2011-9965. Certain Hot-Rolled Flat-Rolled Carbon-Quality Steel Products From Brazil: Final Results of Countervailing Duty Administrative Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

On October 7, 2010, the Department of Commerce (Department) issued the preliminary results of administrative review of the countervailing duty order on certain hot-rolled flat-rolled carbon-quality steel products (HRS) from Brazil for the period January 1, 2008, through December 31, 2008. Based on the results of our verification and the analysis of the comments received, the Department has made certain revisions to the subsidy rates for the respondent, Usinas Siderurgicas de Minas Gerais (USIMINAS) and its subsidiary, Companhia Siderurgica Paulista (COSIPA). The final subsidy rate for the reviewed company is listed below in the section entitled “Final Results of Review.”

DATES:

Effective Date: April 25, 2011.

FOR FURTHER INFORMATION CONTACT:

Myrna Lobo, Justin Neuman or Milton Koch, 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] and [phone], respectively.

SUPPLEMENTARY INFORMATION:

Background

Since the issuance of Certain Hot-Rolled Flat-Rolled Carbon-Quality Steel Products From Brazil: Preliminary Results of Countervailing Duty Administrative Review, 75 FR 64700 (October 20, 2010) (Preliminary Results), the following events have occurred. The Department issued its third supplemental questionnaire to the Government of Brazil (GOB) and to USIMINAS/COSIPA on November 9, 2010. On the same day, the Department informed parties of the postponement of the briefing schedule. The GOB and USIMINAS/COSIPA filed their responses on November 23, 2010, and December 3, 2010, respectively. On December 13, 2010, the United States Steel Corporation (USS or petitioner) submitted factual information in rebuttal to information contained in USIMINAS/COSIPA's December 3, 2010 questionnaire response. On January 6, 2011, the Department issued a fourth supplemental questionnaire to USIMINAS/COSIPA and the company submitted its response on January 19, 2011. On January 20, 2011, the Department placed on the record information from the investigation of cold-rolled steel and the prior administrative review of the instant order on HRS. See Memorandum to The File from Justin M. Neuman, Analyst, Certain Hot-Rolled Carbon Steel Flat Products from Brazil: Additional Programs Memorandum and Calculation Memorandum, Certain Hot-Rolled Carbon Steel Flat Products from Brazil, dated January 20, 2011.

On December 14, 2010, the Department extended the deadline for the final results from February 17, 2011 to April 18, 2011. See Certain Hot-Rolled Flat-Rolled Carbon-Quality Steel Products From Brazil: Extension of Time Limit for Final Results of Countervailing Duty Administrative Review, 75 FR 77828 (December 14, 2010).

On January 21, 2011, USS submitted comments in light of the Department's planned verification. In accordance with section 782(i) of the Tariff Act of 1930, as amended (“the Act”) the Department conducted verification in Brazil of the questionnaire responses of USIMINAS/COSIPA from January 24 to January 27, 2011, and of one program of the GOB on January 28, 2011. See Memorandum to The File from Myrna Lobo, International Trade Compliance Analyst, through Dana S. Mermelstein, Program Manager, Countervailing Duty Administrative Review of Certain Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from Brazil: Verification of the Questionnaire Responses Submitted by Usinas Siderurgicas de Minas Gerais (USIMINAS) and Companhia Siderurgica Paulista (COSIPA), dated March 7, 2011; see also Memorandum to The File from Myrna Lobo, International Trade Compliance Analyst, through Dana S. Mermelstein, Program Manager, Countervailing Duty Administrative Review of Certain Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from Brazil: Verification of the Questionnaire Responses Submitted by the Government of Brazil, dated March 7, 2011.

On March 3, 2011, the Department issued a post-preliminary analysis memorandum on the countervailability of the FINEM loan program. See Memorandum to Ronald K. Lorentzen, Deputy Assistant Secretary for Import Administration from Christian Marsh, Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations, Countervailing Duty Administrative Review of Certain Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from Brazil: Post-Preliminary Analysis Regarding the Provision of FINEM Loans, dated March 3, 2011 (Post-Preliminary Decision). On March 9, 2011, the Department notified parties of the briefing schedule, inviting comments on the Preliminary Results and the Post-Preliminary Decision. The Department received case briefs and rebuttal briefs from USS, Nucor Corporation (Nucor), a domestic interested party, and USIMINAS/COSIPA.^[1] Timely requests for a hearing were submitted by USS and Nucor; however, both parties subsequently withdrew their hearing requests.

Period of Review

The period for which we are measuring subsidies, i.e., the period of review (POR), is January 1, 2008, through December 31, 2008.

Scope of the Order

For purposes of this review, the products covered are certain hot-rolled flat-rolled carbon-quality steel products of a rectangular shape, of a width of 0.5 inch or greater, neither clad, plated, nor coated with metal and whether or not painted, varnished, or coated with plastics or other non-metallic substances, in coils (whether or not in successively superimposed layers) regardless of thickness, and in straight lengths, of a thickness less than 4.75 mm and of a width measuring at least 10 times the thickness. Universal mill plate (i.e., flat-rolled products rolled on four faces or in a closed box pass, of a width exceeding 150 mm, but not exceeding 1250 mm and of a thickness of not less than 4 mm, not in coils and without patterns in relief) of a thickness not less than 4.0 mm is not included within the scope of the order.

Specifically included in the scope are vacuum degassed, fully stabilized (commonly referred to as interstitial-free (“IF”)) steels, high strength low alloy (“HSLA”) steels, and the substrate for motor lamination steels. IF steels are recognized as low carbon steels with micro-alloying levels of elements such as titanium and/or niobium added to stabilize carbon and nitrogen elements. HSLA steels are recognized as steels with micro-alloying levels of elements such as chromium, copper, niobium, titanium, vanadium, and molybdenum. The substrate for motor lamination steels contains micro-alloying levels of elements such as silicon and aluminum.

Steel products to be included in the scope of the order, regardless of HTSUS definitions, are products in which: (1) Iron predominates, by weight, over each of the other contained elements; (2) the carbon content is 2 percent or less, by weight; and (3) none of the elements listed below exceeds the quantity, by weight, respectively indicated: 1.80 percent of manganese, or 1.50 percent of silicon, or 1.00 percent of copper, or 0.50 percent of aluminum, or 1.25 percent of chromium, or 0.30 percent of cobalt, or 0.40 percent of lead, or 1.25 percent of nickel, or 0.30 percent of tungsten, or 0.012 percent of boron, or 0.10 percent of molybdenum, or 0.10 percent of niobium, or 0.41 percent of titanium, or 0.15 percent of vanadium, or 0.15 percent of zirconium.

All products that meet the physical and chemical description provided above are within the scope of the order unless otherwise excluded. The following products, by way of example, are outside and/or specifically excluded from the scope of the order:

• Alloy hot-rolled steel products in which at least one of the chemical elements exceeds those listed above (including e.g., ASTM specifications A543, A387, A514, A517, and A506).
• SAE/AISI grades of series 2300 and higher.
• Ball bearing steels, as defined in the HTSUS.
• Tool steels, as defined in the HTSUS.
• Silico-manganese (as defined in the HTSUS) or silicon electrical steel with a silicon level exceeding 1.50 percent.
• ASTM specifications A710 and A736.
• USS Abrasion-resistant steels (USS AR 400, USS AR 500).
• Hot-rolled steel coil which meets the following chemical, physical and mechanical specifications:

[In percent]

C	Mn (max)	P (max)	S (max)	Si	Cr	Cu	Ni (max)
0.10-0.14	0.90	0.025	0.005	0.30-0.50	0.30-0.50	0.20-0.40	0.20
Width = 44.80 inches maximum; Thickness = 0.063-0.198 inches; Yield Strength = 50,000 ksi minimum; Tensile Strength = 70,000-88,000 psi.

• Hot-rolled steel coil which meets the following chemical, physical and mechanical specifications:

[In percent]

C	Mn	P (max)	S (max)	Si	Cr	Cu (max)	Ni (max)	Mo
0.10-0.16	0.70-0.90	0.025	0.006	0.30-0.50	0.30-0.50	0.25	0.20	0.21
Width = 44.80 inches maximum; Thickness = 0.350 inches maximum; Yield Strength = 80,000 ksi minimum; Tensile Strength = 105,000 psi Aim.

• Hot-rolled steel coil which meets the following chemical, physical and mechanical specifications:

[In percent]

C	Mn	P (max)	S (max)	Si	Cr	Cu	Ni (max)	V (wt.) (max)	Cb (max)
0.10-0.14	1.30-1.80	0.025	0.005	0.30-0.50	0.50-0.70	0.20-0.40	0.20	0.10	0.08
Width = 44.80 inches maximum; Thickness = 0.350 inches maximum; Yield Strength = 80,000 ksi minimum; Tensile Strength = 105,000 psi Aim.

• Hot-rolled steel coil which meets the following chemical, physical and mechanical specifications:

[In percent]

C (max)	Mn (max)	P (max)	S (max)	Si (max)	Cr (max)	Cu (max)	Ni (max)	Nb (min)	Ca	Al
0.15	1.40	0.025	0.010	0.50	1.00	0.50	0.20	0.005	Treated	0.01-0.07
Width = 39.37 inches; Thickness = 0.181 inches maximum; Yield Strength = 70,000 psi minimum for thicknesses ≤ 0.148 inches and 65,000 psi minimum for thicknesses > 0.148 inches; Tensile Strength = 80,000 psi minimum.

• Hot-rolled dual phase steel, phase-hardened, primarily with a ferritic-martensitic microstructure, contains 0.9 percent up to and including 1.5 percent silicon by weight, further characterized by either (i) tensile strength between 540 N/mm2 and 640 N/mm2 and an elongation percentage ≥ 26 percent for thicknesses of 2 mm and above, or (ii) a tensile strength between 590 N/mm2 and 690 N/mm2 and an elongation percentage ≥ 25 percent for thicknesses of 2 mm and above.
• Hot-rolled bearing quality steel, SAE grade 1050, in coils, with an inclusion rating of 1.0 maximum per ASTM E 45, Method A, with excellent surface quality and chemistry restrictions as follows: 0.012 percent maximum phosphorus, 0.015 percent maximum sulfur, and 0.20 percent maximum residuals including 0.15 percent maximum chromium.
• Grade ASTM A570-50 hot-rolled steel sheet in coils or cut lengths, width of 74 inches (nominal, within ASTM tolerances), thickness of 11 gauge (0.119 inch nominal), mill edge and skin passed, with a minimum copper content of 0.20%.

The merchandise subject to the order is classified in the Harmonized Tariff Schedule of the United States (HTSUS) at subheadings: 7208.10.15.00, 7208.10.30.00, 7208.10.60.00, 7208.25.30.00, 7208.25.60.00, 7208.26.00.30, 7208.26.00.60, 7208.27.00.30, 7208.27.00.60, 7208.36.00.30, 7208.36.00.60, 7208.37.00.30, 7208.37.00.60, 7208.38.00.15, 7208.38.00.30, 7208.38.00.90, 7208.39.00.15, 7208.39.00.30, 7208.39.00.90, 7208.40.60.30, 7208.40.60.60, 7208.53.00.00, 7208.54.00.00, 7208.90.00.00, 7210.70.30.00, 7210.90.90.00, 7211.14.00.30, 7211.14.00.90, 7211.19.15.00, 7211.19.20.00, 7211.19.30.00, 7211.19.45.00, 7211.19.60.00, 7211.19.75.30, 7211.19.75.60, 7211.19.75.90, 7212.40.10.00, 7212.40.50.00, 7212.50.00.00. Certain hot-rolled flat-rolled carbon-quality steel covered by the order, including: vacuum degassed, fully stabilized; high strength low alloy; and the substrate for motor lamination steel may also enter under the following tariff numbers: 7225.11.00.00, 7225.19.00.00, 7225.30.30.50, 7225.30.70.00, 7225.40.70.00, 7225.99.00.90, 7226.11.10.00, 7226.11.90.30, 7226.11.90.60, 7226.19.10.00, 7226.19.90.00, 7226.91.50.00, 7226.91.70.00, 7226.91.80.00, and 7226.99.00.00. Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the merchandise covered by the order is dispositive.

Analysis of Comments Received

All issues raised in the case briefs and rebuttal briefs by parties to this administrative review are addressed in the Issues and Decision Memorandum for the Final Results of the Countervailing Duty Administrative Review of Certain Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from Brazil, from Christian Marsh, Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations, to Ronald K. Lorentzen, Deputy Assistant Secretary for Import Administration, dated concurrently with this notice (Issues and Decision Memorandum), and which is hereby adopted by this notice. The Issues and Decision Memorandum also contains a complete analysis of the programs covered by this review, the methodologies used to calculate the subsidy rates, and discusses any changes since the Preliminary Results and Post-Preliminary Decision to the subsidy rates. A list of the comments raised in the briefs and addressed in the Issues and Decision Memorandum is appended to this notice. The Issues and Decision Memorandum is on file in the Central Records Unit (CRU), Room 7046 of the main Department building, and can be accessed directly on the Web at http://ia.ita.doc.gov/​frn.

Changes Since the Preliminary Results

Based on the results of verification, our consideration of information submitted by USIMINAS/COSIPA and the GOB in supplemental questionnaire responses received subsequent to the issuance of the Preliminary Results, and our analysis of comments received, we have made changes to the calculations of the Preliminary Results and Post-Preliminary Decision. These changes are discussed in detail in the Issues and Decision Memorandum, and the Memorandum to the File from The Team, Calculations for the Final Results: Usinas Siderurgicas de Minas Gerais S.A. and Companhia Siderugica Paulista (USIMINAS/COSIPA), dated concurrently with this notice, a public version of which is on file in the CRU.

Final Results of Review

In accordance with section 751(a)(1)(A) of the Act and 19 CFR 351.221(b)(5), we calculated a net subsidy for USIMINAS/COSIPA, the only producer/exporter subject to this review, of 0.46 percent ad valorem. This rate is de minimis. See 19 CFR 351.106(c)(1).

Assessment and Cash Deposit Instructions

The Department intends to issue assessment instructions to U.S. Customs and Border Protection (CBP) 15 days after the date of publication of these final results of review. The Department will instruct CBP to liquidate shipments of subject merchandise by USIMINAS/COSIPA entered, or withdrawn from warehouse, for consumption on or after January 1, 2008, through December 31, 2008, without regard to countervailing duties. We will also instruct CBP to collect cash deposits for USIMINAS/COSIPA at the rate of 0.00 percent on all shipments of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the date of publication of these final results of review. The cash deposit rates for all companies not covered by this review are not changed by the results of this review.

Return or Destruction of Proprietary Information

This notice serves as a reminder to parties subject to the administrative protective order (APO) of their responsibility concerning the disposition of proprietary information disclosed under the APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of return or destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation.

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

Dated: April 18, 2011.

Ronald K. Lorentzen,

Deputy Assistant Secretary for Import Administration.

Appendix I

List of Issues Addressed in the Issues and Decision Memorandum

Comment 1: Whether it is Appropriate to Apply Adverse Facts Available to Find the FINEM Loans Countervailable

Comment 2: Selection of an Appropriate Benchmark for BNDES Loans

Comment 3: Calculation of FOB Sales Value

Footnotes

1.  The Department rejected USIMINAS/COSIPA's case brief received on March 16, 2011, because it contained untimely new factual information. See Letter to USIMINAS/COSIPA from the Department, Re: Countervailing Duty Administrative Review: Certain Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from Brazil (March 17, 2011). Subsequently, the Department allowed USIMINAS/COSIPA to resubmit its case brief without the untimely factual information, which it received on March 18, 2011.