[Federal Register Volume 62, Number 174 (Tuesday, September 9, 1997)]
[Notices]
[Pages 47429-47436]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-23848]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-122-822, A-122-823]


Certain Corrosion-Resistant Carbon Steel Flat Products and 
Certain Cut-to-Length Carbon Steel Plate From Canada: Preliminary 
Results of Antidumping Duty Administrative Reviews

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

ACTION: Notice of preliminary results of antidumping duty 
administrative reviews.

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SUMMARY: In response to requests from interested parties, the 
Department of Commerce (the Department) is conducting administrative 
reviews of the antidumping duty orders on certain corrosion-resistant 
carbon steel flat products and certain cut-to-length carbon steel plate 
from Canada. These reviews cover five manufacturers/exporters of the 
subject merchandise to the United States and the period August 1, 1995 
through July 31, 1996.
    We have preliminarily determined that sales have been made below 
normal value (``NV'') by various companies subject to these reviews. If 
these preliminary results are adopted in our final results of these 
administrative reviews, we will instruct U.S. Customs to assess 
antidumping duties based on the difference between the export price 
(``EP'') and the NV.

EFFECTIVE DATE: September 9, 1997.

FOR FURTHER INFORMATION CONTACT: Lyn Baranowski (Dofasco Inc. and 
Sorevco Inc. (``Dofasco'')), Carrie Blozy (Continuous Colour Coat 
(``CCC'')), Greg Weber (Algoma, Inc. (``Algoma'')) and Gerdau MRM Steel 
(``MRM'')), N. Gerard Zapiain (Stelco, Inc. (``Stelco'')), or Rick 
Johnson, Import Administration, International Trade Administration, 
U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230; telephone: (202) 482-3793.

SUPPLEMENTARY INFORMATION:

The Applicable Statute

    Unless otherwise indicated, all citations to the Tariff Act of 
1930, as amended (the Act), are to the provisions effective January 1, 
1995, the effective date of the amendments made to the Act by the 
Uruguay Round Agreements Act (URAA). In addition, unless otherwise 
indicated, all citations to the Department's regulations are to 19 CFR 
Part 353, as they existed on April 1, 1996.

Background

    On August 19, 1993, the Department published in the Federal 
Register (58 FR 44162) the antidumping duty orders on certain 
corrosion-resistant carbon steel flat products and certain cut-to-
length carbon steel plate from Canada. On August 16, 1996, Algoma (cut-
to-length steel plate) requested a review of its exports of subject 
merchandise. On August 21, 1996, MRM (cut-to-length steel plate) 
requested a review of its exports of subject merchandise. On August 30, 
1996, the following companies also requested reviews for their exports 
of subject merchandise: CCC (corrosion-resistant steel), Dofasco 
(corrosion-resistant steel), and Stelco (corrosion-resistant steel and 
cut-to-length steel plate). On August 30, 1996, Bethlehem Steel 
Corporation, U.S. Steel Group (a Unit of USX Corporation), Inland Steel 
Industries Inc., Gulf States Steel Inc. of Alabama, Sharon Steel 
Corporation, Geneva Steel, and Lukens Steel Company, petitioners, 
requested reviews of Algoma, CCC, Dofasco, MRM, and Stelco on both 
classes or kinds of merchandise. On September 17, 1996, in accordance 
with 19 CFR 353.22(c), we published a notice of initiation of 
administrative reviews of these orders for the period August 1, 1995, 
through July 31, 1996 (61 FR 51892).
    On October 10, 1996, petitioners requested that the Department 
determine whether antidumping duties had been absorbed by Algoma, CCC, 
Dofasco, MRM, Sorevco, and Stelco during the POR, pursuant to section 
751(a)(4) of the Act. Section 751(a)(4) provides that the Department, 
if requested, will determine during an administrative review initiated 
two years or four years after publication of the order whether 
antidumping duties have been absorbed by a foreign producer or exporter 
subject to the order if the subject merchandise is sold in the United 
States through an importer who is affiliated with such foreign producer 
or exporter. Section 751(a)(4) was added to the Act by the URAA. The 
Department's interim regulations do not address this provision of the 
Act.
    For transition orders as defined in section 751(c)(6)(C) of the 
Act, i.e., orders in effect as of January 1, 1995, Sec. 351.213(j)(2) 
of the Department's May 19, 1997 regulations provides that the 
Department will make a duty absorption determination, if requested, for 
any administrative review initiated in 1996 or 1998. See Antidumping 
Duties; Countervailing Duties: Final Rule, 62 FR 27296, 27394 (``new 
regulations'').

[[Page 47430]]

Although these new regulations do not govern these administrative 
reviews, they do constitute a public statement of how the Department 
will proceed in construing section 751(a)(4) of the Act. This approach 
assures that interested parties will have the opportunity to request a 
duty absorption determination on entries for which the second and 
fourth years following an order have already passed, prior to the time 
for sunset review of the order under section 751(c). Because the orders 
on corrosion-resistant carbon steel flat products and cut-to-length 
carbon steel plate from Canada have been in effect since 1993, these 
are transition orders in accordance with section 751(c)(6)(C) of the 
Act; therefore, based on the policy stated above, the Department will 
consider a request for an absorption determination during a review 
initiated in 1996. This being a review initiated in 1996 and a request 
having been made, we are making a duty-absorption determination as part 
of these administrative reviews.
    The statute provides for a determination on duty absorption if the 
subject merchandise is sold in the United States through an affiliated 
importer. For all respondents, these companies are themselves the 
importers of record for either some (Algoma, Stelco, and Dofasco) or 
all (CCC and MRM) of their respective sales to the U.S. (i.e., the 
exporter and the importer are the same entity). In addition, some of 
Dofasco's U.S. sales are made through a U.S. affiliate. Therefore, the 
importer and the exporter are ``affiliated'' within the meaning of 
751(a)(4) for all Dofasco, MRM and CCC transactions, and for some 
Algoma and Stelco transactions.
    With respect to CCC, we have preliminarily determined that there is 
a dumping margin on 7.39 percent of its U.S. sales during the POR. For 
Dofasco, we have preliminarily determined that there is a dumping 
margin on 28.91 percent of its U.S. sales. For Algoma, MRM, and Stelco, 
we have preliminarily determined that there are zero or de minimis 
dumping margins on these companies' U.S. sales during the POR.
    In addition, for CCC and Dofasco, we cannot conclude from the 
record that the unaffiliated purchaser in the United States will pay 
the ultimately assessed duty. Under these circumstances, therefore, we 
preliminarily find that antidumping duties have been absorbed by 
Dofasco on 28.91 percent of its U.S. sales and by CCC on 7.39 percent 
of its U.S. sales. For Algoma, MRM, and Stelco, because there are no 
dumping margins, we preliminarily find that antidumping duties have not 
been absorbed by Algoma, MRM, and Stelco on their U.S. sales.
    Under section 751(a)(3)(A) of the Act, the Department may extend 
the deadline for completion of administrative reviews if it determines 
that it is not practicable to complete the review within the statutory 
time limit of 365 days. On March 13, 1997, the Department published a 
notice of extension of the time limit for the preliminary results in 
this case to September 2, 1997. See Extension of Time Limit for 
Antidumping Duty Administrative Reviews, 62 FR 11813.
    The Department is conducting these reviews in accordance with 
section 751(a) of the Act.

Scope of Reviews

    The products covered by these administrative reviews constitute two 
separate ``classes or kinds'' of merchandise: (1) Certain corrosion-
resistant steel and (2) certain cut-to-length plate.
    The first class or kind, certain corrosion-resistant steel, 
includes flat-rolled carbon steel products of rectangular shape, either 
clad, plated, or coated with corrosion-resistant metals such as zinc, 
aluminum, or zinc-, aluminum-, nickel-or iron-based alloys, whether or 
not corrugated or painted, varnished or coated with plastics or other 
nonmetallic substances in addition to the metallic coating, in coils 
(whether or not in successively superimposed layers) and of a width of 
0.5 inch or greater, or in straight lengths which, if of a thickness 
less than 4.75 millimeters, are of a width of 0.5 inch or greater and 
which measures at least 10 times the thickness or if of a thickness of 
4.75 millimeters or more are of a width which exceeds 150 millimeters 
and measures at least twice the thickness, as currently classifiable in 
the Harmonized Tariff Schedule (HTS) under item numbers 7210.31.0000, 
7210.39.0000, 7210.41.0000, 7210.49.0030, 7210.49.0090, 7210.60.0000, 
7210.70.6030, 7210.70.6060, 7210.70.6090, 7210.90.1000, 7210.90.6000, 
7210.90.9000, 7212.21.0000, 7212.29.0000, 7212.30.1030, 7212.30.1090, 
7212.30.3000, 7212.30.5000, 7212.40.1000, 7212.40.5000, 7212.50.0000, 
7212.60.0000, 7215.90.1000, 7215.90.5000, 7217.12.1000, 7217.13.1000, 
7217.19.1000, 7217.19.5000, 7217.22.5000, 7217.23.5000, 7217.29.1000, 
7217.29.5000, 7217.32.5000, 7217.33.5000, 7217.39.1000, and 
7217.39.5000. Included are flat-rolled products of 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. 
Excluded are flat-rolled steel products either plated or coated with 
tin, lead, chromium, chromium oxides, both tin and lead (``terne 
plate''), or both chromium and chromium oxides (``tin-free steel''), 
whether or not painted, varnished or coated with plastics or other 
nonmetallic substances in addition to the metallic coating. Also 
excluded are clad products in straight lengths of 0.1875 inch or more 
in composite thickness and of a width which exceeds 150 millimeters and 
measures at least twice the thickness. Also excluded are certain clad 
stainless flat-rolled products, which are three-layered corrosion-
resistant carbon steel flat-rolled products less than 4.75 millimeters 
in composite thickness that consist of a carbon steel flat-rolled 
product clad on both sides with stainless steel in a 20%-60%-20% ratio. 
These HTS item numbers are provided for convenience and Customs 
purposes. The written description remains dispositive. 33
    The second class or kind, certain cut-to-length plate, includes 
hot-rolled carbon steel universal mill plates (i.e., flat-rolled 
products rolled on four faces or in a closed box pass, of a width 
exceeding 150 millimeters but not exceeding 1,250 millimeters and of a 
thickness of not less than 4 millimeters, not in coils and without 
patterns in relief), of rectangular shape, neither clad, plated nor 
coated with metal, whether or not painted, varnished, or coated with 
plastics or other nonmetallic substances; and certain hot-rolled carbon 
steel flat-rolled products in straight lengths, of rectangular shape, 
hot rolled, neither clad, plated, nor coated with metal, whether or not 
painted, varnished, or coated with plastics or other nonmetallic 
substances, 4.75 millimeters or more in thickness and of a width which 
exceeds 150 millimeters and measures at least twice the thickness, as 
currently classifiable in the HTS under item numbers 7208.31.0000, 
7208.32.0000, 7208.33.1000, 7208.33.5000, 7208.41.0000, 7208.42.0000, 
7208.43.0000, 7208.90.0000, 7210.70.3000, 7210.90.9000, 7211.11.0000, 
7211.12.0000, 7211.21.0000, 7211.22.0045, 7211.90.0000, 7212.40.1000, 
7212.40.5000, and 7212.50.0000. Included are flat-rolled products of 
non-rectangular cross-section where such cross-section is achieved 
subsequent to the rolling process (i.e., products which

[[Page 47431]]

have been worked after rolling)--for example, products which have been 
beveled or rounded at the edges. Excluded is grade X-70 plate. These 
HTS item numbers are provided for convenience and Customs purposes. The 
written description remains dispositive.

Verification

    As provided in section 782(i) of the Act, we verified information 
provided by Algoma (cost), Dofasco (cost), Stelco (cost), and MRM 
(sales and cost), using standard verification procedures, including on-
site inspection of the manufacturer's facilities, the examination of 
relevant sales and financial records, and selection of original 
documentation containing relevant information. Our verification results 
are outlined in the public versions of the verification reports.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced by the respondent, covered by the description in the 
Scope of the Review section, above, and sold in the home market during 
the POR, to be foreign like products for purposes of determining 
appropriate product comparisons to U.S. sales. Where there were no 
sales of identical merchandise in the home market to compare to U.S. 
sales, we compared U.S. sales to the most similar foreign like product 
on the basis of the characteristics listed in Appendix III of the 
Department's September 19, 1996, antidumping questionnaire. In making 
the product comparisons, we matched foreign like products based on the 
physical characteristics reported by the respondent.

Fair Value Comparisons

    To determine whether sales of subject merchandise to the United 
States were made at less than fair value, we compared the EP to the NV, 
as described in the ``Export Price'' and ``Normal Value'' sections of 
this notice. In accordance with section 777A(d)(2), we calculated 
monthly weighted-average prices for NV and compared these to individual 
U.S. transactions.

Export Price

    For calculation of the price to the United States, we used EP, in 
accordance with subsections 772(a) and (c) of the Act because the 
subject merchandise was sold directly or indirectly to the first 
unaffiliated purchaser in the United States prior to importation and 
CEP was not otherwise warranted based on the facts of record.
    We will also examine for the final results whether certain sales 
claimed by respondents to be indirect EP should in fact be considered 
CEP. We will reexamine the issues surrounding the affiliate's selling 
activities in the United States in determining whether a particular 
sale should be considered indirect EP or CEP.

Algoma

    The Department calculated EP for Algoma based on packed, prepaid or 
delivered prices to customers in the United States. We made adjustments 
to the starting price for movement expenses (foreign and U.S. movement, 
brokerage and handling, and U.S. Customs duties), in accordance with 
section 772(c)(2) of the Act.
    We used Algoma's date of invoice as the date of sale for both U.S. 
sales and home market sales in accordance with the Department's 
standard practice. See, e.g., Porcelain-on-Steel Cookware from Mexico; 
Preliminary Results of Antidumping Duty Administrative Review, 62 FR 
4723, 4725 (January 31, 1997). For a discussion of the Department's 
position with respect to the normal use of invoice date as date of 
sale, see Antidumping Duties; Countervailing Duties; Proposed Rule 
(``Proposed Regulations''), 61 FR 7308, 7381 (February 27, 1996).

CCC

    The Department calculated EP for CCC based on packed, prepaid or 
delivered prices to customers in the United States.
    We made deductions to the starting price for movement expenses 
(foreign and U.S. movement, brokerage and handling, and U.S. Customs 
duties) in accordance with section 772(c)(2), and for discounts and 
rebates.
    We used CCC's date of invoice as the date of sale for U.S. sales in 
accordance with the Department's standard practice.

Dofasco

    For purposes of these reviews, we treated Dofasco, Inc. and 
Sorevco, Inc. as one respondent, as we have done in prior segments of 
the proceeding. See, e.g., Certain Corrosion-Resistant Carbon Steel 
Flat Products from Canada: Final Determination of Sales at Less than 
Fair Value, 58 FR 37099 (1993), and Preliminary Results of Antidumping 
Duty Administrative Review, 60 FR 42511 (1995)). The Department 
calculated EP for Dofasco based on packed prices to customers in the 
United States.
    We made deductions to the starting price for discounts, a rebate, 
and, in accordance with section 772(c)(2), movement expenses (foreign 
and U.S. movement, U.S. Customs duty and brokerage, and post-sale 
warehousing). As in the prior review, U.S. further processing expenses 
for certain sales have not been treated as part of the export price.
    It is the Department's current practice normally to use the invoice 
date as the date of sale; we may, however, use a date other than the 
invoice date if we are satisfied that a different date better reflects 
the date on which the exporter or producer establishes the material 
terms of sale. See 19 CFR 351.401(i) (62 FR at 27411).
    The questionnaire we sent to the respondents on September 19, 1996 
instructed them to report the date of invoice as the date of sale; it 
also stated, however, that ``(t)he date of sale cannot occur after the 
date of shipment.'' In this review, Dofasco's date of shipment in many 
instances preceded the date of invoice, and therefore we cannot use the 
date of invoice as the new regulations prescribe. Accordingly, as 
allowed by the exception set forth in Sec. 351.401(i) of the new 
regulations, we used the dates of sale described below. These sale 
dates reflect the dates on which the exporter or producer established 
the material terms of sale.
    We used the date of order acknowledgment as date of sale, as 
reported by Dofasco, Inc., for all Dofasco, Inc. sales in both the U.S. 
and the home market (except sales made pursuant to long-term 
contracts). For Dofasco, Inc.'s sales made pursuant to long-term 
contracts, we used date of the contract as date of sale.
    We used the date of order confirmation as the date of sale, as 
reported by Sorevco, Inc., for all Sorevco, Inc. sales in the U.S. and 
the home market, except that when Sorevco shipped more merchandise than 
the customer originally ordered, and such overages were in excess of 
accepted industry tolerances, we used date of shipment as date of sale 
for the excess merchandise.

MRM

    The Department calculated EP for MRM based on packed, prepaid or 
delivered prices to customers in the United States. We made deductions 
to the starting price for movement expenses (foreign and U.S. movement, 
brokerage and handling, and U.S. Customs duties) pursuant to section 
772(c)(2) of the Act.
    We used MRM's date of invoice as the date of sale for its U.S. 
sales in accordance with the Department's standard practice.

[[Page 47432]]

Stelco

    Corrosion-resistant products: We calculated EP based on the packed 
price to unaffiliated purchasers in, or for exportation to, the United 
States. We made deductions to the starting price for movement expenses 
including foreign and U.S. freight, brokerage and handling, U.S. 
Customs duties, and post-sale warehousing, in accordance with section 
772(c)(2) of the Act.
    We used Stelco's date of invoice as the date of sale for EP 
corrosion-resistant sales in accordance with the Department's standard 
practice.
    Plate: We calculated EP based on the packed price to unaffiliated 
purchasers in, or for exportation, to the United States. We made 
deductions for movement expenses including foreign and U.S. movement, 
brokerage and handling, U.S. Customs duty and warehousing, in 
accordance with section 772(c)(2) of the Act. We made no other 
adjustments for EP.
    We used the date of invoice as the date of sale for plate sales in 
accordance with the Department's standard practice.

Normal Value

    The Department determines the viability of the home market as the 
comparison market by comparing the aggregate quantity of home market 
and U.S. sales. We found that each company's quantity of sales in its 
home market exceeded five percent of its sales to the U.S. Moreover, 
there is no evidence on the record supporting a particular market 
situation in the exporting country that would not permit a proper 
comparison of home market and U.S. prices. We, therefore, have 
determined that each company's home market sales are viable for 
purposes of comparison with sales of the subject merchandise to the 
United States, pursuant to section 773(a)(1)(C) of the Act. Therefore, 
in accordance with section 773(a)(1)(B)(i) of the Act, we based NV on 
the price at which the foreign like product was first sold for 
consumption in the home market, in the usual commercial quantities and 
in the ordinary course of trade, at the same level of trade as the 
export price.
    We used sales to affiliated customers only where we determined such 
sales were made at arm's-length prices, i.e., at prices comparable to 
prices at which the firm sold identical merchandise to unaffiliated 
customers.
    Considering first all respondents except MRM, for both classes or 
kinds of merchandise under review, the Department disregarded sales 
below the cost of production (``COP'') in the last completed review 
(see Certain Corrosion-Resistant Carbon Steel Flat Products and Certain 
Cut-to-Length Carbon Steel Plate from Canada: Final Results of 
Antidumping Duty Administrative Reviews 62, FR 18448 (April 15, 1997)). 
We therefore had reasonable grounds to believe or suspect, pursuant to 
section 773(b)(2)(A)(ii) of the Act, that sales of the foreign like 
product under consideration for the determination of NV in this review 
may have been made at prices below the COP. With respect to MRM, we 
note that Manitoba Rolling Mills participated in the first 
administrative review of plate from Canada (See Certain Corrosion-
Resistant Carbon Steel Flat Products and Certain Cut-to-Length Carbon 
Steel Plate from Canada: Final Results of Antidumping Duty 
Administrative Reviews (61 FR 13815 (March 28, 1996)). However, on June 
1, 1995, Manitoba Rolling Mills was acquired by Metalurgica Gerdau 
S.A., with the new corporate entity named Gerdau MRM Steel, Inc. Based 
on information on the record, there is no indication that Gerdau MRM 
Steel, Inc. operates in a manner substantively different from that of 
its predecessor, with respect to either management, production, 
suppliers, or customer base. Therefore, the Department finds that, with 
respect to initiation of a cost investigation, the disregarding of MRM 
sales in the first administrative review provides sufficient grounds to 
believe or suspect that sales by Gerdau MRM Steel, Inc. of the foreign 
like product under consideration for the determination of NV in this 
review may have been made at prices below the COP. Therefore, pursuant 
to section 773(b)(1) of the Act, we initiated COP investigations of 
sales by all respondents in the home market.
    We compared sales of the foreign like product in the home market 
with the model-specific cost of production figure for the POR 
(``COP''). In accordance with section 773(b)(3) of the Act, we 
calculated the COP based on the sum of the costs of materials and 
fabrication employed in producing the foreign like product plus 
selling, general and administrative (SG&A) expenses and all costs and 
expenses incidental to placing the foreign like product in condition 
packed and ready for shipment. In our COP analysis, we used home market 
sales and COP information provided by each respondent in its 
questionnaire responses.
    After calculating COP, we tested whether home market sales of 
subject merchandise were made at prices below COP and, if so, whether 
the below-cost sales were made within an extended period of time in 
substantial quantities and at prices that did not permit recovery of 
all costs within a reasonable period of time. Because each individual 
price was compared against the POR-long average COP, any sales that 
were below cost were also not at prices which permitted cost recovery 
within a reasonable period of time. We compared model-specific COPs to 
the reported home market prices less any applicable movement charges, 
discounts, and rebates.
    Pursuant to section 773(b)(2)(C) of the Act, where less than 20 
percent of a respondent's sales of a given product were at prices less 
than COP, we did not disregard any below-cost sales of that product 
because the below-cost sales were not made in substantial quantities 
within an extended period of time. Where 20 percent or more of a 
respondent's sales of a given product during the POR were at prices 
less than the weighted-average COPs for the POR, we disregarded the 
below-cost sales because they were made within an extended period of 
time in substantial quantities in accordance with sections 773(b)(2) 
(B) and (C) of the Act, and were at prices which would not permit 
recovery of all costs within a reasonable period of time in accordance 
with section 773(b)(2)(D) of the Act. Based on this test, we 
disregarded below-cost sales with respect to all companies and classes 
or kinds of merchandise.
    In accordance with section 773(a)(1)(B)(i) of the Act, we based NV 
on sales at the same level of trade (``LOT'') as the EP. If NV was 
calculated at a different level of trade, we made an additional 
adjustment, if appropriate and if possible, in accordance with section 
773(a)(7) of the Act. (See Level of Trade section below.)
    In accordance with section 773(a)(4) of the Act, we used CV as the 
basis for NV when there were no usable sales of the foreign like 
product in the comparison market. We calculated CV in accordance with 
section 773(e) of the Act. We included the cost of materials and 
fabrication, SG&A expenses, and profit. In accordance with section 
773(e)(2)(A) of the Act, we based SG&A expenses and profit on the 
amounts incurred and realized by the respondent in connection with the 
production and sale of the foreign like product in the ordinary course 
of trade for consumption in the foreign country. For selling expenses, 
we used the weighted-average home market selling expenses.
    Where appropriate, we made adjustments to CV in accordance with 
section 773(a)(8) of the Act and 19 CFR 353.56 for circumstance of sale 
(COS) differences. For comparisons to EP, we made COS adjustments by 
deducting

[[Page 47433]]

home market direct selling expenses and adding U.S. direct selling 
expenses. We also made adjustments, where applicable, for home market 
indirect selling expenses to offset U.S. commissions in EP comparisons 
pursuant to 19 CFR section 353.56(b).

Algoma

    For those models for which there was a sufficient quantity of sales 
at prices above COP, we based NV on home market prices to unaffiliated 
purchasers (Algoma made no home market sales to affiliated parties), in 
accordance with 19 CFR 353.45(a). Home market prices were based on the 
packed, ex-factory or delivered prices to unaffiliated purchasers in 
the home market.
    We deducted discounts and rebates. We made adjustments, where 
applicable, for packing and movement expenses in accordance with 
sections 773(a)(6) (A) and (B) of the Act. We also made adjustments for 
differences in cost attributable to differences in physical 
characteristics of the merchandise pursuant to section 773(a)(6)(C)(ii) 
of the Act and for differences in COS in accordance with 
773(a)(6)(C)(iii) of the Act and 19 CFR 353.56. For comparison to EP, 
we made COS adjustments by deducting home market direct selling 
expenses and adding U.S. direct selling expenses. These included direct 
selling expenses (credit and warranty) in the home market and credit 
and warranty expenses in the U.S. market. When comparisons were made to 
EP sales on which commissions were paid, we made adjustments for home 
market indirect selling expenses to offset these U.S. commissions 
pursuant to 19 CFR section 353.56(b).

CCC

    For those models for which there was a sufficient quantity of sales 
at prices above COP, we based NV on home market prices to unaffiliated 
parties, in accordance with 19 CFR 353.45(a). Home market prices were 
based on the packed, ex-factory or delivered prices to affiliated (when 
made at prices determined to be arm's-length) or unaffiliated 
purchasers in the home market. We adjusted for discounts and rebates. 
We made adjustments, where applicable, for packing and movement 
expenses in accordance with sections 773(a)(6) (A) and (B) of the Act. 
We also made adjustments for differences in cost attributable to 
differences in physical characteristics of the merchandise pursuant to 
section 773(a)(6)(C)(ii) of the Act and for COS differences in 
accordance with 773(a)(6)(C)(iii) of the Act and 19 CFR 353.56. For 
comparison to EP, we made COS adjustments by deducting home market 
direct selling expenses (credit) and adding U.S. direct selling 
expenses (credit). When comparisons were made where commissions were 
paid on EP sales, we made adjustments for home market indirect selling 
expenses to offset U.S. commissions pursuant to 19 CFR section 
353.56(b).

Dofasco

    For those models for which there was a sufficient quantity of sales 
at prices above COP, we based NV on home market prices to affiliated 
(when made at prices determined to be arm's-length) or unaffiliated 
parties, in accordance with 19 CFR 353.45(a). Home market prices were 
based on the packed, ex-factory or delivered prices to affiliated or 
unaffiliated purchasers in the home market. We deducted discounts and 
rebates. We made adjustments, where applicable, for packing and 
movement expenses in accordance with sections 773(a)(6) (A) and (B) of 
the Act. We also made adjustments for differences in cost attributable 
to differences in physical characteristics of the merchandise pursuant 
to section 773(a)(6)(C)(ii) of the Act and for COS differences in 
accordance with 773(a)(6)(C)(iii) of the Act and 19 CFR 353.56. For 
comparison to EP, we made COS adjustments by deducting home market 
direct selling expenses (credit, royalties and warranty expenses) and 
adding U.S. direct selling expenses (credit, royalties and warranty 
expenses). When comparisons were made where commissions were paid on EP 
sales, we made adjustments for home market indirect selling expenses to 
offset U.S. commissions pursuant to Sec. 353.56(b).

MRM

    For those models for which there was a sufficient quantity of sales 
at prices above COP, we based NV on home market prices to unaffiliated 
purchasers (MRM made no home market sales to affiliated parties), in 
accordance with 19 CFR 353.45(a). Home market prices were based on the 
packed, ex-factory or delivered prices to unaffiliated purchasers in 
the home market.
    We deducted discounts and rebates. We made adjustments, where 
applicable, for packing and movement expenses in accordance with 
sections 773(a)(6) (A) and (B) of the Act. We also made adjustments for 
differences in circumstances of sale (``COS'') in accordance with 
773(a)(6)(C)(iii) of the Act and 19 CFR 353.56. For comparison to EP, 
we made COS adjustments by deducting home market direct selling 
expenses and adding U.S. direct selling expenses. These included credit 
expenses in the home market and credit expenses in the U.S. market. 
When comparisons were made to EP sales on which commissions were paid, 
we made adjustments for home market indirect selling expenses to offset 
these U.S. commissions pursuant to 19 CFR 353.56(b).

Stelco

    For those models for which there was a sufficient quantity of sales 
at prices above COP, we based NV on home market prices to affiliated or 
unaffiliated parties, in accordance with 19 CFR 353.45(a). Home market 
prices were based on the packed, ex-factory or delivered prices to 
affiliated or unaffiliated purchasers in the home market. We made 
deductions for discounts and rebates. We made adjustments, where 
applicable, for packing and movement expenses, in accordance with 
sections 773(a)(6) (A) and (B) of the Act. We also made adjustments for 
differences in cost attributable to differences in physical 
characteristics of the merchandise pursuant to section 773(a)(6)(C)(ii) 
of the Act and for COS differences in accordance with 773(a)(6)(C)(iii) 
of the Act and 19 CFR 353.56.
    Corrosion resistant steel: We adjusted home market prices for 
interest revenue on certain sales. For comparison to EP, we made COS 
adjustments by deducting home market direct selling expenses (credit, 
warranties, technical services) and adding U.S. direct selling expenses 
(credit and technical services).
    Plate: For comparison to EP, we made COS adjustments by deducting 
home market direct selling expenses (credit, warranties, technical 
services) and adding U.S. direct selling expenses (credit and technical 
services). When comparisons were made to EP sales on which commissions 
were paid, we made adjustments for home market indirect selling 
expenses to offset the U.S. commissions pursuant to 19 CFR 353.56(b).

Level of Trade (``LOT'')

    To the extent practicable, we determine NV for sales at the same 
level of trade as the U.S. sales (either export price (EP) or 
constructed export price (CEP)). When there are no sales at the same 
level of trade, we compare U.S. sales to home market (or, if 
appropriate, third-country) sales at a different level of trade. The NV 
level of trade is that of the starting-price sales in the home market. 
When NV is based on CV, the level of trade is that of the sales from 
which we derive selling, general, and administrative expenses (SG&A) 
and profit.

[[Page 47434]]

    For both EP and CEP, the relevant transaction for the level of 
trade analysis is the sale (or constructed sale) from the exporter to 
the importer.
    To determine whether home market sales are at a different level of 
trade than U.S. sales, we examine whether the home market sales are at 
different stages in the marketing process than the U.S. sales. The 
marketing process in both markets begins with goods being sold by the 
producer and extends to the sale to the final user, regardless of 
whether the final user is an individual consumer or an industrial user. 
The chain of distribution between the producer and the final user may 
have many or few links, and each respondent's sales occur somewhere 
along this chain. In the United States, the respondent's sales are 
generally to an importer, whether independent or affiliated. We review 
and compare the distribution systems in the home market and U.S. export 
markets, including selling functions, class of customer, and the extent 
and level of selling expenses for each claimed level of trade. Customer 
categories such as distributor, original equipment manufacturer (OEM), 
or wholesaler are commonly used by respondents to describe levels of 
trade, but, without substantiation, they are insufficient to establish 
that a claimed level of trade is valid. An analysis of the chain of 
distribution and of the selling functions substantiates or invalidates 
the claimed levels of trade. Different levels of trade necessarily 
involve differences in selling functions, but differences in selling 
functions, even substantial ones, are not alone sufficient to establish 
a difference in the levels of trade. Different levels of trade are 
characterized by purchasers at different stages in the chain of 
distribution and sellers performing qualitatively or quantitatively 
different functions in selling to them.
    When we compare U.S. sales to home market sales at a different 
level of trade, we make a level-of-trade adjustment if the difference 
in levels of trade affects price comparability. We determine any effect 
on price comparability by examining sales at different levels of trade 
in a single market, the home market. Any price effect must be 
manifested in a pattern of consistent price differences between home 
market sales used for comparison and sales at the equivalent level of 
trade of the export transaction. To quantify the price differences, we 
calculate the difference in the average of the net prices of the same 
models sold at different levels of trade. We use the average difference 
in net prices to adjust NV when NV is based on a level of trade 
different from that of the export sale. If there is a pattern of no 
price differences, the difference in levels of trade does not have a 
price effect and, therefore, no adjustment for level of trade is 
necessary.
    In the present review, none of the respondents requested a level of 
trade (LOT) adjustment. To ensure that no such adjustment was 
necessary, in accordance with the principles discussed above, we 
examined information regarding the distribution systems in both the 
United States and Canadian markets, including the selling functions, 
classes of customer, and selling expenses for each respondent.

Algoma

    In both the home market and the United States, Algoma reported one 
LOT and one distribution system with two classes of customers: end-
users and steel service centers (SSCs). We analyzed the selling 
functions and activities performed for both classes of customers in 
both markets. We preliminarily determine that Algoma's selling 
functions and activities are substantially similar for both classes of 
customers for sales of subject merchandise and, therefore, warrant one 
level of trade in both markets. Finally, we compared the selling 
functions performed at the home market LOT and the LOT in the United 
States and found them substantially similar. Thus, no adjustment is 
appropriate. For a further discussion of the Department's LOT analysis 
with respect to Algoma, see Memorandum to the File: Analysis Memorandum 
for the Preliminary Results of Review for Algoma, pg. 2, September 2, 
1997.

CCC

    CCC reported three different LOTs in the home market based on class 
of customer: original equipment manufacturers (OEMs), steel service 
centers, and scrap merchants. However, we examined the reported selling 
functions and found that CCC provides the same selling functions to its 
home market customers regardless of distribution level, marketing 
phase, or the equivalent. Overall, we preliminarily determine that the 
selling functions between the reported LOTs are sufficiently similar to 
consider them as one LOT in the comparison market.
    CCC stated that it sells to two LOTs in the United States: OEMs and 
steel service centers. Again, we examined the selling functions at both 
claimed levels, and found they were the same. Therefore, we 
preliminarily determine that the selling functions between the reported 
LOTs are sufficiently similar to consider them as one LOT in the United 
States market. Finally, we compared the selling functions performed at 
the home market LOT and the LOT in the United States and found them 
substantially similar. Therefore, no adjustment is appropriate. For a 
further discussion of the Department's LOT analysis with respect to 
CCC, see Memorandum to the File: Analysis Memorandum for the 
Preliminary Results of Review for CCC, pg. 2, September 2, 1997.

Dofasco

    Dofasco reported three LOTs in the home market. Dofasco defined its 
LOT categories by customer category: service center, automotive, and 
construction and converters/manufacturers (``construction''). We 
examined the selling functions performed at each claimed level and 
found that there was a significant difference in selling functions 
offered between the automotive and service center sales levels. 
Moreover, Dofasco has established a separate sales division for its 
automotive sales. Additionally, sales to automotive customers are sales 
to end users, while sales to service centers are sales to resellers. In 
sum, these sales were made at different stages of marketing. Therefore, 
we preliminarily conclude that the automotive and service center 
classes of customer constitute separate levels of trade.
    Between the automotive and construction sales channels, although 
Dofasco sales to both of these classes of customer are sales to OEMs, 
we note that both quantitatively and qualitatively, the selling 
functions offered to automotive customers involve significantly greater 
resources and thus represent a distinct stage of marketing. 
Specifically, Dofasco performed only five of the same or similar 
selling functions between these LOTs. Dofasco's functions for these two 
channels differed with respect to numerous other activities. Therefore, 
given these differences, we preliminarily conclude that automotive and 
construction constitute separate levels of trade.
    Between the construction and service center sales channels, we note 
that sales to construction customers are sales to end users, while 
sales to service centers are sales to resellers. Furthermore, there 
were numerous differences in selling functions between these two 
channels. We found that these differences suggested distinct stages of 
marketing. Therefore, we preliminarily conclude that construction and 
service centers constitute different levels of trade.
    Overall, we determine that the selling functions between the 
automotive,

[[Page 47435]]

service center, and construction customer categories are substantially 
dissimilar to one another. Furthermore, sales to service centers are 
made at a different stage of marketing than sales to automotive and 
construction customers. Therefore, we preliminarily determine that the 
automotive, service center, and construction customer categories should 
be treated as three LOTs in the comparison market.
    Respondents reported the same three LOTs in the U.S. market: 
automotive, service center, and construction and converters/
manufacturers (``construction''). We preliminarily determine that the 
results of our analysis of U.S. LOTs are identical to those of the 
comparison market. There were only insignificant differences in selling 
functions at each LOT between the comparison market and the U.S. 
market.
    The Department did not find that there existed a pattern of 
consistent price differences between the three levels of trade. 
Therefore, we did not make LOT adjustments when calculating the final 
margins for Dofasco. For a further discussion of the Department's LOT 
analysis with respect to Dofasco, see Memorandum to the File: Analysis 
Memorandum for the Preliminary Results of Review for Dofasco, pp. 2-3, 
September 2, 1997.

MRM

    In both the home market and the United States, MRM reported one LOT 
and one distribution system with two classes of customers: distributors 
and original equipment manufacturers (OEMs). We analyzed the selling 
functions and activities performed for both classes of customers in 
both markets. We found that MRM's selling functions and activities were 
substantially similar for both classes of customers for sales of 
subject merchandise and, therefore, constitute one level of trade in 
both markets. Finally, we compared the selling functions performed at 
the home market LOT and the LOT in the United States and found them 
substantially similar. Thus, no adjustment was appropriate. For a 
further discussion of the Department's LOT analysis with respect to 
MRM, see Memorandum to the File: Analysis Memorandum for the 
Preliminary Results of Review for MRM, pp. 1-2, September 2, 1997.

Stelco

    Stelco identified one level of trade and two classes of customers 
(end-users and resellers) in the home market for each class or kind of 
merchandise. We examined the selling functions performed for each class 
of customer and found that Stelco provided many of the same or similar 
selling functions in each, including: personnel training, engineering 
services, and technical advice. We found few differences between 
selling functions for transactions made through the two classes of 
customers and that Stelco's prices did not vary consistently based on 
the type of customer. Overall, we determine that the selling functions 
between the two classes of customers are sufficiently similar to 
consider them one LOT in the comparison market for sales of both 
corrosion-resistant products and plate products.
    In the United States, Stelco sold corrosion-resistant products 
through one distribution system and to end users only. Stelco's U.S. 
sales of plate products were made to end users and service centers. We 
preliminarily determine that the results of our analysis of U.S. LOTs 
are identical to those of the comparison market: the selling functions 
performed for sales to the United States are sufficiently similar to 
consider them one LOT for both corrosion-resistant products and plate 
products. Additionally, we consider this LOT to be the same as that 
identified in the comparison market. Therefore, no adjustment is 
appropriate. For a further discussion of the Department's LOT analysis 
with respect to Stelco, see Memorandum to the File: Analysis Memorandum 
for the Preliminary Results of Review for Stelco, pg. 2, September 2, 
1997.

Preliminary Results of Reviews

    As a result of our reviews, we preliminarily determine the 
weighted-average dumping margins (in percent) for the period August 1, 
1995, through July 31, 1996 to be as follows:

------------------------------------------------------------------------
                                                                Margin  
                    Manufacturer/exporter                      (percent)
------------------------------------------------------------------------
Corrosion-Resistant Steel:                                              
  Dofasco...................................................        3.02
  CCC.......................................................        1.16
  Stelco....................................................        0.22
Cut-to-Length Plate:                                                    
  Algoma....................................................        0.37
  MRM.......................................................        0.00
  Stelco....................................................        0.24
------------------------------------------------------------------------

    Parties to the proceeding may request disclosure within five days 
of the date of publication of this notice. Any interested party may 
request a hearing within 10 days of publication. Any hearing, if 
requested, will be held 44 days after the date of publication or the 
first business day thereafter. Case briefs from interested parties may 
be submitted not later than 30 days after the date of publication. 
Rebuttal briefs, limited to issues raised in those briefs, may be filed 
not later than 37 days after the date of publication of this notice. 
The Department will publish the final results of this administrative 
review, including its analysis of issues raised in the case and 
rebuttal briefs, not later than 120 days after the date of publication 
of this notice.
    Upon issuance of the final results of review, the Department shall 
determine, and the U.S. Customs Service shall assess, antidumping 
duties on all appropriate entries. Because the inability to link sales 
with specific entries prevents calculation of duties on an entry-by-
entry basis, we will calculate an importer-specific ad valorem duty 
assessment rate for each class or kind of merchandise based on the 
ratio of the total amount of antidumping duties calculated for the 
examined sales made during the POR to the total customs value of the 
sales used to calculate those duties. This rate will be assessed 
uniformly on all entries of that particular importer made during the 
POR. (This is equivalent to dividing the total amount of antidumping 
duties, which are calculated by taking the difference between statutory 
NV and statutory EP, by the total statutory EP value of the sales 
compared, and adjusting the result by the average difference between EP 
and customs value for all merchandise examined during the POR).
    Furthermore, the following deposit requirements will be effective 
for all shipments of the subject merchandise entered, or withdrawn from 
warehouse, for consumption on or after the publication date, as 
provided by section 751(a) of the Tariff Act: (1) The cash deposit rate 
for each reviewed company will be that established in the final results 
of review (except that no deposit will be required for firms with zero 
or de minimis margins, i.e., margins less than 0.5 percent); (2) for 
exporters not covered in this review, but covered in the LTFV 
investigation or previous review, the cash deposit rate will continue 
to be the company-specific rate from the LTFV investigation; (3) if the 
exporter is not a firm covered in this review, a previous review, or 
the original LTFV investigation, but the manufacturer is, the cash 
deposit rate will be the rate established for the most recent period 
for the manufacturer of the merchandise; (4) the cash deposit rate for 
all other manufacturers or exporters will continue to be the ``all 
others'' rates made effective by the LTFV investigations, which were 
18.71 percent for corrosion-resistant steel products and 61.88 percent 
for plate

[[Page 47436]]

(see Amended Final Determination, 60 FR 49582 (September 26, 1995)). 
These requirements, when imposed, shall remain in effect until 
publication of the final results of the next administrative reviews.
    This notice serves as a preliminary reminder to importers of their 
responsibility under 19 CFR 353.26 to file a certificate regarding the 
reimbursement of antidumping duties prior to liquidation of the 
relevant entries during this review period. Failure to comply with this 
requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    These administrative reviews and notices are published in 
accordance with section 751(a)(1) of the Act and 19 CFR 353.22.

    Dated: September 2, 1997.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 97-23848 Filed 9-8-97; 8:45 am]
BILLING CODE 3510-DS-P