made at prices below the fully allocated 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''), selling, general, and administrative 
expenses (``SG&A''), and packing. To calculate COP, petitioners based 
COM, with the exception of depreciation, on their own production 
experience, adjusted for known differences between costs incurred to 
produce SSWR in the United States and costs incurred for producing the 
merchandise in Germany.

[[Page 45226]]

To calculate depreciation, petitioners relied upon Krupp's 1996 
consolidated financial statements. To derive the direct materials, 
energy, direct labor and factory overhead costs, petitioners obtained 
cost data from two U.S. producers and relied upon the average costs of 
those producers. One of the U.S. producers manufactures its own billets 
while the other purchases all billets consumed. The foreign market 
research obtained by the petitioner indicated that Krupp produces its 
own billets. Therefore, we recalculated the submitted COM based on the 
cost data of the U.S. company that produces its own billets.
    To calculate SG&A, petitioners relied upon expense rates of 
nineteen German companies, only one of which appears to be involved in 
the metal manufacturing industry. We recalculated SG&A using the 
reported rate for the company that appears to be in an industry similar 
to that which manufactures steel products. Petitioners calculated 
financing expenses using Krupp's 1996 consolidated audited financial 
statements. Petitioners added the average packing costs reported by the 
U.S. producers to COP. Based upon the comparison of the adjusted prices 
of the foreign like product in the home market to the calculated COP, 
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 (see Initiation Checklist, dated 
August 19, 1997). Accordingly, with respect to the German case, the 
Department is initiating a county-wide cost investigation.
    Pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act, 
petitioners also based NV for sales in Germany on constructed value 
(``CV''). For purposes of this initiation, we accepted CV as the 
appropriate basis for NV. Petitioners calculated CV using the same COM, 
SG&A, and interest expense figures used to compute German home market 
costs. We adjusted the CV as noted above in the discussion of COP. 
Consistent with section 773(e)(2) of the Act, petitioners also added to 
CV an amount for profit. Profit was based upon Krupp's 1996 
consolidated audited financial statements.
    The revised average dumping margins in the petition, based on the 
comparisons between Krupp's U.S. prices and the revised constructed 
values, range from 17.17 percent to 21.28 percent.
Italy
    Petitioners identified four exporters and producers of SSWR: Cogne 
Acciai Speciali SrL (``Cogne''); Rodacciai; Acciaierie Valbruna SrL 
(``Valbruna''); and Acciaierie di Bolzano (``Bolzano''). Petitioners 
based export price on actual U.S. sales by Cogne and by Valbruna/
Bolzano during November 1996 for the SSWR grades most commonly exported 
to the United States from Italy. Petitioners calculated net U.S. prices 
by subtracting an estimate of the costs incurred to transport the 
stainless wire rod from the factory to the customer's location in the 
United States.
    Petitioners calculated the cost of international freight based upon 
the average difference in the CIF values and the U.S. Customs values 
reported in the official U.S. import statistics. Petitioners estimated 
U.S. inland freight costs based on the distance from the U.S. port of 
entry to the U.S. customer's location. Petitioners subtracted amounts 
for U.S. import duties and customs user fees. Petitioners also 
subtracted amounts for the U.S. harbor maintenance fee and for the U.S. 
merchandise processing fee. Petitioners added duty drawback to the U.S. 
prices for comparisons that involved grades of SSWR that include 
molybdenum or titanium based on information obtained from foreign 
market research.
    With respect to NV, petitioners obtained home market prices through 
foreign market research. Petitioners calculated net home market prices 
for sales in Italy by subtracting the estimated delivery costs reported 
in the foreign market research. Petitioners converted home market 
prices quoted in lire per kilogram to U.S. dollars per pound by using a 
conversion ratio of one kilogram equals 2.2046 pounds and the Italian 
lire/U.S. dollar exchange rate in effect during the period in which the 
U.S. sales occurred. The exchange rates used to make currency 
conversions were the rates published in the International Financial 
Statistics for November 1996, the month of the U.S. sales.
    Petitioners made a circumstance of sale adjustment for imputed 
credit expenses by subtracting home market credit expenses and by 
adding U.S. imputed credit expenses to the net home market prices 
calculated in the petition. Petitioners calculated home market imputed 
credit expenses based on the average payment period, reported in the 
foreign market research, of 90 days, and the average lending rate in 
Italy published by the International Financial Statistics for the 
fourth quarter of 1996. Petitioners calculated U.S. imputed credit 
expenses based on payment terms reported in the foreign market research 
of 60 days and the average lending rate in the United States published 
in the International Financial Statistics. Petitioners did not adjust 
the reported prices for differences in packing costs because 
petitioners assumed that packing costs were the same for home market 
sales and for U.S. sales.
    According to the foreign market research, Italian producers impose 
a surcharge per kilogram for wire rod with a diameter of 6 millimeters 
to 13 millimeters. Petitioners subtracted this amount from NV as a 
difference-in-merchandise adjustment when the price comparisons 
involved a U.S. sale of wire rod with a diameter of less than 6 
millimeters and wire rod sold in Italy with a diameter between 6 
millimeters and 13 millimeters.
    Comparison of NV and net U.S. prices for sales of SSWR from Italy 
results in estimated dumping margins that range from 33.29 percent to 
46.79 percent.
Japan
    Petitioners identified four exporters and producers of SSWR: Aichi 
Steel Works Ltd.; Daido Steel Co. Ltd. (``Daido''); Nippon Steel Corp. 
(``Nippon''); and Sumitomo Metal Industries Ltd. Petitioners based 
export prices on actual, port-of-export, prices for U.S. sales made by 
Nippon and Daido to unaffiliated Japanese trading companies during the 
fourth quarter of 1996 for the SSWR grades most commonly exported to 
the United States from Japan. Petitioners calculated net U.S. prices by 
subtracting amounts to deliver the subject merchandise from the factory 
to the port of export. This information was obtained from foreign 
market research.
    Petitioners did not calculate imputed credit expenses for the U.S. 
sales because the foreign market research indicated letter of credit 
payments terms for U.S. sales. Petitioners converted U.S. prices quoted 
in yen per metric ton to U.S. dollars per metric ton based on the 
average exchange rate published in the International Financial 
Statistics for the fourth quarter of 1996, the period in which U.S. 
sales occurred.
    With respect to NV, petitioners obtained from the foreign market 
research home market price quotations for actual sales from Nippon and 
Daido to unrelated distributors in Japan. These prices were quoted in 
Japanese yen on a delivered basis. Petitioners calculated net home 
market prices by subtracting an amount for average delivery costs 
incurred by Nippon and Daido. Petitioners converted home market prices 
quoted in yen per metric ton to U.S. dollars per metric ton based on 
the average exchange rate published in the International Financial 
Statistics for the

[[Page 45227]]

fourth quarter of 1996, the period in which U.S. sales occurred.
    Petitioners made a circumstance of sale adjustment for imputed 
credit expenses by subtracting home market credit expenses from the 
reported home market prices. Petitioners did not add U.S. imputed 
credit expenses to the net home market prices since the foreign market 
research showed letter of credit payment terms for U.S. sales. 
Petitioners calculated home market imputed credit expenses based on the 
average payment period reported in the foreign market research of 115 
days, and the average annual lending rate in Japan for the first 
quarter of 1996, the most current annual lending rate published by the 
International Financial Statistics for Japan. Petitioners also adjusted 
the reported prices for differences in packing costs by subtracting 
home market packing costs and by adding packing costs incurred for U.S. 
sales to the reported net home market sales price.
    Comparison of NV and net U.S. prices for sales of SSWR from Japan 
results in estimated dumping margins that range from 14.53 percent to 
29.49 percent.
Korea
    Petitioners identified three Korean exporters and producers of 
SSWR: Pohang Iron & Steel Co. Ltd. (``Posco''); Dongbang Special Steel 
Co. Ltd. (``Dongbang''); and Sammi Steel Co. Ltd. (``Sammi'').
    Petitioners based export price on actual, port-of-export, prices 
for U.S. sales made by Posco to unaffiliated trading companies during 
the fourth quarter of 1996, for the stainless steel wire rod grades 
most commonly exported to the United States from Korea, which they 
obtained from foreign market research. In addition, petitioners 
calculated net U.S. prices by subtracting from export prices amounts to 
deliver the subject merchandise from the factory to the port of export 
based on information obtained from foreign market research. Petitioners 
added to these prices amounts for duty drawback. Petitioners also 
converted the reported U.S. prices from Korean won per metric ton to 
U.S. dollars per metric ton based on the average exchange rate 
published in the International Financial Statistics for the fourth 
quarter of 1996, the period in which the U.S. sales occurred.
    With respect to NV, the petitioners obtained actual, delivered home 
market prices for Posco from the foreign market research. Petitioners 
calculated net home market prices for sales made in Korea by 
subtracting amounts for discounts and rebates and delivery costs as 
obtained through foreign market research, and by subtracting imputed 
credit expenses from the reported gross home market sales prices. 
Petitioners calculated imputed credit expenses based on the average 
payment period reported in the foreign market research of 75 days, and 
the average lending rate in Korea published by the International 
Financial Statistics for the fourth quarter of 1996. Petitioners also 
adjusted the reported prices for differences in packing costs by 
subtracting home market packing costs from the reported home market 
prices and by adding packing costs incurred for U.S. sales to the 
reported home market prices. Petitioners converted home market prices 
from Korean won per metric ton to U.S. dollars per metric ton by using 
the Korean won/U.S. dollar exchange rate in effect during the period in 
which the U.S. sales occurred. The exchange rates used to make currency 
conversions were the rates published in the International Financial 
Statistics for the fourth quarter 1996.
    Comparison of NV and net U.S. prices for sales of SSWR from Korea 
results in estimated dumping margins that range from 23.81 percent to 
28.44 percent (see Initiation Checklist, dated August 19, 1997).
Spain
    Petitioners identified Roldan, S.A. (``Roldan'') as the sole 
exporter and producer of SSWR from Spain. Petitioners based export 
price on information obtained through foreign market research for 
recent sales by Roldan for the SSWR grades most commonly exported to 
the United States from Spain. Petitioners calculated net U.S. prices by 
subtracting estimated costs for ocean freight and insurance and for 
U.S. duties and fees from reported U.S. prices. Petitioners did not 
subtract costs incurred to transport the stainless steel wire rod from 
the factory to the port of export and from the U.S. port to the 
customer's location in the United States.
    Petitioners calculated the cost of international freight based upon 
the average difference in the CIF values and the U.S. Customs values 
reported in the official U.S. import statistics. Petitioners subtracted 
amounts for U.S. import duties and customs user fees. Petitioners also 
subtracted amounts for the U.S. harbor maintenance fee and for the U.S. 
merchandise processing fee. Petitioners did not calculate imputed 
credit expenses for Roldan's U.S. sales because petitioners did not 
have information concerning the payment terms for these sales.
    With respect to NV, petitioners obtained home market prices through 
foreign market research. Petitioners calculated net home market prices 
for sales made in Spain by subtracting an amount for delivery costs as 
obtained through foreign market research from the reported gross home 
market sales prices.
    In addition, the petitioners provided information demonstrating 
reasonable grounds to believe or suspect that sales of SSWR in the home 
market were made at prices below the fully allocated 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, and packing. To calculate COP, petitioners based COM, with the 
exception of depreciation, on their own production experience, adjusted 
for known differences between costs incurred to produce SSWR in the 
United States and costs incurred for producing the merchandise in 
Spain. To calculate depreciation the petitioner relied upon the 1996 
consolidated financial statement from Roldan's parent company Acerinox.
    To calculate Roldan's SG&A and financing expenses petitioners also 
relied upon the 1996 consolidated financial statements from Acerinox. 
Petitioners maintain that they relied upon Acerinox's consolidated 
financial statements because they were unable to obtain Roldan's 
financial statements. Since steel production appears to be the primary 
business activity of the consolidated Acerinox Group, we considered it 
reasonable to rely on its financial data for determining these costs 
for purposes of the petition. Petitioners added to the COP the average 
packing costs reported by the U.S. producers. Based upon the comparison 
of the adjusted prices of the foreign like product in the home market 
to the calculated COP, 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, with 
respect to the Spanish case, the Department is initiating a country-
wide cost investigation.
    Pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act, 
petitioners also based NV on CV. For purposes of this initiation, we 
are accepting CV as the appropriate basis for NV. Petitioners 
calculated CV using the same COM, SG&A, and interest expense figures 
used to compute Spain's home market costs. Consistent with section 
773(e)(2) of the Act, petitioners also added to CV an amount for 
profit. Profit was based upon

[[Page 45228]]

the consolidated audited financial statements of Acerinox.
    Comparison between Roldan's U.S. prices and the constructed values 
results in dumping margins that range from 31.00 to 63.39 percent.
Sweden
    Petitioners identified Fagersta Stainless AB (``Fagersta'') as the 
sole exporter and producer of SSWR from Sweden. Fagersta is a joint 
venture company formed by the two of the largest steel producing 
companies in Sweden: Avesta Sheffield AB and Sandvik Steel. Petitioners 
based export price on U.S. sales by Avesta Sheffield AB during November 
1996 of the SSWR most commonly exported to the United States from 
Sweden. Petitioners calculated net U.S. prices by subtracting from 
export prices an estimate of the costs incurred to transport the SSWR 
from the factory to the customer's location in the United States.
    Petitioners estimated the cost of international freight based upon 
the weighted average difference for certain U.S. ports between the CIF 
values and the FOB values reported in the official U.S. import 
statistics for November 1996 for imports from Sweden. Petitioners 
estimated U.S. inland freight costs based on the distance from the U.S. 
port of entry to the U.S. customer's location. Petitioners subtracted 
amounts for U.S. import duties, for the U.S. harbor maintenance fee, 
and for the U.S. merchandise processing fee. Petitioners added duty 
drawback to the U.S. prices for comparisons that involved grades of 
SSWR that include molybdenum or titanium based on an amount obtained 
through foreign market research.
    With respect to NV, petitioners obtained home market prices from 
foreign market research. The foreign market research provided 
information on the base prices, surcharges, discounts, payment terms 
and estimated sale-by-sale delivery costs for each of the home market 
sales. Petitioners added the surcharges to the reported base prices, 
and subtracted the discounts and estimated sale-by-sale delivery costs. 
Petitioners converted home market prices quoted in Swedish kronor per 
kilogram to U.S. dollars per pound by using a conversion ratio of one 
kilogram to 2.2046 pounds and the Swedish kronor/U.S. dollar exchange 
rate in effect during the month in which the U.S. sales occurred. The 
exchange rates used to make currency conversions were the rates 
published in the International Financial Statistics for November 1996, 
the month in which of the U.S. sales occurred.
    Petitioners made a circumstance of sale adjustment for imputed 
credit expenses by subtracting home market credit expenses and by 
adding U.S. imputed credit expenses to the net home market prices 
calculated in the petition. Petitioners calculated home market imputed 
credit expenses based on the average payment period reported in the 
foreign market research, and the average lending rate in Sweden 
published in the International Financial Statistics for the fourth 
quarter of 1996. Petitioners calculated U.S. imputed credit expenses 
based on payment terms included in the foreign market research, of 60 
days and the average lending rate in the United States published in the 
International Financial Statistics. Petitioners did not adjust for 
differences in packing costs because petitioners assumed that packing 
costs were the same for home market and U.S. sales.
    Comparison of NV and net U.S. prices for sales of SSWR from Sweden 
results in estimated dumping margins that range from 21.17 percent to 
22.74 percent.
Taiwan
    Petitioners identified three Taiwan exporters and producers of 
SSWR: Walsin-CarTech Specialty Steel Corp.; Yieh Hsing; and Yieh United 
Steel Corp.
    Most of the domestic production of SSWR is sold to unaffiliated 
end-users and includes delivery charges to the customer. Petitioners 
obtained prices for U.S. sales by Yieh Hsing during November 1996 for 
the grades of SSWR that are most commonly exported to the United States 
from Taiwan. Petitioners used export prices as the basis for U.S. 
prices because the SSWR was sold prior to the date of importation and 
to an unaffiliated U.S. distributor. Petitioners provided port of 
export prices for Yieh Hsing's U.S. sales. Petitioners subtracted 
foreign inland freight from the reported U.S. prices. Petitioners did 
not calculate imputed credit expenses for the U.S. sales since letter 
of credit payment terms were available for these sales.
    Petitioners provided information showing that the volume of the 
home market sales is sufficient to form a basis for NV and provided 
prices for actual recent sales from the SSWR producers to unaffiliated 
customers in Taiwan.
    Petitioners calculated net NV by subtracting amounts for delivery 
costs and imputed credit expenses from the reported gross home market 
price. Petitioners based credit expenses on the average payment period 
of 85 days and the average borrowing rate reported in the foreign 
market research. Additionally, petitioners adjusted NV for differences 
in packing costs between the U.S. and domestic sales. Finally, 
petitioners converted home market prices in New Taiwan dollars per 
metric ton to U.S. dollars per metric ton by using the New Taiwan 
dollar/U.S. dollar exchange rate in effect during the month in which 
the U.S. sales occurred. For conversion purposes, petitioners used the 
monthly average exchange rates published by the Federal Reserve rather 
than the monthly average exchange rates published by the International 
Monetary Fund (IMF) because Taiwan is not a member country of the IMF; 
thus, there are no IMF-published exchange rates for Taiwan.
    In addition, petitioners provided information demonstrating 
reasonable grounds to believe or suspect that sales of SSWR in the home 
market were made at prices below the fully allocated COP, within the 
meaning of section 773(b) of the Act, and requested that the Department 
conduct a Taiwan-wide sales below cost investigation.
    Pursuant to section 773(b)(3) of the Act, COP consists of the COM, 
SG&A, and packing. To calculate COP, the petitioners calculated COM 
primarily using foreign market research.
    To calculate SG&A and finance expenses petitioners relied on 
amounts reported in Yieh Hsing's 1996 financial statements and other 
financial data. We recalculated Yieh Hsing's SG&A and finance expenses 
to reflect the amounts reported in its 1996 financial statements. 
Petitioner based packing costs on data obtained from foreign market 
research. Based upon the comparison of the adjusted prices of the 
foreign like product in the home market to the calculated COP, 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 (see Initiation Checklist, dated August 19, 
1997). Accordingly, the Department is initiating a Taiwan-wide cost 
investigation.
    Pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act, 
petitioners also based NV for sales in Taiwan on CV. For this 
initiation, we are accepting CV as an appropriate basis for NV. 
Petitioners calculated CV using the same COM, SG&A, and interest 
expense figures used to compute Taiwan home market costs. Consistent 
with section 773(e)(2) of the Act, petitioners also added to CV an 
amount for profit. Profit was based upon Yieh Hsing's 1996 consolidated 
audited financial statements.
    Comparison of NV and net U.S. price of SSWR from Taiwan results in 
an estimated dumping margin of 16.74 percent. Comparisons between Yieh 
Hsing's U.S. prices and the constructed

[[Page 45229]]

values result in dumping margins that range from 9.61 percent to 10.05 
percent.

Fair Value Comparisons

    Based on the data provided by petitioners, there is reason to 
believe that imports of SSWR from Germany, Italy, Japan, Korea, Spain, 
Sweden, and Taiwan are being, or are likely to be, sold at less than 
fair value.

Initiation of Antidumping Investigations

    We have examined the petition on SSWR and have found that it meets 
the requirements of section 732 of the Act, including the requirements 
concerning allegations of the material injury or threat of material 
injury to the domestic producers of a domestic like product by reason 
of the subject imports, allegedly sold at less than fair value. 
Therefore, we are initiating antidumping duty investigations to 
determine whether imports of SSWR from Germany, Italy, Japan, Korea, 
Spain, Sweden, and Taiwan are being, or are likely to be, sold in the 
United States at less than fair value. Unless extended, we will make 
our preliminary determinations for the antidumping duty investigations 
by January 6, 1998.

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 Germany, Italy, Japan, Korea, 
Spain, Sweden, and Taiwan. 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 September 15, 1997, whether there is a 
reasonable indication that imports of SSWR from Germany, Italy, Japan, 
Korea, Spain, Sweden, and Taiwan are causing material injury, or 
threatening to cause material injury, to a U.S. industry. Any negative 
ITC determination will result in the particular investigation being 
terminated; otherwise, the investigations will proceed according to 
statutory and regulatory time limits.

    Dated: August 19, 1997.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 97-22690 Filed 8-25-97; 8:45 am]
BILLING CODE 3510-DS-P