[Federal Register Volume 68, Number 215 (Thursday, November 6, 2003)]
[Notices]
[Pages 62770-62774]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-27975]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-580-836]


Certain Cut-to-Length Carbon-Quality Steel Plate Products From 
the Republic of Korea: Preliminary Results and Rescission in Part 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 U.S. producers of the subject 
merchandise, the Department of Commerce (the Department) is conducting 
an administrative review of the antidumping duty order on certain cut-
to-length carbon-quality steel plate products (steel plate) from the 
Republic of Korea (Korea). The review covers one manufacturer/exporter 
of subject merchandise during the period of review (POR), February 1, 
2002, through January 31, 2003. Based upon our analysis, the Department 
has preliminarily determined that a dumping margin exists for the 
manufacturer/exporter covered by this review. If these preliminary 
results are adopted in our final results of administrative review, we 
will instruct U.S. Customs and Border Protection (CBP) to assess 
antidumping duties as appropriate. Interested parties are invited to 
comment on these preliminary results.

EFFECTIVE DATE: November 6, 2003.

FOR FURTHER INFORMATION CONTACT: Jeff Pedersen or Drew Jackson, AD/CVD 
Enforcement, Office IV, Group II, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th and 
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
2769 or (202) 482-4406, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On February 10, 2000, the Department published in the Federal 
Register the antidumping duty order on steel plate from Korea. See 
Notice of Amendment of Final Determinations of Sales at Less Than Fair 
Value and Antidumping Duty Orders: Certain Cut-To-Length Carbon-Quality 
Steel Plate Products From France, India, Indonesia, Italy, Japan and 
the Republic of Korea, 65 FR 6585 (February 10, 2000) (Amended Final 
Determination and Order). On February 3, 2003, the Department published 
a notice of ``Opportunity to Request Administrative Review'' of the 
antidumping duty order on steel plate from Korea. See Antidumping or 
Countervailing Duty Order, Finding, or Suspended Investigation; 
Opportunity to Request Administrative Review, 68 FR 5272 (February 3, 
2003). On February 27, 2003, Nucor Corporation, a domestic producer, 
requested an administrative review of Dongkuk Steel Mill Co., Ltd. 
(DSM), Korea Iron & Steel Co., Ltd. (KISCO), Pohang Iron & Steel Co., 
Ltd. (Pohang) and Union Steel Manufacturing Co., Ltd. (Union) for the 
POR February 1, 2002, through January 31, 2003. Also, on February 27, 
2003, IPSCO Steel, one of the petitioning firms in the steel plate 
investigations, requested an administrative review of DSM this review. 
On March 18, 2003, the Department initiated an administrative review of 
DSM, KISCO, and Union. See Initiation of Antidumping and Countervailing 
Duty Administrative Reviews and Requests for Revocation in Part, 68 FR 
14394 (March 25, 2003). The Department did not initiate an 
administrative review of Pohang because Pohang is excluded from the 
antidumping order on steel plate from Korea. See Amended Final 
Determination and Order.
    On April 10, 2003, the Department issued antidumping questionnaires 
to DSM, KISCO and Union. The Department received a letter from KISCO on 
June 6, 2003, in which it stated that it had shut down its steel plate 
mill in early 1998 and, thus, had no shipments of subject merchandise 
during the POR. In March and April 2003, Union reported that it did not 
produce the subject merchandise and had no shipments of subject 
merchandise during the POR. DSM responded to the Department's 
questionnaire responses in May and June 2003. The Department issued 
supplemental questionnaires to DSM in May, June, July, August, and 
September of 2003, and received responses from

[[Page 62771]]

DSM in June, July, August, and September of 2003.

Scope of the Review

    The products covered by the antidumping duty order are certain hot-
rolled carbon-quality steel: (1) Universal mill plates (i.e., flat-
rolled products rolled on four faces or in a closed box pass, of a 
width exceeding 150 mm but not exceeding 1250 mm, and of a nominal or 
actual thickness of not less than 4 mm, which are cut-to-length (not in 
coils) and without patterns in relief), of iron or non-alloy-quality 
steel; and (2) flat-rolled products, hot-rolled, of a nominal or actual 
thickness of 4.75 mm or more and of a width which exceeds 150 mm and 
measures at least twice the thickness, and which are cut-to-length (not 
in coils). Steel products to be included in the scope of the order are 
of rectangular, square, circular or other shape and of rectangular or 
non-rectangular cross-section where such non-rectangular 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. Steel products that meet the 
noted physical characteristics that are painted, varnished or coated 
with plastic or other non-metallic substances are included within this 
scope. Also, specifically included in the scope of the order are high 
strength, low alloy (HSLA) steels. HSLA steels are recognized as steels 
with micro-alloying levels of elements such as chromium, copper, 
niobium, titanium, vanadium, and molybdenum. Steel products to be 
included in this scope, regardless of Harmonized Tariff Schedule of the 
United States (HTSUS) definitions, are products in which: (1) Iron 
predominates, by weight, over each of the other contained elements, (2) 
the carbon content is two percent or less, by weight, and (3) none of 
the elements listed below is equal to or exceeds the quantity, by 
weight, respectively indicated: 1.80 percent of manganese, or 1.50 
percent of silicon, or 1.00 percent of copper, or 0.50 percent of 
aluminum, or 1.25 percent of chromium, or 0.30 percent of cobalt, or 
0.40 percent of lead, or 1.25 percent of nickel, or 0.30 percent of 
tungsten, or 0.10 percent of molybdenum, or 0.10 percent of niobium, or 
0.41 percent of titanium, or 0.15 percent of vanadium, or 0.15 percent 
zirconium. All products that meet the written physical description, and 
in which the chemistry quantities do not equal or exceed any one of the 
levels listed above, are within the scope of the order unless otherwise 
specifically excluded. The following products are specifically excluded 
from the order: (1) Products clad, plated, or coated with metal, 
whether or not painted, varnished or coated with plastic or other non-
metallic substances; (2) SAE grades (formerly AISI grades) of series 
2300 and above; (3) products made to ASTM A710 and A736 or their 
proprietary equivalents; (4) abrasion-resistant steels (i.e., USS AR 
400, USS AR 500); (5) products made to ASTM A202, A225, A514 grade S, 
A517 grade S, or their proprietary equivalents; (6) ball bearing 
steels; (7) tool steels; and (8) silicon manganese steel or silicon 
electric steel. The merchandise subject to the order is classified in 
the HTSUS under subheadings: 7208.40.3030, 7208.40.3060, 7208.51.0030, 
7208.51.0045, 7208.51.0060, 7208.52.0000, 7208.53.0000, 7208.90.0000, 
7210.70.3000, 7210.90.9000, 7211.13.0000, 7211.14.0030, 7211.14.0045, 
7211.90.0000, 7212.40.1000, 7212.40.5000, 7212.50.0000, 7225.40.3050, 
7225.40.7000, 7225.50.6000, 7225.99.0090, 7226.91.5000, 7226.91.7000, 
7226.91.8000, 7226.99.0000. Although the HTSUS subheadings are provided 
for convenience and CBP purposes, the written description of the 
merchandise covered by the order is dispositive.

Period of Review

    The POR is February 1, 2002 through January 31, 2003.

Preliminary Partial Rescission of Review

    We are preliminarily rescinding this review, in part, with respect 
to KISCO and Union because they reported that they made no shipments of 
subject merchandise during the POR. The Department reviewed CBP data, 
which supports the claims that these companies did not export subject 
merchandise during the POR.

Duty Absorption

    Section 751(a)(4) of the Tariff Act of 1930, as amended (the Act), 
provides for the Department, if requested, to determine during an 
administrative review initiated two or four years after the publication 
of the order, whether antidumping duties have been absorbed by a 
foreign producer or exporter, if the subject merchandise is sold in the 
United States through an affiliated importer. Nucor Corporation 
requested that the Department make a duty absorption determination with 
respect to each respondent. Because the instant review was not 
initiated two or four years after publication of the order, the 
Department will not make a duty absorption determination in this 
review.

Affiliation

    During the POR, DSM sold subject merchandise to Dongkuk Industries 
Co., Ltd. (DKI), a Korean trading company, which, in turn, resold the 
merchandise to Dongkuk International, Inc. (DKA), a U.S. importer that 
is affiliated with DSM. The Department has preliminarily determined 
that DSM and DKI are under the common control of a family grouping. 
According to section 771(33)(F) of the Act, ``{t{time} wo or more 
persons directly or indirectly controlling, controlled by, or under 
common control with, any person'' shall be considered to be affiliated. 
Thus we have preliminarily found DSM and DKI to be affiliated parties. 
For a complete discussion of this issue see the memorandum from the 
Team to Thomas F. Futtner, Acting Office Director, concerning 
Affiliation Analysis for Dongkuk Steel Mill Company, Ltd., dated 
concurrently with this notice.

Section 201 Duties

    The Department notes that merchandise subject to this review is 
subject to duties imposed under section 201 of the Act (section 201 
duties). Because the Department has not previously addressed the 
appropriateness of deducting section 201 duties from export price and 
constructed export price (CEP), on September 9, 2003, the Department 
published a request for public comments on this issue (68 FR 53104). 
All comments were due on October 9, 2003. Rebuttal comments are due by 
November 7, 2003. See 68 FR 60079 (October 21, 2003). Since the 
Department has not made a determination on this issue at this time, for 
purposes of these preliminary results, no adjustment has been made.

Normal Value Comparisons

    To determine whether the respondent's sales of steel plate from 
Korea to the United States were made at less than normal value (NV), we 
compared the CEP to the NV, as described in the ``Constructed Export 
Price'' and ``Normal Value'' sections of this notice, below. We first 
attempted to compare contemporaneous U.S. and comparison-market sales 
of products that are identical with respect to the following 
characteristics: paint, quality, grade, heat treatment, thickness, 
width, patterns in relief and descaling. Where we were unable to 
compare sales of identical merchandise, we compared U.S. sales to 
contemporaneous comparison-market sales of the most

[[Page 62772]]

similar merchandise based on the above characteristics, which are 
listed in order of importance for matching purposes.

Constructed Export Price

    In calculating U.S. price, the Department used CEP, as defined in 
section 772(b) of the Act, because the merchandise was sold, after 
importation, by DSM's U.S. affiliate, DKA, to unaffiliated purchasers 
in the United States. We calculated CEP based on delivered prices to 
unaffiliated customers in the United States. We made deductions from 
the starting price, where appropriate, for foreign and U.S. brokerage 
and handling, foreign and U.S. inland freight, international freight, 
marine insurance, U.S. duties, and direct and indirect selling expenses 
to the extent that they are associated with economic activity in the 
United States in accordance with sections 772(c)(2)(A) and 772(d)(1)(B) 
and (D) of the Act. The direct selling expenses included credit 
expenses. We added duty drawback received on imported materials 
pursuant to section 772(c)(1)(B) of the Act. In accordance with section 
772(d)(3) of the Act, we made a deduction for CEP profit. Finally, 
pursuant to section 772(c)(1)(C) of the Act, we increased U.S. price by 
the amount of the export subsidy found in the countervailing duty 
investigation on steel plate from Korea. See Final Affirmative 
Countervailing Duty Determination: Certain Cut-to-Length Carbon-Quality 
Steel Plate From the Republic of Korea, 64 FR 73176 (December 29, 
1999).

Level of Trade

    In accordance with section 773(a)(1)(B) of the Act, to the extent 
practicable, we determined NV based on sales in the comparison-market 
at the same level of trade (LOT) as the CEP sales. The NV LOT is that 
of the starting-price sales in the comparison-market. For CEP sales, 
the U.S. LOT is the level of the constructed sale from the exporter to 
the importer. The Department adjusts the CEP, pursuant to section 
772(d) of the Act, prior to performing its LOT analysis, as articulated 
by the Department's regulations at section 351.412(c)(1)(ii). See 
Micron Technology, Inc. v. United States, 243 F.3rd 1301, 1315 (Fed. 
Cir. 2001).
    To determine whether NV sales are at a different LOT than the CEP 
sales, we examined stages in the marketing process and selling 
activities along the chain of distribution between the producer and the 
unaffiliated customer. If the comparison-market sales are at a 
different LOT than that of the U.S. sale, 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 an LOT 
adjustment under section 773(a)(7)(A) of the Act. For CEP sales, if the 
NV LOT is more remote from the factory than the CEP LOT and there is no 
basis for determining whether the difference 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 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 determining whether separate LOTs exist, we obtained information 
from DSM about the marketing stages for the reported U.S. and 
comparison-market sales, including a description of the selling 
activities performed by DSM for each channel of distribution. In 
identifying LOTs for CEP sales, we considered the selling functions 
reflected in the starting price, as adjusted under section 772(d) of 
the Act. See section 351.412(c)(1)(ii) of the Department's regulations. 
We expect that, if claimed LOTs are the same, the selling functions and 
activities of the seller at each level should be similar. Conversely, 
if a party claims that LOTs are different for different groups of 
sales, the selling functions and activities of the seller for each 
group of sales should be dissimilar.
    In its questionnaire responses, DSM reported that it sold the 
foreign like product through one channel of distribution in the 
comparison-market and subject merchandise through several channels of 
distribution in the United States. We found that DSM engaged in similar 
selling activities for almost all sales in the comparison-market, and 
thus, we have preliminarily determined that there is one LOT in the 
comparison-market. Moreover, we found that the sales activities 
performed in the U.S. channels of distribution are substantially 
similar and, thus there is one LOT in the U.S. market. Further, we 
compared the single LOT in the comparison-market to the single LOT in 
the U.S. market, and have preliminarily determined that they are 
substantially similar. Thus, we have determined that the LOTs in the 
comparison and U.S. markets are the same LOT. Because the LOT is the 
same in both markets, we have denied DSM's request for a CEP offset, 
and not considered an LOT adjustment. See memorandum to the File from 
the Team concerning Level of Trade Analysis: Dongkuk Steel Mill Co., 
Ltd., dated concurrently with this notice.

Normal Value

    After testing home market viability and whether home market sales 
failed the cost test, we calculated NV as noted in subsection 5, 
``Calculation of NV,'' below.

1. Home Market Viability

    In order to determine whether there is a sufficient volume of sales 
in the home market to serve as a viable basis for calculating NV (i.e., 
whether the aggregate volume of home market sales of the foreign like 
product is equal to or greater than five percent of the aggregate 
volume of U.S. sales), we compared the respondent's volume of home 
market sales of the foreign like product to the volume of its U.S. 
sales of subject merchandise, in accordance with section 773(a)(1) of 
the Act. Because the respondent's aggregate volume of home market sales 
of the foreign like product is greater than five percent of its 
aggregate volume of U.S. sales of subject merchandise, we determined 
that the home market is viable for the respondent, and have used the 
home market as the comparison-market.

2. Ordinary Course of Trade--Overrun Sales

    DSM reported home market sales of ``overrun'' merchandise (i.e., 
sales of a greater quantity of steel plate than the customer ordered 
due to overproduction). Section 773(a)(1)(B) of the Act provides that 
NV shall be based on the price at which the foreign like product is 
first sold, inter alia, in the ordinary course of trade. Section 
771(15) of the Act defines ordinary course of trade as the conditions 
and practices which, for a reasonable time prior to the exportation of 
the subject merchandise, have been normal in the trade under 
consideration with respect to merchandise of the same class or kind. In 
past cases, the Department has examined a number of factors to 
determine whether ``overrun'' sales are in the ordinary course of 
trade. These factors include: (1) Whether the merchandise is ``off-
quality'' or produced according to unusual specifications; (2) the 
comparative volume of sales and number of buyers in the home market; 
(3) the average quantity of an overrun sale compared to the average 
quantity of a commercial sale; and (4) price and profit differentials 
in the home market. Based on our analysis of these factors and the 
terms of sale, we found all overrun sales to be outside the ordinary 
course of

[[Page 62773]]

trade. See memorandum to the File from the Team concerning Overrun 
Sales Analysis: Dongkuk Steel Mill Co., Ltd., dated concurrently with 
this notice.

3. Affiliated-Party Transactions and Arm's-Length Test

    DSM reported no home market sales to affiliates.

4. Cost of Production Analysis

    In the investigation of steel plate from Korea, the Department 
disregarded DSM's sales that were found to have failed the cost test. 
See Preliminary Determination of Sales at Less Than Fair Value: Certain 
Cut-to-Length Carbon-Quality Steel Plate Products From the Republic of 
Korea, 64 FR 41224 (July 29, 1999); Amended Final Determination and 
Order (no change from the preliminary results). Accordingly, the 
Department, pursuant to section 773(b) of the Act, initiated a cost of 
production (COP) investigation of the respondent for purposes of this 
administrative review. We conducted the COP analysis as described 
below.
A. Calculation of COP
    In accordance with section 773(b)(3) of the Act, we calculated the 
weighted-average COP, by model, for the POR, based on the sum of 
materials and fabrication costs, general and administrative (G&A) 
expenses, and packing costs.
B. Test of Home Market Sales Prices
    As required under section 773(b) of the Act, we compared the 
weighted-average COPs to the home market sales of the foreign like 
product, in order to determine whether these sales had been made at 
prices below the COP within an extended period of time in substantial 
quantities, and whether such prices were sufficient to permit the 
recovery of all costs within a reasonable period of time. On a product-
specific basis, we compared the COP to home market prices, less any 
applicable movement charges and direct and indirect selling expenses.
C. Results of the COP Test
    Pursuant to section 773(b)(2)(C) of the Act, where less than 20 
percent of DSM's sales of a given product were made at prices below the 
COP, we did not disregard any below-cost sales of that product because 
the below-cost sales were not made in ``substantial quantities.'' Where 
20 percent or more of DSM's sales of a given product were made at 
prices below the COP, we determined that such sales were made in 
substantial quantities within an extended period of time (i.e., a 
period of one year). Further, because we compared prices to POR-average 
costs, we determined that the below-cost prices would not permit 
recovery of all costs within a reasonable time period, and thus, we 
disregarded the below-cost sales in accordance with sections 773(b)(1) 
and (2) of the Act.
    We found that for certain products, DSM made home market sales at 
prices below the COP within an extended period of time in substantial 
quantities. Further, we found that these sales prices did not permit 
the recovery of costs within a reasonable period of time. We therefore 
excluded these sales from our analysis in accordance with section 
773(b)(1) of the Act.

5. Calculation of NV

    We determined price-based NVs for DSM as follows: We calculated NV 
based on packed, delivered and ex-factory prices to home market 
customers. Where appropriate, we increased the starting price for 
interest and duty drawback revenue received from customers. We made 
deductions from the starting price for foreign inland freight, where 
appropriate, pursuant to sections 773(a)(6)(B)(ii) of the Act. Pursuant 
to section 773(a)(6)(C)(iii) of the Act and Sec.  351.410(c) of the 
Department's regulations, we made circumstance-of-sale adjustments to 
the starting price, where appropriate, for differences in credit, 
warranty, and bank expenses.
    We deducted home market packing costs from, and added U.S. packing 
costs to, the starting price, in accordance with section 773(a)(6)(A) 
and (B) of the Act. Where appropriate, we made adjustments to NV to 
account for differences in the physical characteristics of the 
merchandise sold in the U.S. and home market, in accordance with 
section 773(a)(6)(C)(ii) of the Act and Sec.  351.411 of the 
Department's regulations.

Currency Conversion

    Pursuant to section 773A(a) of the Act, we made currency 
conversions into U.S. dollars based on the exchange rates in effect on 
the dates of the U.S. sales as certified by the Federal Reserve Bank.

Preliminary Results of Review

    As a result of this review, we preliminarily determine that the 
following weighted-average margin exists for the period February 1, 
2002, through January 31, 2003:

------------------------------------------------------------------------
                                                                Margin
                   Manufacturer/Exporter                      (percent)
------------------------------------------------------------------------
Dongkuk Steel Mill Co., Ltd................................         0.85
------------------------------------------------------------------------

    We will disclose the calculations used in our analysis to parties 
to this proceeding within five days of the publication date of this 
notice. See Sec.  351.224(b) of the Department's regulations. Any 
interested party may request a hearing within 30 days of the 
publication date of this notice. See Sec.  351.310(c) of the 
Department's regulations. If requested, a hearing will be held 44 days 
after the date of publication of this notice, or the first workday 
thereafter. Interested parties may submit case briefs within 30 days of 
the date of publication of this notice. Rebuttal briefs, limited to 
issues raised in the case briefs, may be filed not later than 7 days 
after the deadline for filing case briefs. Interested parties are 
invited to comment on the preliminary results. Parties who submit 
arguments are requested to submit with each argument: (1) A statement 
of the issue, (2) a brief summary of the argument and (3) a table of 
authorities. Further, we would appreciate it if parties submitting 
written comments would provide the Department with a copy of the public 
version of any such comments on a diskette. The Department will issue 
the final results of this administrative review, which will include the 
results of its analysis of issues raised in any written comments, 
within 120 days from the publication date of this notice.

Assessment Rate

    Upon completion of this administrative review, the Department will 
determine, and CBP shall assess, antidumping duties on all appropriate 
entries. In accordance with Sec.  351.212(b)(1) of the Department's 
regulations, we have calculated an importer-specific assessment rate 
for merchandise subject to this review. Where the importer-specific 
assessment rate is above de minimis, we will instruct the CBP to assess 
the importer-specific rate uniformly on all entries made during the 
POR. The Department will issue appropriate assessment instructions 
directly to CBP within 15 days of publication of the final results of 
review. If these preliminary results are adopted in the final results 
of review, we will direct CBP to assess the resulting assessment rates 
against the entered customs values for the subject merchandise on each 
of the importers' entries during the review period.

Cash Deposit Requirements

    The following cash deposit requirements will be effective upon 
publication of these final results for all shipments of the subject 
merchandise entered, or withdrawn from warehouse, for consumption on or 
after the

[[Page 62774]]

publication date of these final results of administrative review, as 
provided by section 751(a)(1) of the Act: (1) The cash deposit rate for 
the reviewed company will be the rate listed above (except that if the 
rate is de minimis, i.e., less than 0.5 percent, a cash deposit rate of 
zero will be required); (2) for previously investigated or reviewed 
companies not listed above, the cash deposit rate 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 review, a prior review, or 
the original less than fair value (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) 
the cash deposit rate for all other manufacturers or exporters will 
continue to be the ``all others'' rate of 0.98 percent, which is the 
``all others'' rate established in the LTFV investigation, adjusted for 
the export subsidy rate in the countervailing duty investigation. See 
Amended Final Determination and Order. These deposit requirements, when 
imposed, shall remain in effect until publication of the final results 
of the next administrative review.

Notification to Interested Parties

    This notice also serves as a preliminary reminder to importers of 
their responsibility under Sec.  351.402(f)(2) of the Department's 
regulations 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 the 
antidumping duties occurred and the subsequent assessment of double 
antidumping duties.
    This administrative review and this notice are in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: October 31, 2003.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 03-27975 Filed 11-5-03; 8:45 am]
BILLING CODE 3510-DS-P