E6-7360. Notice of Final Results of Antidumping Duty Administrative Review: Carbon and Certain Alloy Steel Wire Rod From Mexico

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

On November 7, 2005, the Department of Commerce (the Department) published the preliminary results of its second administrative review of the antidumping duty order on carbon and certain alloy steel wire rod from Mexico. The review covers two producers of the subject merchandise. The period of review (POR) is October 1, 2003, through September 30, 2004. 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 15, 2006.

FOR FURTHER INFORMATION CONTACT:

Tipten Troidl or Jolanta Lawska, at [phone] or [phone], respectively; AD/CVD Operations, Office 3, Import Administration, International Trade Administration, U.S. Department of Commerce, 14^th Street & Constitution Avenue, NW, Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

Background

On November 7, 2005, the Department published in the Federal Register the preliminary results of the first administrative review of the antidumping duty order on carbon and certain alloy steel wire rod from Mexico. See Preliminary Results of Antidumping Duty Administrative Review: Carbon and Certain Steel Alloy Steel Wire Rod from Mexico, 70 FR 67422 (November 7, 2005) (Preliminary Results). On December 7, 2005, petitioners ¹ requested a hearing, and on December 7, 2005, Hylsa Puebla, S.A. de C.V. (Hylsa) also requested a hearing. On January 6, 2006, both petitioners and Hylsa withdrew their requests for a hearing. No other interested parties requested a hearing.

We invited parties to comment on the Preliminary Results. On December 14, 2005, we received case briefs from Siderurgica Lazaro Cardenas Las Truchas S.A. de C.V. (SICARTSA), Hysla, and petitioners. All parties submitted rebuttal briefs on December 19, 2005.

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. This 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.

This 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 the grade 1080 tire cord quality wire rod and the 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 the 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 subject to this order are currently classifiable under subheadings 7213.91.3011, 7213.91.3015, 7213.91.3092, 7213.91.4500, 7213.91.6000, 7213.99.0030, 7213.99.0090, 7227.20.0000, 7227.90.6010, 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 proceeding is dispositive.²

Analysis of Comments Received

The issues raised in the case briefs by parties to this administrative review are addressed in the Issues and Decision Memorandum to David M. Spooner, Assistant Secretary for Import Administration, from Stephen J. Claeys, Deputy Assistant Secretary (Wire Rod Decision Memorandum), which is hereby adopted by this notice. A list of the issues addressed in the Wire Rod Decision Memorandum is appended to this notice. The Wire Rod Decision Memorandum is on file in the Central Records Unit in Room B-099 of the main Commerce building, and can also be accessed directly on the Web at www.ia.ita.doc.gov/​frn. The paper copy and electronic version of the Wire Rod Decision Memorandum are identical in content.

Changes Since the Preliminary Results

Based on our analysis of comments received for Hylsa, we have: (1) Included our weighting of characteristic methodology used in prior segments which was omitted for the preliminary results; (2) made adjustments to the reported costs of direct materials (iron ore and steel scrap) from affiliated suppliers; (3) recalculated Hylsa's warranty expense ratio using a three-year history of U.S. warranty claims; (4) revised Hylsa's parent company's calculation of G&A expenses to include “corporate charges from affiliated parties;” (5) adjusted Hylsa's General & Administrative (G&A) expense ratio to account for “parent company profit sharing expenses;” (6) corrected a ministerial error in the calculation of net price for U.S. sales with billing adjustments. See May 8, 2006, Final Calculation Memorandum for Hylsa Puebla, S.A. de C.V.

Based on our analysis of comments received for SICARTSA and our finding, we have: (1) Included our weighting of characteristic methodology used in prior segments which was omitted for the preliminary results; (2) removed an improper adjustment to cost of manufacturing; (3) included the variable for debit notes in the programs; (4) corrected a syntax error in summing home-market credit expenses; (5) corrected an error in which we improperly excluded partially unpaid accounts receivables; (6) renamed a file of home-market selling expenses used for constructed value which is imported from the comparison market program to the margin program; (7) removed an incorrect adjustment made to SICARTSA's general and administrative expense; (8) used the invoice date as the date of sale in the comparison market program; and (9) applied a per-unit assessment rate. See May 8, 2006, Final Calculation Memorandum for Siderurgica Lazaro Cardenas Las Truchas (SICARTSA).

Both Hylsa's and SICARTSA's adjustments are discussed in detail in the accompanying Wire Rod Decision Memorandum.

Final Results of Review

As a result of our review, we determine that the following weighted-average margins exist for the period October 01, 2003, through September 30, 2004:

Producer	Weighted-Average Margin (Percentage)
Hylsa	1.81
SICARTSA	1.26

Assessment

The Department will determine, and CBP shall assess, antidumping duties on all appropriate entries, pursuant to 19 CFR 351.212(b). For Hylsa, the Department has 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. For SICARTSA, the Department has calculated importer-specific assessment rates on a per-unit basis. Specifically, to calculate the assessment rate on a per-unit basis, the Department divided the total dumping margin for SICARTSA (calculated as the difference between normal value and export price) for each importer by the total quantity of subject merchandise sold to that importer during the POR. Where the assessment rate is above de minimis, we will instruct CBP to assess duties on all entries of subject merchandise by that importer. The Department will issue appropriate assessment instructions directly to CBP within 15 days of publication of these final results of review.

Cash Deposits

Furthermore, the following deposit requirements will be effective upon publication of the final results of this administrative review for all shipments of carbon and certain alloy steel wire rod from Mexico entered, or withdrawn from warehouse, for consumption on or after the publication date of these final results, as provided by section 751(a) of the Tariff Act of 1930, as amended (the Act): (1) For SICARTSA and Hylsa, the cash deposit rate will be the rate listed above; (2) for merchandise exported by producers or exporters not covered in this review but covered a prior segment, the cash deposit rate will continue to be the company-specific rate from the final results; (3) if the exporter is not a firm covered in this review or a prior segment, but the producer is, the cash deposit rate will be that established for the producer of the merchandise in these final results of review or in the final determination; and (4) if neither the exporter nor the producer is a firm covered in this review or the investigation, the cash deposit rate will be 20.11 percent, the “All Others” rate established in the less-than-fair-value investigation. These deposit requirements shall remain in effect until publication of the final results of the next administrative review.

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 the subsequent increase in antidumping duties by the amount of antidumping duties reimbursed.

This notice also is the only reminder to parties subject to 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. 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 and notice in accordance with sections 751(a)(1) and 777(i)(1) of the Act.

Dated: May 8, 2006.

David M. Spooner,

Assistant Secretary for Import Administration.

Appendix

I. List of Comments:

Hylsa Puebla S.A. (Hysla)

Comment 1: Treatment of Home-Market Sales of Redirected Merchandise

Comment 2: Recalculation of Hylsa's Warranty Expenses

Comment 3: Hylsa's Cost of Materials from Affiliated Suppliers - Major Input Rule

Comment 4: Treatment of Sales with Negative Dumping Margins (“Zeroing”)

Comment 5: Managerial Labor Costs

Comment 6: Parent Company General and Administrative (“G&A”) Expenses

Comment 7: Parent Company Employee Profit Sharing Expenses

Comment 8: Use of Monthly Costs for Profit Calculations

Comment 9: Hylsa's Home-Market Credit Expenses

Comment 10: Error in the Calculation of Net Price for U.S. Sales with Billing Adjustments

Siderurgica Lazaro Cardenas las Truchas, S.A. de C.V. (SICARTSA)

Comment 11. Major Input of Iron Ore and Ferrous Scrap

Comment 12: Credit Expense using U.S. Dollar Interest Rates

Comment 13: Assessment Rate

Comment 14: Adjustment to SICARTSA's G&A Expenses

Comment 15: Home-Market Discounts and Rebates

Comment 16: Home-Market Credit Expense

Comment 17: Treatment of Unpaid Accounts Receivable

Comment 18: Incorrect File Name

Footnotes

1.  Gerdau Ameristeel US Inc., ISG Georgetown Inc., Keystone Consolidated Industries, Inc., and North Star Steel Texas, Inc.

2.  Effective January 1, 2006, U.S. Customs and Border Protection (CBP) reclassified certain HTSUS numbers related to the subject merchandise. See http: //hotdocs.usitc.gov/ tariff_chapters_current/toc.html.