04-8012. Stainless Steel Sheet and Strip in Coils From Japan: Rescission of Antidumping Duty Administrative Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of rescission of antidumping duty administrative review.

SUMMARY:

On August 22, 2003, the Department of Commerce (“Department”) published in the Federal Register a notice announcing the initiation of an administrative review of the antidumping duty order on stainless steel sheet and strip in coils (“SSSS”) from Japan. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Request for Revocation in Part, (“Initiation”) 68 FR 50750 (August 22, 2003). The period of review (“POR”) is July 1, 2002 to June 30, 2003. This review has now been rescinded because there were no entries for consumption of subject merchandise that are subject to review in the United States during the POR.

EFFECTIVE DATE:

April 8, 2004.

FOR FURTHER INFORMATION CONTACT:

Kit Rudd or James Doyle, Enforcement Group III, Office 9, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Room 7866, Washington, DC 20230; telephone [phone] or [phone] respectively.

Scope of Review

Upon completion of four changed circumstances reviews pursuant to section 751(b) of the Act and section 351.216 of the Department's regulations, we have excluded certain products from the scope of the order. These four excluded products are identified in the scope, infra.

For purposes of this review, the products covered are certain stainless steel sheet and strip in coils. Stainless steel is an 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 (“HTS”) at subheadings: 7219130031, 7219130051, 7219130071, 7219130081 ^[1] , 7219140030, 7219140065, 7219140090, 7219320005, 7219320020, 7219320025, 7219320035, 7219320036, 7219320038, 7219320042, 7219320044, 7219330005, 7219330020, 7219330025, 7219330035, 7219330036, 7219330038, 7219330042, 7219330044, 7219340005, 7219340020, 7219340025, 7219340030, 7219340035, 7219350005, 7219350015, 7219350030, 7219350035, 7219900010, 7219900020, 7219900025, 7219900060, 7219900080, 7220121000, 7220125000, 7220201010, 7220201015, 7220201060, 7220201080, 7220206005, 7220206010, 7220206015, 7220206060, 7220206080, 7220207005, 7220207010, 7220207015, 7220207060, 7220207080, 7220208000, 7220209030, 7220209060, 7220900010, 7220900015, 7220900060, and 7220900080. Although the HTS subheadings are provided for convenience and Customs purposes, the Department's written description of the merchandise under review is dispositive.

Excluded from the scope of this 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 HTS, “Additional U.S. Note” 1(d).

Flapper valve steel is also excluded from the scope of the order. This product 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 in 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 this 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 less than 0.002 or greater than 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 this 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.” ^[2]

Certain electrical resistance alloy steel is also excluded from the scope of this 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.” ^[3]

Certain martensitic precipitation-hardenable stainless steel is also excluded from the scope of this 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.” ^[4]

Also excluded are three specialty stainless steels typically used in certain industrial blades and surgical and medical instruments. These include stainless steel strip in coils used in the production of textile cutting tools (e.g., carpet knives).^[5] This steel is similar to AISI grade 420 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 100 square microns. 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.” ^[6]

Also excluded are stainless steel welding electrode strips that are manufactured in accordance with American Welding Society (“AWS”) specification ANSI/AWS A5.9-93. See Stainless Steel Sheet and Strip in Coils from Japan: Final Results of Changed Circumstance Antidumping Duty Review, and Determination to Revoke Order in Part, 65 FR 17856 (April 5, 2000). The products are 0.5 mm in thickness, 60 mm in width, and in coils of approximately 60 pounds each. The products are limited to the following AWS grade classifications: ER308L, ER 309L, ER316L and ER347, and a modified ER 309L or 309LCb which meets the following chemical composition limits (by weight):

Carbon—0.03% maximum.

Chromium—20.0-22.0%.

Nickel—10.0-12.0%.

Molybdenum—0.75% maximum.

Manganese—1.0-2.5%.

Silicon—0.65% maximum.

Phosphorus—0.03% maximum.

Sulphur—0.03% maximum.

Copper—0.75% maximum.

Columbium—8 times the carbon level minimum—1.0% maximum.

Also excluded is certain stainless steel used for razor blades, medical surgical blades, and industrial blades, and sold under proprietary names such as DSRIK7, DSRIK8, and DSRIK9. See Stainless Steel Sheet and Strip in Coils from Japan: Final Results of Changed Circumstance Antidumping Duty Review, and Determination to Revoke Order in Part, 65 FR 54841 (September 11, 2000). This stainless steel strip in coils is a specialty product with a thickness of 0.15 mm to 1.000 mm, or 0.006 inches to 0.040 inches, and a width of 6 mm to 50 mm, or 0.250 inches to 2.000 inches. The edge of the product is slit, and the finish is bright. The steel contains the following chemical composition by weight: Carbon 0.65% to 1.00%, Silicon 1.00% maximum, Manganese 1.00% maximum, Phosphorus 0.35% maximum, Sulfur 0.25% maximum, Nickel 0.35% maximum, Chromium 0.15% maximum, Molybdenum 0.30% maximum.

Also excluded is certain stainless steel lithographic sheet. See Stainless Steel Sheet and Strip in Coils from Japan: Final Results of Changed Circumstance Antidumping Duty Review, and Determination To Revoke Order in Part, 65 FR 64423 (October 27, 2000). This sheet is made of 304-grade stainless steel and must satisfy each of the following fifteen specifications. The sheet must have: (1) An ultimate tensile strength of minimum 75 KSI; (2) a yield strength of minimum 30 KSI; (3) a minimum elongation of 40 percent; (4) a coil weight of 4000-6000 lbs.; (5) a width tolerance of −0/+0.0625 inch; and (6) a gauge tolerance of +/−0.001 inch. With regard to flatness, (7) the wave height and wave length dimensions must correspond to both edge wave and center buckle conditions; (8) the maximum wave height shall not exceed 0.75 percent of the wave length or 3 mm (0.118 inch), whichever is less; and (9) the wave length shall not be less than 100 mm (3.937 inch). With regard to the surface, (10) the surface roughness must be RMS (RA) 4-8; (11) the surface must be degreased and no oil will be applied during the slitting operation; (12) the surface finish shall be free from all visual cosmetic surface variations or stains in spot or streak form that affect the performance of the material; (13) no annealing border is acceptable; (14) the surface finish shall be free from all defects in raised or depression nature (e.g., scratches, gouges, pimples, dimples, etc.) exceeding 15 microns in size and with regard to dimensions; and (15) the thickness will be .0145 +/−.001 and the widths will be either 38″, 38.25″, or 43.5″ and the thickness for 39″ material will be .0118 +/−.001 inches. Also excluded is nickel clad stainless steel sheet and strip in coils from Japan. See Stainless Steel Sheet and Strip in Coils from Japan: Final Results of Changed Circumstance Antidumping Duty Review, and Determination to Revoke Order in Part, 65 FR 77578 (December 12, 2000). This nickel clad stainless steel sheet must satisfy each of the following specifications. The sheet must: (1) Have a maximum coil weight of 1000 pounds; (2) with a coil interior diameter of 458 mm to 540 mm; (3) with a thickness of .33 mm and a width of 699.4 mm; (4) fabricated in three layers with a middle layer of grade 316L or UNS 531603 sheet and strip sandwiched between the two layers of nickel cladding, using a roll bonding process to apply the nickel coating to each side of the stainless steel, each nickel coating being not less than 99 percent nickel and a minimum .038 mm in thickness. The resultant nickel clad stainless steel sheet and strip also must meet the following additional chemical composition requirement (by weight): The first layer weight is 14%, specification Ni201 or N02201, Carbon 0.009, Sulfur 0.001, Nickel 99.97, Molybdenum 0.001, Iron 0.01, Copper 0.001 for a combined total of 99.992. The second layer weight is 72%, specification 316L or UNS 513603, Carbon 0.02, Silicon 0.87, Manganese 1.07, Phosphorus 0.033, Sulfur 0.001, Nickel 12.08, Chromium 17.81, Molybdenum 2.26, Iron 65.856 for a combined total of 100. The third layer is 14%, specification Ni201 or N02201, Carbon 0.01, Sulfur 0.001, Nickel 99.97, Molybdenum 0.001, Iron 0.01, Copper 0.001 for a combined total of 99.993. The weight average weight is 100%. The following is the weighted average: Carbon 0.01706, silicon 0.6264, Manganese 0.7704, Phosphorus 0.02376, Sulfur 0.001, Nickel 36.6892, Chromium 12.8232, Molybdenum 1.62748, Iron 47.41912, and Copper is 0.00028. The above-described material is sold as grade 316L and manufactured in accordance with UNS specification 531603. This material is classified at subheading 7219.90.00.20 of the HTS.

Background

On July 30, 2003, petitioners ^[7] requested an administrative review of Kawasaki Steel Corporation ^[8] (“KSC”), a Japanese producer and exporter of SSSS, with respect to the antidumping order published in the Federal Register. On August 22, 2003, the Department initiated the review for KSC. See Initiation at 50752. Additionally, on September 22, 2003, petitioners requested that the Department conduct a duty absorption inquiry of KSC.

SUPPLEMENTARY INFORMATION

Case History

On September 8, 2003, the Department issued an antidumping duty questionnaire to KSC. On September 16, 2003, KSC informed the Department that it would not be responding to the antidumping duty questionnaire as they had “no reportable sales” of subject merchandise to the United States during the POR. On September 17, 2003 the Department forwarded a no-shipment inquiry to CBP for circulation to all CBP ports requesting information regarding any entries of merchandise subject to this review. CBP indicated to the Department that there was no record of consumption entries during the POR of SSSS from Japan exported by KSC. However, on September 19, 2003, the Department conducted a query of CBP import data via CBP's Automated Broker Interface (“ABI”) system using the current review's scope as defined by HTS number and Japan as the country of export. This query provided the Department with data indicating the possibility of entries of merchandise subject to this review. On September 26, 2003, KSC claimed in writing that they “had no reportable sales of merchandise subject to this review in or for export to the United States during the period of review (July 2002 through June 2003).” On October 30, 2003 the Department issued a letter to KSC inquiring about possible entries of subject merchandise by KSC during the POR. On November 14, 2003, KSC replied to the Department's October 30, 2003 submission and requested that all the data from CBP be released to the respondent's counsel to facilitate KSC's reply. On November 19, 2003, the Department sent a letter to KSC providing its counsel with CBP data, subject to an administrative protection order (“APO”) on the possible shipments and extending KSC's date to respond to the Department's October 30, 2003 letter to December 8, 2003. On December 17, 2003, the respondent submitted a letter in response to the Department's November 19, 2003 letter. On December 17, 2003, the Department submitted a letter to CBP requesting the complete entry packages for the possible KSC POR shipments. The Department received the complete entry documentation packages from CBP on February 6, 2004. On February 10, 2004 the Department released the entry packages under APO and solicited comments from petitioners and KSC. The Department received comments from KSC on February 18, 2004. On February 17, 2004 the petitioners submitted comments and on February 23, 2004, the petitioners submitted a request for an extension of time to comment on KSC's February 18, 2004 submission. The Department received rebuttal comments from KSC on February 25, 2004 and March 17, 2004 and from petitioners on March 10, 2004. In its February 18, 2004 comments, KSC provided data from the official record of the original SSSS investigation and the first administrative review concerning KSC's local and export merchandise identification methodologies which it claimed supports its contention that the company had no knowledge that the entries in question were eventually exported to the United States by an unrelated third party. Based on their contention that they had no knowledge that the entries in question were eventually exported to the United States, KSC concluded that the administrative review should be rescinded. In its March 10, 2004 submission, petitioners agreed that the entries were not KSC sales and that the review should be rescinded.

Analysis

After analyzing the data contained in the CBP-provided customs entry packages, petitioners' and KSC's comments and rebuttal comments, the Department notes that both parties agree these entries are not KSC shipments and the review should be rescinded. The Department further notes that KSC accounting records, which show that the entries at issue were coded by KSC as a domestic Japanese sale, supports KSC's contention that it had no knowledge these home market sales of subject merchandise were destined for the United States. Moreover, the data contained in the CBP entry packages shows that these entries were more likely shipped by a Japanese reseller to the United States. Further, based on the identities of the Japanese reseller and the Japanese importer, as reported in the CBP entry documentation, these two entities are part of the same corporate group one of whose companies was assigned a rate in the original investigation. Please see the accompanying analysis memorandum for identification of each of these entities. See Memorandum to the File from Kit L. Rudd, Case Analyst through Edward C. Yang, Director, Office IX regarding Stainless Steel Sheet and Strip in Coils from Japan—Rescission Analysis Memorandum dated April 1, 2004. We corroborated this understanding by examining the group's website which shows all these entities as part of the same group. See Id. As a result of this analysis, we conclude that the exporter's cash deposit rate should have been posted, rather than the manufacturer's (KSC's) rate, and we will instruct CBP to liquidate those entries at that rate. Please refer to CBP for further information as to the circumstances relating to the incorrect rate claimed. For an explanation of the Department's automatic-liquidation regulation concerning circumstances where a reseller has been involved in the chain of commerce, please refer to the Department's May 6, 2003 explanation as published in the Federal Register. See Antidumping and Countervailing Duty Proceedings: Assessment of Antidumping Duties, 68 FR 23954 (May 6, 2003).

Accordingly, we are rescinding this review. The cash deposit rate will continue to be the rate established in the most recently completed segment of this proceeding.

This notice is issued and published in accordance with sections 777(i) of the Act and 19 CFR 351.213(d)(4).

Dated: April 1, 2004.

Jeffrey May,

Acting Assistant Secretary for Import Administration.

Footnotes

1.  Due to changes to the HTS numbers in 2001, 7219130030, 7219130050, 7219130070, and 7219130080 are now 7219130031, 7219130051, 7219130071, and 7219130081, respectively.

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

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

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

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

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

7.  Allegheny Ludlum Corp., AK Steel Corporation, J&L Specialty Steel, Inc., North American Stainless, Butler-Armco Independent Union, Zanesville Armco Independent Organization and the United Steelworkers of America, AFL-CIO/CLC.

8.  The Department notes that this administrative review was initiated with respect to subject merchandise manufactured or exported by KSC during the POR. Counsel for KSC has referred to JFE Steel Corporation (“JFE”) throughout this segment of the proceeding as the successor to KSC. However, neither KSC nor petitioners have requested that the Department conduct a successor-in-interest analysis in order to confirm whether for antidumping purposes JFE is the successor-in-interest to KSC with respect to the subject merchandise. Moreover, as there was no issue in this segment other than whether KSC had knowledge that certain merchandise it produced was destined for the United States, there was no opportunity for the Department to conduct a successor-in-interest analysis on its own initiative in this context. Therefore, the Department not only will continue to refer to the respondent as KSC but also will issue instructions to U.S. Customs and Border Protection (“CBP”) reminding it that only merchandise manufactured or exported by KSC is eligible to enter using its cash deposit rate.