[Federal Register Volume 69, Number 215 (Monday, November 8, 2004)]
[Notices]
[Pages 64722-64726]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E4-3070]



[[Page 64722]]

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DEPARTMENT OF COMMERCE

International Trade Administration

[A-201-830]


Preliminary Results of Antidumping Duty Administrative Review of 
the Antidumping Duty: Carbon and Alloy Steel Wire Rod from Mexico

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 by interested parties, the Department 
of Commerce (``the Department'') is conducting an administrative review 
of the antidumping duty order on carbon and alloy steel wire rod 
(``wire rod'') from Mexico for the period of review (``POR'') April 10, 
2002, through September 30, 2003.
    We preliminarily determine that during the POR, Hylsa Puebla, S.A. 
de C.V. (``Hylsa Puebla'') and Siderurgica Lazaro Cardenas Las Truchas 
S.A. de C.V., and its affiliate, CCC Steel GmbH (``CCC Steel''), 
collectively (``SICARTSA'') sold subject merchandise at less than 
normal value (``NV''). If these preliminary results are adopted in the 
final results of this administrative review, we will instruct U.S. 
Customs and Border Protection (``CBP'') to assess antidumping duties 
equal to the difference between the export price (``EP'') and NV. 
Interested parties are invited to comment on these preliminary results. 
Parties who submit comments in this segment of the proceeding should 
also submit with them: (1) a statement of the issues and (2) a brief 
summary of the comments. Further, parties submitting written comments 
are requested to provide the Department with an electronic version of 
the public version of any such comments on diskette. The due date of 
the case briefs and the date of the hearing (if required) will be 
announced at a later date.

EFFECTIVE DATE: November 8, 2004.

FOR FURTHER INFORMATION CONTACT: Mark Young or Tipten Troidl at (202) 
482-6397 or (202) 482-1767, respectively; AD/CVD Operations, Office 3, 
Import Administration, Room 1870, International Trade Administration, 
U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, 
Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

Background

    On October 29, 2002, the Department published in the Federal 
Register the antidumping duty order on wire rod from Mexico; see Notice 
of Antidumping Duty Orders: Carbon and Certain Alloy Steel Wire Rod 
from Brazil, Indonesia, Mexico, Moldova, Trinidad and Tobago, and 
Ukraine, 67 FR 65945. On October 1, 2003, we published in the Federal 
Register the notice of Antidumping or Countervailing Duty Order, 
Finding, or Suspended Investigation: Opportunity To Request 
Administrative Review, 68 FR 56618.
    By October 31, 2003, we had received requests for review from 
petitioners,\1\ SICARTSA, and Hylsa Puebla and its parent company 
Hylsamex, S.A. de C.V. (``Hylsamex''),\2\ in accordance with 19 CFR 
351.213(b)(2).
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    \1\ The petitioners are Gerdau Ameristeel U.S., Inc., Georgetown 
Steel Co., Keystone Consolidated Industries, Inc., and North Star 
Steel Texas, Inc.
    \2\ Hylsa Puebla is a wholly-owned subsidiary of Hylsa, S.A. de 
C.V., which in turn is wholly-owned by Hylsamex, a Mexican holding 
company. On January 7, 2004, Hylsamex stated that it did not produce 
subject merchandise and it did not have any sales of subject 
merchandise to customers in the United States or Mexico during the 
review period. As a result Hylsamex withdrew its request for a 
review during the current review period.
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    On November 28, 2003, we published the notice of initiation of this 
antidumping duty administrative review covering the period April 10, 
2002, through September 30, 2003. See Initiation of Antidumping and 
Countervailing Duty Administrative Reviews, 68 FR 66799 (November 28, 
2003) (``Initiation Notice'').
    During the most recently completed segment of the proceeding in 
which SICARTSA participated, the Department found and disregarded sales 
that failed the cost test.\3\ Pursuant to section 773(b)(2)(A)(ii) of 
the Tariff Act of 1930, as amended (``the Act''), we had reasonable 
grounds to believe or suspect that sales by SICARTSA of the foreign 
like product under consideration for the determination of NV in this 
review were made at prices below the cost of production (``COP''). 
Therefore, we initiated a cost investigation of SICARTSA, and 
instructed the company to fill out sections A-D\4\ of our initial 
questionnaire which was issued on December 9, 2003. SICARTSA submitted 
its response, in toto, by January 30, 2004.
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    \3\ The most recently completed segment in which SICARTSA 
participated was the investigation. See Notice of Final 
Determination of Sales at Less Than Fair Value: Carbon and Certain 
Alloy Steel Wire Rod From Mexico 67 FR 55800 (August 30, 2002) 
(``Wire Rod from Mexico'').
    \4\ Section A: Organization, Accounting Practices, Markets and 
Merchandise
    Section B: Comparison Market Sales
    Section C: Sales to the United States
    Section D: Cost of Production and Constructed Value
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    On February 18, 2004, petitioners submitted a sales-below-cost 
allegation against Hylsa Puebla. We determined that petitioners' cost 
allegations provided a reasonable basis to initiate a COP investigation 
of Hylsa Puebla's sales. See the company-specific COP initiation 
memorandum, dated February 25, 2004, in the case file in the Central 
Records Unit (``CRU''), main Commerce building, room B-099. Also, on 
February 27, 2004, we informed Hylsa Puebla that it was required to 
respond to section D of the antidumping questionnaire. See letter from 
the Department to Hylsa Puebla requiring a section D questionnaire 
response, dated February 27, 2004, in the CRU. On March 31, 2004, Hylsa 
Puebla submitted its response to the section D questionnaire.
    On June 14, 2004, the Department published an extension of 
preliminary results for this review, extending the preliminary results 
until October 30, 2004.\5\ See Carbon and Certain Alloy Steel Wire Rod 
From Mexico and Trinidad and Tobago: Extension of Preliminary Results 
of 2002/2003 Antidumping Duty Administrative Reviews, 69 FR 32979 (June 
14, 2004).
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    \5\ Since the due date falls on a Saturday, the actual signature 
date is November 1, 2004.
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    On September 9, 2004, the Department issued a supplemental section 
A-C questionnaire to SICARTSA. On September 24, 2004, we issued the 
company a supplemental section D questionnaire. We received SICARTSA's 
response to the section A-C supplemental questionnaire on September 15, 
2004, and a response to the section D supplemental questionnaire on 
October 8, 2004. On September 16, 2004, the Department issued a 
supplemental section A-C questionnaire to Hylsa Puebla. On October 8, 
2004, we issued the company a supplemental section D questionnaire. We 
received the response to Hylsa Puebla's section A-C supplemental 
questionnaire on October 7, 2004, and a response to the section D 
supplemental questionnaire on October 22, 2004.

Scope of Review

    Effective July 24, 2003, in accordance with the Department's Notice 
of Final Result of Changed Circumstances Review of the Antidumping Duty 
and Countervailing Duty Orders, and Intent To Revoke Orders in Part, 68 
FR 64079 (November 12, 2003), the scope of this order was amended. 
Therefore, for

[[Page 64723]]

purposes of this review, there were separate scopes in effect. These 
scopes are set forth below.

Scope of Order from October 29, 2002, through July 23, 2003

    The merchandise subject to 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 inclusions greater than 20 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 inclusions greater than 20 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).
    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 7213.91.3010, 7213.91.3090, 7213.91.4510, 7213.91.4590, 
7213.91.6010, 7213.91.6090, 7213.99.0031, 7213.99.0038, 7213.99.0090, 
7227.20.0010, 7227.20.0020, 7227.20.0090, 7227.20.0095, 7227.90.6051, 
7227.90.6053, 7227.90.6058, and 7227.90.6059 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.

Scope of Order from July 24, 2003, through the POR

    The merchandise subject to 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 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

[[Page 64724]]

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 7213.91.3010, 7213.91.3090, 7213.91.4510, 7213.91.4590, 
7213.91.6010, 7213.91.6090, 7213.99.0031, 7213.99.0038, 7213.99.0090, 
7227.20.0010, 7227.20.0020, 7227.20.0090, 7227.20.0095, 7227.90.6051, 
7227.90.6053, 7227.90.6058, and 7227.90.6059 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.\6\
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    \6\ Effective January 1, 2004, CBP reclassified certain HTSUS 
numbers related to the subject merchandise. See http://
hotdocs.usitc.gov/tariff--chapters--current/toc.html.
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Verification

    The Department intends to verify the questionnaire response 
submitted by Hysla Puebla, as this company was not included in the less 
than fair value (``LTFV'') investigation.

Product Comparisons

    In accordance with section 771(16) of the Act, all products 
produced by the respondents covered by the description in the ``Scope 
of Review'' section, above, and sold in Mexico during the POR are 
considered to be foreign like products for purposes of determining 
appropriate product comparisons to U.S. sales. We have relied on eight 
criteria to match U.S. sales of subject merchandise to comparison-
market sales of the foreign like product or constructed value (``CV''): 
grade range, carbon content range, surface quality, deoxidation, 
maximum total residual content, heat treatment, diameter range, and 
coating. These characteristics have been weighted by the Department 
where appropriate. Where there were no sales of identical merchandise 
in the home market made in the ordinary course of trade to compare to 
U.S. sales, we compared U.S. sales to the next most similar foreign 
like product on the basis of the characteristics listed above. Where 
there were no sales of the foreign like product in the home market 
suitable for matching to the subject merchandise, we used constructed 
value as the basis for normal value.

Comparisons to Normal Value

    To determine whether sales of wire rod from Mexico were made in the 
United States at less than NV, we compared the EP to the NV, as 
described in the ``Export Price'' and ``Normal Value'' sections of this 
notice. In accordance with section 777A(d)(2) of the Act, we calculated 
monthly weighted-average prices for NV and compared these to individual 
U.S. transactions. See the company-specific calculation memoranda, 
available in the CRU.

Export Price

    For the price to the United States, we used, as appropriate, EP in 
accordance with sections 772(a) and (b) of the Act. We calculated EP 
when the merchandise was sold by the producer or exporter outside of 
the United States directly to the first unaffiliated purchaser in the 
United States prior to importation and when CEP was not otherwise 
warranted based on the facts on the record. We based EP on the packed 
cost-insurance-freight (``CIF''), ex-factory, free-on-board (``FOB''), 
or delivered prices to the first unaffiliated customer in, or for 
exportation to, the United States. When appropriate, we reduced these 
prices to reflect discounts and rebates.
    In accordance with section 772(c)(2) of the Act, we made 
deductions, where appropriate, for movement expenses including inland 
freight from plant or warehouse to port of exportation, foreign 
brokerage, handling and loading charges, export duties, international 
freight, marine insurance, U.S. duties, and U.S. inland freight 
expenses (freight from port to the customer).

Normal Value

A. Selection of Comparison Markets

    To determine whether there was a sufficient volume of sales in the 
home market to serve as a viable basis for calculating NV, we compared 
each respondent's volume of home market sales of the foreign like 
product to the volume of its U.S. sales of the subject merchandise. 
Pursuant to sections 773(a)(1)(B) and 773(a)(1)(C) of the Act, because 
each respondent had an aggregate volume of home market sales of the 
foreign like product that was greater than five percent of its 
aggregate volume of U.S. sales of the subject merchandise, we 
determined that the home market was viable for all producers.

B. Arm's-Length Test

    SICARTSA and Hylsa Puebla reported sales of the foreign like 
product to an affiliated end-user and an affiliated reseller. The 
Department calculates the NV based on a sale to an affiliated party 
only if it is satisfied that the price to the affiliated party is 
comparable to the price at which sales are made to parties not 
affiliated with the producer or exporter, i.e., sales at arm's-length. 
See 19 CFR 351.403(c). To test whether these sales were made at arm's-
length, we compared the starting prices of sales to affiliated and 
unaffiliated customers

[[Page 64725]]

net of all movement charges, direct selling expenses, discounts and 
packing. In accordance with the Department's current practice, if the 
prices charged to an affiliated party were, on average, between 98 and 
102 percent of the prices charged to unaffiliated parties for 
merchandise identical or most similar to that sold to the affiliated 
party, we consider the sales to be at arm's-length prices. See 19 CFR 
351.403(c). Conversely, where sales to the affiliated party did not 
pass the arm's-length test, all sales to that affiliated party have 
been excluded from the NV calculation. See Antidumping Proceedings: 
Affiliated Party Sales in the Ordinary Course of Trade, 67 FR 69186 
(November 15, 2002). Both Hysla and SICARTSA had sales that did not 
pass the arm's-length test and were excluded from the NV calculation.

C. Cost of Production Analysis

1. Calculation of COP
    Before making any comparisons to NV, we conducted a COP analysis of 
SICARTSA and Hylsa Puebla, pursuant to section 773(b) of the Act, to 
determine whether the respondents' comparison market sales were made 
below the COP. We calculated the COP based on the sum of the cost of 
materials and fabrication for the foreign like product, plus amounts 
for selling, general, and administrative expenses (``SG&A'') and 
packing, in accordance with section 773(b)(3) of the Act. We relied on 
the respondents' information as submitted.
    In the investigation we found that for iron ore and lime, major 
inputs in wire rod production, the affiliates' average COP exceeded the 
transfer price SICARTSA paid to its affiliated suppliers. In the 
current review, we also preliminarily find that the affiliates' average 
COP exceeded the transfer price SICARTSA paid for those inputs. 
Therefore, pursuant to section 773(f)(3) of the Act, we applied the 
major input rule and adjusted SICARTSA's reported cost of manufacturing 
to account for purchases of iron ore and lime from affiliated parties 
at non-arm's length prices. We were unable to compare the transfer 
price for iron ore to a market price as there were no unaffiliated 
purchases or sales. See October 8, 2004 supplemental questionnaire 
response at Exhibit 8. We therefore, adjusted SICARTSA's reported COM 
to reflect the higher COP.
2. Test of Comparison Market Prices
    As required under section 773(b)(2) of the Act, we compared the 
weighted-average COP to the per-unit price of the comparison market 
sales of the foreign like product, 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. We 
determined the net comparison market prices for the below-cost test by 
subtracting from the gross unit price any applicable movement charges, 
discounts, rebates, direct and indirect selling expenses (also 
subtracted from the COP), and packing expenses.
3. Results of the COP Test
    Pursuant to section 773(b)(2)(C)(i) of the Act, where less than 20 
percent of sales of a given product were at prices less than the COP, 
we did not disregard any below-cost sales of that product because we 
determined that the below-cost sales were not made in ``substantial 
quantities.'' Where 20 percent or more of a respondent's sales of a 
given product during the POR were at prices less than the COP, we 
determined such sales to have been made in ``substantial quantities.'' 
See section 773(b)(2)(C) of the Act. The sales were made within an 
extended period of time in accordance with section 773(b)(2)(B) of the 
Act, because they were made over the course of the POR. In such cases, 
because we compared prices to POR-average costs, we also determined 
that such sales were not made at prices which would permit recovery of 
all costs within a reasonable period of time, in accordance with 
section 773(b)(2)(D) of the Act. Therefore, for SICARTSA and Hylsa 
Puebla, for purposes of this administrative review, we disregarded 
below-cost sales of a given product and used the remaining sales as the 
basis for determining NV, in accordance with section 773(b)(1) of the 
Act. See the company-specific calculation memoranda on file in the CRU 
for our calculation methodology and results.

D. Calculation of Normal Value Based on Comparison Market Prices

    We calculated NV based on ex-works, FOB or delivered prices to 
comparison market customers. We made deductions from the starting 
price, when appropriate, for handling, loading, inland freight, 
warehousing, inland insurance, and discounts. We added interest, 
freight, and other revenue (i.e., Mexican and U.S. brokerage and 
handling, and duty charged to customer) where applicable. In accordance 
with sections 773(a)(6)(A) and (B) of the Act, we added U.S. packing 
costs and deducted comparison market packing, respectively. In 
addition, we made circumstance of sale (``COS'') adjustments for direct 
expenses, including imputed credit expenses, advertising, warranty 
expenses, commissions, bank charges, and billing adjustments, in 
accordance with section 773(a)(6)(C)(iii) of the Act.
    We also made adjustments, in accordance with 19 CFR 351.410(e), for 
indirect selling expenses incurred on comparison market or U.S. sales 
where commissions were granted on sales in one market but not in the 
other, the ``commission offset.'' Specifically, where commissions are 
incurred in one market, but not in the other, we will limit the amount 
of such allowance to the amount of either the selling expenses incurred 
in the one market or the commissions allowed in the other market, 
whichever is less.
    When comparing U.S. sales with comparison market sales of similar, 
but not identical, merchandise, we also made adjustments for physical 
differences in the merchandise in accordance with section 
773(a)(6)(C)(ii) of the Act and section 351.411 of the Department's 
regulations. We based this adjustment on the difference in the variable 
cost of manufacturing for the foreign like product and subject 
merchandise, using POR-average costs.
    Sales of wire rod purchased by the respondents from unaffiliated 
producers and resold in the comparison market were treated in the same 
manner described above in the ``Export Price'' section of this notice.

E. Calculation of Normal Value Based on Constructed Value

    When we could not determine the NV based on comparison market sales 
because there were no contemporaneous sales of a comparable product, we 
compared the EP to CV. In accordance with section 773(e) of the Act, we 
calculated CV based on the sum of the cost of manufacturing (``COM'') 
of the product sold in the United States, plus amounts for SG&A 
expenses, profit, and U.S. packing costs. In accordance with section 
773(e)(2)(A) of the Act, we based SG&A expenses and profit on the 
amounts incurred by SICARTSA in connection with the production and sale 
of the foreign like product in the comparison market.
    For price-to-CV comparisons, we made adjustments to CV for COS 
differences, in accordance with section 773(a)(8) of the Act and 19 CFR 
351.410. We made COS adjustments by deducting direct selling expenses 
incurred on comparison market sales and adding U.S. direct selling 
expenses.

[[Page 64726]]

F. Level of Trade

    In accordance with section 773(a)(1)(B) of the Act, we determined 
NV based on sales in the comparison market at the same level of trade 
(``LOT'') as the EP sales, to the extent practicable. When there were 
no sales at the same LOT, we compared U.S. sales to comparison market 
sales at a different LOT. When NV is based on CV, the NV LOT is that of 
the sales from which we derive SG&A expenses and profit.
    Pursuant to section 351.412 of the Department's regulations, to 
determine whether comparison market sales were at a different LOT, we 
examined stages in the marketing process and selling functions along 
the chain of distribution between the producer and the unaffiliated (or 
arm's-length) customers. If the comparison-market sales were at a 
different LOT and the differences affect 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 will make an LOT adjustment under section 
773(a)(7)(A) of the Act.
    For a detailed description of our LOT methodology and a summary of 
company-specific LOT findings for these preliminary results, see the 
calculation memoranda, all on file in the CRU.

Currency Conversion

    For purposes of these preliminary results, we made currency 
conversions in accordance with section 773A(a) of the Act, based on the 
official exchange rates published by the Federal Reserve Bank.

Preliminary Results of Review

    As a result of our review, we preliminarily determine that the 
following percentage weighted-average margins exist for the period 
April 10, 2002, through September 30, 2003:

------------------------------------------------------------------------
                                                                Margin
                    Manufacturer/exporter                      (percent)
------------------------------------------------------------------------
SICARTSA....................................................        1.82
Hylsa Puebla................................................        7.27
------------------------------------------------------------------------

    The Department will disclose calculations performed within five 
days of the date of publication of this notice to the parties of this 
proceeding 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). The Department will 
announce the due date of the case briefs at a later date. Rebuttal 
briefs must be limited to issues raised in the case briefs. Parties who 
submit arguments are requested to submit with the argument (1) a 
statement of the issue, and (2) a brief summary of the argument. 
Further, parties submitting written comments are requested to provide 
the Department with an additional copy of the public version of any 
such comments on diskette. 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, ordinarily will be held two days 
after the due date of the rebuttal briefs. 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, or at a 
hearing, if requested, within 120 days of publication of these 
preliminary results.

Assessment Rate

    Pursuant to 19 CFR 351.212(b), the Department calculated an 
assessment rate for each importer of the subject merchandise. Upon 
issuance of the final results of this administrative review, if any 
importer-specific assessment rates calculated in the final results are 
above de minimis (i.e., at or above 0.5 percent), the Department will 
issue appraisement instructions directly to CBP to assess antidumping 
duties on appropriate entries by applying the assessment rate to the 
entered value of the merchandise. For assessment purposes, we 
calculated importer-specific assessment rates for the subject 
merchandise by aggregating the dumping margins for all U.S. sales to 
each importer and dividing the amount by the total entered value of the 
sales to that importer. Where appropriate, to calculate the entered 
value, we subtracted international movement expenses (e.g., 
international freight) from the gross sales value.

Cash Deposit Requirements

    To calculate the cash deposit rate for each producer and/or 
exporter included in this administrative review, we divided the total 
dumping margins for each company by the total net value for that 
company's sales during the review period.
    The following deposit rates will be effective upon publication of 
the final results of this administrative review for all shipments of 
wire rod from Mexico entered, or withdrawn from warehouse, for 
consumption on or after the publication date, as provided by section 
751(a)(2)(C) of the Act: (1) The cash deposit rates for the companies 
listed above will be the rates established in the final results of this 
review, except if the 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 
final results in which that manufacturer or exporter participated; (3) 
if the exporter is not a firm covered in this review, a prior review, 
or the original LTFV investigation, but the manufacturer is, the cash 
deposit rate will be the rate established for the most recent final 
results 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 20.11 
percent, the ``All Others'' rate established in the LTFV investigation. 
See Wire Rod From Mexico, 67 FR 55800, at 55801.
    These cash deposit requirements, when imposed, shall remain in 
effect until publication of the final results of the next 
administrative review.

Notification to Importers

    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 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 administrative review is issued and published in accordance 
with sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: November 1, 2004.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. E4-3070 Filed 11-5-04; 8:45 am]
Billing Code: 3510-DS-P