federal register - U.S. Government Printing Office

6196 Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Noticescategory 7228.20.30 (‘‘bearing-qualitysteel’’). We found that, for the timeperiod covered by the POR, the value ofthe Indian basket category 7228.30 wassignificantly higher than the bearingqualitysteel imported into the UnitedStates. It was also significantly higher incomparison with E.U. import statistics. 1The Indian eight-digit ‘‘others’’ categoryrecommended by Petitioner, valuedhigher than the broad six-digit heading,was even more unreliable in comparisonwith the value of bearing-quality steel.In light of these findings, we havedetermined that the Indian import datathat we used to value cups and cones inthe preliminary results are not reliable.For these final results, we are usingimport data from a secondary surrogate,Indonesia, a producer of merchandisecomparable to TRBs, to value steel usedto produce these components. As withthe Indian data, we were unable toisolate the value of bearing-quality steelor identify an eight-digit categorycontaining such steel imported intoIndonesia; however, unlike the Indiandata, the Indonesian six-digit category7228.30 closely approximates the valueof U.S. imports of bearing-quality steel,as well as the comparable six-digitcategory in the United States. Thus, wehave determined that Indonesiancategory 7228.30, which is thenarrowest category we can determinewould contain bearing-quality steel, isthe best available information forvaluing steel used to produce cups andcones. Although Indonesia is not thefirst-choice surrogate country in thisreview, in past cases the Department hasused values from other surrogatecountries for inputs where the value forthe first-choice surrogate country wasdetermined to be unreliable. See DrawerSlides at 54475–76, Cased Pencils at55629, and Lock Washers at 48835.Furthermore, Indonesia has previouslybeen used as a source of surrogate datain cases involving the PRC. Because weare valuing the steel used to producecups and cones using Indonesian importdata, we are valuing the scrap offset tothis steel value using the same source.We also disagree with Shanghairegarding the appropriateness of Indiancategory 7227.90.11 as the steel type forcups and cones. Respondents reportedthat they use hot-rolled steel bar tomanufacture cups and cones. Category1 Although the E.U. import data do not explicitlyidentify ‘‘bearing quality steel,’’ the relevantsubheading (7228.30.40) provides a narrativedescription that closely matches to the chemicalcomposition of the bar steel that the PRCrespondents used to produce cups and cones. SeeMemorandum from Analyst to File: Factors ofProduction for the Final Results of the 1993–94Administrative Review of TRBs from the PRC,February 3, 1997.7227.90.11 is coil steel and isnecessarily produced by a different millthan bar steel. No respondent reportedusing coil steel to manufacture cups andcones. In addition, during factory toursof various PRC-based bearingsproducers we found no evidence thatany producer uses coil steel tomanufacture cups and cones. Finally,we disagree with Shanghai regarding theuse of category 7228.30.01, bright barsof alloy tool steel. No party hassuggested that such steel is used for theproduction of bearings.Although we acknowledge the clericalerrors noted by Chin Jun in ourcalculation of the value of steel used tomanufacture cups and cones, we havechanged our surrogate source for thevalue of this steel as explained above.Therefore, no recalculation is necessary.Comment 4Shanghai argues that the prices itactually pays for steel are sufficientlymarket-driven to be used instead ofsurrogate values. Shanghai states thatthe domestic steel producers fromwhom Shanghai purchased steelcompete against steel producers frommarket-economy countries. Shanghaitakes the position that the Departmentshould not employ surrogatemethodology in NME cases when theproducer is a foreign-invested jointventurecompany, adding that theDepartment’s current methodology doesnot recognize the special statusaccorded such companies under PRClaw. Shanghai also notes that there areno import restrictions limiting its abilityto purchase either domestic or importedsteel based on rational businessdecisions. Shanghai claims that underPRC joint-venture law it has the legalright to purchase steel from anysuppliers in the world and states thatthe prices at which it purchased steelfrom domestic suppliers during thisPOR were consistent with world steelprices for comparable types of steel.Shanghai argues that, where inputprices and production costs ofmerchandise under investigation aresubject to free-market forces sufficientenough to allow their use indetermining FMV, the Departmentshould apply its normal methodology(citing S. Rep. No. 100–71, 100th Cong.,1st Sess., at 108 (1987)). Shanghaiclaims that the Department has statedthat the presumption that no domesticfactor of production is valued on marketprinciples ‘‘can be overcome forindividual factors by individualrespondents with a showing that aparticular NME value is market driven’’(quoting Ceiling Fans).Petitioner counters that there is nobasis for adopting Shanghai’s claim thatits actual domestic steel purchases weremarket-driven, claiming that steelpurchased in the PRC is not free of theeffects of state controls on labor, energy,input and infrastructure prices.Petitioner states that Shanghai hasoffered no basis for concluding thateither the PRC bearings industry or thePRC steel industry meet theDepartment’s criteria for being deemeda MOI. Petitioner adds that theparticipation of a market-economyinvestor will not purge the PRC inputsof the effects of state control.Department’s PositionWe agree with Petitioner. Shanghaihas provided no evidence to support itscontention that either the steel industryor the bearings industry in the PRC is anMOI. To the extent that Shanghai is freeto source its steel either domestically orfrom imports, the fact that it purchasedonly domestic steel confirms only thatdomestic steel was consistently pricedlower than steel available on the worldmarket. This does not support a claimthat PRC steel is provided at marketprices. In Ceiling Fans, as in this case,we considered values of FOP to bemarket-driven when sufficient evidenceexists to demonstrate that such factorswere purchased from a market-economysupplier and paid for with a convertiblecurrency. Absent such evidence fromShanghai, we have valued Shanghai’sPRC-sourced steel inputs usingsurrogate values.Comment 5Petitioner notes that in thepreliminary results the Departmentvalued scrap using the Indian tariffheadings 7204.29 for alloy-steel scrapand 7204.49 for non-alloy-steel scrap.Petitioner contends that both headingsare wrong and that the Departmentshould use subheadings 7204.29.09 and7204.41.00, respectively, as it did in thepreliminary results of the three previousreviews.Petitioner claims that using the entireheading 7204.29 is wrong because itincludes ‘‘waste and scrap of high speedsteel’’ under subheading 7204.29.01 andsuch steel is not used to producebearings. Petitioner states that thecategory of 7204.29.09, ‘‘waste andscrap of other alloy steel,’’ includesbearing steel.Petitioner argues that heading 7204.49is wrong because it excludes ‘‘turnings,shavings, chips, milling waste, sawdust,filings, trimmings and stampings,whether or not in bundles’’ (heading7204.41). Petitioner claims that theseexcluded types of scrap are precisely the