67 FR 35479, May 20, 2002 A-570-869 Investigation Public Document G1O3: LJ MEMORANDUM TO: Faryar Shirzad Assistant Secretary for Import Administration FROM: Richard W. Moreland Deputy Assistant Secretary for Import Administration SUBJECT: Issues and Decision Memorandum for the Antidumping Duty Investigation of Structural Steel Beams From The People's Republic of China - October 1, 2000, through March 31, 2001 Summary We have analyzed the comments and rebuttals of the interested parties in the antidumping duty investigation of structural steel beams from the People's Republic of China (PRC). As a result of our analysis, we have made changes to the margin calculations. We recommend that you approve the positions we have developed in the "Discussion of the Issues" section of this memorandum. Below is the complete list of the issues in this investigation for which we received comments and rebuttals by interested parties: A. New Factual Information B. Valuation of Oxygen, Nitrogen, and Argon C. Labor Calculation D. Surrogate-Company Selection for Financial Data E. Financial-Ratio Calculations F. By-Product Yields G. Surrogate Values Selection H. Value of Iron Ore Background On December 28, 2001, the Department of Commerce (the Department) published the preliminary determination of sales at less than fair value of structural steel beams from the PRC. See Notice of Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Structural Steel Beams from The People's Republic of China, 66 FR 67197 (December 28, 2001) (Preliminary Determination). We invited parties to comment on the Preliminary Determination. On January 7, 2002, the Department received from the respondent, Maanshan Iron & Steel Co. Ltd. (Maanshan), a timely allegation of ministerial errors in the Preliminary Determination. Because we agreed with the respondent's ministerial-error allegations, we have revised the margin calculations for the final determination to reflect the corrections of these ministerial errors. See the Ministerial Error Comments Decision Memorandum dated January 24, 2002. On March 15, 2002, the respondent filed a case brief which we rejected in part. (See the letter from the petitioners dated March 20, 2002, requesting the Department to strike information from the record and, the letter from Laurie Parkhill dated March 22, 2002, rejecting certain parts of Maanshan's case brief.) The respondent filed a redacted case brief on March 26, 2002. The petitioners, the Committee for Fair Beam Imports and its individual members, filed a case brief on March 21, 2002. The petitioners and the respondent filed rebuttal briefs on March 25, 2002, and March 26, 2002, respectively. Discussion of the Issues A. New Factual Information Comment 1: The petitioners submitted a letter on March 20, 2002, requesting that the Department strike all or portions of Maanshan's March 15, 2002, case brief from the record because it contained new factual information that was submitted in an untimely manner. (The Department struck certain information from the record on March 22, 2002. See letter from Laurie Parkhill dated March 22, 2002.) Maanshan argues that the Department was incorrect in striking from the record information submitted in Maanshan's case brief submitted on March 15, 2002. According to the respondent, the information that the Department characterized as new factual information was in accordance with 19 CFR 351.301(b)(1) and 351.301(c) for the following reasons: 1) it is publicly available information from an internet source, which had been noted in Maanshan's timely submitted January 14, 2002, comments on the Preliminary Determination and served as clarifying supporting public documentation to its earlier submission, and 2) it included copies of the Department's own legal memoranda, which are legal decrees and not factual information. On March 26, 2002, the respondent filed a redacted version of the case brief to comply with the Department's request which did not contain the information the Department had deemed to be new factual information. Department's Position: We disagree with the respondent and maintain our position as stated in our March 22, 2002, letter. The material contained in Maanshan's March 15, 2002, case brief comprised new factual information. This new factual information was related to the Steel Authority of India Limited's (SAIL's) 2001 financial statements and to prior Departmental proceedings and was provided by Maanshan to supplement factual information in its January 14, 2002, comments. This information was not on the record prior to the deadline for new factual information and was not solicited by the Department. As stated in 19 CFR 351.301(b)(1), the deadline for submitting new factual information is seven days prior to verification (unless the Department requests new factual information after this deadline). Maanshan's March 15, 2002, case brief, in addition to providing arguments, provided new factual information well after the deadline for submission of such information. For this final determination, we have considered the redacted case brief submitted by Maanshan on March 26, 2002. B. Valuation of Oxygen, Nitrogen and Argon Comment 2: Maanshan argues that, in the Preliminary Determination, the Department incorrectly attributed large surrogate-value amounts to relatively minor inputs of oxygen, nitrogen, and argon gases due to Maanshan's own complicated explanation of the factors of production (FOP) in its response to the Department's questionnaire. Maanshan believes that this led the Department to treating the generation of these gases as direct inputs to certain production stages as opposed to treating the generation of these gases as intermediate processes. In comments dated January 14, 2002, Maanshan contends that it provided to the Department a more appropriate and less complicated method of calculating the FOPs, which values the inputs (i.e., electricity, capital equipment, and labor) used to make the gases in question. The respondent argues that this is appropriate because it does not purchase the gases oxygen, nitrogen, and argon; rather it produces them. Maanshan contends that the production process of making the gases is an intermediate stage of the steel-making process and, therefore, the Department should not consider the gases as direct inputs. Instead, Maanshan continues, the Department should value and include in the cost of production the inputs necessary for the production of the gases, since Maanshan is able to extract these gases directly from the atmosphere. Maanshan claims that it has accounted for all costs associated with generating the gases as intermediate products in the manufacture of structural steel beams. According to standard accounting practices, Maanshan asserts, the air plant it uses to produce the gases is a capital cost which will be covered under the surrogate company's overhead costs just as all of Maanshan's other manufacturing facilities will be covered. Maanshan asserts that, although there will be differences between Maanshan's and the surrogate company's manufacturing facilities, the plant for generating the gases will be very similar. In any case, Maanshan continues, the surrogate will not be buying the gases in accordance with the petitioners' proposed methodology. Maanshan also argues that the surrogate value data from the 1999 United Nations Trade Commodity Statistics (UN Statistics), which the Department used to value argon, nitrogen, and oxygen was inappropriate because the data was based on gases sold after being reduced to a liquid state and transported in refrigerated containers. According to the respondent, this methodology is unrelated to any steel-manufacturing process. That is, the respondent claims, no steel manufacturer would buy the gases in a liquid state and in individual containers that would have to be transported, stored, and converted back to gas. The petitioners argue that the Department valued Maanshan's electricity, argon, nitrogen, and oxygen correctly by applying a surrogate value to the quantity of these inputs consumed in the manufacture of the subject merchandise. According to the petitioners, this methodology is consistent with prior Department practice and should be followed for the final determination. The petitioners assert that the Department considered an identical issue in the Final Determination of Sales of Less Than Fair Value: Certain Hot-Rolled Carbon Steel Flat Products from the People's Republic of China, 66 FR 49632 (September 28, 2001) (Hot-Rolled Steel), and rejected the respondents' request to use the FOP of the self-produced electricity and the gases argon, nitrogen, and oxygen. Instead, the petitioners continue, the Department applied the surrogate values to the amounts of the inputs consumed. According to the petitioners, there is no indication in the Department's verification report that it was unable to verify the quantities of the gases in the steel-making process and the respondent in this investigation has presented no reasons for the Department to change its practice. In rebuttal, Maanshan argues that the petitioners' reliance on Hot-Rolled Steel is misplaced. Maanshan points out that the respondents in that case had reported oxygen, argon, nitrogen, and electricity as energy inputs. Maanshan believes that, although it is not clear from the decision memorandum for that proceeding, the respondents in Hot-Rolled Steel may have included the gases with the electricity because the principle variable cost of producing the gases was electricity, which was self- produced. Maanshan also believes that the Department was concerned that the capital costs would not be covered by the valuation because the surrogate producer it used in Hot-Rolled Steel did not produce electricity. Maanshan concludes that in Hot-Rolled Steel the Department's concern was solely with a failure to account for the capital costs for the production of electricity and not a concern for the capital costs of the plant that produces the gases. With respect to the current investigation, Maanshan claims that the gases are not energy inputs but material inputs and that electricity is the only energy input; thus, its electricity should be valued on a surrogate basis the same way that electricity used in other manufacturing processes is valued. Department's Position: We agree with the petitioners that we should continue to apply surrogate values to oxygen, nitrogen, and argon based on the quantities reported by Maanshan. With respect to Maanshan's assertion that the capital costs associated with generating the gases will be captured in the surrogate company's overhead figures, we cannot make this assumption. As explained below in response to Comment 4, we are relying on the 2000-2001 financial statements of SAIL and TATA; nowhere in the financial statements of either company is there any indication that they produce any of the three gases. By applying surrogate values to these gases, however, we are capturing the capital costs associated with the production of these gases. Market prices capture not only the value of the product itself, but also the value of the inputs used to produce the product. We avoid double-counting such inputs because electricity and capital costs are higher at Maanshan due to the added costs of producing its own gases. Further, our application of surrogate values to these gases is consistent with our practice of valuing self-produced argon, nitrogen, and oxygen as finished products rather than valuing factor inputs going into the production of these inputs. See Hot-Rolled Steel and accompanying Decision Memorandum at Comment 2. Despite Maanshan's interpretation of the circumstances in Hot-Rolled Steel (i.e., its interpretation that the Department was only concerned about capturing the capital costs for the production of electricity and not gases), we believe that the issue in Hot- Rolled Steel with respect to valuing oxygen, nitrogen, and argon is very similar to the issue in this investigation in that, in both cases, the Department is concerned about capturing the capital cost of the production of the three gases. The only difference is that in this investigation capturing the capital cost of electricity is not an issue. However, we agree with Maanshan, in part, because we believe a better source exists for valuing these gases than the UN Statistics. Section 773(b)(4) of the Act states, "The administering authority, in valuing factors of production under paragraph (1), shall utilize, to the extent possible, the prices or costs of factors of production in one or more market economy countries that are (A) at a level of economic development comparable to that of the nonmarket economy country, and (B) significant producers of comparable merchandise." Futhermore, 19 CFR 351.408(c)(2) says, "the Secretary will normally value all factors in a single surrogate country." Therefore, for this final determination, we have relied on the October 1996 price information from Bhoruka Gases Limited (Bhoruka), an Indian manufacturer of industrial gases, and adjusted the amounts for inflation using the International Monetary Fund's International Financial Statistics for India. Since India is at a level of economic development comparable to that of China and is, in fact, the surrogate country selected for this investigation, we find the prices based on Bhoruka's data to be more appropriate than the prices based on the UN Statistics. C. Labor Calculation Comment 3: The petitioners argue that the Department should recalculate Maanshan's labor expenses based on an eight-hour workday. It claims that Maanshan understated its labor FOP by calculating rates based on the time the employees are actually involved in the production of the subject merchandise. The petitioners argue that this calculation methodology goes against the Department's practice and cites to Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From the People's Republic of China; Final Results of 1996-1997 Antidumping Administrative Review and New Shipper Review and Determination Not to Revoke Order in Part, 63 FR 63842 (November 17, 1998) (TRBs), to support their argument. In TRBs, the petitioners continue, the Department stated, "It is the Department's practice to value labor by determining the number of hours (including downtime) which are needed to produce the subject merchandise in the facilities in the state-controlled economy country." The petitioners stress that Maanshan admits to paying its employees for eight-hour work periods which, reportedly, includes the time the employees were not actually involved in the production of subject merchandise. Therefore, the petitioners argue, the Department should account for all labor time, including downtime, in Maanshan's FOP calculation. In addition, the petitioners argue that Maanshan did not include all employees in the labor data provided. Specifically, the petitioners refer to Exhibit 12 of the verification report and state that Maanshan did not include all of the employees working on certain non-production tasks. The petitioners state that, since the labor costs for certain non-production tasks were not indicated in TATA's financial statements explicitly as overhead costs, they should not be considered a part of Maanshan's overhead costs either. Thus, they claim, those labor costs that would not be included in selling, general, and administrative (SG&A) costs must be considered as a part of labor for the FOP. Maanshan argues that, although employees are physically present at the factory eight hours a day, they work on the subject merchandise for six- and-a-half hours a day. The respondent points out that employees are paid on a monthly basis and the Department values labor in China on an hourly basis. Whether the per-hour wage attributable to China is based on the number of hours actually worked or on the number of hours present at the facility, Maanshan asserts, is a policy issue for the Department. With respect to its reported labor data, Maanshan asserts that there is no basis for the petitioners' allegation and that the Department has verified all of its labor data. Department's Position: We agree with the petitioners that we should recalculate Maanshan's labor expenses based on an eight-hour workday. During verification of Maanshan's reported labor amounts, we were informed that employees were paid for eight hours although they actually worked six- and-a-half hours. Therefore, consistent with our practice in TRBs, we have recalculated Maanshan's labor expenses based on the number of hours (including downtime) which were needed to produce the subject merchandise. That is, we calculated labor expenses based on eight-hour days for these final results. Contrary to the petitioners' assertion that Maanshan did not include all employees in the labor data, we are satisfied based on our detailed verification that all production labor was captured by Maanshan in its response. See Verification Report for Maanshan at 10-11 (March 11, 2002). D. Surrogate-Company Selection for Financial Data Comment 4: Maanshan argues that the Department was incorrect in using the financial data of TATA Steel (TATA) for valuing SG&A, overhead costs, and profit. It argues that the Department should, instead, use the financial data of SAIL to calculate these costs because SAIL produced subject merchandise and is the most appropriate Indian surrogate. Citing Persulfates from the People's Republic of China: Final Results of Antidumping Duty Administrative Review, 64 FR 69494, 69499 (December 13, 1999) (Persulfates), Maanshan argues that it is the Department's practice to use, whenever possible, producers of identical merchandise for surrogate-value data. The petitioners argue that TATA is a viable surrogate which produced structural steel among other products. The petitioners also argue that SAIL's data is flawed because SAIL received substantial government financial assistance for restructuring costs and because SAIL did not report a profit during the POI. Furthermore, the petitioners argue that Maanshan did not place sufficient information on the record to evaluate SAIL's suitability for use as a surrogate. The petitioners conclude by urging the Department to continue to utilize TATA's financials to calculate the expenses in question. Maanshan counters by pointing out that, with respect to SAIL's restructuring costs, neither SAIL's audited financial reports for the fiscal year ending March 31, 2001, nor its internet site refer to any of the government assistance alleged by the petitioners and that no such evidence has been submitted by the petitioners on the record of this case. With respect to SAIL's lack of profitability, Maanshan indicates that SAIL has been profitable for seven out of the past ten years and that many world steel producers have experienced losses in recent years. Maanshan cites the Notice of Final Determination of Sales at Less than Fair Value: Steel Concrete Reinforcing Bars from The People's Republic of China, 66 FR 33522, 33524 (June 22, 2001) (Reinforcing Bars) and Silicomanganese from Brazil; Final Results of Antidumping Investigative Review, 62 FR 37869, 37877 (July 15, 1997), and asserts that it is Department's policy to use an alternative source for profit when the surrogate company has not made a profit during the POI. The respondent contends that the most reasonable approach would be to use an industry average as adopted recently by the Department in the Notice of Preliminary Determination of Sales at Less Than Fair Value: Certain Circular Welded Carbon Quality Steel Pipe From the People's Republic of China, 66 FR 67500 (December 31, 2001). Department's Position: We believe that both TATA and SAIL are appropriate surrogate companies for valuing SG&A costs, overhead costs, and profit since both produce products representative of the subject merchandise sold by Maanshan to the United States. Also, both companies are large integrated steel producers which focus mainly on the production of steel products. Although we stated in Persulfates that it is our practice to use, whenever possible, producers of identical merchandise for surrogate- value data, it is also our practice to base ratios on more than a single producer in the surrogate country where appropriate, as we indicated in Brake Rotors From the People's Republic of China: Final Results of Third New Shipper Review and Final Results and Partial Rescission of Second Antidumping Duty Administrative Review, 64 FR 73007 (December 29, 1999). Moreover, we could not use SAIL alone as the SAIL data do not provide an appropriate profit rate. In any case, the goal is to use the best available information and calculate the most accurate dumping margin. Therefore, we have used the financial data of both Indian steel producers for these final results. We have calculated a simple average of the financial ratios based on SAIL's and TATA's data. We based the profit ratio on TATA's data only since SAIL did not have a profit for the fiscal year 2001. We have done this in accordance with our practice in Reinforcing Bars, and accompanying Decision Memorandum at Comment 8. Although in some previous cases we have averaged in a loss as zero profit, we believe that a better approach has been established in Reinforcing Bars where we calculated profit based on the financial statements of one surrogate company because the other surrogate company being used had experienced a loss. We believe that the principle applied in that case is reasonably applied in this investigation. With respect to the petitioners' comment that Maanshan did not provide sufficient financial data for SAIL for the Department to perform a proper analysis, we have obtained sufficiently detailed publicly available information and placed it on the record for this investigation. Although we rejected Maanshan's submission of SAIL's 2001 financial statements previously, we always retain the discretion to use such information in determining surrogate values. Our review of SAIL's 2001 financial statements indicates no mention of government restructuring assistance or anything indicating that SAIL's financial ratios are skewed. As discussed above, we accounted for SAIL's lack of profitability by excluding its data from the calculation of the profit ratios in order to avoid distortion of the ratio. In any case, we believe that SAIL's experience is representative of the experience of producers in India in all respects. Furthermore, we have used SAIL's financial data in other recent investigations even though it was not profitable. See Reinforcing Bars. See also Notice of Preliminary Determination of Sales at Less Than Fair Value: Certain Cold-Rolled Carbon Steel Flat Products from the People's Republic of China, 66 FR 76500 (December 31, 2001). E. Financial-Ratio Calculations Comment 5: The petitioners argue that the Department should not have excluded commissions, discounts, or rebates and should continue to include rents, royalties, and taxes in the calculations of the financial ratios the Department used in the calculation of SG&A, overhead, and profit for Maanshan. Citing Freshwater Crawfish Tail Meat from the Peoples Republic of China; Final Results of New Shipper Review, 64 FR 27961 (May 24, 1999), and Tapered Roller Bearings and Parts Thereof, Finished and Unfinished from the Peoples Republic of China; Final Results of 1997-1998 Antidumping Duty Administrative Review and Final Results of New Shipper Review, 64 FR 61837 (November 15, 1999), the petitioners argue that it is the Department's practice to include unexceptional items found in a surrogate company's financial statements in any financial-ratio calculations and to consider the actual experience of the non-market producer irrelevant to this process. According to the petitioners, the Department has held that the purpose of a surrogate-country analysis is to value the costs of a surrogate producer in the surrogate country. Department's Position: We agree with the petitioners that it is appropriate to include commissions and other selling expenses in the financial-ratio calculations since they are standard selling costs and are properly categorized under SG&A. Therefore, we have added commissions to total SG&A where necessary. We also agree with the petitioners that rent, royalties, and taxes should continue to be included in SG&A because we are measuring the actual experience of the surrogate company. We have made the appropriate changes to our calculations. F. By-Product Yields Comment 6: The petitioners argue that Maanshan has reported erroneous yields of by-products in several calculations; therefore, the Department should not make by-product deductions for the H-beam rolling stage nor should it deduct a certain by-product for the steelmaking stage. The petitioners provide several calculations to illustrate how Maanshan has erred and concludes that these inaccuracies cast doubt on Maanshan's reported FOP data. Maanshan responds by stating that steel slabs and steel beams are not weighed on a scale; they are assigned theoretical weights based on the known weight of a given quality of steel for a given volume. Therefore, it contends, it is reasonable for steel slab and scale to have a weight that is even less exact. Furthermore, Maanshan continues, the example of the calculation for the steel smelting stage which the petitioners provided is inaccurate. Maanshan claims that, if the petitioners use the correct amount for iron and add it to the other raw material inputs, it is clear that sufficient inputs are going into the steel smelting stage to produce the amount of slab output it reported. Maanshan also states that it suspects that the petitioners have assumed, incorrectly, that the output of an intermediate product from one stage of the production process will coincide with the input of that same product in the next stage. Maanshan explains that, at the beginning of the POI, previously produced iron will already be at the steel smelting and casting process. Later during the POI, Maanshan explains, iron produced during the POI will not yet have reached this process. The respondent concludes that this and seasonal variations in production at the beginning or end of the POI can also cause input and output amounts for an intermediate product to differ. Department's Position: We disagree with the petitioners' allegations. During verification we examined the consumption and production amounts of the direct materials at each production stage and are satisfied that these items have been reported by Maanshan accurately. See Verification Report for Maanshan at 7-9. Therefore, we have not made the changes suggested by the petitioners. G. Surrogate-Values Selection Comment 7 - Slag: The petitioners argue that the surrogate value used by the Department to value slag is aberrational and should be rejected for several reasons. They contend that the values for slag are significantly higher than the price of the subject merchandise and that the surrogate values are substantially higher than values for the same merchandise in other markets. Third, they assert that, in terms of total quantity imported, the Monthly Trade Statistics of Foreign Trade of India (MSFTI) statistics are minuscule and could not be representative of a market price. According to the petitioners, the MSFTI quantity can hardly be considered a commercial quantity on which the Department can rely. The petitioners argue that the Department should revise its methodology and use values as reported by the United States Geological Survey in its 1998 publication Commodity Prices. The petitioners point out that the Department used these values in Cold-Rolled and Reinforcing Bars and they were proposed by Maanshan in its October 9, 2001, factor-valuation submission. The respondent considers it possible that the MSFTI data for slag may be over-stated but it also argues that any difference stemming from the HTS classification is de minimis for the purposes of this investigation because the amounts are negligible. Department's Position: We have reconsidered this matter since the Preliminary Determination. According to the "Tradstat" data service information provided by the petitioners, for the time period spanning from October 2000 to March 2001, the total quantity of iron slag imported into India was 7,525 short tons. When comparing this with the total quantity imported into the United States for the last quarter of 2000 and the first quarter of 2001, which was 645,374 metric tons, we concluded that the quantity imported into India was very small. Because the MSFTI value is based on these small quantities, we believe that it is aberrational. For this final determination, we believe it is more appropriate to apply the most recent data available for iron slag contained in the United States Geological Survey 2000 Minerals Yearbook, which is the United States Geological Survey's latest publication. Comment 8 - Iron Dust and Iron Scale: The petitioners argue that for the Preliminary Determination, the Department used surrogate values for certain by-products (iron dust and iron scale) that exceeded the value of the corresponding input product, iron ore. The petitioners state that it is highly unlikely that the by-product residue of iron-making would be valued at a price higher than that of the input. The petitioners propose that the Department use the value it used to value iron ore. The respondent rebuts that iron ore is a roughly mined material with a large percentage of dirt and other impurities. According to Maanshan, iron dust and scale, although not pure, contain a much higher percentage of iron and much lower percentage of dirt and other extraneous materials than the original ore and that it is not surprising that the by-product is more valuable than the input. Department's Position: Because impurities may reduce the value of the iron ore in relation to the value of iron dust and scale, we have not altered the surrogate values in question for this final determination. Comment 9 - Steel Strap: The petitioners argue that the Department used the wrong MSFTI tariff number to value the bundling agent used for packing. According to the petitioners, this led the Department to use import data for steel sheet instead of steel strap. The petitioners argue further that, unless information on the record exists that Maanshan purchased steel sheet and sheared it to appropriate widths, requiring the Department to calculate the manufacturing cost necessary to cut the merchandise to appropriate widths, the Department should use import data of steel strap. The respondent agrees that the MSFTI data for the bundling agent is incorrect and that it covers steel sheet, and not steel strap. The respondent comments that there is an alternative product code under the MSFTI which refers to steel strap and that it is preferable to the "Tradstat" data service product code the petitioners propose. Maanshan observes that MSFTI data has been used for surrogate values throughout the case. Department's Position: We have reexamined the tariff number we used for the Preliminary Determination and concluded that it is erroneous. For this final determination, we have used the harmonized tariff number for strap. For the sake of consistency, we used the value of steel strap as given in the MSFTI. Comment 10 - Iron Ore: The petitioners argue that the Department should value home-market purchases of iron ore utilizing Indian import statistics instead of valuing this input based on home-market purchases of iron ore by Maanshan of all market-economy suppliers. The petitioners assert that the Department had stated incorrectly that "no surrogate value data was provided for these materials." The petitioners state that two separate sets of such data are available to the Department: the surrogate-value data the petitioners provided for iron ore in their October 9, 2001, factor-values submission and the data the Department placed on the record regarding Indian imports of iron ore pellets. Maanshan argues that, according to the Department's policy and the WTO Antidumping Agreement, surrogate data is used only when market-based data is unavailable. Maanshan believes that the Department's approach in the Preliminary Determination was perfectly reasonable in valuing the domestic iron ore purchases at the same price as its market-economy purchases. Department's Position: Our practice is to use market-economy import prices to value both domestic (non-market-economy) and imported (market- economy) inputs when the market-economy imports are of a meaningful quantity and identical to the domestic inputs. The import price is a more reliable and more accurate basis for establishing the normal value of the domestic iron ore. See Helical Spring Lock Washers from the PRC, 62 FR 61794-801 (November 19, 1997), Lasko Metal Prods., Inc. V. United States, 43 F.3d 1442,1445 (Fed. Cir. 1994), and Shakeproof Assembly Components Division of Illinois Tool Works, Inc. V. United States, 268 F.3d 1376 (CIT 2001). According to information on the record, Maanshan purchased a meaningful quantity of the total iron ore used during the POI from market-economy producers. Specifically, the iron ore purchased from both market- and non- market-economy producers was almost identical. Thus, by using the market- economy purchase price for all quantities of iron ore used during the POI, we are using the most reliable and accurate data to establish normal value. Comment 11- Brokerage and Handling Expenses: Maanshan comments that the Department used a surrogate value for brokerage and handling expenses which pertained to sales of stainless steel products. Maanshan claims that stainless steel products are considered high-value steel products which require special handling and, therefore, the brokerage and handling expenses are high. Maanshan asserts that H-beams, on the contrary, are bulk products which do not require special handling. Therefore, Maanhsan claims, the Department should use the brokerage and handling expense value pertaining to hot-rolled carbon steel flat products which the Department used in Hot-Rolled Steel. The petitioners argue that the Department should continue to use the brokerage and handling value from Certain Stainless Steel Wire Rod from India; Final Results of Antidumping Duty Administrative and New Shipper Reviews, 64 FR 856 (January 6, 1999) (Wire Rod). Since the Department has relied on Wire Rod in many previous proceedings where India was used, the petitioners contend, there is no reason for the Department to change its well-established practice for this investigation. Furthermore, the petitioners claim, that the respondent has not provided any evidence to support its claim that Maanshan's products are dissimilar from stainless steel wire rod. Department's Position: Although it is our practice to consider product specificity in selecting surrogate values (see Sebacic Acid from the People's Republic of China: Final Results of Antidumping Duty Review, 62 FR 10530, 10530 (March 7, 1997)), we can not make such a determination in this investigation since Maanshan has not provided any details on the special handling that is required for stainless steel products. Therefore, we have not made any changes to the valuation of brokerage and handling for this final determination. H. Iron Ore Calculation Comment 12: The petitioners argue that, in its FOP questionnaire response, Maanshan reported its iron ore quantities based on the "wet weight" of the ore. As a result of using the wet weight, petitioners claim, Maanshan reported quantities of iron ore incorrectly. Maanshan disagrees, stating that the Department has verified the data concerning the weight of the ore used and the economic effect. Maanshan explains that the weights reported are indeed wet weights since the ore is transported and stored in the open and gets wet from rain. During the sintering stage of production, Maanshan continues, water is added to the ore. Thus, because it is purchased and consumed in a wet form, Maanshan asserts that there is no reason to convert the ore to a different (dry) form for accounting purposes. Department's Position: We have determined that, because the iron ore is purchased, transported, stored, and consumed in a wet state, the wet weight is appropriate for use in the calculations of the margin. Recommendation Based on our analysis of the comments received, we recommend adopting all of the above positions and adjusting all related margin calculations accordingly. If these recommendations are accepted, we will publish the final determination and the final weighted-average dumping margins for Maanshan in the Federal Register. Agree ________ Disagree ________ ______________________ Faryar Shirzad Assistant Secretary for Import Administration ______________________ (Date)