[Federal Register Volume 72, Number 173 (Friday, September 7, 2007)]
[Notices]
[Pages 51411-51418]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-17703]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-401-806]


Stainless Steel Wire Rod from Sweden: Preliminary Results of 
Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: In response to a timely request by the petitioners,\1\ the 
Department of Commerce (``the Department'') is conducting an 
administrative review of the antidumping duty order on stainless steel 
wire rod (``SSWR'') from Sweden with respect to Fagersta Stainless AB 
(``FSAB''). The period of review (``POR'') is September 1, 2005, 
through August 31, 2006.
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    \1\ The petitioners include the following companies: Carpenter 
Technology Corporation and Charter Speciality Steel.
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    We preliminarily determine that sales have been made below normal 
value (``NV''). Interested parties are invited to comment on the 
preliminary results. If the 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.

EFFECTIVE DATE: September 7, 2007.

FOR FURTHER INFORMATION CONTACT: Brian C. Smith or Gemal Brangman, AD/
CVD Operations, Office 2, Import Administration-Room B-099, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW, Washington, DC 20230; telephone: 
(202) 482-1766 or (202) 482-3773, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On September 15, 1998, the Department published in the Federal 
Register an antidumping duty order on SSWR from Sweden. See Notice of 
Antidumping Duty Order: Stainless Steel Wire Rod from Sweden, 63 FR 
49329 (``SSWR Order''). On September 1, 2006, the Department published 
in the Federal Register a notice of ``Opportunity to Request 
Administrative Review'' of the antidumping duty order on SSWR from 
Sweden covering the period September 1, 2005, through August 31, 2006. 
See Antidumping or Countervailing Duty Order, Finding, or Suspended 
Investigation; Opportunity to Request Administrative Review, 71 FR 
52061 (September 1, 2006). On September 28, 2006, the petitioners 
submitted a letter timely requesting that the Department conduct an 
administrative review of the sales of SSWR made by FSAB, pursuant to 
section 751 of the Tariff Act of 1930, as amended (``the Act''). On 
October 2, 2006, FSAB also requested that the Department conduct an 
administrative review of its sales. \2\ Based on the petitioners' and 
FSAB's requests for an administrative review of FSAB's sales, on 
October 19, 2006, we issued an antidumping duty questionnaire\3\ to

[[Page 51412]]

FSAB in advance of our initiation of the administrative review. The 
Department published a notice of initiation of an administrative review 
with respect to FSAB on October 31, 2006. See Initiation of Antidumping 
and Countervailing Duty Reviews, 71 FR 63752 (October 31, 2006).
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    \2\ FSAB later withdrew its request for an administrative review 
on January 29, 2007.
    \3\ Section A of the questionnaire requests general information 
concerning a company's corporate structure and business practices, 
the merchandise under review that it sells, and the manner in which 
it sells that merchandise in all of its markets. Section B requests 
a complete listing of all home market sales, or, if the home market 
is not viable, of sales in the most appropriate third-country market 
(this Section is not applicable to respondents in non-market economy 
cases). Section C requests a complete listing of U.S. sales. Section 
D requests information on the cost of production of the foreign like 
product and the constructed value of the merchandise under review. 
Section E requests information on further manufacturing.
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    FSAB submitted its response to Section A of the Department's 
questionnaire on November 27, 2006, Sections B, D, and E of the 
questionnaire on December 22, 2006, and Section C of the questionnaire 
on January 5, 2007. We issued to FSAB a Sections A through C 
supplemental questionnaire on January 26, 2006. FSAB submitted a timely 
response to this supplemental questionnaire on March 9, 2007.
    On March 22, 2007, we issued a decision memorandum which outlined 
the Department's basis for collapsing FSAB with its affiliates, AB 
Sandvik Materials Technology (``SMT'') and Kanthal AB (``Kanthal''), 
and treating them as a single entity in this review. See March 22, 
2007, Memorandum from the Team to The File, entitled, ``Stainless Steel 
Wire Rod from Sweden: Whether to Collapse FSAB, SMT, and Kanthal.''
    We issued to FSAB a Sections D and E supplemental questionnaire on 
March 27, 2007. FSAB submitted timely responses to this supplemental 
questionnaire on May 1 and 8, 2007, respectively.
    On April 24, 2007, we issued to FSAB a second Sections A and C 
supplemental questionnaire to which it submitted a timely response on 
May 15, 2007.
    On May 21, 2007, we partially extended the time limit for the 
preliminary results in this review until August 31, 2007. See Stainless 
Steel Wire Rod from Sweden: Notice of Extension of Time Limit for 2005-
2006 Administrative Review, 72 FR 29485 (May 29, 2007).
    On July 10, 2007, we issued to FSAB a second Section E supplemental 
questionnaire to which it submitted a timely response on July 17, 2007.
    In response to the Department's request, FSAB submitted on August 
22, 2007, cost of production (``COP'') information for three products 
sold in the United States during the POR which it inadvertently did not 
include in its May 8, 2007, supplemental questionnaire response (see 
also August 22, 2007, Memorandum to The File, entitled, ``Telephone 
Conversation with Consultant for Fagersta Stainless AB 
(``Fagersta'')'').
    On August 24, 2007, we issued FSAB a supplemental questionnaire 
based on our analysis of its August 22, 2007, submission. For purposes 
of the preliminary results, we have relied on the data provided by FSAB 
in the August 22, 2007, submission. However, we will examine the 
information submitted by FSAB in response to the August 24, 2007, 
questionnaire for the final results of this review.

Scope of the Order

    For purposes of this order, SSWR comprises products 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.
    Certain stainless steel grades are excluded from the scope of the 
order. SF20T and K-M35FL are excluded. The following proprietary grades 
of Kanthal AB are also excluded: Kanthal A-1, Kanthal AF, Kanthal A, 
Kanthal D, Kanthal DT, Alkrothal 14, Alkrothal 720, and Nikrothal 40. 
The chemical makeup for the excluded grades is as follows:

SF20T.........................................
Carbon........................................                  0.05 max
Chromium......................................               19.00/21.00
Manganese.....................................                  2.00 max
Molybdenum....................................                 1.50/2.50
Phosphorous...................................                  0.05 max
Lead..........................................         added (0.10/0.30)
Sulfur........................................                  0.15 max
Tellurium.....................................          added (0.03 min)
Silicon.......................................                  1.00 max
K-M35FL.......................................
Carbon........................................                 0.015 max
Nickel........................................                  0.30 max
Silicon.......................................                 0.70/1.00
Chromium......................................               12.50/14.00
Manganese.....................................                  0.40 max
Lead..........................................                 0.10/0.30
Phosphorous...................................                  0.04 max
Aluminum......................................                 0.20/0.35
Sulfur........................................                  0.03 max
Kanthal A-1...................................
Carbon........................................                  0.08 max
Aluminum......................................        5.30 min, 6.30 max
Silicon.......................................                  0.70 max
Iron..........................................                   balance
Manganese.....................................                  0.40 max
Chromium......................................      20.50 min, 23.50 max
Kanthal AF....................................
Carbon........................................                  0.08 max
Aluminum......................................        4.80 min, 5.80 max
Silicon.......................................                  0.70 max
Iron..........................................                   balance
Manganese.....................................                  0.40 max
Chromium......................................      20.50 min, 23.50 max
Kanthal A.....................................
Carbon........................................                  0.08 max
Aluminum......................................        4.80 min, 5.80 max
Silicon.......................................                  0.70 max
Iron..........................................                   balance
Manganese.....................................                  0.50 max
Chromium......................................      20.50 min, 23.50 max
Kanthal D.....................................
Carbon........................................                  0.08 max
Aluminum......................................        4.30 min, 5.30 max
Silicon.......................................                  0.70 max
Iron..........................................                   balance
Manganese.....................................                  0.50 max
Chromium......................................      20.50 min, 23.50 max
Kanthal DT....................................
Carbon........................................                  0.08 max
Aluminum......................................        4.60 min, 5.60 max
Silicon.......................................                  0.70 max
Iron..........................................                   balance
Manganese.....................................                  0.50 max
Chromium......................................      20.50 min, 23.50 max
Alkrothal 14..................................
Carbon........................................                  0.08 max
Aluminum......................................        3.80 min, 4.80 max
Silicon.......................................                  0.70 max
Iron..........................................                   balance
Manganese.....................................                  0.50 max
Chromium......................................      14.00 min, 16.00 max
Alkrothal 720.................................
Carbon........................................                  0.08 max
Aluminum......................................        3.50 min, 4.50 max
Silicon.......................................                  0.70 max
Iron..........................................                   balance
Manganese.....................................                  0.70 max
Chromium......................................      12.00 min, 14.00 max
Nikrothal 40..................................
Carbon........................................                  0.10 max
Nickel........................................      34.00 min, 37.00 max
Silicon.......................................        1.60 min, 2.50 max
Iron..........................................                   balance
Manganese.....................................                  1.00 max
Chromium......................................      18.00 min, 21.00 max
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    The subject merchandise is currently classifiable under subheadings 
7221.00.0005, 7221.00.0015,

[[Page 51413]]

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 this order is dispositive.

Fair Value Comparisons

    To determine whether sales of SSWR by FSAB to the United States 
were made at less than NV, we compared constructed export price 
(``CEP'') to the NV, as described in the ``Constructed Export Price'' 
and ``Normal Value'' sections of this notice.
    Pursuant to section 777A(d)(2) of the Act, we compared the CEP of 
individual U.S. transactions to the weighted-average NV of the foreign 
like product where there were sales made in the ordinary course of 
trade, as discussed in the ``Cost of Production Analysis'' section 
below.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced by FSAB covered by the description in the ``Scope of 
the Order'' section, above, to be foreign like products for purposes of 
determining appropriate product comparisons to U.S. sales. Pursuant to 
19 CFR 351.414(e)(2)(ii), we 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 of the U.S. sale until two months 
after the sale. Where there were no sales of identical merchandise in 
the comparison market made in the ordinary course of trade to compare 
to U.S. sales, we compared U.S. sales to sales of the most similar 
foreign like product made in the ordinary course of trade. In making 
the product comparisons, we matched foreign like products based on the 
physical characteristics reported by FSAB in the following hierarchical 
order: grade, diameter, further processing, and coating.

Electro-Slag Remelting

    In its December 22, 2006, response to Section B of the 
questionnaire (``Section B response''), FSAB requested, as it did in 
the prior administrative review, that the Department include an 
additional characteristic, electro-slag remelting (``ESR''),\4\ in the 
above-noted product-matching criteria and also consider it as one of 
the most significant physical characteristics in the product matching 
hierarchy. Specifically, FSAB claims that (1) the physical differences 
associated with remelting are significant, as the ESR process reduces 
the number of inclusions in the steel enabling the steel to withstand 
stress better and to have a higher fatigue resistance; (2) the model-
matching criteria used in the stainless steel bar (``SSB'') 
proceedings, which include remelting, are relevant to the model-
matching criteria in this review because SSB is an immediate downstream 
product of SSWR; and (3) significant price and costs differences exist 
between ESR-treated and non-ESR-treated SSWR and, therefore, the 
exclusion of ESR from the model-matching criteria has a dramatic effect 
on the dumping margin. In support of its request to include ESR in the 
SSWR product-comparison criteria, FSAB provided the same technical 
information in its questionnaire responses\5\ in this administrative 
review as it had provided in the prior administrative review. Like in 
the prior review, we preliminarily find an insufficient basis in this 
review upon which to include ESR as a model-matching criterion for the 
reasons explained in detail below.
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    \4\ ESR is one form of remelting. Another form of remelting is 
vacuum arc remelting (``VAR'').
    \5\ See Exhibit 1 of the Section B Response.
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    In accordance with the Department's practice, when identical 
merchandise is not available in the home market for comparison to 
merchandise sold to the United States, the Department will compare 
``similar'' merchandise based upon the physical characteristics of the 
merchandise being compared. See section 771(16)(B) of the Act. The 
statute also instructs the Department to compare merchandise that is 
produced in the same country and by the same person as the subject 
merchandise; like that subject merchandise in component material or 
materials and in the purposes for which used; and approximately equal 
in commercial value to the subject merchandise. See section 771(16)(B) 
of the Act. Section 771(16)(C) of the Act instructs that, where no 
matches can be found under section 771(16)(B) of the Act, three 
criteria must be met to consider a product similar to the U.S. model: 
(1) the comparison-market model must be produced in the same country 
and by the same person and of the same general class or kind as the 
merchandise which is the subject of the investigation; (2) the 
comparison-market model must be like that merchandise in the purposes 
for which used; and (3) the comparison-market model must be found to be 
reasonably comparable to the U.S. model by the Department.
    When the Department has an established model-matching methodology 
in a proceeding, it may alter its established methodology if there is a 
reasonable basis for doing so. See NTN Bearing Corp. v. United States, 
295 F. 3d. 1263, 1269 (CIT 2002). With respect to changes to its model-
matching methodology, the Department has applied a ``compelling 
reasons'' standard, which is fully consistent, if not more rigorous, 
than the principles applied by the courts in reviewing the Department's 
determination to alter or change its practice. See Ball Bearings and 
Parts Thereof From France, Germany, Italy, Japan, Singapore, and the 
United Kingdom: Final Results of Antidumping Duty Administrative 
Review, 70 FR 54711 (September 16, 2005), and accompanying Issues and 
Decision Memorandum at Comment 2. Compelling reasons that warrant a 
change to the model-matching methodology may include, for example, 
greater accuracy in comparing foreign like product to the single most 
similar U.S. model, in accordance with section 771(16)(B) of the Act, 
or a greater number of reasonable price-to-price comparisons in 
accordance with section 773(a)(1) of the Act.
    As in the prior review, we preliminarily find no compelling reason 
in this review to change the current model-matching criteria as 
requested by FSAB. In this review, FSAB used ESR to produce one AISI-
equivalent SSWR grade\6\ that it sold to one customer in the home 
market during the POR. Although FSAB reported sales to the United 
States and home market of the same SSWR grade, FSAB did not perform ESR 
on that same SSWR grade sold in the U.S. market. Although FSAB did 
report more than one sale of this SSWR grade to a single home market 
customer during the POR, the fact remains that the single ESR-treated 
AISI-equivalent SSWR grade is insignificant when compared to the large 
number of non-ESR-treated AISI-equivalent SSWR grades FSAB sold in both 
the home and U.S. markets during the POR. Moreover, FSAB's use of ESR 
(and remelting in general) on products subject to this review is 
limited to home market sales of one AISI-equivalent SSWR grade, which 
are insignificant in terms of the total quantity of the AISI-equivalent 
SSWR grades FSAB sold to the U.S. and home markets during the POR.
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    \6\ The Department's antidumping duty questionnaire instructed 
FSAB to assign codes to its SSWR grades sold during the POR based on 
the specifications established for AISI-recognized grades. See 
antidumping duty questionnaire at page B-6 and C-5.

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[[Page 51414]]

    Moreover, we do not find that there is greater accuracy with 
respect to comparing the foreign like product to the most similar U.S. 
model if we include ESR as a model-matching criterion. Specifically, 
the Department's current product-matching criteria use all of FSAB's 
home market sales of the ESR-treated and non-ESR-treated grade at issue 
(i.e., FSAB's internal grade 20) when comparing those sales of that 
grade to the identical grade sold in the U.S. market. In accordance 
with the instructions contained in the Department's questionnaire, 
FSAB's reported costs for each SSWR grade include both non-ESR and ESR-
related production costs. FSAB's proposal to treat ESR as a separate 
model-matching criterion would effectively remove the home market sales 
of ESR-treated SSWR from the margin calculation analysis. Specifically, 
adding ESR to the model-matching criteria would result in separate 
control numbers for the ESR-treated and non-ESR-treated merchandise at 
issue, as well as separate production costs and prices for the 
merchandise. Consequently, by excluding the ESR-treated SSWR home 
market sales from our analysis, the home market price and production 
costs of the SSWR grade at issue are artificially lowered when compared 
to sales of the same grade in the U.S. market. Therefore, including ESR 
as a model-matching criterion will not result in greater accuracy with 
respect to product comparisons involving the SSWR grade at issue. In 
addition, given the fact that the use of ESR is limited to the 
production of one AISI-equivalent grade in this review, inclusion of 
ESR as a model-matching characteristic will not result in greater 
accuracy with respect to comparing the remaining foreign like product 
(i.e., all other SSWR grades sold in the home market during the POR) to 
the single most similar U.S. model, in accordance with section 
771(16)(B) of the Act.
    Furthermore, we find no basis to include remelting in the model-
matching criteria because its use in the production of SSWR is limited. 
We note that other stainless steel products such as stainless steel 
plate and stainless steel sheet and strip in coils, like SSWR, do 
undergo, to a limited extent, some form of remelting.\7\ However, the 
model-matching criteria applicable to those other stainless steel 
products do not include remelting.\8\ In contrast, the model-matching 
criteria for SSB include remelting forms such as ESR because remelting 
is an integral part of the production of a wide range of SSB and is 
used extensively by that industry.\9\ See Stainless Steel Wire Rod from 
Sweden: Final Results of Antidumping Duty Administrative Review, 72 FR 
17834 (April 10, 2007), and accompanying Issues and Decision Memorandum 
at Comment 1 (``2004-2005 SSWR Final Results''). In addition, we note 
that even though SSWR is used to produce SSB, we find that to the 
extent that SSWR is used to produce SSB, its use in the production of 
SSB is limited to the smaller diameters of SSB.\10\ As such, we find no 
basis to conclude that SSB requires the use of remelted SSWR or that 
remelted SSWR is used primarily to produce SSB; and thus we find no 
merit to FSAB's claim that the model-matching criteria used in the SSB 
proceedings, which include remelting, are relevant to the model-
matching criteria applicable to SSWR.
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    \7\ See, e.g., Final Results of Expedited Sunset Review: 
Stainless Steel Plate from Sweden, 63 FR 67658 (December 8, 1998), 
which notes that the Department issued a July 11, 1995, scope ruling 
with respect to a stainless steel plate product named Stavax ESR; 
Stainless Steel Sheet and Strip in Coils From Taiwan: Preliminary 
Results and Rescission in Part of Antidumping Duty Administrative 
Review, 71 FR 45521, 45523 (August 9, 2006) (``SSSS from Taiwan''); 
Stainless Steel Sheet and Strip in Coils From Germany: Notice of 
Preliminary Results of Antidumping Duty Administrative Review, 71 FR 
45024, 45025 (August 8, 2006) (``SSSS from Germany''); Stainless 
Steel Sheet and Strip in Coils From Mexico: Preliminary Results of 
Antidumping Duty Administrative Review, 71 FR 35618, 35619 (June 21, 
2006) (``SSSS from Mexico'').
    \8\ See, e.g., SSSS from Taiwan, 71 FR at 45527; SSSS from 
Germany, 71 FR at 45027; SSSS from Mexico, 71 FR at 35620.
    \9\ Moreover, when the Department sought comment on its proposed 
model-matching criteria in the less-than-fair-value (``LTFV'') 
segment of the SSB proceedings, the vast majority of interested 
parties, not just the petitioners, participating in the SSB 
proceedings all agreed that remelting was a significant 
characteristic in SSB production and therefore should be included in 
the model-matching criteria. See August 31, 2007, Memorandum to The 
File entitled, ``Public Documentation Placed on the Record'' (which 
includes discussion of remelting in the SSB proceedings).
    \10\ See also 2004-2005 SSWR Final Results at Comment 1.
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    Furthermore, we find that the use of other production processes or 
steps (i.e., not just remelting) to make SSWR can have an impact on 
costs and can also affect the quality (both internally and externally) 
of the final SSWR product, including the level of inclusions, and 
therefore, the resulting quality of the final SSWR product is not 
necessarily unique to the remelting process. Moreover, we find that 
these additional production steps appear to be dependent on a 
particular customer's request, as in the case of FSAB's use of ESR to 
produce one SSWR grade sold in the home market during the POR. 
Therefore, we find that such use appears to be limited and, therefore, 
is the exception rather than the norm when producing SSWR. In prior 
reviews, the Department has stated that changing the model-matching 
criteria may be warranted if an interested party can show that a 
specific standard exists that is not captured in the model-matching 
criteria but which is industry-wide, commercially accepted and 
recognizes material physical characteristics of various types for the 
particular product at issue.\11\ In this review, it is clear based on 
the limited application of ESR, in particular, and remelting, in 
general, to SSWR that FSAB has not met this test.
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    \11\ See, e.g., Certain Corrosion-Resistant Carbon Steel Flat 
Products from Canada: Final Results of Antidumping Duty 
Administrative Review, 70 FR 13458 (March 21, 2005), and 
accompanying Issues and Decision Memorandum at Comment 1; Notice of 
Final Results of Twelfth Administrative Review of the Antidumping 
Duty Order on Certain Corrosion-Resistant Carbon Steel Flat Products 
from the Republic of Korea, 72 FR 13086 (March 12, 2007), and 
accompanying Issues and Decision Memorandum at Comment 1.
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    As pointed out earlier, ESR is but one form of remelting. As such, 
even though FSAB may have only started using the ESR process to produce 
the one grade at issue after the Department completed the LTFV segment 
of this proceeding, we find that other forms of remelting, such as VAR, 
have been used to produce SSWR before the initiation of the LFTV 
segment of this proceeding.\12\ In fact, both ESR and VAR are similar 
in terms of their intended purposes and uses. For example, ESR and VAR 
are both used to make a cleaner steel (i.e., a steel with fewer, 
smaller, and more evenly distributed and/or segregated inclusions). 
However, the use of one remelting form may be preferred over the other 
depending on the type of final end use of the SSWR.\13\ Therefore, we 
do not consider remelting (in one form or another) to be a new 
technological development affecting the SSWR industry, as it has been 
in existence for decades.\14\
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    \12\ See 2004-2005 SSWR Final Results at Comment 1.
    \13\ See FSAB's Section B Response at Exhibit 1.
    \14\ See FSAB's Section B response at Exhibit 1.
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    We recognize that FSAB may have incurred additional costs when it 
used ESR to remelt one AISI-equivalent SSWR grade of merchandise sold 
in the home market during the POR. We also recognize that a producer 
which remelts grades of steel used to produce any stainless steel 
product may incur additional costs, and those costs will be greater 
when compared to the costs incurred to produce the same grades without 
remelting. However, in this case, the single AISI-equivalent SSWR

[[Page 51415]]

grade for which FSAB used ESR represents only one in a broad range of 
other SSWR grades sold by FSAB in the U.S. and home markets during the 
POR. Moreover, based on FSAB's own data and our findings in the 2004-
2005 SSWR Final Results, it does not appear that the use of remelting 
is a common practice in the SSWR industry. Therefore, the cost 
differences identified by FSAB with respect to the single remelted 
AISI-equivalent grade relative to the numerous other non-remelted 
grades sold during the POR, coupled with the fact that ESR remelting is 
a production step not common to producing SSWR, do not warrant the 
inclusion of ESR as an additional model-matching criterion as suggested 
by FSAB in this review.

Constructed Export Price

    We calculated CEP in accordance with section 772(b) of the Act 
because the subject merchandise was either sold for the account of FSAB 
by its subsidiary, Fagersta Stainless, Inc. (``FSI''), in the United 
States to unaffiliated purchasers, or subsequently further manufactured 
into non-subject merchandise by its affiliate, Sandvik Materials 
Technology U.S. (``SMT U.S.''), in the United States and then resold to 
its unaffiliated customers.
    We based CEP on the packed prices to unaffiliated purchasers in the 
United States. We identified the correct starting price by adjusting 
for alloy surcharges and billing adjustments associated with the sale, 
and by making deductions for early payment discounts and volume 
rebates, where applicable, as required by section 772 of the Act. We 
also made deductions for movement expenses in accordance with section 
772(c)(2)(A) of the Act. These expenses included, where appropriate, 
foreign inland freight (including freight from the plant to the port of 
exportation), U.S. brokerage and handling, ocean freight, marine 
insurance, U.S. inland freight expenses (including freight from the 
U.S. port to the U.S. customer or warehouse, and freight from the 
warehouse to the U.S. customer) offset by freight revenue, U.S. customs 
fees (including harbor maintenance fees and merchandise processing 
fees), and warehousing expenses. In accordance with section 772(d)(1) 
of the Act, we deducted those selling expenses associated with economic 
activities occurring in the United States, including direct selling 
expenses (credit expenses, warranty expenses, and repacking expenses) 
and indirect selling expenses (including inventory carrying costs) 
incurred in the country of exportation and the United States. We also 
deducted an amount for further-manufacturing costs, where applicable, 
in accordance with section 772(d)(2) of the Act, and made an adjustment 
for profit in accordance with section 772(d)(3) of the Act. To 
calculate the cost of further manufacturing, we relied on SMT U.S.'s 
reported cost of further-manufacturing materials, labor, and overhead, 
plus amounts for further- manufacturing general and administrative 
(``G&A'') expenses, and financial expenses. For further details 
regarding the further-manufacturing cost calculation, see the 
Memorandum from LaVonne Clark, Senior Accountant, to Neal M. Halper, 
Director of Accounting, ``Cost of Production and Constructed Value 
Calculation for the Preliminary Results - Fagersta Stainless AB'' 
(``COP/CV Memo'') dated August 31, 2007.

Normal Value

A. Home Market Viability

    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, 
we compared the volume of home market sales of the foreign like product 
to the volume of U.S. sales of the subject merchandise, in accordance 
with section 773(a)(1)(B) of the Act.
    Because FSAB's aggregate volume of home market sales of the foreign 
like product was greater than five percent of its aggregate volume of 
U.S. sales of the subject merchandise, we determined that its home 
market was viable.

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

    During a portion of the POR, FSAB sold the foreign like product to 
an affiliated customer. To test whether these sales were made at arm's-
length prices, we compared, on a product-specific basis, the starting 
prices of sales to affiliated and unaffiliated customers, net of all 
discounts and rebates, movement charges, direct selling expenses, and 
packing expenses. Pursuant to 19 CFR 351.403(c) and in accordance with 
the Department's practice, where the price to the affiliated party was, 
on average, within a range of 98 to 102 percent of the price of the 
same or comparable merchandise sold to unaffiliated parties, we 
determined that sales made 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) 
(establishing that the overall ratio calculated for an affiliate must 
be between 98 percent and 102 percent in order for sales to be 
considered in the ordinary course of trade and used in the NV 
calculation). Sales to the affiliated customer in the home market that 
were not made at arm's-length prices were excluded from our analysis 
because we considered these sales to be outside the ordinary course of 
trade. See 19 CFR 351.102(b).

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 level of trade (``LOT'') as the export price (``EP'') or CEP. 
Sales are made at different LOTs if they are made at different 
marketing stages (or their equivalent). See 19 CFR 351.412(c)(2). 
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) (Plate from 
South Africa). 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), including selling functions, class of customer (customer 
category), and the level of selling expenses for each type of sale.
    Pursuant to section 773(a)(1)(B)(i) of the Act, in identifying LOTs 
for EP and comparison market sales (i.e., NV based on either home 
market or third country prices),\15\ 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 (Fed. Cir. 2001).
---------------------------------------------------------------------------

    \15\ Where NV is based on constructed value (``CV''), we 
determine the NV LOT based on the LOT of the sales from which we 
derive selling expenses, G&A expenses, and profit for CV, where 
possible.
---------------------------------------------------------------------------

    When the Department is unable to match U.S. 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 an LOT adjustment under section 773(a)(7)(A) of the Act. Finally, 
for CEP sales only, if the NV LOT is more remote from the factory than 
the CEP

[[Page 51416]]

LOT and there is no basis for determining whether the difference in 
LOTs between NV and CEP affects price comparability (i.e., no LOT 
adjustment was practicable), the Department shall grant a CEP offset, 
as provided in section 773(a)(7)(B) of the Act. See Plate from South 
Africa, 62 FR at 61732.
    We obtained information from FSAB regarding the marketing stages 
involved in making the reported foreign market and U.S. sales, 
including a description of the selling activities performed for each 
channel of distribution. Our LOT findings are summarized below.
    FSAB sold SSWR only to end-users in the home market, but sold to 
both end-users and distributors in the U.S. market. FSAB reported that 
it made CEP sales in the U.S. market through the following two channels 
of distribution: (1) sales of FSAB-produced SSWR to its U.S. affiliate 
FSI (``U.S. Channel 1''), and (2) sales of FSAB-produced SSWR to its 
U.S. affiliate SMT U.S. (which further manufactured the SSWR into wire 
products for sale to its unaffiliated U.S. customers) (``U.S. Channel 
2''). We compared the selling activities performed in each channel, and 
found that certain selling functions (i.e., sales process/marketing 
support and freight/delivery) were performed at the same relative level 
of intensity in both channels of distribution. With regard to the other 
selling functions considered in this analysis (i.e., warehousing/
inventory and quality assurance/warranty service), we found that either 
the difference in the selling function between U.S. Channel 1 and U.S. 
Channel 2 is insignificant or the selling function was not performed at 
all in either channel during the POR. As a result, both U.S. channels, 
on balance, are at the same LOT. Accordingly, we find that all CEP 
sales constitute one LOT. For further discussion, see August 31, 2007, 
Memorandum to the File, entitled, ``Level of Trade Analysis for the 
Preliminary Results - FSAB'' (``LOT Memo'').
    With respect to the home market, FSAB reported one channel of 
distribution (i.e., factory direct sales) through which it sold SSWR to 
both affiliated and unaffiliated end-user customers. According to FSAB, 
its direct sales to both affiliated and unaffiliated home market 
customers constitute one distinct LOT in the home market. In 
determining whether separate LOTs exist in the home market, we compared 
the selling functions performed by FSAB for its home market sales to 
both affiliated and unaffiliated customers. Based on our analysis of 
the information submitted for the record of this review, we find that 
all home market sales were made at the same LOT. See LOT Memo.
    Finally, we compared the CEP LOT to the home market LOT and found 
that the selling functions performed for home market sales are either 
performed at the same degree of intensity as, or vary only slightly 
from, the selling functions performed for U.S. sales. Specifically, we 
found that two of the four selling functions (i.e., freight/delivery 
and warehousing/inventory) are performed by FSAB at the same level of 
intensity in both the U.S. and home markets. With respect to the 
remaining two selling functions (i.e., sales process/marketing support 
and quality assurance/warranty service), we found that there are only 
slight differences in the level of intensity between the home and U.S. 
markets which are not a sufficient basis to determine separate LOTs 
between the two markets. Therefore, we find that the NV LOT and single 
U.S. LOT are at the same LOT. Accordingly, we matched CEP sales to home 
market sales at the same LOT and have not made a CEP offset.

Cost of Production Analysis

    In the LTFV investigation, the most recently completed segment of 
this proceeding as of October 31, 2006, the date this review was 
initiated, we found that FSAB had made sales below the cost of 
production (``COP''). See Notice of Preliminary Determination of Sales 
at Less Than Fair Value and Postponement of Final Determination: 
Stainless Steel Wire Rod From Sweden, 63 FR 10841, 10846 (March 5, 
1998); affirmed in Notice of Final Determination of Sales at Less Than 
Fair Value: Stainless Steel Wire Rod from Sweden, 63 FR 40449, 40452 
(July 29, 1998) (``SSWR from Sweden LTFV Final''). Thus, in accordance 
with section 773(b)(2)(A)(ii) of the Act, there are reasonable grounds 
to believe or suspect that FSAB made sales in the home market at prices 
below the cost of producing the merchandise in the current review 
period. Accordingly, we instructed FSAB to respond to Section D (Cost 
of Production) of the Department's questionnaire.

A. Calculation of Cost of Production

    In accordance with section 773(b)(3) of the Act, we calculated 
FSAB's COP based on the sum of FSAB's costs of materials and conversion 
for the foreign like product, plus amounts for G&A expenses and 
interest expenses (see ``Test of Home Market Sales Prices'' section 
below for treatment of home market selling expenses). The Department 
relied on the COP data submitted by FSAB in its supplemental Section D 
questionnaire responses.

B. Test of Home Market Sales Prices

    On a product-specific basis, we compared the weighted-average COP 
to the home market sales of the foreign like product, as required under 
section 773(b) of the Act, in order to determine whether the sale 
prices were below the COP. For purposes of this comparison, we used COP 
exclusive of selling and packing expenses. The prices (inclusive of 
alloy surcharges and billing adjustments, where appropriate) were 
exclusive of any applicable movement charges, rebates, discounts, 
direct and indirect selling expenses and packing expenses.

C. Results of the COP Test

    In determining whether to disregard home market sales made at 
prices below the COP, we examined, in accordance with sections 
773(b)(1)(A) and (B) or the Act: (1) whether, within an extended period 
of time, such sales were made in substantial quantities; and (2) 
whether such sales were made at prices which permitted the recovery of 
all costs within a reasonable period of time in the normal course of 
trade. Where less than 20 percent of the respondent's home market sales 
of a given product are at prices less than the COP, we do not disregard 
any below-cost sales of that product because we determine that in such 
instances the below-cost sales were not made within an extended period 
of time and in ``substantial quantities.'' Where 20 percent or more of 
a respondent's sales of a given product are at prices less than the 
COP, we disregard the below-cost sales because: (1) they were made 
within an extended period of time in ``substantial quantities,'' in 
accordance with sections 773(b)(2)(B) and (C) of the Act, and (2) based 
on our comparison of prices to the weighted-average COPs for the POR, 
they were at prices which would not permit the recovery of all costs 
within a reasonable period of time, in accordance with section 
773(b)(2)(D) of the Act.
    We found that, for certain specific products, more than 20 percent 
of FSAB's home market sales were at prices less than the COP and, in 
addition, such sales did not provide for the recovery of costs within a 
reasonable period of time. We therefore excluded these sales and used 
the remaining sales as the basis for determining NV, in accordance with 
section 773(b)(1) of the Act.

[[Page 51417]]

Price-to-Price Comparisons

    We calculated NV based on delivered prices (inclusive of alloy 
surcharges) to unaffiliated customers or prices to affiliated customers 
that were determined to be at arm's length. We made adjustments, where 
appropriate, to the starting price for billing adjustments, discounts, 
and rebates. We made deductions, where appropriate, from the starting 
price for inland freight (from the plant to the customer) and inland 
insurance, under section 773(a)(6)(B)(ii) of the Act. We also made 
deductions from the starting price for credit, warranty, and other 
direct selling expenses, under section 773 of the Act.
    We made adjustments for differences in costs attributable to 
differences in the physical characteristics of the merchandise in 
accordance with section 773(a)(6)(C)(ii) of the Act and 19 CFR 351.411. 
We also deducted home market packing costs and added U.S. packing 
costs, in accordance with sections 773(a)(6)(A) and (B) of the Act.

Calculation of Constructed Value

    We calculated CV in accordance with section 773(e) of the Act, 
which states that CV shall be based on the sum of the respondent's cost 
of materials and fabrication for the subject merchandise, plus amounts 
for selling, general and administrative (``SG&A'') expenses, profit and 
U.S. packing costs. We relied on the submitted CV information.

Price-to-Constructed Value Comparisons

    We based NV on CV for comparison to certain U.S. sales, in 
accordance with section 773(a)(4) of the Act. For comparisons to FSAB's 
CEP sales, we made circumstance-of-sale adjustments by deducting from 
CV the weighted-average home market direct selling expenses, in 
accordance with section 773(a)(8) of the Act and 19 CFR 351.410.

Currency Conversion

    We made currency conversions in accordance with section 773A of the 
Act based on the exchange rates in effect on the dates of the U.S. 
sales as certified by the Federal Reserve Bank.

Preliminary Results of Review

    As a result of this review, we preliminarily determine that the 
weighted-average dumping margin for the period September 1, 2005, 
through August 31, 2006, is as follows:

------------------------------------------------------------------------
                                                                Percent
                    Manufacturer/Exporter                       Margin
------------------------------------------------------------------------
Fagersta Stainless AB/AB Sandvik Materials Technology/             40.24
 Kanthal AB.................................................
------------------------------------------------------------------------

Disclosure and Public Hearing

    The Department will disclose to the parties the calculations 
performed in connection with these preliminary results within five days 
of the publication date of this notice. See 19 CFR 351.224(b). 
Interested parties may submit case briefs not later than 30 days after 
the date of publication of this notice. Rebuttal briefs, limited to 
issues raised in the case briefs, may be filed not later than 35 days 
after the date of publication of this notice. Parties who submit case 
briefs or rebuttal briefs in this proceeding 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. Interested parties who 
wish to request a hearing or to participate if one is requested, must 
submit a written request to the Assistant Secretary for Import 
Administration, Room B-099, within 30 days of the date of publication 
of this notice. Requests should contain: (1) the party's name, address 
and telephone number; (2) the number of participants; and (3) a list of 
issues to be discussed. See 19 CFR 351.310(c). Issues raised in the 
hearing will be limited to those raised in the respective case briefs. 
The Department will issue the final results of this administrative 
review, including the results of its analysis of issues raised in any 
written briefs, not later than 120 days after the date of publication 
of this notice, pursuant to section 751(a)(3)(A) of the Act.

Assessment Rates

    Upon completion of the administrative review, the Department shall 
determine, and CBP shall assess, antidumping duties on all appropriate 
entries, in accordance with 19 CFR 351.212. The Department will issue 
appropriate appraisement instructions for the company subject to this 
review directly to CBP 15 days after publication of the final results 
of this review.
    For assessment purposes, we will calculate importer-specific ad 
valorem duty assessment rates based on the ratio of the total amount of 
dumping margins calculated for the examined sales to the total entered 
value of those same sales. However, for subject merchandise produced by 
FSAB but imported by its U.S. affiliate, SMT U.S., we do not have the 
actual entered value. Therefore, for those entries of subject 
merchandise imported by SMT U.S., we will calculate the importer-
specific assessment rate by aggregating the dumping margins calculated 
for all of the U.S. sales examined and dividing that amount by the 
total quantity of the sales examined. To determine whether the duty 
assessment rates are de minimis, in accordance with the requirement set 
forth in 19 CFR 351.106(c)(2), we will calculate importer-specific ad 
valorem ratios based on the estimated entered value.
    We will instruct CBP to assess antidumping duties on all 
appropriate entries covered by this review if any importer-specific 
assessment rate calculated in the final results of this review is above 
de minimis (i.e., at or above 0.50 percent). See 19 CFR 351.106(c)(1). 
The final results of this review shall be the basis for the assessment 
of antidumping duties on entries of merchandise covered by the final 
results of this review.
    The Department clarified its ``automatic assessment'' regulation on 
May 6, 2003. See Antidumping and Countervailing Duty Proceedings: 
Assessment of Antidumping Duties, 68 FR 23954 (May 6, 2003) 
(``Assessment Policy Notice''). This clarification will apply to 
entries of subject merchandise during the POR produced by the company 
included in these preliminary results of review for which the reviewed 
company did not know the merchandise it sold to the intermediary (e.g., 
a reseller, trading company, or exporter) 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 
intermediary involved in the transaction. See Assessment Policy Notice 
for a full discussion of this clarification.

Cash Deposit Requirements

    Pursuant to the Implementation of the Findings of the WTO Panel in 
US--Zeroing (EC): Notice of Determinations Under Section 129 of the 
Uruguay Round Agreements Act and Revocations and Partial Revocations of 
Certain Antidumping Duty Orders, 72 FR 25261, 25263 (May 4, 2007), 
effective April 23, 2007, we have revoked the antidumping duty order on 
SSWR from Sweden and accordingly have instructed CBP to discontinue 
collection of cash deposits of antidumping duties on entries of the 
subject merchandise.

Notification to Importers

    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 351.402(f) to file a certificate 
regarding

[[Page 51418]]

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 and notice are published in accordance 
with sections 751(a)(1) and 777(i)(1) of the Act and 19 CFR 351.221.

    Dated: August 31, 2007.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E7-17703 Filed 9-6-07; 8:45 am]
BILLING CODE 3510-DS-S