E7-9039. Notice of Final Results of Antidumping Duty Administrative Review: Carbon and Certain Alloy Steel Wire Rod from Canada

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

On November 6, 2006, the Department of Commerce (“the Department”) published the preliminary results of its third administrative review of the antidumping duty order on carbon and certain alloy steel wire rod from Canada. The review covers the shipments of subject merchandise to the United States by Ivaco Rolling Mills 2004 L.P. (“IRM”), and Sivaco Ontario, a division of Sivaco Wire Group 2004 L.P., (“Sivaco”) (collectively, both IRM and Sivaco are referred to as “Ivaco”).¹ The period of review (“POR”) is October 1, 2004, through September 30, 2005. Based on our analysis of comments received, these final results differ from the preliminary results. The final results are listed below in the Final Results of Review section.

EFFECTIVE DATE:

May 10, 2007.

FOR FURTHER INFORMATION CONTACT:

Damian Felton or Brandon Farlander, at [phone] or [phone], respectively; AD/CVD Operations, Office 1, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street & Constitution Avenue, NW, Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

Background

On November 6, 2006, the Department published in the Federal Register the preliminary results of the third administrative review of the antidumping duty order on carbon and certain alloy steel wire rod from Canada. See Notice of Preliminary Results of Antidumping Duty Administrative Review and Notice of Initiation of Changed Circumstances Review: Carbon and Certain Alloy Steel Wire Rod from Canada, 71 FR 64921 (November 6, 2006) (“Preliminary Results”).

We invited parties to comment on the Preliminary Results. On December 11, 2006, we received case briefs from the respondent, Ivaco, and the petitioners, Gerdau Ameristeel US, Inc., ISG Georgetown, Inc., Keystone Consolidated Industries, Inc., and North Star Steel Texas, Inc. (herein after referred to as “the petitioners”). Ivaco submitted its rebuttal brief on December 18, 2006. No public hearing was requested.

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.

Level of Trade

As stated in the Preliminary Results, section 773(a)(7)(A) of the Act provides that in order to grant a level of trade (“LOT”) adjustment, we must find that the export price (“EP”) or constructed export price sale (as appropriate) was made at a different level than that of the normal value sale and that this difference: (1) involved different selling activities, and (2) affected price comparability based on a pattern of consistent price differences between sales at different LOTs in the country in which normal value is determined.²

Ivaco reported two channels of distribution in the home and U.S. markets. The channels of distribution were: (1) direct sales by IRM and (2) direct sales by Sivaco. To determine whether the two channels constitute separate levels of trade, we examined the stages in the marketing process and selling functions along the chains of distribution between Ivaco and its customers. Based on this examination, we preliminarily determined that Ivaco sold merchandise at two LOTs during the POR. One LOT is for sales made by the steel wire rod manufacturing facility, IRM; the second LOT is for sales made by Sivaco, the customer service center, which is a steel wire rod processing and drawing facility.

Sales by Sivaco have different, more complex, distribution patterns, involving substantially greater selling activities. These selling activities are explained in greater detail in Comment 1 in the accompanying Issues and Decision Memorandum to David M. Spooner, Assistant Secretary for Import Administration, from Stephen J. Claeys, Deputy Assistant Secretary (“Decision Memorandum”), which is hereby adopted by this notice. Based upon our analysis of the marketing process for these sales, we continue to find that sales by Sivaco are at a more advanced stage than sales by IRM.

For the Preliminary Results, the Department performed its standard analysis of price differences on Ivaco's submitted home market sales by comparing, for each identical model sold at both levels, the average net price of sales made in the ordinary course of trade at the two LOTs.³ Our analysis for the Preliminary Results as well as for the final results reveals that for a preponderance of models and quantities sold at different LOTs by Sivaco and IRM, a pattern of consistent price differences existed. Therefore, we continue to grant a LOT adjustment for EP sales for which we were not able to find sales of the foreign-like product in the home market at the same level of trade as the U.S. sales. See Decision Memorandum, at Comments 1-4; see also Memorandum to the File entitled, “Analysis Memorandum for Ivaco,” Re: Final Results for the Third Antidumping Duty Review of Carbon and Certain Alloy Steel Wire Rod from Canada, at 2 (May 3, 2007).

Analysis of Comments Received

The issues raised in the case briefs by parties to this administrative review are addressed in the accompanying Decision Memorandum. A list of the issues addressed in the Decision Memorandum is appended to this notice. The Decision Memorandum is on file in the Central Records Unit in Room B-099 of the main Department of Commerce building, and can also be accessed directly on the Web at http://ia.ita.doc.gov/​frn/​index.html. The paper copy and electronic version of the Decision Memorandum are identical in content.

Changes Since the Preliminary Results

Based on our analysis of comments received, we have corrected a programming error identified by Ivaco. Due to an error in the programing language, no level of trade adjustments were applied to any of Ivaco's sales in our preliminary margin calculation. Consequently, we have corrected the programming language for Ivaco for purposes of the final results. The changes are discussed in detail in the accompanying Decision Memorandum.

Final Results of Review

As a result of our review, we determine that the following weighted-average margin exists for the period October 1, 2004, through September 30, 2005:

Producer	Weighted-Average Margin (Percentage)
Ivaco	2.06

Assessment

The Department will determine, and U.S. Customs and Border Protection (“CBP”) shall assess, antidumping duties on all appropriate entries, pursuant to 19 CFR 351.212(b). The Department calculated importer-specific duty assessment rates on the basis of the ratio of the total amount of antidumping duties calculated for the examined sales to the total entered value of the examined sales for that importer. Where the assessment rate is above de minimis, we will instruct CBP to assess duties on all entries of subject merchandise by that importer. In accordance with 19 CFR 356.8(a), the Department will issue appropriate assessment instructions directly to CBP on or after 41 days following the date of publication of these final results of review.

Cash Deposits

Furthermore, the following deposit requirements will be effective upon publication of this notice of final results of administrative review for all shipments of carbon and certain alloy steel wire rod from Canada entered, or withdrawn from warehouse, for consumption on or after the date of publication, as provided by section 751(a)(1) of the Tariff Act of 1930, as amended (“the Act”): (1) For the company covered by this review, the cash deposit rate will be the rate listed above; (2) for previously reviewed or investigated companies not listed above, 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 investigation, but the producer is, the cash deposit rate will be that established for the producer of the merchandise in these final results of review, a prior review, or in the final determination; and (4) if neither the exporter nor the producer is a firm covered in this review, a prior review, or the investigation, the cash deposit rate will be 8.11 percent, the “All Others” rate established in the less-than-fair-value investigation. These deposit requirements shall remain in effect until further notice.

This notice also serves as a final reminder to importers of their responsibility under 19 CFR 351.402(f) 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 Secretary's presumption that reimbursement of antidumping duties occurred, and in the subsequent assessment of double antidumping duties.

This notice also is the only reminder to parties subject to the administrative protective order (“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 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 the terms of an APO is a sanctionable violation.

We are issuing and publishing these results in accordance with sections 751(a)(1) and 777(i)(1) of the Act.

Dated: May 3, 2007.

David M. Spooner,

Assistant Secretary for Import Administration.

APPENDIX

I. Level of Trade

Comment 1: Statutory Requirements for a Level of Trade Adjustment

Comment 2: Pattern of Price Differences Analysis

Comment 3: Pattern of Price Differences Methodology

Comment 4: Post-Sale Price Adjustments

II. Programing

Comment 5: Level of Trade Adjustment in the Programing Language

Footnotes

1.  On March 30, 2007, the Department determined that Ivaco Rolling Mills 2004 L.P. was the successor-in-interest to Ivaco Rolling Mills L.P.; and Sivaco Ontario, a division of Sivaco Wire Group 2004 L.P., was the successor-in-interest to Ivaco Inc. See Notice of Final Results of Antidumping Duty Changed Circumstances Review: Carbon and Certain Alloy Steel Wire Rod from Canada, 72 FR 15102 (March 30, 2007).

2.  See Preliminary Results, 71 FR at 64924.

3.  See e.g., Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From France, Germany, Italy, Japan, Singapore, and the United Kingdom; Final Results of Antidumping Duty Administrative Reviews, 62 FR 2081, 2106 (January 15, 1997).