E5-2863. Stainless Steel Plate in Coils from Belgium: Preliminary Results of Antidumping Duty Administrative Review

AGENCY:

Import Administration, International Trade Administration, U.S. Department of Commerce.

SUMMARY:

The Department of Commerce (the Department) is conducting an administrative review of the antidumping duty order on stainless steel plate in coils (SSPC) from Belgium. For the period May 1, 2003, through April 30, 2004, we have preliminarily determined that U.S. sales have been made below normal value (NV). If these preliminary results are adopted in our final results, we will instruct U.S. Customs and Border Protection (CBP) to assess antidumping duties based on the difference between the constructed export price (CEP) and NV. See “Preliminary Results of Review” section of this notice. Interested parties are invited to comment on these preliminary results.

EFFECTIVE DATE:

June 3, 2005.

FOR FURTHER INFORMATION CONTACT:

Toni Page or Scott Lindsay, AD/CVD Operations, Office 6, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington DC 20230; telephone [phone] or [phone], respectively.

SUPPLEMENTARY INFORMATION:

BACKGROUND

On May 3, 2004, the Department published a notice of opportunity to request an administrative review of the antidumping duty order on SSPC from Belgium (69 FR 24117). On May 28, 2004, and June 1, 2004, the Department received timely requests for an administrative review of this order from Petitioners , Allegheny Ludlum, AK Steel Corporation, Butler Armco Independent Union, United Steelworkers of America, AFL-CIO/CLC, and Zanesville Armco Independent Organization (collectively, Petitioners), and Respondent, Ugine & ALZ Belgium (U&A Belgium), respectively. On June 30, 2004, we published a notice initiating an administrative review of the antidumping duty order on SSPC from Belgium covering one respondent, U&A Belgium. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Requests for Revocation in Part, (69 FR 39409).

On August 3, 2004, we issued a questionnaire to U&A Belgium and received their response on October 1, 2004. Supplemental questionnaires were issued on January 7, 2005, February 9, 2005, April 1, 2005, April 29, 2005, and May 9, 2005 and responses were submitted on February 4, 2005, February 17, 2005, April 21, 2005, May 6, 2005, and May 13, 2005, respectively.

On December 28, 2004, the Department extended the deadline for the preliminary results of this antidumping duty administrative review from January 31, 2005, until May 31, 2005. See Notice of Extension of Time Limit for Preliminary Results of Administrative Review: Stainless Steel Plate in Coils from Belgium, 69 FR 77727 (December 28, 2004).

We intend to issue an additional supplemental questionnaire requesting information to clarify a discrepancy between the sales database submitted by U&A Belgium and the data provided by the CBP concerning entries of subject merchandise during the period of review (POR). The response is due after the issuance of the preliminary results of this review. In accordance with 19 CFR 351.301(c), parties will have 10 days to comment on the new information. Parties will also have an opportunity to comment on any determination resulting from the analysis of this information. Any decision reached by the Department concerning this issue will be reflected in the final results of this review.

SCOPE OF THE ANTIDUMPING DUTY ORDER

The product covered by this order is certain stainless steel plate 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 plate products are flat-rolled products, 254 mm or over in width and 4.75 mm or more in thickness, in coils, and annealed or otherwise heat treated and pickled or otherwise descaled. The subject plate may also be further processed (e.g., cold-rolled, polished, etc.) provided that it maintains the specified dimensions of plate following such processing. Excluded from the scope of this order are the following: (1) Plate not in coils, (2) plate that is not annealed or otherwise heat treated and pickled or otherwise descaled, (3) sheet and strip, and (4) flat bars.

The merchandise subject to this order is currently classifiable in the Harmonized Tariff Schedule of the United States (HTSUS) at subheadings: 7219.11.00.30, 7219.11.00.60, 7219.12.00.06, 7219.12.00.21, 7219.12.00.26, 7219.12.00.51, 7219.12.00.56, 7219.12.00.66, 7219.12.00.71, 7219.12.00.81, 7219.31.00.10, 7219.90.00.10, 7219.90.00.20, 7219.90.00.25, 7219.90.00.60, 7219.90.00.80, 7220.11.00.00, 7220.20.10.10, 7220.20.10.15, 7220.20.10.60, 7220.20.10.80, 7220.20.60.05, 7220.20.60.10, 7220.20.60.15, 7220.20.60.60, 7220.20.60.80, 7220.90.00.10, 7220.90.00.15, 7220.90.00.60, and 7220.90.00.80. Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the merchandise subject to these orders is dispositive.

ANALYSIS

Product Comparisons

In accordance with section 771(16) of the Tariff Act of 1930, as amended (the Act), we considered all products produced by the respondent that are covered by the description contained in the “Scope of Antidumping Duty Order” section above and were sold in the home market during the POR, to be the foreign like product for purposes of determining appropriate product comparisons to U.S. sales. Where there were no sales of identical merchandise in the home market to compare to U.S. sales, we compared U.S. sales to the most similar foreign like product on the basis of the characteristics listed in Appendix V of the initial antidumping questionnaire we provided to U&A Belgium. See U&A Belgium Antidumping Questionnaire, dated August 3, 2004, on the record in the Central Records Unit (CRU), Room B-0999 of the Main Commerce Building.

Normal Value Comparisons

To determine whether sales of subject merchandise to the United States were made at less than fair value, we compared CEP to NV, as described in the “Constructed Export Price” and “Normal Value” sections of this notice. In accordance with section 777A(d)(2) of the Act, we calculated monthly weighted-average prices for NV and compared these to individual U.S. transaction prices.

Home Market Viability

In accordance with section 773(a)(1)(C) of the Act, to determine whether there was a sufficient volume of sales in the home market to serve as a viable basis for calculating NV, we compared U&A Belgium's volume of home market sales of the foreign like product to the volume of U.S. sales of the subject merchandise. Pursuant to section 773(a)(1)(B) and 19 CFR 351.404(b), because U&A Belgium's aggregate volume of home market sales of the foreign like product was greater than five percent of its aggregate volume of U.S. sales of the subject merchandise, we determined that the home market was viable. Moreover, there is no evidence on the record supporting a particular market situation in the exporting company's country that would not permit a proper comparison of home market and U.S. prices.

Arm's Length Test

Sales to affiliated customers in the home market not made at arm's length were excluded from our analysis. To test whether these sales were made at arm's length, we compared the starting prices of sales to affiliated and unaffiliated customers net of all movement charges, direct selling expenses, discounts, and packing. In accordance with the Department's current practice, if the prices charged to an affiliated party were, on average, between 98 and 102 percent of the prices charged to unaffiliated parties for merchandise identical or most similar to that sold to the affiliated party, we consider the sales to be at arm's length prices. See 19 CFR 351.403(c). Conversely, where the affiliated party did not pass the arm's length test, all sales to that affiliated party have been excluded from the NV calculation. See Antidumping Proceedings: Affiliated Party Sales in the Ordinary Course of Trade, 67 FR 69186 (November 15, 2002).

Constructed Export Price

In accordance with section 772(b) of the Act, CEP is the price at which the subject merchandise is first sold (or agreed to be sold) in the United States before or after the date of importation by or for the account of the producer or exporter of such merchandise, or by a seller affiliated with the producer or exporter, to a purchaser not affiliated with the producer or exporter.

As stated at 19 CFR 351.401(i), the Department will use Respondent's invoice date as the date of sale unless another date better reflects the date upon which the exporter or producer establishes the essential terms of sale. U&A Belgium reported the invoice date as the date of sale for both the U.S. market and the home market because the date of invoice reflects the date on which the material terms of sale were finalized.

For purposes of this review, U&A Belgium classified all of its export sales of SSPC to the United States as CEP sales. During the POR, U&A Belgium made sales in the United States through its U.S. affiliate Arcelor Stainless USA (AS USA), which then resold the merchandise to unaffiliated customers. Prior to November 1, 2002, U&A Belgium made sales through its U.S. affiliate, TrefilARBED. A few open but unfilled orders made prior to November 1, 2002, were finalized through TrefilARBED during this POR. See page 11 of the October 4, 2004, Questionnaire Response. The Department calculated CEP based on packed prices to customers in the United States. We made deductions from the starting price, net of discounts, for movement expenses (foreign and U.S. movement, U.S. customs duty and brokerage, and post-sale warehousing) in accordance with section 772(c)(2) of the Act and 19 CFR 351.401(e). In addition, because U&A Belgium reported CEP sales, in accordance with section 772(d)(1) of the Act, we deducted from the starting price, credit expenses, commissions, warranty expenses, and indirect selling expenses, including inventory carrying costs, incurred in the United States and Belgium and associated with economic activities in the United States.

Normal Value

In accordance with section 773(a)(1)(B)(i) of the Act, we have based NV on the price at which the foreign like product was first sold for consumption in the home market, in the usual commercial quantities and in the ordinary course of trade. In addition, because the NV level of trade (LOT) is more remote from the factory than the CEP LOT, and available data provide no appropriate basis to determine an LOT adjustment between NV and CEP, we made a CEP offset pursuant to section 773(a)(7)(B) of the Act (see “Level of Trade” section, below).

We used sales to affiliated customers only where we determined such sales were made at arm's length prices (i.e., at prices comparable to the prices at which Respondent sold identical merchandise to unaffiliated customers).

Cost of Production

The Department disregarded sales below cost of production (COP) in the last completed review. See Stainless Steel Plate in Coils From Belgium: Final Results of Antidumping Administrative Review, 69 FR 74495 (December 14, 2004). We therefore have reasonable grounds to believe or suspect, pursuant to section 773(b)(2)(A)(ii) of the Act, that sales of the foreign like product under consideration for the determination of NV in this review may have been made at prices below COP. Thus, pursuant to section 773(b)(1) of the Act, we examined whether U&A Belgium's sales in the home market were made at prices below the COP.

We compared sales of the foreign like product in the home market with model-specific COP figures for the POR. In accordance with section 773(b)(3) of the Act, we calculated COP based on the sum of the costs of materials and fabrication employed in producing the foreign like product, plus selling, general and administrative (G&A) expenses and all costs and expenses incidental to placing the foreign like product in packed condition and ready for shipment. In our sales-below-cost analysis, we relied on home market sales and COP information provided by U&A Belgium in its questionnaire responses. We made adjustments to COP and to constructed value (CV) to reflect appropriately U&A Belgium's total cost of manufacturing SSPC and various fixed overhead costs.

We compared the weighted-average model-specific COPs to home market sales of the foreign like product, as required under section 773(b) of the Act, in order to determine whether these sales had been made at prices below the COP. In determining whether to disregard home market sales made at prices below the COP, we examined whether such sales were made (1) within an extended period of time in substantial quantities, and (2) at prices which did not permit recovery of all costs within a reasonable period of time in the normal course of trade, in accordance with sections 773(b)(1)(A) and (B) of the Act. On a product-specific basis, we compared the COP to home market prices, less any movement charges, discounts, and direct and indirect selling expenses.

Pursuant to section 773(b)(2)(C) of the Act, where less than 20 percent of Respondent's sales of a given product were at prices which represent less than the COP, we did not disregard any below-cost sales of that product because the below-cost sales were not made in substantial quantities within an extended period of time. Where 20 percent or more of Respondent's sales of a given product were at prices which represented less than the COP, we determined that they were made in substantial quantities within an extended period of time, in accordance with section 773(b)(2)(C) of the Act. Because we compared prices to POR-average costs, we also determined that the below-cost prices did not permit the recovery of costs within a reasonable period of time, in accordance with section 773(b)(1)(B) of the Act. Therefore, we disregarded the below-cost sales and used the remaining sales, if any, as the basis for NV, in accordance with section 773(b)(1) of the Act.

CEP to NV Comparison

For those sales at prices above COP, we based NV on home market prices to affiliated (when made at prices determined to be arm's length) or unaffiliated parties, in accordance with 19 CFR 351.403. Home market starting prices were based on packed prices to affiliated or unaffiliated purchasers in the home market, net of discounts. We made adjustments, where applicable, for packing and movement expenses, in accordance with sections 773(a)(6)(A) and (B) of the Act. We also made adjustments for differences in costs attributable to differences in physical characteristics of the merchandise pursuant to section 773(a)(6)(C)(ii) of the Act. For comparison to CEP, we deducted home market direct selling expenses pursuant to section 773(a)(6)(C)(iii) of the Act and 19 CFR 351.410(c) of the Department's regulations.

In accordance with section 773(a)(4) of the Act, we used CV as the basis for NV when there were no above-cost contemporaneous sales of identical or similar merchandise in the comparison market. We calculated CV in accordance with section 773(e) of the Act. We included the cost of materials and fabrication, G&A, and profit. In accordance with section 773(e)(2)(A) of the Act, we based SG&A expenses and profit on the amounts incurred and realized by Respondent in connection with the production and sale of the foreign like product in the ordinary course of trade for consumption in the foreign country. For selling expenses, we used the weighted-average home market selling expenses.

Level of Trade

In accordance with section 773(a)(1)(B)(i) of the Act, to the extent practicable, we determined NV based on sales in the comparison market at the same LOT as the U.S. sales. See 19 CFR 351.412. The NV LOT is the level of the starting-price sale in the comparison market or, when NV is based on CV, the level of the sales from which we derive SG&A and profit. For EP, the U.S. LOT is also the level of the starting-price sale, which is usually from exporter to importer. For CEP, it is the level of the constructed sale from the exporter to the importer. See 19 CFR 351.412. As noted above, U&A Belgium classified all its exported sales of SSPC as CEP sales. The Department's analysis found nothing to indicate that U&A Belgium's sales were not CEP.

To determine whether NV sales are at a different LOT than CEP, we examine stages in the marketing process and selling functions along the chain of distribution between the producer and the unaffiliated customer. If the comparison-market sales are at a different LOT, and the difference affects price comparability, as manifested in a pattern of consistent price differences between the sales on which NV is based and comparison-market sales at the LOT of the export transaction, we make an LOT adjustment under section 773(a)(7)(A) of the Act. For CEP sales, if the NV level is more remote from the factory than the CEP level and there is no basis for determining whether the difference in the levels between NV and CEP affects price comparability, we adjust NV under section 773(a)(7)(B) of the Act (the CEP offset provision). See, e.g., Final Determination of Sales at Less Than Fair Value: Greenhouse Tomatoes From Canada, 67 FR 8781 (February 26, 2002); see also Notice of Final Determination of Sales at Less than Fair Value: Certain Cut-to-Length Carbon Steel Plate from South Africa, 62 FR 61731 (November 19, 1997) and Certain Hot-Rolled Flat-Rolled Carbon Quality Steel Products from Brazil; Preliminary Results of Antidumping Duty Administrative Review, 70 FR 17406 (April 6, 2005). For CEP sales, we consider only the selling activities reflected in the price after the deduction of expenses and CEP profit under section 772(d) of the Act. See Micron Technology Inc. v. United States, 243 F.3d 1301, 1314-1315 (Fed. Cir. 2001). We expect that, if the claimed LOTs are the same, the functions and activities of the seller should be similar. Conversely, if a party claims that the LOTs are different for different groups of sales, the functions and activities of the seller should be dissimilar. See Porcelain-on-Steel Cookware from Mexico: Final Results of Administrative Review, 65 FR 30068 (May 10, 2000).

In the current review, U&A Belgium reported six customer categories and one LOT in the comparison market. U&A Belgium performs a variety of distinct selling functions in the comparison market. See Appendix A-12 of the October 4, 2004, Questionnaire Response. We examined the selling functions performed for the six customer categories and found there were no differences in selling functions offered among them. See Memorandum from Toni Page to The File “Analysis for Ugine & ALZ, N.V. Belgium (U&A Belgium) for the Preliminary Results of the Fifth Administrative Review of Stainless Steel Plate in Coils (SSPC) from Belgium,” dated May 31, 2005 (“Analysis Memorandum”). Therefore, we preliminarily conclude that U&A Belgium's sales in the home market constitute one LOT.

U&A Belgium reported two channels of distribution and one LOT in the U.S. market. U&A Belgium's two channels of distribution are: 1) direct sales by AS USA of made-to-order merchandise produced by U&A Belgium, and 2) warehouse sales by AS USA of merchandise imported from U&A Belgium and stocked by AS USA. See page 22 of the October 4, 2004, Questionnaire Response. AS USA performed the majority of sales functions in both sales channels. In the instances of the few open orders that are being handled and finalized TrefilARBED, TrefilARBED performed the same selling functions otherwise handled by AS USA. See page 11 of the October 4, 2004, Questionnaire Response. We examined the selling functions performed and found that there were only minor differences with respect to the degree to which the U.S. affiliates performed those selling functions for both channels. In addition, Arcelor Stainless International and U&A Belgium perform two sales functions jointly with the U.S. affiliates in both sales channels. In light of the above, we preliminarily conclude that U&A Belgium's two U.S. sales channels constitute one LOT. See “Analysis Memorandum.”

U&A Belgium, and its affiliates, Ugine & ALZ SA and Ugine & ALZ Benelux, perform all home market selling activities. Selling functions for the U.S. market, as indicated above, are performed by AS USA, with the exception of two selling functions which AS USA shared with U&A Belgium and Arcelor Stainless International. We compared the U.S. and home market LOTs and determined that, after eliminating from consideration selling functions performed by AS USA (pursuant to section 772(d) of the Act), U&A Belgium's home market sales are made at a different, and more remote, LOT than its CEP sales. See “Analysis Memorandum.”

We therefore examined whether an LOT adjustment or CEP offset may be appropriate. In this case, U&A Belgium only sold at one LOT in the comparison market; therefore, there is no information available to determine a pattern of consistent price differences between the sales on which NV is based and the comparison market sales at the LOT of the export transaction, in accordance with the Department's normal methodology as described above. See 19 CFR 351.412(d). Further, we do not have record information which would allow us to examine pricing patterns based on Respondent's sales of other products, and there are no other respondents or other record information on which such an analysis could be based. Accordingly, because the data available do not provide an appropriate basis for making an LOT adjustment, but the LOT in the comparison market is at a more advanced stage of distribution than the LOT of the CEP transactions, we made a CEP offset adjustment in accordance with section 773(a)(7)(B) of the Act and 19 CFR 351.412(f). This offset is equal to the amount of indirect selling expenses incurred in the comparison market not exceeding the amount of indirect selling expenses and commissions deducted from the U.S. price in accordance with section 772(d)(1)(D) of the Act. For a detailed discussion, see “Analysis Memorandum.”

Currency Conversion

We made currency conversions pursuant to 19 CFR 351.415 based on rates certified by the Federal Reserve Bank.

PRELIMINARY RESULTS OF REVIEW

We preliminarily determine that for the period May 1, 2003, through April 30, 2004, the following dumping margin exists:

Manufacturer/Exporter	Margin(percent)
U&A Belgium	2.61

Duty Assessment and Cash Deposit Requirements

The Department shall determine, and CBP shall assess, antidumping duties on all appropriate entries. Pursuant to 19 CFR 351.212(b), the Department calculates an assessment rate for each importer of the subject merchandise for each respondent. The Department will issue appropriate assessment instructions directly to CBP within 15 days of publication of the final results of this review.

Furthermore, the following cash deposit rates will be effective with respect to all shipments of SSPC from Belgium entered, or withdrawn from warehouse, for consumption on or after the publication date of the final results, as provided for by section 751(a)(1) of the Act: (1) for U&A Belgium, the cash deposit rate will be the rate established in the final results of this review; (2) for previously reviewed or investigated companies not listed above, the cash deposit rate will be the company-specific rate established for the most recent period; (3) if the exporter is not a firm covered in this review, a prior review, or the less-than-fair-value (LTFV) investigation, but the manufacturer is, the cash deposit rate will be the rate established for the most recent period for the manufacturer of the subject merchandise; and (4) if neither the exporter nor the manufacturer is a firm covered by this review, a prior review, or the LTFV investigation, the cash deposit rate shall be the all others' rate established in the LTFV investigation, which is 9.86 percent. See Notice of Final Determination of Sales at Less Than Fair Value: Stainless Steel Plate in Coils From Belgium, 64 FR 15476 (March 31, 1999). These deposit rates, when imposed, shall remain in effect until publication of the final results of the next administrative review.

Public Comment

Pursuant to 19 CFR 351.224(b), the Department will disclose to parties to the proceeding any calculations performed in connection with these preliminary results within five days after the date of publication of this notice. Pursuant to 19 CFR 351.309, interested parties may submit written comments in response to these preliminary results. Unless extended by the Department, case briefs are to be submitted within 30 days after the date of publication of this notice, and rebuttal briefs, limited to arguments raised in case briefs, are to be submitted no later than five days after the time limit for filing case briefs. Parties who submit arguments in this proceeding are requested to submit with the argument: (1) a statement of the issues, and (2) a brief summary of the argument. Case and rebuttal briefs must be served on interested parties in accordance with 19 CFR 351.303(f).

Also, pursuant to 19 CFR 351.310(c), within 30 days of the date of publication of this notice, interested parties may request a public hearing on arguments to be raised in the case and rebuttal briefs. Unless the Secretary specifies otherwise, the hearing, if requested, will be held two days after the date for submission of rebuttal briefs. Parties will be notified of the time and location. The Department will publish the final results of this administrative review, including the results of its analysis of issues raised in any case or rebuttal brief, no later than 120 days after publication of these preliminary results, unless extended. See 19 CFR 351.213(h).

Notification to Importers

This notice serves as a preliminary 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 assessment of double antidumping duties.

These preliminary results of this administrative review and notice are issued and published in accordance with sections 751(a)(1) and 777(i)(1) of the Act.

Dated: May 26, 2005.

Holly A. Kuga,

Acting Assistant Secretary for Import Administration.