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6178 Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Noticesthan for our primary surrogate, India, forvaluing steel used to produce cups andcones are set forth in our response toComment 4.We prefer published surrogate importdata to the SKF data in valuing thematerial FOP for the following reasons.First, we are able to obtain data specificto the POR, which more closely reflectthe costs to producers during the POR.Second, the raw-material costs from theSKF report do not specify the types ofsteel SKF purchased. The record doesnot indicate whether SKF purchased barsteel (the type used by the Chinesemanufacturers) or more expensive tubesteel to produce bearings parts. Third,although we agree with Petitioner thatSKF is a producer of subjectmerchandise, the report also identifiesother products it manufactures. Fromthe information in the SKF report, weare unable to allocate direct labor andraw-materials expenses to theproduction of subject merchandise. Forthese reasons, we have valued thematerial FOP using surrogate importdata.Furthermore, we agree withRespondents that Petitioner’s citation toTimken for the proposition that theDepartment must use a single surrogatesource when possible is misplaced. Thatcase, although critical of theDepartment, does not state that allfactors must be valued in the samesurrogate country. Indeed, the opinionin Timken explicitly states that‘‘Commerce may avail itself of data froma country other than the designatedconduit, adoption of such an intersurrogatemethodology [althoughdeparting from the normal practice atthat time] remains within the scope ofCommerce’s discretionary power.’’Timken at 304.We also disagree with Petitioner’scontention that we should adjust theoverhead and SG&A rates if we continueto use the SKF report to value theserates while valuing the material andlabor FOP using other sources. As notedabove, we prefer to base our factorsinformation on industry-wide PI.Because such information is notavailable regarding overhead and SG&Arates for producers of subjectmerchandise during the POR (except forthe indirect labor portion of overheadand SG&A, which we valuedseparately—see Comment 8, below), weused the overhead and SG&A ratesapplicable to SKF India, a company thatproduces subject and non-subjectmerchandise.In deriving these rates, we used theSKF data both with respect to thenumerators (total overhead and SG&Aexpenses, respectively) anddenominator (total cost ofmanufacturing). This methodologyallowed us to derive internallyconsistent ratios of SKF India’soverhead and SG&A expenses. Theseratios, when multiplied by the FOP weused in our analysis, thereby constitutethe best available informationconcerning the overhead and SG&Aexpenses that would be incurred by aPRC bearings producer given such FOP.Petitioner’s recommended adjustmentwould affect (reduce) the denominator,but it would leave the overhead andSG&A expenses in the numeratorunchanged. As such, we find that thisadjustment would itself distort theresulting ratio, rather than curing thealleged distortion in our calculations.Finally, with respect to Petitioner’sassertion that the overhead, SG&A, andprofit denominators we used in thepreliminary results improperly includedimport duties paid, we note thatPetitioner has not provided anyinformation regarding the amount ofimport duties that are included nor hasPetitioner provided a means ofidentifying and eliminating such dutiesfrom our calculations. Although wewould not include duties paid on theimportation of merchandise by SKF, wehave no evidence as to the amount ofduties, if any, that are included in SKF’sraw-materials costs. Therefore, we didnot subtract any amount for importduties in our calculation of overheadand SG&A percentages. See TRBs IV–VIat 65529–65530 and TRBs VII, Comment2.2. (a) Material ValuationComment 4East Sea and Guizhou Machinery etal. contend that the Indian importcategory (7228.30.19) which theDepartment used to value the steel usedto produce cups and cones in thepreliminary results is an inappropriatesource because the values derived usingthis category do not accurately reflectthe cost to PRC producers of the hotrolledalloy-steel bar used to producethese components. Respondents statethat the Department should value thissteel using a source that more accuratelyreflects the input costs incurred by PRCproducers.East Sea argues that Indian importcategory 7228.30.19 contains a widevariety of steel products and acorrespondingly wide range of prices. Inthis regard, East Sea notes that theaverage price per metric ton of steelcontained in this category ranges from$610 to $4,860. East Sea states that theoverall steel value per metric ton theDepartment derived using this category(over $1,400) far exceeds the value ofsteel used by PRC producers tomanufacture TRBs.East Sea states that it is Departmentpractice to compare the surrogate steelprices it selects with world prices todetermine if the proposed surrogatevalues for steel are aberrational. East Seanotes that, in Heavy Forged Hand Toolsfrom the PRC, the Departmentdetermined that Indian import statisticswere aberrational in comparison withIndonesian and U.S. import statistics(citing Final Results of AntidumpingDuty Administrative Review: HeavyForged Hand Tools from the PRC, 60 FR49241, 49254 (September 22, 1995)(Hand Tools), Furfuryl Alcohol from thePRC, 60 FR 225444 (May 8, 1995)(Furfuryl Alcohol), and Certain CasedPencils from the PRC, 59 FR 55625(November 4, 1994) (Pencils)). East Seaadds that the Department’s ProposedRules also indicate that the Departmentwill test surrogate values againstinternational prices.East Sea suggests, as an alternative tothe Indian data the Department used inthe preliminary results, an‘‘international’’ price of $673 per metricton, which it derived using U.S.,Japanese, and European Union (E.U.)import statistics. East Sea contends thatthis value approximates thecorresponding steel value used in arecent review of TRBs from Romania,where the surrogate value for steel usedin cups and cones was $718 per metricton (citing Preliminary Results ofAntidumping Administrative Review:Tapered Roller Bearings from theRomania, 68 FR 15465 (April 8, 1996)).East Sea argues in the alternative that,if the Department continues to valuecups and cones using Indian importstatistics, it should modify this value byexcluding from its calculations allindividual steel import values in excessof $1,421 per metric ton as not reflectiveof the price of bearing-quality steel. EastSea states that this ceiling is notarbitrary because it is the average valuederived in the preliminary results and isthe highest surrogate value that theDepartment has ever selected in itsbearings cases.Guizhou Machinery et al. agree withEast Sea that: (1) the surrogate value thatthe Department used in the preliminaryresults is aberrational when comparedwith U.S., E.U., and Japanese importstatistics, and (2) the Department has anestablished practice, as noted in theProposed Regulations, of testingpotential surrogate values againstinternational prices (citing, inter alia,Disposable Lighters; Coumarin; SiliconCarbide; Drawer Slides; Helical SpringLock Washers from the PRC, 58 FR