[Federal Register Volume 63, Number 132 (Friday, July 10, 1998)]
[Notices]
[Pages 37320-37328]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-18343]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-122-822, A-122-823]
Certain Corrosion-Resistant Carbon Steel Flat Products and
Certain Cut-to-Length Carbon Steel Plate From Canada: Preliminary
Results of Antidumping Duty Administrative Reviews and Intent To Revoke
in-Part
AGENCY: Import Administration, International Trade Administration, U.S.
Department of Commerce.
ACTION: Notice of preliminary results of the antidumping duty
administrative review of certain corrosion-resistant carbon steel flat
products and certain cut-to-length carbon steel plate from Canada.
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SUMMARY: In response to requests from interested parties, the
Department of Commerce (the Department) is conducting administrative
reviews of the antidumping duty orders on certain corrosion-resistant
carbon steel flat products and certain cut-to-length carbon steel plate
from Canada. These reviews cover six manufacturers/exporters of the
subject merchandise to the United States (three manufacturers/exporters
of corrosion resistant steel and four manufacturers/exporters of cut-
to-length steel plate), and the period August 1, 1996 through July 31,
1997.
We have preliminarily determined that sales have been made below
normal value (``NV'') by various companies subject to these reviews. If
these preliminary results are adopted in our final results of these
administrative reviews, we will instruct the U.S. Customs Service to
assess antidumping duties based on the difference between the export
price (``EP'') or constructed export price (``CEP'') and the NV.
EFFECTIVE DATE: July 10, 1998.
FOR FURTHER INFORMATION CONTACT: Lyn Baranowski (Dofasco Inc. and
Sorevco Inc. (collectively, ``Dofasco'')), Eric Scheier (Continuous
Colour Coat (``CCC'')), Lesley Stagliano (Algoma Steel, Inc.
(``Algoma'')), Gideon Katz (Gerdau MRM Steel (``MRM'') and A.J. Forsyth
and Co., Ltd. (``Forsyth'')), N. Gerard Zapiain (Stelco, Inc.
(``Stelco'')), or Maureen Flannery, Import Administration,
International Trade Administration, U.S. Department of Commerce, 14th
Street and Constitution Avenue, N.W., Washington, DC 20230; telephone:
(202) 482-4733.
SUPPLEMENTARY INFORMATION:
The Applicable Statute
Unless otherwise indicated, all citations to the Tariff Act of
1930, as amended (the Act), are to the provisions effective January 1,
1995, the effective date of the amendments made to the Act by the
Uruguay Round Agreements Act (URAA). In addition, unless otherwise
indicated, all citations to the Department's regulations are to 19 CFR
part 351 (62 FR 27379, May 19, 1997).
Background
On August 19, 1993, the Department published in the Federal
Register (58 FR 44162) the antidumping duty orders on certain
corrosion-resistant carbon steel flat products and certain cut-to-
length carbon steel plate from Canada. On August 12, 1997, Forsyth
requested a review of its exports of cut-to-length steel plate. On
August 13, 1997, CCC requested a review of its exports of corrosion-
resistant steel. On August 28, 1997, Algoma requested a review of its
exports of cut-to-length steel plate and that the Department revoke the
order on cut-to-length steel plate with regard to Algoma. On August 29,
1997, the following companies also requested reviews for their exports
of corrosion-resistant carbon steel flat products: Dofasco (corrosion-
resistant steel), Stelco (corrosion-resistant steel and cut-to-length
steel plate), and MRM (cut-to-length steel plate). On August 29, 1997,
Bethlehem Steel Corporation, U.S. Steel Group (a Unit of USX
Corporation), Inland Steel Industries Inc., AK Steel Corporation, LTV
Steel Co., Inc., and National Steel Corporation, petitioners, requested
reviews of CCC, Dofasco, and Stelco on corrosion-resistant carbon steel
flat products. On September 8, 1997, Stelco submitted an addendum to
its August 29, 1997 submission, requesting that the Department revoke
the orders on corrosion-resistant steel and carbon steel plate with
regard to Stelco, pursuant to Section 351.222(b) of the Department's
regulations. On September 25, 1997, in accordance with Section 751 of
the Act, we published a notice of initiation of administrative reviews
of these orders for the period August 1, 1996 through July 31, 1997 (62
FR 50292).
Under section 751(a)(3)(A) of the Act, the Department may extend
the deadline for completion of an administrative review if it
determines that it is not practicable to complete the review within the
statutory time limit of 365 days. On March 19, 1998, the Department
published a notice of extension of the time limit for the preliminary
results in the review to July 3, 1998. See Corrosion-Resistant Carbon
Steel Flat Products and Cut-to-Length Carbon Steel Plate: Extension of
Time Limits for Preliminary Results of Antidumping Administrative
Review, 63 FR 13990.
The Department is conducting these reviews in accordance with
section 751(a) of the Act.
Scope of Reviews
The products covered by these administrative reviews constitute two
separate ``classes or kinds'' of merchandise: (1) certain corrosion-
resistant steel and (2) certain cut-to-length plate.
The first class or kind, certain corrosion-resistant steel,
includes flat-rolled carbon steel products of rectangular shape, either
clad, plated, or coated with corrosion-resistant metals such as zinc,
aluminum, or zinc-,
[[Page 37321]]
aluminum-, nickel-or iron-based alloys, whether or not corrugated or
painted, varnished or coated with plastics or other nonmetallic
substances in addition to the metallic coating, in coils (whether or
not in successively superimposed layers) and of a width of 0.5 inch or
greater, or in straight lengths which, if of a thickness less than 4.75
millimeters, are of a width of 0.5 inch or greater and which measures
at least 10 times the thickness or if of a thickness of 4.75
millimeters or more are of a width which exceeds 150 millimeters and
measures at least twice the thickness, as currently classifiable in the
Harmonized Tariff Schedule (HTS) under item numbers 7210.30.0030,
7210.30.0060, 7210.41.0000, 7210.49.0030, 7210.49.0090, 7210.61.0000,
7210.69.0000, 7210.70.6030, 7210.70.6060, 7210.70.6090, 7210.90.1000,
7210.90.6000, 7210.90.9000, 7212.20.0000, 7212.30.1030, 7212.30.1090,
7212.30.3000, 7212.30.5000, 7212.40.1000, 7212.40.5000, 7212.50.0000,
7212.60.0000, 7215.90.1000, 7215.90.3000, 7215.90.5000, 7217.20.1500,
7217.30.1530, 7217.30.1560, 7217.90.1000, 7217.90.5030, 7217.90.5060,
and 7217.90.5090. Included are flat-rolled products of non-rectangular
cross-section where such cross-section is achieved subsequent to the
rolling process (i.e., products which have been worked after rolling)--
for example, products which have been beveled or rounded at the edges.
Excluded are flat-rolled steel products either plated or coated with
tin, lead, chromium, chromium oxides, both tin and lead (``terne
plate''), or both chromium and chromium oxides (``tin-free steel''),
whether or not painted, varnished or coated with plastics or other
nonmetallic substances in addition to the metallic coating. Also
excluded are clad products in straight lengths of 0.1875 inch or more
in composite thickness and of a width which exceeds 150 millimeters and
measures at least twice the thickness. Also excluded are certain clad
stainless flat-rolled products, which are three-layered corrosion-
resistant carbon steel flat-rolled products less than 4.75 millimeters
in composite thickness that consist of a carbon steel flat-rolled
product clad on both sides with stainless steel in a 20%-60%-20% ratio.
The HTS item numbers are provided for convenience and Customs purposes.
The written description remains dispositive of the scope of this
review.
The second class or kind, certain cut-to-length plate, includes
hot-rolled carbon steel universal mill plates (i.e., flat-rolled
products rolled on four faces or in a closed box pass, of a width
exceeding 150 millimeters but not exceeding 1,250 millimeters and of a
thickness of not less than 4 millimeters, not in coils and without
patterns in relief), of rectangular shape, neither clad, plated nor
coated with metal, whether or not painted, varnished, or coated with
plastics or other nonmetallic substances; and certain hot-rolled carbon
steel flat-rolled products in straight lengths, of rectangular shape,
hot-rolled, neither clad, plated, nor coated with metal, whether or not
painted, varnished, or coated with plastics or other nonmetallic
substances, 4.75 millimeters or more in thickness and of a width which
exceeds 150 millimeters and measures at least twice the thickness, as
currently classifiable in the HTS under item numbers 7208.40.3030,
7208.40.3060, 7208.51.0030, 7208.51.0045, 7208.51.0060, 7208.52.0000,
7208.53.0000, 7208.90.0000, 7210.70.3000, 7210.90.9000, 7211.13.0000,
7211.14.0030, 7211.14.0045, 7211.90.0000, 7212.40.1000, 7212.40.5000,
and 7212.50.0000. Included are flat-rolled products of non-rectangular
cross-section where such cross-section is achieved subsequent to the
rolling process (i.e., products which have been worked after rolling)--
for example, products which have been beveled or rounded at the edges.
Excluded is grade X-70 plate. The HTS item numbers are provided for
convenience and Customs purposes. The written description remains
dispositive of the scope of this review.
Verification
As provided in section 782(i) of the Act, we verified information
provided by Algoma (cost and sales), Dofasco (sales), and Stelco
(sales, cost and further manufacturing) using standard verification
procedures, including on-site inspection of the manufacturer's
facilities and the examination of relevant sales and financial records.
Our verification results are outlined in the public versions of the
verification reports.
Product Comparisons
In accordance with section 771(16) of the Act, we considered all
products produced by the respondent, covered by the description in the
Scope of the Review section, above, and sold in the home market during
the period of review (POR), to be foreign like products 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
Department's September 19, 1997 antidumping questionnaire.
Fair Value Comparisons
To determine whether sales of subject merchandise to the United
States were made at less than fair value, we compared the EP or CEP to
the NV, as described in the ``United States 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.
Interested Party Comments
On June 22, 1998, the petitioner submitted comments regarding
Stelco and CCC. On June 23, 1998, Forsyth submitted comments. Because
of the lateness of these submissions, we are not able to consider them
for these preliminary results, but will consider them for the final
results.
Intent To Revoke
On August 28, 1997, Algoma submitted a request, in accordance with
19 CFR 351.222(b), that the Department revoke the order covering cut-
to-length carbon steel plate from Canada with respect to its sales of
this merchandise. On August 29, 1997, Stelco submitted a request that
the Department revoke the orders covering cut-to-length carbon steel
plate and corrosion-resistant steel from Canada with respect to its
sales of this merchandise.
In accordance with 19 CFR 351.222(b)(2)(iii), these requests were
accompanied by certifications from Algoma and Stelco that they had not
sold the subject merchandise at less than NV for a three-year period,
including this review period, and would not do so in the future. Algoma
and Stelco also agreed to its immediate reinstatement in the relevant
antidumping order, as long as any firm is subject to the order, if the
Department concludes under 19 CFR 351.216 that, subsequent to
revocation, it sold the subject merchandise at less than NV.
The Department conducted verifications of Algoma's and of Stelco's
responses for this period of review. In the two prior reviews of this
order, we determined that Algoma and Stelco sold cut-to-length carbon
steel plate from Canada at not less than NV or at de
[[Page 37322]]
minimis margins. We preliminarily determine that both Algoma and Stelco
sold cut-to-length carbon steel plate at not less than NV during this
review period. Based on Algoma's and on Stelco's three consecutive
years of zero or de minimis margins and the absence of evidence to the
contrary, we preliminarily determine that it is not likely that either
Algoma or Stelco will in the future sell cut-to-length carbon steel
plate at less than NV. Therefore, if these preliminary findings are
affirmed in our final results, we intend to revoke the order on cut-to-
length carbon steel plate from Canada with respect to Algoma and to
Stelco.
In the last two administrative reviews, we determined that Stelco
sold corrosion-resistant steel at less than fair value. See Certain
Corrosion-Resistant Carbon Steel Flat Products and Certain Cut-to-
Length Carbon Steel Plate From Canada: Final Results of Antidumping
Duty Administrative Reviews, 62 FR 12725 (March 16, 1998) and Certain
Corrosion-Resistant Carbon Steel Flat Products and Certain Cut-to-
Length Carbon Steel Plate From Canada: Final Results of Antidumping
Duty Administrative Reviews, 62 FR 18448 (April 15, 1997). Although the
final results of the second and third reviews are subject to
litigation, that litigation is not yet complete. Additionally, as
discussed below, we have preliminarily determined that Stelco sold
corrosion-resistant steel at less-than-fair-value (LTFV) during the
period covered by this review. Consequently, we preliminarily determine
that because Stelco does not have three consecutive years of zero or de
minimis margins on corrosion-resistant steel, Stelco is not eligible
for revocation of the order on corrosion-resistant steel under 19 CFR
351.222(b).
United States Price
For calculation of the price to the United States, we used EP when
the subject merchandise was sold directly or indirectly to the first
unaffiliated purchaser in the United States prior to importation and
constructed export price (CEP) was not otherwise warranted, based on
facts on the record. We used CEP for certain sales by Stelco. See the
subsection of ``United States Price'' titled ``Stelco.''
Algoma
The Department calculated EP for Algoma based on packed, prepaid or
delivered prices to customers in the United States. We made adjustments
to the starting price, net of billing adjustments, for movement
expenses (foreign and U.S. movement, brokerage and handling, and U.S.
Customs duties), in accordance with section 772(c)(2) of the Act.
We used Algoma's date of invoice as the date of sale for both U.S.
sales and home market sales, where applicable, in accordance with 19
CFR 351.401(i), and the Department's standard practice. See, e.g.,
Porcelain-on-Steel Cookware from Mexico; Preliminary Results of
Antidumping Duty Administrative Review, 62 FR 4723, 4725 (January 31,
1997). For further discussion of this issue, see Memorandum to the
File: Analysis Memorandum for the Preliminary Results of Review for
Algoma, July 2, 1998.
CCC
The Department calculated EP for CCC based on packed, prepaid or
delivered prices to customers in the United States.
We made deductions to the starting price, net of discounts and
price adjustments, for movement expenses (foreign and U.S. movement,
brokerage and handling, and U.S. Customs duties), in accordance with
section 772(c)(2). Although the record does not contain pre-sale
agreements for certain payments which CCC reported as ``credit notes,''
based on CCC's information we have determined to treat these payments
as price adjustments which should be excluded from the starting price.
See Memorandum to the File: Analysis Memorandum for the Preliminary
Results of Review for CCC, July 2, 1998.
Dofasco
For purposes of these reviews, we treated Dofasco, Inc. and
Sorevco, Inc. as one respondent, as we have done in prior segments of
the proceeding. See, e.g., Certain Corrosion-Resistant Carbon Steel
Flat Products from Canada: Final Determination of Sales at Less than
Fair Value, 58 FR 37099 (1993), and Final Results of Antidumping Duty
Administrative Review: Certain Corrosion-Resistant Carbon Steel Flat
Products from Canada, 63 FR 12725 (March 16, 1998). The Department
calculated EP for Dofasco based on packed prices to customers in the
United States.
We made deductions to the starting price, net of discounts and
rebates, 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).
As discussed in prior reviews, certain Dofasco sales have undergone
minor further processing in the United States as a condition of sale to
the customer. See Certain Corrosion-Resistant Carbon Steel Flat
Products and Certain Cut-to-Length Carbon Steel Plate From Canada:
Final Results of Antidumping Duty Administrative Reviews, 62 FR 18461,
(April 15, 1997). In order to determine the value of subject
merchandise at the time of exportation of such merchandise to the
United States, the Department has deducted the price charged to Dofasco
for this minor further processing from gross unit price to determine
U.S. price.
It is the Department's current practice normally to use the invoice
date as the date of sale; we may, however, use a date other than the
invoice date if we are satisfied that a different date better reflects
the date on which the exporter or producer establishes the material
terms of sale. See 19 CFR 351.401(i) (62 FR at 27411).
The questionnaire we sent to the respondents on September 19, 1998
instructed them to report the date of invoice as the date of sale; it
also stated, however, for EP sales, that ``(t)he date of sale cannot
occur after the date of shipment.'' In this review, Dofasco's date of
shipment in many instances preceded the date of invoice, and therefore
we cannot use the date of invoice as the new regulations prescribe.
Accordingly, as allowed by the exception set forth in section
351.401(i) of the regulations, we used the dates of sale described
below. These sale dates reflect the dates on which the exporter or
producer established the material terms of sale.
We used the date of order acknowledgment as date of sale, as
reported by Dofasco, Inc., for all Dofasco, Inc. sales in both the U.S.
market and the home market, except for sales made pursuant to long-term
contracts. For Dofasco, Inc.'s sales made pursuant to long-term
contracts, we used date of the contract as date of sale.
We used the date of order confirmation as the date of sale, as
reported by Sorevco, Inc., for all Sorevco, Inc. sales in the U.S. and
the home market, except that when Sorevco shipped more merchandise than
the customer originally ordered, and such overages were in excess of
accepted industry tolerances. Lacking any evidence of the precise date
after the date of order confirmation on which the quantity was changed,
we used date of shipment as date of sale for the excess merchandise.
MRM
The Department calculated EP for MRM based on packed, prepaid or
delivered prices to customers in the United States. We made deductions
to the starting price for movement expenses (foreign and U.S. movement,
[[Page 37323]]
brokerage and handling, and U.S. Customs duties) pursuant to section
772(c)(2) of the Act.
We used MRM's date of invoice as the date of sale for its U.S.
sales in accordance with the Department's standard practice.
Stelco
Corrosion-resistant steel: We calculated EP or CEP, as appropriate,
based on the packed price to unaffiliated purchasers in, or for
exportation to, the United States. We made deductions to the starting
price for movement expenses, including foreign and U.S. freight,
brokerage and handling, and U.S. Customs duties, in accordance with
section 772(c)(2) of the Act. In accordance with sections 772(d)(1) and
(2) of the Act, for CEP sales, we also deducted credit expenses,
technical service expenses, indirect selling expenses, inventory
carrying costs, U.S. inland freight incurred by Stelco USA (``SUSA''),
and further manufacturing costs incurred by SUSA. Finally, we made an
adjustment for an amount of profit allocated to these expenses, when
incurred in connection with economic activity in the United States, in
accordance with section 772(d)(3) of the Act.
We used Stelco's date of invoice as the date of sale for both EP
and CEP corrosion-resistant sales in accordance with the Department's
standard practice.
Plate: We calculated EP based on the packed price to unaffiliated
purchasers in, or for exportation to, the United States. There were no
CEP sales of plate. We made deductions for movement expenses, including
foreign and U.S. movement, brokerage and handling, and U.S. Customs
duty, in accordance with section 772(c)(2) of the Act. We used Stelco's
date of invoice as the date of sale for EP plate sales in accordance
with the Department's standard practice.
Normal Value
The Department determines the viability of the home market as the
comparison market by comparing the aggregate quantity of home market
and U.S. sales. We found that each company's quantity of sales in its
home market exceeded five percent of its sales to the United States for
the relevant class or kind of merchandise. Moreover, there is no
evidence on the record supporting a particular market situation in the
exporting country that would not permit a proper comparison of home
market and U.S. prices. We, therefore, have determined that each
company's home market sales are viable for purposes of comparison with
sales of the subject merchandise to the United States, pursuant to
section 773(a)(1)(C) of the Act. Therefore, in accordance with section
773(a)(1)(B)(i) of the Act, we 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,
at the same level of trade as the EP sale.
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, SG&A expenses, 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 the 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.
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
prices at which the firm sold identical merchandise to unaffiliated
customers.
For both classes or kinds of merchandise under review and for all
respondents with the exception of Forsyth, the Department disregarded
sales below the cost of production (``COP'') in the last completed
review as of the date of the issuance of the antidumping questionnaire
(see Certain Corrosion-Resistant Carbon Steel Flat Products and Certain
Cut-to-Length Carbon Steel Plate from Canada: Final Results of
Antidumping Duty Administrative Reviews, 62 FR 18448 (April 15, 1997)).
We therefore had 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 the COP. Pursuant to section
773(b)(1) of the Act, we initiated COP investigations of sales by all
respondents, except Forsyth, in the home market.
We compared sales of the foreign like product in the home market
with the model-specific cost of production figure for the POR
(``COP''). In accordance with section 773(b)(3) of the Act, we
calculated the COP based on the sum of the costs of materials and
fabrication employed in producing the foreign like product plus
selling, general and administrative (SG&A) expenses and all costs and
expenses incidental to placing the foreign like product in condition
packed and ready for shipment. In our COP analysis, we used home market
sales and COP information provided by each respondent in its
questionnaire responses.
After calculating COP, we tested whether home market sales of
subject merchandise were made at prices below COP and, if so, whether
the below-cost sales were made within an extended period of time in
substantial quantities and at prices that did not permit recovery of
all costs within a reasonable period of time. Because each individual
price was compared against the POR-long average COP, any sales that
were below cost were also not at prices which permitted cost recovery
within a reasonable period of time. We compared model-specific COPs to
the reported home market prices less any applicable movement charges,
discounts, and rebates.
Pursuant to section 773(b)(2)(C) of the Act, where less than 20
percent of a respondent's sales of a given model were at prices less
than COP, we did not disregard any below-cost sales of that model
because the below-cost sales were not made in substantial quantities
within an extended period of time. Where 20 percent or more of a
respondent's sales of a given model during the POR were at prices less
than the weighted-average COPs for the POR, we disregarded the below-
cost sales because they were made within an extended period of time in
substantial quantities in accordance with sections 773(b)(2) (B) and
(C) of the Act, and were at prices which would not permit recovery of
all costs within a reasonable period of time in accordance with section
773(b)(2)(D) of the Act. Based on this test, we disregarded below-cost
sales with respect to all companies and classes or kinds of
merchandise.
In accordance with section 773(a)(1)(B)(i) of the Act, where
possible, we based NV on sales at the same level of trade (``LOT'') as
the U.S. price. See the Level of Trade Section below.
The Department determined in the final results of the last
administrative review (Certain Corrosion-Resistant Carbon Steel Flat
Products and Certain Cut-to-Length Carbon Steel Plate From Canada:
Final Results of Antidumping Duty Administrative Reviews, 62 FR 12725,
March 9, 1998) that it would be inappropriate to resort directly to
constructed value (CV), in lieu of foreign market sales, as the basis
for NV if the Department finds foreign market
[[Page 37324]]
sales of merchandise identical or most similar to that sold in the
United States to be outside the ``ordinary course of trade.''
Therefore, we will match a given U.S. sale to foreign market sales of
the next most similar model when all sales of the most comparable model
are below cost. The Department will use CV as the basis for NV only
when there are no above-cost sales that are otherwise suitable for
comparison. Therefore, in this proceeding, when making comparisons in
accordance with section 771(16) of the Act, we considered all products
sold in the home market as described in the ``Scope of Review'' section
of this notice, above, that were in the ordinary course of trade for
purposes of determining appropriate product comparisons to U.S. sales.
Where there were no sales of identical merchandise in the home market
made in the ordinary course of trade to compare to U.S. sales, we
compared U.S. sales to sales of the most similar foreign like product
made in the ordinary course of trade, based on the characteristics
listed in Sections B and C of our antidumping questionnaire. This
methodology is pursuant to the ruling of the Court of Appeals for the
Federal Circuit in CEMEX v. United States, 1998 WL 3626 (Fed Cir.
1998), and has been implemented to the extent that the data on the
record permitted.
Where appropriate, we made adjustments to NV for differences in
circumstances of sale (COS), in accordance with section 773(a)(6) and
(8) of the Act and 19 CFR 351.410. For comparisons to EP, we made COS
adjustments by deducting home market direct selling expenses and adding
U.S. direct selling expenses. We also made adjustments, where
applicable for home market indirect selling expenses to offset U.S.
commissions in EP pursuant to 19 CFR section 351.410(b). For
comparisons to CEP, we made COS adjustments by deducting home market
direct selling expenses pursuant to section 772(d) of the Act.
Algoma
For those models for which there was a sufficient quantity of sales
at prices above COP, we based NV on home market prices to unaffiliated
purchasers (Algoma made no home market sales to affiliated parties), in
accordance with 19 CFR 351.403. Home market prices were based on the
packed, ex-factory or delivered prices to unaffiliated purchasers in
the home market.
We calculated the starting price net of discounts, rebates, and
post-sale adjustments, where applicable. 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 cost attributable to differences in physical
characteristics of the merchandise pursuant to section 773(a)(6)(C)(ii)
of the Act and for differences in COS in accordance with
773(a)(6)(C)(iii) of the Act and 19 CFR 351.410. For comparison to EP,
we made COS adjustments by deducting home market direct selling
expenses (credit and warranty expenses) and adding U.S. direct selling
expenses (credit and warranty expenses). When comparisons were made to
EP sales on which commissions were paid, but no commissions were paid
on the foreign market sales, we made adjustments for home market
indirect selling expenses to offset these U.S. commissions pursuant to
19 CFR section 351.410(e).
MRM
For those models for which there was a sufficient quantity of sales
at prices above COP, we based NV on home market prices to unaffiliated
purchasers (MRM made no home market sales to affiliated parties), in
accordance with 19 FR 351.403. Home market prices were based on the
packed, ex-factory or delivered prices to unaffiliated purchasers in
the home market.
We used a starting price net of rebates, where applicable. We made
adjustments, where applicable, for movement expenses in accordance with
sections 773(a)(6) (A) and (B) of the Act. For comparison to EP, we
made COS adjustments by deducting home market direct selling expenses
(credit expenses) and adding U.S. direct selling expenses (credit
expense). When comparisons were made to EP sales on which commissions
were paid, but no commissions were paid on the foreign market sales, we
made adjustments for home market indirect selling expenses to offset
these U.S. commissions pursuant to 19 CFR section 351.410(e).
CCC
For those models for which there was a sufficient quantity of sales
at prices above COP, we based NV on home market prices to unaffiliated
parties, in accordance with 19 CFR 351.403. Home market starting prices
were based on the packed, ex-factory or delivered prices to
unaffiliated purchasers in the home market, net of discounts and price
adjustments, where applicable. Although the record does not contain
pre-sale agreements for certain payments which CCC reported as ``credit
notes,'' based on CCC's information we have determined to treat these
payments as price adjustments which should be excluded from the
starting price. 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 cost attributable
to differences in physical characteristics of the merchandise pursuant
to section 773(a)(6)(C)(ii) of the Act and for COS differences in
accordance with 773(a)(6)(C)(iii) of the Act and 19 CFR 351.410. For
comparison to EP, we made COS adjustments by deducting home market
direct selling expenses (credit) and adding U.S. direct selling
expenses (credit). When comparisons were made where commissions were
paid on EP sales, but no commissions were paid on the foreign market
sales, we made adjustments for home market indirect selling expenses to
offset U.S. commissions pursuant to 19 CFR section 351.410(e).
Dofasco
For those models for which there was a sufficient quantity of sales
at prices above COP, we based NV on home market prices to affiliated
parties (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 the packed, ex-factory or delivered
prices to affiliated or unaffiliated purchasers in the home market, net
of discounts and rebates, where applicable. 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 cost attributable to differences in physical
characteristics of the merchandise pursuant to section 773(a)(6)(C)(ii)
of the Act and for COS differences in accordance with 773(a)(6)(C)(iii)
of the Act and 19 CFR 351.410. For comparison to EP, we made COS
adjustments by deducting home market direct selling expenses (credit,
royalties and warranty expenses) and adding U.S. direct selling
expenses (credit, royalties and warranty expenses). When comparisons
were made where commissions were paid on EP sales, but no commissions
were made on foreign market sales, we made adjustments for home market
indirect selling expenses to offset U.S. commissions pursuant to 19 CFR
351.410(e).
We denied Dofasco's requested start-up adjustment to its costs, as
we determined that Dofasco did not meet the statutory criteria for
granting an adjustment. Under section 773(f)(1)(C)(ii) of the Act,
Commerce may make an adjustment for start-up
[[Page 37325]]
costs only if the following two conditions are satisfied: (1) A company
is using new production facilities or producing a new product that
requires substantial additional investment, and (2) production levels
are limited by technical factors associated with the initial phase of
commercial production. The Statement of Administrative Action (``SAA'')
to the URAA states that ``any determination of the appropriate startup
period involves a fact-intensive inquiry.'' This includes a
consideration of ``factors unrelated to startup operations that may
have affected the volume of production processed, such as demand,
seasonality, or business cycles.'' The SAA further states that the
``start-up [period] will be considered to end at the time the level of
commercial production characteristic of the merchandise, producer, or
industry concerned is achieved. The attainment of peak production
levels will not be the standard for identifying the end of the start-up
period, because the start-up period may end well before a company
achieves optimum capacity utilization.'' SAA at 836. Moreover, ``[t]o
determine when a company reaches commercial production levels, Commerce
will consider first the actual production experience of the merchandise
in question. Production levels will be based on units processed.'' SAA
at 836 (166).
In the instant case, we agree with Dofasco that the construction of
the new Electric Arc Furnace (EAF) facility constitutes a new
production facility.
In order to determine the duration of the initial phase of
commercial production, we examined Dofasco's reported production starts
at the EAF. Our determination of an appropriate startup period was
based, in large part, on a review of scrap starts at the new facility
during the POR, which represents the best measure of the facility's
ability to produce at commercial production levels. We concluded that
the number of scrap starts during the first two months (September and
October 1996) did not meet commercial production levels characteristic
of the producer, but that commercial production levels were reached by
November 1996.
However, we have determined that the reported technical factors
which Dofasco claims limited production during this two-month period
are insufficient to constitute what the Department believes to be
technical factors. The kind of chronic production problems experienced
by Dofasco do not constitute ``technical factors'' which are unique to
a startup operation. As such, we have not granted Dofasco a startup
adjustment for the POR. For further details, see Memorandum to the
File: Analysis Memorandum for the Preliminary Results of Review for
Dofasco, July 2, 1998.
Stelco
For those models for which there was a sufficient quantity of sales
at prices above COP, we based NV on home market prices to affiliated
(when made at prices determined to be arms-length) or unaffiliated
parties, in accordance with 19 CFR 351.403. Home market starting prices
were based on the packed, ex-factory or delivered prices to affiliated
or unaffiliated purchasers in the home market net of discounts and
rebates. 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 cost attributable
to differences in physical characteristics of the merchandise pursuant
to section 773(a)(6)(C)(ii) of the Act and for COS differences in
accordance with 773(a)(6)(C)(iii) of the Act and 19 CFR 351.410.
Corrosion resistant steel: We adjusted home market prices for
interest revenue on certain sales. For comparison to EP, we made COS
adjustments by deducting home market direct selling expenses (credit,
warranties, advertising and technical services) and adding U.S. direct
selling expenses (credit, advertising, warranties and technical
services). For comparison to CEP, we made COS adjustments by deducting
home market direct selling expenses pursuant to section
773(a)(6)(C)(iii) of the Act and 19 CFR 351.410.
Plate: For comparison to EP, we made COS adjustments by deducting
home market direct selling expenses (credit, warranties, advertising,
commissions, and technical services) and adding U.S. direct selling
expenses (credit, warranties, advertising and technical services). We
offset home market commissions by the amount of indirect selling
expenses incurred on the U.S. sale, up to the amount of the home market
commission.
Level of Trade (``LOT'')
In accordance with section 773(a)(1)(B) of the Act, to the extent
practicable, we determine NV based on sales in the comparison market at
the same level of trade (``LOT'') as the EP or CEP transaction. The NV
LOT is that of the starting-price sales in the comparison market or,
when NV is based on constructed value (``CV''), that of the sales from
which we derive selling, general and administrative (``SG&A'') expenses
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.
To determine whether NV sales are at a different LOT than EP or
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. Finally, 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 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).
In the present review, only Dofasco, Forsyth, and CCC claimed that
more than one LOT existed; none of the respondents requested a LOT
adjustment. To evaluate LOTs, we examined information regarding the
distribution systems in both the U.S. and Canadian markets, including
the selling functions, classes of customer, and selling expenses for
each respondent. Forsyth's claim of LOT differences is discussed below
in the Facts Available section.
Algoma
In both the home market and the United States, Algoma reported one
LOT and one distribution system with two classes of customers: end-
users and steel service centers. We analyzed the selling functions and
activities performed for both classes of customers in both markets. We
preliminarily determine that Algoma's selling functions and activities
are substantially similar for both classes of customers for sales of
subject merchandise and, therefore, that there is one level of trade in
both markets. For a further discussion of the Department's LOT analysis
with respect to Algoma, see Memorandum to the File: Analysis Memorandum
for the Preliminary Results of Review for Algoma, July 2, 1998.
[[Page 37326]]
CCC
CCC reported three different LOTs in the home market based on class
of customer: OEMs, steel service centers, and scrap merchants. However,
we examined the reported selling functions and found that CCC provides
the same selling functions to its home market customers regardless of
channel of distribution. We preliminarily determine that the selling
functions between the reported LOTs are sufficiently similar to
consider them as one LOT in the comparison market.
CCC stated that it sells to two LOTs in the United States: OEMs and
steel service centers. Again, we examined the selling functions at both
claimed levels, and found they were the same. Therefore, we
preliminarily determine that the selling functions between the reported
LOTs are sufficiently similar to consider them as one LOT in the United
States market. Finally, we compared the selling functions performed at
the home market LOT and the LOT in the United States and found them
substantially similar. For a further discussion of the Department's LOT
analysis with respect to CCC, see Memorandum to the File: Analysis
Memorandum for the Preliminary Results of Review for CCC, July 2, 1998.
Dofasco
Dofasco reported three LOTs in the home market. Dofasco defined its
LOT categories by customer category: service center, automotive, and
construction and converters/manufacturers (``construction''). We
examined the selling functions performed at each claimed level and
found that there was a significant difference in selling functions
offered to these three categories. Of the seventeen reported selling
functions, Dofasco performed only three of the same or similar selling
functions at both the automotive and service center sales levels.
Dofasco reported fourteen selling functions which were different
between these two levels. Moreover, Dofasco has established a separate
sales division for its automotive sales. Additionally, sales to
automotive customers are sales to end users, while sales to service
centers are sales to resellers. In sum, these sales were made at
different stages of marketing. Therefore, we preliminarily conclude
that the automotive and service center classes of customer constitute
separate levels of trade.
Although both automotive and construction customers are OEMs, we
note that both quantitatively and qualitatively, the selling functions
offered to automotive customers involve significantly greater resources
and thus represent a distinct stage of marketing. Specifically, of the
seventeen reported selling functions, Dofasco performed only seven of
the same or similar selling functions to both automotive and
construction customers. Dofasco's functions for these two channels
differed with respect to ten other activities. Therefore, given these
differences, we preliminarily conclude that automotive and construction
constitute separate levels of trade.
There were numerous differences in selling functions between
construction and service center sales channels. Of the seventeen
reported selling functions, Dofasco performed only eight of the same or
similar selling functions at both levels. We found that these
differences suggested distinct stages of marketing. Therefore, we
preliminarily conclude that construction and service centers constitute
different LOTs.
Overall, we determine that the selling functions for the
automotive, service center, and construction customer categories are
substantially dissimilar to one another and that these sales are made
at different stages of marketing. Therefore, we preliminarily determine
that the automotive, service center, and construction customer
categories should be treated as three LOTs in the comparison market.
Respondents reported the same three LOTs in the U.S. market:
automotive, service center, and construction. We preliminarily
determine that the results of our analysis of U.S. LOTs are identical
to those of the comparison market. In addition, there were only
insignificant differences in selling functions at each LOT between the
comparison market and the U.S. market. Therefore, we found that the
three U.S. LOTs corresponded to the three comparison market LOTs.
The Department did not find that there existed a pattern of
consistent price differences between the three levels of trade.
Therefore, we did not make LOT adjustments when comparing sales at
different LOTs. For a further discussion of the Department's LOT
analysis with respect to Dofasco, see Memorandum to the File: Analysis
Memorandum for the Preliminary Results of Review for Dofasco, July 2,
1998.
MRM
In both the home market and the United States, MRM reported one LOT
and one distribution system with two classes of customers in the home
market, distributors and OEMs, and one class of customer, OEMs, in the
U.S. market. We analyzed the selling functions and activities performed
for each class of customer in each market. We found that MRM's selling
functions and activities were substantially similar for both classes of
customers for sales of subject merchandise and, therefore, constitute
one level of trade in the home market. Finally, we compared the selling
functions performed at the home market LOT and the LOT in the United
States and found them substantially similar. Thus, no adjustment was
appropriate.
Stelco
Stelco identified one level of trade and two channels of
distribution (to end-users or to resellers) in the home market for each
class or kind of merchandise. We examined the selling functions
performed in each channel and found that Stelco provided many of the
same or similar selling functions in each, including inventory
maintenance, after sales service, technical advice, and freight and
delivery arrangements. We found few differences between selling
functions for transactions made through the two channels of trade.
Overall, we determine that the selling functions between the two sales
channels are sufficiently similar to consider them one LOT in the home
market for sales of both corrosion-resistant products and plate
products.
In the United States, Stelco Inc. sold both products through the
two channels of distribution listed above. For EP sales, we determine
that the results of our analysis of the U.S. LOT is identical to that
of the home market: the selling functions performed for sales to the
United States are sufficiently similar to consider them one LOT for
both corrosion-resistant products and plate products. Additionally, we
consider this LOT to be the same as that identified in the home market.
Therefore, no adjustment is appropriate.
For CEP sales of corrosion-resistant steel made by SUSA, we
compared the selling activities associated with the sale to the
affiliated reseller to those associated with the home market sales and
found them to be dissimilar. For example, the level of trade of the CEP
sales involved no after sales services, or technical advice. Therefore,
we considered the home market sales to be at a different level of trade
and at a more advanced stage of distribution than the CEP sales.
Because the sole home market level of trade was different from the
level of trade of the CEP, we could not match to sales at the same
level of trade in the home market nor could we determine a level-of-
trade adjustment based on Stelco's home market sales of merchandise
under review.
[[Page 37327]]
Furthermore, we have no other information that provides an appropriate
basis for determining a level-of-trade adjustment. Accordingly, for
Stelco, we determined NV at the sole home market level of trade and
made a CEP offset adjustment in accordance with section 773(a)(7)(B) of
the Act. For a further discussion of the Department's LOT analysis with
respect to Stelco, see Memorandum to the File: Analysis Memorandum for
the Preliminary Results of Review for Stelco, July 2, 1998.
Facts Available
Forsyth has stated that it sells subject merchandise in the home
market at three distinct LOTs and at only one LOT in the U.S. market.
Forsyth did not report a significant portion of its home market sales
because it claims that these home market sales are made at a different
LOT than the U.S. sales made during the POR, that there are sufficient
contemporaneous sales of identical merchandise at the same LOT, and
that, therefore, the Department will not be using these sales in its
calculation of NV. The Department, however, clearly warned Forsyth that
if it did not report all of its home market sales made during the
period of review, we may be required to base our findings on the facts
available.
Forsyth has not provided adequate information to justify its LOT
claim. More specifically, Forsyth has not shown there to be a
significant difference in selling functions between its coil division,
which sells in both the home market and in the U.S. market, and its
distribution and distribution & processing divisions, which sell only
in the home market. In fact, there was substantial overlap among the
selling functions performed by these three divisions. Moreover, many of
the alleged ``selling functions'' which Forsyth identified and claimed
differed among the three divisions were not selling functions at all,
but rather manufacturing processes. Section 773(a)(7)(A) clearly
establishes that relevant differences between levels of trade must be
supported by differences in selling functions. See also, SAA at 829-830
and 19 C.F.R. Sec. 351.412. The statute accounts for other differences
between sales through other adjustments; thus, for example, differing
manufacturing processes may be accounted for under the adjustment for
physical differences in the merchandise being compared under section
773(a)(6)(C)(ii). It would contravene the purposes inherent in the
adjustment provisions of section 773 if the Department were to subsume
the differences for which such specific adjustments are made within a
broader definition of level of trade differences. Finally, the SAA
specifically warns the Department against finding differences in the
level of trade that are more appropriately attributable to differences
in the nature of the products. SAA at 830.
Consequently, we conclude that, because the record does not reveal
significant differences in the selling functions performed by Forsyth's
three home market divisions, all of Forsyth's HM sales were made at a
single level of trade. Therefore, we require detailed information on
all of Forsyth's home market sales in order to accurately calculate NV.
Since Forsyth did not report all of its home market sales made during
the POR, we preliminarily determine that, in accordance with section
776(a) of the Act, the use of facts available is appropriate for
Forsyth.
Where a respondent has failed to cooperate to the best of its
ability, section 776(b) of the Act authorizes the Department to use
facts available that are adverse to the interests of that respondent,
which may include information derived from the petition, the final
determination, a previous administrative review, or other information
placed on the record. Forsyth did not respond to our repeated requests
for information about all of its home market sales; rather it presented
arguments as to why it should not have to provide that information.
Therefore, we conclude that Forsyth has failed to cooperate to the best
of its ability.
As adverse facts available, we are using the highest dumping margin
calculated in any segment of this proceeding, 68.70 percent. This rate
was calculated for Stelco, Inc. in the LTFV determination of certain
cut-to-length carbon steel plate from Canada (58 FR 37121, July 9,
1993).
Preliminary Results of Reviews
As a result of our reviews, we preliminarily determine the
weighted-average dumping margins for the period August 1, 1996 through
July 31, 1997 to be as follows:
----------------------------------------------------------------------------------------------------------------
Margin
Manufacturer/Exporter Time period (percent)
----------------------------------------------------------------------------------------------------------------
Algoma (plate)................................ 08/01/96-07/31/97.................................. 1 0.28
Stelco (plate)................................ 08/01/96-07/31/97.................................. 0.00
Stelco (corrosion-resistant).................. 08/01/96-07/31/97.................................. 2.69
MRM (plate)................................... 08/01/96-07/31/97.................................. 0.00
CCC (corrosion-resistant)..................... 08/01/96-07/31/97.................................. 2.06
Dofasco (corrosion-resistant)................. 08/01/96-07/31/97.................................. 0.54
Forsyth (plate)............................... 08/01/96-07/31/97.................................. 68.70
----------------------------------------------------------------------------------------------------------------
1 De minimis.
Parties to the proceeding may request disclosure within five days
of the date of publication of this notice. Any interested party may
request a hearing within 30 days of publication. Any hearing, if
requested, will be held 37 days after the date of publication or the
first business day thereafter. Case briefs from interested parties may
be submitted not later than 30 days after the date of publication.
Rebuttal briefs, limited to issues raised in those briefs, may be filed
not later than 35 days after the date of publication of this notice.
The Department will publish the final results of this administrative
review, including its analysis of issues raised in the case and
rebuttal briefs, not later than 120 days after the date of publication
of this notice.
Upon issuance of the final results of review, the Department shall
determine, and the U.S. Customs Service shall assess, antidumping
duties on all appropriate entries. Because the inability to link sales
with specific entries prevents calculation of duties on an entry-by-
entry basis, we will calculate an importer-specific ad valorem duty
assessment rate for each class or kind of merchandise based on the
ratio of the total amount of antidumping duties calculated for the
examined sales made during the POR to the total customs value of the
sales used to calculate those duties. This rate will be assessed
uniformly on all entries of that particular importer for that class or
[[Page 37328]]
kind of merchandise made during the POR.
If the revocation is made final for Algoma and Stelco, it will
apply to all unliquidated entries of this merchandise produced by
Algoma and Stelco, exported to the United States and entered, or
withdrawn from warehouse, for consumption, on or after August 31, 1997,
which is the effective date of the revocation from the order for Algoma
and Stelco.
Furthermore, the following deposit requirements will be effective
for all shipments of the subject merchandise entered, or withdrawn from
warehouse, for consumption on or after the publication date, as
provided by section 751(a) of the Act: (1) The cash deposit rate for
each reviewed company will be that established in the final results of
review (except that a deposit of zero will be required for firms with
zero or de minimis margins, i.e., margins less than 0.5 percent); (2)
for exporters not covered in this review, but covered in the LTFV
investigation or previous review, 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 previous
review, or the original 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 merchandise; (4) the cash deposit
rate for all other manufacturers or exporters will continue to be the
``all others'' rates established in the LTFV investigations, which were
18.71 percent for corrosion-resistant steel products and 61.88 percent
for plate (see Amended Final Determination, 60 FR 49582 (September 26,
1995)). These requirements, when imposed, shall remain in effect until
publication of the final results of the next administrative reviews.
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 administrative reviews and notices are published in
accordance with 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR
351.213 and 19 CFR 351.221(b)(4).
Dated: July 2, 1998.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 98-18343 Filed 7-9-98; 8:45 am]
BILLING CODE 3510-DS-P
