[Federal Register Volume 76, Number 119 (Tuesday, June 21, 2011)]
[Notices]
[Pages 36086-36089]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-15461]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-201-805]


Certain Circular Welded Non-Alloy Steel Pipe From Mexico: Final 
Results of Antidumping Duty Administrative Review

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

SUMMARY: On December 15, 2010, the Department of Commerce (the 
Department) published the preliminary results of the administrative 
review of the antidumping duty order on certain circular welded non-
alloy steel pipe from Mexico. See Certain Circular Welded Non-Alloy 
Steel Pipe From Mexico: Preliminary Results of Antidumping Duty 
Administrative Review, 75 FR 78216 (December 15, 2010) (Preliminary 
Results). This administrative review covers mandatory respondents 
Mueller Comercial de Mexico, S. de R.L. de C.V., and Southland Pipe 
Nipples Company, Inc., (Mueller) and Ternium Mexico, S.A. de C.V. 
(Ternium). Tuberia Nacional, S.A. de C.V. (TUNA) was subject to a 
concurrent changed circumstances review of this order; in its changed 
circumstances review, the Department determined that Lamina y Placa 
Comercial, S.A. de C.V. (Lamina) is the successor-in-interest to TUNA. 
See Notice of Final Results of Antidumping Duty Changed Circumstances 
Review: Certain Circular Welded Non-Alloy Steel Pipe from Mexico, 75 FR 
82374 (December 30, 2010). Because the determination was made after the 
Preliminary Results and the parties refer to this entity as TUNA in 
their case and rebuttal briefs, we continue to refer to this entity as 
TUNA for these final results so as to avoid confusion. The period of 
review (POR) is November 1, 2008, through October 31, 2009.
    We determine that sales of subject merchandise have been made at 
less than normal value (NV). One of the companies, Ternium, refused to 
cooperate with the Department in this administrative review. We have 
calculated a dumping margin for Mueller. We determine that TUNA had no 
reviewable sales, shipments, or entries during the POR. The 
Department's review of import data supported TUNA's claim of no 
shipments during the POR (see ``TUNA's No-Shipment Claim'' section of 
this notice for further explanation).
    As a result of our analysis of the comments received, these final 
results differ from the Preliminary Results. For our final results, we 
find that Ternium and Mueller made sales of subject merchandise at less 
than NV. We have listed the final dumping margin below in the section 
entitled ``Final Results of Review.''

DATES: Effective Date: June 21, 2011.

FOR FURTHER INFORMATION CONTACT: Mark Flessner or Robert James, AD/CVD 
Operations, Office 7, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
6312 and (202) 482-0649, respectively.

SUPPLEMENTARY INFORMATION: 

Background

    On December 15, 2010, the Department published in the Federal 
Register the preliminary results of the administrative review of the 
antidumping duty order on certain circular welded non-alloy steel pipe 
from Mexico for the period November 1, 2008, to October 31, 2009. See 
Preliminary Results.
    As noted in the Preliminary Results, we conducted verification of 
the Mueller sales responses on October 25-29, 2010, and of the TUNA no-
shipments claim on November 1-3, 2010. Because there was insufficient 
time to complete the verification memoranda for the Preliminary 
Results, these verification memoranda were released after the 
Preliminary Results. Mueller submitted new sales data (in response to 
the Department's request made at the end of verification) on December 
1, 2010; we used these data in our post-preliminary margin calculation 
for Mueller and continue to use them for these final results.
    On December 7, 2010, the Department issued second supplemental 
section D questionnaires to Mueller, TUNA, and Ternium. On December 21, 
2010, Ternium submitted its response to our second supplemental section 
D questionnaire (but we are not using a Ternium database for this final 
results calculation, nor did we use one for the post-preliminary margin 
calculation). On January 4, 2011, Mueller submitted its response to our 
second supplemental section D questionnaire (which contained its latest 
cost database). On January 4, 2011, TUNA submitted its response to our 
second supplemental section D questionnaire (but did not need to revise 
its database). Therefore, these final results are based on the same 
databases used for the post-preliminary calculation. (Note: Ternium is 
the successor-in-interest to HYLSA; it is referenced alternately by 
``Ternium,'' by ``HYLSA,'' and by ``Termex'' in the body of the 
program. See Final Results of Antidumping Duty Changed Circumstances 
Review: Certain Circular Welded Non-Alloy Steel Pipe and Tube from 
Mexico, 74 FR 41681 (August 18, 2009)).
    On February 10, 2011, the Department released a post-preliminary 
calculation. See Memorandum from Mark Flessner to the File entitled 
``Certain Circular Welded Non-Alloy Steel Pipe from Mexico: Post-
Preliminary Results Analysis Memorandum for Mueller Comercial, S. de 
R.L. de C.V.,'' dated February 10, 2011 (Post-Preliminary Results 
Analysis Memorandum). As part of that post-preliminary calculation, 
three memoranda from Heidi K. Schriefer to Neal M. Halper were placed 
on the record. These memoranda were entitled: (1) ``Cost of Production 
and Constructed Value Calculation Adjustments for the Post-Preliminary 
Results--Mueller Comercial de Mexico, S. de R.L. de C.V.;'' (2) ``Cost 
of Production and Constructed Value Adjustments for the Post-
Preliminary Results--Ternium Mexico, S.A. de C.V.;'' and (3) ``Cost of 
Production and Constructed Value Adjustments for the Post-Preliminary 
Results--Tuberia Nacional, S.A. de C.V.'' These memoranda were 
incorporated by reference into the Post-Preliminary Results Analysis 
Memorandum, providing all changes made to the programming.
    In response to the Department's invitation to comment on the 
preliminary results of this review, parties filed multiple case and 
rebuttal briefs. Respondent Mueller filed its case brief on February 
25, 2011 (Mueller case brief). Petitioner United States Steel 
Coporation (U.S. Steel) also filed its case brief regarding TUNA on 
February 25, 2011 (U.S. Steel's TUNA case brief). In

[[Page 36087]]

addition, petitioner U.S. Steel filed a separate case brief regarding 
Mueller on February 25, 2011 (U.S. Steel's Mueller case brief). 
Petitioners Allied Tube and Conduit and TMK-IPSCO (Allied/TMK) also 
filed their case brief on February 25, 2011 (Allied/TMK case brief). 
Respondent Mueller filed its rebuttal brief on March 9, 2011 (Mueller 
rebuttal brief). Respondent TUNA also filed its rebuttal brief on March 
9, 2011 (TUNA rebuttal brief). Likewise, petitioner U.S. Steel filed 
its rebuttal brief on March 9, 2011 (U.S. Steel rebuttal brief). 
Finally, petitioners Allied/TMK filed their rebuttal brief on March 9, 
2011 (Allied/TMK rebuttal brief).
    In response to Mueller's case brief, the Department issued a letter 
to Mueller Comercial de Mexico, S. de R.L. de C.V. (Yohai Baisburd) 
entitled ``Administrative Review of Certain Circular Welded Non-Alloy 
Steel Pipe from Mexico,'' dated May 12, 2011, in which the Department 
invited Mueller to propose programming language with regard to weight-
averaging certain costs of TUNA and TERNIUM. On May 13, 2011, Mueller 
submitted its proposed programming language.

Scope of the Order

    The products covered by this order are circular welded non-alloy 
steel pipes and tubes, of circular cross-section, not more than 406.4 
millimeters (16 inches) in outside diameter, regardless of wall 
thickness, surface finish (black, galvanized, or painted), or end 
finish (plain end, beveled end, threaded, or threaded and coupled). 
These pipes and tubes are generally known as standard pipes and tubes 
and are intended for the low pressure conveyance of water, steam, 
natural gas, and other liquids and gases in plumbing and heating 
systems, air conditioning units, automatic sprinkler systems, and other 
related uses, and generally meet ASTM A-53 specifications. Standard 
pipe may also be used for light load-bearing applications, such as for 
fence tubing, and as structural pipe tubing used for framing and 
support members for reconstruction or load-bearing purposes in the 
construction, shipbuilding, trucking, farm equipment, and related 
industries. Unfinished conduit pipe is also included in these orders. 
All carbon steel pipes and tubes within the physical description 
outlined above are included within the scope of this order, except line 
pipe, oil country tubular goods, boiler tubing, mechanical tubing, pipe 
and tube hollows for redraws, finished scaffolding, and finished 
conduit. Standard pipe that is dual or triple certified/stenciled that 
enters the U.S. as line pipe of a kind used for oil or gas pipelines is 
also not included in this order.
    The merchandise covered by the order and subject to this review are 
currently classified in the Harmonized Tariff Schedule of the United 
States (HTSUS) at subheadings: 7306.30.10.00, 7306.30.50.25, 
7306.30.50.32, 7306.30.50.40, 7306.30.50.55, 7306.30.50.85, and 
7306.30.50.90. Although the HTSUS subheadings are provided for 
convenience and customs purposes, our written description of the scope 
of these proceedings is dispositive.

Analysis of Comments Received

    All issues raised in the case and rebuttal briefs by interested 
parties in this administrative review are addressed in the Issues and 
Decision Memorandum (Decision Memorandum) from Christian Marsh, Deputy 
Assistant Secretary for Antidumping and Countervailing Duty Operations, 
to Ronald K. Lorentzen, Deputy Assistant Secretary for Import 
Administration, dated June 13, 2011, which is hereby adopted by this 
notice. A list of the issues which parties have raised and to which we 
have responded, all of which are in the Decision Memorandum, is 
attached to this notice as an appendix. Parties can find a complete 
discussion of all issues raised in this review and the corresponding 
recommendations in this public memorandum, which is on file in the 
Central Records Unit in room 7046 of the main Department building. In 
addition, a complete version of the Decision Memorandum can be accessed 
directly via the Internet at http://ia.ita.doc.gov/frn/index.html. The 
paper copy and electronic version of the Decision Memorandum are 
identical in content.

Use of Total Adverse Facts Available

    The Department found in the Preliminary Results that Ternium failed 
to cooperate to the best of its ability by withholding information 
requested by the Department's questionnaire, and thereby impeded the 
Department's proceeding. See Preliminary Results. Therefore, in 
accordance with section 776(b) of the Tariff Act of 1930, as amended 
(the Act), and 19 CFR 351.308(c), the Department preliminarily selected 
48.33 percent as the adverse facts available (AFA) dumping margin. The 
Department received no comments regarding its preliminary application 
of the AFA dumping margin to Ternium. For these final results, the 
Department has not altered its analysis or decision to apply the AFA 
dumping margin to Ternium. See accompanying Decision Memorandum for the 
issues raised by the parties and addressed by the Department.

Changes Since the Preliminary Results

    First, consistent with our decision in the post-preliminary 
calculation (but different from our position in the Preliminary 
Results), we have applied AFA to Ternium's cost information in 
calculating Mueller's margin for the final results. We apply AFA 
because of Ternium's failure to cooperate by not acting to the best of 
its ability to comply with the Department's request for information, in 
that Ternium repeatedly refused to provide product-specific costs.
    Second, as a reasonable alternative in the absence of manufacturer-
specific information, we have revised the final calculations to weight-
average the control-number-specific costs of Mueller's suppliers based 
on Mueller's reported resold and processed quantities so as to better 
reflect Mueller's purchases from its suppliers.
    Third, because we do not find that the record evidence supports any 
contention that the intangible assets were impaired prior to the POR or 
that expenses would be double-counted and the costs would be distorted, 
we have included the amount related to other intangible assets in the 
reported costs for the final results. However, we continue to exclude 
the impairment loss related to goodwill, consistent with the 
Preliminary Results.
    Fourth, because (a) The total G&A expenses from the reported 
calculation worksheets can be reconciled to the total reported in the 
2009 financial statements by adding back other income, and (b) the 
reported G&A expenses already include the payments made to its parent 
company for corporate expenses, we have adjusted the reported G&A 
expense ratio calculation for the final results to exclude the other 
income amount so as to avoid double-counting.\1\
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    \1\ For these final results, we have relied on Mueller's revised 
G&A expense ratio based on its 2009 audited financial statements, as 
reported in its supplemental response submitted subsequent to the 
Preliminary Results; see Mueller's January 4, 2011, section D 
submission at exhibit 11.
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    Finally, because the constructed export price (CEP) level of trade 
(LOT) involves a much more advanced stage of distribution than the NV 
LOT, it is not possible to make a CEP offset to NV.
    In accordance with section 773(a)(1)(B)(i) of the Act, to the 
extent practicable, we base NV on sales made in the comparison market 
at the same LOT as the export transaction. The NV LOT is based on the 
starting price of

[[Page 36088]]

sales in the home market or, when NV is based on CV, on the LOT of the 
sales from which SG&A expenses and profit are derived. With respect to 
CEP transactions in the U.S. market, the CEP LOT is defined as the 
level of the constructed sale from the exporter to the importer. See 19 
CFR 351.412(c)(1)(ii).
    To determine whether NV sales are at a different LOT than EP or CEP 
sales, we examine stages in the marketing process and selling functions 
along the chain of distribution between the producer and the customer. 
See 19 CFR 351.412(c)(2). If the comparison-market sales are at a 
different LOT, and the difference affects price comparability, as 
manifested in a pattern of consistent price differences between the 
sales on which NV is based and comparison-market sales at the LOT of 
the export transaction, we make a LOT adjustment under section 
773(a)(7)(A) of the Act. For CEP sales, if the NV level is more remote 
from the factory than the CEP level and there is no basis for 
determining whether the difference in the levels between NV and CEP 
affects price comparability, we adjust NV under section 773(a)(7)(B) of 
the Act (the CEP offset provision). See, e.g., Certain Hot-Rolled Flat-
Rolled Carbon Quality Steel Products From Brazil; Preliminary Results 
of Antidumping Duty Administrative Review, 70 FR 17406, 17410 (April 6, 
2005), results unchanged in Notice of Final Results of Antidumping Duty 
Administrative Review: Certain Hot-Rolled Flat-Rolled Carbon Quality 
Steel Products from Brazil, 70 FR 58683 (October 7, 2005); see also 
Final Determination of Sales at Less Than Fair Value: Greenhouse 
Tomatoes From Canada, 67 FR 8781 (February 26, 2002), and accompanying 
Issues and Decisions Memorandum at Comment 8. For CEP sales, we 
consider only the selling activities reflected in the price after the 
deduction of expenses and CEP profit under section 772(d)(3) of the 
Act. See Micron Technology, Inc. v. United States, 243 F.3d 1301, 1314-
15 (Fed. Cir. 2001). We expect that if the claimed LOTs are the same, 
the functions and activities of the seller should be similar. 
Conversely, if a party claims that the LOTs are different for different 
groups of sales, the functions and activities of the seller should be 
dissimilar. See Porcelain-on-Steel Cookware From Mexico: Final Results 
of Antidumping Duty Administrative Review, 65 FR 30068 (May 10, 2000), 
and accompanying Issues and Decisions Memorandum at Comment 6.
    Mueller reported it sold circular welded non-alloy steel pipe and 
tube to end-users and distributors in the home market and to end-users 
in the United States. For the home market, Mueller identified two 
channels of distribution: Direct shipments (channel 1) and warehouse 
shipments (channel 2). See Mueller's section A response at 14-15 and 
Exhibit A-5. For the U.S. market, Mueller identified two channels of 
distribution: Direct sales (channel 1) and indirect sales (channel 2). 
Id. Mueller stated that ``a level-of-trade adjustment cannot be 
established'' and requested a CEP offset. See Mueller's section B 
response at 28.
    We obtained information from Mueller regarding the marketing stages 
involved in making its reported home market and U.S. sales. See 
Mueller's July 16, 2010, supplemental questionnaire response at 13-19. 
We reviewed Mueller's claims concerning the intensity to which all 
selling functions were performed for each home market channel of 
distribution and customer category. Based on our analysis of all of 
Mueller's home market selling functions, we conclude that there is a 
single level of trade in the home market. In the U.S. market, Mueller 
did not report multiple levels of trade for EP sales. See Mueller's 
July 16, 2010 supplemental questionnaire response at 13-19. Based on 
our review of the record, we determine that all EP sales were made at 
the same LOT.
    We compared Mueller's EP level of trade to the single NV level of 
trade found in the home market. While we find differences in the levels 
of intensity performed for some of these functions between the home 
market NV level of trade and the EP level of trade, such differences 
are minor and do not establish distinct levels of trade between the 
home market and the U.S. market. Based on our analysis of all of 
Mueller's home market and EP selling functions, we find these sales 
were made at the same level of trade.
    For CEP sales, Mueller claims that the number and intensity of 
selling functions performed by Mueller in making its sales to 
Streamline are lower than the number and intensity of selling functions 
Mueller performed for its EP sales, and further claims that CEP sales 
are at a less advanced stage than home market sales. See Mueller's July 
16, 2010, supplemental questionnaire response at 13-19.
    We compared the NV LOT (based on the selling activities associated 
with the transactions between Mueller and its customers in the home 
market) to the CEP LOT (which is based on the selling activities 
associated with the transaction between Mueller and its affiliated 
importer, Streamline). Mueller's reported data would indicate that the 
selling functions performed for home market customers are either 
performed at a higher degree of intensity or are greater in number than 
the selling functions performed for Streamline. See Mueller's July 16, 
2010 supplemental questionnaire response at Exhibit SA-10. For example, 
in comparing Mueller's selling activities, we find many of the reported 
selling functions performed in the home market are not performed with 
respect to CEP sales in the U.S. market. For those selling activities 
performed for both home market sales and CEP sales, Mueller reported it 
performed each activity at either the same or at a higher level of 
intensity in one or both of the home market channels of distribution. 
Id. However, we find that the CEP LOT is more advanced than the NV LOT. 
At verification, Mueller's personnel indicated that Mueller's CEP sales 
are at a more advanced marketing stage than are its home market sales. 
See Mueller Verification Report at page 7. Many of the principal 
functions in both markets are carried out by employees in the Mexico 
office. While U.S. employees of Streamline do perform important selling 
functions, such as contacting customers and negotiating prices, the 
preponderance of overall selling functions are, in fact, performed by 
the Mueller employees in Mexico City. The record indicates these 
employees devote a disproportionate amount of their efforts on CEP 
sales, despite the fact that both the Mexican home market and EP market 
are larger than Mueller's CEP market. From our analysis of Mueller's 
overall selling functions, it is evident that the intensity of activity 
for the principal functions is greater for CEP sales than other sales. 
Id.; see also Exhibit A-1. Accordingly, we preliminarily determine that 
the CEP LOT (that is, sales from Mueller to its U.S. affiliate) 
involves a much more advanced stage of distribution than the NV LOT. 
See Analysis Memorandum at pages 3-6.
    Because we found the home market and U.S. CEP sales were made at 
different LOTs, we examined whether a LOT adjustment or a CEP offset 
may be appropriate in this review. As we found only one LOT in the home 
market, it was not possible to make a LOT adjustment to home market 
sales prices, because such an adjustment is dependent on our ability to 
identify a pattern of consistent price differences between the home 
market sales on which NV is based and home market sales at the CEP LOT. 
See 19 CFR 351.412(d)(1)(ii). Furthermore, because the CEP LOT involves 
a much more advanced stage of distribution than the NV LOT, it is not 
possible to make a

[[Page 36089]]

CEP offset to NV in accordance with section 773(a)(7)(B) of the Act.
    On account of these changes, the final dumping margin for Mueller 
has changed. For a more detailed description of these changes, see the 
Memorandum from Mark Flessner to the File entitled ``Certain Circular 
Welded Non-Alloy Steel Pipe from Mexico: Post-Preliminary Results 
Analysis Memorandum for Mueller Comercial, S. de R.L. de C.V.,'' dated 
June 13, 2011 (Final Results Analysis Memorandum), which is on file in 
the Department's Central Records Unit, Room 7046 of the main Commerce 
building; see also the accompanying Decision Memorandum.

Final Results of Review

    We determine the following percentage margin exists for the period 
November 1, 2008 to October 31, 2009:

------------------------------------------------------------------------
                                                            Weighted-
                 Manufacturer/exporter                   average margin
                                                          (percentage)
------------------------------------------------------------------------
Ternium (formerly known as Hylsa).....................             48.33
Mueller...............................................             19.81
------------------------------------------------------------------------

Assessment

    The Department will determine, and U.S. Customs and Border 
Protection (CBP) shall assess, antidumping duties on all appropriate 
entries, pursuant to section 751(a)(1) of the Act and 19 CFR 
351.212(b). We will issue appraisement instructions directly to CBP to 
assess antidumping duties on appropriate entries by applying the 
assessment rate to the entered value of the merchandise. Pursuant to 19 
CFR 356.8(a), the Department intends to issue assessment instructions 
to CBP 41 days after the date of publication of these final results of 
review.

Cash Deposit Requirements

    The following cash deposit requirements will be effective upon 
publication of these final results for all shipments of the subject 
merchandise entered, or withdrawn from warehouse, for consumption on or 
after the publication date of these final results of administrative 
review, consistent with section 751(a)(1) of the Act: (1) The cash 
deposit rate for the reviewed companies will be the rate listed above; 
(2) if the exporter is not a firm covered in this review, but was 
covered in a previous review or the original less-than-fair-value 
(LTFV) investigation, 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 
original 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 merchandise; and (4) the cash deposit rate for all 
other manufacturers or exporters will continue to be 32.62 percent, the 
all-others rate established in the LTFV investigation. See Final 
Determination of Sales at Less Than Fair Value: Circular Welded Non-
Alloy Steel Pipe From Mexico, 57 FR 42953 (September 17, 1992). These 
deposit requirements, when imposed, shall remain in effect until 
further notice.

Notification to Interested Parties

    This notice also serves as a final reminder to importers of their 
responsibility under 19 CFR 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 Department's presumption that 
reimbursement of the antidumping duties occurred and the subsequent 
assessment of doubled antidumping duties.
    This notice also serves as a reminder to parties subject to 
administrative protective orders (APOs) of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with 19 CFR 351.305, which continues to govern 
business proprietary information in this segment of the proceeding. 
Timely written notification of the return or destruction of APO 
materials or conversion to judicial protective order is hereby 
requested. Failure to comply with the regulations and the terms of an 
APO is a sanctionable violation.
    This notice is issued and published in accordance with sections 
751(a)(1) and 777(i)(1) of the Act.

    Dated: June 13, 2011.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.

Appendix--List of Issues in Decision Memorandum

Comment 1: Total AFA for TUNA Because It ``should have known'' Its 
Products Were Exported to the United States.
Comment 2: Treatment of ``Negative Dumping Margins.'' (Zeroing)
Comment 3: Partial AFA for Mueller Because of Failure to Report 
Manufacturer for Sales.
Comment 4: Application of Adverse Inferences to TERNIUM's Reported 
Information.
Comment 5: Application of Adverse Inferences to TUNA's Reported 
Information.
Comment 6: Use of Production Quantities for Calculating Mueller's 
CONNUM-Specific Costs.
Comment 7: Inclusion of Impairment Losses in General and 
Administrative Expenses.
Comment 8: Other Minor Revisions to the G&A Expense Ratio.

[FR Doc. 2011-15461 Filed 6-20-11; 8:45 am]
BILLING CODE 3510-DS-P