2011-626. Stainless Steel Sheet and Strip in Coils From Mexico; Final Results of Antidumping Duty Administrative Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

On August 9, 2010, the Department of Commerce (the Department) published the preliminary results of the administrative review of the antidumping duty order on stainless steel sheet and strip (S4) in coils from Mexico. See Stainless Steel Sheet and Strip in Coils From Mexico; Preliminary Results of Antidumping Duty Administrative Review, 75 FR 47780 (August 9, 2010) (Preliminary Results). This review covers sales of subject merchandise made by ThyssenKrupp Mexinox S.A. de C.V. (Mexinox) for the period July 1, 2008, to June 30, 2009. Based on our analysis of the comments received, we have made changes to the margin calculation; therefore, the final results differ from the preliminary results. The final weighted-average dumping margin for the reviewed firm is listed below in the section entitled “Final Results of Review.”

DATES:

Effective Date: January 13, 2011.

FOR FURTHER INFORMATION CONTACT:

Patrick Edwards, Brian Davis, or Angelica Mendoza, 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: [phone], and [phone], respectively.

SUPPLEMENTARY INFORMATION:

Background

On August 9, 2010, the Department published in the Federal Register the preliminary results of the administrative review of the antidumping duty order on S4 in coils from Mexico for the period July 1, 2008, to June 30, 2009. See Preliminary Results. In response to the Department's invitation to comment on the preliminary results of this review, Mexinox submitted (1) a request for a public hearing and (2) a case brief on September 8, 2010. See “Stainless Steel Sheet and Strip in Coils from Mexico—Case Brief,” dated September 8, 2010 (Mexinox's Case Brief). Also on September 8, 2010, Allegheny Ludlum Corporation, AK Steel Corporation, and North American Stainless (collectively, petitioners), submitted a case brief. See “Stainless Steel Sheet and Strip in Coils from Mexico—Petitioner's Case Brief,” dated September 8, 2010 (Petitioners' Case Brief). On September 9, 2010, the Department received a request from petitioners to extend the deadline to submit rebuttal briefs. On September 13, 2010, the Department granted this request. Petitioners timely submitted their rebuttal brief on September 15, 2010. See “Stainless Steel Sheet and Strip in Coils from Mexico—Petitioners' Rebuttal Brief,” dated September 15, 2010 (Petitioners' Rebuttal Brief). Also on September 15, 2010, Mexinox submitted its rebuttal brief. See “Stainless Steel Sheet and Strip in Coils from Mexico—Rebuttal Brief,” dated September 15, 2010 (Mexinox's Rebuttal Brief). On September 17, 2010, Mexinox withdrew its request for a hearing. See “Stainless Steel Sheet and Strip in Coils from Mexico—Withdrawal of Hearing Request,” dated September 17, 2010.

On November 17, 2010, we issued a letter to petitioners notifying them that we were rejecting their case brief because it contained new information regarding the U.S. entities that petitioners believe are purchasers of certain merchandise. Also on November 17, 2010, we issued a letter to Mexinox stating that we were rejecting its rebuttal brief because it also contained new information regarding the U.S. entities that petitioners believe are purchasers of certain merchandise. The deadline for submitting any factual information in the ongoing administrative review was December 18, 2009. Therefore, we requested that both petitioners and Mexinox re-file their respective briefs to exclude all references to the U.S. entities that petitioners believe are purchasers of the certain merchandise (and the relevant attachments). On November 22, 2010, Mexinox submitted its revised rebuttal brief and on November 23, 2010, petitioners submitted its revised case brief. On December 7, 2010, the Department issued a letter (1) notifying Mexinox of our intent to reclassify certain information as “public” rather than “business proprietary” and (2) requesting justification from Mexinox as to why certain information should be considered proprietary. On December 8, 2010, the Department published in the Federal Register our notice extending the time limit for this review until January 6, 2011. See Stainless Steel Sheet and Strip in Coils from Mexico: Extension of Time Limit for Final Results of Antidumping Duty Administrative Review, 75 FR 76396 (December 8, 2010). On Friday, December 10, 2010, Mexinox submitted its response to the Department's December 7, 2010, request.

Period of Review

The period of review (POR) is July 1, 2008, to June 30, 2009.

Scope of the Order

For purposes of the order, the products covered are stainless steel sheet and strip in coils. Stainless steel is alloy steel containing, by weight, 1.2 percent or less of carbon and 10.5 percent or more of chromium, with or without other elements. The subject sheet and strip is a flat-rolled product in coils that is greater than 9.5 mm in width and less than 4.75 mm in thickness, and that is annealed or otherwise heat treated and pickled or otherwise descaled. The subject sheet and strip may also be further processed (e.g., cold-rolled, polished, aluminized, coated, etc.) provided that it maintains the specific dimensions of sheet and strip following such processing.

The merchandise subject to this order is currently classifiable in the Harmonized Tariff Schedule of the United States (HTSUS) at subheadings: 7219.13.00.31, 7219.13.00.51, 7219.13.00.71, 7219.13.00.81, 7219.14.00.30, 7219.14.00.65, 7219.14.00.90, 7219.32.00.05, 7219.32.00.20, 7219.32.00.25, 7219.32.00.35, 7219.32.00.36, 7219.32.00.38, 7219.32.00.42, 7219.32.00.44, 7219.33.00.05, 7219.33.00.20, 7219.33.00.25, 7219.33.00.35, 7219.33.00.36, 7219.33.00.38, 7219.33.00.42, 7219.33.00.44, 7219.34.00.05, 7219.34.00.20, 7219.34.00.25, 7219.34.00.30, 7219.34.00.35, 7219.35.00.05, 7219.35.00.15, 7219.35.00.30, 7219.35.00.35, 7219.90.00.10, 7219.90.00.20, 7219.90.00.25, 7219.90.00.60, 7219.90.00.80, 7220.12.10.00, 7220.12.50.00, 7220.20.10.10, 7220.20.10.15, 7220.20.10.60, 7220.20.10.80, 7220.20.60.05, 7220.20.60.10, 7220.20.60.15, 7220.20.60.60, 7220.20.60.80, 7220.20.70.05, 7220.20.70.10, 7220.20.70.15, 7220.20.70.60, 7220.20.70.80, 7220.20.80.00, 7220.20.90.30, 7220.20.90.60, 7220.90.00.10, 7220.90.00.15, 7220.90.00.60, and 7220.90.00.80. Although the HTSUS subheadings are provided for convenience and customs purposes, the Department's written description of the merchandise subject to the order is dispositive.

Excluded from the scope of the order are the following: (1) Sheet and strip that is not annealed or otherwise heat treated and pickled or otherwise descaled; (2) sheet and strip that is cut to length; (3) plate (i.e., flat-rolled stainless steel products of a thickness of 4.75 mm or more); (4) flat wire (i.e., cold-rolled sections, with a prepared edge, rectangular in shape, of a width of not more than 9.5 mm); and (5) razor blade steel. Razor blade steel is a flat-rolled product of stainless steel, not further worked than cold-rolled (cold-reduced), in coils, of a width of not more than 23 mm and a thickness of 0.266 mm or less, containing, by weight, 12.5 to 14.5 percent chromium, and certified at the time of entry to be used in the manufacture of razor blades. See Chapter 72 of the HTSUS, “Additional U.S. Note” 1(d).

In response to comments by interested parties, the Department has determined that certain specialty stainless steel products are also excluded from the scope of the order. These excluded products are described below.

Flapper valve steel is defined as stainless steel strip in coils containing, by weight, between 0.37 and 0.43 percent carbon, between 1.15 and 1.35 percent molybdenum, and between 0.20 and 0.80 percent manganese. This steel also contains, by weight, phosphorus of 0.025 percent or less, silicon of between 0.20 and 0.50 percent, and sulfur of 0.020 percent or less. The product is manufactured by means of vacuum arc remelting, with inclusion controls for sulphide of no more than 0.04 percent and for oxide of no more than 0.05 percent. Flapper valve steel has a tensile strength of between 210 and 300 ksi, yield strength of between 170 and 270 ksi, plus or minus 8 ksi, and a hardness (Hv) of between 460 and 590. Flapper valve steel is most commonly used to produce specialty flapper valves for compressors.

Also excluded is a product referred to as suspension foil, a specialty steel product used in the manufacture of suspension assemblies for computer disk drives. Suspension foil is described as 302/304 grade or 202 grade stainless steel of a thickness between 14 and 127 microns, with a thickness tolerance of plus-or-minus 2.01 microns, and surface glossiness of 200 to 700 percent Gs. Suspension foil must be supplied in coil widths of not more than 407 mm, and with a mass of 225 kg or less. Roll marks may only be visible on one side, with no scratches of measurable depth. The material must exhibit residual stresses of 2 mm maximum deflection, and flatness of 1.6 mm over 685 mm length.

Certain stainless steel foil for automotive catalytic converters is also excluded from the scope of the order. This stainless steel strip in coils is a specialty foil with a thickness of between 20 and 110 microns used to produce a metallic substrate with a honeycomb structure for use in automotive catalytic converters. The steel contains, by weight, carbon of no more than 0.030 percent, silicon of no more than 1.0 percent, manganese of no more than 1.0 percent, chromium of between 19 and 22 percent, aluminum of no less than 5.0 percent, phosphorus of no more than 0.045 percent, sulfur of no more than 0.03 percent, lanthanum of between 0.002 and 0.05 percent, and total rare earth elements of more than 0.06 percent, with the balance iron.

Permanent magnet iron-chromium-cobalt alloy stainless strip is also excluded from the scope of the order. This ductile stainless steel strip contains, by weight, 26 to 30 percent chromium, and 7 to 10 percent cobalt, with the remainder of iron, in widths 228.6 mm or less, and a thickness between 0.127 and 1.270 mm. It exhibits magnetic remanence between 9,000 and 12,000 gauss, and a coercivity of between 50 and 300 oersteds. This product is most commonly used in electronic sensors and is currently available under proprietary trade names such as “Arnokrome III.” ^[1]

Certain electrical resistance alloy steel is also excluded from the scope of the order. This product is defined as a non-magnetic stainless steel manufactured to American Society of Testing and Materials (ASTM) specification B344 and containing, by weight, 36 percent nickel, 18 percent chromium, and 46 percent iron, and is most notable for its resistance to high temperature corrosion. It has a melting point of 1390 degrees Celsius and displays a creep rupture limit of 4 kilograms per square millimeter at 1000 degrees Celsius. This steel is most commonly used in the production of heating ribbons for circuit breakers and industrial furnaces, and in rheostats for railway locomotives. The product is currently available under proprietary trade names such as “Gilphy 36.” ^[2]

Certain martensitic precipitation-hardenable stainless steel is also excluded from the scope of the order. This high-strength, ductile stainless steel product is designated under the Unified Numbering System (UNS) as S45500-grade steel, and contains, by weight, 11 to 13 percent chromium, and 7 to 10 percent nickel. Carbon, manganese, silicon and molybdenum each comprise, by weight, 0.05 percent or less, with phosphorus and sulfur each comprising, by weight, 0.03 percent or less. This steel has copper, niobium, and titanium added to achieve aging, and will exhibit yield strengths as high as 1700 Mpa and ultimate tensile strengths as high as 1750 Mpa after aging, with elongation percentages of 3 percent or less in 50 mm. It is generally provided in thicknesses between 0.635 and 0.787 mm, and in widths of 25.4 mm. This product is most commonly used in the manufacture of television tubes and is currently available under proprietary trade names such as “Durphynox 17.” ^[3]

Finally, three specialty stainless steels typically used in certain industrial blades and surgical and medical instruments are also excluded from the scope of the order. These include stainless steel strip in coils used in the production of textile cutting tools (e.g., carpet knives).^[4] This steel is similar to ASTM grade 440F, but containing, by weight, 0.5 to 0.7 percent of molybdenum. The steel also contains, by weight, carbon of between 1.0 and 1.1 percent, sulfur of 0.020 percent or less, and includes between 0.20 and 0.30 percent copper and between 0.20 and 0.50 percent cobalt. This steel is sold under proprietary names such as “GIN4 Mo.” The second excluded stainless steel strip in coils is similar to AISI 420-J2 and contains, by weight, carbon of between 0.62 and 0.70 percent, silicon of between 0.20 and 0.50 percent, manganese of between 0.45 and 0.80 percent, phosphorus of no more than 0.025 percent and sulfur of no more than 0.020 percent. This steel has a carbide density on average of 100 carbide particles per square micron. An example of this product is “GIN5” steel. The third specialty steel has a chemical composition similar to AISI 420 F, with carbon of between 0.37 and 0.43 percent, molybdenum of between 1.15 and 1.35 percent, but lower manganese of between 0.20 and 0.80 percent, phosphorus of no more than 0.025 percent, silicon of between 0.20 and 0.50 percent, and sulfur of no more than 0.020 percent. This product is supplied with a hardness of more than Hv 500 guaranteed after customer processing, and is supplied as, for example, “GIN6.” ^[5]

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, “Issues and Decision Memorandum for the Final Results of the Antidumping Duty Administrative Review of Stainless Steel Sheet and Strip in Coils from Mexico” (Issues and 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 January 5, 2011, which is hereby adopted by this notice.^[6] A list of all issues, which parties have raised and to which we have responded, in the Issues and 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 Commerce building. In addition, a complete version of the Issues and Decision Memorandum can be accessed directly via the Internet at www.ia.ita.doc.gov/​fm/​index.html. The paper copy and electronic version of the Issues and Decision Memorandum are identical in content.

Changes Since the Preliminary Results

The Department has revised its indirect selling expense calculation since the Preliminary Results. For these final results, we included the total POR indirect selling expenses incurred by all three companies (Mexinox USA, TKNNA, and TKAST USA) on sales of finished goods in the ratio's numerator (while excluding expenses attributable to raw material transfers to Mexinox), and total sales revenue made on all finished goods by all three companies (while excluding net raw material transfers for the POR and reserves/adjustments) in the denominator.

Because the denominator of the revised ratio includes the total net sales of finished goods for all three companies (i.e., both subject and non-subject) and the revised numerator includes total indirect selling expenses relating to all three companies (i.e., both sales of subject and non-subject merchandise), this methodology properly accounts for the fact that in selling German and Italian steel as purchased from ThyssenKrupp Nirosta GmbH and ThyssenKrupp Acciai Speciali Terni S.p.A. (TKNNA and TKAST USA's German and Italian affiliates, respectively) ^[7] to their U.S. affiliates, some selling functions were performed and indirect selling expenses were incurred by entities other than Mexinox USA (i.e., TKNNA and TKAST USA).^[8] In this way, we have ensured that all of Mexinox USAs, TKNNA's and TKAST USA's indirect selling expenses are captured and allocated over all of their U.S. sales.

See (1) Memorandum to the File, from Patrick Edwards and Brian Davis, Case Analysts, through Angelica Mendoza, Program Manager, titled “Analysis of Data Submitted by ThyssenKrupp Mexinox S.A. de C.V. for the Final Results of the Antidumping Duty Administrative Review of Stainless Steel Sheet and Strip in Coils from Mexico (A-201-822),” dated January 5, 2011 (Final Analysis Memorandum) at pages 6 through 7 and (2) the Department's Issues and Decision Memorandum at pages 18 through 24 for further information regarding the Department's revised indirect selling expense calculation.

Furthermore, based on our analysis of the comments received, we have made the following changes to the margin calculation:

(1) We revised the Comparison Market Program to utilize cost data for all control numbers that Mexinox produced in the POR.

(2) We corrected the U.S. Margin Program to extend the cost of production (COP) and packing expenses on U.S. sales by quantity sold.

(3) We included sales by Ken-Mac Metals in our margin analysis.

(4) We removed all sample transactions from our margin analysis.

(5) We have adjusted our programming in order to include the value and quantity of merchandise that first entered but was subsequently exported to a third-country in our calculation of the assessment rate.

These changes are discussed in the relevant sections of the Issues and Decision Memorandum and Final Analysis Memorandum.

Final Results of Review

We determine the following weighted-average percentage margin exists for the period July 1, 2008, to June 30, 2009:

Manufacturer/Exporter	Weighted average margin (percentage)
ThyssenKrupp Mexinox S.A. de C.V.	21.16

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 Tariff Act of 1930, as amended (the Act), and 19 CFR 351.212(b). The Department calculated an assessment rate for each importer of the subject merchandise covered by the review. Upon issuance of the final results of this review, for any importer-specific assessment rates calculated in the final results that are above de minimis (i.e., at or above 0.50 percent), 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.

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). This clarification will apply to entries of subject merchandise during the POR produced by Mexinox for which Mexinox did not know the merchandise was destined for the United States. In such instances, we will instruct CBP to liquidate unreviewed entries at the 30.69 percent all-others rate if there is no company-specific rate for an intermediary involved in the transaction.

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 company 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 30.69 percent, the all-others rate established in the LTFV investigation (s ee Notice of Amended Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order; Stainless Steel Sheet and Strip in Coils From Mexico, 64 FR 40560 (July 27, 1999)) and modified during the section 129 determination (see Implementation of the Findings of the WTO Dispute Settlement Panel and Appellate Body in United States—Final Anti-Dumping Measures on Stainless Steel from Mexico: Notice of Determination Under Section 129 of the Uruguay Round Agreements Act, 74 FR 19527 (April 29, 2009)). These deposit requirements, when imposed, shall remain in effect until further notice.

Notifications 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: January 5, 2011.

Ronald K. Lorentzen,

Deputy Assistant Secretary for Import Administration.

Appendix—List of Issues in Issues and Decision Memorandum

Comment 1: Ministerial Errors

Comment 2: Offsetting for U.S. Sales that Exceed Normal Value

Comment 3: Contemporaneous Model Matching

Comment 4: Date of Sale

Comment 5: U.S. Indirect Selling Expenses

Comment 6: Circumstance of Sale Adjustment

Comment 7: The Use of Quarterly Costs for the Cost Recovery Test

Comment 8: TKSI SG&A Ratio for Purchases from Affiliates

Comment 9: Profit Sharing Expenses Included in G&A

Comment 10: G&A ratio includes Offsets for Other Income

Comment 11: The COP Database

Footnotes

1.  “Arnokrome III” is a trademark of the Arnold Engineering Company.

2.  “Gilphy 36” is a trademark of Imphy, S.A.

3.  “Durphynox 17” is a trademark of Imphy, S.A.

4.  This list of uses is illustrative and provided for descriptive purposes only.

5.  “GIN4 Mo,” “GIN5” and “GIN6” are the proprietary grades of Hitachi Metals America, Ltd.

6.  See also Memorandum from Christian Marsh, Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations, to Ronald K. Lorentzen, Deputy Assistant Secretary for Import Administration, dated January 5, 2011, titled, “Proprietary Arguments from the Issues and Decision Memorandum for the Final Results of the Antidumping Duty Administrative Review of Stainless Steel Sheet and Strip in Coils from Mexico.”

7.  See Mexinox's AQR at 10.

8.  See Mexinox's AQR at pages A-9 (and footnote 5) through A-14 for additional information regarding TKNNA and TKAST USA. The Department notes that TKNNA and TKAST USA are German and Italian affiliates, respectively, that sell German and Italian steel, respectively. See also Mexinox's July 21, 2010, supplemental questionnaire at attachments C-37 and C-38 for schedules of all TKNNA's and TKAST USA's U.S. indirect selling expenses, respectively.