E8-115. Carbon and Certain Alloy Steel Wire Rod from Brazil: Final Results of Expedited Five-Year Sunset Review of the Countervailing Duty Order

AGENCY:

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

SUMMARY:

On September 4, 2007, the Department of Commerce (“the Department”) published in the Federal Register the notice of initiation of the five-year sunset review of the countervailing duty order on carbon and certain alloy steel wire rod (“wire rod”) from Brazil, pursuant to section 751(c) of the Tariff Act of 1930, as amended (“the Act”). The Department has conducted an expedited sunset review of this order pursuant to section 751(c) of the Act and 19 CFR 351.218(e)(1)(ii)(C)(2). As a result of this sunset review, the Department finds that revocation of the countervailing duty order is likely to lead to continuation or recurrence of a countervailable subsidy at the levels indicated in the “Final Results of Review” section of this notice.

EFFECTIVE DATE:

January 8, 2008.

FOR FURTHER INFORMATION CONTACT:

Devta Ohri or Brandon Farlander, AD/CVD Operations, Office 1, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Ave., N.W., Washington, D.C. 20230; telephone: [phone] or [phone], respectively.

SUPPLEMENTARY INFORMATION:

Background

On September 4, 2007, the Department published the notice of initiation of the sunset review of the countervailing duty order on wire rod from Brazil, pursuant to section 751(c) of the Act. See Initiation of Five-Year (“Sunset”) Reviews, 72 FR 50659 (September 4, 2007) (“Notice of Initiation”). The Department received a notice of intent to participate from the following domestic parties: Gerdau Ameristeel U.S. Inc.; ISG Georgetown, Inc.; Keystone Consolidated Industries, Inc.; and Rocky Mountain Steel Mills within the deadline specified in 19 CFR 351.218(d)(1)(i). The companies claimed interested party status under section 771(9)(C) of the Act, as manufacturers of a domestic like product in the United States. The Department received a separate notice of intent to participate from Nucor Corporation within the deadline specified in 19 CFR 351.218(d)(1)(i). Nucor Corporation claimed interested party status under section 771(9)(C) of the Act, as a manufacturer of a domestic like product in the United States.

Gerdau Ameristeel U.S. Inc. reported that it is related to Gerdau S.A., a producer and exporter of subject merchandise in Brazil. ISG Georgetown, Inc. reported that it is related to Belgo Siderurgia S.A. in Brazil, a producer and exporter of subject merchandise. Pursuant to Section 771(4)(B) of the Act, a domestic interested party may be excluded from participating as part of the domestic industry if it is related to an exporter of subject merchandise. In this sunset review, even if we excluded the parties above from participating as part of the domestic industry in the sunset review of the order, there would still be sufficient participation by other domestic interested parties to merit a sunset review of the order. Since there is sufficient industry support regardless of whether these two companies are included, we do not need to resolve the issue of whether to include or exclude Gerdau Ameristeel U.S. Inc. and ISG Georgetown, Inc. Therefore, collectively, Gerdau Ameristeel U.S. Inc., ISG Georgetown, Inc., Keystone Consolidated Industries, Inc.; Rocky Mountain Steel Mills; and Nucor Corporation will be known as the “domestic interested parties.”

The Department received a complete substantive response to the notice of initiation from the domestic interested parties within the 30-day deadline specified in 19 CFR 351.218(d)(3)(i). We received no responses from respondent interested parties, nor was a hearing requested. Therefore, we conducted an expedited (120-day) sunset review of the CVD order on wire rod from Brazil, as provided for in section 351.218 (e)(1)(ii)(C)(2) of the Department's regulations.

Scope of the Order

The merchandise subject to this order is certain hot-rolled products of carbon steel and alloy steel, in coils, of approximately round cross section, 5.00 mm or more, but less than 19.00 mm, in solid cross-sectional diameter.

Specifically excluded are steel products possessing the above-noted physical characteristics and meeting the Harmonized Tariff Schedule of the United States (“HTSUS”) definitions for (a) stainless steel; (b) tool steel; (c) high nickel steel; (d) ball bearing steel; and (e) concrete reinforcing bars and rods. Also excluded are (f) free machining steel products (i.e., products that contain by weight one or more of the following elements: 0.03 percent or more of lead, 0.05 percent or more of bismuth, 0.08 percent or more of sulfur, more than 0.04 percent of phosphorus, more than 0.05 percent of selenium, or more than 0.01 percent of tellurium).

Also excluded from the scope are 1080 grade tire cord quality wire rod and 1080 grade tire bead quality wire rod. Grade 1080 tire cord quality rod is defined as: (i) grade 1080 tire cord quality wire rod measuring 5.0 mm or more but not more than 6.0 mm in cross-sectional diameter; (ii) with an average partial decarburization of no more than 70 microns in depth (maximum individual 200 microns); (iii) having no non-deformable inclusions greater than 20 microns and no deformable inclusions greater than 35 microns; (iv) having a carbon segregation per heat average of 3.0 or better using European Method NFA 04-114; (v) having a surface quality with no surface defects of a length greater than 0.15 mm; (vi) capable of being drawn to a diameter of 0.30 mm or less with 3 or fewer breaks per ton, and (vii) containing by weight the following elements in the proportions shown: (1) 0.78 percent or more of carbon, (2) less than 0.01 percent of aluminum, (3) 0.040 percent or less, in the aggregate, of phosphorus and sulfur, (4) 0.006 percent or less of nitrogen, and (5) not more than 0.15 percent, in the aggregate, of copper, nickel and chromium.

Grade 1080 tire bead quality rod is defined as: (i) grade 1080 tire bead quality wire rod measuring 5.5 mm or more but not more than 7.0 mm in cross-sectional diameter; (ii) with an average partial decarburization of no more than 70 microns in depth (maximum individual 200 microns); (iii) having no non-deformable inclusions greater than 20 microns and no deformable inclusions greater than 35 microns; (iv) having a carbon segregation per heat average of 3.0 or better using European Method NFA 04-114; (v) having a surface quality with no surface defects of a length greater than 0.2 mm; (vi) capable of being drawn to a diameter of 0.78 mm or larger with 0.5 or fewer breaks per ton; and (vii) containing by weight the following elements in the proportions shown: (1) 0.78 percent or more of carbon, (2) less than 0.01 percent of soluble aluminum, (3) 0.040 percent or less, in the aggregate, of phosphorus and sulfur, (4) 0.008 percent or less of nitrogen, and (5) either not more than 0.15 percent, in the aggregate, of copper, nickel and chromium (if chromium is not specified), or not more than 0.10 percent in the aggregate of copper and nickel and a chromium content of 0.24 to 0.30 percent (if chromium is specified).

For purposes of grade 1080 tire cord quality wire rod and grade 1080 tire bead quality wire rod, an inclusion will be considered to be deformable if its ratio of length (measured along the axis - that is, the direction of rolling - of the rod) over thickness (measured on the same inclusion in a direction perpendicular to the axis of the rod) is equal to or greater than three. The size of an inclusion for purposes of the 20 microns and 35 microns limitations is the measurement of the largest dimension observed on a longitudinal section measured in a direction perpendicular to the axis of the rod. This measurement methodology applies only to inclusions on certain grade 1080 tire cord quality wire rod and certain grade 1080 tire bead quality wire rod that are entered, or withdrawn from warehouse, for consumption on or after July 24, 2003.

The designation of the products as “tire cord quality” or “tire bead quality” indicates the acceptability of the product for use in the production of tire cord, tire bead, or wire for use in other rubber reinforcement applications such as hose wire. These quality designations are presumed to indicate that these products are being used in tire cord, tire bead, and other rubber reinforcement applications, and such merchandise intended for the tire cord, tire bead, or other rubber reinforcement applications is not included in the scope. However, should petitioners or other interested parties provide a reasonable basis to believe or suspect that there exists a pattern of importation of such products for other than those applications, end-use certification for the importation of such products may be required. Under such circumstances, only the importers of record would normally be required to certify the end use of the imported merchandise.

All products meeting the physical description of subject merchandise that are not specifically excluded are included in this scope.

The products under review are currently classifiable under subheadings 7213.91.3010, 7213.91.3015, 7213.91.3090, 7213.91.3092, 7213.91.4510, 7213.91.4590, 7213.91.6010, 7213.91.6090, 7213.99.0031, 7213.99.0038, 7213.99.0090, 7227.20.0010, 7227.20.0020, 7227.20.0090, 7227.20.0095, 7227.90.6010, 7227.90.6051, 7227.90.6053, 7227.90.6058, 7227.90.6059, and 7227.90.6080 of the HTSUS. Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of this order is dispositive.

Analysis of Comments Received

All issues raised in substantive responses by parties in this sunset review are addressed in the “Issues and Decision Memorandum for the Expedited Sunset Review of the Countervailing Duty Order on Carbon and Certain Alloy Steel Wire Rod from Brazil; Final Results,” (“Decision Memo”), from Stephen J. Claeys, Deputy Assistant Secretary for Import Administration, to David M. Spooner, Assistant Secretary for Import Administration, dated December 31, 2007, which is hereby adopted by this notice. The issues discussed in the Decision Memo include the likelihood of continuation or recurrence of a countervailable subsidy, the net countervailable subsidy rate likely to prevail if the order were revoked, and the nature of the subsidies.

Parties can find a complete discussion of all issues raised in this sunset review and the corresponding recommendation in this public memorandum which is on file in B-099, the Central Records Unit, of the main Commerce building. In addition, a complete version of the Decision Memo can be accessed directly on the Department's Web page at http://ia.ita.doc.gov/​frn. The paper copy and electronic version of the Decision Memo are identical in content.

Final Results of Review

For the reasons stated in the Decision Memo, the Department determines that revocation of the countervailing duty order on wire rod from Brazil is likely to lead to continuation or recurrence of countervailable subsidies at the following countervailing duty rates:

Manufacturer/Exporter	Net Subsidy Rate (percent)
Belgo Mineira	6.74
Gerdau S.A.	2.76
All-Others	5.64

Notification Regarding Administrative Protective Orders

This notice also serves as the only reminder to parties subject to administrative protective orders (“APO”) of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely 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 terms of an APO is a violation which is subject to sanction.

We are issuing and publishing this determination and notice in accordance with sections 751(c), 752(b), and 777(i) of the Act.

Dated: December 31, 2007.

Susan H. Kuhbach,

Acting Assistant Secretary for Import Administration.