51572 Federal Register / Vol. 62, No. 190 / Wednesday, October 1, 1997 / Notices

DEPARTMENT OF COMMERCE

International Trade Administration

[A–122–826]

Notice of Preliminary Determination of

Sales at Less Than Fair Value and

Postponement of Final Determination:

Steel Wire Rod From Canada

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: October 1, 1997.

FOR FURTHER INFORMATION CONTACT:

Lisette Lach (202/482–6412); Cindy

Sonmez (202/482–0961); or Dorothy

Woster (202/482–3362) for Stelco, Inc.

and Sidbec-Dosco (Ispat), Inc.;

Alexander Braier (202/482–3818);

Abdelali Elouaradia (202/482–2243); or

Sharon Harris (202/482–0190) for Ivaco,

Inc. Import Administration,

International Trade Administration,

U.S. Department of Commerce, 14th

Street and Constitution Avenue, N.W.,

Washington, D.C. 20230.

The Applicable Statute

Unless otherwise indicated, all

citations to the Tariff Act of 1930, as

amended (the Act), are references to the

provisions effective January 1, 1995, the

effective date of the amendments made

to the Act by the Uruguay Round

Agreements Act (‘‘URAA’’). In addition,

unless otherwise indicated, all citations

to the Department’s regulations are

references to the provisions codified at

19 CFR Part 353 (April 1997). Although

the Department’s new regulations,

codified at 19 CFR 351 (62 FR 27296,

May 19, 1997), do not govern this

investigation, citations to those

regulations are provided, where

appropriate, as a statement of current

departmental practice.

Preliminary Determination

We preliminarily determine that steel

wire rod (‘‘SWR’’) from Canada is being,

or is likely to be, sold in the United

States at less than fair value (‘‘LTFV’’),

as provided in section 733 of the Act.

The estimated margins are shown in the

‘‘Suspension of Liquidation’’ section of

this notice.

Case History

Since the initiation of this

investigation on March 18, 1997 (see

Notice of Initiation of Antidumping

Duty Investigations: Steel Wire Rod from

Canada, Germany, Trinidad and

Tobago, and Venezuela, 62 FR 13854

(March 24, 1997), (‘‘Notice of

Initiation’’), the following events have

occurred:

On April 14, 1997, the United States

International Trade Commission (‘‘ITC’’)

notified the Department of Commerce

(‘‘the Department’’) of its affirmative

preliminary injury determination in this

case.

On April 21, 1997, the Department

issued the antidumping duty

questionnaire to counsel for the

following producers/exporters of SWR:

Stelco, Inc. (‘‘Stelco’’); Sidbec-Dosco

(Ispat) Inc. (‘‘SDI’’); and Ivaco, Inc.

(‘‘Ivaco’’) (collectively ‘‘respondents’’).

The questionnaire is divided into four

sections: Section A requests general

information concerning a company’s

corporate structure and business

practices, the merchandise under

investigation that it sells, and the sales

of the merchandise in all of its markets.

Sections B and C request home market

sales listings and U.S. sales listings,

respectively. Section D requests

information on the cost of production

(‘‘COP’’) of the foreign like product and

the constructed value (‘‘CV’’) of the

subject merchandise. Section E requests

information on further manufactured

merchandise.

During April and May 1997, the

Department received interested party

comments regarding modifications to

the product characteristic reporting

requirements. On May 22, 1997, the

Department issued revised product

characteristic reporting instructions.

Respondents submitted their

questionnaire responses in May and

June 1997. The Department issued

supplemental requests for information

in June, July, August, and September

1997, and received the supplemental

responses to these requests in July,

August and September 1997. Petitioners

in this investigation (Connecticut Steel

Group, Co-Steel Raritan, GS Industries,

Inc., Keystone Steel & Wire Co., North

Star Steel Texas, Inc., and Northwestern

Steel & Wire Co.) filed comments on

respondents’ questionnaire responses in

June, July, August, and September 1997.

On July 3, 1997, petitioners made a

timely request that the Department

postpone the preliminary determination

in this investigation and the companion

investigations of SWR from Canada,

Trinidad and Tobago, and Venezuela to

September 24, 1997. We did so on July

14, 1997, in accordance with section

733(c)(1) of the Act (see Notice of

Postponement of Preliminary

Antidumping Duty Determinations:

Steel Wire Rod from Canada, Germany,

Trinidad and Tobago, and Venezuela,

62 FR 38257 (July 17, 1997)).

On July 18, 1997, the Department

granted requests received from all three

respondents to exclude certain

categories of ‘‘outlier’’ sales that

represented an insignificant portion of

each company’s home market and U.S.

sales (see Memoranda from Roland L.

MacDonald to Joseph A. Spetrini, dated

July 18, 1997).

Postponement of Final Determination

and Extension of Provisional Measures

On September 15, 1997, Ivaco

requested that, pursuant to section

735(a)(2)(A) of the Act, in the event of

an affirmative preliminary

determination in this investigation, the

Department postpone its final

determination, until not later than 135

days after the date of publication of the

affirmative preliminary in the Federal

Register. In accordance with section 735

(a)(2)(A) of the Act and 19 CFR 353.2(b),

inasmuch as our preliminary

determination is affirmative, Ivaco

accounts for a significant proportion of

exports of the subject merchandise, and

we have not identified any compelling

reasons for denying this request, we are

granting Ivaco’s request and postponing

the final determination. Suspension of

liquidation will be extended

accordingly. See Final Determination of

Sales at Less Than Fair Value: Certain

Pasta From Italy, 61 FR 30326 (June 14,

1996).

Scope of Investigation

The products covered by this

investigation are certain hot-rolled

carbon steel and alloy steel products, in

coils, of approximately round cross

section, between 5.00 mm (0.20 inch)

and 19.0 mm (0.75 inch), inclusive, in

solid cross-sectional diameter.

Specifically excluded are steel products

possessing the above noted physical

characteristics and meeting the

Harmonized Tariff Schedule of the

United States (‘‘HTSUS’’) definitions for

(a) stainless steel, (b) tool steel, (c) high

nickel steel, (d) ball bearing steel, (e)

free machining steel that contains by

weight 0.03 percent or more of lead,

0.05 percent or more of bismuth, 0.08

percent or more of sulfur, more than 0.4

percent of phosphorus, more than 0.05

percent of selenium, and/or more than

0.01 percent of tellurium, or (f) concrete

reinforcing bars and rods.

The following products are also

excluded from the scope of this

investigation:

Coiled products 5.50 mm or less in

true diameter with an average partial

decarburization per coil of no more than

70 microns in depth, no inclusions

greater than 20 microns, containing by

weight the following: carbon greater

than or equal to 0.68 percent; aluminum

less than or equal to 0.005 percent;

phosphorous plus sulfur less than or

equal to 0.040 percent; maximum
Federal Register / Vol. 62, No. 190 / Wednesday, October 1, 1997 / Notices 51573

combined copper, nickel and chromium

content of 0.13 percent; and nitrogen

less than or equal to 0.006 percent. This

product is commonly referred to as

‘‘Tire Cord Wire Rod.’’

Coiled products 7.9 to 18 mm in

diameter, with a partial decarburization

of 75 microns or less in depth and

seams no more than 75 microns in

depth, containing 0.48 to 0.73 percent

carbon by weight. This product is

commonly referred to as ‘‘Valve Spring

Quality Wire Rod.’’

The products under investigation are

currently classifiable under subheadings

7213.91.3000, 7213.91.4500,

7213.91.6000, 7213.99.0030,

7213.99.0090, 7227.20.0000, and

7227.90.6050 of the HTSUS. Although

the HTSUS subheadings are provided

for convenience and customs purposes,

our written description of the scope of

this investigation is dispositive.

North American Wire Products

Corporation (‘‘NAW’’), an importer of

the subject merchandise from Germany,

has requested that the Department

exclude SWR used to manufacture pipe

wrapping wire from the scope of the

antidumping and countervailing duty

investigations. Petitioners have not

agreed to this scope exclusion. For

purposes of the preliminary

determination, we have not excluded

SWR for manufacturing pipe wrapping

wire from the scope.

On June 2, 1997, Ivaco requested that

the Department exclude from its

antidumping analysis U.S. and home

market sales of processed rod (subject

merchandise) produced from nonCanadian sourced ‘‘green’’ rod which

falls within the physical description of

merchandise subject to the proceeding.

We examined the nature of the

processing, which consisted of heat

treating and cleaning/coating, to

determine whether the green rod was

substantially transformed so as to

qualify as Canadian-origin merchandise

within the scope of this investigation.

Under the Department’s ‘‘substantial

transformation’’ practice, the nature of

the processing must result in an article

different in character and use to render

the merchandise a product of the

country in which it was processed. See

Notice of Final Determination of Sales

at Less Than Fair Value: Certain Carbon

Steel Butt-Weld Pipe Fittings From

India, 60 FR 10545, 10546 (Feb. 27,

1995); Notice of Final Determination of

Sales at Less Than Fair Value: Certain

Cold-Rolled Carbon Steel Flat Products

From Argentina (Appendix 1), 58 FR

37062, 37066 (July 9, 1993).

Ivaco’s response indicates that Sivaco

performed two processing steps on its

purchases of green SWR during the POI:

cleaning/coating and heat treatment.

The cleaning/coating step first removes

scale from the SWR, while the coating

aids in subsequent wire drawing and

cold drawing. The heat treatment

modifies the SWR microstructure in

order to produce desired mechanical

and metallurgical properties.

Neither of these two steps

significantly change the physical or

chemical properties of the product, nor

do they change the intended uses.

Further, the dimensional characteristics

are similarly unchanged. The types of

processing Sivaco performed does not

move the product out of the scope or

create a product of a new class or kind.

Instead, this processing would at most

change the classification of a given rod

within individual model match

characteristics. In sum, the nature of

these processing steps do not

substantially transform the subject

merchandise. We note that our finding

is consistent with the Customs’ practice

of treating such processing as less than

substantial transformation. Therefore,

we find that processed rod produced

from non-Canadian green SWR is

outside the scope of this investigation.

Thus, these sales have been excluded

from our analysis.

Period of Investigation

The period of investigation (‘‘POI’’) is

January 1, 1996 through December 31,

1996.

Product Comparisons

In accordance with section 771(16) of

the Act, we considered all products

produced by the respondents, covered

by the description in the Scope of

Investigation section above, and sold in

the home market during the POI, to be

foreign like products for purposes of

determining appropriate product

comparisons to U.S. sales. Where there

were no sales of identical merchandise

in the home market to compare to U.S.

sales, we compared U.S. sales to the

next most similar foreign like product

on the basis of the characteristics listed

in the antidumping duty questionnaire

and the May 22, 1997, reporting

instructions.

For Stelco, the Department noted that,

in the product characteristic field

deoxidation practice, silicon-killed

titanium grain refined steel had been

classified under the category ‘‘other’’

rather than ‘‘silicon-killed.’’ However,

the category ‘‘silicon-killed’’ was

intended to include all silicon-killed

steels other than silicon-killed

vanadium or niobium grain refined

steels. Silicon-killed titanium grain

refined steel is not included among

these specific exceptions; hence, the

Department has reclassified all siliconkilled titanium grain refined

transactions as ‘‘silicon-killed’’ under

deoxidation practice.

On April 4, 1997, as the Department

was in the process of preparing its

antidumping duty questionnaire, the

Department requested comments on the

product characteristics to be included in

the questionnaire. On April 18, 1997,

Ivaco requested the Department to

establish a separate class or kind of

subject merchandise for cold heading

quality (‘‘CHQ’’) wire rod. On April 21,

1997, the Department issued the

antidumping duty questionnaire, which

specified the physical characteristics to

be used in matching sales of subject

merchandise. In response to comments

made by interested parties regarding the

appropriate product characteristics, on

May 13, 1997, the Department requested

comments from all interested parties

regarding modification to the product

characteristic reporting requirements.

On May 22, 1997, the Department

issued the revised product characteristic

reporting instructions, which included

the deoxidation variable. We

preliminarily find that the respondents’

diversified analysis does not provide a

sufficient basis for finding a separate

class or kind of merchandise for CHQ.

However, we have accounted for

product differences in the revised

product characteristics.

Consistent with our practice, we

compared prime merchandise sold in

the United States to prime merchandise

sold in the home market, and secondary

merchandise to secondary merchandise.

See e.g., Final Results of Antidumping

Duty Administrative Review: Cold-rolled

Carbon Steel Flat Products from the

Netherlands, 61 FR 48465 (September

13, 1996).

Fair Value Comparisons

To determine whether sales of SWR

by the Canadian respondents to the

United States were made at less than

fair value, we compared the Export

Price (‘‘EP’’) or Constructed Export Price

(‘‘CEP’’) to the Normal Value (‘‘NV’’), as

described in the ‘‘Export Price/

Constructed Export Price’’ and ‘‘Normal

Value’’ sections of this notice below. In

accordance with section

777A(d)(1)(A)(i) of the Act, we

compared POI-wide weighted-average

EPs and CEPs to weighted-average NVs.

Level of Trade

In accordance with section

773(a)(1)(B) of the Act, to the extent

practicable, we determine NV based on

sales in the comparison market at the

same level of trade (‘‘LOT’’) as the EP or

CEP transaction. The NV LOT is that of
51574 Federal Register / Vol. 62, No. 190 / Wednesday, October 1, 1997 / Notices

the starting-price sales in the

comparison market or, when NV is

based on constructed value (‘‘CV’’), that

of the sales from which we derive

selling, general and administrative

(‘‘SG&A’’) expenses and profit. For EP,

the U.S. LOT is also the level of the

starting-price sale, which is usually

from exporter to importer. For CEP, it is

the level of the constructed sale from

the exporter to the importer.

To determine whether NV sales are at

a different LOT than EP or CEP, we

examine stages in the marketing process

and selling functions along the chain of

distribution between the producer and

the unaffiliated customer. If the

comparison-market sales are at a

different LOT, and the difference affects

price comparability, as manifested in a

pattern of consistent price differences

between the sales on which NV is based

and comparison-market sales at the LOT

of the export transaction, we make an

LOT adjustment under section

773(a)(7)(A) of the Act. Finally, for CEP

sales, if the NV level is more remote

from the factory than the CEP level and

there is no basis for determining

whether the difference in the levels

between NV and CEP affects price

comparability, we adjust NV under

section 773(a)(7)(B) of the Act (the CEP

offset provision). See Certain Welded

Carbon Steel Standard Pipes and Tubes

From India: Preliminary Results of New

Shipper Antidumping Duty

Administrative Review, 62 FR 23760,

23761 (May 1, 1997).

Stelco

In this investigation, we calculated

NV based on the same LOT. Stelco did

not claim a LOT adjustment. To

examine whether such an adjustment

was necessary, we requested and

examined Stelco’s distribution system,

including classes of customers, selling

functions, and selling expenses. Stelco’s

home market sales are made through

two channels of distribution: (1) Direct

sales from Stelco to unaffiliated

customers, and (2) direct sales by

Stelwire, Stelco’s wholly-owned

processor, to unaffiliated customers.

Sales at both channels are made to the

same category of customer, (e.g., original

equipment manufacturers (OEMs)). We

next reviewed where sales are made in

the chain of distribution. Sales by Stelco

are made directly from the factory,

whereas sales by Stelwire are not—

Stelwire first purchases rod from Stelco,

then resells the rod to unaffiliated

customers. Sales by a reseller represent

an additional stage in the marketing

process, since the reseller is an

intermediary between the factory and

the customer. Thus, sales by the two

entities appear to be made at different

stages in the chain of distribution.

However, we found no evidence that the

entities perform different selling

activities (e.g., inventory services,

technical services, credit extension, and

warranty services), or incur different

selling expenses at these different

marketing stages. We therefore conclude

that Stelco’s home market sales were

made at one LOT.

Stelco reported EP sales in the U.S.

market. We conducted an identical

analysis as described above and found

that all sales were made at the same

stage in the chain of distribution, i.e.,

direct to unaffiliated customers, with no

distinction in selling functions

provided, or selling expenses incurred,

among U.S. sales. On this basis we

conclude that Stelco’s sales in the U.S.

are made at one LOT. Finally, we found

no differences among the LOTs in the

U.S. and home market. Stelco provided

the same or similar services with respect

to U.S. transactions and home market

transactions. Overall, based on this

analysis, we conclude that there is no

difference among the LOT in the U.S.

and home markets. As we are able to

calculate NV based on the same LOT as

a U.S. sale, no LOT adjustment is

warranted.

SDI

In this investigation, we calculated

NV based on the same LOT. SDI did not

claim a LOT adjustment. To examine

whether such an adjustment was

necessary, we requested and examined

information on SDI’s distribution

system, including classes of customers,

selling functions, and selling expenses.

We noted that SDI had only one channel

of distribution (wire drawers and parts

manufacturers) in the home market and

two channels of distribution in the U.S.

market: EP sales (wire drawers and parts

manufacturers) and CEP sales (further

manufactured products). We also noted

that SDI had two classes of customers

(i.e., wire drawers and parts

manufacturers) in the home market and

U.S. market. Furthermore, SDI’s selling

functions were the same for both classes

of customers in the home market and

U.S. markets (for CEP sales, we

examined these functions after

deducting U.S. selling expenses and

associated profit). Finally, we also noted

that SDI performed all selling functions

or services during the POI, regardless of

channel of distribution, and the related

expenses were reported to the

Department as indirect selling expenses.

These functions and services include (1)

negotiating terms/developing/

maintaining customer base, (2)

preparing merchandise for shipment, (3)

maintaining records, (4) collecting bills,

(5) providing technical assistance and

services (provided to a greater degree to

wire drawers rather than parts

manufacturers in both the United States

and Canada), and (6) after-sale service,

and they are the same for the home

market and U.S. market (including EP

and CEP sales). Therefore, it appears

that all sales made by SDI in both the

home and U.S. markets were made at

one LOT. As such, no LOT adjustment

is warranted for SDI.

Ivaco

We also examined the stages in the

marketing process and selling functions

along the chain of distribution between

Ivaco and its customers. Based on this

examination, we preliminarily

determine that Ivaco sold merchandise

at two LOTs in the home market during

the POI. One level of trade is for sales

made by Ivaco’s wire rod manufacturing

facility, Ivaco Rolling Mills (‘‘IRM’’); the

second level of trade is for sales made

by Ivaco’s wire rod processing and

drawing facilities, Sivaco Ontario and

Sivaco Quebec. From our analysis of the

marketing process for these sales, we

determined that sales by Sivaco Ontario

and Sivaco Quebec are at a more remote

marketing stage than that for sales by

IRM. See Memorandum from Alexander

Braier to Roland MacDonald, dated

September 24, 1997, which is on file in

Import Administration’s Central

Records Unit, Room B–099, U.S.

Department of Commerce, 14th &

Constitution Avenue, N.W.,

Washington, D.C. We also found

significant distinctions between the

selling activities and associated

expenses between these sales at each

marketing stage. Based on these

differences, we concluded that two

LOTs exist in the home market, an IRM

LOT and a Sivaco LOT.

Ivaco reported both EP and CEP sales

in the U.S. market, claiming that the

same two LOTs exist in the U.S. as in

the home market. We examined the

chains of distribution in the U.S., which

were the same as those reported for the

home market. We also examined the

selling functions with respect to these

sales (for CEP sales, we examined these

functions after deducting U.S. selling

expenses and associated profit). Based

on this analysis, we concluded that

there are two LOTs in the U.S. market

and that these LOTs are the same as

those found in the home market.

Because the LOTs in the United States

are identical to those in the home

market, the preceding analysis with

respect to the home market LOTs

applies equally to the U.S. market.

Therefore, the preceding analysis
Federal Register / Vol. 62, No. 190 / Wednesday, October 1, 1997 / Notices 51575

applies to the U.S. market in total. See

Memorandum from Alexander Braier to

Roland L. MacDonald, dated September

24, 1997.

To the extent possible, we have

compared U.S. and home market sales at

the same LOT without making a LOT

adjustment. When we were unable to

find sales of the foreign like product in

the home market at the same LOT as the

U.S. sale, we examined whether a LOT

adjustment was appropriate. The

Department makes this adjustment

when it is demonstrated that a

difference in LOT effects price

comparability. To make this

determination, we compared the

weighted-average of Ivaco’s NV prices of

sales made in the ordinary course of

trade at the two LOTs for models sold

at both levels. Because the weightedaverage prices were higher at one of the

LOTs for a preponderance of the models

and higher for a preponderance (by

quantity) of total sales on the quantities

of each model sold, we considered this

to demonstrate a pattern of consistent

price differences. See Antifriction

Bearings (Other Than Tapered Roller

Bearings) and Parts Thereof From

France, et al.; Final Results of

Antidumping Duty Administrative

Reviews, 62 FR 2081, 2106 (January 15,

1997). Thus, we made an adjustment to

NV for the differences in LOT when

appropriate. To calculate the LOT

adjustment, we applied the percentage

differential between the weightedaverage home market starting price at

one LOT and the weighted-average

home market starting price at the next

LOT. Because we were able to quantify

the LOT adjustment, in accordance with

section 773(a)(7)(B) of the Act, no CEP

offset is applicable to relevant NV-CEP

comparisons. For a detailed discussion

of Ivaco’s LOT analysis, see

Memorandum from Alexander Braier to

Roland MacDonald, dated September

24, 1997.

Export Price/Constructed Export Price

For Stelco, SDI, and Ivaco, we used

the Department’s EP methodology, in

accordance with section 772(a) of the

Act, where the subject merchandise was

sold to the first unaffiliated purchaser in

the United States prior to importation

because CEP methodology was not

otherwise warranted based on the facts

on the record. For SDI and Ivaco, we

used the Department’s CEP

methodology, in accordance with

sections 772(b) of the Act, where the

subject merchandise was sold to

unaffiliated purchasers after importation

into the United States.

We made company-specific

adjustments as follows:

1. Stelco

In accordance with section 772(c) of

the Act, we calculated EP based on

packed, delivered prices to the first

unaffiliated customer in the United

States. We made deductions from the

starting price (gross unit price), where

appropriate, for rebates, pre-sale

warehousing, Canadian inland freight

from plant to distribution warehouse,

inland freight from plant/warehouse to

point of delivery in the United States,

U.S. brokerage and handling, and U.S.

customs duties.

2. SDI

We calculated EP based on packed,

delivered prices to the first unaffiliated

customer in the United States. We made

deductions from the starting price (gross

unit price), where appropriate, for

rebates, Canadian inland freight from

warehouse to port of exit, U.S. inland

freight from warehouse to unaffiliated

customers, U.S. inland freight from port

to warehouse, U.S. brokerage and

handling, and U.S. customs duties.

We calculated CEP based on packed,

delivered prices to the first unaffiliated

customer in the United States. We made

the same deductions from the starting

price as described above. In accordance

with sections 772(d)(1) and (2) of the

Act, we also made deductions, where

appropriate, for direct selling expenses,

including credit and warranty expenses,

indirect selling expenses, including

Canadian and U.S. inventory carrying

costs, further manufacturing costs, and

CEP profit, in accordance with section

772(d)(3) of the Act.

3. Ivaco

We calculated EP based on packed,

delivered prices to the first unaffiliated

customer in the United States. In some

instances, customers took delivery of

the merchandise at the factory. We

made additions to the starting price

(gross unit price), where appropriate, for

freight revenue (reimbursement for

freight charges paid by Ivaco) and debitnote price adjustments (adjustments

made by Ivaco for billing errors), and

deductions, where appropriate, for

discounts, rebates, inland freight from

IRM to Sivaco Ontario or Sivaco

Quebec, inland from IRM to Sivaco New

York, inland freight from IRM to

unaffiliated U.S. customers, inland

freight from IRM to unaffiliated U.S.

processors, inland freight from Sivaco

Ontario to unaffiliated customers,

inland freight from Sivaco Ontario,

Sivaco Quebec, or Sivaco New York to

their unaffiliated U.S. customers, U.S.

customs duties, U.S. brokerage and

handling, and credit price adjustments.

We calculated CEP based on packed,

delivered prices to the first unaffiliated

customer in the United States. In some

instances, customers took delivery of

the merchandise at the factory. We

made the same adjustments to the

starting price as described above. In

accordance with sections 772(d)(1) and

(2) of the Act, we also made deductions,

where appropriate, for direct and

indirect selling expenses, commissions,

further manufacturing costs, and CEP

profit, in accordance with 773(d)(3) of

the Act.

Normal Value

In order to determine whether there is

a sufficient volume of sales in the home

market to serve as a viable basis for

calculating NV (i.e., the aggregate

volume of home market sales of the

foreign like product is greater than five

percent of the aggregate volume of U.S.

sales), we compared each respondent’s

volume of home market sales of the

foreign like product to the volume of

U.S. sales of the subject merchandise, in

accordance with section 773(a)(1)(C) of

the Act. Since each respondent’s

aggregate volume of home market sales

of the foreign like product was greater

than five percent of its aggregate volume

of U.S. sales for the subject

merchandise, we determined that the

home market was viable for each

respondent. Therefore, we have based

NV on home market sales.

We based NV on the price at which

the foreign like product was first sold

for consumption in Canada, in the usual

commercial quantities, in the ordinary

course of trade in accordance with

section 773(a)(1)(B)(i) of the Act. To the

extent practicable, we based NV on sales

at the same level of trade as the EP or

CEP sales. If NV was calculated at a

different level of trade, when

appropriate, we made an adjustment in

accordance with section 773(a)(7) of the

Act. This adjustment is discussed

further in the Level of Trade section

above.

Because Stelco, SDI, and Ivaco

reported home market sales to affiliated

parties during the POI, we tested these

sales to ensure that the affiliated party

sales were at ‘‘arm’s length.’’ To conduct

this test, we compared the gross unit

prices of sales to affiliated and

unaffiliated customers net of all

movement charges, direct selling

expenses (credit and warranty

expenses), rebates, and packing. Where

the price to the affiliated party was on

average 99.5 percent or more of the

price to the unaffiliated party, we

determined that the sale made to the

affiliated party was at arm’s length.

Based on the results of this test, we
51576 Federal Register / Vol. 62, No. 190 / Wednesday, October 1, 1997 / Notices

excluded from the calculation of each

respondent’s NV all sales made to an

affiliated party that failed the ‘‘arm’s

length’’ test.

Cost of Production Analysis

Pursuant to an allegation made by

petitioners, we initiated a cost of

production investigation in our notice of

initiation. See Notice of Initiation, 62 FR

13854 (March 24, 1997). Before making

any fair value comparisons, we

conducted the COP analysis described

below.

a. Calculation of COP

We calculated the COP based on the

sum of the respondent’s cost of

materials and fabrication for the foreign

like product, plus amounts for home

market general expenses and packing

costs in accordance with section

773(b)(3) of the Act. We adjusted the

company’s reported COP as follows:

1. Stelco: We adjusted Stelco’s

reported COP to allocate ingot teeming

costs only to the products manufactured

from billets produced at the facility for

which these costs were incurred. We

recalculated Stelco’s general and

administrative amounts to exclude offsets to research and development and

capital tax expenses. See Memorandum

to Chris Marsh from Beverly Lyons,

dated September 17, 1997.

2. Ivaco: We recalculated Ivaco’s

general and administrative amounts

based on the expenses incurred by IRM,

Sivaco Ontario, and Sivaco Quebec. We

adjusted the cost of billets to account for

Atlantic Steel’s selling, general and

administrative costs. We recalculated

further manufacturing general and

administrative amounts to reflect Sivaco

New York’s expenses rather than IRM’s

expenses. See Memorandum to Chris

Marsh from Art Stein, dated September

18, 1997.

b. Test of Home Market Prices

We used each respondent’s submitted

POI weighted-average COPs, as adjusted

(see above). We compared the weightedaverage COP figures to home market

sales of the foreign like product as

required under section 773(b) of the Act.

In determining whether to disregard

home market sales made at prices below

the COP, we examined whether (1)

within an extended period of time, such

sales were made in substantial

quantities, and (2) such sales were made

at prices which permitted the recovery

of all costs within a reasonable period

of time. On a product-specific basis, we

compared the COP to the home market

prices, less any applicable movement

charges, rebates, discounts, packing, and

direct and indirect selling expenses.

c. Results of COP Test

Pursuant to section 773(b)(2)(C),

where less than 20 percent of the

respondent’s sales of a given product

were at prices less than the COP, we did

not disregard any below-cost sales of

that product because we determined

that the below-cost sales were not made

in ‘‘substantial quantities.’’ Where 20

percent or more of the respondent’s

sales of a given product during the POI

were at prices less than the COP, we

determined such sales to have been

made in ‘‘substantial quantities’’ within

an extended period of time in

accordance with section 773(b)(2)(B) of

the Act. In such cases, we also

determined that such sales were not

made at prices which would permit

recovery of all costs within a reasonable

period of time, in accordance with

section 773(b)(2)(D) of the Act.

Therefore, we disregarded the belowcost sales. Where all sales of a specific

product were at prices below the COP,

we disregarded all sales of that product,

and calculated NV based on CV, in

accordance with section 773(a)(4) of the

Act.

d. Calculation of CV

In accordance with section 773(e) of

the Act, we calculated CV based on the

sum of the respondent’s cost of

materials, fabrication, G&A, U.S.

packing costs, direct and indirect selling

expenses, interest expenses, and profit.

As noted above, we adjusted Stelco’s

COP for ingot teeming costs and

recalculated general and administrative

expense amounts. We also adjusted

Ivaco’s cost of billets, and general and

administrative expense amounts.

In accordance with section

773(e)(2)(A) of the Act, we based SG&A

and profit on the amounts incurred and

realized by the respondent in

connection with the production and sale

of the foreign like product in the

ordinary course of trade, for

consumption in the foreign country. For

selling expenses, we used the actual

monthly weighted-average home market

direct and indirect selling expenses.

e. Adjustments to Prices

1. Stelco: We calculated NV based on

packed, delivered prices to unaffiliated

customers and prices to affiliated

customers where the sales were made at

arm’s length. We made deductions from

the starting price (gross unit price),

where appropriate, for rebates, inland

freight from plant to distribution

warehouse, inland freight from plant/

warehouse to customers, pre-sale

warehouse expense, and packing, in

accordance with section 773(a)(6) of the

Act. Pursuant to section 773(a)(6)(C)(iii)

of the Act and 19 CFR 353.56(a)(2), we

made circumstance-of-sale adjustments,

where appropriate, by deducting home

market direct selling expenses (i.e.,

warranty, credit and technical service

expenses) and adding U.S. direct selling

expenses (i.e., warranty, credit and

technical service expenses).

Because Stelco paid commissions on

U.S. sales, in calculating NV for the

respondents, we deducted the lesser of

either (1) the weighted-average amount

of commission paid on a U.S. sale for a

particular product, or (2) the weightedaverage amount of indirect selling

expenses paid on the home market sales

for a particular product. See 351.410(e),

62 FR 27414 (May 19, 1997).

For matches of similar merchandise,

we made adjustments, where

appropriate, for physical differences in

the merchandise in accordance with

section 773(a)(6)(C)(ii) of the Act.

2. SDI: We calculated NV based on

packed, delivered prices to unaffiliated

customers and prices to affiliated

customers where sales were made at

arm’s length. We made deductions from

the starting price (gross unit price),

where appropriate, for rebates, inland

freight from plant/warehouse to

customer, packing, and warranty and

credit expenses, in accordance with

section 773(a)(6) of the Act. Pursuant to

section 773(a)(6)(C)(iii) of the Act and

19 CFR 353.56(a)(2), we made

circumstance-of-sale adjustments, where

appropriate, by deducting home market

direct selling expenses (i.e., warranty

and credit expenses) and adding U.S.

direct selling expenses (i.e., warranty

and credit expenses). For matches of

similar merchandise, we made

adjustments, where appropriate, for

physical differences in the merchandise

in accordance with section

773(a)(6)(C)(ii) of the Act.

3. Ivaco: We calculated NV based on

packed, delivered prices to unaffiliated

customers and prices to affiliated

customers where sales were made at

arm’s length. We made deductions from

the starting price (gross unit price),

where appropriate, for discounts,

rebates, post-sale price adjustments,

foreign inland freight, warranty

expense, and the direct portion of

technical service expenses, in

accordance with section 773(a)(6) of the

Act. Pursuant to section 773(a)(6)(C)(iii)

of the Act and 19 CFR 353.56(a)(2), we

made circumstance-of-sale adjustments,

where appropriate, for warranty and

credit expenses. If NV was calculated at

a different level of trade than EP, we

made an adjustment in accordance with

section 773(a)(7) of the Act, as discussed

in the Level of Trade section above.
Federal Register / Vol. 62, No. 190 / Wednesday, October 1, 1997 / Notices 51577

If NV was calculated at a different

level of trade than CEP, we made an

adjustment in accordance with section

773(a)(7) of the Act, as discussed in the

Level of Trade section above.

Because Ivaco paid commissions on

U.S. sales, in calculating NV for the

respondent, we deducted the lesser of

either (1) the weighted-average amount

of commission paid on a U.S. sale for a

particular product, or (2) the weightedaverage amount of indirect selling

expenses paid on the home market sales

for a particular product. See 351.410(e),

62 FR 27414 (May 19, 1997). For

matches of similar merchandise, we

made adjustments, where appropriate,

for physical differences in the

merchandise in accordance with section

773(a)(6)(C)(ii) of the Act.

Currency Conversions

We made currency conversions into

U.S. dollars in accordance with section

773(A) of the Act based on the official

exchange rates in effect on the dates of

the U.S. sales as certified by the Federal

Reserve Bank.

Verification

As provided in section 782(i) of the

Act, we will verify all information

determined to be acceptable for use in

making our final determination.

Suspension of Liquidation

In accordance with section 733(d) of

the Act, we are directing the Customs

Service to suspend liquidation of all

imports of subject merchandise that are

entered, or withdrawn from warehouse,

for consumption on or after the date of

publication of this notice in the Federal

Register. We will instruct the Customs

Service to require a cash deposit or the

posting of a bond equal to the weightedaverage amount by which the NV

exceeds the export price, as indicated in

the chart below. These suspension of

liquidation instructions will remain in

effect until further notice. The

weighted-average dumping margins are

as follows:

Exporter/manufacturer

Weighted-average margin

percentage

Stelco, Inc. ............................ 2.43

Sidbec-Dosco (Ispat), Inc. .... 11.76

Ivaco, Inc. ............................. 7.49

All Others Rate ..................... 7.79

ITC Notification

In accordance with section 733(f) of

the Act, we have notified the ITC of our

determination. If our final

determination is affirmative, the ITC

will determine, before the later of 120

days after the date of this preliminary

determination or 45 days after our final

determination, whether these imports

are materially injuring, or threatening

material injury to, the U.S. industry.

Public Comment

Case briefs or other written comments

in at least six copies must be submitted

to the Assistant Secretary for Import

Administration no later than December

16, 1997, and rebuttal briefs, no later

than December 30, 1997. A list of

authorities used and an executive

summary of issues should accompany

any briefs submitted to the Department.

Such summary should be limited to five

pages total, including footnotes. In

accordance with section 774 of the Act,

we will hold a public hearing, if

requested, to afford interested parties an

opportunity to comment on arguments

raised in case or rebuttal briefs.

Tentatively, the hearing will be held on

January 6, 1998, at the U.S. Department

of Commerce, 14th Street and

Constitution Avenue, N.W.,

Washington, D.C. 20230. Parties should

confirm by telephone the time, date, and

place of the hearing 48 hours before the

scheduled time.

Interested parties who wish to request

a hearing, or to participate if one is

requested, must submit a written

request to the Assistant Secretary for

Import Administration, U.S. Department

of Commerce, Room 1870, within ten

days of the publication of this notice.

Requests should contain: (1) The party’s

name, address, and telephone number;

(2) the number of participants; and (3)

a list of the issues to be discussed. Oral

presentations will be limited to issues

raised in the briefs. We will make our

final determination not later than 135

days after the publication of this notice

in the Federal Register.

This determination is published

pursuant to sections 733(f) and 777(i) of

the Act.

Dated: September 24, 1997.

Robert S. LaRussa,

Assistant Secretary for Import

Administration.

[FR Doc. 97–26040 Filed 9–30–97; 8:45 am]

BILLING CODE 3510–DS–P

DEPARTMENT OF COMMERCE

International Trade Administration

[A–428–822]

Notice of Preliminary Determination of

Sales at Less Than Fair Value and

Postponement of Final Determination:

Steel Wire Rod From Germany

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: October 1, 1997.

FOR FURTHER INFORMATION CONTACT:

Judith Wey Rudman or John Brinkmann,

Import Administration, International

Trade Administration, U.S. Department

of Commerce, 14th Street and

Constitution Avenue, N.W.,

Washington, D.C. 20230; telephone:

(202) 482–0192 or (202) 482–5288,

respectively.

The Applicable Statute

Unless otherwise indicated, all

citations to the Tariff Act of 1930, as

amended (‘‘the Act’’), are references to

the provisions effective January 1, 1995,

the effective date of the amendments

made to the Act by the Uruguay Round

Agreements Act (‘‘URAA’’). In addition,

unless otherwise indicated, all citations

to the Department’s regulations are

references to the provisions codified at

19 CFR part 353 (April 1997). Although

the Department’s new regulations,

codified at 19 CFR 351 (62 FR 27296;

May 19, 1997), do not govern these

proceedings, citations to those

regulations are provided, where

appropriate, to explain current

departmental practice.

Preliminary Determination

We preliminarily determine that steel

wire rod (‘‘SWR’’) from Germany is

being, or is likely to be, sold in the

United States at less than fair value

(‘‘LTFV’’), as provided in section 733 of

the Act. The estimated margins are

shown in the ‘‘Suspension of

Liquidation’’ section of this notice.

Case History

Since the initiation of this

investigation on March 18, 1997 (see

Notice of Initiation of Antidumping

Duty Investigations: Steel Wire Rod from

Canada, Germany, Trinidad and

Tobago, and Venezuela, 62 FR 13854

(March 24, 1997), ‘‘Notice of

Initiation’’), the following events have

occurred:

On April 14, 1997, the United States

International Trade Commission (‘‘ITC’’)

notified the Department of its

affirmative preliminary injury

determination in this case.