[Federal Register Volume 65, Number 5 (Friday, January 7, 2000)]
[Notices]
[Pages 1117-1127]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-300]


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

DEPARTMENT OF COMMERCE

International Trade Administration
[A-570-854]


Preliminary Determination of Sales at Less Than Fair Value and 
Postponement of Final Determination: Certain Cold-Rolled Flat-Rolled 
Carbon Quality Steel Products From The People's Republic of China

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

ACTION: Notice of preliminary determination of sales at less than fair 
value.

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

EFFECTIVE DATE: January 7, 2000.

FOR FURTHER INFORMATION CONTACT: Gideon Katz or Karla Whalen, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue NW, Washington, DC 20230; 
telephone: (202) 482-1102 or (202) 482-1391, respectively.

The Applicable Statue

    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 
regulations at 19 CFR part 351 (1998).

Preliminary Determination

    We determine preliminarily that certain cold-rolled flat-rolled 
carbon quality steel products (``cold-rolled steel'') from the People's 
Republic of China (``PRC'') 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 (64 FR 34194, June 25, 
1999) (``Notice of Initiation''), the following events have occurred:
    On June 22, 1999, we sent a Section A questionnaire to the Chinese 
Ministry of Foreign Trade and Economic Cooperation (``MOFTEC''), the 
Embassy of the People's Republic of China in Washington, D.C. 
(``Embassy'') with instructions to forward the questionnaire to all 
producers/exporters of the subject merchandise explaining that these 
companies must respond by the due date. We also sent a copy of the 
questionnaire to Baoshan Iron and Steel Corporation, which was 
specifically named in the petition. We received no response from MOFTEC 
nor the Embassy, but we received a response from Shanghai Baosteel 
Group Corporation (``Baosteel'').
    On July 23, 1999, the United States International Trade Commission 
(``ITC'') issued an affirmative preliminary injury determination in the 
case (See ITC Investigations Nos. 701-TA-393-396 and 731TA-829-840). 
The ITC found that there is a reasonable indication that an industry in 
the United States is threatened with material injury by reason of 
imports from the PRC of cold-rolled steel. On July 9, 1999, we issued 
an antidumping questionnaire, Sections C-E to MOFTEC and to the Embassy 
with instructions to forward the questionnaire to all producers/
exporters of the subject merchandise and that these companies must 
respond by the due date. We also sent a courtesy copy of the same 
questionnaire to Baosteel.
    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. Section C 
requests home market sales listings. Section D requests information on 
the factors of production of the subject merchandise. Section E 
requests information on further manufacturing.
    On July 1, 6, and 20, 1999, Baosteel submitted its section A 
response. Baosteel, a producer of subject merchandise, also submitted 
Section A on behalf of two wholly-owned subsidiaries, Baosteel Group 
International Trade, Inc. (``Baosteel ITC'') and Baosteel America, Inc. 
(``BaoMei''). On August 30, 1999, Baosteel submitted its response to 
sections C, D and E of the questionnaire.
    On August 24, 1999, we issued a Section A supplemental 
questionnaire to Baosteel. On September 10, 1999, we issued Sections C, 
D, and E supplemental questionnaire to Baosteel. Baosteel submitted its 
Section A supplemental questionnaire response on September 14, 1999. 
Baosteel submitted its Sections C, D, and E, supplemental questionnaire 
response on October 4, 1999.
    On September 3, 1999, we requested publicly-available information 
for valuing the factors of production and for surrogate country 
selection. Petitioners had already provided comments on surrogate 
values to be used in this investigation in their petition of June 2, 
1999. Respondents provided their

[[Page 1118]]

comments on this matter on September 15, 1999.
    Petitioners submitted comments regarding Baosteel's questionnaire 
response on August 25, September 8, 10, and 17, and October 8 and 13, 
1999. On October 15, 1999, Baosteel submitted additional information 
regarding its factors of production. On October 19, 1999, we issued a 
second supplemental questionnaire requesting clarification of certain 
items and other additional information. Baosteel submitted its response 
to this questionnaire on November 9 and 16, 1999.
    The Department issued additional supplemental questionnaire on 
November 1, 5, and 22, 1999. Baosteel responded to these questionnaire 
on November 16, 30, and December 7, 1999, respectively.
    The Department set aside a period for all interested parties to 
raise issues regarding product coverage. From July through October 
1999, the Department received responses from a number of parties 
including importers, respondents, consumers, and petitioners, aimed at 
clarifying the scope of the investigation. See Memorandum to Joseph A. 
Spetrini, November 1, 1999 (``Scope Memorandum'') for a list of all 
persons submitting comments and a discussion of all scope comments. 
There are several scope exclusion requests for products which are 
currently covered by the scope of this investigation that are still 
under consideration by the Department. These items are considered to be 
within the scope for this preliminary determination; however, these 
requests will be reconsidered for the final determination. See Scope 
Memorandum.

Scope of the Investigation

    For purposes of this investigation, the products covered are 
certain cold-rolled (cold-reduced) flat-rolled carbon-quality steel 
products, neither clad, plated, nor coated with metal, but whether or 
not annealed, painted, varnished, or coated with plastics or other non-
metallic substances, both in coils, 0.5 inch wide or wider, (whether or 
not in successively superimposed layers and/or otherwise coiled, such 
as spirally oscillated coils), and also in straight lengths, which, if 
less than 4.75 mm in thickness having a width that is 0.5 inch or 
greater and that measures at least 10 times the thickness; or, if of a 
thickness of 4.75 mm or more, having a width exceeding 150 mm and 
measuring at least twice the thickness. The products described above 
may be rectangular, square, circular or other shape and include 
products of either rectangular or non-rectangular cross-section where 
such cross-section is achieved subsequent to the rolling process (i.e., 
products which have been ``worked after rolling'')for example, products 
which have been beveled or rounded at the edges.
    Specifically included in this scope are vacuum degassed, fully 
stabilized (commonly referred to as interstitial-free (``IF'')) steels, 
high strength low allow (``HSLA'') steels, and motor lamination steels. 
IF steels are recognized as low carbon steels with micro-alloying 
levels of elements such as titanium and/or niobium added to stabilize 
carbon and nitrogen elements. HSLA steels are rescognized as steels 
with micro-alloying levels of elements such as chromium, cooper, 
niobium, titanium, vanadium, and molybdenum. Motor lamination steels 
contain micro-alloying levels of elements such as silicon and aluminum.
    Steel products included in the scope of this investigation, 
regardless of definitions in the Harmonized Tariff Schedules of the 
United States (``HTSUS''), are products in which: (1) Iron 
predominates, by weight, over each of the other contained elements; (2) 
the carbon content is 2 percent or less, by weight, and; (3) none of 
the elements listed below exceeds the quantity by weight, respectively 
indicated:
1.80 percent of manganese, or
2.25 percent of silicon, or
1.00 percent of copper, or
0.50 percent of aluminum, or
1.25 percent of chromium, or
0.30 percent of cobalt, or
0.40 percent of lead, or
1.25 percent of nickel, or
0.30 percent of tungsten, or
0.10 percent of molybdenum, or
0.10 percent of niobium (also called columbium), or
0.15 percent of vanadium, or
0.15 percent of zirconium.
    All products that meet the written physical description, and in 
which the chemistry quantities do not exceed any one of the noted 
element levels listed above, are within the scope of this investigation 
unless specifically excluded. The following products, by way of 
example, are outside and/or specifically excluded from the scope of 
this investigation:

<bullet> SAE grades (formerly also called AISI grades) above 2300;
<bullet> Ball bearing steels, as defined in the HTSUS;
<bullet> Tool steels, as defined in the HTSUS;
<bullet> Silico-manganese steel, as defined in the HTSUS;
<bullet> Silicon-electrical steels, as defined in the HTSUS, that are 
grain-oriented;
<bullet> Silicon-electrical steels, as defined in the HTSUS, that are 
not grain-oriented and that have a silicon level exceeding 2.25 
percent;
<bullet> All products (proprietary or otherwise) based on an alloy ASTM 
specification (sample specifications: ASTM A506, A507);
<bullet> Silicon-electrical steels, as defined in the HTSUS, that are 
not grain-oriented and that have a silicon level less than 2.25 
percent, and

    (a) fully-processed, with a core loss of less than 0.14 watts/pound 
per mil (.001 inches), or
    (b) semi-processed, with core loss of less than 0.085 watts/pound 
per mil (.001 inches);

<bullet> Certain shadow mask steel, which is aluminum killed cold-
rolled steel coil that is open coil annealed, has an ultra-flat, 
isotropic surface, and which meets the following characteristics:

    Thickness: 0.001 to 0.010 inches
    Width: 15 to 32 inches

                          Chemical Composition
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Element................................................                C
Weight %...............................................          <0.002
------------------------------------------------------------------------

<bullet> Certain flapper valve steel, which is hardened and tempered, 
surface polished, and which meets the following characteristics:

    Thickness: <ls-thn-eq>1.0 mm
    Width: <ls-thn-eq>152.4 mm

                                                                  Chemical Composition
--------------------------------------------------------------------------------------------------------------------------------------------------------
 
--------------------------------------------------------------------------------------------------------------------------------------------------------
Element...........................  C                       Si                      Mn                      P                      S

[[Page 1119]]

 
Weight %..........................  0.90-1.05               0.15-0.35               0.30-0.50               <ls-thn-eq>0.03        <ls-thn-eq>0.006
--------------------------------------------------------------------------------------------------------------------------------------------------------


                          Mechanical Properties
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Tensile Strength.......................  <gr-thn-eq>162 Kgf/mm<SUP>2</SUP>
Hardness...............................  <gr-thn-eq>475 Vickers hardness
                                          number
------------------------------------------------------------------------


                           Physical Properties
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Flatness...............................  <0.2% of nominal strip width
------------------------------------------------------------------------

    Microstructure: Completely free from decarburization. Carbides are 
spheroidal and fine within 1% to 4% (area percentage) and are 
undissolved in the uniform tempered martensite.

                         Non-metallic Inclusion
------------------------------------------------------------------------
                                                               Area
                                                            Percentage
------------------------------------------------------------------------
Sulfide Inclusion.......................................  <ls-thn-eq>0.0
                                                                      4%
Oxide Inclusion.........................................  <ls-thn-eq>0.0
                                                                      5%
------------------------------------------------------------------------

    Compressive Stress: 10 to 40 Kgf/mm<SUP>2</SUP>

                            Surface Roughness
------------------------------------------------------------------------
                                                             Roughness
                     Thickness (mm)                        (<greek-m>m)
------------------------------------------------------------------------
t<ls-thn-eq>0.209.......................................  Rz<ls-thn-eq>0
                                                                      .5
0.209<t<ls-thn-eq>0.310.................................  Rz<ls-thn-eq>0
                                                                      .6
0.310<t<ls-thn-eq>0.440.................................  Rz<ls-thn-eq>0
                                                                      .7
0.440<t<ls-thn-eq>0.560.................................  Rz<ls-thn-eq>0
                                                                      .8
0.560<t.................................................  Rz<ls-thn-eq>1
                                                                      .0
------------------------------------------------------------------------

<bullet> Certain ultra thin guage steel strip, which meets the 
following characteristics:

    Thickness: <ls-thn-eq> 0.100 mm <plus-minus>7%
    Width: 100 to 600 mm

                                                                  Chemical Composition
--------------------------------------------------------------------------------------------------------------------------------------------------------
            Element                       C                   Mn                   P                   S                  Al                  Fe
--------------------------------------------------------------------------------------------------------------------------------------------------------
Weight %.......................  <ls-thn-eq> 0.07     0.2-0.5             <ls-thn-eq> 0.05    <ls-thn-eq> 0.05    <ls-thn-eq> 0.07    Balance
--------------------------------------------------------------------------------------------------------------------------------------------------------


                          Mechanical Properties
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Hardness...............................  Full Hard (Hv 180 minimum)
Total Elongation.......................  <3%
Tensile Strength.......................  600 to 850 N/mm<INF>2</INF>
------------------------------------------------------------------------


                           Physical Properties
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Surface Finish.........................  <ls-thn-eq> 0.3 micron
Camber (in 2.0 m)......................  < 3.0 mm
Flatness (in 2.0 m)....................  <ls-thn-eq> 0.5 mm
Edge Burr..............................  < 0.01 mm greater than
                                          thickness
Coil Set (in 1.0 m)....................  < 75.0 mm
------------------------------------------------------------------------

<bullet>  Certain silicon steel, which meets the following 
characteristics:

    Thickness: 0.024 inches +/-.0015 inches
    Width: 33 to 45.5 inches

                                                                  Chemical Composition
--------------------------------------------------------------------------------------------------------------------------------------------------------
 
--------------------------------------------------------------------------------------------------------------------------------------------------------
Element........................  C                    Mn                  P                   S                   Si                  Al
Min. Weight %..................                                                               0.65
Max. Weight %..................  0.004                0.4                 0.09                0.009                                   0.4
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 1120]]


                          Mechanical Properties
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Hardness...............................  B 60-75 (AIM 65)
------------------------------------------------------------------------


                           Physical Properties
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Finish.................................  Smooth (30-60 microinches)
Gamma Crown (in 5 inches)..............  0.0005 inches, start measuring
                                          \1/4\ inch from slit edge
Flatness...............................  20I-UNIT max
Coating................................  C3A-08A max (A2 coating
                                          acceptable)
Camber (in any 10 feet)................  \1/16\ inch
Coil Size I.D..........................  20 inches
------------------------------------------------------------------------


                           Magnetic Properties
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Core Loss (1.5T/60 Hz) NAAS............  3.8 Watts/Pound max
Permeability (1.5T/60 Hz) NAAS.........  1700 gauss/oersted typical 1500
                                          minimum
------------------------------------------------------------------------

<bullet> Certain aperture mask steel, which has an ultra-flat surface 
flatness and which meets the followingcharacteristics:
    Thickness: 0.025 to 0.245 mm
    Width: 381-1000 mm

                                              Chemical Composition
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Element.............................  C.......................  N......................  Al
Weight %............................  <0.01...................  0.004 to 0.007.........  <0.007
----------------------------------------------------------------------------------------------------------------

<bullet>  Certain tin mill black plate, annealed and temper-rolled, 
continuously cast, which meets the following characteristics:

                                                                  Chemical Composition
--------------------------------------------------------------------------------------------------------------------------------------------------------
 
--------------------------------------------------------------------------------------------------------------------------------------------------------
Element......................  C            Mn           P           S         Si          Al        As          Cu          B           N
Min. Weight %................  0.02         0.20                                           0.03                                          0.003
Max. Weight %................  0.06         0.40         0.02        0.023     0.03        0.08      0.02        0.08                    0.008 (Aiming
                                                                      (Aiming               (Aiming                                       0.005)
                                                                      0.018                 0.05)
                                                                      Max.)
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Non-metallic Inclusions: Examination with the S.E.M. shall not 
reveal individual oxides >1 micro (0.000039 inches) and inclusion 
groups or clusters shall not exceed 5 microns (0.000197 inches) in 
length.
    Surface Treatment as follows:
    The surface finish shall be free of defects (digs, scratches, pits, 
gouges, slivers, etc.) and suitable for nickel plating.

                                                 Surface Finish
----------------------------------------------------------------------------------------------------------------
                                                        Roughness, RA Microinches (Micrometers)
                                     ---------------------------------------------------------------------------
                                                 Aim                      Min.                     Max.
----------------------------------------------------------------------------------------------------------------
Extra Bright........................  5 (0.1)                   0 (0)                    7 (0.2)
----------------------------------------------------------------------------------------------------------------

<bullet> Certain full hard tin mill black plate, continuously cast 
which meets the following characteristics:

                                                                  Chemical Composition
--------------------------------------------------------------------------------------------------------------------------------------------------------
 
--------------------------------------------------------------------------------------------------------------------------------------------------------
Element......................  C            Mn           P           S         Si          A1        As          Cu          B           N
Min.Weight %.................  0.02         0.02                                           0.03                                          0.003
Max. Weight %................  0.06         0.40         0.02        0.023     0.03        0.08      0.02        0.08                    0.008 (Aiming
                                                                      (Aiming               (Aiming                                       0.005)
                                                                      0.018                 0.05)
                                                                      Max.)
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Non-metallic Inclusions: Examination with the S.E.M. shall not 
reveal individual oxides > 1 micron (0.00039 inches) and inclusion 
groups or clusters shall not exceed 5 microns (0.00197 inches) in 
length.
    Surface Treatment as follows:
    The surface finish shall be free of defects (digs, scratches, pits, 
gouges, slivers, etc.) and suitable for nickel plating.

[[Page 1121]]



                                                 Surface Finish
----------------------------------------------------------------------------------------------------------------
                                                        Roughness, RA Microinches (Micrometers)
                                     ---------------------------------------------------------------------------
                                                 Aim                      Min.                     Max.
----------------------------------------------------------------------------------------------------------------
Stone Finish........................  16 (0.4)                  8 (0.2)                  24 (0.6)
----------------------------------------------------------------------------------------------------------------

<bullet>  Certain ``blued steel'' coil (also know as ``steamed blue 
steel'' or ``blue oxide'') with a thickness and size of 0.38 mm x 940 
mm x coil, with a bright finish;
<bullet>  Certain cold-rolled steel sheet, which meets the following 
characteristics:
    Thickness (nominal): <ls-thn-eq> 0.019 inches
    Width: 35 to 60 inches

                                              Chemical Composition
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Element.............................  C.......................  O......................  B
Max. Weight %.......................  0.004...................    .....................
Min. Weight %.......................  ........................  0.010..................  0.012
----------------------------------------------------------------------------------------------------------------

<bullet>  Certain band saw steel, which meets the following 
characteristics:
    Thickness: <ls-thn-eq> 1.31 mm
    Width: <ls-thn-eq> 80 mm

                                                                                      Chemical Composition
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Element..........................  C                      Si                     Mn                     P                      S                      Cr                    Ni
Weight %.........................  1.2 to 1.3             0.15 to 0.35           0.20 to 0.35           <ls-thn-eq>0.03        <ls-thn-eq>0.007       0.3 to 0.5            <ls-thn-eq>0.25
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Other properties:
    Carbide: fully spheroidized having >80% of carbides, which are 
<ls-thn-eq>0.003 mm and uniformed dispersed
    Surface finish: bright finish free from pits, scratches, rust, 
cracks, or seams
    Smooth edges
    Edge camber (in each 300 mm of length): <ls-thn-eq>7 mm arc height
    Cross bow (per inch of width): 0.015 mm max.
    The merchandise subject to this investigation is typically 
classified in the HTSUS at subheading: 7209.15.0000, 7209.16.0030, 
7209.16.0060, 7209.16,0090, 7209.17.0030, 7209.17.0060, 7209.17.0090, 
7209.18.1530, 7209.18.1560, 7209.18.2550, 7209.18.6000. 7209.25.0000, 
7209.26.0000, 7209.28.0000, 7209.90.0000, 7210.70.3000, 7210.90.9000, 
7211.23.1500, 7211.23.2000, 7211.23.3000, 7211.23.4500, 7211.23.6030, 
7211.29.6080, 7211.90.0000, 7212.40.1000, 7212.40.5000, 7212.50.0000, 
7225.19.0000, 7225.50.6000, 7225.50.7000, 7225.50.8010, 7225.50.8085, 
7225.99.0090, 7226.19.1000, 7226.19.9000, 7226.92.5000, 7226.92.7050, 
and 7226.99.0000.
    Although the HTSUS subheading are provided for convenience and U.S. 
Customs Service (``U.S. Customs'') purposes, the written description of 
the merchandise under investigation is dispositive.

Period of Investigation

    The period of investigation (``POT'') is October 1, 1998, through 
March 31, 1999.

Non-Market-Economy Country Status

    The Department has treated the PRC as a nonmarket economy (``NME'') 
country in all past antidumping investigations (see, e.g., Final 
Determination of Sales at Less Than Fair Value: Certain Preserved 
Mushrooms from the People's Republic of China, 63 FR 72255 (December 
31, 1998) (``Mushrooms'')). A designation as an NME remains in effect 
until it is revoked by the Department (See section 771(18)(C) of the 
Act). The respondents have not challenged such treatment. Therefore, in 
accordance with section 771(18)(C) of the Act, we will continue to 
treat the PRC as an NME country.

Surrogate Country

    When investigating imports from an NME country, section 773(c)(1) 
of the Act directs the Department in most circumstances to base normal 
value (``NV'') on the NME producer's factors of production, valued in a 
surrogate market economy country or countries considered to be 
appropriate by the Department. In accordance with section 773(c)(4), 
the Department, in valuing the factors of production, shall utilize, to 
the extent possible, the prices or costs of factors of production in 
one or more market economy countries that are comparable in terms of 
economic development to the NME country and are significant producers 
of comparable merchandise. The sources of the surrogate factor values 
are discussed under the NV section below.
    The Department has determined that India, Pakistan, Sri Lanka, 
Egypt, Indonesia, and the Philippines are countries comparable to the 
PRC in terms of economic development. See Memorandum from Jeff May to 
Edward Yang, dated June 24, 1999. Customarily, we select an appropriate 
surrogate based on the availability and reliability of data from these 
countries. For PRC cases, the primary surrogate has usually been India 
if it is a significant producer of comparable merchandise. In this 
case, we have found that India as well as Indonesia are significant 
producers of comparable merchandise.
    We used India as the primary surrogate country and, accordingly, we 
have calculated NV using Indian prices to value the PRC producer's 
factors of production, when available and appropriate. See Surrogate 
Country Selection Memorandum to The File from James Doyle, Program 
Manager, dated December 28, 1999, (``Surrogate Country Memorandum''). 
We have obtained and relied upon publicly-available information 
wherever possible. For certain factors, we were unable to locate an 
appropriate surrogate value from any of the

[[Page 1122]]

comparable countries identified above. Therefore, we selected a U.S. 
value as the most appropriate surrogate. See Factor Valuation 
Memorandum to The File from Gideon Katz and Karla Whalen, dated 
December 28, 1999, (``Valuation Memorandum'').

Separate Rates

    Baosteel has requested a separate company-specific rate. In its 
questionnaire response, Baosteel states that it is an independent legal 
entity. Baosteel reports that it is an independent trading company 
``owned by all the people'' and is solely responsible for its profits 
and losses. Baosteel further claims that it does not have any corporate 
relationship with any level of the PRC Government, except for its 
mandatory registration with the government, which is required of all 
business entities. As stated in Final Determination of Sales at Less-
Than-Fair-Value: Silicon Carbide from the People's Republic of China 59 
FR 22585 (May 2, 1994) (``Silicon Carbide'') and Final Determination of 
Sales at Less-Than-Fair-Value: Furfuryl Alcohol 60 FR 22545 (May 8, 
1995) (``Furfuryl Alcohol''), ownership of a company by ``all the 
people'' does not require the application of a single rate. 
Accordingly, Baosteel is eligible for consideration for a separate 
rate.
    The Department's separate rate test is not concerned, in general, 
with macroeconomic/border-type controls (e.g., export licenses, quotas, 
and minimum export prices), particularly if these controls are imposed 
to prevent dumping. Rather, the test focuses on controls over the 
investment, pricing, and output decision-making process at the 
individual firm level. See Certain Cut-to-Length Carbon Steel Plate 
from Ukraine: Final Determination of Sales at Less than Fair Value, 62 
FR 61754, 61757 (November 19, 1997); Tapered Roller Bearings and Parts 
Thereof, Finished and Unfinished, from the People's Republic of China: 
Final Results of Antidumping Duty Administrative Review, 62 FR 61276, 
61279 (November 17, 1997); and Honey from the People's Republic of 
China: Preliminary Determination of Sales at Less than Fair Value, 60 
FR 14725, 14726 (March 20, 1995) (``Honey'').
    To establish whether a firm is sufficiently independent to be 
entitled to a separate rate, the Department analyzes each exporting 
entity under the test established in the Final Determination of Sales 
at Less Than Fair Value: Sparklers from the People's Republic of China: 
56 FR 20588 (May 6, 1991) (``Sparklers'') and amplified in Silicon 
Carbide. Under this test, the Department assigns separate rates in NME 
cases only if an exporter can affirmatively demonstrate the absence of 
both (1) de jure and (2) de facto governmental control over export 
activities. See Silicon Carbide and Furfuryl Alcohol.

1. Absence of De Jure Control

    Baosteel has placed on the administrative record two documents to 
demonstrate absence of de jure control. The first document, titled 
``Law of the People's Republic of China on Industrial Enterprises Owned 
By the Whole People,'' was adopted on April 13, 1988. (``The Industrial 
Enterprises Law''). The Industrial Enterprises Law provides that 
enterprises owned by ``the whole people'' shall make their own 
management decisions, be responsible for their own profits and losses, 
choose their own suppliers, and purchase their own goods and materials. 
This law has been analyzed by the Department in past cases and has been 
found to sufficiently establish an absence of de jure control of 
companies ``owned by the whole people,'' such as Baosteel. See Notice 
of Final Determination of Sales at Less Than Fair Value and 
Postponement of Final Determination: Certain Partial-Extension Steel 
Drawer Slides with Rollers from the People's Republic of China, 60 FR 
54472, 55474 (October 24, 1995); Honey, 60 FR at 14726; and Furfuryl 
Alcohol, 60 FR at 22544.
    The second document submitted by Baosteel consists of excerpts from 
``Regulations for Transformation of Operational Mechanism of State-
Owned Industrial Enterprises'' (``Regulations''), issued on December 
31, 1992, by the Ministry of Foreign Economic Relations and Trade of 
the People's Republic of China. These Regulations gave state-owned 
enterprises the right to establish ``production, management, and 
operational policies,'' and the right to set prices, sell products, 
purchase production inputs, make investment decisions, and dispose of 
profits and assets. These rights apply specifically to an enterprise's 
import and export activities (Article XII). The Department determined 
in the past that the existence of these Regulations supports finding 
that a PRC company is not subject to de jure governmental control. See 
Notice of Final Determination of Sales at Less Than Fair Value: 
Manganese Metal from the People's Republic of China, 60 FR 56045 
(November 6, 1995) and Chrome-Plated Lug Nuts from the People's 
Republic of China: Preliminary Results of Antidumping Duty 
Administrative Review, 63 FR 31719 (June 10, 1998).
    In sum, in prior cases, the Department has analyzed the Chinese 
laws and Regulations placed on the record in this case, and found that 
they establish an absence of de jure control. We have no new 
information in this proceeding which would cause us to reconsider such 
a determination.

2. Absence of De Facto Control

    The Department typically considers four factors in evaluating 
whether each respondent is subject to de facto governmental control of 
its export functions: (1) Whether the export prices are set by or are 
subject to the approval of a governmental authority; (2) whether the 
respondent has authority to negotiate and sign contracts and other 
agreements; (3) whether the respondent has autonomy from the government 
in making decisions regarding the selection of management; and (4) 
whether the respondent retains the proceeds of its export sales and 
makes independent decisions regarding disposition of profits or 
financing of losses. See, e.g., Silicon Carbide and Furfuryl Alcohol.
    Baosteel asserted the following: (1) It establishes its own export 
prices independently of the government and without the approval of a 
government authority; (2) it negotiates contracts, without guidance 
from any governmental entities or organizations; (3) it makes its own 
personnel decisions including the selection of management; and (4) it 
retains the proceeds of its export sales, uses profits according to its 
business needs, and has the authority to obtain loans. We have found no 
indication from Baosteel's business licenses that the issuing authority 
imposes any type of restriction on its business. The business license 
simply establishes a legal name for the enterprise, provides the 
address of the enterprise, identifies the legal representative of the 
enterprise, reports the amount of registered capital of the enterprise, 
identifies the type of the enterprise, and establishes the authorized 
scope of business for the enterprise. In addition, Baosteel stated that 
the subject merchandise is not on any government list dealing with 
export provisions or licensing.
    Consequently, we preliminarily determine that Baosteel has met the 
criteria for the application of separate rates. We will examine this 
matter further at verification. For non-responsive exporters, we 
preliminarily determine, as facts available, that they have not met the 
criteria for application of separate rates.

[[Page 1123]]

Use of Facts Available

Baosteel

    In calculating the factors of production, the Department normally 
considers the factors from all production facilities of the respondent 
company that are involved in the production of the subject merchandise. 
Therefore, the Department's questionnaire requires that the respondent 
company provide information regarding the weighted-average factors of 
production across all of the company's plants that produce the subject 
merchandise, not just the factors of production from a single plant. 
This methodology ensures that the Department's calculations are as 
accurate as possible.
    In this case, as discussed in the Case History section, above, the 
Department issued several questionnaires to Baosteel. In response to 
the Department's inquiry into Baosteel's affiliates and factors of 
production, Baosteel indicated that ``Baosteel's wholly-owned 
subsidiaries, Baosteel Group International Trade Inc. (``Baosteel 
ITC'') and Baosteel America Inc. (``BaoMei''), are involved in the 
exportation of the subject merchandise.'' Baosteel stated that of all 
the subsidiaries listed in an exhibit to its section A response, ``no 
other subsidiaries involved [sic] in the manufacture, sales or research 
of the subject merchandise, except for Baosteel ITC and BaoMei. These 
two companies are involved in sales of the product * * *'' Baosteel 
further asserted in its section A supplemental response that ``[t]here 
is no other manufacturing plant, sales office, research and development 
facility, and administrative office involved in the manufacture and 
sale of the subject merchandise other than Baosteel ITC, Bao Mei and 
Baosteel headquarter's [sic] steel mill. Baosteel headquarter's [sic] 
steel mill manufactures the subject merchandise, Baosteel ITC handles 
all internal processing, arranges for shipments, and negotiates Letters 
of Credit; and Bao Mei acts as the sales office in the U.S.A.'' In 
response to the Department's supplemental questions requesting a list 
of all plants, offices, facilities, branches and affiliates involved in 
the manufacture and sale of subject merchandise, Baosteel stated that 
``* * * Baosteel ITC and Bao Mei are wholly owned subsidiaries of 
Baosteel and sold the subject merchandise under investigation.'' 
Baosteel further asserted that ``[o]nly Baosteel's headquarter[s] plant 
produced the subject merchandise during the POI. No other plant was 
involved in the production of the subject merchandise. Baosteel, as 
requested, reported the factors of production and output of the plant 
which produced the subject merchandise.''
    We find that Baosteel's responses that only its headquarters plant 
produces subject merchandise do not correspond with the public and 
proprietary information available on the record. See Memorandum to the 
File from Juanita Chen regarding public articles, dated October 26, 
1999 (``Public Sources Memorandum''). According to public information, 
on November 17, 1998, Baoshan Iron & Steel (Group) Corporation was 
reorganized into Shanghai Baosteel Group Corporation, absorbing 
Shanghai Metallurgical Holding (Group) Corporation (``SMHC'') and 
Meishan Iron & Steel (Group) Corporation. SMHC comprises ten steel 
mills and a total of 30 plants, including Shanghai Nos 1, 3, 5 and 10 
steel works. The International Iron and Steel Institute lists SMHC's 
crude steel output for 1998 at 6.6 million tons. It is also clear that 
Shanghai Pudong Iron & Steel (Group) Co. Ltd. (``Pudong''), formerly 
known as Shanghai No. 3 Iron & Steel Works, is a producer of carbon 
steel cold-rolled sheets. See Iron and Steel Works of the World, Volume 
13, page 82. In addition to this information, Baosteel's own website 
states that:

    . . . with the approval of the State Council and by changing its 
registered company name, the former Baoshan Iron & Steel (Group) 
Corporation was reorganized into Shanghai Baosteel Group 
Corporation, absorbing Shanghai Metallurgical Holding (Group) 
Corporation (``SMHC'') and Meishan Iron & Steel (Group) 
(``Meishan'') Corporation on November 17, 1998. With RMB 45.8 
billion yuan in registered funds and RMB 70.466 billion yuan in net 
assets, the newly established corporation is the largest iron and 
steel conglomerate in China at present. See http://www.bstl.sh.cn/
page__e/a001.htm (visited December 20, 1999).

The Department also notes that, subsequent to the Department's further 
inquiries, Baosteel edited the information it provided in its response 
concerning its list of affiliates. Specifically, in its November 9, 
1999, supplemental response, Baosteel excluded certain companies 
previously submitted as subsidiaries in its September 14, 1999, Section 
A supplemental response, including Baosteel Shanghai Pu Steel Mill, 
Baosteel Group Shanghai Numbers, One, Two, Three, and Five Steel Mills, 
and Baosteel Group Shanghai Mei Shan Company, Ltd.
    Additionally, there is some evidence indicating that Wuhan Iron and 
Steel Works (``Wuhan''), a producer of carbon steel cold-rolled 
uncoated sheet/coil, may have also merged with Baosteel in 1998. See 
Public Sources Memorandum. We note, however, that Baosteel's responses 
fail to provide any factors of production information from either the 
Pudong or the Wuhan facilities, despite the Department's specific 
requests in its supplemental questionnaires.
    Section 776(a)(2)(A) of the Act provides that, if an interested 
party withholds information that has been requested by the 
administering authority, the Department shall, subject to section 
782(d), apply facts otherwise available. In this case, as described 
above, the publicly-available information indicates that, in addition 
to the Baosteel headquarters plant, there exist other Baosteel 
facilities that produce cold-rolled, flat-rolled carbon quality steel. 
Accordingly, in light of the evidence that both Pudong and Wuhan 
produced subject merchandise during the POI, and that Baosteel merged 
with Pudong and may have merged with Wuhan, the Department is concerned 
that Baosteel did not provide any information concerning these 
facilities. As explained above, to properly conduct this investigation, 
it is essential that the Department has at its disposal information 
regarding the weighted-average factors of production across all of a 
company's plants that produce subject merchandise, not just the factors 
of production from a single plant. Using factors of production for only 
one company plant may distort the actual factors of production for the 
entire company.
    In response to the Department's questions on this issue, Baosteel's 
December 7, 1999 supplemental questionnaire response on page two 
asserted that ``The Department should note that the merger plan was 
announced on November 17, 1998, but, the registration did not occur 
until August 1999.'' Baosteel's focus on registration of the merger 
leads to its conclusion on page three that ``It is Baosteel's position 
that Pudong did not legally merge with Baosteel until August 10, 1999, 
that is, well after the POI.'' In addition to taking issue with the 
timing of the merger, Baosteel also challenged its relevance by 
contending that the companies with which it merged do not produce the 
merchandise under investigation, and therefore the provision of factors 
is unnecessary. Specifically, Baosteel's December 7, 1999, supplemental 
questionnaire response on page three notes that ``Pudong has previously 
certified that it did not produce the subject merchandise during the 
POI, and does not produce this subject merchandise.''

[[Page 1124]]

In addition, Baosteel provided a certification in Exhibit S5-3, stamped 
by Shanghai Pusteel (Group) Company Ltd. which it translated as 
follows: ``This is to certify that we do not produce the cold-rolled 
carbon type steel products.''
    Regarding the timing of the merger, the Department first notes that 
Baosteel's responses have evolved, from first listing the merged 
entities among Baosteel's subsidiaries, to the most recent focus on 
registration of the merged entity as the critical event. In addition, 
these evolved statements remain at variance with several public 
documents, in particular public statements originating from Baosteel 
itself. The Department finds, based on the evidence as a whole, that it 
is appropriate to treat the companies as having merged during the POI. 
Baosteel has failed to adequately support its argument that 
registration is the critical merger event because it did not adequately 
explain the merger process. Specifically, Question 4 of the 
Department's November 22, 1999, supplemental questionnaire requested 
Baosteel to ``provide a complete explanation of the actual merger 
process'' and to ``clearly identify all legal documentation and 
proceedings which must occur for the merger to be officially legal 
according to Baosteel.'' Also, the Department requested Baosteel to 
``detail the timing of each event.'' Instead, Baosteel focused almost 
exclusively on registration, providing no useful information regarding 
the process as a whole, despite repeated attempts by the Department to 
get this information on the record (see October 19 and November 5, 
1999, supplemental questionnaires). As a result, Baosteel has prevented 
the Department from fully understanding the merger process as a whole 
so that we could assess the function and effect of registration. Absent 
such information, the Department finds no basis to disregard the 
company's public statements which indicate that the mergers were 
completed during the POI.
    Baosteel's insistence that none of the merged entities produced 
subject merchandise is similarly unpersuasive. In its November 30, 1999 
supplemental questionnaire, the Department explicitly stated that 
Baosteel should report factors of production for Pudong ``if Pudong 
manufactures and merchandise which falls within the scope of the 
investigation.'' Thus, production of the subject merchandise was the 
sole criterion for reporting factors of production. However, Baosteel's 
response indicates that it added an additional criterion for 
determining whether to report factors of production, i.e., whether an 
affiliated producer exported subject merchandise to the United Stated 
during the POI. Therefore, Baosteel's responses have not answered the 
specific question whether any of the merged facilities manufacture the 
products described in the Scope of the Investigation section above.
    Further, while Pudong's certification appears to have been written 
in response to a request from Baosteel regarding specific parameters, 
those parameters were not provided to the Department. Because the 
Department does not know the set of products to which Pudong is 
certifying, the certification's analytical usefulness is limited, 
especially since it directly contradicts recent sources of information 
such as Iron and Steel Works of the World, Volume 13 (1999), page 82, 
which clearly lists Shanghai Pudong as a 1999 producer of carbon steel 
cold-rolled sheets.
    Thus, given that Baosteel appears to have withheld this information 
despite the Department's requests, pursuant to section 776(a)(2)(A), we 
preliminarily determine that the application of facts otherwise 
available is warranted.
    Section 776(b) of the Act provides that, if an interested party has 
failed to cooperate by not acting to the best of its ability to comply 
with a request for information, the Department may, in selecting the 
facts otherwise available, use an inference that is adverse to the 
interests of that party. In this case, we find that although Baosteel 
provided the Department with information regarding its headquarters 
plant, Baosteel has not cooperated to the best of its ability because 
it failed to fully support the information it submitted and provided 
conflicting information on the record regarding this issue.
    Accordingly, we are applying adverse partial facts available to 
account for the portion of the overall Baosteel Group's margin which 
might be attributed to SMHC. Given that the public information is not 
conclusive with regard to Wuhan, we have not included this plant in our 
partial facts available calculation. We used the relation between the 
steelmaking capacity of the Baosteel headquarters plant and the 
capacity of SMHC to weight-average the calculated and partial facts 
available margin to arrive at an overall margin. We weight-averaged the 
margin calculated for Baosteel's headquarters plant with the highest 
petition margin, 23.72% (to account for SMHC), to arrive at the 
preliminary margin. See Public Sources Memorandum. We note, however, 
that we issued an additional supplemental questionnaire on this topic 
and therefore, intend to examine this issue in more detail for the 
final determination.

PRC-Wide Rate

    Information on the record of this investigation indicates that 
there may be producers/exporters of the subject merchandise in the PRC, 
in addition to the company participating in this investigation, as 
noted in the petition and confirmed by the Department's own analysis of 
the import statistics in comparison to Baosteel's reported U.S. sales. 
Also, U.S. import statistics indicate that the total quantity of U.S. 
imports of cold-rolled steel from the PRC is greater than the total 
quantity of cold-rolled steel exported to the U.S. as reported by 
Baosteel. See Corroboration Memorandum to Edward Yang, Office Director 
from Robert Bolling and Karla Whalen, dated December 28, 1999 
(``Corroboration Memorandum''). Given this discrepancy, it appears that 
not all PRC exporters of cold-rolled steel responded to our 
questionnaire. Accordingly, we are applying a single antidumping 
deposit rate--the PRC-wide rate--to all exporters in the PRC, other 
than Baosteel, as specifically identified below under the ``Suspension 
of Liquidation'' section of this notice, based on our presumption that 
the export activities of the companies that failed to respond to the 
Department's questionnaire are controlled by the PRC government (see, 
e.g., Final Determination of Sales at Less-Than-Fair-Value: Bicycles 
from the People's Republic of China, 61 FR 19026 (April 30, 1996) 
(``Bicycles'').
    As explained below, this PRC-wide antidumping rate is based on 
adverse facts available. Section 776(a)(2) of the Act provides that if 
an interested party or any other person--

    (A) withholds information that has been requested by the 
administering authority or the Commission under this title, (B) 
fails to provide such information by the deadlines for submission of 
the information or in the form and manner requested, subject to 
subsections (c)(1) and (e) of section 782, (C) significantly impedes 
a proceeding under this title, or (D) provides such information but 
the information cannot be verified as provided in section 782(i), 
the administering authority and the Commission shall, subject to 
section 782(d), use the facts otherwise available in reaching the 
applicable determination under this title.

In this case, we found that there are PRC producers/exporters who 
failed to respond to our questionnaire, thereby withholding information 
necessary for reaching the applicable determination within the meaning 
of section 776(a)(2)(A) of the Act. Moreover, by

[[Page 1125]]

refusing to respond to the Department's questionnaire, these producers/
exporters significantly impeded this investigation within the meaning 
of section 776(a)(2)(C) of the Act. Thus, in making our preliminary 
determination, we are required to use facts otherwise available.
    In addition, section 776(b) of the Act provides that, if the 
Department finds that an interested party ``failed to cooperate by not 
acting to the best of its ability to comply with a request for 
information,'' the Department may use information that is adverse to 
the interest of that party as the facts otherwise available. The 
exporters that decided not to respond in any form to the Department's 
questionnaire failed to act to the best of their ability in this 
investigation. Thus, the Department has determined that, in selecting 
from among the facts otherwise available, an adverse inference is 
warranted. As adverse facts available, we are assigning the highest 
margin in the petition, 23.72 percent, which is higher than the 
calculated margin. Further, absent a response, we must presume 
government control of these and all other PRC companies for which we 
cannot make a separate rate determination.
    Section 776(c) of the Act provides that, when the Department relies 
upon ``secondary information'' in using facts otherwise available, such 
as the petition rates, the Department shall, to the extent practicable, 
corroborate that information from independent sources reasonably at the 
Department's disposal. The Statement of Administrative Action 
accompanying the URAA, H.R. Doc. No. 103-316 (1994) (``SAA''), states 
that ``corroborate'' means to determine that the information used has 
probative value. See SAA at 870.
    The petitioner's methodology for calculating export price (``EP'') 
and NV is discussed in the Notice of Initiation. The information 
contained in the petition demonstrates that petitioners calculated EP 
based on average unit values (``AUVs''), which rely, in turn, on U.S. 
import statistics. Petitioners used POI data for HTSUS numbers 
7209.16.00.90 and 7209.17.00.90. The AUVs were calculated by dividing 
the free-along-side values by net tons. Petitioners made no deductions 
from these calculated AUVs. The information in the petition with 
respect to NV is based on factors of production for one petitioner 
through the hot-rolled production stage, and on another petitioner's 
factors of production for the additional processing stages necessary to 
produce cold-rolled steel. Petitioners valued the factors of 
production, where possible, based on reasonably available, public 
surrogate country data. Petitioners used India as their surrogate 
country for valuation of the factors of production.
    To corroborate the margins we are using as adverse facts available, 
we re-examined evidence supporting the petition calculation. In 
accordance with section 776(c) of the Act, to the extent practicable, 
we examined the key elements of the U.S. price and NV calculations on 
which the petition margin was based and compared the sources used in 
the petition to publicly-available information, where available. We 
compared petitioner factor usage data to the actual factor usage data 
of Baosteel for the most significant factor inputs, and we find this 
information to be sufficiently corroborated as defined in the statute. 
Furthermore, because the other information in the petition is from 
public sources contemporaneous with the POI, we find, for the purpose 
of the preliminary determination, that the margins in the petition are 
sufficiently corroborated. See Corroboration Memorandum.

Fair Value Comparisons

    To determine whether sales of cold-rolled carbon steel from the PRC 
to the United States were made at LTFV, we compared the EP to the NV, 
as specified in the ``Export Price'' and ``Normal Value'' sections of 
this notice.

Export Price

    In accordance with section 772(a) of the Act, we used EP because 
the subject merchandise was sold directly to unaffiliated customers in 
the United States prior to importation and because constructed export 
price methodology was not otherwise indicated. In accordance with 
section 777A(d)(1)(A)(i) of the Act, we compared POI-wide weighted-
average EPs to the NVs. See Valuation Memorandum. We calculated EP 
based on prices to unaffiliated purchasers in the United States. We 
made deductions, where appropriate, for loading labor.

Normal Value

    In accordance with section 773(c) of the Act, we calculated NV 
based on the value of the factors of production reported by Baosteel. 
We used factors of production, reported by Baosteel, for materials, 
energy, labor, by-products, and packing. We made adjustments to the 
usage rates for these factors as noted below. In accordance with our 
standard practice, where an input is sourced from a market economy and 
paid for in market economy currency, the Department employs the actual 
price paid for the input to calculate the factors-based NV. See Lasko 
Metal Products v. United States, 437 F. 3d 1442 (Fed. Cir. 1994) 
(``Lasko''). Baosteel reported that some of its inputs were sourced 
from market economies and paid for in market economy currency. However, 
we determined not to use the prices reported by Baosteel for coking 
coal because the purchase was insignificant in comparison to the 
domestic purchases. Therefore, we disregarded Baosteel's coking coal 
information and instead used publicly-available information from India. 
See Valuation Memorandum.
    Baosteel identified a number of by-products which it claimed are 
recycled in the production process and/or sold. However, the response 
was unclear as to how much of these various inputs are entered into the 
production process or sold. Therefore, the Department has only offset 
the cost of production by the amount of a by-product where Baosteel's 
response indicated that it was sold and not re-entered into the 
production process. We intend to examine this issue more closely at 
verification. See Valuation Memorandum.
    Finally, we made an adjustment to the reported energy usage factor. 
Because we could not clearly determine what portion of the self-
produced energy factor went into direct steelmaking, we have estimated 
this usage rate based on an Indian steel producer's self-produced 
energy costs.

Factor Valuations

    The selection of the surrogate values was based on the quality and 
contemporaneity of the data. Where possible, we attempted to value 
material inputs on the basis of tax-exclusive domestic prices. We used 
import prices to value factors. We removed from the imports data import 
prices from countries which the Department has previously determined to 
be NMEs. For those values not contemporaneous with the POL, we adjusted 
for inflation using wholesale price indices (``WPI''), published in the 
International Monetary Fund's International Financial Statistics. For a 
complete analysis of surrogate values, see Valuation Memorandum.
    For most raw material and energy surrogate values, we used values 
as reported in the Monthly Statistics of Foreign Trade of India, Vol. 
II--Imports, Directorate General of Commercial Intelligence & 
Statistics, Ministry of Commerce, Government of India, Calcutta. The 
price information from Monthly Statistics of Foreign Trade of India 
represents cumulative values for the period of April 1997 through March

[[Page 1126]]

1998. For each input value obtained from the above referenced 
publication, we used the average value per kilogram for that input from 
market economics. Import statistics from NMEs were excluded in the 
calculation of the average value. Given that the data from this 
publication is not contemporaneous with the POI, we adjusted material 
values for inflation by using the WPI rate for India. We then converted 
each of the raw material inputs to U.S. dollars using an exchange rate 
conversion factor.
    For certain other factors, we used values as reported in the United 
Nations Commodity Trade Statistics for India in 1997. We converted 
these values as appropriate. See Valuation Memorandum.
    The Department determined that the only surrogate value for slag 
from India was unreliable. According to New Steel, February 1997, pages 
24 and 44, slag has a relatively low value compared to the price of 
steel. Because the Indian value for slag was unusually high compared to 
the price of the subject merchandise, the Department has preliminarily 
used values for slag from the U.S. Geological Survey, Minerals, 
Commodities Summaries from 1998.
    Baosteel reported that three types of iron ore were purchased from 
market economy suppliers, namely, iron ore fines, iron ore lumps, and 
iron ore pellets. The evidence provided by Baosteel indicated that its 
market economy purchases of iron ore were significant. See Section B of 
the October 4, 1999 submission, Exhibit SD-5. The Department has 
determined to use the FOB Baosteel prices as reported, in accordance 
with Lasko. However, for that portion of the three iron-ore type 
shipments which were unloaded at an intermediary port, we have added an 
unloading and a loading expense, as well as Indian surrogate river 
transport freight expense, given that the data indicates that the 
prices reported did not account for these additional expenses. We based 
the freight expense on the simple average of three surrogate values 
provided by Baosteel. We then added the freight and shipment expenses 
to a weighted-average FOB Baosteel price to account for materials 
delivered at an intermediary port. Finally, we weight-averaged the 
total value of the iron ore delivered directly to Baosteel with the 
total value of the iron ore unloaded at an intermediately port to 
derive a final market-based iron ore price per category of iron ore 
reported. For the ``other'' iron ore input category reported by 
Baosteel, we used a surrogate value as reported in the United Nations 
Commodity Trade Statistics for India in 1997 because this was not 
purchased via market economy sources. We have also added a proportional 
unloading and loading charge and transportation cost as appropriate 
using the above methodology. See Valuation Memorandum.
    For labor, we used the Chinese regression-based wage rate at Import 
Administration's homepage, Import Library, Expected Wages of Selected 
NMW Countries, revised in May 1999. Because of the variability of wage 
rates in countries with similar per capita gross domestic prices, 
section 351.408(c)(3) of the Department's regulations requires us to 
use a regression-based wage-rate. The source of this wage-rate data on 
Import Administration's homepage is found in the 1998 Year Book of 
Labour Statistics, International Labour Office (Geneva: 1998), Chapter 
5B: Wages in Manufacturing.
    For overhead, profit and SG&A expenses, we used averaged 
information reported in publicly available financial reports to two 
Indian steel producers.

Verification

    As provided in section 782(i) of the Act, we will verify the 
information used in making our final determination.

Suspension of Liquidation

    In accordance with section 733(d) of the Act, we are directing the 
U.S. Customs to suspend liquidation of all imports of subject 
merchandise 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 weighted-average 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:

------------------------------------------------------------------------
                                                              Weighted-
                                                               average
                   Manufacturer/exporter                        margin
                                                              (percent)
------------------------------------------------------------------------
Shanghai Baosteel Group Corporation (including Baosteel             8.84
 Group International Trade, Inc.)..........................
China-wide Rate *..........................................        23.72
------------------------------------------------------------------------
* The China-wide rate applies to all entries of the subject merchandise
  except for entries from exporters that are identified individually
  above.

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 the domestic industry in the United States is materially 
injured, or threatened with material injury, by reason of imports, or 
sales (or the likelihood of sales) for importation, of the subject 
merchandise.

Postponement of Final Determination

    Section 735(a)(2) of the Act provides that a final determination 
may be postponed until not later than 135 days after the date of the 
publication of the preliminary determination if, in the event of an 
affirmative preliminary determination, a request for such postponement 
is made by exporters who account for a significant proportion of 
exports of the subject merchandise, or in the event of a negative 
preliminary determination, a request for such postponement is made by 
the petitioners. The Department's regulations, at 19 CFR 351.210(e)(2), 
require that requests by respondents for postponement of a final 
determination be accompanied by a request for extension of provisional 
measures from a four-month period to not more than six months.
    On November 8, 1999, Baosteel requested that, 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 the publication of an affirmative preliminary 
determination in the Federal Register. Baosteel also included a request 
to extend the provisional measures to not more than six months. 
Accordingly, since we have made an affirmative preliminary 
determination, we have postponed the final determination until not 
later than 135 days after the date of the publication of the 
preliminary determination.

Public Comment

    Case briefs for this investigation must be submitted no later than 
one week after the issuance of the verification reports. Rebuttal 
briefs must be filed within five days after the deadline for submission 
of case briefs. A list of authorities used, a table of contents, and an 
executive summary of issues should accompany any briefs submitted to 
the Department. Executive summaries should be limited to five pages 
total, including footnotes.

[[Page 1127]]

    Section 774 of the Act provides that the Department will hold a 
hearing to afford interested parties an opportunity to comment on 
arguments raised in case or rebuttal briefs, provided that such a 
hearing is requested by any interested party. If a request for a 
hearing is made in an investigation, the hearing will tentatively be 
held two days after the deadline for submission of the rebuttal briefs, 
at the U.S. Department of Commerce, 14th Street and Constitution 
Avenue, NW, Washington, DC 20230. In the event that the Department 
receives requests for hearings from parties to several cold-rolled 
cases, the Department may schedule a single hearing to encompass all 
those cases. 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 participate if 
one is requested, must submit a written request within 30 days of the 
publication of this notice. Requests should specify the number of 
participants and provide a list of the issues to be discussed. Oral 
presentations will be limited to issues raised in the briefs.
    If this investigation proceeds normally, we will make our final 
determination no later than 135 days after the date of publication of 
this preliminary determination.
    This determination is issued and published in accordance with 
sections 733(f) and 777(i)(1) of the Act.

    Dated: December 28, 1999.
Holly A. Kuga,
Acting Assistant Secretary for Import Administration.
[FR Doc. 00-300 Filed 1-6-00; 8:45 am]
BILLING CODE 3510-DS-M