[Federal Register Volume 64, Number 172 (Tuesday, September 7, 1999)]
[Notices]
[Pages 48584-48586]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-23216]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-201-809]
Certain Cut-to-Length Carbon Steel Plate From Mexico: Preliminary
Results of Antidumping Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of preliminary results of antidumping duty
administrative review.
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SUMMARY: In response to requests from a respondent and the petitioners,
the Department of Commerce (the Department) is conducting an
administrative review of the antidumping duty order on certain cut-to-
length (CTL) carbon steel plate from Mexico. This review covers one
manufacturer/exporter of the subject merchandise. The period of review
(POR) is August 1, 1997 through July 31, 1998. We preliminarily
determine that sales have been made below normal value (NV). If these
preliminary results are adopted in our final results of administrative
review, we will instruct the U.S. Customs Service to assess antidumping
duties on entries of subject merchandise from the manufacturer/exporter
reviewed.
Interested parties are invited to comment on these preliminary
results. Parties who submit argument in this proceeding are requested
to submit with the argument: (1) A statement of the issue and (2) a
brief summary of the argument.
EFFECTIVE DATE: September 7, 1999.
FOR FURTHER INFORMATION CONTACT: Thomas Killiam, Michael Heaney, or
Robert James, Enforcement Group III, Office 8, Import Administration,
International Trade Administration, U.S. Department of Commerce, 14th
Street and Constitution Avenue, NW, Washington, DC 20230; telephone
(202) 482-3019 (Killiam), (202) 482-4475 (Heaney), (202) 482-5222
(James).
SUPPLEMENTARY INFORMATION:
Applicable Statute
Unless otherwise indicated, all citations to the Tariff Act of
1930, as amended (the Act) are references to the provision 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 the regulations codified at 19 CFR Part 351 (1998).
Background
The Department published an antidumping duty order on certain CTL
carbon steel plate from Mexico on August 19, 1993 (58 FR 44165). The
Department published a notice of opportunity to request an
administrative review of the antidumping duty order for the 1997-1998
review period on August 11, 1998 (63 FR 42821). On August 31, 1998,
respondent Altos Hornos de Mexico (AHMSA) requested that the Department
conduct an administrative review of the antidumping duty order on
certain CTL carbon steel plate from Mexico. On August 31, 1998, the
petitioners (Bethlehem Steel Corporation, Geneva Steel, Gulf Lakes
Steel, Inc., of Alabama, Inland Steel Industries Inc., Lukens Steel
Company, Sharon Steel Corporation, and U.S. Steel Group (a unit of USX
Corporation)) requested a review of AHMSA. We published a notice of
initiation of the review on September 29, 1998 (63 FR 51893).
Under 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 17, 1999, the Department extended the time limit for
the preliminary results in this case. See Certain Cut-to-Length (CTL)
Carbon Steel Plate from Mexico; Antidumping Duty Administrative Review;
Extension of Time Limits, 64 FR 14690 (March 26, 1999).
The Department is conducting this administrative review in
accordance with section 751 of the Act.
Scope of the Review
The products covered in this review include 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 coil 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
Harmonized Tariff Schedule (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 in this review 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 from this review is grade X-
70 plate.
[[Page 48585]]
These HTS item numbers are provided for convenience and U.S.
Customs purposes. The written descriptions remain dispositive.
The POR is August 1, 1997, through July 31, 1998. This review
covers sales of certain cut-to-length carbon steel plate by AHMSA.
Verification
The Department will consider the results of its verification of
AHMSA's cost of production (COP) and constructed value (CV) submission
prior to issuing the final results of review.
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 of this notice (supra), and sold in the
home market during the period of review (POR), to be foreign like
products for purposes of determining appropriate product comparisons to
U.S. sales. In making product comparisons, we matched foreign like
products based on the physical characteristics reported by the
respondent.
Normal Value Comparisons
To determine whether AHMSA made sales of subject merchandise in the
United States at less than normal value, we compared export price (EP)
to normal value (NV), as described below. In accordance with section
777A(d)(2) of the Act, we calculated monthly weighted-average prices
for NV and compared these to individual U.S. transactions.
Export Price
The Department treated all of AHMSA's sales as EP sales, because
the merchandise was sold directly to unaffiliated U.S. purchasers prior
to the date of importation and constructed export price (CEP)
methodology was not otherwise indicated.
We based EP on the price to unaffiliated purchasers in the United
States. We made deductions for movement expenses, brokerage charges,
bank charges, and inspection fees.
Normal Value
In order to determine whether there were sufficient sales of
subject merchandise in the home market to serve as a viable basis for
calculating NV, we compared AHMSA's volume of home market sales of the
foreign like product to its volume of sales of subject merchandise in
the United States, in accordance with section 773(a)(1)(C) of the Act.
AHMSA's aggregate volume of HM sales of the foreign like product was
greater than five percent of its aggregate volume of U.S. sales of the
subject merchandise. Therefore, we based NV on HM sales.
Cost Investigation
In the prior review, we initiated and conducted a sales-below-cost
investigation of AHMSA. Although AHMSA submitted COP data in that
review, we ultimately determined that AHMSA failed to act to the best
of its ability and we therefore based AHMSA's margin on total adverse
facts available. See Certain Cut-to-Length Carbon Steel Plate From
Mexico: Final Results of Antidumping Duty Administrative Review, 64 FR
76 (January 4, 1999). The adverse inference made in the prior review
provides the Department with a basis to infer that AHMSA's comparison
market sales would have failed the cost test such that we would have
disregarded them in our determination of NV in that review. Therefore,
pursuant to section 773(b)(2)(A)(ii) of the Act, we also have
reasonable grounds to believe or suspect that sales by AHMSA of the
foreign like product under consideration for the determination of NV in
this review may have been made at prices below the COP. See January 19,
1999 recommendation memorandum from Richard Weible to Joseph Spetrini,
Automatic Self-Initiation of COP Investigation in 1997-1998
Administrative Review of Cut-to-Length (CTL) Carbon Steel Plate from
Mexico.
We compared sales of the foreign like product in the home market
with the model-specific COP for the POR. 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 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 the respondent in its
questionnaire responses, revised as follows:
Pursuant to sections 773(f)(2) and (3) of the Act and section
351.407(b) of the Department's regulations, we adjusted the reported
iron ore, limestone and scrap costs, to reflect market prices rather
than the prices AHMSA paid to affiliates for these major inputs. We
revised the general and administrative expense ratio to include income
and expense items which AHMSA omitted. We recalculated net interest
expenses to exclude monetary corrections and foreign exchange gains.
These three adjustments to cost and expense ratios are addressed in
Memorandum to: Neal Halper, Acting Director, Office of Accounting, from
Peter Scholl, Senior Accountant, Cost of Production and Constructed
Value Calculation Adjustments for the Preliminary Determination, August
31, 1999.
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 which did not permit recovery of
all costs within a reasonable period of time. We then compared model-
specific COPs to the reported home market prices less any applicable
movement charges, discounts and selling expenses.
The results of our cost test for AHMSA indicated that for certain
home market models less than twenty percent of the sales of the model
were at prices below COP. Pursuant to section 773(b)(2)(C) of the Act,
we therefore determined that the below-cost sales of these models were
not made in substantial quantities and we retained all sales of these
models in our analysis and used them as the basis for determining NV.
Our cost test for AHMSA also indicated that for certain other home
market models twenty percent or more of the home market sales were at
prices below COP. In accordance with section 773(b)(2)(B) and (C) of
the Act, we disregarded the below-cost sales of these models from our
analysis because we determined that they were made over an extended
period of time in substantial quantities. In addition, because each
individual price was compared against the POR-average COP, any sales
that were below cost were also not at prices which permitted cost
recovery within a reasonable period of time, as defined in section
773(b)(2)(D).
To calculate NV we deducted billing adjustments, movement expenses,
cutting fees, early payment discounts, foreign exchange adjustments,
freight cost calculation variance adjustments, and inspection fees. We
made an addition for interest revenue. In accordance with section
773(a)(6) of the Act, we adjusted NV, where appropriate, by deducting
home market packing expenses and adding U.S. packing expenses. We also
adjusted NV for differences in credit expenses and differences in
physical characteristics between the U.S. and home market merchandise.
[[Page 48586]]
Level of Trade
In accordance with section 773(a)(1)(B)(i) of the Act, to the
extent practicable, we determine NV based on sales in the comparison
market at the same level of trade (LOT) as the EP or CEP transaction.
The NV LOT is that of the starting price sales in the comparison market
or, when NV is based on CV, that of the sales from which we derive
selling, general and administrative expenses and profit. For EP, the
U.S. LOT is also the level of the starting price sale, which is usually
from the exporter to the importer. For CEP, it is the level of the
constructed sale from the exporter to the importer.
To determine whether NV sales are at a different LOT than EP or CEP
sales, we examine stages in the marketing process and selling functions
along the chain of distribution between the producer and the
unaffiliated customer. If the comparison market sales are at a
different LOT, and the difference affects price comparability, as
manifested in a pattern of consistent price differences between the
sales on which NV is based and comparison market sales at the LOT of
the export transaction, we make a LOT adjustment under section
773(a)(7)(A) of the Act. Finally, for CEP sales, if the NV level is
more remote from the factory than the CEP level and there is no basis
for determining whether the differences in the levels between NV and
CEP affects price comparability, we adjust NV under section
773(A)(7)(B) of the Act (the CEP offset provision). (See e.g., Notice
of Final Determination of Sales at Less Than Fair Value: Certain Cut-
to-Length Carbon Steel Plate from South Africa, 62 FR 61731 (November
19, 1997).)
In implementing these principles in this review, we asked AHMSA to
identify the specific differences and similarities in selling functions
and/or support services between all phases of marketing in the home
market and the United States. AHMSA identified three channels of
distribution in the home market: (1) Direct sales to end-users or
distributors, (2) sales requiring cutting services prior to delivery,
and (3) consignment sales. AHMSA performs similar selling functions for
all three channels. Because the selling functions performed for each
customer class are sufficiently similar, we determined that there
exists one LOT for AHMSA's home market sales.
For the U.S. market AHMSA reported one LOT: EP sales made directly
to its U.S. customers. When we compared EP sales to home market sales,
we determined that sales in both markets were made at the same LOT. For
both EP and home market transactions AHMSA sold directly to the
customer and provided similar levels of order processing, delivery
arrangement, and customer liaison. Based upon the foregoing, we
determined that AHMSA sold at the same LOT in the U.S. market as it did
in the home market, and consequently no LOT adjustment is warranted.
Preliminary Results of the Review
As a result of this review, we preliminarily determine that the
following weighted-average margin exists for AHMSA for the period
September 1, 1997, through August 31, 1998:
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Margin
Manufacturer/exporter (percent)
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AHMSA........................................................ 1.77
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The Department will issue disclosure documents within five days of
the date of publication of this notice. Interested parties may also
request a hearing within 30 days of publication. If requested, a
hearing will be held as early as convenient for the parties but
normally not later than 37 days after the date of publication or the
first work day thereafter. Interested parties may submit case briefs
not later than 30 days after the date of publication of this notice.
Rebuttal briefs, which must be limited to issues raised in the case
briefs, may be filed not later than 5 days after the filing of case
briefs. The Department will issue a notice of the final results of this
administrative review, which will include the results of its analysis
of issues raised in any such briefs or at a hearing, within 120 days
from the publication of these preliminary results.
The Department shall determine, and the Customs Service shall
assess, antidumping duties on all appropriate entries. Upon completion
of this review, the Department will issue appraisement instructions
directly to the Customs Service. The final results of this review shall
be the basis for the assessment of antidumping duties on entries of
merchandise covered by this review and for future deposits of estimated
duties. We will instruct the Customs Service to assess antidumping
duties on all appropriate entries covered by this review if any
assessment rate calculated in the final results of this review is above
de minimis (i.e., at or above 0.5 percent) (see 19 CFR 351.106(c)(2)).
For assessment purposes, if applicable, we intend to calculate an
importer-specific assessment rate by aggregating the dumping margins
calculated for all U.S. sales and dividing this amount by the total
quantity sold.
Furthermore, the following deposit rates will be effective upon
publication of the final results of this administrative review for all
shipments of certain CTL carbon steel plate from Mexico entered, or
withdrawn from warehouse, for consumption on or after the publication
date, as provided for by section 751(a)(2)(C) of the Act: (1) The cash
deposit rate for the reviewed company will be the rate established in
the final results of this review; (2) for merchandise exported by
manufacturers or exporters not covered in this review but covered in
the original investigation of sales at less than fair value (LTFV) or a
previous review, the cash deposit will continue to be the company-
specific rate published for the most recent period; (3) if the exporter
is not a firm covered in this or 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; and (4) for all other producers and/or exporters of
this merchandise, the cash deposit rate shall be 49.25 percent, the
``all others'' rate established in the LTFV investigation.
These deposit rates, when imposed, shall remain in effect until
publication of the final results of the next administrative review.
This notice also serves as a preliminary reminder to importers of
their responsibility under 19 CFR 351.401(f)(2) 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.
This determination is issued and published in accordance with
sections 751(a)(1) and 777(i)(1) of the Act.
Dated: August 31, 1999.
Richard W. Moreland,
Acting Assistant Secretary for Import Administration.
[FR Doc. 99-23216 Filed 9-3-99; 8:45 am]
BILLING CODE 3510-DS-P