[Federal Register Volume 71, Number 196 (Wednesday, October 11, 2006)]
[Notices]
[Pages 59739-59744]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-16820]


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DEPARTMENT OF COMMERCE

International Trade Administration

(A-580-829)


Stainless Steel Wire Rod from the Republic of Korea: Preliminary 
Results of Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: In response to a request by domestic interested parties,\1\ 
the Department of Commerce (the ``Department'') is conducting an 
administrative review of the antidumping duty order on stainless steel 
wire rod (``SSWR'') from the Republic of Korea (``Korea''). This review 
covers two producer/exporters of the subject merchandise that have been 
collapsed for purposes of the Department's analysis, consistent with 
the record of this review and prior determinations in this proceeding. 
The period of review (``POR'') is September 1, 2004, through August 31, 
2005.
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    \1\ The domestic interested parties are Carpenter Technology 
Corporation; Dunkirk Specialty Steel, LLC, a subsidiary of Universal 
Stainless & Alloy Products; and North American Stainless 
(hereinafter, the ``Domestic Interested Parties'').
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    The Department has preliminarily determined that the companies 
subject to this review made U.S. sales of SSWR at prices less than 
normal value (``NV''). If these preliminary results are adopted in our 
final results of administrative review, we will instruct U.S. Customs 
and Border Protection (``CBP'') to assess antidumping duties on all 
appropriate entries. Interested parties are invited to comment on these 
preliminary results of review. We will issue the final results of 
review no later than 120 days from the date of publication of this 
notice.

EFFECTIVE DATE:  October 11, 2006.

FOR FURTHER INFORMATION CONTACT: Karine Gziryan or Malcolm Burke, AD/
CVD Operations, Office 4, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230, telephone: (202) 482-
4081 and (202) 482-3584, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On September 15, 1998, the Department published in the Federal 
Register the antidumping duty order on SSWR from Korea. See Notice of 
Amendment of Final Determination of Sales at Less Than Fair Value and 
Antidumping Duty Order: Stainless Steel Wire Rod From Korea, 63 FR 
49331 (September 15, 1998) (``Amended Final Determination'') and 
Stainless Steel Wire Rod From Korea: Amendment of Final Determination 
of Sales at Less Than Fair Value Pursuant to Court Decision, 66 FR 
41550 (August 8, 2001) (``Amended Final Determination Pursuant to Court 
Decision'').\2\ In September 2005, the Department published in the 
Federal Register a notice of ``Opportunity to Request Administrative 
Review'' of the antidumping duty order on SSWR from Korea. See 
Antidumping or Countervailing Duty Order, Finding, or Suspended 
Investigation; Opportunity to Request Administrative Review, 70 FR 
52072 ( September 1, 2005).
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    \2\ In the Amended Final Determination Pursuant To Court 
Decision, the Department reclassified Changwon Specialty Steel Co., 
Ltd.'s (``Changwon'') U.S. sales as constructed export price 
(``CEP'') sales and recalculated the dumping margin for the 
collapsed entity which included Changwon. As a result of the 
recalculation, the ``all others'' rate also changed. See Amended 
Final Determination Pursuant To Court Decision, 66 FR at 41550.
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    On September 30, 2005, in accordance with 19 CFR Sec.  
351.213(b)(1), the Domestic Interested Parties requested that the 
Department conduct a review of Changwon and Dongbang Special Steel Co., 
Ltd. (``Dongbang''), and any of their affiliates (collectively, as a 
collapsed entity, the ``Respondents'' or ``Changwon/Dongbang'') for the 
period from September 1, 2004, through August 31, 2005. See the 
``Collapsing of Respondents'' section of this notice below.
    In October 2005, the Department initiated an administrative review 
of the Respondents. See Initiation of Antidumping and Countervailing 
Duty Administrative Reviews, 70 FR 61601 (October 25, 2005). Also in 
October, the Department issued its antidumping questionnaire to the 
Respondents, and in December 2005, the Respondents responded to this 
questionnaire. Thereafter, the Department issued supplemental 
questionnaires to the Respondents - to which the Department received 
timely responses- and the Domestic Interested Parties submitted 
comments regarding the Respondents' questionnaire and supplemental 
questionnaire responses.
    In May 2006, the Department extended the deadline for issuing the 
preliminary results in this administrative review until October 2, 
2006. See Stainless Steel Wire Rod from the Republic of Korea: Notice 
of Extension of Time Limit for Preliminary Results of Antidumping Duty 
Administrative Review, 71 FR 30658 (May 30, 2006).
    The Department is conducting this administrative review in 
accordance with section 751 of the Tariff Act of 1930, as amended (the 
``Act'').

Collapsing of Respondents

    In the less-than-fair value (``LTFV'') investigation in this 
proceeding, the Department determined that Pohang Iron and Steel Co., 
Ltd. (``POSCO''), and its subsidiary, Changwon, were affiliated with 
Dongbang through a close supplier relationship and that all three 
companies should be treated as one entity (collapsed). See Notice of 
Final Determination of Sales at Less than Fair Value: Stainless Steel 
Wire Rod from Korea, 63 FR 40404, 40408 (July 29, 1998) (``Final 
Determination'') (Comment 2). The Department found a close supplier 
relationship between POSCO/Changwon and Dongbang based on the fact that 
Dongbang, whose operations were almost exclusively dependent upon 
finishing unfinished SSWR (also known as black coil), was not able to 
obtain suitable black coil from sources other than POSCO/Changwon. See 
Memorandum from the Team to Holly Kuga regarding: ``Whether Pohang Iron 
and Steel Co., Ltd. (POSCO), and its subsidiary Changwon Specialty 
Steel Co., Ltd. (Changwon), are affiliated with Dongbang Special Steel 
Co., Ltd. (Dongbang). Whether to collapse Dongbang with the already 
collapsed

[[Page 59740]]

entity POSCO/Changwon for antidumping analysis purposes,'' dated July 
20, 1998 (LTFV affiliation memorandum) at page 8 (which the Department 
has placed on the record of this administrative review). The Department 
collapsed these companies because their interdependent operations 
resulted in a significant potential for the manipulation of price and 
production and the nature of their facilities allowed them to shift the 
production of SSWR among one another. See id. Specifically, the 
Department found a significant potential for manipulation of price and 
production based on the importance of the black coil trade between the 
companies (Dongbang's reliance upon POSCO/Changwon for black coil as 
well as its position as a significant consumer of POSCO/Changwon's 
black coil), POSCO/Changwon's leverage over SSWR production due to the 
fact that it supplied a major input used in production, and the fact 
that the companies had facilities for producing subject merchandise.
    Consistent with the record from the LTFV investigation, we find 
that the instant record indicates that Dongbang has not obtained 
suitable black coil from alternative sources but continues to 
exclusively rely upon POSCO/Changwon for this input. See Dongbang's 
December 1, 2005, questionnaire response at 14. Additionally, POSCO/
Changwon and Dongbang are still able to shift the production of SSWR 
among one another and there continues to be a significant potential for 
the manipulation of price and production because these companies remain 
intertwined by virtue of the significant transactions between them, 
including sales of both SSWR and black coil for the production of SSWR. 
See Dongbang's December 1, 2005, questionnaire response at 3 and 14. 
Finally, Dongbang's business operations remain considerably dependent 
upon the production of subject merchandise. See Dongbang's May 12, 
2006, Sales Reconciliation at Attachment 1. Given these facts, we 
continue to find that POSCO and Changwon are affiliated with Dongbang 
through a close supplier relationship and the three companies should 
continue to be treated as a single entity for purposes of the 
Department's dumping analysis. See LTFV affiliation memorandum.

Period of Review

    The POR is September 1, 2004, through August 31, 2005.

Scope of the Order

    For purposes of this order, the products covered are those SSWR 
that are hot-rolled or hot-rolled annealed and/or pickled and/or 
descaled rounds, squares, octagons, hexagons or other shapes, in coils, 
that may also be coated with a lubricant containing copper, lime or 
oxalate. SSWR is made of alloy steels containing, by weight, 1.2 
percent or less of carbon and 10.5 percent or more of chromium, with or 
without other elements. These products are manufactured only by hot-
rolling or hot-rolling annealing, and/or pickling and/or descaling, are 
normally sold in coiled form, and are of solid cross-section. The 
majority of SSWR sold in the United States is round in cross-sectional 
shape, annealed and pickled, and later cold-finished into stainless 
steel wire or small-diameter bar. The most common size for such 
products is 5.5 millimeters or 0.217 inches in diameter, which 
represents the smallest size that normally is produced on a rolling 
mill and is the size that most wire-drawing machines are set up to 
draw. The range of SSWR sizes normally sold in the United States is 
between 0.20 inches and 1.312 inches in diameter.
    Two stainless steel grades are excluded from the scope of the 
order. SF20T and K-M35FL are excluded. The chemical makeup for the 
excluded grades is as follows:

------------------------------------------------------------------------
                           SF20T
------------------------------------------------------------------------
Carbon.....................................................     0.05 max
Manganese..................................................     2.00 max
Phosphorous................................................     0.05 max
Sulfur.....................................................     0.15 max
Silicon....................................................     1.00 max
Chromium...................................................  19.00/21.00
Molybdenum.................................................    1.50/2.50
Lead-added.................................................  (0.10/0.30)
Tellurium-added............................................   (0.03 min)
------------------------------------------------------------------------


------------------------------------------------------------------------
                          K-M35FL
------------------------------------------------------------------------
Carbon.....................................................    0.015 max
Silicon....................................................    0.70/1.00
Manganese..................................................     0.40 max
Phosphorous................................................     0.04 max
Sulfur.....................................................     0.03 max
Nickel.....................................................     0.30 max
Chromium...................................................  12.50/14.00
Lead.......................................................    0.10/0.30
Aluminum...................................................    0.20/0.35
------------------------------------------------------------------------

    The products subject to the order are currently classifiable under 
subheadings 7221.00.0005, 7221.00.0015, 7221.00.0030, 7221.00.0045, and 
7221.00.0075 of the Harmonized Tariff Schedule of the United States 
(``HTSUS''). Although the HTSUS subheadings are provided for 
convenience and customs purposes, the written description of the scope 
of the order is dispositive.

Affiliation

    During this administrative review, the Respondents reported U.S. 
sales to trading companies which they classified as unaffiliated 
parties in their questionnaire responses. The Domestic Interested 
Parties contend that these trading companies are affiliated with the 
Respondents through a principal-agent relationship, while the 
Respondents maintain that they have no agency relationship with these 
customers. In reviewing the record evidence, we find that the 
Respondents did not have principal-agent relationships with their 
respective trading company customers and, therefore, we have 
preliminarily determined that the Respondents are not affiliated with 
these customers through a principal-agent relationship pursuant to 
section 771(33)(G) of the Act. See the proprietary memorandum to Thomas 
F. Futtner from Malcolm Burke, Agency Analysis of Respondents' Reseller 
Customers, dated concurrently with this notice.

Comparison Methodology

    To determine whether the Respondents sold SSWR in the United States 
at prices less than NV, the Department compared the export price 
(``EP'') and CEP of individual U.S. sales to the weighted-average NV of 
sales of the foreign like product made in the ordinary course of trade 
in a month contemporaneous with the month in which the U.S. sale was 
made. See section 777A(d)(2) of the Act; see also section 
773(a)(1)(B)(i) of the Act. Section 771(16) of the Act defines foreign 
like product as merchandise that is identical or similar to subject 
merchandise and produced by the same person and in the same country as 
the subject merchandise. Thus, we considered all products covered by 
the scope of the order, that were produced by the same person and in 
the same country as the subject merchandise, and sold by Respondents in 
the home market during the POR, to be foreign like products for the 
purpose of determining appropriate product comparisons to SSWR sold in 
the United States.
    The Department compared U.S. sales to sales made in the home market 
within the contemporaneous window period, which extends from three 
months prior to the month in which the U.S. sale was made until two 
months after the month in which the U.S. sale was made. Where there 
were no sales of identical merchandise made in the home market in the 
ordinary course of trade, the Department compared U.S. sales to sales 
of the most similar foreign

[[Page 59741]]

like product made in the ordinary course of trade. In making product 
comparisons, the Department selected identical and most similar foreign 
like products based on the physical characteristics reported by the 
Respondents in the following order of importance: grade, diameter, 
further processing, and coating.

Date of Sale

    Respondents used invoice date as the date of sale for their EP, 
CEP, and home market sales. In comments filed with the Department, the 
Domestic Interested Parties contested the use of the invoice date as 
the date of sale and argued for use of the order input date or revised 
purchase order date. Normally, the Department considers the 
respondent's invoice date as recorded in its business records to be the 
date of sale unless a date other than the invoice date better reflects 
the date on which the company establishes the material terms of sale. 
See 19 CFR Sec.  351.401(i). In this case, after additional inquiry, 
the Department determined that the use of a date other than the invoice 
date was not appropriate. Specifically, Changwon and Dongbang reported 
that the information obtained on the order input date was informal in 
nature, non-binding on the customer, and was obtained only to schedule 
production. Further, Changwon and Dongbang reported that the final 
price and quantity of a particular order were established when a 
particular shipment was invoiced, with that invoice being the first 
written documentation of those confirmed sales terms. Moreover, 
Changwon and Dongbang presented evidence that the material terms of 
sale were subject to change between the order date and the invoice date 
and, in fact, did change for numerous sales. See Dongbang's June 20, 
2006, supplemental questionnaire response at 3 and Appendix SB-3, 
Dongbang's April 24, 2006, supplemental questionnaire response at 3 and 
Appendix SC-2, Changwon's April 6, 2006, supplemental questionnaire 
response at 5 and Appendix SA-2, and Changwon's January 23, 2006, 
supplemental questionnaire response at 11-13. Thus, when compared to 
invoice date, the record does not demonstrate that the order input date 
or revised purchase order date better reflects the date on which the 
material terms of sale were established. Therefore, consistent with 
prior segments of this proceeding, we have preliminarily used invoice 
date as the date of sale for both the U.S. and home markets. However, 
consistent with the Department's practice, where the invoice was issued 
after the date of shipment to the first unaffiliated customer, we 
relied upon the date of shipment as the date of sale. See e.g., Certain 
Cold-Rolled and Corrosion-Resistant Carbon Steel Flat Products From 
Korea: Final Results of Antidumping Duty Administrative Reviews, 64 FR 
12927, 12935 (March 16, 1999).

Export Price and Constructed Export Price

    The Department based the price of the Respondents' U.S. sales of 
subject merchandise on EP or CEP, as appropriate. Specifically, when 
Changwon or Dongbang sold subject merchandise to unaffiliated 
purchasers in the United States prior to importation, and CEP was not 
otherwise warranted based on the facts of the record, we based the 
price of the sale on EP, in accordance with section 772(a) of the Act. 
Alternatively, when Changwon sold subject merchandise to unaffiliated 
purchasers in the United States through a U.S. affiliate, Pohang Steel 
America Corporation (``POSAM''), after importation, we based the price 
of the sale on CEP, in accordance with section 772(b) of the Act.
    In accordance with sections 772(a) and (c) of the Act, we 
calculated EP using the prices the Respondents charged for packed 
subject merchandise. From this price we deducted, where applicable, the 
following expenses: foreign inland freight charges (from the 
Respondents' plants to the port of exportation) - including wharfage 
charges, terminal handling charges, container taxes, document and 
miscellaneous fees, international freight, and marine insurance, 
consistent with section 772(c)(2)(A) of the Act. Additionally, we added 
to the starting price an amount for duty drawback pursuant to section 
772(c)(1)(B) of the Act.
    In accordance with sections 772(c)(2)(A) and 772(d)(1) and (3) of 
the Act, we calculated CEP using the prices charged for packed subject 
merchandise sold to the first unaffiliated purchaser in the United 
States, from which we deducted the following expenses: foreign inland 
freight (from the Respondents' plants to the port of exportation), 
brokerage and handling, international ocean freight, marine insurance, 
container handling fee, harbor fee, other U.S. transportation, U.S. 
duty, direct and indirect selling expenses (to the extent these 
expenses are associated with economic activity in the United States), 
and CEP profit (profit allocated to expenses deducted under sections 
772(d)(1) and (d)(2) of the Act in accordance with sections 772(d)(3) 
and 772(f) of the Act). We computed profit by deducting from total 
revenue realized on sales in both the U.S. and home markets, all 
expenses associated with those sales. We then allocated profit to 
expenses incurred with respect to U.S. economic activity, based on the 
ratio of total U.S. expenses to total expenses for both the U.S. and 
home markets. Lastly, we added to the starting price an amount for duty 
drawback pursuant to section 772(c)(1)(B) of the Act.

Normal Value

    After testing home market viability, whether home market sales to 
affiliates were at arm's-length prices, and whether home market sales 
were at below-cost prices, we calculated NV for Respondents as noted in 
the ``Price-to-Price Comparisons'' section of this notice.
A. Home Market Viability
    In accordance with section 773(a)(1)(C) of the Act, in order to 
determine whether there was 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 
greater than or equal to five percent of the aggregate volume of U.S. 
sales), we compared the aggregate volume of the Respondents' home 
market sales of the foreign like product to the aggregate volume of 
their U.S. sales of subject merchandise. Because the aggregate volume 
of the Respondents' home market sales of foreign like product is more 
than five percent of the aggregate volume of their U.S. sales of 
subject merchandise, we based NV on sales of the foreign like product 
in the Respondents' home market.
B. Affiliated-Party Transactions and Arm's-Length Test
    The Department may calculate 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 prices at which sales are made to parties not 
affiliated with the exporter or producer, i.e., sales at arm's-length. 
See 19 CFR Sec.  351.403(c). Sales to affiliated customers for 
consumption in the home market that are determined not to be at arm's-
length are excluded from our analysis. In this proceeding the 
Respondents reported sales of the foreign like product to an affiliated 
customer. To test whether these sales were made at arm's-length prices, 
the Department compared the prices of sales of comparable merchandise 
to affiliated and unaffiliated customers, net of all

[[Page 59742]]

movement charges, direct selling expenses, and packing. Pursuant to 19 
CFR Sec.  351.403(c), and in accordance with the Department's practice, 
when the prices charged to an affiliated party were, on average, 
between 98 and 102 percent of the prices charged to unaffiliated 
parties for merchandise comparable to that sold to the affiliated 
party, we determined that the sales to the affiliated party were at 
arm's-length. See Antidumping Proceedings: Affiliated Party Sales in 
the Ordinary Course of Trade, 67 FR 69186, 69187 (November 15, 2002). 
Where the Respondents' sales to affiliated home market customers did 
not pass the arm's length test we excluded those sales from our 
analysis.
C. Cost of Production (``COP'') Analysis
    In the most recent administrative review in this proceeding, the 
Department determined that the Respondents sold foreign like product at 
prices below the cost of producing the product and excluded such sales 
from the calculation of NV. See Stainless Steel Wire Rod from Korea: 
Final Results of Antidumping Duty Administrative Review, 69 FR 19153 
(April 12, 2004). As a result, in accordance with section 
773(b)(2)(A)(ii) of the Act, the Department has determined that there 
are reasonable grounds to believe or suspect that during the instant 
POR, the Respondents sold foreign like product at prices below the cost 
of producing the product. Thus, the Department initiated a sales below 
cost inquiry with respect to the Respondents.
1. Calculation of COP
    In accordance with section 773(b)(3) of the Act, for each foreign 
like product sold by the Respondents during the POR, we calculated a 
weighted-average COP based on the sum of the Respondents' materials and 
fabrication costs and general and administrative (``G&A'') expenses, 
including interest expenses. We adjusted the cost data reported by 
Respondents by setting Changwon's negative interest expense to zero. 
For further information see the Calculation Memorandum dated 
concurrently with this notice, on file in the Central Records Unit, 
Room B-099 of the Main Commerce Building (CRU).
2. Test of Home Market Sales Prices
    In order to determine whether sales were made at prices below the 
COP, on a product-specific basis we compared the Respondents' weighted-
average COP to the prices of its home market sales of foreign like 
product, as required under section 773(b) of the Act. In accordance 
with sections 773(b)(1)(A) and (B) of the Act, in determining whether 
to disregard home market sales made at prices less than the COP, we 
examined whether such sales were made: (1) in substantial quantities 
within an extended period of time; and (2) at prices which permitted 
the recovery of all costs within a reasonable period of time. We 
compared the COP to home market sales prices, less any applicable 
movement charges, direct and indirect selling, or packing expenses.
3. Results of the COP Test
    Pursuant to section 773(b)(2)(C) of the Act, where less than 20 
percent of the Respondents' sales of a given product were made at 
prices less than the COP, we did not disregard any below-cost sales of 
that product because the below-cost sales were not made in 
``substantial quantities.'' Where 20 percent or more of the 
Respondents' sales of a given product were made at prices less than the 
COP during the POR, we determined such sales to have been made in 
``substantial quantities'' for an extended period of time (i.e., one 
year) pursuant to sections 773(b)(2)(B) and (C) of the Act. In such 
cases, because we used POR average costs we also determined, in 
accordance with section 773(b)(2)(D) of the Act, that these sales were 
not made at prices which would permit recovery of all costs within a 
reasonable period of time. Based on the results of our cost test, we 
disregarded the Respondents' below-cost sales.

Price-to-Price Comparisons

    Where it was appropriate to base NV on prices, we used the prices 
at which the foreign like product was first sold by the Respondents for 
consumption in the home market, in the usual commercial quantities, in 
the ordinary course of trade, and, to the extent possible, at the same 
level of trade (``LOT'') as the comparison U.S. sale.
    We calculated NV using prices for packed foreign like product 
delivered to unaffiliated purchasers or, were appropriate, affiliated 
purchasers in the home market. In accordance with sections 
773(a)(6)(A), (B), and (C) of the Act, where appropriate, we deducted 
from the starting price warranty expenses, movement expenses, home 
market packing costs, credit expenses and other direct selling 
expenses, and added U.S. packing costs and, for NVs compared to EPs, 
credit expenses and other direct selling expenses. Additionally, where 
appropriate, we made price adjustments for physical differences in the 
merchandise. See 773(a)(6)(C)(ii) of the Act and 19 CFR Sec.  
351.410(e).

Level of Trade

    In accordance with section 773(a)(1)(B) of the Act, to the extent 
practicable, we determined NV based on sales in the home market at the 
same LOT as the EP or CEP sales. The NV LOT is based on the starting 
price of the sales in the home market or, when NV is based on 
constructed value, the starting price of the sales from which we derive 
selling general and administrative expenses and profit. For EP sales, 
the U.S. LOT is based on the starting price of the sales to the U.S. 
market. For CEP sales, the U.S. LOT is based on the starting price of 
the sales to the U.S. market, as adjusted under section 772(d) of the 
Act. See Micron Technology, Inc. v. United States, 243 F.3d, 1301, 1315 
(Fed. Cir. 2001).
    To determine whether NV sales are at a different LOT than the EP 
and CEP sales, the Department examines stages in the marketing process 
and selling functions along the chain of distribution between the 
producer and the customer. If the comparison-market sales are at a 
different LOT than the EP and CEP sales, and the difference affects 
price comparability, as manifested by a pattern of consistent price 
differences between comparison-market sales at the NV LOT and 
comparison-market sales at the LOT of the export transaction, the 
Department makes a LOT adjustment under section 773(a)(7)(A) of the 
Act. For CEP sales, if the NV LOT is at a more advanced stage of 
distribution than the CEP LOT and there is no basis for determining 
whether the difference between the NV and CEP LOTs affects price 
comparability, the Department adjusts NV under section 773(A)(7)(B) of 
the Act (the CEP offset provision). See Notice of Final Determination 
of Sales at Less Than Fair Value: Certain Carbon Steel Plate from South 
Africa, 62 FR 61731 (November 19, 1997).
    In determining whether the Respondents made sales at separate LOTs, 
we obtained information from the Respondents regarding the marketing 
stages for the reported U.S. and home market sales, including a 
description of the selling activities performed by Respondents for each 
channel of distribution. Generally, if the reported LOTs are the same, 
the functions and activities of the seller at each level should be 
similar. Conversely, if a party reports that LOTs are different for 
different groups of sales, the selling functions and activities of the 
seller for each group should be dissimilar.
    In the home market, Changwon and Dongbang each sold foreign like 
product

[[Page 59743]]

during the POR directly to end users through one channel of 
distribution. We compared the types of selling activities performed in 
each channel of distribution, as well as the level of intensity at 
which each activity was performed and found no significant differences 
between the two channels (we cannot discuss the comparison here without 
referencing business proprietary information; therefore, for a detailed 
analysis, see the proprietary memorandum to Thomas F. Futtner from the 
Team regarding level of trade, dated concurrently herewith (``Level of 
Trade Memorandum''). Thus, we determined that there is one home market 
LOT.
    In the U.S. market, Changwon sold subject merchandise during the 
POR to trading companies and end users through two channels of 
distribution, namely through unaffiliated Korean trading companies and 
an affiliated company located in the United States. Dongbang sold 
subject merchandise during the POR to trading companies and end users 
through only one channel of distribution, unaffiliated Korean trading 
companies. We compared the types of selling activities performed in 
each channel of distribution, as well as the level of intensity at 
which each activity was performed and found no significant differences 
between the U.S. channels. See the Level of Trade Memorandum. Thus, we 
determined that there is one U.S. market LOT.
    We then compared the home market LOT to the U.S. market LOT. We did 
not find substantial differences in the selling activities performed in 
the two LOTs. See the Level of Trade Memorandum for further analysis. 
Therefore, we determined that the home and U.S. LOTs are at the same 
level. See 19 CFR Sec.  351.412(c)(2) (noting that ``substantial 
differences in selling activities are a necessary ... condition for 
determining that there is a difference in the stage of marketing''). 
Thus, neither a LOT adjustment to NV, pursuant to section 773(a)(7)(A) 
of the Act, nor a CEP offset pursuant to 773(a)(7)(B) of the Act, is 
warranted. See Antidumping Duties; Countervailing Duties; Final Rule, 
62 FR 27296, 27372 (May 19, 1997) (``{t{time} he Department will not 
make a CEP offset where ... the Department bases normal value on home 
market sales at the same LOT as the CEP'').

Currency Conversion

    Pursuant to section 773A(a) of the Act, we converted amounts 
expressed in foreign currencies into U.S. dollar amounts based on the 
exchange rates in effect on the dates of the U.S. sales, as reported by 
the Federal Reserve Bank.

Preliminary Results of Review

    As a result of this review, we preliminarily determine that the 
following weighted- average dumping margin exists for the period 
September 1, 2004, through August 31, 2005.

------------------------------------------------------------------------
                                                                Margin
                    Manufacturer/Exporter                      (percent)
------------------------------------------------------------------------
POSCO/Changwon/Dongbang.....................................        9.77
                                                                [percnt]
------------------------------------------------------------------------

Public Comment

    Within 10 days of publicly announcing the preliminary results of 
this review, we will disclose to interested parties any calculations 
performed in connection with the preliminary results. See 19 CFR Sec.  
351.224(b). Any interested party may request a hearing within 30 days 
of the publication of this notice in the Federal Register. See 19 CFR 
Sec.  351.310(c). If requested, a hearing will be held 44 days after 
the date of publication of this notice in the Federal Register, or the 
first workday thereafter. Interested parties are invited to comment on 
the preliminary results of this review. The Department will consider 
case briefs filed by interested parties within 30 days after the date 
of publication of this notice in the Federal Register. Also, interested 
parties may file rebuttal briefs, limited to issues raised in the case 
briefs. The Department will consider rebuttal briefs filed not later 
than five days after the time limit for filing case briefs. Parties who 
submit arguments are requested to submit with each argument: (1) A 
statement of the issue, (2) a brief summary of the argument and (3) a 
table of authorities cited. Further, we request that parties submitting 
written comments provide the Department with a diskette containing an 
electronic copy of the public version of such comments. Unless the 
deadline for issuing the final results of review is extended, the 
Department will issue the final results of this administrative review, 
including the results of its analysis of issues raised in the written 
comments, within 120 days of publication of the preliminary results in 
the Federal Register.

Assessment Rates

    In accordance with 19 CFR Sec.  351.212(b)(1), in these preliminary 
results of review we calculated importer/customer-specific assessment 
rates. Where the importer/customer-specific assessment rate is above de 
minimis (i.e., 0.50 percent ad valorem or greater), we will instruct 
CBP to assess the importer/customer-specific rate uniformly, as 
appropriate, on all entries of subject merchandise during the POR that 
were entered by the importer or sold to the customer. Within 15 days of 
publication of the final results of review, the Department will issue 
instructions to CBP directing it to assess the final assessment rates 
(if above de minimis) uniformly on all entries of subject merchandise 
made by the relevant importer or sold to the relevant customer during 
the POR.
    The Department clarified its ``automatic assessment'' regulation on 
May 6, 2003 (68 FR 23954). This clarification applies to POR entries of 
subject merchandise produced by companies examined in this review 
(i.e., companies for which a dumping margin was calculated) where the 
companies did not know that 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. For a full 
discussion of this clarification, see Antidumping and Countervailing 
Duty Proceedings: Assessment of Antidumping Duties, 68 FR 23954 (May 6, 
2003).

Cash Deposit Requirements

    The following cash deposit requirements will be effective for all 
shipments of the subject merchandise entered, or withdrawn from 
warehouse, for consumption on or after the publication date of the 
final results of this administrative review, as provided by section 
751(a)(1) of the Act: (1) the cash deposit rate for the companies 
examined in the instant review will be the rate established in the 
final results of this review (except that if the rate for a particular 
company is de minimis, i.e., less than 0.50 percent, no cash deposit 
will be required for that company); (2) for previously investigated or 
reviewed companies not listed above, the cash deposit rate will 
continue to be the company-specific rate published for the most recent 
period; (3) if the exporter is not a firm covered in this review, a 
prior review, or the 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 (4) the 
cash deposit rate for all other manufacturers or exporters will 
continue to be the ``all others'' rate of 5.77 percent, which is the 
``all others'' rate established in the LTFV investigation, as adjusted 
in a subsequent remand redetermination. See Amended Final Determination 
and Amended Final Determination Pursuant

[[Page 59744]]

to Court Decision. These cash deposit rates, when imposed, shall remain 
in effect until publication of the final results of the next 
administrative review.

Notification to Importers

    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR Sec.  351.402(f)(2) to file a 
certificate regarding the reimbursement of antidumping duties prior to 
liquidation of the relevant entries during this review period. Failure 
to comply with this requirement could result in the Secretary's 
presumption that reimbursement of antidumping occurred and the 
subsequent assessment of double antidumping duties.
    We are issuing and publishing this notice in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: October 2, 2006.
Joseph A. Spetrini,
Acting Assistant Secretaryfor Import Administration.
[FR Doc. E6-16820 Filed 10-10-06; 8:45 am]
BILLING CODE 3510-DS-S