[Federal Register Volume 66, Number 119 (Wednesday, June 20, 2001)]
[Notices]
[Pages 33048-33052]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-15545]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-869, A-428-831, A-475-831, A-423-810, A-821-814, A-791-811, A-
469-811, A-583-838]


Initiation of Antidumping Duty Investigations: Structural Steel 
Beams From the People's Republic of China, Germany, Italy, Luxembourg, 
Russia, South Africa, Spain, and Taiwan

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

EFFECTIVE DATE: June 20, 2001.

FOR FURTHER INFORMATION CONTACT: Thomas Schauer (Germany, Italy, 
Luxembourg) at (202) 482-0410; Davina Hashmi (Spain, South Africa, 
Taiwan) at (202) 482-5760; Rebecca Trainor (The People's Republic of 
China) at (202) 482-4007; or Dinah McDougall (Russia) at (202) 482-
3773, Import Administration-Room 1870, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, N.W., Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

Initiation of Investigations

The Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the statute are 
references to the provisions effective January 1, 1995, the effective 
date of the amendments made to the Tariff Act of 1930 (``the Act'') by 
the Uruguay Round Agreements Act (``URAA''). In addition, unless 
otherwise indicated, all citations to the Department of Commerce's 
(``the Department's'') regulations are to the regulations codified at 
19 CFR Part 351 (2001).

The Petition

    On May 23, 2001, the Department received a petition filed in proper 
form by the Committee for Fair Beam Imports and its individual members, 
Northwestern Steel and Wire Company, Nucor Corporation, Nucor-Yamato 
Steel Company, and TXI-Chaparral Steel Company (``the petitioners'').
    In accordance with section 732(b) of the Act, the petitioners 
allege that imports of structural steel beams from the People's 
Republic of China (the PRC), Germany, Italy, Luxembourg, Russia, South 
Africa, Spain, and Taiwan are being, or are likely to be, sold in the 
United States at less than fair value within the meaning of section 731 
of the Act and that such imports are materially injuring, or 
threatening material injury to, an industry in the United States.
    The Department finds that the petitioners filed the petition on 
behalf of the domestic industry because they are interested parties as 
defined in section 771(9)(C) and (D) of the Act and they have 
demonstrated sufficient industry support with respect to the 
antidumping duty investigations they are requesting the Department to 
initiate (see ``Determination of Industry Support for the Petitions,'' 
below).

Scope of Investigations

    For purposes of these investigations, the products covered are 
doubly-symmetric shapes, whether hot-or cold-rolled, drawn, extruded, 
formed or finished, having at least one dimension of at least 80 mm 
(3.2 inches or more), whether of carbon or alloy (other than stainless) 
steel, and whether or not drilled, punched, notched, painted, coated, 
or clad. These products (``structural steel beams'') include, but

[[Page 33049]]

are not limited to, wide-flange beams (``W'' shapes), bearing piles 
(``HP'' shapes), standard beams (``S'' or ``I'' shapes), and M-shapes.
    All products that meet the physical and metallurgical descriptions 
provided above are within the scope of these investigations unless 
otherwise excluded. The following products are outside and/or 
specifically excluded from the scope of these investigations:
    <bullet> Structural steel beams greater than 400 pounds per linear 
foot or with a web or section height (also known as depth) over 40 
inches.
    The merchandise subject to these investigations is classified in 
the Harmonized Tariff Schedule of the United States (``HTSUS'') at 
subheadings 7216.32.0000, 7216.33.0030, 7216.33.0060, 7216.33.0090, 
7216.50.0000, 7216.61.0000, 7216.69.0000, 7216.91.0000, 7216.99.0000, 
7228.70.3040, and 7228.70.6000. Although the HTSUS subheadings are 
provided for convenience and customs purposes, the written description 
of the merchandise under investigation is dispositive.
    During our review of the petition, we discussed with the 
petitioners whether the proposed scope was an accurate reflection of 
the product for which the domestic industry is seeking relief. The 
petitioners indicated that the scope in the petition accurately 
reflected the product for which they are seeking relief. Consistent 
with the preamble to its regulations (see Antidumping Duties; 
Countervailing Duties, 62 FR 27296, 27323 (May 19, 1997)), the 
Department is setting aside a period for parties to raise issues 
regarding product coverage. The Department encourages all parties to 
submit such comments by 20 days after the publication of this notice. 
Comments should be addressed to Import Administration's Central Records 
Unit at Room 1870, U.S. Department of Commerce, Pennsylvania Avenue and 
14th Street, N.W., Washington, D.C. 20230. This period of scope 
consultation is intended to provide the Department with ample 
opportunity to consider all comments and to consult with parties prior 
to the issuance of the preliminary determinations.

Determination of Industry Support for the Petitions

    Section 732(b)(1) of the Act requires that a petition be filed on 
behalf of a domestic industry. Section 732(c)(4)(A) of the Act provides 
that a petition meets this requirement if the domestic producers or 
workers who support the petition account for: (1) at least 25 percent 
of the total production of the domestic like product; and (2) more than 
50 percent of the production of the domestic like product produced by 
that portion of the industry expressing support for, or opposition to, 
the petition.
    Section 771(4)(A) of the Act defines the ``industry'' as the 
producers of a domestic like product. Thus, to determine whether the 
petition has the requisite industry support, the statute directs the 
Department to look to producers and workers who account for production 
of the domestic like product. The International Trade Commission 
(``ITC''), which is responsible for determining whether the domestic 
industry has been injured, must also determine what constitutes a 
domestic like product in order to define the industry. While both the 
Department and the ITC are required to apply the same statutory 
provision regarding the domestic like product (section 771(10) of the 
Act), they do so for different purposes and pursuant to separate and 
distinct authority. In addition, the Department's determination is 
subject to limitations of time and information. Although this may 
result in different definitions of the domestic like product, such 
differences do not render the decision of either agency contrary to 
law.\1\
---------------------------------------------------------------------------

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

    Section 771(10) of the Act defines domestic like product as ``a 
product which is like, or in the absence of like, most similar in 
characteristics and uses with, the article subject to an investigation 
under this title.'' Thus, the reference point from which the domestic 
like product analysis begins is ``the article subject to an 
investigation,'' i.e., the class or kind of merchandise to be 
investigated, which normally will be the scope as defined in the 
petition. The domestic like product referred to in the petition is the 
single domestic like product defined in the ``Scope of Investigation'' 
section, above. We consulted with the ITC, the U.S. Customs Service, 
and the petitioners and have, as a result of these discussions, adopted 
the definition of domestic like product definition set forth in the 
petition. We have not received comments from interested parties 
challenging the petitioners' definition of domestic like product.
    The petitioners identified the total shipments of steel beams 
(including some merchandise that is not the domestic like product) from 
data gathered by the American Iron and Steel Institute (AISI). By 
comparing their own production with the total shipment of steel beams, 
the petitioners established that they accounted for well over 50 
percent of production of the domestic like product in the United 
States. Furthermore, we find the petitioners' estimation of industry 
support to be conservative because the denominator in the calculation 
(the total shipment of steel beams) includes merchandise that is not 
the domestic like product, while the numerator (the petitioners' 
production) is comprised solely of production of the domestic like 
product.
    The petitioners established industry support representing over 50 
percent of the total production of the domestic like product. 
Therefore, the domestic producers or workers who support the petition 
account for at least 25 percent of the total production of the domestic 
like product and, therefore, the requirements of section 
732(c)(4)(A)(i) of the Act are met. Furthermore, because the Department 
received no opposition to the petitions, the domestic producers or 
workers who support the petitions account for 100 percent of the 
production of the domestic like product produced by that portion of the 
industry expressing support for or opposition to the petitions. 
Therefore, the requirements of section 732(c)(4)(A)(ii) of the Act are 
met. Accordingly, the Department determines that the petitions were 
filed on behalf of the domestic industry within the meaning of section 
732(b)(1) of the Act.

Export Price and Constructed Export Price

    The following are descriptions of the allegations of sales at less 
than fair value upon which we have based our decisions to initiate 
these investigations. Should the need arise to use any of this 
information in our preliminary or final determinations for purposes of 
facts available under section 776 of the Act, we may re-examine the 
information and revise the margin calculations, if appropriate.
    With respect to sales to the U.S. market, the petitioners used a 
constructed export price (CEP) analysis in the Germany, Italy, 
Luxembourg and Spain petitions based on sales of the merchandise in the 
United States by a U.S. affiliate of the foreign producer. The 
petitioners used an export price (EP) analysis in the PRC and Russia 
petitions based on sales of the merchandise directly to unaffiliated 
customers in the United States by one of the foreign producers. The 
petitioners

[[Page 33050]]

also used an export price (EP) analysis in the Germany, South Africa, 
and Taiwan petitions based on sales of the merchandise through 
unaffiliated distributors in the United States by one of the foreign 
producers. The petitioners based CEP and EP on affidavits supported by 
price quotes and offers. The petitioners calculated CEP in the German 
petition by subtracting ocean freight, U.S. Customs duties, and a 
distributor margin representing the U.S. selling expenses and profit. 
The petitioners calculated CEP in the Italy petition by subtracting 
ocean freight, U.S. port charges, U.S. Customs duties, and a 
distributor margin representing the U.S. selling expenses and profit. 
The petitioners calculated CEP in the Luxembourg petition by 
subtracting ocean freight, U.S. Customs duties, and a distributor 
margin representing the U.S. selling expenses and profit. The 
petitioners calculated CEP in the Spain petition by subtracting 
domestic inland freight, foreign port charges, ocean freight, U.S. 
Customs duties, and the distributor margin. The petitioners calculated 
EP in the Germany petition by subtracting ocean freight, U.S. port 
charges, U.S. Customs duties, and the distributor margin to account for 
the fact that the prices are quoted from an unaffiliated U.S. 
distributor. The petitioners calculated EP in the PRC petition by 
subtracting domestic inland freight, export charges, domestic wharfage, 
ocean freight, insurance, U.S. port charges, and U.S. duties. The 
petitioners calculated EP in the Russia petition by subtracting 
domestic inland freight, foreign port charges, ocean freight, 
insurance, U.S. port charges, and U.S. duties. The petitioners 
calculated EP in the South Africa petition by subtracting domestic 
inland freight, ocean freight, U.S. port charges, and the distributor 
margin. The petitioners calculated EP in the Taiwan petition by 
subtracting domestic inland freight, foreign port charges, ocean 
freight, U.S. port charges, U.S. Customs duties, and the distributor 
margin. The petitioners also calculated imputed credit expenses 
applicable to EP sales in the Taiwan petition and added the expense to 
NV. The data for these adjustments was based on U.S. Customs 
statistics, the Port of Houston Authority Tariff No. 8, affidavits, and 
the 2001 import duty rates. The petitioners did not deduct domestic 
inland freight, export port charges, or imputed credit expenses from 
CEP or EP in the Germany, Italy, or Luxembourg petitions because they 
were not able to obtain such data. No other adjustments to EP or CEP 
were necessary due to the terms of the sales. We restated some of the 
constructed export prices and export prices in the Germany, Italy, 
Luxembourg, Spain, and Taiwan petitions. See Memoranda to File titled 
Recalculation of Antidumping Margins for Germany, Italy, Luxembourg, 
Spain, and Taiwan dated June 11, 2001, for a complete discussion of the 
changes we made.

Home-Market and Third-Country Prices

    The petitioners used home-market prices based on affidavits 
supported by price quotes and offers except in the PRC, Luxembourg, and 
Russia petitions. The petitioners used third-country prices based on 
affidavits supported by price quotes and offers in the Luxembourg 
petition because they were unable to obtain price information for sales 
in the home market. The petitioners selected Germany as the third-
country market. The petitioners presented evidence that Germany is the 
largest third-country market for steel beams produced in Luxembourg. 
After examining this evidence, we found the petitioners' selection of 
Germany as the comparison market to be reasonable. Because the PRC and 
Russia are considered non-market economy countries, the petitioners did 
not obtain home-market or third-country prices. See the ``Normal 
Value'' section below.
    The petitioners adjusted the home-market and third-country prices 
for CEP comparisons in the Germany, Italy, and Luxembourg petitions by 
deducting a distributor margin to represent a reseller's selling 
expenses. The petitioners adjusted the home-market prices for EP 
comparisons in the South Africa petition by deducting credit expense, 
discounts, and a distributor margin to represent a reseller's selling 
expenses. The petitioners adjusted the home-market prices for EP 
comparisons in the Taiwan petition by deducting inland freight and a 
distributor margin to represent a reseller's selling expenses.
    The petitioners did not deduct inland freight in the Germany, 
Luxembourg, Spain, or Taiwan petitions because of the terms of sale. 
The petitioners did not deduct inland freight in the Italy or South 
Africa petitions because they were unable to calculate such expenses. 
With regard to the South Africa petition, the petitioners were able to 
make an adjustment so that the home-market prices would not be 
overstated. Because of the proprietary nature of this adjustment, 
please see the proprietary version of the Initiation Checklist dated 
June 12, 2001, for a description. With regard to the Italy petition, as 
described in the Normal Value section below, we found that each of the 
unadjusted home-market prices in the Italy petition was below the cost 
of production. Thus, even if the petitioners had been able to calculate 
inland freight expenses incurred on the home-market sales, we would 
continue to find that the home-market prices were below the cost of 
production. As a result, we used constructed value as the basis for 
normal value (NV) for the Italy petition. Because the constructed 
values that the petitioners calculated do not include freight expenses, 
we find the petitioners' approach to be reasonable.
    The petitioners did not deduct credit expense from home-market or 
third-country prices in the Italy, Luxembourg, Spain, or Taiwan 
petitions and for one of the companies in the Germany petition because 
of the terms of sale. The petitioners did not deduct credit expense 
from home-market prices for the other company in the Germany petition 
because they had no information regarding the foreign producers' credit 
terms. However, the petitioners also did not adjust normal value for 
the credit expense incurred on EP sales for this company. Because the 
petitioners did not have information on the credit terms for home-
market sales, we find the petitioners' approach to be a reasonable 
methodology given the information available to them.
    The data for the adjustments the petitioners made to home-market 
and third-country prices were based on affidavits. No other adjustments 
to home-market or third-country prices were necessary due to the terms 
of the sales.

Normal Value

    The petitioners based NV for the South Africa petition on home-
market prices, which it calculated as described above. As discussed in 
the ``Initiation of Cost Investigations'' section below, the 
petitioners established that the comparison-market prices in the 
Germany, Italy, Luxembourg, Spain, and Taiwan petitions were below the 
cost of production. Because the comparison-market prices were below the 
cost of production, pursuant to sections 773(a)(4) and 773(e) of the 
Act, the petitioners also based NV for the Germany, Italy, Luxembourg, 
Spain, and Taiwan petitions on constructed value (CV). CV consists of 
the cost of manufacture (COM), selling, general and administrative 
expenses (SG&A), and profit (there is no packing cost for the subject 
merchandise). The petitioners based their calculations for COM, SG&A, 
and profit on costs obtained by affidavits from the petitioning 
companies' officials and foreign industry data compiled by the

[[Page 33051]]

petitioners. We restated some of the costs in the Germany, Italy, 
Luxembourg, and Spain petitions. See Memoranda to File titled 
Recalculation of Antidumping Margins for Germany, Italy, Luxembourg, 
and Spain dated June 11, 2001, for a complete discussion of the changes 
we made.
    Because Russia is considered a non-market-economy (NME) country 
under section 771(18) of the Act, the petitioners based NV on the 
factors of production valued in a surrogate country, in accordance with 
section 773(c)(3) of the Act. For purposes of the petition, the 
petitioners selected Thailand as the surrogate market economy. The 
petitioners calculated NV using publicly available Thai prices to value 
all unit costs associated with the factors of production. The 
petitioners established estimates for per-unit consumption based on the 
production experience of a U.S. producer of structural steel beams 
adjusted for known differences in the Russian production process 
according to information reasonably available to the petitioners.
    The petitioners valued steel scrap using Thai prices obtained from 
publicly available information. The petitioners valued labor using the 
Department's regression-based wage rate for Russia, in accordance with 
19 CFR 351.408(c)(3). The petitioners obtained the value for 
electricity from a report issued by Thailand's National Energy Policy 
Office. The petitioners valued natural gas using data based on a quote 
published in the Bangkok Post. To determine factory overhead, SG&A, and 
profit, the petitioners relied on data from a Thai producer of steel 
products.
    Because the PRC is considered a NME country under section 771(18) 
of the Act, the petitioners based NV on the factors of production 
valued in a surrogate country, in accordance with section 773(c)(3) of 
the Act. For purposes of the petition, the petitioners selected India 
as the most appropriate surrogate market economy. The petitioners 
calculated NV using publicly available Indian prices to value all unit 
costs associated with the factors of production. The petitioners 
established estimates for per-unit consumption based on the production 
experience of a U.S. producer of structural steel beams adjusted for 
known differences in the PRC production process according to 
information reasonably available to the petitioners.
    The petitioners valued steel scrap using Indian prices obtained 
from publicly available information published in Metal Bulletin, and 
adjusted using the wholesale price index (WPI) published in the 
International Financial Statistics. The petitioners valued labor using 
the Department's regression-based wage rate for the PRC, in accordance 
with 19 CFR 351.408(c)(3). The petitioners obtained the value for 
electricity from a publication of the International Energy Agency 
containing the prices applicable to India, and adjusted using the WPI 
published in the International Financial Statistics. The petitioners 
valued natural gas using data based on the quarterly report of a major 
Indian supplier, and adjusted using the WPI published in the 
International Financial Statistics. To determine factory overhead, 
SG&A, and profit, the petitioners relied on data from an Indian 
producer of steel products.
    Based on comparisons of EP to NV, the petitioners estimate margins 
of 73.54 to 81.06 percent for South Africa. Based on our revisions to 
the petitioners' methodology, we calculated the estimated margins to be 
61.09 to 94.73 percent for Germany, 83.80 percent for Italy, 38.45 to 
44.43 percent for Luxembourg, 81.67 to 94.93 percent for Spain, 98.77 
for the PRC, 133.12 percent for Russia, and 45.72 to 73.64 percent for 
Taiwan. Should the need arise to use any of this information in our 
preliminary or final determinations, we will re-examine the information 
and revise the margin calculations, if appropriate.

Initiation of Cost Investigations

    Pursuant to section 773(b) of the Act, the petitioners alleged that 
sales in the home market of structural steel beams produced in Germany, 
Italy, Spain, and Taiwan were made at prices below the cost of 
production (COP) and, accordingly, requested that the Department 
conduct country-wide sales-below-COP investigations in these countries. 
Furthermore, the petitioners alleged that sales in the third country 
(Germany) of structural steel beams produced in Luxembourg were made at 
prices below the COP and, accordingly, requested that the Department 
conduct a country-wide sales-below-COP investigation in this country. 
The Statement of Administrative Action (``SAA''), submitted to Congress 
in connection with the Uruguay Round Agreements Act, states that an 
allegation of sales below COP need not be specific to individual 
exporters or producers. SAA, H.R. Doc. No. 316, 103d Cong., 2d Sess., 
at 833 (1994). The SAA states at 833 that ``Commerce will consider 
allegations of below-cost sales in the aggregate for a foreign country, 
just as Commerce currently considers allegations of sales at less than 
fair value on a country-wide basis for purposes of initiating an 
antidumping investigation.''
    The statute at section 773(b) of the Act states that the Department 
must have ``reasonable grounds to believe or suspect'' that below-cost 
sales have occurred before initiating such an investigation. 
``Reasonable grounds'' exist when an interested party provides specific 
factual information on costs and prices, observed or constructed, 
indicating that sales in the foreign market in question are at below-
cost prices. See section 773(b)(2)(A) of the Act. Based upon the 
comparison of the adjusted prices from the petition of the foreign like 
product in Germany, Italy, Luxembourg, Spain, and Taiwan to the COP 
calculated in the petition (and adjusted in the Germany, Italy, 
Luxembourg, and Spain cases as described in Memoranda to File titled 
Recalculation of Antidumping Margins for Germany, Italy, Luxembourg, 
and Spain dated June 11, 2001), we find ``reasonable grounds to believe 
or suspect'' that sales of these foreign like products were made below 
their respective COPs within the meaning of section 773(b)(2)(A)(i) of 
the Act. Accordingly, the Department is initiating the requested 
country-wide cost investigations for Germany, Italy, Spain, and Taiwan. 
With regard to Luxembourg, the Department is initiating a country-wide 
cost investigation with respect to sales in Germany. In the event that 
we determine that Germany is the appropriate market upon which to base 
normal value, we will conduct a COP investigation.

Fair Value Comparisons

    Based on the data provided by the petitioners, there is reason to 
believe that imports of structural steel beams from the PRC, Germany, 
Italy, Luxembourg, Russia, South Africa, Spain, and Taiwan are being, 
or are likely to be, sold at less than fair value.

Allegations and Evidence of Material Injury and Causation

    The petition alleges that the U.S. industry producing the domestic 
like product is being materially injured, and is threatened with 
material injury, by reason of the individual and cumulated imports of 
the subject merchandise sold at less than NV. The allegations of injury 
and causation are supported by relevant evidence including business 
proprietary data from the petitioning firms and U.S. Customs import 
data. The Department assessed the allegations and supporting evidence 
regarding material injury and causation and

[[Page 33052]]

determined that these allegations are sufficiently supported by 
accurate and adequate evidence and meet the statutory requirements for 
initiation.

Initiation of Antidumping Investigations

    We have examined the petition on structural steel beams and have 
found that it meets the requirements of section 732 of the Act. 
Therefore, we are initiating antidumping duty investigations to 
determine whether imports of structural steel beams from the PRC, 
Germany, Italy, Luxembourg, Russia, South Africa, Spain, and Taiwan are 
being, or are likely to be, sold in the United States at less than fair 
value. Unless the deadline is extended pursuant to section 733(b)(1)(A) 
of the Act, we will make our preliminary determinations for the 
antidumping duty investigations no later than October 30, 2001, which 
is 140 days after the date of initiation.

Distribution of Copies of the Petitions

    In accordance with section 732(b)(3)(A) of the Act, a copy of the 
public version of each petition has been provided to the 
representatives of the governments of the PRC, Germany, Italy, 
Luxembourg, Russia, South Africa, Spain, and Taiwan. We will attempt to 
provide a copy of the public version of each petition to each exporter 
named in the petition, as provided for under 19 CFR 351.203(c)(2).

International Trade Commission Notification

    We have notified the ITC of our initiations, as required by section 
732(d) of the Act.

Preliminary Determinations by the ITC

    The ITC will determine by July 7, 2001, whether there is a 
reasonable indication that imports of structural steel beams from the 
PRC, Germany, Italy, Luxembourg, Russia, South Africa, Spain, and 
Taiwan are causing material injury, or threatening to cause material 
injury, to a U.S. industry. Negative ITC determinations will result in 
the particular investigations being terminated; otherwise, the 
investigations will proceed according to statutory and regulatory time 
limits.

    Dated: June 12, 2001.
Bernard T. Carreau,
Acting Assistant Secretary for Import Administration.
[FR Doc. 01-15545 Filed 6-19-01; 8:45 am]
BILLING CODE 3510-DS-P