03-10257. Notice of Final Determination of Sales at Less Than Fair Value: Lawn and Garden Steel Fence Posts From the People's Republic of China

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of final determination of sales at less than fair value.

SUMMARY:

We determine that lawn and garden steel fence posts (fence posts) from the People's Republic of China (PRC) are being sold, or are likely to be sold, in the United States at less than fair value (LTFV), as provided in section 735 of the Tariff Act of 1930, as amended (the Act). The estimated margins of sales at LTFV are shown in the Final Determination of Investigation section of this notice.

EFFECTIVE DATE:

April 25, 2003.

FOR FURTHER INFORMATION CONTACT:

Salim Bhabhrawala or Chris Welty, Group II, Office 5, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone: [phone], respectively.

SUPPLEMENTARY INFORMATION:

Case History

The preliminary determination in this investigation was published on December 4, 2002. See Notice of Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Lawn and Garden Steel Fence Posts from the People's Republic of China, 67 FR 72141 (December 4, 2002) (Preliminary Determination). Since the preliminary determination, the following events have occurred.

We conducted verification of the questionnaire responses of Shanghai BaoSteel International Economic and Trading Corporation, Ltd. (BaoSteel),^[1] Hebei Metals and Minerals Import and Export Corporation (Hebei), and China Nanyang Import & Export Corporation (Nanyang),^[2] from January 13 through January 24, 2003. See Verification of Sales and Factors of Production Data Submitted by Shanghai BaoSteel International Economic and Trading Corporation, Ltd. (Feb. 20, 2003); Verification of Sales and Factors of Production Data Submitted by Hebei Metals and Minerals Import and Export Corporation and its Suppliers, (Mar. 4, 2003); and Verification of Sales and Factor of Production Data Submitted by China Nanyang Import & Export Co., Ltd. (Mar. 4, 2003).

On January 15, 2003, the petitioner ^[3] submitted information to support its contention that the price of BaoSteel's market-economy supplied input should not be included in the calculation of normal value. See Issues and Decision Memorandum for the Final Determination of the Antidumping Duty Investigation of Lawn and Garden Steel Fence Posts from the People's Republic of China, from Holly A. Kuga, Acting Deputy Assistant Secretary, Import Administration, to Joseph A. Spetrini, Acting Assistant Secretary for Import Administration (Decision Memorandum) dated April 18, 2003, at Comment 2.

Respondents Hebei and Nanyang filed surrogate value information and data on January 21, 2003.

On February 23, 2003, the Department of Commerce (the Department) issued a correction to the Preliminary Determination, correcting the scope of the investigation to be consistent with the International Trade Commission's preliminary determination. See Lawn and Garden Steel Fence Posts from China, 67 FR 42581 (June 24, 2002). No other changes were made to the Preliminary Determination. See Correction: Notice of Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Lawn and Garden Steel Fence Posts from the People's Republic of China, 68 FR 8737 (Feb. 25, 2003).

On March 13, 2003, Hebei, Nanyang, and the petitioner filed case briefs. BaoSteel did not file a case brief. On March 17, 2003, the Department filed a letter rejecting the petitioner's March 13, 2003, case brief because it contained untimely filed new information. We asked the petitioner to resubmit its case brief in compliance with the Department's specific redaction instructions contained within that letter. (See Letter from the Department to Steel City Corporation dated March 17, 2003). On March 18, 2003, the petitioner submitted a revised version of its case brief, complying with the Department's instructions in the Department's March 17, 2003, letter. The petitioner also filed its rebuttal brief on March 18, 2003. All three respondents filed rebuttal briefs on March 24, 2003.

No hearing was requested by the interested parties in this proceeding.

Scope of Investigation

For purposes of this investigation, the products covered consist of all “U” shaped or “hat” shaped lawn and garden fence posts made of steel and/or any other metal, weighing 1 pound or less per foot, and produced in the PRC. The fence posts included within the scope of this investigation weigh up to 1 pound per foot and are made of steel and/or any other metal. Imports of these products are classified under the following categories: fence posts, studded with corrugations, knobs, studs, notches or similar protrusions with or without anchor posts and exclude round or square tubing or pipes.

These posts are normally made in two different classes, light and heavy duty. Light duty lawn and garden fence posts are normally made of 14 gauge steel (0.068 inches—0.082 inches thick), 1.75 inches wide, in 3, 4, 5, or 6 foot lengths. These posts normally weigh approximately 0.45 pounds per foot and are packaged in mini-bundles of 10 posts and master bundles of 400 posts. Heavy duty lawn and garden steel fence posts are normally made of 13 gauge steel (0.082 inches—0.095 inches thick), 3 inches wide, in 5, 6, 7, and 8 foot lengths. Heavy duty posts normally weigh approximately 0.90 pounds per foot and are packaged in mini-bundles of 5 and master bundles of 200. Both light duty and heavy duty posts are included within the scope of the investigation.

Imports of these products are classified under the Harmonized Tariff Schedule of the United States (HTSUS) subheading 7326.90.85.35. Fence posts classified under subheading 7308.90 are also included within the scope of the investigation if the fence posts are made of steel and/or metal.

Specifically excluded from the scope are other posts made of steel and/or other metal including “tee” posts, farm posts, and sign posts, regardless of weight.^[4] Although the HTSUS subheadings are provided for convenience and U.S. Customs Service (Customs) purposes, the written description of the merchandise under investigation is dispositive.

Period of Investigation

The POI is October 1, 2001, through March 31, 2002.

Analysis of Comments Received

All issues raised in the case and rebuttal briefs by parties to this proceeding and to which we have responded are listed in the Appendix to this notice and addressed in the Decision Memorandum, which is hereby adopted by this notice. Parties can find a complete discussion of the issues raised in this investigation and the corresponding recommendations in this public memorandum which is on file in the Central Records Unit (CRU), room B-099 of the main Department building. In addition, a complete version of the Decision Memorandum can be accessed directly on the internet at http://ia.ita.doc.gov. The paper copy and electronic version of the Decision Memorandum are identical in content.

Non-Market Economy

The Department has treated the PRC as an non-market economy (NME) country in all its past antidumping investigations. See e.g., Notice of Final Determination of Sales at Less Than Fair Value: Ferrovanadium From the People's Republic of China, 67 FR 71137, 71138 (Nov. 29, 2002); and Notice of Final Determination of Sales at Less Than Fair Value: Certain Circular Welded Carbon-Quality Steel Pipe From the People's Republic of China, 67 FR 36570, 36571 (May 24, 2002). An NME country designation remains in effect until it is revoked by the Department. See section 771(18)(C) of the Act. The respondents in this investigation have not requested revocation of the PRC's NME status. Therefore, we have continued to treat the PRC as an NME country in this investigation. For further details, see the Preliminary Determination.

Separate Rates

In our Preliminary Determination, we found that all three responding companies met the criteria for the application of separate, company-specific antidumping duty rates. We have not received any other information since the preliminary determination which would warrant reconsideration of our separates rates determination with respect to these companies. For a complete discussion of the Department's determination that the respondents are entitled to a separate rate, see the Preliminary Determination.

The PRC-Wide Rate

In the preliminary determination, we found that the use of adverse facts available for the PRC-wide rate was appropriate for other exporters in the PRC based on our presumption that those respondents who failed to demonstrate entitlement to a separate rate constitute a single enterprise under common control by the Chinese government. The PRC-wide rate applies to all entries of the merchandise under investigation except for entries from Hebei, entries from Nanyang which were produced by Tianjin Shenyuan Steel Company, Ltd. or Tianjin Sunny Steel Products Company, Ltd., and entries from BaoSteel which were produced by Hangzhou Hongyuan Sporting Goods Company, Ltd.

When analyzing the petition for purposes of the initiation, the Department reviewed all of the data upon which the petitioners relied in calculating the estimated dumping margin and determined that the margin in the petition was appropriately calculated and supported by adequate evidence in accordance with the statutory requirements for initiation. In order to corroborate the petition margin for purposes of using it as adverse facts available, we examined the price and cost information provided in the petition in the context of our preliminary determination. For further details, see Memorandum from Christopher Smith to Gary Taverman, Corroboration of Secondary Information, dated November 27, 2002 (Preliminary Corroboration Memorandum). We received no comments on this decision and continue to find in this final determination that the rate contained in the petition, as recalculated, has probative value. We have continued to apply this rate in the final determination. For further discussion, see Preliminary Determination.

Since the preliminary determination, we have obtained new information regarding several surrogate values. In order to take into account the more recent information, we recalculated the petition margin using, where possible, revised surrogate values to value the petitioners' consumption rates. As a result of this recalculation, the PRC-wide rate is, for the final determination, 15.61 percent. See Memorandum from Christopher Smith to the File, Corroboration of Secondary Information, dated April 18, 2003.

Surrogate Country

For purposes of the final determination, we continue to find that India remains the appropriate surrogate country for the PRC. For further discussion and analysis regarding the surrogate country selection for the PRC, see the Preliminary Determination.

Verification

As provided in section 782(i) of the Act, we verified the information submitted by the respondents for use in our final determination. We used standard verification procedures including examination of relevant accounting and production records, and original source documents provided by the respondents. For changes from the Preliminary Determination as a result of verification, see the Changes Since the Preliminary Determination section below.

Changes Since the Preliminary Determination

Based on our findings at verification and on our analysis of the comments received, we have made the following adjustments to the calculation methodologies used in the preliminary determination. These adjustments are discussed in detail in the Decision Memorandum; Final Calculation of Antidumping Duty Investigation of Lawn and Garden Steel Fence Posts From the People's Republic of China for Shanghai BaoSteel International Economic and Trading Co., Ltd. (Apr. 18, 2003) (BaoSteel's Final Calculation Memorandum); Final Calculation of Antidumping Duty Investigation of Lawn and Garden Steel Fence Posts From the People's Republic of China for Hebei Metals and Minerals Import and Export Corporation (Apr. 18, 2003) Hebei's Final Calculation Memorandum); and Final Calculation of Antidumping Duty Investigation of Lawn and Garden Steel Fence Posts From the People's Republic of China for China Nanyang Import & Export Corporation (Apr. 18, 2003) (Nanyang's Final Calculation Memorandum).

BaoSteel

1. We revised our calculation of freight costs for the factors of production to include the revised distances identified during verification. See BaoSteel's Final Calculation Memorandum.

2. We revised the calculations for the following packing materials for BaoSteel as a result of changes discovered at verification: packing labels, plastic hanging ties, and plastic ties. See id.

Hebei

1. Hebei omitted certain bank fees from its reporting of U.S. sales. Accordingly, we have included these verified fees as adjustments to U.S. price. See Hebei's Final Calculation Memorandum.

2. We removed non-subject “T-posts” from Hebei's U.S. sales database. See id.

3. We revised our calculation of freight costs for the factors of production to include the revised distances identified during verification. See id.

4. We revised certain packing material weights to account for remeasurements conducted at verification. See id.

5. We revised the electricity factor for one of Hebei's suppliers in accordance with our verification findings. See id.

Nanyang

1. As reported by Nanyang during the company's presentation of minor corrections at verification, the company omitted certain bank fees from its reporting of U.S. sales. Accordingly, we have included these verified fees as adjustments to U.S. price. See Nanyang's Final Calculation Memorandum.

2. At verification, certain differences were found between reported transportation distances and remeasured distances. We have revised the transportation distances previously used to reflect the remeasured amounts. See id.

3. We revised our calculation for certain rivet costs to reflect changes in weight, loss rate, and consumption rates discovered at verification. See id.

4. We revised our acid bath and phosphate acid calculations to reflect changes in input allocations discovered at verification. See id.

5. At verification, certain differences were found between reported packing material weights and remeasured weights. We have revised the packing material weights previously used to reflect the remeasured amounts. See id.

6. We revised certain electricity calculations to reflect changes in electricity consumption discovered as a result of verification. See id.

7. We revised certain labor calculations to reflect changes in labor allocations discovered as a result of verification. See id.

8. We revised certain calculations for steel coil scrap production to reflect changes in steel allocations discovered as a result of verification. See id.

Surrogate Values

1. We adjusted the surrogate value for steel coil to reflect updated surrogate data. See Decision Memorandum at Comment 3.

2. We adjusted the surrogate values for the following packing materials to reflect updated surrogate data: steel screws, nails, wood pallets, wood, plastic sheet/strips, foam, plastic twine, and steel pallets. See id.

3. We revised the surrogate value for hydrochloric acid to reflect less aberrational data. See Decision Memorandum at Comment 4.

4. We revised the surrogate value for brokerage and handling to include a more representative and contemporaneous source of surrogate data. See Decision Memorandum at Comment 5.

5. We revised the surrogate value for labor to reflect the Department's updated wage rate regression calculation. See Decision Memorandum at Comment 6.

Continuation of Suspension of Liquidation

In accordance with section 735(c)(1)(B)(ii) of the Act, we are directing the Customs Service to continue suspension liquidation of entries of subject merchandise from the PRC, with the exception of merchandise exported by Shanghai BaoSteel International Economic and Trading Co., Ltd. which was produced by Hangzhou Hongyuan Sporting Goods Company, Ltd., and merchandise exported by China Nanyang Import & Export corporation which was produced by Tianjin Shenyuan Steel Company, Ltd. or Tianjin Sunny Steel Products Company, Ltd., that are entered, or withdrawn from warehouse, for consumption on or after December 4, 2002 (the date of publication of the Preliminary Determination in the Federal Register). We will instruct the Customs Service to require a cash deposit or the posting of a bond equal to the weighted-average amount by which NV exceeds the U.S. price, as indicated in the chart below. These suspension-of-liquidation instructions will remain in effect until further notice.

Final Determination

We determine that the following weighted-average percentage margins exist for the period October 1, 2001, through March 31, 2002:

Manufacturer/Exporter	Weighted- average margin (percent)
Shanghai BaoSteel International Economic and Trading Co., Ltd	0.00
Hebei Metals and Minerals Imports and Export Corporation	6.60
China Nanyang Import & Export Corporation	1.42
PRC-Wide Rate	15.61

The PRC-wide rate applies to all entries of the merchandise under investigation except for entries from Hebei, entries from Nanyang which were produced by Tianjin Shenyuan Steel company, Ltd. or Tianjin Sunny Steel Products Company, Ltd., and entries from BaoSteel which were produced by Hangzhou Hongyuan Sporting Goods Company, Ltd.

International Trade Commission Notification

In accordance with section 735(d) of the Act, we have notified the International Trade Commission (ITC) of our determination. As our final determination is affirmative, the ITC will determine, within 45 days, whether these imports are materially injuring, or threaten material injury to, the U.S. industry. If the ITC determines that material injury, or threat of material injury does not exist, the proceeding will be terminated and all securities posted will be refunded or cancelled. If the ITC determines that such injury does exist, the Department will issue an antidumping duty order directing Customs officials to assess antidumping duties on all imports of subject merchandise entered for consumption on or after the effective date of the suspension of liquidation.

Notification Regarding Administrative Protective Order (APO)

This notice also serves as a reminder to parties subject to APO of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305. Timely notification of return/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 determination is issued and published in accordance with sections 735(d) and 777(i)(1) of the Act.

Dated: April 18, 2003.

Joseph A. Spetrini,

Acting Assistant Secretary for Import Administration.

Appendix—Decision Memorandum

Comment 1: Department's Acceptance of New Information

Comment 2: Use of BaoSteel's Market Economy Steel Value

Comment 3: Surrogate Value Selection for Steel Coil and Packing Materials

Comment 4: Surrogate Value Selection for Powder Coating, Coal, and Hydrochloric Acid

Comment 5: Surrogate Value Selection for Selection for Brokerage and Handling

Comment 6: Surrogate Value Selection for Labor

Comment 7: Exclusion of Labor Costs from Calculation of Surrogate Overhead and SG&A Ratios

Comment 8: Use of Gross, Rather Than Net, Material Costs in the Calculation of Surrogate Overhead and SG&A Ratios

Footnotes

1.  Hangzhou Hongyuan Sporting Goods Company, Ltd. was the producer of the subject merchandise sold by BaoSteel during the period of investigation (POI).

2.  Tianjin Shenyuan Steel Company, Ltd. and Tianjin Sunny Steel Products Company, Ltd. were the producers of the subject merchandise sold by Nanyang during the POI.

3.  The petitioner in this investigation is Steel City Corporation.

4.  Tee posts are made by rolling red hot steel into a “T” shape. These posts do not have tabs or holes to help secure fencing to them and have primarily farm and industrial uses.