01-9100. Certain Welded Carbon Steel Pipes and Tubes from Thailand: Preliminary Results of Antidumping Duty Administrative Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of preliminary results of antidumping duty administrative review.

SUMMARY:

In response to requests by a Thai manufacturer, Saha Thai Steel Company, Ltd. (“Saha Thai”), two importers, Ferro Union Inc. (“Ferro Union”) and ASOMA Corp. (“ASOMA”), and three domestic producers, Allied Tube and Conduit Corporation, Sawhill Tubular Division—AK Steel Inc., and Wheatland Tube Company (collectively, the “petitioner”), the Department of Commerce (“the Department”) is conducting an administrative review of the antidumping duty order on certain welded carbon steel pipes and tubes from Thailand. This review covers Saha Thai, a Thai manufacturer and exporter of the subject merchandise to the United States. The period of review (“POR”) is March 1, 1999, through February 29, 2000.

We have preliminary determined that the respondent did not sell subject merchandise at less than normal value (“NV”) during the POR. For information on the weighted average dumping margins, see the “Preliminary Results of Review” section below. If these preliminary results are adopted in our final results, we will instruct U.S. Customs to liquidate appropriate entries during the POR without regard to antidumping duties.

Interested parties are invited to comment on these preliminary results. Parties who submit argument in this proceeding should also submit with the argument (1) a statement of the issue, and (2) a brief summary of the argument.

EFFECTIVE DATE:

April 12, 2001.

FOR FURTHER INFORMATION CONTACT:

Javier Barrientos or Samantha Denenberg, AD/CVD Enforcement Group III, Room 7866, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: [phone] and [phone], respectively.

Applicable Statute: Unless otherwise indicated, all citations to the statute are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Tariff Act of 1930 (“the Act”) by the Uruguay Round Agreements Act. In addition, unless otherwise indicated, all citations to the Department's regulations are to those codified at 19 CFR Part 351 (2000).

SUPPLEMENTARY INFORMATION:

Background

On March 11, 1986, the Department published, in the Federal Register, an antidumping duty order on circular welded carbon steel pipes and tubes from Thailand (51 FR 8341). On March 16, 2000, the Department published a notice of opportunity to request an administrative review of this order covering the period March 1, 1999, through February 29, 2000 (65 FR 14242). Timely requests for an administrative review of the antidumping order with respect to sales by Saha Thai during the POR were filed by Saha Thai, Ferro Union and ASOMA, and the petitioners. The Department published a notice of initiation of this antidumping duty administrative review on May 1, 2000 (65 FR 25303).

Because the Department determined that it was not practicable to complete this review within the statutory time limits, on November 20, 2000, we published, in the Federal Register, a notice of extension of the time limit for this review (65 FR 69734). As a result, we extended the deadline for these preliminary results to March 31, 2001; however, because this date falls on a non-business day, the preliminary results are actually due on April 2, 2001. Unless extended, the deadline for the final results will be 120 days after publication of these preliminary results.

Scope of the Review

The products covered by this administrative review are certain welded carbon steel pipes and tubes from Thailand. The subject merchandise has an outside diameter of 0.375 inches or more, but not exceeding 16 inches. These products, which are commonly referred to in the industry as “standard pipe” or “structural tubing,” are hereinafter designated as “pipe and tube.” The merchandise is classifiable under the Harmonized Tariff Schedule (HTS) item numbers 7306.30.1000, 7306.30.5025, 7306.30.5032, 7306.30.5040, 7306.30.5055, 7306.30.5085, and 7306.30.5090. Although the HTS subheadings are provided for convenience and Customs purposes, our written description of the scope of the order is dispositive.

Date of Sale

Saha Thai reported invoice date as the date of sale. Invoice date is also the Department's presumptive date for date of sale (see section 351.401(i) of the Department's regulations), but in the last administrative review of this proceeding, we determined that contract date better represented the date of sale because it better reflected the date on which the material terms of sale, i.e., price and quantity, were established. For purposes of this review, we also have examined whether invoice date or some other date better represents the date on which the material terms of sale were established. The Department has examined sales documentation, including contracts and invoices, provided by Saha Thai for its U.S. sales, and has found that the material terms of sale are set at the contract date. Specifically, changes in quantity were within the specified contract tolerances and as such were not material. Unit prices for the products themselves did not change between the contract and invoice on any of the sales examined. For the business proprietary details of our analysis of the date of sale issue, see the Memorandum from Javier Barrientos through Sally C. Gannon for The file Regarding Date of Sale Analysis—Certain Welded Carbon Steel Pipes and Tubes from Thailand for the Period March 1, 1999 through February 29, 2000, dated April 2, 2001 (public version on file in the Department's Central Records Unit). As such, we preliminarily determine that contract date is the appropriate date of sale in this administrative review because it better represents the date upon which the material terms of sale were established. With respect to home market sales, the invoice is the first written document that establishes the material terms of sale. Therefore, we are using the invoice date as the date of sale for home market sales.

Normal Value Comparisons

To determine whether sales of steel pipes and tubes from Thailand to the United States were made at less than NV, we compared the EP to the NV for Saha Thai as specified in the “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. transactions.

Export Price

Based upon our review of the record evidence, we classified all Saha Thai sales to U.S. customers as EP sales because, as in previous segments of this proceeding, we found that Saha Thai is not affiliated with its U.S. distributors, which are the first purchasers in the United States. Certain Welded Carbon Steel Pipes and tubes From Thailand: Final Results of Antidumping Duty Administrative Review, 61 FR 56515 (November 1, 1996). Therefore, we calculated the EP based on the price from Saha Thai to the first unaffiliated purchaser in the United States in accordance with section 772(a) of the Act.

Where appropriate,in accordance with section 772(c)(2) of the Act, we made deductions from the gross price for ocean freight to the U.S. port, foreign inland freight, foreign brokerage and handling, foreign inland insurance, bill of lading charge, U.S. duty and U.S. brokerage and handling charges. In addition, pursuant to section 772(c)(1)(B) of the Act, we have made an adjustment for duty drawback.

Normal Value

In order to determine whether there is a sufficient volume of sales in the home market to serve as a viable basis for calculating NV, we compared the volume of Saha Tahi's home market sales of the foreign like product to the volume of U.S. sales of subject merchandise, in accordance with section 773(a)(1) of the Act. Based on this comparison, we determined that the aggregate volume of Saha Thai's home market sales of the foreign like product is greater than five percent of the aggregate volume of Saha Thai's U.S. sales. Thus, we determined that Saha Thai had a viable home market during the POR. Consequently, we based NV on home market sales.

We applied the standard arm's length test to Saha Thai's sales to affiliated parties. Where Saha Thai's sales to affiliated parties were not made at arm's length prices, we excluded these sales from our home market normal value calculation.

Pursuant to section 773(b)(2)(A)(ii) of the Act, there were reasonable grounds to believe or suspect that Saha Thai had made home market sales at prices below its cost of production (“COP”) in this review because the Department had disregarded sales that failed the cost test in the 1997-1998 administrative review (i.e., the most recently completed review at the time we issued our antidumping questionnaire) (63 FR 55578; October 21, 1999). As a result, the Department initiated an investigation to determine whether Saha Thai made home market sales during the POR at prices below its COP. We calculated the COP based on the sum of respondent's cost of materials and fabrication for the foreign like product, plus amounts for selling, general and administrative expenses (“SG&A”) and packing costs, in accordance with section 773(b)(3) of the Act.

For these preliminary results we are using respondent's reported COP. We compared the COP figures 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. On a product-specific basis, we compared the COP to home market prices, less any applicable movement charges and discounts.

In determining whether to disregard home market sales made at prices below the COP, we examined (1) whether, within an extended period of time, such sales were made in substantial quantities, and (2) whether such sales were made at prices which permitted the recovery of all costs within a reasonable period of time in the normal course of trade.

Pursuant to section 773(b)(2)(C) of the Act, where less than 20 percent of the respondent's sales of a given product were at prices less than the COP, we did not disregard any below-cost sales of that product because we determined that the below-cost sales were not made in “substantial quantities.” Where 20 percent or more of the respondent's sales of a given product during the POR were at prices less than the COP, we determined such sales to have been made in substantial quantities within an extended period of time in accordance with section 773(b)(1)(A) of the Act. In such cases, because we compared prices to POR weight-averaged costs, we also determined that such sales were not made at prices which would permit recovery of all 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.

Where appropriate, we adjusted Saha Thai's home market sales for discounts, direct selling expenses and inland freight. In addition, in accordance with section 773(a)(6), we deducted home market packing costs and added U.S. packing costs, U.S. imputed credit, bank charges, and penalty fees.

In accordance with section 773(a)(4) of the Act, we used constructed value (CV) as the basis for NV when there were no contemporaneous sales of identical or similar merchandise in the comparison market that passed the cost test. We calculated CV, in accordance with section 773(e) of the Act, based on the sum of Saha Thai's cost of materials, fabrication, SG&A, profit, and U.S. packing costs. In accordance with section 773(e)(2)(A) of the Act, we based SG&A and profit on the actual amounts incurred and realized by Saha Thai 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 average of the selling expenses reported for home market sales that passed the cost test, weighted by the total quantity of those sales. For profit, we first calculated the difference between the home market sales value and home market COP, and divided the difference by the home market COP. We then multiplied this percentage by the COP for each U.S. model to derive a profit amount.

Level of Trade

As set forth in section 773(a)(1)(B)(i) of the Act and in the Statement of Administrative Action, 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 the constructed export price (“CEP”). The NV LOT is that of the starting-price sale in the comparison market or, when NV is based on CV, that of the sales from which we derive selling, general and administrative expenses and profit. For EP, the U.S. LOT is 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. 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).

For the U.S. market, Saha Thai reported only one LOT for its EP sales. This single LOT represents large volume sales to unaffiliated trading companies/distributors in the United States. In the home market, Saha Thai claimed that it made sales at one LOT. These sales were made to unaffiliated trading companies and distributors (made at the same LOT as U.S. sales). There are no significant differences in the selling functions Saha Thai performs for these customers in the home market or in the United States. Therefore, we conclude that EP and NV sales are made at the same LOT and no adjustment is warranted.

Currency Conversion

We made currency conversions into U.S. dollars in accordance with section 773A of the Act, based on exchange rates in effect on the dates of the U.S. sales as certified by the Federal Reserve Bank. Section 773A(a) of the Act directs the Department to use a daily exchange rate in order to convert foreign currencies into U.S. dollars unless the daily rate involves a fluctuation. It is the Department's practice to find that a fluctuation exists when the daily exchange rate differs from the benchmark rate by more than 2.25 percent. The benchmark is defined as the moving average of the actual daily exchange rates for the eight weeks immediately prior to the date of the actual daily exchange rate. When we determine a fluctuation to have existed, we substitute the benchmark rate for the daily rate, in accordance with established practice. See Change in Policy Regarding Currency Conversions, 61 FR 9434 (March 8, 1996).

Preliminary Results of the Review

We preliminarily determine that the following weighted-average dumping margins exist:

Manufactuer/exporter	Period	Margin (percent)
Saha Thai Steel Pipe Company, Ltd.	3/1/99-2/29/00	0.00

The Department shall determine, and the U.S. Customs Service shall assess, antidumping duties on all appropriate entries. In accordance with 19 CFR 351.212(b), we calculated importer-specific ad-valorem duty assessment rates for the class or kind of merchandise based on entered value. Upon completion of this review, the Department will issue appraisement instructions directly to the Customs Service.

Furthermore, the following deposit rates will be effective upon the publication of the final results of this administrative review for all shipments of certain welded carbon steel pipes and tubes from Thailand entered, or withdrawn from warehouse, for consumption on or after the publication date, as provided for by section 751(a)(2)(c) of the Act: (1) The cash deposit rate for the reviewed company will be that established in the final results of this review; (2) for previously reviewed or investigated companies not listed above, the cash deposit rate will continue to be the company-specific rate published for the most recent period; (3) if the exporter is not a firm covered in this review, 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 15.67 percent, the “All Others” rate made effective by the LTFV investigation, 51 FR 8341 (March 11, 1986). These requirements, when imposed, shall remain in effect until publication of the final results of the next administrative review.

The Department will disclose to parties to this proceeding the calculations performed in connection with these preliminary results of review within 5 days after publication of these preliminary results in accordance with 19 CFR 351.224(b). Any interested party may request a hearing within 30 days of publication of this notice in accordance with section 351.310(c) of the Department's regulations. Any hearing would normally be held 37 days after the publication of this notice or the first workday thereafter, at the U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230. Individuals who wish to request a hearing must submit a written request within 30 days of the publication of this notice in the Federal Register to the Assistant Secretary for Import Administration, U.S. Department of Commerce, Room 1870, 14th Street and Constitution Avenue, NW., Washington, DC 20230. Requests for a public hearing should contain: (1) The party's name, address, and telephone number; (2) the number of participants; and (3) to the extent practicable, an identification of the arguments to be raised at the hearing. Unless otherwise notified by the Department, interested parties may submit case briefs within 30 days of the date of publication of this notice in accordance with 351.309(c)(2) of the Department's regulations. As part of the case brief, parties are encouraged to provide a summary of the arguments not to exceed five pages and a table of statutes, regulations, and cases cited. Rebuttal briefs, which must be limited to issues raised in the case briefs, must be filed within five days after the case brief is filed. If a hearing is held, an interested party may make an affirmative presentation only on arguments included in that party's case brief and may make a rebuttal presentation only on arguments included in that party's rebuttal brief. Parties should confirm by telephone the time, date, and place of the hearing 48 hours before the scheduled time.

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 review are issued and published in accordance with sections 751(a)(1) and 777(i)(1) of the Act. Effective January 20, 2001, Bernard T. Carreau is fulfilling the duties of the Assistant Secretary for Import Administration.

Dated: April 12, 2001.

Bernard T. Carreau,

Deputy Assistant Secretary, Import Administration.