[Federal Register Volume 69, Number 138 (Tuesday, July 20, 2004)]
[Notices]
[Pages 43389-43394]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-16582]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-122-840]


Notice of Preliminary Results of Antidumping Duty Administrative 
Review: Carbon and Certain Alloy Steel Wire Rod From Canada

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

SUMMARY: The Department of Commerce (the Department) is conducting an 
administrative review of the antidumping duty order on carbon and 
certain alloy steel wire rod from Canada. We preliminarily determine 
that sales of subject merchandise by Ivaco Inc. (Ivaco) have been made 
below normal value (NV). If these preliminary results are adopted in 
our final results, we will instruct U.S. Customs and Border Protection 
(CBP) to assess antidumping duties on appropriate entries based on the 
difference between the export price (EP) and the NV.
    Interested parties are invited to comment on these preliminary 
results. We will issue the final results no later than 120 days from 
the publication of this notice.

DATES: Effective July 20, 2004.

FOR FURTHER INFORMATION CONTACT: Daniel O'Brien or Constance Handley, 
at (202) 482-5346 or (202) 482-0631, respectively; AD/CVD Enforcement 
Office 1, Group 1, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street & Constitution 
Avenue, NW., Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

Background

    On October 29, 2002, the Department published an antidumping duty 
order on carbon and certain alloy steel wire rod from Canada. See 
Notice of Amended Final Determination of Sales at Less Than Fair Value 
and Antidumping Duty Order: Carbon and Certain Alloy Steel Wire Rod 
From Canada, 67 FR 65944 (October 29, 2002). On October 1, 2003, the 
Department issued a notice of opportunity to request the first 
administrative review of this order. See Antidumping or Countervailing 
Duty Order, Finding, or Suspended Investigation; Opportunity to Request 
Administrative Review, 68 FR 56618 (October 1, 2003). On October 31, 
2003, in accordance with 19 CFR 351.213(b), Ivaco requested an 
administrative review. On October 31, 2003, also in accordance with 19 
CFR 351.213(b), the

[[Page 43390]]

petitioners \1\ requested an administrative review of Ivaco. On 
November 18, 2003, the Department published the notice of initiation of 
this antidumping duty administrative review, covering the period April 
10, 2002, through September 30, 2003 (the POR). See Initiation of 
Antidumping and Countervailing Duty Administrative Reviews, 68 FR 
66799, November 28, 2003.
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    \1\ The petitioners in this case are Gerdau Ameristeel U.S. 
Inc., Georgetown Steel Company, Keystone Consolidated Industries, 
Inc., and North Star Steel Texas, Inc.
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    On December 9, 2003, the Department issued its antidumping 
questionnaire to Ivaco, specifying that the responses to Section A and 
Sections B-E would be due on December 30, 2003, and January 15, 2004, 
respectively.\2\ We received timely responses to Sections A-E of the 
initial antidumping questionnaire and associated supplemental 
questionnaires. In accordance with section 773(b)(2)(A)(ii) of the 
Tariff Act of 1930, as amended (``the Act''), since the Department 
determined in the original investigation that Ivaco made home-market 
sales below cost, we found that there were reasonable grounds to 
believe or suspect that Ivaco made sales below cost in this review.
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    \2\ Section A of the questionnaire requests general information 
concerning a company's corporate structure and business practices, 
the merchandise under review that it sells, and the manner in which 
it sells that merchandise in all of its markets. Section B requests 
a complete listing of all home market sales, or, if the home market 
is not viable, of sales in the most appropriate third-country market 
(this section is not applicable to respondents in non-market economy 
cases). Section C requests a complete listing of U.S. sales. Section 
D requests information on the cost of production of the foreign like 
product and the constructed value of the merchandise under review. 
Section E requests information on further manufacturing.
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Scope of the Review

    The merchandise covered by this order is certain hot-rolled 
products of carbon steel and alloy steel, in coils, of approximately 
round cross section, 5.00 mm or more, but less than 19.00 mm, in solid 
cross-sectional diameter.
    Specifically excluded are steel products possessing the above-noted 
physical characteristics and meeting the Harmonized Tariff Schedule of 
the United States (HTSUS) definitions for (a) stainless steel; (b) tool 
steel; (c) high nickel steel; (d) ball bearing steel; and (e) concrete 
reinforcing bars and rods. Also excluded are (f) free machining steel 
products (i.e., products that contain by weight one or more of the 
following elements: 0.03 percent or more of lead, 0.05 percent or more 
of bismuth, 0.08 percent or more of sulfur, more than 0.04 percent of 
phosphorus, more than 0.05 percent of selenium, or more than 0.01 
percent of tellurium).
    Also excluded from the scope are 1080 grade tire cord quality wire 
rod and 1080 grade tire bead quality wire rod. This grade 1080 tire 
cord quality rod is defined as: (i) Grade 1080 tire cord quality wire 
rod measuring 5.0 mm or more but not more than 6.0 mm in cross-
sectional diameter; (ii) with an average partial decarburization of no 
more than 70 microns in depth (maximum individual 200 microns); (iii) 
``having no non-deformable inclusions greater than 20 microns and no 
deformable inclusions greater than 35 microns; (iv) having a carbon 
segregation per heat average of 3.0 or better using European Method NFA 
04-114; (v) having a surface quality with no surface defects of a 
length greater than 0.15 mm; (vi) capable of being drawn to a diameter 
of 0.30 mm or less with 3 or fewer breaks per ton, and (vii) containing 
by weight the following elements in the proportions shown: (1) 0.78 
percent or more of carbon, (2) less than 0.01 percent of aluminum, (3) 
0.040 percent or less, in the aggregate, of phosphorus and sulfur, (4) 
0.006 percent or less of nitrogen, and (5) not more than 0.15 percent, 
in the aggregate, of copper, nickel and chromium.
    This grade 1080 tire bead quality rod is defined as: (i) Grade 1080 
tire bead quality wire rod measuring 5.5 mm or more but not more than 
7.0 mm in cross-sectional diameter; (ii) with an average partial 
decarburization of no more than 70 microns in depth (maximum individual 
200 microns); (iii) ``having no non-deformable inclusions greater than 
20 microns and no deformable inclusions greater than 35 microns; (iv) 
having a carbon segregation per heat average of 3.0 or better using 
European Method NFA 04-114; (v) having a surface quality with no 
surface defects of a length greater than 0.2 mm; (vi) capable of being 
drawn to a diameter of 0.78 mm or larger with 0.5 or fewer breaks per 
ton; and (vii) containing by weight the following elements in the 
proportions shown: (1) 0.78 percent or more of carbon, (2) less than 
0.01 percent of soluble aluminum, (3) 0.040 percent or less, in the 
aggregate, of phosphorus and sulfur, (4) 0.008 percent or less of 
nitrogen, and (5) either not more than 0.15 percent, in the aggregate, 
of copper, nickel and chromium (if chromium is not specified), or not 
more than 0.10 percent in the aggregate of copper and nickel and a 
chromium content of 0.24 to 0.30 percent (if chromium is specified).
    For purposes of the grade 1080 tire cord quality wire rod and the 
grade 1080 tire bead quality wire rod, an inclusion will be considered 
to be deformable if its ratio of length (measured along the axis--that 
is, the direction of rolling--of the rod) over thickness (measured on 
the same inclusion in a direction perpendicular to the axis of the rod) 
is equal to or greater than three. The size of an inclusion for 
purposes of the 20 microns and 35 microns limitations is the 
measurement of the largest dimension observed on a longitudinal section 
measured in a direction perpendicular to the axis of the rod. This 
measurement methodology applies only to inclusions on certain grade 
1080 tire cord quality wire rod and certain grade 1080 tire bead 
quality wire rod that are entered, or withdrawn from warehouse, for 
consumption on or after July 24, 2003.
    The designation of the products as ``tire cord quality'' or ``tire 
bead quality'' indicates the acceptability of the product for use in 
the production of tire cord, tire bead, or wire for use in other rubber 
reinforcement applications such as hose wire. These quality 
designations are presumed to indicate that these products are being 
used in tire cord, tire bead, and other rubber reinforcement 
applications, and such merchandise intended for the tire cord, tire 
bead, or other rubber reinforcement applications is not included in the 
scope. However, should petitioners or other interested parties provide 
a reasonable basis to believe or suspect that there exists a pattern of 
importation of such products for other than those applications, end-use 
certification for the importation of such products may be required. 
Under such circumstances, only the importers of record would normally 
be required to certify the end use of the imported merchandise.
    All products meeting the physical description of subject 
merchandise that are not specifically excluded are included in this 
scope. The products under review are currently classifiable under 
subheadings 7213.91.3000, 7213.91.3011, 7213.91.3091, 7213.91.4500, 
7213.91.6000, 7213.99.0030, 7213.99.0090, 7227.20.0000, and 
7227.90.6050 of the HTSUS. Although the HTSUS subheadings are provided 
for convenience and customs purposes, the written description of the 
scope of this proceeding is dispositive.
    To determine whether sales of steel wire rod from Canada were made 
in the United States at less than fair value, we compared the export 
price (EP) and the constructed export price (CEP) to the normal value 
(NV), as described in the Export Price and Constructed Export Price and 
Normal Value sections of this notice. In accordance with section

[[Page 43391]]

777A(d)(1)(A)(i) of the Act, we calculated weighted-average EPs and 
CEPs. We compared these to weighted-average home market prices or CVs, 
as appropriate, in Canada.

Export Price and Constructed Export Price

    For the price to the United States, we used, as appropriate, EP or 
CEP, as defined in sections 772(a) and 772(b) of the Act, respectively. 
Section 772(a) of the Act defines EP as the price at which the subject 
merchandise is first sold before the date of importation by the 
producer or exporter outside of the United States to an unaffiliated 
purchaser in the United States or to an unaffiliated purchaser for 
exportation to the United States, as adjusted under subsection 722(c) 
of the Act.
    Section 772(b) of the Act defines CEP as the price at which the 
subject merchandise is first sold in the United States before or after 
the date of importation by or for the account of the producer or 
exporter of such merchandise or by a seller affiliated with the 
producer or exporter, to a purchaser not affiliated with the producer 
or exporter, as adjusted under subsections 772(c) and (d) of the Act.
    During the POR, Ivaco made both EP and CEP sales. We calculated an 
EP for sales where the merchandise was sold directly by Ivaco to the 
first unaffiliated purchaser in the United States prior to importation, 
and CEP was not otherwise warranted based on the facts on the record. 
We calculated a CEP for sales made by Ivaco Rolling Mills (IRM) and by 
Ivaco's two affiliated U.S. further processors after the importation of 
the subject merchandise into the United States. For EP sales, we made 
additions to the starting price (gross unit price), where appropriate, 
for freight revenue (reimbursement for freight charges paid by Ivaco) 
and for billing errors (debit-note price adjustments made by Ivaco), 
and deductions, where appropriate, for billing adjustments (including 
credit-note price adjustments made by Ivaco), early payment discounts 
and rebates, and movement expenses in accordance with section 
772(c)(2)(A) of the Act. Movement expenses included inland freight, 
warehousing expenses, brokerage fees, U.S. customs duty, and U.S. 
merchandise processing fees.
    For CEP sales, we made the same adjustments to the starting price 
as for the EP transactions described above. In accordance with sections 
772(d) of the Act, we also made deductions, where appropriate, for 
direct and indirect selling expenses, further manufacturing costs, and 
CEP profit. Included in the indirect selling expenses we deducted those 
expenses Ivaco and IRM incurred in Canada which were associated with 
economic activities in the United States; i.e., expenses incurred 
arranging transportation to unaffiliated U.S. customers, evaluating 
orders from such customers, and issuing invoices for CEP sales, and so 
forth. The preamble to Antidumping Duties; Countervailing Duties; Final 
Rule, 62 FR 27296, 27351 (May 19, 1997) (Preamble), states that the 
Department will deduct all CEP expenses related to the first sale to an 
unaffiliated U.S. customer ``* * * even if, for example, the foreign 
parent of the affiliated U.S. importer pays those expenses.'' See also 
the Statement of Administrative Action (SAA) accompanying the Uruguay 
Round Agreements Act (URAA), H. Doc. 103-316, Vol. I (1994), at 823. 
The U.S. Court of International Trade has upheld such deductions. See 
Mitsubishi Heavy Industry Ltd. v. United States, 54 F. Supp. 2d 1183 
(Ct. Int'l Trade 1999).
    In accordance with section 772(c)(2) of the Act, we made deductions 
from the starting price for movement expenses and export taxes and 
duties, where appropriate. Section 772(d)(1) of the Act provides for 
additional adjustments to calculate CEP. Accordingly, where 
appropriate, we deducted direct and indirect selling expenses related 
to economic activity in the United States. Pursuant to section 
772(d)(3) of the Act, where applicable, we made an adjustment for CEP 
profit.

Normal Value

A. Selection of Comparison Markets

    Section 773(a)(1) of the Act directs that NV be based on the price 
at which the foreign like product is sold in the home market, provided 
that the merchandise is sold in sufficient quantities (or value, if 
quantity is inappropriate) and that there is no particular market 
situation that prevents a proper comparison with the EP. The statute 
contemplates that quantities (or value) will normally be considered 
insufficient if they are less than five percent of the aggregate 
quantity (or value) of sales of the subject merchandise to the United 
States.
    We found that Ivaco had a viable home market for steel wire rod. As 
such, Ivaco submitted home market sales data for purposes of the 
calculation of NV. In deriving NV, we made adjustments as detailed in 
the Calculation of Normal Value Based on Home Market Prices section 
below.

B. Cost of Production Analysis

    Because we disregarded below-cost sales in the investigation, we 
have reasonable grounds to believe or suspect that home market sales of 
the foreign like product by Ivaco were made at prices below the cost of 
production (COP) during the period of the second review. Therefore, 
pursuant to section 773(b)(2)(A)(ii) of the Act, we initiated a COP 
investigation of sales made by Ivaco.
1. Calculation of Cost of Production
    In accordance with section 773(b)(3) of the Act, we calculated the 
weighted-average COP, by model, based on the sum of materials, 
fabrication, and general and administrative (G&A) expenses. We relied 
on Ivaco's submitted COP except for the following adjustments:
    (a) We removed the further manufacturing field from the home market 
sales database and added the further manufacturing expenses erroneously 
reported in the sales database to Ivaco's cost of manufacturing;
    (b) We added the depreciation expenses incurred on Ivaco Steel 
Processing (New York) LLC's idled assets to ISP's G&A expenses; and
    (c) We allocated the portion of Ivaco's head office expenses that 
did not go to IRM, Sivaco Quebec, and Sivaco Ontario to Ivaco's other 
entities.
    See Memorandum from Daniel O'Brien and Amber Musser, International 
Trade Compliance Analysts, to Constance Handley, Program Manager, Re: 
Analysis Memorandum for Ivaco, Inc., dated July 2, 2004 (the Analysis 
Memorandum).
2. Test of Comparison Market Sales Prices
    We compared the weighted-average COPs for Ivaco to its home market 
sales prices of the foreign like product, as required under section 
773(b) of the Act, to determine whether these sales had been made at 
prices below the COP within an extended period of time (i.e., a period 
of one year) in substantial quantities and whether such prices were 
sufficient to permit the recovery of all costs within a reasonable 
period of time.
    On a model-specific basis, we compared the COP to the home market 
prices, less any applicable movement charges, discounts, rebates, and 
direct and indirect selling expenses.
3. Results of the COP Test
    We disregard below-cost sales where (1) 20 percent or more of a 
respondent's sales of a given product during the POR were made at 
prices below the COP and thus were made within an extended period of 
time in substantial quantities in accordance with sections 773(b)(2)(B)

[[Page 43392]]

and (C) of the Act, and (2) based on comparisons of price to weighted-
average COPs for the POR, we determined that the below-cost sales of 
the product were at prices which would not permit recovery of all costs 
within a reasonable time period, in accordance with section 
773(b)(2)(D) of the Act. We found that Ivaco made sales below cost and 
we disregarded such sales where appropriate.

C. Calculation of Normal Value Based on Comparison-Market Prices

    We determined NV for Ivaco as follows. We made adjustments for any 
differences in packing and deducted home market movement expenses 
pursuant to sections 773(a)(6)(A) and 773(a)(6)(B)(ii) of the Act. In 
addition, we made adjustments for differences in circumstances of sale 
(COS) pursuant to section 773(a)(6)(C)(iii) of the Act.
    We made COS adjustments for Ivaco's EP transactions by deducting 
direct selling expenses incurred for home market sales (credit expenses 
and warranty expenses) and adding U.S. direct selling expenses (credit 
expenses and warranty expenses). For matches of similar merchandise, we 
made adjustments, where appropriate, for physical differences in the 
merchandise in accordance with section 773(a)(6)(C)(ii) of the Act.
    Because Ivaco paid commissions on its EP sales, in calculating NV, 
we deducted the lesser of either (1) the weighted-average amount of 
commission paid on a U.S. sale for a particular product, or (2) the 
weighted-average amount of indirect selling expenses paid on the home 
market sales for a particular product. See Preamble, 62 FR 27296, 27414 
(May 19, 1997) at 19 CFR 351.410(e) (clarifying the deduction described 
in 19 CFR 351.410 (e)).

D. Arm's-Length Sales

    Ivaco reported sales of the foreign like product to an affiliated 
customer. To test whether these sales to affiliated customers were made 
at arm's length, where possible, we compared the prices of sales to 
affiliated and unaffiliated customers, net of all movement charges, 
direct selling expenses, and packing. To test whether the sales to 
affiliates were made at arm's-length prices, we compared the unit 
prices of sales to affiliated and unaffiliated customers net of all 
movement charges, direct selling expenses, and packing expenses. Where 
the price to that affiliated party was, on average, within a range of 
98 to 102 percent of the price of the same or comparable merchandise 
sold to the unaffiliated parties at the same level of trade, we 
determined that the sales made to the affiliated party were at arm's 
length. See Modification Concerning Affiliated Party Sales in the 
Comparison Market, 67 FR 69186 (November 15, 2002).

E. Calculation of Normal Value Based on Constructed Value

    Section 773(a)(4) of the Act provides that, where NV cannot be 
based on comparison-market sales, NV may be based on constructed value 
(CV). Accordingly, for those models of steel wire rod for which we 
could not determine the NV based on comparison-market sales, either 
because there were no sales of a comparable product or all sales of the 
comparison products failed the COP test, we based NV on CV.
    Section 773(e)(1) of the Act provides that CV shall be based on the 
sum of the cost of materials and fabrication for the imported 
merchandise plus amounts for selling, general, and administrative 
expenses (SG&A), profit, and U.S. packing expenses. We calculated the 
cost of materials and fabrication based on the methodology described in 
the COP section of this notice. We based SG&A and profit on the actual 
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 comparison market, in accordance with 
section 773(e)(2)(A) of the Act. In addition, we used U.S. packing 
costs as described in the Export Price section of this notice, above.
    We made adjustments to CV for differences in COS in accordance with 
section 773(a)(8) of the Act and 19 CFR 351.410. For CEP and EP 
comparisons, we deducted direct selling expenses incurred for home 
market sales (credit expenses and warranty expenses). For EP sales we 
added U.S. direct selling expenses (credit expenses and warranty 
expenses) to the NV.
    Because Ivaco paid commissions on its EP sales, in calculating NV, 
we deducted the lesser of either (1) the weighted-average amount of 
commission paid on a U.S. sale for a particular product, or (2) the 
weighted-average amount of indirect selling expenses paid on the home 
market sales for a particular product. See Preamble, 62 FR 27296, 27414 
(May 19, 1997) at 19 CFR 351.410(e) (clarifying the deduction described 
in 19 CFR 351.410 (e)).

F. Level of Trade/Constructed Export Price Offset

    In accordance with section 773(a)(1)(B) of the Act, to the extent 
practicable, we determine NV based on sales in the comparison market at 
the same level of trade as the EP transaction. The NV level of trade is 
that of the starting-price sales in the comparison market. For EP 
sales, the U.S. level of trade is also the level of the starting-price 
sale, which is usually from exporter to importer.
    To determine whether NV sales are at a different level of trade 
than EP transactions, 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 level of trade 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 level of trade of the export transaction, we make a 
level-of-trade adjustment under section 773(a)(7)(A) of the Act.
    In implementing these principles in this administrative review, we 
obtained information from Ivaco about the marketing stages involved in 
the reported U.S. and home market sales, including a description of the 
selling activities performed by the respondent for each channel of 
distribution. In identifying levels of trade for EP and home market 
sales, we considered the selling functions reflected in the starting 
price before any adjustments.
    In conducting our level-of-trade analysis for Ivaco, we examined 
the specific types of customers, the channels of distribution, and the 
selling practices of the respondent. Generally, if the reported levels 
of trade are the same, the functions and activities of the seller 
should be similar. Conversely, if a party reports levels of trade that 
are different for different categories of sales, the functions and 
activities may be dissimilar. We found the following.
    Ivaco reported two channels of distribution in the home market. The 
channels of distribution are: (1) Direct sales by IRM and (2) direct 
sales by Sivaco. To determine whether separate levels of trade exist in 
the home market, we examined the stages in the marketing process and 
selling functions along the chain of distribution between Ivaco and its 
customers. Based on this examination, we preliminarily determine that 
Ivaco sold merchandise at two levels of trade in the home market during 
the POR. One level of trade is for sales made by Ivaco's steel wire rod 
manufacturing facility, IRM; the second level of trade is for sales 
made by Sivaco, Ivaco's customer service center, which is also a steel 
wire rod processing and drawing facility. From our analysis of the 
marketing

[[Page 43393]]

process for these sales, we determined that sales by Sivaco are at a 
more remote marketing stage than that for sales by IRM. Sales by Sivaco 
have different, more complex, distribution patterns, involving 
substantially greater selling activities. Based on these differences, 
we concluded that two levels of trade exist in the home market, an IRM 
level of trade (``level one'') and a Sivaco level of trade (``level 
two'').
    The Department analyzed Ivaco's selling functions in the home 
market, including inventory maintenance services, delivery services, 
handling services, freight services, sales administration services, bid 
assistance, technical services, and extension of credit. With regard to 
inventory maintenance, Sivaco offers more extensive inventory services 
than IRM. Sivaco maintains a significant general inventory, which 
results in a significantly longer inventory turnover rate for Sivaco, 
and additional services. This allows Sivaco to offer its customers 
just-in-time (JIT) delivery services. Thereby, Sivaco assumes the 
inventory services that would normally be performed by the customer. 
IRM does not provide these additional services. As stated by the 
Department in Pipe and Tube from Turkey, ``inventory maintenance is a 
principal selling function'' and `` the additional responsibilities of 
maintaining merchandise in inventory also gives rise to related selling 
functions that are performed.'' \3\
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    \3\ See Certain Welded Carbon Steel Pipe and Tube From Turkey, 
63 FR 35190 (1998) (Pipe and Tube from Turkey).
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    Specifically, Sivaco ships more often than IRM due to the fact that 
Sivaco offers its customers JIT inventory, while IRM produces and ships 
rod based on a quarterly rolling schedule. In addition, Sivaco provides 
more handling and freight services than IRM in that it offers smaller, 
more frequent shipments with more varied freight services. For example, 
IRM sells rod in either full truck load or rail car quantities, while 
Sivaco will arrange shipment for less than truck-load quantities. With 
regard to sales administration services, Sivaco has a smaller average 
shipment size than IRM, resulting in a higher proportional sales 
administrative service cost than IRM. Furthermore, Sivaco offers the 
following services to its customers, which IRM does not; (1) Bid 
assistance to customers, (2) assistance with product specification and 
material/ processing review, and (3) a wider range of technical 
assistance, including helping customers solve usage problems and choose 
the best type of rod for their applications and machinery.
    In the U.S. market, Ivaco reported two EP channels of distribution. 
The channels of distribution are: (1) Direct sales by IRM to U.S. 
customers and (2) direct sales by Sivaco to U.S. customers. To 
determine whether separate levels of trade exist for EP sales to the 
U.S. market, we examined the selling functions, the chain of 
distribution, and the customer categories reported in the United 
States.
    Specifically, we have found that direct sales by IRM to U.S. 
customers involve all the same selling functions as IRM's sales in the 
home market. Further, direct sales by Sivaco in the U.S. include all 
the same selling functions and are made at the same level of trade as 
those found in the home market. Sales by Ivaco's steel wire rod 
manufacturing facility, IRM, are made at level of trade one, the same 
as IRM's home market sales. EP sales by Sivaco are made at the second 
level of trade. Because the levels of trade in the United States for EP 
sales are identical to those in the home market, the preceding analysis 
with respect to the home market levels of trade applies equally to the 
U.S. market.
    To the extent possible, we have compared U.S. EP transactions and 
home market sales at the same level of trade without making a level-of-
trade adjustment. When we were unable to find sales of the foreign like 
product in the home market at the same level of trade as the U.S. sale, 
we examined whether a level-of-trade adjustment was appropriate. 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. Net prices are used because any difference 
will be due to differences in level of trade rather than other factors. 
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 no pattern of consistent price differences, the difference in 
levels of trade does not have a price effect and, therefore, no 
adjustment is necessary.
    For EP sales, we found that there were consistent price differences 
between models sold at different levels of trade. Therefore, we made a 
level-of-trade adjustment for EP sales for which we were unable to find 
sales of the foreign like product in the home market at the same level 
of trade as the U.S. sale.
    In addition, Ivaco has two CEP channels of distribution which 
constitute a single level of trade: (1) Sales of goods manufactured by 
IRM that are not further manufactured before being sold to unaffiliated 
customers from inventory locations in the United States and (2) sales 
by IRM of products further manufactured in the United States by 
affiliated companies. For CEP sales, we examined the relevant functions 
after deducting the costs of further manufacturing and U.S. selling 
expenses and associated profit. As a result, there are no selling 
activities associated with Ivaco's CEP sales in either channel of 
distribution when effecting the level-of-trade comparison with home 
market sales. Therefore, we preliminarily find that the CEP level of 
trade is not comparable to either level of trade in the home market. We 
were unable to quantify the level-of-trade adjustment, in accordance 
with section 773(a)(7)(B) of the Act; therefore, we matched, where 
possible, to the closest home market level of trade, level one, and 
granted a CEP offset pursuant to section 773(a)(7)(B) of the Act.

Currency Conversion

    We made currency conversions into U.S. dollars in accordance with 
section 773A of the Act, based on exchange rates in effect on the date 
of the U.S. sale, 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 April 10, 2002, 
through September 30, 2003:

------------------------------------------------------------------------
                                                Weighted-average  margin
                   Producer                           (Percentage)
------------------------------------------------------------------------
Ivaco.........................................                    10.38
------------------------------------------------------------------------

    The Department will disclose calculations performed in accordance 
with 19 CFR 351.224(b). An interested party may request a hearing 
within 30 days of publication of these preliminary results. See 19 CFR 
351.310(c). Any hearing, if requested, will be held 44 days after the 
date of publication, or the first working day thereafter. Interested 
parties may submit case briefs and/or written comments no later than 30 
days

[[Page 43394]]

after the date of publication of these preliminary results. Rebuttal 
briefs and rebuttals to written comments, limited to issues raised in 
such briefs or comments, may be filed no later than 37 days after the 
date of publication. Parties who submit arguments are requested to 
submit with the argument (1) a statement of the issue, (2) a brief 
summary of the argument, and (3) a table of authorities. Further, the 
parties submitting written comments should provide the Department with 
an additional copy of the public version of any such comments on 
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 such comments, within 120 days of publication 
of these preliminary results.

Assessment

    Upon completion of this administrative review, pursuant to 19 CFR 
351.212(b), the Department will calculate an assessment rate on all 
appropriate entries. We will calculate importer-specific duty 
assessment rates on the basis of the ratio of the total amount of 
antidumping duties calculated for the examined sales to the total 
volume of the examined sales for that importer. Where the assessment 
rate is above de minimis, we will instruct CBP to assess duties on all 
entries of subject merchandise by that importer.

Cash Deposit Requirements

    The following deposit rates will be effective upon publication of 
the final results of this administrative review for all shipments of 
steel wire rod from Canada entered, or withdrawn from warehouse, for 
consumption on or after the publication date, as provided by section 
751(a)(1) of the Act: (1) The cash deposit rate listed above for Ivaco 
will be the rate established in the final results of this review, 
except if a rate is less than 0.5 percent, and therefore de minimis, 
the cash deposit will be zero; (2) for previously reviewed or 
investigated 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 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) 
if neither the exporter nor the manufacturer is a firm covered in this 
or any previous review conducted by the Department, the cash deposit 
rate will be 8.11 percent, the ``All Others'' rate established in the 
LTFV investigation. These cash deposit requirements, when imposed, 
shall remain in effect until publication of the final results of the 
next administrative review.
    This notice serves as a preliminary reminder to importers of their 
responsibility under 19 CFR 351.402(f) to file a certificate regarding 
the reimbursement of antidumping duties prior to liquidation of the 
relevant entities 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: July 2, 2004.
Jeffrey May,
Acting Assistant Secretary for Import Administration.
[FR Doc. 04-16582 Filed 7-19-04; 8:45 am]
BILLING CODE 3510-DS-P