[Federal Register Volume 75, Number 78 (Friday, April 23, 2010)]
[Notices]
[Pages 21241-21243]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-9488]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-849]


Certain Cut-to-Length Carbon Steel Plate from the People's 
Republic of China: Initiation of Antidumping Circumvention Inquiry

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

Effective Date:
    April 23, 2010.
SUMMARY: In response to a request from ArcelorMittal USA, Inc.; Nucor 
Corporation; SSAB N.A.D., Evraz Claymont Steel and Evraz Oregon Steel 
Mills (collectively ``Domestic Producers''), the Department of Commerce 
(``Department'') is initiating an antidumping circumvention inquiry, 
pursuant to section 781(c) of the Tariff Act of 1930, as amended (the 
``Act''), to determine whether certain imports of certain cut-to-length 
carbon steel plate (``CTL plate'') are circumventing the antidumping 
duty order on CTL plate from the People's Republic of China (``PRC''). 
See Suspension Agreement on Certain Cut-to-Length Carbon Steel Plate 
From the People's Republic of China; Termination of Suspension 
Agreement and Notice of Antidumping Duty Order, 68 FR 60081 (October 
21, 2003) (``Order'').

FOR FURTHER INFORMATION CONTACT: Rebecca Pandolph or Howard Smith, AD/
CVD Operations, Office 4, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, N.W., Washington, DC 20230, telephone: (202) 482-
3627 or (202) 482-5193, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On February 17, 2010, Domestic Producers requested that the 
Department make a final circumvention ruling within 45 days pursuant to 
19 CFR 351.225(c)(2) and (d) with respect to CTL plate produced by 
Wuyang Iron and Steel Co., Ltd. (``Wuyang''), regardless of the 
exporter or importer, or imported by Stemcor USA Inc. (``Stemcor''), 
regardless of the producer or exporter, which contain 0.0008 percent or 
more, by weight, of boron.
    Domestic Producers maintain that such plates are circumventing the 
Order on CTL plate from the PRC because of minor alterations thereto. 
See 781(c) of the Act; see also Letter from Domestic Producers 
regarding, ``Certain Cut-to-Length Carbon Steel Plate From the People's 
Republic of China: Request for Circumvention Ruling,'' dated February 
17, 2010 (``Domestic Producers' Request''). As evidence, Domestic 
Producers submitted a mill test certificate from Wuyang for ASTM A830 
steel plate and a letter from a non-petitioning U.S. steel producer, 
stating that Stemcor was importing steel plate from PRC producers 
containing small amounts of boron resulting in the classification of 
the plate as ``alloy'' steel plate and, thus, circumventing the Order. 
See id. at 7-8 and Exhibits 1 and 2.
    Domestic Producers note that the Department has made a previous 
ruling that CTL plate produced by Tianjin Iron and Steel Co., Ltd. and/
or imported by Toyota Tsusho America with small amounts of boron added, 
but otherwise fitting the description of subject CTL plate, are 
circumventing the Order on CTL plate from the PRC. See id. at 9; see 
also, Affirmative Final Determination of Circumvention of the 
Antidumping Duty Order on Certain Cut-to-Length Carbon Steel Plate From 
the People's Republic of China, 74 FR 40565 (August 12, 2009). 
Moreover, Domestic Producers argue that there is an incentive for PRC 
producers to add insignificant amounts of boron to their steel products 
for the purpose of securing a higher export rebate, which further 
confirms the evidence that circumvention is occurring. See Domestic 
Producers' Request at 8 and Exhibit 4; see also, Letter from Domestic 
Producers, regarding ``Certain Cut-to-Length Carbon Steel Plate From 
the People's Republic of China: Clarification of Request for 
Circumvention Ruling,'' dated March 23, 2010 (``Domestic Producers' 
Response'') at 8-9 and Exhibit 4. Furthermore, Domestic Producers note 
that Wuyang's production and export of CTL plate with

[[Page 21242]]

boron follows the imposition of the Order on CTL plate from the PRC and 
occurs as the PRC government changed its own tariff system to favor 
exporters' shift from exporting non-alloy steel products to alloy steel 
products. See Domestic Producers' Request at 18.
    On March 10, 2010, the Department identified various issues in the 
Domestic Producers' Request that required clarification. On March 18, 
and March 23, 2010, Domestic Producers submitted their responses. In 
their responses, Domestic Producers clarified that the ASTM A830 
specification is not for alloy steels, but for carbon and manganese 
carbon steels. See Domestic Producers' Response at 4. Domestic 
Producers further assert that the submitted mill test certificate 
presented none of the characteristics that would be expected for steel 
to which boron has been added for hardenability. See id. at 5-7 and 
Exhibits 1 and 3.
    On March 23, and March 26, 2010, Stemcor submitted comments on 
Domestic Producers' Request and responses to the Department's March 10, 
2010, request for clarification. In its March 23, 2010, comments, 
Stemcor asserts that, contrary to Domestic Producers' allegation, it is 
not involved in circumventing the Order on CTL plate from the PRC. See 
letter from Stemcor regarding, ``Certain Cut-to-Length Steel Plate from 
the People's Republic of China: Initial Comments on Request for 
Circumvention Ruling, dated March 23, 2010 at 2. Moreover, Stemcor 
claims that the facts of this case are distinct from the previous 
circumvention ruling. See id. at 3. Specifically, Stemcor notes that 
boron is not mentioned in the ASTM A36 specification, the specification 
of CTL plate which was examined in the previous circumvention ruling, 
whereas the CTL plate it imports is made to the ASTM A830 
specification, which explicitly mentions boron. See id. at 3-4. In its 
March 26, 2010, comments, Stemcor asserts that boron is included in the 
ASTM A830 plate that it imports because boron imparts certain desirable 
physical properties, which enhances the wearability of the steel. See 
letter from Stemcor regarding, ``Certain Cut-to-Length Steel Plate from 
the People's Republic of China: Further Comments on Request for 
Circumvention Ruling, dated March 26, 2010 at 2-3. Stemcor further 
asserts that the ASTM A830 plate meets its customers' requirements with 
regard to wear characteristics of steel. See id. at 7-8. Moreover, 
Stemcor asserts that the ASTM A830 steel plate is used for making metal 
molds for the automotive industry, and not for structural steel as 
Domestic Producers allege. See id. at 9-10. Stemcor also notes that the 
Domestic Producers' allegation concerning the role of the PRC 
government's rebate program for exports of alloy steel is wrong because 
the timing of the rebate program does not match the timing of Stemcor's 
imports of alloy steel plates. See id. at 12. The Department intends to 
explore the issues raised in Stemcor's comments after initiation.

Scope of the Order

    The products covered by the order include hot-rolled iron and non-
alloy steel universal mill plates (i.e., flat-rolled products rolled on 
four faces or in a closed box pass, of a width exceeding 150 mm but not 
exceeding 1250 mm and of a thickness of not less than 4 mm, not in 
coils and without patterns in relief), of rectangular shape, neither 
clad, plated nor coated with metal, whether or not painted, varnished, 
or coated with plastics or other nonmetallic substances; and certain 
iron and non-alloy steel flat-rolled products not in coils, of 
rectangular shape, hot-rolled, neither clad, nor coated with metal, 
whether or not painted, varnished, or coated with plastics or other 
nonmetallic substances, 4.75 mm or more in thickness and of a width 
which exceeds 150 mm and measures at least twice the thickness. 
Included as subject merchandise in the order are flat-rolled products 
of nonrectangular 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. This merchandise is currently 
classified in the Harmonized Tariff Schedule of the United States 
(``HTS'') under item numbers 7208.40.3030, 7208.40.3060, 7208.51.0030, 
7208.51.0045, 7208.51.0060, 7208.52.0000, 7208.53.0000, 7208.90.0000, 
7210.70.3000, 7210.90.9000, 7211.13.0000, 7211.14.0030, 7211.14.0045, 
7211.90.0000, 7212.40.1000, 7212.40.5000, 7212.50.0000. Although the 
HTS subheadings are provided for convenience and customs purposes, the 
written description of the scope of the order is dispositive. 
Specifically excluded from subject merchandise within the scope of the 
order is grade X-70 steel plate.

Merchandise Subject to the Minor Alterations Antidumping Circumvention 
Inquiry

    The merchandise subject to this antidumping circumvention inquiry 
consists of CTL plate from the PRC produced by Wuyang containing 0.0008 
percent or more boron, by weight, and otherwise meeting the 
requirements of the scope of the Order as listed under the ``Scope of 
the Order'' section above, with the exception of merchandise meeting 
all of the following requirements: (1) aluminum level of 0.02 percent 
or greater, by weight; (2) a ratio of 3.4 to 1 or greater, by weight, 
of titanium to nitrogen; and (3) a hardenability test (i.e., Jominy 
test) result indicating a boron factor of 1.8 or greater. The 
Department also intends to address whether its circumvention ruling 
will apply to particular producers, exporters, and/or importers (e.g., 
Stemcor) or to U.S. imports of all CTL plate from the PRC.

Initiation of Minor Alterations Antidumping Circumvention Proceeding

    Section 781(c)(1) of the Act provides that the Department may find 
circumvention of an antidumping duty order when products which are of 
the class or kind of merchandise subject to an antidumping duty order 
have been ``altered in form or appearance in minor respects . . . 
whether or not included in the same tariff classification.'' The 
Department notes that, while the statute is silent as to what factors 
to consider in determining whether alterations are properly considered 
``minor,'' the legislative history of this provision indicates there 
are certain factors which should be considered before reaching a 
circumvention determination. In conducting a circumvention inquiry 
under section 781(c) of the Act, the Department has generally relied 
upon ``such criteria as the overall physical characteristics of the 
merchandise, the expectations of the ultimate users, the use of the 
merchandise, the channels of marketing and the cost of any modification 
relative to the total value of the imported products.'' See S. Rep. 
No.71, 100th Cong., 1st Sess. 100 (1987) (``In applying this provision, 
the Commerce Department should apply practical measurements regarding 
minor alterations, so that circumvention can be dealt with effectively, 
even where such alterations to an article technically transform it into 
a differently designated article.'')

Overall Physical Characteristics

    Domestic Producers maintain that CTL plate with the addition of 
boron is produced in the same manner and to the same specifications as 
subject CTL plate. See Domestic Producers' Request at 13. Domestic 
Producers note that while boron can improve steel's hardenability, 
there are certain other

[[Page 21243]]

parameters that must be met. See id. at 13-14. Specifically, Domestic 
Producers maintain that if CTL plate is to be used as an alloy steel 
plate (i.e., boron steel plate), then an aluminum level of 0.02 percent 
or greater, by weight; a ratio of 3.4 to 1 or greater, by weight, of 
titanium to nitrogen; and a hardenability test (i.e., Jominy test) 
result indicating a boron factor of 1.8 or greater must be present. See 
id.

Expectations of the Ultimate Users

    Domestic Producers indicate that they are unaware of any instances 
where customers expect or request CTL plate with small amounts of boron 
added, other than to potentially avoid the added expense to the plate 
products that result from the antidumping duties in place. See id. at 
15. Domestic Producers argue that without the proper amounts of 
aluminum and titanium and sufficient hardenability, there would be no 
reason to request the addition of boron nor would there be a basis for 
concluding that the presence of small amounts of boron added any 
special properties to CTL plate. See id.

Use of the Merchandise

    Domestic Producers state the product at issue is used for the same 
purposes as subject merchandise. See id. at 16. Moreover, Domestic 
Producers assert that CTL plate with small amounts of boron is not 
suitable for different or additional uses compared to subject CTL plate 
without boron. See id. Domestic Producers conclude, therefore, that 
Wuyang's customers would have no basis for concluding that the presence 
of small amounts of boron imparts any special properties to the CTL 
plate beyond those already present in ASTM A830 plate without boron. 
See id.

Channels of Marketing

    Domestic Producers state the channels of marketing for the boron-
added CTL plate and the subject CTL plate are the same, noting that 
both products are marketed in the same manner, appeal to the same end 
users, and are used for the same end uses. See id.

Cost of Modification

    Domestic Producers indicate that the addition of boron at levels 
recognized as alloy amounts by the tariff schedule involve minimal 
additional cost. In addition, Domestic Producers cite the Department's 
finding in a previous ruling that reaching the 0.0008 percent threshold 
for boron involved a cost amounting to considerably less than one-third 
of one percent of the sales price. See Domestic Producers' Request at 
16-17.
    Based on the information provided by Domestic Producers, the 
Department finds there is sufficient basis to initiate an antidumping 
circumvention inquiry, pursuant to section 781(c) of the Act, to 
determine whether the merchandise subject to the inquiry (identified in 
the ``Merchandise Subject to the Minor Alterations Antidumping 
Circumvention Inquiry'' section above) involves a minor alteration to 
subject merchandise that is so insignificant as to render the resulting 
merchandise (classified as ``alloy'' steel under the HTS) subject to 
the Order on CTL plate from the PRC. As noted above, in making this 
determination the Department also intends to address whether its 
circumvention ruling applies to particular producers, exporters, and/or 
importers or to all U.S. imports of CTL plate from the PRC. Although 
Domestic Producers requested that the Department make a final ruling 
within 45 days, additional time is needed for further inquiry into 
Domestic Producers' allegations and Stemcor's comments.
    The Department will not order the suspension of liquidation of 
entries of any additional merchandise at this time. However, in 
accordance with 19 CFR 351.225(l)(2), if the Department issues a 
preliminary affirmative determination, we will then instruct U.S. 
Customs and Border Protection to suspend liquidation and require a cash 
deposit of estimated duties, at the applicable rate, for each 
unliquidated entry of the merchandise at issue, entered or withdrawn 
from warehouse for consumption on or after the date of initiation of 
the inquiry.
    We intend to notify the International Trade Commission in the event 
of an affirmative preliminary determination of circumvention, in 
accordance with 781(e)(1) of the Act and 19 CFR 351.225(f)(7)(i)(C). 
The Department will, following consultation with interested parties, 
establish a schedule for questionnaires and comments on the issues. The 
Department intends to issue its final determination within 300 days of 
the date of publication of this initiation notice.
    This notice is published in accordance with sections 781(c) and (d) 
of the Act and 19
    CFR 351.225(i).

    Dated: April 16, 2010.
John M. Andersen,
Acting Deputy Assistant Secretary for Antidumping and Countervailing 
Duty Operations.
[FR Doc. 2010-9488 Filed 4-22-10; 8:45 am]
BILLING CODE 3510-DS-S