Certain Cut-to-length Carbon Steel Plate from Mexico: 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:

The Department of Commerce (the Department) is conducting an administrative review of the antidumping duty order on certain cut-to-length carbon steel plate (steel plate) from Mexico (A-201-809) manufactured by Altos Hornos de Mexico, S.A. de C.V. (AHMSA). The period of review (POR) is August 1, 2000 through July 31, 2001. We preliminarily determine that AHMSA made no sales of steel plate below the normal value (NV). If these preliminary results are adopted in our final results of administrative review, we will instruct the U.S. Customs Service to assess no antidumping duties on AHMSA's entries. Interested parties are invited to comment on these preliminary results. Parties who submit argument in these proceedings are requested to submit with the argument 1) a statement of the issues and 2) a brief summary of the argument.

EFFECTIVE DATE

: September 13, 2002.

FOR FURTHER INFORMATION CONTACT:

Thomas Killiam, Mike Heaney, or Robert James, AD/CVD Enforcement, Group III, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, N.W., Washington, D.C. 20230, telephone: (202) 482-5222, (202) 482-4475, or (202) 482-0649, respectively.

SUPPLEMENTARY INFORMATION:

APPLICABLE STATUTE AND REGULATIONS:

Unless otherwise indicated, all citations to the Act of 1930, as amended (the Tariff Act) are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Tariff 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 (2001).

Background

On August 19, 1993, the Department published the antidumping duty order on steel plate from Mexico (58 FR 44165). On August 1, 2001, the Department published the notice of “Opportunity to Request Administrative Review” for this order, covering the period August 1, 2000 through July 31, 2001 (66 FR 39729). In accordance with 19 CFR 351.213(b)(2), on August 31, 2001, AHMSA requested a review. On October 26, 2001, the Department published in the Federal Register a notice of initiation of this antidumping duty administrative review (66 FR 54195). On April 25, 2002, we extended the time limit for the preliminary results of this administrative review to August 31, 2002 (67 FR 20487).

Scope of the Review

The products covered in this review include 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 coil 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 Harmonized Tariff Schedule (HTS) under item numbers 7208.31.0000, 7208.32.0000, 7208.33.1000, 7208.33.5000, 7208.41.0000, 7208.42.0000, 7208.43.0000, 7208.90.0000, 7210.70.3000, 7210.90.9000, 7211.11.0000, 7211.12.0000, 7211.21.0000, 7211.22.0045, 7211.90.0000, 7212.40.1000, 7212.40.5000, and 7212.50.0000. Included in this review are flat-rolled products of non-rectangular cross-section where such cross-section is achieved subsequent to the rolling process products which have been “worked after rolling”); for example, products which have been beveled or rounded at the edges. Excluded from this review is grade X-70 plate.

These HTS item numbers are provided for convenience and U.S. Customs purposes. The written descriptions remain dispositive. The POR is August 1, 2000, through July 31, 2001. This review covers sales of certain cut-to-length carbon steel plate by AHMSA.

Period of Review

The POR is August 1, 2000 through July 31, 2001.

Fair Value Comparisons

To determine whether AHMSA made sales of steel plate from Mexico in the United States at less than fair value, we compared the export price (EP) to the NV, as described in the “Export Price” and “Normal Value” sections of this notice. In accordance with section 777A(d)(1)(A)(i) of the Tariff Act, we calculated EPs and compared these prices to weighted-average NVs or constructed values (CVs).

Export Price

In accordance with section 772 of the Tariff Act, we calculated an EP for each U.S. sale, because all merchandise was sold by AHMSA outside the United States to the first unaffiliated purchaser in the United States prior to the importation, and constructed export price was not otherwise indicated. Section 772(a) of the Tariff Act defines EP as the price at which the subject merchandise is first sold before the date of importation by the exporter or producer outside the United States to an unaffiliated purchaser in the United States, or to an unaffiliated purchaser for exportation to the United States, as adjusted under subsection (c). We calculated EP based on prices charged to the first unaffiliated customer in the United States. We used the date of invoice as the date of sale. We based EP on the packed prices to the first unaffiliated purchasers in the United States. AHMSA reported no duty drawback claim. We made deductions for movement expenses in accordance with section 772(c)(2)(A) of the Tariff Act, including foreign inland freight, foreign brokerage and handling, and shipping insurance. See Memorandum from Thomas Killiam to the file, “Analysis of Data Submitted by AHMSA,” dated August 31, 2002 (“analysis memo”).

Normal Value

A. Viability

We determined that AHMSA had a viable home market, pursuant to 19 CFR 351.404(b)(2), because AHMSA's home market sales were greater than 5 percent of its U.S. sales based on aggregate volume by weight.

B. Arm's Length Sales

AHMSA reported that it made sales in the home market to affiliated and unaffiliated end users and distributors/retailers. We excluded from our analysis sales which AHMSA made to affiliated customers in the home market when these sales were not made at arm's length. To test whether these sales were made at arm's length, we compared the starting prices of sales to affiliated and unaffiliated customers net of all billing adjustments, movement charges, direct selling expenses, discounts and packing expense. Where prices to the affiliated party were on average 99.5 percent or more of the price to the unrelated party, we determined that sales made to the related party were at arm's length. See 19 CFR 351.403(c).

In our home market NV calculation, we included AHMSA's sales to those of its affiliated resellers who passed the Department's arm's length test criteria.

C. Cost of Production Analysis

In the preceding review the Department disregarded sales that failed the cost test. See Notice of Amended Final Results of Antidumping Duty Administrative Review: Certain Cut-to-Length Carbon Steel Plate From Mexico, 66 FR 7619 (January 24, 2001). See also Certain Cut-to-Length Carbon Steel Plate From Mexico: Preliminary Results of Antidumping Duty Administrative Review, 64 FR 48584 (September 7, 1999). Therefore, pursuant to section 773(b)(1) of the Tariff Act, the Department initiated an investigation to determine whether AHMSA made home market sales of subject merchandise during the POR at prices below its COP.

In accordance with section 773(b)(3) of the Tariff Act, we calculated COP based on the sum of the costs of materials and fabrication employed in producing the foreign like product, plus selling, general, and administrative expenses (SG&A) and packing. We relied on the COP data submitted by AHMSA except we recalculated net interest expenses to include the current portion of the gain on monetary position and net foreign exchange gains and losses. Additionally, in accordance with section 773(f)(3) of the Act, we increased AHMSA's reported cost of major inputs obtained from affiliates to the highest of transfer price, market price or the affililiate's COP. See Memorandum from Trinette L. Ruffin to Neal Halper, Director Office of Accounting, dated September 3, 2002, Re: Cost Adjustments.

On a product-specific basis, we compared the adjusted weighted-average COP to the home market sales of the foreign like product, as required under section 773(b) of the Tariff Act, in order to determine whether the sale prices were below the COPs. The prices were exclusive of any applicable movement charges, rebates, discounts, and direct and indirect selling expenses. In determining whether to disregard home market sales made at prices less than their COP, we examined whether such sales were made (1) within an extended period of time in substantial quantities, and (2) at prices which permitted the recovery of all costs within a reasonable period of time.

Pursuant to section 773(b)(2)(C) of the Tariff Act, where less than 20 percent of a respondent's home market sales for a model are at prices less than the COP, we do not disregard any below-cost sales of that model because we determine that the below-cost sales were not made within an extended period of time in “substantial quantities.” Where 20 percent or more of a respondent's sales of a given product were at prices less than the COP, we disregard those sales of that product, because we determine that in such instances the below-cost sales represented “substantial quantities” within the extended period of time, in accordance with section 773(b)(1)(A) of the Tariff Act. In such cases, we also determine whether such sales were made at prices which would not permit recovery of all costs within a reasonable period of time, in accordance with section 773(b)(1)(B) of the Tariff Act.

The results of our cost test for AHMSA indicated that for certain comparison market models, less than 20 percent of the sales of the model were at prices below COP. We therefore retained all sales of these comparison market models in our analysis and used them as the basis for determining NV. Our cost test also indicated that within an extended period of time (one year, in accordance with section 773(b)(2)(B) of the Tariff Act), for certain comparison market models, AHMSA made more than 20 percent of the comparison market sales at prices below COP. Because we compared prices to POR-average costs, we also determined that the below-cost prices would not permit the recovery of costs within a reasonable time. In accordance with section 773(b)(1) of the Tariff Act, we therefore excluded these below-cost sales from our analysis and used the remaining above-cost sales as the basis for determining NV.

D. Product Comparisons

We compared AHMSA's U.S. sales with contemporaneous sales of the foreign like product in the home market. In matching merchandise we considered the following physical and manufacturing attributes: overrun or normal production lot, steel quality (structural or pressure vessel), steel specification, heat treatment used, if appropriate, plate thickness, width, surface finish (checkering, paint), and whether or not descaled. We used a 20 percent difference-in-merchandise (DIFMER) cost deviation cap as the maximum difference in cost allowable for similar merchandise, which we calculated as the absolute value of the difference between the U.S. and comparison market variable costs of manufacturing divided by the total cost of manufacturing of the U.S. product.

E. Level of Trade

In accordance with section 773(a)(1)(B) of the Tariff Act, to the extent practicable, we determine NV based on sales in the comparison market at the same level of trade (LOT) as the U.S. transaction. See Certain Cut-to-Length Carbon Steel Plate From Mexico: Preliminary Results of Antidumping Duty Administrative Review, 64 FR 48584, 48586, September 7, 1999. See also Import Administration Policy Bulletin Number 92/1, July 29, 1992, “Matching at Levels of Trade.” (http://ia.ita.doc.gov/policy/bull92-1.txt). AHMSA reported no differences in its selling activities in the U.S. and home markets. Based upon the record evidence, we have determined that AHMSA sold at only one LOT for its U.S. sales, the same LOT at which its home market sales were made. Accordingly, no LOT adjustment under section 773(a)(7)(A) is warranted.

F. Home Market Price

We based home market prices on the packed, delivered prices to the purchasers in the comparison market. We made adjustments for differences in packing and movement expenses where applicable, in accordance with sections 773(a)(6)(A) and (B) of the Tariff Act. In addition, we 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 Tariff Act, and for differences in circumstances of sale (COS) in accordance with section 773(a)(6)(C)(iii) of the Tariff Act and 19 CFR 351.410. For comparison to EP we made COS adjustments by deducting comparison market direct selling expenses and adding U.S. direct selling expenses. We included credit expense and cutting fees, where applicable, in these direct selling expenses.

In accordance with section 773(a)(4) of the Tariff Act, we based NV on CV when we were unable to find a contemporaneous comparison market match for the U.S. sale. We calculated CV based on the cost of materials and fabrication of the subject merchandise, SG&A, and profit. We calculated the cost of materials, fabrication, and general and administrative expenses based on the methodology described in the “Calculation of COP” section of this notice. In accordance with 773(e)(2)(A) of the Tariff 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 comparison market selling expenses. Where appropriate, we made COS adjustments to CV in accordance with section 773(a)(8) of the Tariff Act and 19 CFR 351.410.

Currency Conversion

We made currency conversions into U.S. dollars based on the exchange rates in effect on the dates of the U.S. sales as certified by the Federal Reserve Bank, in accordance with section 773A of the Tariff Act.

Preliminary Results of Review

As a result of our review, we preliminarily determine the weighted-average dumping margins for the period August 1, 2000 through July 31, 2001, to be as follows:

The Department will disclose calculations performed in connection with these preliminary results of review within five days of the date of publication of this notice in accordance with 19 CFR 351.224(b). An interested party may request a hearing within 30 days of publication. See CFR 351.310(c). Any hearing, if requested, will be held 37 days after the date of publication, or the first business day thereafter, unless the Department alters the date per 19 CFR 351.310(d). Interested parties may submit case briefs and/or written comments no later than 30 days after the date of publication of these preliminary results of review. Rebuttal briefs and rebuttals to written comments, limited to issues raised in the case briefs and comments, may be filed no later than 35 days after the date of publication of this notice. Parties who submit argument in these proceedings are requested to submit with the argument 1) a statement of the issue, 2) a brief summary of the argument and (3) a table of authorities. The Department will issue the final results of this administrative review, including the results of our analysis of the issues raised in any such written comments or at a hearing, within 120 days of publication of these preliminary results.

Assessment Rates

Upon completion of this administrative review, the Department will determine, and the Customs Service shall assess, antidumping duties on all appropriate entries. In accordance with 19 CFR 351.212(b)(1), we have calculated an exporter-specific assessment rate for merchandise subject to this review. The Department will issue appropriate assessment instructions directly to the Customs Service within 15 days of publication of the final results of review. If these preliminary results are adopted in the final results of review, we will direct the Customs Service to assess the resulting assessment rates against the entered customs values for the subject merchandise on each of the importer's/customer's entries during the review period.

Furthermore, the following deposit requirements will be effective upon completion of the final results of this administrative review for all shipments of steel plate from Mexico entered, or withdrawn from warehouse, for consumption on or after the publication date of the final results of this administrative review, as provided by section 751(a)(1) of the Tariff Act: (1) the cash deposit rate for the reviewed company will be the rate established in the final results of administrative review; (2) for merchandise exported by manufacturers or exporters not covered in this review but covered in the original less-than-fair-value (LTFV) investigation or a previous review, the cash deposit will continue to be the most recent rate published in the final determination or final results for which the manufacturer or exporter received a company-specific rate; (3) if the exporter is not a firm covered in this review, or the original investigation, but the manufacturer is, the cash deposit rate will be that established for the manufacturer of the merchandise in the final results of this review, or the LTFV investigation; and (4) if neither the exporter nor the manufacturer is a firm covered in this review or any previous reviews, the cash deposit rate will be 49.25 percent, the “all others” rate established in the LTFV investigation (58 FR 44165, August 19, 1993).

This notice also 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.

We are issuing and publishing this notice in accordance with sections 751(a)(1) and 777(i)(1) of the Tariff Act.