2020-01721. Certain Fabricated Structural Steel From the People's Republic of China: Final Affirmative Countervailing Duty Determination

AGENCY:

Enforcement and Compliance, International Trade Administration, Department of Commerce.

SUMMARY:

The Department of Commerce (Commerce) determines that countervailable subsidies are being provided to producers and/or exporters of certain fabricated structural steel (fabricated structural steel) from the People's Republic of China (China). The period of investigation is January 1, 2018 through December 31, 2018.

DATES:

Applicable January 30, 2020.

FOR FURTHER INFORMATION CONTACT:

Darla Brown or William Miller, AD/CVD Operations, Office II, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: [phone] or [phone], respectively.

SUPPLEMENTARY INFORMATION:

Background

On July 12, 2019, Commerce published the Preliminary Determination.^[1] The petitioner in this investigation is the American Institute of Steel Construction Full Member Subgroup. In addition to the Government of China (GOC), the mandatory respondents in this investigation are Modern Heavy Industries (Taicang) Co., Ltd. (Modern Heavy) and Shanghai Matsuo Steel Structure Co., Ltd. (Shanghai Matsuo).

A summary of the events that occurred since Commerce published the Preliminary Determination, as well as a full discussion of the issues raised by parties for this final determination, are discussed in the Issues and Decision Memorandum, which is hereby adopted by this notice.^[2] The Issues and Decision Memorandum is a public document and is on file electronically via Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS). ACCESS is available to registered users at http://access.trade.gov,, and to all parties in the Central Records Unit, room B8024 of the main Commerce building. In addition, a complete version of the Issues and Decision Memorandum can be accessed directly at http://enforcement.trade.gov/​frn/​index.html. The signed and electronic versions of the Issues and Decision Memorandum are identical in content.

Scope of the Investigation

The product covered by this investigation is fabricated structural steel from China. For a complete description of the scope of this investigation, see Appendix I.

Scope Comments

In accordance with the preamble to Commerce's regulations,^[3] the Initiation Notice set aside a period of time for parties to raise issues regarding product coverage (i.e., scope).^[4] Certain interested parties commented on the scope of the investigation as it appeared in the Initiation Notice. Commerce addressed these comments in the Preliminary Determination, wherein Commerce preliminarily modified the scope language.

In addition, certain interested parties commented on Commerce's preliminary scope decisions. For a summary of the product coverage comments and rebuttal comments submitted to the record for this final determination, and accompanying discussion and analysis of all comments timely received, see the Final Scope Decision Memorandum.^[5] Based on the comments received, Commerce is modifying the scope language as it appeared in the Preliminary Determination. See the revised scope in Appendix I to this notice.

Analysis of Subsidy Programs and Comments Received

The subsidy programs under investigation and the issues raised in the case and rebuttal briefs by parties in this investigation are discussed in the Issues and Decision Memorandum. A list of the issues that parties raised is attached to this notice as Appendix II.

Methodology

Commerce conducted this investigation in accordance with section 701 of the Tariff Act of 1930, as amended (the Act). For each of the subsidy programs found countervailable, Commerce determines that there is a subsidy, i.e., a financial contribution by an “authority” that gives rise to a benefit to the recipient, and that the subsidy is specific.^[6] For a full description of the methodology underlying our final determination, see the Issues and Decision Memorandum.

Verification

As provided in section 782(i) of the Act, in August and September 2019, Commerce verified the subsidy information reported by Modern Heavy and Shanghai Matsuo. We used standard verification procedures, including an examination of relevant accounting records and original source documents provided by the respondents.^[7]

Changes Since the Preliminary Determination

Based on our review and analysis of the comments received from parties, minor corrections presented at verification, and our verification findings, we made certain changes to the subsidy rate calculations for Modern Heavy and Shanghai Matsuo. As a result of the changes to the respondents' calculated rates, Commerce has revised the all-others rate. Commerce has also revised the adverse facts available (AFA) rate. For a discussion of these changes, see the Issues and Decision Memorandum and the Final Calculation Memoranda.^[8]

Final Determination

In accordance with section 705(c)(1)(B)(i)(I) of the Act, we calculated individual estimated subsidy rates for Modern Heavy and Shanghai Matsuo, and established subsidy rates for the 12 companies that failed to respond to Commerce's quantity and value questionnaire by applying AFA. Section 705(c)(5)(A)(i) of the Act states that, for companies not individually investigated, Commerce will determine an all-others rate equal to the weighted-average countervailable subsidy rates established for exporters and/or producers individually investigated, excluding any zero and de minimis countervailable subsidy rates, and any rates determined entirely under section 776 of the Act. Therefore, Commerce calculated the all-others rate using a weighted-average of the individual estimated subsidy rates calculated for the examined respondents using each company's publicly-ranged values for the merchandise under consideration.^[9]

Commerce determines the total estimated net countervailable subsidy rates to be the following:

Company	Subsidy rate (percent)
Hongju Metals Co., Ltd	206.49
Huaye Steel Structure Co	206.49
Jiangsu Kingmore Storage Equipment	206.49
Jiangsu Zhengchang Cereal Oil & Feed	206.49
Modern Heavy Industries (Taicang) Co., Ltd	27.34
Ningbo Jiangbei Huarentai Trade	206.49
Ningbo Win Success Machinery Co., Ltd	206.49
Shangdong Taipeng Home Products Co	206.49
Shanghai Matsuo Steel Structure Co., Ltd.10	34.70
Sinopec Engineering (Group) Co., Ltd	206.49
Sunjoy Industrial Group Limited	206.49
Sunjoy Industries (Jiashan) Co., Ltd	206.49
Wuxi Huishan Metalwork Technology Co., Ltd	206.49
Yueqing Yihua New Energy Technology	206.49
All Others	30.28

Disclosure

Commerce intends to disclose the calculations performed in connection with this final determination within five days of the date of publication of this notice to parties in this proceeding in accordance with 19 CFR 351.224(b).

Continuation of Suspension of Liquidation

As a result of our Preliminary Determination and pursuant to sections 703(d)(1)(B) and (d)(2) of the Act, Commerce instructed U.S. Customs and Border Protection (CBP) to suspend liquidation of entries of subject merchandise, as described in the scope of the investigation section, entered, or withdrawn from warehouse, for consumption on or after July 12, 2019, the date of publication of the Preliminary Determination in the Federal Register. In accordance with section 703(d) of the Act, we issued instructions to CBP to discontinue the suspension of liquidation for countervailing duty (CVD) purposes for subject merchandise entered, or withdrawn from warehouse, on or after November 9, 2019, but to continue the suspension of liquidation of all entries from July 12, 2019 through November 8, 2019.

If the U.S. International Trade Commission (ITC) issues a final affirmative injury determination, we intend to issue a CVD order, reinstate the suspension of liquidation under section 706(a) of the Act, and require a cash deposit of estimated countervailing duties for such entries of subject merchandise in the amounts indicated above. If the ITC determines that material injury, or threat of material injury, does not exist, this proceeding will be terminated and all estimated duties deposited or securities posted as a result of the suspension of liquidation will be refunded or canceled.

ITC Notification

In accordance with section 705(d) of the Act, we will notify the ITC of our determination. Because the final determination in this proceeding is affirmative, in accordance with section 705(b) of the Act, the ITC will make its final determination as to whether the domestic industry in the United States is materially injured, or threatened with material injury, by reason of imports of fabricated structural steel from China no later than 45 days after our final determination. If the ITC determines that material injury or threat of material injury does not exist, the proceeding will be terminated and all cash deposits will be refunded. If the ITC determines that such injury does exist, Commerce will issue a CVD order directing CBP to assess, upon further instruction by Commerce, countervailing duties on all imports of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the effective date of the suspension of liquidation, as discussed above in the “Continuation of Suspension of Liquidation” section.

Notification Regarding Administrative Protective Order (APO)

In the event that the ITC issues a final negative injury determination, this notice will serve as the only reminder to parties subject to the APO of their responsibility concerning the destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of the return/destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction.

Notification to Interested Parties

This determination is issued and published pursuant to sections 705(d) and 777(i) of the Act, and 19 CFR 351.210(c).

Dated: January 23, 2020.

Jeffrey I. Kessler,

Assistant Secretary for Enforcement and Compliance.

Appendix I

Scope of the Investigation

The merchandise covered by the investigation is carbon and alloy fabricated structural steel. Fabricated structural steel is made from steel in which: (1) Iron predominates, by weight, over each of the other contained elements; and (2) the carbon content is two percent or less by weight. Fabricated structural steel products are steel products that have been fabricated for erection or assembly into structures, including, but not limited to, buildings (commercial, office, institutional, and multi-family residential); industrial and utility projects; parking decks; arenas and convention centers; medical facilities; and ports, transportation and infrastructure facilities. Fabricated structural steel is manufactured from carbon and alloy (including stainless) steel products such as angles, columns, beams, girders, plates, flange shapes (including manufactured structural shapes utilizing welded plates as a substitute for rolled wide flange sections), channels, hollow structural section (HSS) shapes, base plates, and plate-work components. Fabrication includes, but is not limited to cutting, drilling, welding, joining, bolting, bending, punching, pressure fitting, molding, grooving, adhesion, beveling, and riveting and may include items such as fasteners, nuts, bolts, rivets, screws, hinges, or joints.

The inclusion, attachment, joining, or assembly of non-steel components with fabricated structural steel does not remove the fabricated structural steel from the scope.

Fabricated structural steel is covered by the scope of the investigation regardless of whether it is painted, varnished, or coated with plastics or other metallic or non-metallic substances and regardless of whether it is assembled or partially assembled, such as into modules, modularized construction units, or sub-assemblies of fabricated structural steel.

Subject merchandise includes fabricated structural steel that has been assembled or further processed in the subject country or a third country, including but not limited to painting, varnishing, trimming, cutting, drilling, welding, joining, bolting, punching, bending, beveling, riveting, galvanizing, coating, and/or slitting or any other processing that would not otherwise remove the merchandise from the scope of the investigation if performed in the country of manufacture of the fabricated structural steel.

All products that meet the written physical description of the merchandise covered by the investigation are within the scope of the investigation unless specifically excluded or covered by the scope of an existing countervailing duty order.

Specifically excluded from the scope of the investigation are:

1. Fabricated steel concrete reinforcing bar (rebar) if: (i) It is a unitary piece of fabricated rebar, not joined, welded, or otherwise connected with any other steel product or part; or (ii) it is joined, welded, or otherwise connected only to other rebar.

2. Fabricated structural steel for bridges and bridge sections that meets American Association of State and Highway and Transportation Officials (AASHTO) bridge construction requirements or any state or local derivatives of the AASHTO bridge construction requirements.

3. Pre-engineered metal building systems, which are defined as complete metal buildings that integrate steel framing, roofing and walls to form one, pre-engineered building system, that meet Metal Building Manufacturers Association guide specifications. Pre-engineered metal building systems are typically limited in height to no more than 60 feet or two stories.

4. Steel roof and floor decking systems that meet Steel Deck Institute standards.

5. Open web steel bar joists and joist girders that meet Steel Joist Institute specifications.

6. Also excluded from the scope of the investigation is scaffolding, and parts and accessories thereof, that comply with ANSI/ASSE A10.8—2011—Scaffolding Safety Requirements, and/or Occupational Safety and Health Administration regulations at 29 CFR part 1926 subpart L—Scaffolds. The outside diameter of the scaffold tubing covered by this exclusion ranges from 25mm to 150mm.

7. Excluded from the scope of the investigation are access flooring systems panels and accessories, where such panels have a total thickness ranging from 0.75 inches to 1.75 inches and consist of concrete, wood, other non-steel materials, or hollow space permanently attached to a top and bottom layer of galvanized or painted steel sheet or formed coil steel, the whole of which has been formed into a square or rectangle having a measurement of 24 inches on each side ± 0.1 inch; 24 inches by 30 inches ± 0.1 inch; or 24 by 36 inches ± 0.1 inch.

8. Excluded from the investigation are the following types of steel poles, segments of steel poles, and steel components of those poles:

• Steel Electric Transmission Poles, or segments of such poles, that meet (1) the American Society of Civil Engineers (ASCE)—Design of Steel Transmission Pole Structures, ASCE/SEI 48 or (2) the USDA RUS bulletin 1724E-214 Guide specification for standard class Steel Transmission Poles. The exclusion for steel electric transmission poles also encompasses the following components thereof: Transmission arms which attach to poles; pole bases; angles that do not exceed 8″ x 8″ x 0.75″; steel vangs, steel brackets, steel flanges, and steel caps; safety climbing cables; ladders; and steel templates.
• Steel Electric Substation Poles, or segments of such poles, that meet the American Society of Civil Engineers (ASCE)—Manuals and Reports on Engineering Practice No. 113. The exclusion for steel electric substation poles also encompasses the following components thereof: Substation dead end poles; substation bus stands; substation mast poles, arms, and cross-arms; steel brackets, steel flanges, and steel caps; pole bases; safety climbing cables; ladders; and steel templates.
• Steel Electric Distribution Poles, or segments of such poles, that meet (1) American Society of Civil Engineers (ASCE)—Design of Steel Transmission Pole Structures, ASCE/SEI 48, (2) USDA RUS bulletin 1724E-204 Guide specification for steel single pole and H-frame structures, or (3) ANSI 05.1 height and class requirements for steel poles. The exclusion for steel electric distribution poles also encompasses the following components thereof: Distribution arms and cross-arms; pole bases; angles that do not exceed 8″ x 8″ x 0.75″; steel vangs, steel brackets, steel flanges, and steel caps; safety climbing cables; ladders; and steel templates.
• Steel Traffic Signal Poles, Steel Roadway Lighting Poles, Steel Parking Lot Lighting Poles, and Steel Sports Lighting Poles, or segments of such poles, that meet (1) the American Association of State Highway and Transportation Officials (AASHTO)—Specifications for Structural Supports for Highway Signs, Luminaires, and Traffic Signals, (2) any state or local derivatives of the AASHTO highway sign, luminaries, and traffic signals requirements, or (3) American National Standard Institute (ANSI) C136—American National Standard for Roadway and Area Lighting Equipment standards. The exclusion for steel traffic signal poles, steel roadway lighting poles, steel parking lot lighting poles, and steel sports lighting poles also encompasses the following components thereof: Luminaire arms; hand hole rims; hand hole covers; base plates that connect to either the shaft or the arms; mast arm clamps; mast arm tie rods; transformer base boxes; formed full base covers that hide anchor bolts; step lugs; internal cable guides; lighting cross arms; lighting service platforms; angles that do not exceed 8″ x 8″ x 0.75″; stainless steel hand hole door hinges and wind restraints; steel brackets, steel flanges, and steel caps; safety climbing cables; ladders; and steel templates.
• Communication Poles, or segments of such poles, that meet (1) Telecommunications Industry Association (TIA) ANSI/TIA-222 Structural Standards for Steel Antenna Towers and Antenna Supporting Structures, or (2) American Association of State Highway and Transportation Officials (AASHTO)—Specifications for Structural Supports for Highway Signs, Luminaires, and Traffic Signals. The exclusion for communication poles also encompasses the following components thereof: Luminaire arms; hand hole rims; hand hole covers; base plate that connects the pole to the foundation or arm to the pole; safety climbing cables; ladders; service ground platforms; step lugs; pole steps; steel brackets, steel flanges, and steel caps; angles that do not exceed 8″ x 8″ x 0.75″; coax, and safety brackets; subcomponent kits for antenna mounts weighing 80 lbs. or less; service platforms; ice bridges; stainless steel hand hole door hinges and wind restraints; and steel templates.
• OEM Round or Polygonal Tapered Steel Poles, segments or shaft components of such poles, that meet the (1) ASCE 48 or AASHTO, (2) ANSI/TIA 222, (3) ANSI 05.1, (4) RUS bulletin 1724E-204, or (5) RUS bulletin 1724E-214. The exclusion for OEM round or polygonal tapered steel poles also encompasses the following components thereof: Subcomponent kits for antenna mounts weighing 80 lbs. or less; mounts and platforms; steel brackets, steel flanges, and steel caps; angles that do not exceed 8″ x 8″ x 0.75″; bridge kits; safety climbing cables; ladders; and steel templates.

The inclusion or attachment of one or more of the above-referenced steel poles in a structure containing fabricated structural steel does not remove the fabricated structural steel from the scope of the investigation. No language included in this exclusion should be read or understood to have applicability to any other aspect of this scope or to have applicability to or to exclude any product, part, or component other than those specifically identified in the exclusion.

9. Also excluded from the scope of the investigation are Shuttering, Formworks, Propping and Shoring and parts and accessories thereof that comply with ANSI/ASSE A10.9—Safety Requirements for Concrete and Masonry Work and ACI-347—Recommended Practice for Concrete Formwork. For Shoring and propping made from tube, the outside diameter of the tubing covered by this exclusion ranges from 48mm to 250mm. For Shuttering and Formworks, the panel sizes covered by this exclusion range from 25mm X 600mm to 3000mm X 3000mm.

10. Also excluded from the scope of the investigation are consumer items for do-it-yourself assembly that are prepackaged for retail sale. For the purposes of this exclusion, prepackaged for retail sale means that, at the time of importation, all components necessary to assemble the merchandise, including all steel components, all accessory parts (e.g., screws, bolts, washers, nails), and instructions providing guidance on the assembly of the finished merchandise or directions on where to find such instructions, are enclosed in retail packaging, such that an end-use, retail consumer could assemble the completed product with no additional components. The items may enter the United States in one or in multiple retail packages as long as all of the components are imported together.

The products subject to the investigation are currently classified in the Harmonized Tariff Schedule of the United States (HTSUS) under subheadings: 7308.90.3000, 7308.90.6000, and 7308.90.9590.

The products subject to the investigation may also enter under the following HTSUS subheadings: 7216.91.0010, 7216.91.0090, 7216.99.0010, 7216.99.0090, 7222.40.6000, 7228.70.6000, 7301.10.0000, 7301.20.1000, 7301.20.5000, 7308.40.0000, 7308.90.9530, and 9406.90.0030.

The HTSUS subheadings above are provided for convenience and customs purposes only. The written description of the scope of the investigation is dispositive.

Appendix II

List of Topics Discussed in the Issues and Decision Memorandum

I. Summary

II. Background

III. Scope of the Investigation

IV. Scope Comments

V. Use of Adverse Facts Available

VI. Subsidies Valuation Information

VII. Analysis of Programs

VIII. Analysis of Comments

General Issues

Comment 1: Whether Policy Lending Is Specific

Comment 2: Export Buyer's Credit (EBC) Program

Comment 3: Whether the Provision of Electricity for Less Than Adequate Remuneration (LTAR) Is Specific

Comment 4: Whether Input Purchases for LTAR Are Specific

Comment 5: Input Market Distortion

Comment 6: Whether To Adjust Benchmark Ocean Freight Rates for Input Purchases for LTAR

Comment 7: Using Basket Harmonized Tariff Schedule (HTS) Categories in the Benchmark for Hot-Rolled Steel Purchases for LTAR

Company-Specific Issues

Modern Heavy

Comment 8: How Commerce Should Treat a Policy Loan Discovered at Verification

Comment 9: Whether Commerce Improperly Rejected Modern Heavy's Customer Declarations as Untimely New Factual Information

Comment 10: Errors in the Benefit Calculation for the Electricity for LTAR Program

Shanghai Matsuo

Comment 11: Uncreditworthiness Allegation for Shanghai Matsuo's Cross-Owned Affiliates

Comment 12: Whether Commerce Should Find Electricity Purchased by Shanghai Matsuo's Cross-Owned Affiliates Countervailable

Comment 13: Whether Input Purchases From Market-Economy Suppliers Are Countervailable

Comment 14: Appropriate Benchmark for Valuing Land Use Rights for LTAR

Comment 15: Whether Commerce Should Countervail Policy Loans Uncovered During the Course of the Investigation

IX. Recommendation

Footnotes

1.  See Certain Fabricated Structural Steel from the People's Republic of China: Preliminary Affirmative Countervailing Duty Determination, and Alignment of Final Determination with Final Antidumping Duty Determination, 84 FR 33224 (July 12, 2019) (Preliminary Determination), and accompanying Preliminary Decision Memorandum.

2.  See Memorandum, “Issues and Decision Memorandum for the Final Determination in the Countervailing Duty Investigation of Certain Fabricated Structural Steel from the People's Republic of China,” dated concurrently with, and hereby adopted by, this notice (Issues and Decision Memorandum).

3.  See Antidumping Duties; Countervailing Duties, Final Rule, 62 FR 27296, 27323 (May 19, 1997).

4.  See Certain Fabricated Structural Steel from Canada, Mexico, and the People's Republic of China: Initiation of Countervailing Duty Investigations, 84 FR 7339 (March 4, 2019) (Initiation Notice).

5.  See Memorandum, “Fabricated Structural Steel from Canada, Mexico, and the People's Republic of China: Final Scope Decision Memorandum,” dated concurrently with, and hereby adopted by, this notice (Final Scope Decision Memorandum).

6.  See sections 771(5)(B) and (D) of the Act regarding financial contribution; section 771(5)(E) of the Act regarding benefit; and section 771(5A) of the Act regarding specificity.

7.  See Memoranda, “Verification of the Questionnaire Responses of Modern Heavy Industries (Taicang) Co., Ltd. (Modern Heavy),” dated October 10, 2019, and “Verification of the Questionnaire Responses of Shanghai Matsuo Steel Structure Co., Ltd.,” dated October 11, 2019.

8.  See Memoranda, “Countervailing Duty Investigation of Fabricated Structural Steel from the People's Republic of China: Final Determination Calculation Memorandum for Modern Heavy Industries (Taicang) Co., Ltd.,” and “Countervailing Duty Investigation of Fabricated Structural Steel from the People's Republic of China: Final Determination Calculation Memorandum for Shanghai Matsuo Steel Structure Co., Ltd.,” both dated concurrently with this notice (collectively, Final Calculation Memoranda).

9.  With two respondents under examination, Commerce normally calculates (A) a weighted-average of the estimated subsidy rates calculated for the examined respondents; (B) a simple average of the estimated subsidy rates calculated for the examined respondents; and (C) a weighted-average of the estimated subsidy rates calculated for the examined respondents using each company's publicly-ranged U.S. sale quantities for the merchandise under consideration. Commerce then compares (B) and (C) to (A) and selects the rate closest to (A) as the most appropriate rate for all other producers and exporters. See, e.g., Ball Bearings and Parts Thereof from France, Germany, Italy, Japan, and the United Kingdom: Final Results of Antidumping Duty Administrative Reviews, Final Results of Changed-Circumstances Review, and Revocation of an Order in Part, 75 FR 53661, 53662-63 (September 1, 2010). As complete publicly ranged sales data was available, Commerce based the all-others rate on the publicly ranged sales data of the mandatory respondents. For a complete analysis of the data, see Memorandum, “Calculation of the `All Others' Rate in the Final Determination of the Countervailing Duty Investigation of Certain Fabricated Structural Steel from the People's Republic of China,” dated concurrently with this notice.

10.  As discussed in the Preliminary Determination, Commerce has found the following companies to be cross-owned with Shanghai Matsuo: (1) Chixiao Enterprise Co., Ltd.; and (2) Nanshan Development (Group) Incorporation.