[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:

------------------------------------------------------------------------
                                                                 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