[Federal Register Volume 70, Number 174 (Friday, September 9, 2005)]
[Notices]
[Pages 53621-53627]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-4947]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-122-822]


Certain Corrosion-Resistant Carbon Steel Flat Products from 
Canada: Preliminary Results of Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration, U.S. 
Department of Commerce.
SUMMARY: In response to timely requests, the U.S. Department of 
Commerce (the Department) is conducting an administrative review of the 
antidumping duty order on certain corrosion-resistant carbon steel flat 
products (CORE) from Canada for the period August 1, 2003, through July 
31, 2004. The review covers two respondents, Dofasco Inc. and Sorevco 
and Company, Ltd. (collectively Dofasco), and Stelco Inc. (Stelco).
    The Department preliminarily determines that Dofasco made sales to 
the United States at less than normal value (NV). If these preliminary 
results are adopted in our final results of this administrative review, 
we will instruct U.S. Customs and Border Protection (CBP) to assess 
antidumping duties on entries of Dofasco's merchandise during the 
period of review. The Department also preliminarily determines that 
Stelco did not make sales to the United States at less than NV. If 
these preliminary results are adopted in our final results of this 
administrative review, we will instruct CBP to liquidate without regard 
to antidumping duties entries of Stelco's merchandise during the period 
of review. The preliminary results are listed below in the section 
titled ``Preliminary Results of Review.''

EFFECTIVE DATE: September 9, 2005.

FOR FURTHER INFORMATION CONTACT: Kyle Lamborn or Douglas Kirby, AD/CVD 
Operations, Office 6, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th & Constitution 
Avenue, NW, Washington, DC 20230; telephone: 202-482-3586 and 202-482-
3782, respectively.

SUPPLEMENTARY INFORMATION:

Background

    The Department published the antidumping duty order on CORE from 
Canada on August 19, 1993. See Antidumping Duty Orders: Certain 
Corrosion-Resistant Carbon Steel Flat Products and Certain Cut-to-
Length Carbon Steel Plate From Canada, 58 FR 44162, as amended by 
Amended Final Determinations of Sales at Less Than Fair Value and 
Antidumping Orders: Certain Corrosion-Resistant Carbon Steel Flat 
Products and Certain Cut-to-Length Carbon Steel Plate From Canada, 60 
FR 49582 (September 26, 1995) (Amended Final and Order). On August 3, 
2004, the Department published in the Federal Register a notice of 
``Opportunity to Request Administrative Review'' of the antidumping 
duty order on CORE from Canada for the period August 1, 2003, through 
July 31, 2004. See Antidumping or Countervailing Duty Order, Finding, 
or Suspended Investigation; Opportunity to Request Administrative 
Review, 69 FR 46496. Based on timely requests, in accordance with 
section 751(a) of the Tariff Act of 1930, as amended (the Act), the 
Department initiated an administrative review of the antidumping duty 
order on CORE from Canada, covering the period August 1, 2003, through 
July 31, 2004. See Initiation of Antidumping and Countervailing Duty 
Administrative Reviews and Request for Revocation in Part, 69 FR 56745 
(September 22, 2004). This administrative review covers the following 
exporters: Dofasco, Impact Steel Canada, Ltd. (Impact Steel), and 
Stelco. On April 1, 2005, the Department rescinded the administrative 
review of Impact Steel because Impact Steel timely withdrew its 
request, and no other party requested an administrative review of 
Impact Steel. See Notice of Rescission, in Part, of Antidumping Duty 
Administrative Review: Corrosion-Resistant Carbon Steel Flat Products 
From Canada, 70 FR 17648 (April 7, 2005).
    On April 15, 2005, the Department extended the deadline for the 
preliminary results of this antidumping duty administrative review from 
May 3, 2005, to August 31, 2005. Notice of Extension of Time Limit for 
Preliminary Results of Antidumping Duty Administrative Review: 
Corrosion-Resistant Carbon Steel Flat Products From Canada, 70 FR 20863 
(April 22, 2005).

Period of Review

    The period of review (POR) is August 1, 2003, through July 31, 
2004.

Scope of the Order

    The product covered by the order is certain corrosion-resistant 
steel, and includes flat-rolled carbon steel products, of rectangular 
shape, either clad, plated, or coated with corrosion-resistant metals 
such as zinc, aluminum, or zinc-, aluminum-, nickel- or iron-based 
alloys, whether or not corrugated or painted, varnished or coated with 
plastics or other nonmetallic substances

[[Page 53622]]

in addition to the metallic coating, in coils (whether or not in 
successively superimposed layers) and of a width of 0.5 inch or 
greater, or in straight lengths which, if of a thickness less than 4.75 
millimeters, are of a width of 0.5 inch or greater and which measures 
at least 10 times the thickness or if of a thickness of 4.75 
millimeters or more are of a width which exceeds 150 millimeters and 
measures at least twice the thickness, as currently classifiable in the 
U.S. Harmonized Tariff Schedule (HTSUS) under item numbers 
7210.30.0030, 7210.30.0060, 7210.41.0000, 7210.49.0030, 7210.49.0090, 
7210.61.0000, 7210.69.0000, 7210.70.6030, 7210.70.6060, 7210.70.6090, 
7210.90.1000, 7210.90.6000, 7210.90.9000, 7212.20.0000, 7212.30.1030, 
7212.30.1090, 7212.30.3000, 7212.30.5000, 7212.40.1000, 7212.40.5000, 
7212.50.0000, 7212.60.0000, 7215.90.1000, 7215.90.3000, 7215.90.5000, 
7217.20.1500, 7217.30.1530, 7217.30.1560, 7217.90.1000, 7217.90.5030, 
7217.90.5060, and 7217.90.5090. Although the HTSUS subheadings are 
provided for convenience and customs' purposes, the Department's 
written description of the merchandise under the order is dispositive.
    Included in the order are corrosion-resistant flat-rolled products 
of non-rectangular cross-section where such cross-section is achieved 
subsequent to the rolling process (i.e., products which have been 
``worked after rolling'') for example, products which have been beveled 
or rounded at the edges. Excluded from the order are flat-rolled steel 
products either plated or coated with tin, lead, chromium, chromium 
oxides, both tin and lead (``terne plate''), or both chromium and 
chromium oxides (``tin-free steel''), whether or not painted, varnished 
or coated with plastics or other nonmetallic substances in addition to 
the metallic coating. Also excluded from the order are clad products in 
straight lengths of 0.1875 inch or more in composite thickness and of a 
width which exceeds 150 millimeters and measures at least twice the 
thickness. Also excluded from the order are certain clad stainless 
flat-rolled products, which are three-layered corrosion-resistant 
carbon steel flat-rolled products less than 4.75 millimeters in 
composite thickness that consist of a carbon steel flat-rolled product 
clad on both sides with stainless steel in a 20%-60%-20% ratio.

ANALYSIS

Affiliation and Collapsing

    For purposes of this review, we have collapsed Dofasco, Sorevco, 
and Do Sol Galva Ltd. (DSG) and treated them as a single respondent, as 
we have done in prior segments of the proceeding. There have been no 
changes to the pertinent facts such as, for example, ownership 
structure, that warrant reconsideration of our decisions to collapse 
these companies. As noted on page A-8 of Dofasco's Section A 
questionnaire response dated December 22, 2004, Sorevco still operates 
as a 50-50 joint venture between Dofasco and Ispat Sidbec. See Final 
Determinations of Sales at Less Than Fair Value: Certain Hot-Rolled 
Carbon Steel Flat Products, Certain Cold-Rolled Carbon Steel Flat 
Products, Certain Corrosion-Resistant Carbon Steel Flat Products, and 
Certain Cut-to-Length Carbon Steel Plate From Canada, 58 FR 37099, 
37107 (July 9, 1993), for our analysis regarding collapsing Sorevco.
    Do Sol Galva Ltd. (DSG) is a galvanizing line operated as a limited 
partnership between Dofasco and Arcelor. As in the prior review; 1) DSG 
remains a partnership between Dofasco (80% ownership interest), and the 
European steel producer Arcelor (20% ownership interest); 2) Dofasco 
continues to operate DSG, which is located at the Dofasco Hamilton 
plant, and to treat this line as its number five galvanizing line; and 
3) all of the DSG production workers are still employed by Dofasco. See 
pages A-5 and A-8 of Dofasco's Section A questionnaire response dated 
December 22, 2004. For all intents and purposes, DSG is still 
considered another production line run on Dofasco's property. See 
Certain Certain Corrosion-Resistant Carbon Steel Flat Products from 
Canada: Preliminary Results of Antidumping Duty Administrative Review, 
69 FR 55138, 55139 (September 13, 2004), unchanged in Certain 
Corrosion-Resistant Carbon Steel Flat Products From Canada: Final 
Results of Antidumping Duty Administrative Review, 70 FR 13458 (March 
21, 2005) (Final Results of 10th Review), for our analysis regarding 
collapsing DSG. As we are collapsing Dofasco, Sorevco, and DSG for 
purposes of the preliminary results, we will instruct CBP to apply 
Dofasco's rate to merchandise produced, exported, or processed by 
Sorevco or DSG.
    Consistent with our determination in past segments of this 
proceeding, in these preliminary results, we have not collapsed Dofasco 
and its toll producer DJ Galvanizing Ltd. Partnership (DJG) (formerly 
DNN Galvanizing Ltd. Partnership (DNN)). Therefore, for CORE that is 
processed by DJG before it is exported to the United States, we will, 
for assessment and cash deposit purposes, instruct CBP to: (1) Apply 
Dofasco's rate on merchandise supplied by Dofasco or DSG; (2) apply the 
company specific rate on merchandise supplied by other previously 
reviewed companies; and, (3) apply the ``all others'' rate for 
merchandise supplied by companies which have not been reviewed in the 
past.

Model-Match Criteria

    In its questionnaire response, Dofasco reported ``surface type'' as 
a physical characteristic, and argued that it should be incorporated as 
a model-match criterion in order to capture the different applications 
and uses of the products based on that criterion. See Dofasco's section 
B questionnaire response dated January 12, 2005, at pages B-7 to B-9. 
Dofasco claims that the higher cost of CORE for exposed, as opposed to 
unexposed, applications also justifies the inclusion of a new model-
match criterion.
    For purposes of the preliminary results, we have not changed the 
model-match criteria to account for ``surface type.'' We excluded this 
field in the prior administrative review because: (1) Dofasco has not 
defined its proposed new product characteristic in sufficiently precise 
terms for the Department to consider integrating this characteristic 
into its model match hierarchy; (2) Dofasco has not demonstrated that 
any industry-wide, commercially accepted standards exist that recognize 
the material characteristics of exposed products made only from the 
hot-dipped galvanized process; (3) we do not find significant cost 
differences between exposed and unexposed galvanized steels; (4) we 
continue to find a degree of interchangeability of use for Dofasco's 
Extragal products that can reasonably be attributed to the subjective 
preferences of the customer rather than commercially significant 
differences in the physical characteristics of the product; and, (5) 
the record evidence demonstrates that there have been no new 
technological advancements in this field since the original 
investigation. See Final Results of 10th Review, and accompanying 
Issues and Decision Memorandum at Comment 1. Dofasco has provided the 
same information on the record of this administrative review. 
Therefore, because no new information has been provided to warrant our 
reconsideration in the instant review, we continue to find that it is

[[Page 53623]]

inappropriate to incorporate ``surface type'' as a physical 
characteristic into our model match hierarchy.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced by the respondents that are covered by the 
description in the ``Scope of the Order'' section, above, and sold in 
the home market during the POR, to be foreign like products for 
purposes of determining appropriate product comparisons to U.S. sales. 
Where there were no sales of identical merchandise in the home market 
to compare to U.S. sales, we compared U.S. sales to the most similar 
foreign like product on the basis of the characteristics listed in 
Appendix V of the Department's November 9, 2004, antidumping 
questionnaires.

Normal Value Comparisons

    To determine whether sales of subject merchandise to the United 
States were made at less than NV, we compared the export price (EP) or 
the constructed export price (CEP) to NV, as described in the ``Export 
Price and Constructed 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. transaction prices.

Export Price and Constructed Export Price

A. Classification of U.S. Sales

    In accordance with section 772(a) of the Act, we used EP when the 
subject merchandise was sold, directly or indirectly, to the first 
unaffiliated purchaser in the United States prior to importation, and 
CEP was not otherwise warranted by facts on the record. In accordance 
with section 772(b) of the Act, CEP is the price at which subject 
merchandise is first sold (or agreed to be 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. As discussed below, based on evidence on 
the record, we conclude that certain sales are made by Dofasco's U.S. 
affiliate, Dofasco U.S.A. (DUSA), and should thus be classified as CEP 
sales. Also, as discussed below, we conclude that Dofasco's other sales 
are EP, and that all Stelco's sales are EP.
    Dofasco's sales in the United States through its affiliate, DUSA, 
were reported as channel 2 (shipped directly to the U.S. customer) or 
channel 3 (shipped indirectly to the U.S. customer) sales. We find that 
for these sales, both parties to the transaction (DUSA and the 
unaffiliated customer) were located in the United States, and that the 
transfer of ownership was executed in the United States. See Dofasco's 
section A questionnaire response at A-26. Therefore, consistent with 
our determination in prior reviews, we are classifying Dofasco's 
Channels 2 and 3 sales as CEP sales. See Certain Corrosion-Resistant 
Carbon Steel Flat Products From Canada: Final Results of Antidumping 
Duty Administrative Review, 69 FR 2566 (January 16, 2004), and 
accompanying Issues and Decision Memorandum (Final Results of 9th 
Review) at Comment 1, and Final Results of 10th Review at Comment 5.
    We have classified Dofasco's Channel 1 (direct shipments) and 4 
(direct through commission agents) sales, and all of Stelco's U.S. 
sales, as EP sales. As in prior reviews, we find these to be direct 
sales made in Canada without the involvement of any affiliated party in 
the United States. Id. Accordingly, we are treating these respective 
sales as EP sales for both Dofasco and Stelco.
    The Department calculated EP or CEP based on packed prices to 
customers in the United States. We made deductions from the starting 
price (net of discounts and rebates) for movement expenses (foreign and 
U.S. movement, U.S. customs duty and brokerage, and post-sale 
warehousing) in accordance with section 772(c)(2) of the Act and 
section 351.401(e) of the Department's regulations. In addition, for 
CEP sales, in accordance with sections 772(d)(1) and (2) of the Act, we 
deducted from the starting price credit expenses, indirect selling 
expenses, including inventory carrying costs, commissions, royalties, 
and warranty expenses incurred in the United States and Canada 
associated with economic activities in the United States. As in prior 
reviews, certain Dofasco sales have undergone minor further processing 
in the United States as a condition of sale. The Department has 
deducted the price charged to Dofasco by the unaffiliated contractor 
for this minor further processing from gross unit price to determine 
U.S. price, consistent with section 772(d)(2) of the Act. See Certain 
Corrosion Resistant Carbon Steel Flat Products From Canada: Preliminary 
Results of Antidumping Duty Administrative Review, 68 FR 53105, 53106 
(September, 9, 2003), for a discussion of this adjustment, finalized in 
Final Results of 9th Review at 69 FR 2566, 2567.

Date of Sale

    As provided in section 351.401(i) of the Department's regulations, 
we determined the date of sale based on the date on which the exporter 
or producer established the material terms of sale. See Allied Tube and 
Conduit Corp. v. United States, 127 F. Supp. 2d 207, 219 (CIT 2000). 
Dofasco reported, as in the prior review, that except for long-term 
contracts and sales of secondary products, the date on which all 
material terms of sale are established is the final order 
acknowledgment or re-acknowledgment date, where prices and quantity are 
binding upon buyer and seller. See page A-23 of Dofasco's Section A 
questionnaire response dated December 22, 2004. Therefore, for these 
sales, we used this reported date as the date of sale. For Dofasco's 
sales made pursuant to long-term contracts, we used the date of the 
contract as date of sale, which is when prices are fixed and the 
customer agrees to purchase one hundred percent of its requirements for 
a particular part from Dofasco. Id. page A-24. For Dofasco's sales of 
secondary products for which there is no order acknowledgment date, we 
preliminarily determine that date of shipment best reflects the date on 
which the material terms of sale are established since date of shipment 
is almost always the day before the invoice is produced. Id. page A-23. 
Accordingly, for these sales, we have relied on the date of shipment as 
the date of sale. See, e.g., Notice of Final Determination of Sales at 
Less Than Fair Value: Certain Durum Wheat and Hard Red Spring Wheat 
from Canada, 68 FR 52741 (Sept. 5, 2003) and accompanying Issues and 
Decision Memorandum at Comment 3 (Wheat from Canada). Dofasco did not 
have sales of secondary products to the United States during the POR.
    Stelco reported that, generally, the quantity and product 
specifications are not set until the date of shipment, which is the 
date on which the invoice is issued. Therefore, for Stelco's sales, we 
determined that the date of invoice reflects the date of sale since 
this is when the material terms of the sale are fixed. In those 
instances when the date of shipment occurred prior to the date of 
invoice (when Stelco ships directly from a processor to a customer and 
the paperwork necessary to invoice the customer is delayed), Stelco 
reported, and we used, the date of shipment as the date of sale. See 
Stelco Section B questionnaire response, dated December 23, 2004, at B-
2; see, e.g., Wheat from Canada at Comment 3.

B. Universe of Sales in Margin Calculation

    Section 751(a)(2)(A) of the Act states that a dumping calculation 
should be performed for each entry during the

[[Page 53624]]

POR. Our standard practice for EP sales is to use entry date to 
determine the universe of U.S. sales in the margin calculation. See 
Circular Welded Non-Alloy Steel Pipe From the Republic of Korea; Final 
Results of Antidumping Duty Administrative Review, 63 FR 32833, 32836 
(June 6, 1998), and accompanying Issues and Decision Memorandum at 
Comment 2. Accordingly, we have included in our analysis for these 
final results all entries of EP sales made during the POR.
    The Department's normal practice for CEP sales is to review each 
transaction that has a date of sale within the POR. See section 351.212 
of the Department's regulations and the preamble to that section in 
Antidumping Duties; Countervailing Duties; Final Rule, 62 FR 27296, 
27314-15 (May 19, 1997). However, in Notice of Final Results of 
Antidumping Duty Administrative Review of Circular Welded Non-alloy 
Steel Pipe from the Republic of Korea, 66 FR 18747 (April 11, 2001), at 
Comment 2, the Department recognized unique circumstances that could 
lead us to base the margin for CEP sales on the sales of merchandise 
entered, rather than sold during the POR. In that case, there was no 
dispute that the respondents could tie their sales to specific entries 
during the POR because their U.S. sales were made to order, the date of 
sale occurred prior to the date of entry, the merchandise was shipped 
directly from the factory to the final customer, and the respondents 
were generally the importer of record.
    We find that Dofasco's Channel 2 and 3 CEP sales follow a similar 
fact pattern and therefore, we consider the date of entry to be the 
appropriate date for establishing the universe of sales for purposes of 
calculating a margin. First, we are able to tie almost all these sales 
to entries since Dofasco, in the instant review, provided exact entry 
dates for the vast majority of its U.S. sales. As was done in the 
previous review, for the few CEP transactions where the entry date was 
not obtained from its customs broker, Dofasco reasonably reported 
shipment date as the entry date because entry into the United States 
normally occurs the same day as shipment from its factory. See 
Dofasco's January 12, 2005, section C questionnaire response at page C-
71. Second, the merchandise was shipped directly from the factory to 
the location specified by the customer. See Dofasco's December 22, 
2004, section A questionnaire response at page A-14 and A-15. Third, 
since the vast majority of these sales were made pursuant to long-term 
contracts, and the date of the long-term contract was used as the date 
of sale, the dates of sale occurred prior to the dates of entry. See 
Dofasco's December 22, 2004, section A questionnaire response at page 
A-28. Therefore, for these reasons, we have performed a margin 
calculation on each Channel 2 and 3 CEP sale, entered during the POR. 
The date of sale for these entries is primarily the date of contract. 
Also included is a limited number of entries of ``spot'' sales for 
which the date of sale is based on date of order acknowledgment. See 
page A-26 of Dofasco's section A questionnaire response dated December 
22, 2004. This is consistent with our finding in the Final Results of 
10th Review at Comment 5.

Normal Value

A. 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., 
the aggregate volume of home market sales of the foreign like product 
is five percent or more of the aggregate volume of U.S. sales), we 
compared the volume of each respondent's home market sales of the 
foreign like product to the volume of U.S. sales of subject 
merchandise. Based on this comparison, we determined for both Dofasco 
and Stelco, that the quantity of sales in their home market exceeded 
five percent of their sales of CORE to the United States. See section 
351.404(b) of the Department's regulations. Therefore, in accordance 
with section 773(a)(1)(B)(i) of the Act, we have based NV on the price 
at which the foreign like product was first sold for consumption in the 
home market, in the usual commercial quantities, in the ordinary course 
of trade, and, to the extent practicable, at the same level of trade 
(LOT) as the EP or CEP. See ``Level of Trade'' section below.

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

    We used sales to affiliated customers in the home market only where 
we determined such sales were made at arm's-length prices (i.e., at 
prices comparable to the prices at which the respondent sold identical 
merchandise to unaffiliated customers). 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, discounts and packing. In 
accordance with the Department's 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 section 351.403(c) of the 
Department's regulations. Where the affiliated party transactions did 
not pass the arm's-length test, all sales to that affiliated party have 
been excluded from the NV calculation. Because the aggregate volume of 
sales to these affiliates is less than 5 percent of total home market 
sales, we did not request downstream sales. See section 351.403(d) of 
the Department's regulations; see also Antidumping Proceedings: 
Affiliated Party Sales in the Ordinary Course of Trade, 67 FR 69186 
(November 15, 2002).

C. Cost of Production Analysis

    The Department disregarded certain Dofasco and Stelco sales that 
failed the cost test in the prior review. We, therefore, have 
reasonable grounds to believe or suspect, pursuant to section 
773(b)(2)(A)(ii) of the Act, that sales of the foreign like product 
under consideration for the determination of NV in this review may have 
been made at prices below the cost of production (COP). Thus, pursuant 
to section 773(b)(1) of the Act, we examined whether Dofasco's and 
Stelco's sales in the home market were made at prices below the COP.
    We compared sales of the foreign like product in the home market 
with model-specific COP figures in the POR. In accordance with section 
773(b)(3) of the Act, we calculated COP based on the sum of the costs 
of materials and fabrication employed in producing the foreign like 
product, plus selling, general and administrative (SG&A) expenses, and 
all costs and expenses incidental to placing the foreign like product 
in a packed condition and ready for shipment. In our sales-below-cost 
analysis, we used home market sales and COP information provided by 
Dofasco and Stelco in their questionnaire responses.
    We compared the weighted-average COPs to home market sales of the 
foreign like product, as required under section 773(b) of the Act, in 
order to determine whether these sales had been made at prices below 
the COP. In determining whether to disregard home market sales made at 
prices below the COP, we examined whether such sales were made (1) 
within an extended period of time in substantial quantities, and (2) at 
prices which permitted the recovery of all costs within a reasonable 
period of time in the normal course of trade, in accordance with 
section 773(b)(1)(A) and (B) of the Act. On a product-specific basis, 
we compared

[[Page 53625]]

the COP to home market prices, less any movement charges, discounts, 
and direct and indirect selling expenses.
    Pursuant to section 773(b)(2)(C) of the Act, where less than 20 
percent of a respondent's sales of a given model were at prices less 
than the COP, we did not disregard any below-cost sales of that model 
because the below-cost sales were not made in substantial quantities 
within an extended period of time. Where 20 percent or more of a 
respondent's sales of a given model were at prices less than the COP, 
we disregarded the below-cost sales because they were made in 
substantial quantities within an extended period of time, in accordance 
with sections 773(b)(2)(B) and (C) of the Act. Because we compared 
prices to average costs in the POR, we also determined that the below-
cost prices did not permit the recovery of costs within a reasonable 
period of time, in accordance with section 773(b)(1)(B) of the Act.

D. Constructed Value

    In accordance with section 773(a)(4) of the Act, we used 
constructed value (CV) as the basis for NV when there were no above-
cost contemporaneous sales of identical or similar merchandise in the 
comparison market. We calculated CV in accordance with section 773(e) 
of the Act. We included the cost of materials and fabrication, SG&A, 
and profit. In accordance with section 773(e)(2)(A) of the Act, we 
based SG&A expenses and profit on the 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 foreign country. For selling expenses, we used the weighted-average 
home market selling expenses.
    For those product comparisons for which there were sales at prices 
above the COP, we based NV on home market prices to affiliated (when 
made at prices determined to be arms-length) or unaffiliated parties, 
in accordance with section 773(a)(1)(A) and (B) of the Act. We made 
adjustments for differences in cost attributable to differences in 
physical characteristics of the merchandise, pursuant to section 
773(a)(6)(C)(ii) of the Act, and for circumstance-of-sales (COS) 
differences, in accordance with 773(a)(6)(C)(iii) of the Act and 
section 351.410 of the Department's regulations. We relied on our model 
match criteria in order to match U.S. sales of subject merchandise to 
comparison sales of the foreign like product based on the reported 
physical characteristics of the subject merchandise. Where there were 
no sales of identical merchandise in the home market 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 and reporting instructions 
listed in the Department's questionnaire.
    Home market starting prices were based on packed prices net of 
discounts and rebates. We made adjustments, where applicable, for 
packing and movement expenses, in accordance with sections 773(a)(6)(A) 
and (B) of the Act. For comparisons to EP, we made COS adjustments to 
NV by deducting home market packing, movement, and direct selling 
expenses (e.g., credit, warranties, and royalties), and adding U.S. 
packing, movement, and direct selling expenses. For comparison to CEP, 
we made COS adjustments by deducting home market direct selling 
expenses pursuant to section 773(a)(6)(C)(iii) of the Act and section 
351.410 of the Department's regulations. We offset commissions paid on 
sales to the United States by the lesser of U.S. commissions or 
comparison (home) market indirect selling expenses.

Level of Trade

    Section 773(a)(1)(B)(i) of the Act states that, to the extent 
practicable, the Department will calculate NV based on sales at the 
same LOT as the EP or CEP. Sales are made at different LOTs if they are 
made at different marketing stages (or their equivalent). See section 
351.412(c)(2) of the Department's regulations. Substantial differences 
in selling activities are a necessary, but not sufficient, condition 
for determining that there is a difference in the stages of marketing. 
Id.; see also Notice of Final Determination of Sales at Less Than Fair 
Value: Certain Cut-to-Length Carbon Steel Plate From South Africa, 62 
FR 61731, 61732 (November 19, 1997) (South African Plate Final). In 
order to determine whether the comparison sales were at different 
stages in the marketing process than the U.S. sales, we reviewed the 
distribution system in each market (i.e., the chain of 
distribution),\1\ including selling functions,\2\ class of customer 
(customer category), and the level of selling expenses for each type of 
sale.
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    \1\ The marketing process in the United States and in the 
comparison markets begins with the producer and extends to the sale 
to the final user or consumer. The chain of distribution between the 
two may have many or few links, and the respondents' sales occur 
somewhere along this chain. In performing this evaluation, we 
considered the narrative responses of each respondent to properly 
determine where in the chain of distribution the sale occurs.
    \2\ Selling functions associated with a particular chain of 
distribution help us to evaluate the level(s) of trade in a 
particular market. For purposes of this preliminary determination, 
we have organized the common selling functions into four major 
categories: sales process and marketing support, technical service, 
freight and delivery, and inventory maintenance.
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    Pursuant to section 773(a)(1)(B)(i) of the Act, in identifying 
levels of trade for EP and comparison market sales (i.e., NV based on 
either home market or third country prices\3\), we consider the 
starting prices before any adjustments. For CEP sales, we consider only 
the selling activities reflected in the price after the deduction of 
expenses and profit under section 772(d) of the Act. See Micron 
Technology, Inc. v. United States, 243 F. 3d 1301, 1314-1315 (Fed. Cir. 
2001).
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    \3\ Where NV is based on CV, we determine the NV LOT based on 
the LOT of the sales from which we derive selling expenses, G&A and 
profit for CV, where possible.
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    When the Department is unable to match U.S. sales to sales of the 
foreign like product in the comparison market at the same LOT as the EP 
or CEP, the Department may compare the U.S. sale to sales at a 
different LOT in the comparison market. In comparing EP or CEP sales at 
a different LOT in the comparison market, where available data make it 
practicable, we make a LOT adjustment under section 773(a)(7)(A) of the 
Act. Finally, for CEP sales only, if a NV LOT is more remote from the 
factory than the CEP LOT and we are unable to make a level of trade 
adjustment, the Department shall grant a CEP offset, as provided in 
section 773(a)(7)(B) of the Act. See South African Plate Final at 62 FR 
61731, 61732-33 (November 19, 1997).

A. Dofasco LOT Analysis

    We obtained information from Dofasco regarding the marketing stages 
involved in making the reported home market and U.S. sales, including a 
description of the selling activities performed by the respondents for 
each channel of distribution. In the current review, as in the previous 
review, Dofasco claimed that sales in both the home market and the 
United States market were made at different LOTs. In the previous 
review, we concluded that Dofasco did sell at different LOTs. See Final 
Results of 10th Review.
    We examined the chain of distribution and the selling activities 
associated with sales reported by Dofasco to three distinct customer 
categories (automotive, construction, and service centers) in its 
single channel of distribution in the home market. See Memorandum from 
Kyle Lamborn (AD/CVD Financial Analyst) through Sean Carey (Acting 
Program Manager) to the

[[Page 53626]]

File; Certain Corrosion-Resistant Carbon Steel Flat Products from 
Canada: Analysis of Dofasco Inc. (Dofasco) and Sorevco for the 
Preliminary Results, (August 31, 2005) (Dofasco Analysis Memo, on file 
in the Central Record Unit (CRU), room B-099 of the main Commerce 
building. We found that sales to the construction and service center 
customer categories, were similar with respect to technical service, 
freight services, and warehouse/inventory maintenance, and that they 
differed only slightly with respect to sales process. Therefore, we 
found that these customer categories constituted a distinct level of 
trade (LOTH2). We found that sales to automotive customer category 
differed significantly from LOTH2 with respect to sales process and 
technical service and therefore, constitute a distinct level of trade 
(LOTH1). Thus, based upon our analysis of the home market, we found 
that LOTH1 and LOTH2 constitute two different levels of trade.
    Dofasco reported EP sales through two channels of distribution: 
Channel 1 including sales to automotive, service centers, and 
construction, and Channel 4 sales to construction. We examined the 
chain of distribution and the selling activities associated with sales 
to construction and service center categories through these channels 
and found them to be similar with respect to technical service, freight 
services, and warehouse/inventory maintenance; they differed only 
slight with respect to the sales process. Therefore, we found that 
these two channels of distribution to these customer categories 
constituted a distinct level of trade (LOTU2). We found that sales to 
the automotive customer category differed significantly from LOTU2 with 
respect to sales process and technical service, but were similar with 
respect to freight service and warehouse/inventory maintenance. Since 
the sales process and technical service functions comprise significant 
selling activities, we find that these factors are determinative in 
finding that sales to this automotive customer category constitute a 
separate level of trade (LOTU1). Thus, based upon our analysis of 
Dofasco's EP sales, we find that LOTU1 and LOTU2 constitute two 
different levels of trade.
    We then compared the two EP levels of trade to the two home market 
LOTs. We found that LOTU2 differed considerably from LOTH1 with respect 
to sales process, technical services and freight services. However, 
LOTU2 was similar to LOTH2 with respect to sales process, technical 
service, and warehouse/inventory maintenance. We also found that LOTU1 
differed considerably from LOTH2 with respect to sales process, 
technical services, and freight services. However, LOTU1 was similar to 
LOTH1 with respect to sales process, technical service, and warehouse/
inventory maintenance. Consequently, we matched LOTU2 sales to sales at 
the same level of trade in the home market (LOTH2), and LOTU1 sales to 
sales at the same level of trade in the home market (LOTH1). Where we 
did not match products at the same LOT, and there was a pattern of 
consistent prices differences between different LOTs, we made a LOT 
adjustment. See section 773(a)(7)(A) of the Act; see, also Dofasco 
Analysis Memo at page 2.
    Dofasco had two channels of distribution related to its CEP sales 
to automotive customers through Dofasco USA. These channels of 
distribution had the same selling functions and thus constitute a 
single level of trade (LOTU3). We compared LOTU3 to our two home market 
LOTs. We found that LOTU3 differed considerably from LOTH2 with respect 
to sales process, technical services and freight services. However, the 
LOTU3 was similar to LOTH1 with respect to sales process, technical 
service, and warehouse/inventory maintenance. Consequently, we matched 
LOTU3 sales to sales at the same LOT in the home market (LOTH1) and, 
where possible, we matched CEP sales to NV based on home market sales 
in LOTH1 and made no CEP offset adjustment. Where we did not match 
products at the same LOT, and there was a pattern of consistent prices 
differences between different LOTs, we made a LOT adjustment. See 
section 773(a)(7)(A) of the Act. Where we are unable to make a LOT 
adjustment, we considered granting a CEP offset as provided for in 
section 773(a)(7)(B) of the Act. After comparing the CEP LOT (LOTU3) 
with the LOTH1, we have preliminarily determined that the LOTH1 is not 
more remote from the factory than the LOTU3. As indicated by Exhibit 
I.A.8 of Dofasco's Section A response, dated December 22, 2004, as well 
as elsewhere in Dofasco's response, the vast majority of selling 
functions for both U.S. and home market sales are performed by Dofasco 
in Canada. Therefore, a CEP offset is not warranted under section 
773(a)(7)(B) of the Act.

B. Stelco LOT Analysis

    Stelco stated in its response that it was not claiming a LOT 
adjustment. However, Stelco did provide a chart of its selling 
functions, which we analyzed. In the home market, Stelco sold directly 
to end-users and service centers. Stelco performed a variety of 
distinct selling functions in both home market channels of 
distribution, including research and development, engineering services, 
personnel training, and technical advice. All of Stelco's U.S. sales 
are EP sales to end-users.
    We examined Stelco's chain of distribution and the selling 
activities in the home market, and categorized its channel of sales 
under two customer categories, sales to end-users and service centers. 
See Memorandum to the File, From Douglas Kirby Through Sean Carey, re: 
Analysis of Stelco for the Preliminary Results, dated August 31, 2004 
(Stelco Preliminary Analysis Memorandum), on file in the CRU. We found 
that sales to end-users (LOTH1) differed significantly from sales to 
service centers (LOTH2) with respect to sales process and technical 
service, and slightly with regard to freight services. Therefore, we 
found that these customer categories in the home market constitute two 
distinct levels of trade in the home market.
    Stelco reported only EP sales through one channel of distribution 
to just one customer category in the United States, end-users (LOTU3). 
Therefore, Stelco has only a single LOT in the United States. We 
compared the EP LOT to the two home market LOTs. We found that LOTU3 
differed significantly from LOTH1 with respect to sales process and 
slightly with regard to technical services. Even though both LOTU3 and 
LOTH1 comprise end-users, Stelco noted in its response that its selling 
activities for its U.S. sales were made at a lesser intensity than for 
its home market sales, and that they included sales of samples at 
``small quantities of non-repeat business that is directed to a die 
developer rather than to the customer's stamping facility.'' See 
Stelco's Sections A, B and C supplemental questionnaire response, dated 
May 20, 2005 at 4. We then compared LOTU3 to LOTH2 and found that they 
differed with respect to technical support and freight services.
    Our comparisons of the EP LOT to the two NV LOTs noted above, taken 
in conjunction with the narrative description that characterizes some 
types of U.S. customers as being distinct from typical end-users or 
service centers, leads us to conclude that the EP LOT is significantly 
different from those found in the home market. Therefore, we 
disregarded level of trade and we compared LOTU3 EP sales to all home 
market LOTs.

Currency Conversion

    For purposes of the preliminary results, in accordance with section 
773(a) of the Act, we made currency

[[Page 53627]]

conversions based on the official exchange rates in effect on the dates 
of the U.S. sales as certified by the Federal Reserve Bank of New York.

Preliminary Results of Review

    As a result of this review, we preliminarily find that the 
following weighted-average dumping margins exist:

------------------------------------------------------------------------
                                                            Weighted-
             Producer/Manufacturer/Exporter               Average Margin
------------------------------------------------------------------------
Dofasco Inc., Sorevco Inc., Do Sol Galva Ltd...........        11.08 %
Stelco Inc.............................................     De minimis
------------------------------------------------------------------------

Cash Deposit Requirements

    If the preliminary results are adopted in the final results of 
review, the following deposit requirements will be effective upon 
completion of the final results of this administrative review for all 
shipments of the subject merchandise entered, or withdrawn from 
warehouse, for consumption on or after the publication of the final 
results of this administrative review, as provided in section 751(a)(1) 
of the Act: (1) The cash deposit rate for Dofasco, Sorevco, and DSG 
will be that established in the final results of this review for 
Dofasco (and entities collapsed with Dofasco); (2) the cash deposit 
rate for Stelco will be that established in the final results of this 
review (currently de minimis); (3) for previously reviewed or 
investigated companies not covered in this review, the cash deposit 
rate will continue to be the company-specific rate published for the 
most recent period; (4) 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 subject merchandise; and (5) if neither the exporter nor the 
manufacturer is a firm covered in this or any previous proceeding 
conducted by the Department, the cash deposit rate will continue to be 
the ``all others'' rate established in the LTFV investigation, which is 
18.71 percent. See Amended Final and Order. For shipments processed by 
DJG we will, (1) apply Dofasco's rate on merchandise supplied by 
Dofasco or DSG; (2) apply the company specific rate on merchandise 
supplied by other previously reviewed companies; and, (3) apply the 
``all others'' rate for merchandise supplied by companies which have 
not been reviewed in the past. These cash deposit requirements, when 
imposed, shall remain in effect until publication of the final results 
of the next administrative review.

Duty Assessment

    Upon publication of the final results of review, the Department 
shall determine, and CBP shall assess, antidumping duties on all 
appropriate entries. The Department will issue appraisement 
instructions directly to CBP on the 41st day after the date of 
publication of the final results of review. The final results of this 
review shall be the basis for the assessment of antidumping duties on 
entries of merchandise covered by this review and for future deposits 
of estimated duties. For duty assessment purposes, we calculate an 
importer-specific assessment rate by dividing the total dumping margins 
calculated for the U.S. sales of each importer by the respective total 
entered value of these sales. If the preliminary results are adopted in 
the final results of review, this rate will be used for the assessment 
of antidumping duties on all entries of the subject merchandise by that 
importer during the POR.
    The Department clarified its ``automatic assessment'' regulation on 
April 30, 2003. See Notice of Policy Concerning Assessment of 
Antidumping Duties, 68 FR 23954 (May 6, 2003). This clarification will 
apply to entries of subject merchandise during the POR produced by 
companies included in these final results of review for which the 
reviewed companies did not know their merchandise was destined for the 
United States. In such instances, we will instruct CBP to liquidate 
unreviewed entries at the ``all others'' rate if there is no rate for 
the intermediate company(ies) involved in the transaction.

Public Comment

    Pursuant to section 351.224(b) of the Department's regulations, the 
Department will disclose to any party to the proceeding the 
calculations performed in connection with these preliminary results, 
within five days after the date of publication of this notice. Pursuant 
to section 351.309 of the Department's regulations, interested parties 
may submit case briefs in response to these preliminary results no 
later than 30 days after the date of publication of this notice. 
Rebuttal briefs, limited to issues raised in case briefs, may be filed 
no later than 5 days after the time limit for filing case briefs. 
Parties who submit arguments in this proceeding 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 Department 
requests that parties submitting briefs provide the Department with an 
additional copy of the public version of any such comments on a 
computer diskette. Case and rebuttal briefs must be served on 
interested parties in accordance with section 351.303(f) of the 
Department's regulations. Any interested party may request a hearing 
within 30 days of publication of this notice. Any hearing, if 
requested, will normally be held two days after the date for submission 
of 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 written comments or at a hearing, within 
120 days after the publication of this notice, unless extended. See 
section 351.213(h) of the Department's regulations.

Notification to Importers

    This notice serves as a preliminary reminder to importers of their 
responsibility under section 351.402(f) 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 antidumping duties occurred and the 
subsequent assessment of double antidumping duties.
    These preliminary results of this administrative review and notice 
are issued and published in accordance with sections 751(a)(1) and 
777(i)(1) of the Act.

    Dated: August 31, 2005.
Barbara E. Tillman,
Acting Assistant Secretary for Import Administration.
[FR Doc. E5-4947 Filed 9-8-05; 8:45 am]
BILLING CODE 3510-DS-S