[Federal Register Volume 74, Number 151 (Friday, August 7, 2009)]
[Notices]
[Pages 39615-39621]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-18959]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-588-845]
Stainless Steel Sheet and Strip in Coils From Japan: Preliminary
Results of Antidumping Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: In response to timely requests by two manufacturers/exporters,
the Department of Commerce (the Department) is conducting an
administrative review of the antidumping duty order on certain
stainless steel sheet and strip in coils (SSSSC) from Japan with
respect to Hitachi Cable Ltd. (Hitachi Cable) and Nippon Kinzoku Co.,
Ltd. (NKKN). The review covers the period July 1, 2007, through June
30, 2008.
We preliminarily determine that NKKN and Hitachi Cable did not make
sales below normal value (NV).
If the preliminary results are adopted in our final results of the
administrative review, we will instruct U.S. Customs and Border
Protection (CBP) to assess antidumping duties on all appropriate
entries. Interested parties are invited to comment on the preliminary
results.
DATES: Effective Date: August 7, 2009.
FOR FURTHER INFORMATION CONTACT: Kate Johnson or Rebecca Trainor, AD/
CVD Operations, Office 2, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW., Washington, DC 20230; telephone (202) 482-
4929 and (202) 482-4007, respectively.
SUPPLEMENTARY INFORMATION:
Background
In response to timely requests by two manufacturers/exporters, on
August 26, 2008, the Department published in the Federal Register a
notice of initiation of an administrative review of the antidumping
duty order on certain SSSSC from Japan with respect to Hitachi Cable
and NKKN covering the period July 1, 2007, through June 30, 2008. See
Initiation of Antidumping and Countervailing Duty Administrative
Reviews, 73 FR 50308 (August 26, 2008).
On September 4, 2008, we issued the antidumping duty questionnaire
to Hitachi Cable and NKKN. We received responses to sections A, B, and
C of the questionnaire from Hitachi Cable and NKKN in October and
November 2008.
On November 12, and 25, 2008, the petitioners in the above-
referenced administrative review (i.e., AK Steel Corporation and
Allegheny Technologies, Inc.) (collectively, the petitioners) filed
timely sales-below-cost-allegations against Hitachi Cable and NKKN,
respectively. See 19 CFR 351.301(d)(2)(ii). Accordingly, on December
18, 2008, the Department initiated sales-below-cost investigations on
both Hitachi Cable and NKKN and, as a result, required Hitachi Cable
and NKKN to submit responses to section D of the Department's
antidumping duty questionnaire.\1\ We received responses to section D
of the questionnaire in January 2009.
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\1\ See Memorandum to James Maeder, Director Office 2, ``The
Petitioners' Allegation of Sales Below the Cost of Production for
Hitachi Cable Limited and Hitachi Cable America,'' (December 18,
2008) (Hitachi Cable Cost Initiation Memo); and Memorandum to James
Maeder, Director Office 2, ``The Petitioners' Allegation of Sales
Below the Cost of Production for Nippon Kinzoku Co., Ltd. and its
Affiliates S-Metal, Goka, Marubeni-Itochu Steel America Inc., and
Marubeni-Itochu Specialty Steel Corp.,'' (December 18, 2008) (NKKN
Cost Initiation Memo).
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During the period December 2008 through July 2009, we issued to
Hitachi Cable and NKKN supplemental questionnaires with respect to
sections A, B, C, and D of the original questionnaire. We received
responses to these questionnaires during the period December 2008
through July 2009.
On March 9, 2009, pursuant to section 751(a)(3) of the Tariff Act
of 1930, as amended (the Act), the Department postponed the preliminary
results of this review until July 31, 2009. See Stainless Steel Sheet
and Strip in Coils from Japan and Taiwan: Notice of Extension of Time
Limit for Preliminary Results of the 2007-2008 Administrative Reviews,
74 FR 10885 (March 13, 2009).
Pursuant to section 782(i) of the Act, the Department conducted
verifications of the questionnaire responses submitted by Hitachi
Cable, NKKN, and one of NKKN's affiliated resellers, Nikkin Steel Co.,
Ltd. in May and June 2009.\2\ See Memoranda to The File, ``Verification
of the Sales Responses of Nippon Kinzoku Co, Ltd. (NKKN) in the
Antidumping Duty Administrative Review of Stainless Steel Sheet and
Strip in Coils from Japan,'' (July 31, 2009) (``NKKN Sales Verification
Report''); ``Verification of the Sales Response of Nikkin Steel Co.,
Ltd. (Nikkin Steel) in the Antidumping Duty Administrative Review of
Stainless Steel Sheet and Strip in Coils (SSSSC) from Japan,'' (July
13, 2009); ``Verification of the Sales Responses of Hitachi Cable
Limited (HCL) and Hitachi Cable America (HCA) (collectively Hitachi
Cable) in the Antidumping Duty Administrative Review of Stainless Steel
Sheet and Strip in Coils from Japan,'' (July 20, 2009) (``Hitachi Cable
Sales Verification Report''); and ``Verification of the Cost Response
of Nippon Kinzoku Co., Ltd. in the Antidumping Duty Administrative
Review of Certain Stainless Steel Sheet and Strip in Coils from
Japan,'' (June 3, 2009). The verification reports are on file and
available in the Central Records Unit (CRU), Room 1117 of the
Department's main building.
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\2\ The verification of Hitachi Cable's cost response will be
conducted after the preliminary results.
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[[Page 39616]]
Scope of the Order
For purposes of this order, the products covered are certain SSSSC.
Stainless steel is an alloy steel containing, by weight, 1.2 percent or
less of carbon and 10.5 percent or more of chromium, with or without
other elements. The subject sheet and strip is a flat-rolled product in
coils that is greater than 9.5 mm in width and less than 4.75 mm in
thickness, and that is annealed or otherwise heat treated and pickled
or otherwise descaled. The subject sheet and strip may also be further
processed (e.g., cold-rolled, polished, aluminized, coated, etc.)
provided that it maintains the specific dimensions of sheet and strip
following such processing.
The merchandise subject to this order is currently classifiable in
the Harmonized Tariff Schedule of the United States (HTS) at
subheadings: 7219.13.00.31, 7219.13.00.51, 7219.13.00.71,
7219.13.00.81, 7219.14.00.30, 7219.14.00.65, 7219.14.00.90,
7219.32.00.05, 7219.32.00.20, 7219.32.00.25, 7219.32.00.35,
7219.32.00.36, 7219.32.00.38, 7219.32.00.42, 7219.32.00.44,
7219.33.00.05, 7219.33.00.20, 7219.33.00.25, 7219.33.00.35,
7219.33.00.36, 7219.33.00.38, 7219.33.00.42, 7219.33.00.44,
7219.34.00.05, 7219.34.00.20, 7219.34.00.25, 7219.34.00.30,
7219.34.00.35, 7219.35.00.05, 7219.35.00.15, 7219.35.00.30,
7219.35.00.35, 7219.90.00.10, 7219.90.00.20, 7219.90.00.25,
7219.90.00.60, 7219.90.00.80, 7220.12.10.00, 7220.12.50.00,
7220.20.10.10, 7220.20.10.15, 7220.20.10.60, 7220.20.10.80,
7220.20.60.05, 7220.20.60.10, 7220.20.60.15, 7220.20.60.60,
7220.20.60.80, 7220.20.70.05, 7220.20.70.10, 7220.20.70.15,
7220.20.70.60, 7220.20.70.80, 7220.20.80.00, 7220.20.90.30,
7220.20.90.60, 7220.90.00.10, 7220.90.00.15, 7220.90.00.60, and
7220.90.00.80. Although the HTS subheadings are provided for
convenience and customs purposes, the Department's written description
of the merchandise under review is dispositive.
Excluded from the scope of this order are the following: (1) Sheet
and strip that is not annealed or otherwise heat treated and pickled or
otherwise descaled, (2) sheet and strip that is cut to length, (3)
plate (i.e., flat-rolled stainless steel products of a thickness of
4.75 mm or more), (4) flat wire (i.e., cold-rolled sections, with a
prepared edge, rectangular in shape, of a width of not more than 9.5
mm), and (5) razor blade steel. Razor blade steel is a flat-rolled
product of stainless steel, not further worked than cold-rolled (cold-
reduced), in coils, of a width of not more than 23 mm and a thickness
of 0.266 mm or less, containing, by weight, 12.5 to 14.5 percent
chromium, and certified at the time of entry to be used in the
manufacture of razor blades. See Chapter 72 of the HTS, ``Additional
U.S. Note'' 1(d).
Flapper valve steel is also excluded from the scope of the order.
This product is defined as stainless steel strip in coils containing,
by weight, between 0.37 and 0.43 percent carbon, between 1.15 and 1.35
percent molybdenum, and between 0.20 and 0.80 percent manganese. This
steel also contains, by weight, phosphorus of 0.025 percent or less,
silicon of between 0.20 and 0.50 percent, and sulfur of 0.020 percent
or less. The product is manufactured by means of vacuum arc remelting,
with inclusion controls for sulphide of no more than 0.04 percent and
for oxide of no more than 0.05 percent. Flapper valve steel has a
tensile strength of between 210 and 300 ksi, yield strength of between
170 and 270 ksi, plus or minus 8 ksi, and a hardness (Hv) of between
460 and 590. Flapper valve steel is most commonly used to produce
specialty flapper valves in compressors.
Also excluded is a product referred to as suspension foil, a
specialty steel product used in the manufacture of suspension
assemblies for computer disk drives. Suspension foil is described as
302/304 grade or 202 grade stainless steel of a thickness between 14
and 127 microns, with a thickness tolerance of plus-or-minus 2.01
microns, and surface glossiness of 200 to 700 percent Gs. Suspension
foil must be supplied in coil widths of not more than 407 mm, and with
a mass of 225 kg or less. Roll marks may only be visible on one side,
with no scratches of measurable depth. The material must exhibit
residual stresses of 2 mm maximum deflection, and flatness of 1.6 mm
over 685 mm length.
Certain stainless steel foil for automotive catalytic converters is
also excluded from the scope of this order. This stainless steel strip
in coils is a specialty foil with a thickness of between 20 and 110
microns used to produce a metallic substrate with a honeycomb structure
for use in automotive catalytic converters. The steel contains, by
weight, carbon of no more than 0.030 percent, silicon of no more than
1.0 percent, manganese of no more than 1.0 percent, chromium of between
19 and 22 percent, aluminum of no less than 5.0 percent, phosphorus of
no more than 0.045 percent, sulfur of no more than 0.03 percent,
lanthanum of less than 0.002 or greater than 0.05 percent, and total
rare earth elements of more than 0.06 percent, with the balance iron.
Permanent magnet iron-chromium-cobalt alloy stainless strip is also
excluded from the scope of this order. This ductile stainless steel
strip contains, by weight, 26 to 30 percent chromium, and 7 to 10
percent cobalt, with the remainder of iron, in widths 228.6 mm or less,
and a thickness between 0.127 and 1.270 mm. It exhibits magnetic
remanence between 9,000 and 12,000 gauss, and a coercivity of between
50 and 300 oersteds. This product is most commonly used in electronic
sensors and is currently available under proprietary trade names such
as ``Arnokrome III.'' \3\
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\3\ ``Arnokrome III'' is a trademark of the Arnold Engineering
Company.
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Certain electrical resistance alloy steel is also excluded from the
scope of this order. This product is defined as a non-magnetic
stainless steel manufactured to American Society of Testing and
Materials (ASTM) specification B344 and containing, by weight, 36
percent nickel, 18 percent chromium, and 46 percent iron, and is most
notable for its resistance to high temperature corrosion. It has a
melting point of 1390 degrees Celsius and displays a creep rupture
limit of 4 kilograms per square millimeter at 1000 degrees Celsius.
This steel is most commonly used in the production of heating ribbons
for circuit breakers and industrial furnaces, and in rheostats for
railway locomotives. The product is currently available under
proprietary trade names such as ``Gilphy 36.'' \4\
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\4\ ``Gilphy 36'' is a trademark of Imphy, S.A.
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Certain martensitic precipitation-hardenable stainless steel is
also excluded from the scope of this order. This high-strength, ductile
stainless steel product is designated under the Unified Numbering
System (UNS) as S45500-grade steel, and contains, by weight, 11 to 13
percent chromium, and 7 to 10 percent nickel. Carbon, manganese,
silicon and molybdenum each comprise, by weight, 0.05 percent or less,
with phosphorus and sulfur each comprising, by weight, 0.03 percent or
less. This steel has copper, niobium, and titanium added to achieve
aging, and will exhibit yield strengths as high as 1,700 Mpa and
ultimate tensile strengths as high as 1,750 Mpa after aging, with
elongation percentages of 3 percent or less in 50 mm. It is generally
provided in thicknesses between 0.635 and 0.787 mm, and in widths of
25.4 mm. This product is most commonly
[[Page 39617]]
used in the manufacture of television tubes and is currently available
under proprietary trade names such as ``Durphynox 17.'' \5\
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\5\ ``Durphynox 17'' is a trademark of Imphy, S.A.
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Finally, three specialty stainless steels typically used in certain
industrial blades and surgical and medical instruments are also
excluded from the scope of this order. These include stainless steel
strip in coils used in the production of textile cutting tools (e.g.,
carpet knives).\6\ This steel is similar to AISI grade 420 but
containing, by weight, 0.5 to 0.7 percent of molybdenum. The steel also
contains, by weight, carbon of between 1.0 and 1.1 percent, sulfur of
0.020 percent or less, and includes between 0.20 and 0.30 percent
copper and between 0.20 and 0.50 percent cobalt. This steel is sold
under proprietary names such as ``GIN4 Mo.'' The second excluded
stainless steel strip in coils is similar to AISI 420-J2 and contains,
by weight, carbon of between 0.62 and 0.70 percent, silicon of between
0.20 and 0.50 percent, manganese of between 0.45 and 0.80 percent,
phosphorus of no more than 0.025 percent and sulfur of no more than
0.020 percent. This steel has a carbide density on average of 100
carbide particles per 100 square microns. An example of this product is
``GIN5'' steel. The third specialty steel has a chemical composition
similar to AISI 420 F, with carbon of between 0.37 and 0.43 percent,
molybdenum of between 1.15 and 1.35 percent, but lower manganese of
between 0.20 and 0.80 percent, phosphorus of no more than 0.025
percent, silicon of between 0.20 and 0.50 percent, and sulfur of no
more than 0.020 percent. This product is supplied with a hardness of
more than Hv 500 guaranteed after customer processing, and is supplied
as, for example, ``GIN6.'' \7\
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\6\ This list of uses is illustrative and provided for
descriptive purposes only.
\7\ ``GIN4 Mo,'' ``GIN5'' and ``GIN6'' are the proprietary
grades of Hitachi Metals America, Ltd.
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Period of Review
The period of review (POR) is July 1, 2007, through June 30, 2008.
Bona Fides Analysis of Hitachi Cable's U.S. Sale
In comments submitted to the Department on November 12, 2008,
February 2, 2009, and February 23, 2009, the petitioners alleged that
Hitachi Cable's sole U.S. sale during the POR was not a bona fide
transaction, and requested that the Department rescind the review of
Hitachi Cable on this basis. Specifically, the petitioners argued that
the price, quantity, payment period and delivery terms were not
consistent with normal commercial considerations for the product and
producer concerned. They concluded that, given the totality of the
circumstances, there is no evidence to support a finding that the sale
at issue was a bona fide commercial transaction reflective of normal
commercial terms to be followed for future sales.
For the following reasons, we preliminarily determine that Hitachi
Cable's sale to the United States is a bona fide sale. We confirmed at
verification that the U.S. sale at issue consisted of a sample of
subject merchandise sold for testing purposes. As explained in the
sales verification report and as discussed in Hitachi Cable's
questionnaire responses, Hitachi Cable produces a niche product to the
exact specifications of each customer. It routinely produces test
samples for both established and new customers in a similar quantity as
that requested by the U.S. customer in this case. See Hitachi Cable
Sales Verification Report, at 6-8.\8\ Although the home market database
contains no sales of identical merchandise to serve as a comparison to
the U.S sale, it contains several sales of similar subject merchandise
with prices and quantities that are comparable to those of the U.S.
sale. See ``Hitachi Cable Ltd. Preliminary Results Margin
Calculations'' (July 31, 2009) (Hitachi Calculation Memo).\9\
Furthermore, we find that the delivery method Hitachi Cable employed
for the U.S. sale was not inconsistent with normal industry practice
for small-quantity sales, as the same delivery method was used by the
other respondent in this review, NKKN (see Hitachi Cable Sales
Verification Report, at 6; and NKKN Sales Verification Report, at 5).
Finally, with respect to the payment, Hitachi Cable established payment
terms in accordance with its normal sales process, and provided a
reasonable explanation at verification for why the timing of the actual
payment was inconsistent with the payment terms indicated on the sales
documents. See Hitachi Cable Sales Verification Report at 14.
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\8\ We note that NKKN, the other respondent in this review, also
produced test samples for customers in the normal course of
business. See NKKN Sales Verification Report, at 5.
\9\ At verification we observed that one of the reported home
market sales selected for individual review also consisted of a test
sample. See Hitachi Cable Sales Verification Report, at 6.
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Therefore, based on the record information and our verification
thereof, we preliminarily determine that Hitachi Cable's sale to the
United States constitutes a bona fide commercial transaction.
Comparisons to Normal Value
To determine whether sales of SSSSC from Japan to the United States
were made at less than NV, we compared the export price (EP) or
constructed export price (CEP) to the NV, as described in the
``Constructed Export Price/Export Price'' and ``Normal Value'' sections
of this notice, below. We made adjustments to the reported U.S. and
home market sales data based on verification findings, as described in
the Hitachi Calculation Memo and Memorandum to the File, ``Nippon
Kinzoku Ltd. Preliminary Results Margin Calculations'' (July 31, 2009).
Pursuant to section 777A(d)(2) of the Act, for NKKN and Hitachi
Cable we compared the EPs or CEPs, as appropriate, of individual U.S.
transactions to the weighted-average NV of the foreign like product
where there were sales made in the ordinary course of trade, as
discussed in the ``Cost of Production Analysis'' section, below.
Product Comparisons
In accordance with section 771(16) of the Act, we considered all
products produced by NKKN and Hitachi Cable covered by the description
in the ``Scope of the Order'' section, above, to be foreign like
products for purposes of determining appropriate product comparisons to
U.S. sales. Pursuant to 19 CFR 351.414(e)(2), we compared U.S. sales of
SSSSC to sales of SSSSC made in the comparison market for NKKN and
Hitachi Cable within the contemporaneous window period, which extends
from three months prior to the month of the U.S. sales until two months
after the U.S. sales. Where there were no sales of identical
merchandise in the comparison market made in the ordinary course of
trade to compare to U.S. sales, we compared U.S. sales of SSSSC to
sales of SSSSC of the most similar foreign like product made in the
ordinary course of trade.
In making the product comparisons, we matched foreign like products
based on the physical characteristics reported by the respondents in
the following order: Grade of stainless steel, whether hot- or cold-
rolled, gauge, surface finish, metallic coating, non-metallic coating,
width, temper, and edge trim.
Constructed Export Price/Export Price
For certain U.S. sales made by NKKN we used EP methodology, in
accordance with section 772(a) of the Act, because the subject
merchandise was sold directly to the first unaffiliated purchaser in
the United States prior to
[[Page 39618]]
importation and CEP methodology was not otherwise warranted based on
the facts of record.
For Hitachi Cable's U.S. sale and certain of NKKN's U.S. sales, we
calculated CEP in accordance with section 772(b) of the Act because the
subject merchandise was sold for the account of NKKN and Hitachi Cable
by their respective subsidiaries in the United States to unaffiliated
purchasers.
A. Hitachi Cable
In accordance with section 772(b) of the Act, we calculated CEP, as
the subject merchandise was first sold (or agreed to be sold) in the
United States before or after the date of importation by or for the
account of the producer or exporter, or by a seller affiliated with the
producer or exporter, to a purchaser not affiliated with the producer
or exporter.
We made deductions from the starting price for international
freight expenses, in accordance with section 772(c)(2)(A) of the Act.
In accordance with section 772(d)(1) of the Act and 19 CFR
351.402(b), we deducted those selling expenses associated with economic
activities occurring in the United States, including direct selling
expenses (e.g., imputed credit expenses), and indirect selling expenses
(including inventory carrying costs and other indirect selling
expenses).
Pursuant to section 772(d)(3) of the Act, we further reduced the
starting price by an amount for profit to arrive at CEP. In accordance
with section 772(f) of the Act, we calculated the CEP profit rate using
the expenses incurred by Hitachi Cable and its U.S. affiliate on its
sales of the subject merchandise in the United States and the profit
associated with those sales.
B. NKKN
In accordance with section 772(a) of the Act, we calculated EP for
those sales where the merchandise was sold to the first unaffiliated
purchaser in the United States prior to importation by the exporter or
producer outside the United States. We based EP on prices to the first
unaffiliated purchaser in the United States. We made deductions from
the starting price, where appropriate, for foreign inland freight
expenses, foreign inland insurance expenses, and foreign brokerage and
handling expenses, in accordance with section 772(c)(2)(A) of the Act.
In accordance with section 772(b) of the Act, we calculated CEP for
those sales where the merchandise was first sold (or agreed to be sold)
in the United States before or after the date of importation by or for
the account of the producer or exporter, or by a seller affiliated with
the producer or exporter, to a purchaser not affiliated with the
producer or exporter.
We made deductions from the starting price for movement expenses,
in accordance with section 772(c)(2)(A) of the Act; these included,
where appropriate, foreign inland freight and insurance expenses,
foreign brokerage and handling expenses, marine insurance expenses,
international freight expenses, U.S. brokerage and handling expenses,
and U.S. warehousing expenses.
In accordance with section 772(d)(1) of the Act and 19 CFR
351.402(b), we deducted those selling expenses associated with economic
activities occurring in the United States, including direct selling
expenses (e.g., imputed credit expenses and warranty expenses), and
indirect selling expenses (including inventory carrying costs and other
indirect selling expenses).
Pursuant to section 772(d)(3) of the Act, we further reduced the
starting price by an amount for profit to arrive at CEP. In accordance
with section 772(f) of the Act, we calculated the CEP profit rate using
the expenses incurred by NKKN and its U.S. affiliate on its sales of
the subject merchandise in the United States and the profit associated
with those sales.
Normal Value
A. Home Market Viability and Selection of Comparison Markets
In order to determine whether there was a sufficient volume of
sales in the home market to serve as a viable basis for calculating NV,
we compared the volume of home market sales of the foreign like product
to the volume of U.S. sales of the subject merchandise, in accordance
with section 773(a)(1)(C) of the Act. Based on this comparison, we
determined that both NKKN and Hitachi Cable had viable home markets
during the POR. Consequently, we based NV on home market sales for NKKN
and Hitachi Cable.
B. Affiliated-Party Transactions and Arm's-Length Test
During the POR, NKKN and Hitachi Cable sold the foreign like
product to affiliated customers. To test whether these sales were made
at arm's-length prices, we compared, on a product-specific basis, the
starting prices of sales to affiliated and unaffiliated customers, net
of all applicable billing adjustments, discounts and rebates, movement
charges, direct selling expenses, and packing expenses. Pursuant to 19
CFR 351.403(c) and in accordance with the Department's practice, where
the price to the affiliated party was, on average, within a range of 98
to 102 percent of the price of the same or comparable merchandise sold
to unaffiliated parties, we determined that sales made to the
affiliated party were at arm's length. See Antidumping Proceedings:
Affiliated Party Sales in the Ordinary Course of Trade, 67 FR 69186,
69187 (Nov. 15, 2002) (establishing that the overall ratio calculated
for an affiliate must be between 98 percent and 102 percent in order
for sales to be considered in the ordinary course of trade and used in
the NV calculation). Sales to affiliated customers in the comparison
market that were not made at arm's-length prices were excluded from our
analysis because we considered these sales to be outside the ordinary
course of trade. See 19 CFR 351.102(b).
C. Level of Trade
Section 773(a)(1)(B)(i) of the Act states that, to the extent
practicable, the Department will calculate NV based on sales at the
same level of trade (LOT) as the EP or CEP. Sales are made at different
LOTs if they are made at different marketing stages (or their
equivalent). See 19 CFR 351.412(c)(2). Substantial differences in
selling activities are a necessary, but not sufficient, condition for
determining that there is a difference in the stages of marketing. See
id.; see also Notice of Final Determination of Sales at Less Than Fair
Value: Certain Cut-to-Length Carbon Steel Plate From South Africa, 62
FR 61731, 61732 (November 19, 1997) (Plate from South Africa). In order
to determine whether the comparison sales were at different stages in
the marketing process than the U.S. sales, we reviewed the distribution
system in each market (i.e., the chain of distribution), including
selling functions, class of customer (customer category), and the level
of selling expenses for each type of sale.
Pursuant to section 773(a)(1)(B)(i) of the Act, in identifying LOTs
for EP and comparison market sales (i.e., NV based on either home
market or third country prices),\10\ we consider the starting prices
before any adjustments. For CEP sales, we consider only the selling
activities reflected in the price after the deduction of expenses and
profit under section 772(d) of the Act. See Micron Technology, Inc. v.
United States, 243 F. 3d 1301, 1314 (Fed. Cir. 2001). When
[[Page 39619]]
the Department is unable to match U.S. sales of the foreign like
product in the comparison market at the same LOT as the EP or CEP, the
Department may compare the U.S. sales to sales at a different LOT in
the comparison market. In comparing EP or CEP sales at a different LOT
in the comparison market, where available data make it practicable, we
make an LOT adjustment under section 773(a)(7)(A) of the Act. Finally,
for CEP sales only, if the NV LOT is at a more advanced stage of
distribution than the LOT of the CEP and there is no basis for
determining whether the difference in LOTs between NV and CEP affects
price comparability (i.e., no LOT adjustment was practicable), the
Department shall grant a CEP offset, as provided in section
773(a)(7)(B) of the Act. See Plate from South Africa, at 61732-33.
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\10\ Where NV is based on CV, we determine the NV LOT based on
the LOT of the sales from which we derive selling expenses, general
and administrative (G&A) expenses, and profit for CV, where
possible.
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In this administrative review, we obtained information from each
respondent regarding the marketing stages involved in making the
reported foreign market and U.S. sales, including a description of the
selling activities performed by each respondent for each channel of
distribution. Company-specific LOT findings are summarized below.
1. Hitachi Cable
Hitachi Cable made one CEP sale through the U.S. affiliate, HCA, to
an end-user in the United States on a delivered basis. We examined the
selling functions performed by Hitachi Cable for the sale, but not
those performed by HCA, consistent with our normal practice for CEP
sales. See Plate from South Africa, at 61731, 61732. Hitachi Cable
performed the following selling functions for the U.S. sale: invoicing,
customer visits, finished goods storage, freight arrangements, and
payment collection. As there was only one channel of distribution for
the CEP sale made during the POR, we find that there is one LOT in the
U.S. market.
In the Japanese market, Hitachi Cable made sales to end-users on a
delivered basis. We found that Hitachi Cable performed the following
selling functions for home market sales: invoicing, customer visits,
finished goods storage, freight arrangements, and payment collection.
As there was only one channel of distribution for home market sales, we
find that there was one LOT in the home market. As the selling
functions performed for U.S. and home market customers are identical,
we preliminarily determine that the U.S. and home market sales were
made at the same LOT during the POR. Consequently, we matched the CEP
sale to comparison-market sales at the same LOT, and no LOT adjustment
is warranted.
2. NKKN
NKKN reported that it made EP and CEP sales to end-users in the
United States through two channels of distribution. For EP sales, NKKN
made sales to end-users on an FOB basis through an unaffiliated
Japanese reseller with knowledge that the subject merchandise was
destined for the United States (channel 2). For CEP sales, NKKN made
sales to end-users through affiliated trading companies in Japan and
the United States, on either an ex-warehouse or a delivered basis
(channel 1).
We compared the selling activities performed for the two sales
channels in the United States to determine whether they were indicative
of different LOTs. For EP sales, NKKN performed the following selling
functions: sales and marketing (e.g., invoicing and joint customer
visits), freight and delivery services, and warranty claim processing.
For CEP sales, NKKN and/or its affiliated Japanese trading company
performed the following selling functions: sales and marketing (e.g.,
invoicing and joint customer visits), and freight and delivery
services. Thus, with the exception of warranty claim processing, NKKN
performed the same selling activities for sales made through both
channels of distribution in the United States. With respect to warranty
claim processing, which NKKN performed for EP sales, but not CEP sales,
we find that this selling function alone does not constitute a
substantial difference in selling functions and, therefore, is not
sufficient to establish a different LOT. As explained in the
Department's regulations at 19 CFR 351.412(c)(2), ``{s{time} ubstantial
differences in selling activities are a necessary, but not sufficient,
condition for determining that there is a difference in the stage of
marketing.'' Therefore, we determine that one LOT exists in the U.S.
market.
In the Japanese market, NKKN and its affiliated resellers made
sales to unaffiliated trading companies and end-users through two
channels of distribution (i.e., direct from NKKN to trading companies,
or out of inventory). For direct sales, NKKN and/or its affiliated
resellers performed the following selling functions: sales and
marketing (e.g., invoicing and customer visits), freight and delivery
services, print advertising, and warranty claim processing. For sales
made out of inventory, NKKN's affiliated resellers performed
warehousing/inventory maintenance in addition to the selling functions
listed above for direct sales. We do not find that the performance of
warehousing/inventory maintenance alone is sufficient to distinguish
sales made out of inventory as a separate LOT. See 19 CFR
351.412(c)(2). Therefore, we determine that there is one LOT in the
home market.
Finally, we compared the U.S. LOT to the home-market LOT, and found
that the selling functions performed for customers in both markets were
virtually identical. Specifically, NKKN and/or its affiliates in Japan
provided sales and marketing, freight and delivery services, and
warranty claim processing at equal levels of intensity to both markets.
The exception was print advertising, which NKKN performed at a low
level of intensity in the home market only. As the performance of this
selling function alone is not sufficient to establish a different LOT
between sales made in the Japanese market and those made to the United
States, we preliminarily determine that the sales to the U.S. and home
market during the POR were made at the same LOT. Id. Consequently, we
matched EP and CEP sales to comparison-market sales at the same LOT and
no LOT adjustment was warranted.
D. Cost of Production Analysis
Based on our analysis of the petitioners' allegations, we found
that there were reasonable grounds to believe or suspect that Hitachi
Cable's and NKKN's sales of SSSSC in the home market were made at
prices below their COP. Accordingly, pursuant to section 773(b) of the
Act, we initiated sales-below-cost investigations to determine whether
Hitachi Cable's and NKKN's sales were made at prices below their
respective COPs. See the Hitachi Cable Cost Initiation Memo, and the
NKKN Cost Initiation Memo.
1. Calculation of Cost of Production
In accordance with section 773(b)(3) of the Act, we calculated the
respondents' COPs based on the sum of their costs of materials and
conversion for the foreign like product, plus amounts for G&A expenses
and interest expenses. See ``Test of Comparison Market Sales Prices''
section below for treatment of comparison-market selling expenses.
The Department relied on the COP data submitted by Hitachi Cable
and NKKN for the cost reporting period in their most recent
supplemental section D questionnaire responses for the COP
calculations, except for the following instances where the information
was not appropriately quantified or valued.
[[Page 39620]]
Hitachi Cable
1. The only product Hitachi Cable sold in the United States during
the POR was produced within the POR but outside of the alternative cost
reporting period (CRP).\11\ Accordingly, the reported costs for the
U.S. product were based on the standard costs and variances applicable
during the POR but outside the alternative CRP. Because Hitachi Cable's
reported costs for the products sold in the home market were based on
the standard costs and variances for the alternative CRP, we used the
alternative CRP standard costs and variances to calculate the costs of
the U.S. product.
---------------------------------------------------------------------------
\11\ The CRP for Hitachi Cable was shifted from July 1, 2007,
through June 30, 2008 (POR) to April 1, 2007, through March 31, 2008
(Hitachi Cable's fiscal year).
---------------------------------------------------------------------------
2. We included certain non-operating income and expense items in
the numerator of the G&A expense ratio calculation, which Hitachi had
excluded from its calculation. Also, we used the cost of goods sold
from Hitachi Cable's financial statements as the denominator in the
calculation of the G&A expense ratio as opposed to the total COM plus
beginning inventory, as calculated by Hitachi.
3. We estimated the consolidated packing expense based on Hitachi's
unconsolidated packing expenses and removed it from the cost of goods
sold, which is used as the denominator in the calculation of the
financial expense ratio. See Stainless Steel Sheet and Strip in Coils
from Mexico: Final Results of Antidumping Duty Administrative Review,
73 FR 7710 (February 11, 2008), and accompanying Issues and Decision
Memorandum at Comment 12.
4. Hitachi did not provide a cost for one product. Thus, for the
preliminary results, we used a similar product's cost as a surrogate
cost.
See Memorandum to Neal M. Halper, Director of Office of Accounting,
``Cost of Production and Constructed Value Calculation Adjustments for
the Preliminary Results--Hitachi Cable Ltd.'' (July 31, 2009).
NKKN
1. We used the revised COM for the U.S. steel grades that NKKN
provided at the Department's request after the cost verification.
2. We revised the reported COM to include the cost of re-slitting
that was performed by affiliated resellers, consistent with the statute
to treat such costs as a part of COM. See sections 773(a)(6) and
773(b)(3)(A) of the Act. NKKN originally included these costs in its
affiliated resellers' home market sales databases.
See Memorandum to Neal M. Halper, Director of Office of Accounting,
``Cost of Production and Constructed Value Calculation Adjustments for
the Preliminary Results--Nippon Kinzoku Co., Ltd.'' (July 31, 2009).
Test of Comparison-Market Sales Prices
On a product-specific basis, we compared the weighted-average COP
to the home market sales of the foreign like product, adjusted where
applicable, as required under section 773(b) of the Act, in order to
determine whether the sale prices were below the COP. For purposes of
this comparison, we used COP exclusive of selling and packing expenses.
The prices, adjusted for any applicable billing adjustments, were
exclusive of any applicable movement charges, rebates, discounts, and
direct and indirect selling expenses, and packing expenses.
3. Results of the COP Test
In determining whether to disregard comparison-market sales made at
prices below the COP, we examine, in accordance with sections
773(b)(1)(A) and (B) or the Act: (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 comparison-market sales of a given product
are at prices less than the COP, we do not disregard any below-cost
sales of that product because we determine that in such instances the
below-cost sales were not made within an extended period of time and in
``substantial quantities.'' Where 20 percent or more of a respondent's
sales of a given product are at prices less than the COP, we disregard
the below-cost sales because: (1) 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 (2) based on our
comparison of prices to the weighted-average COPs for the POR, they
were at prices that would not permit the recovery of all costs within a
reasonable period of time, in accordance with section 773(b)(2)(D) of
the Act.
We found that, for certain specific products, more than 20 percent
of Hitachi Cable's and NKKN's comparison-market sales were at prices
less than the COP and, in addition, such sales did not provide for the
recovery of costs within a reasonable period of time. We therefore
excluded these sales and used the remaining sales as the basis for
determining NV, in accordance with section 773(b)(1) of the Act.
E. Calculation of Normal Value Based on Comparison-Market Prices
1. Hitachi Cable
We based NV for Hitachi Cable on prices to unaffiliated customers
in the home market, or prices to affiliated customers in the home
market that were determined to be at arm's length. Where appropriate,
we made adjustments to the starting price for billing adjustments. We
also made deductions for inland freight (plant/warehouse to customer),
under section 773(a)(6)(B)(ii) of the Act, and home market credit
expenses, pursuant to 773(a)(6)(C)(iii) of the Act.
Furthermore, we made adjustments for differences in costs
attributable to differences in the physical characteristics of the
merchandise in accordance with section 773(a)(6)(C)(ii) of the Act and
19 CFR 351.411.
We also deducted home market packing costs and added U.S. packing
costs in accordance with sections 773(a)(6)(A) and (B) of the Act.
2. NKKN
We based NV for NKKN on delivered prices to unaffiliated customers
in the home market, or prices to affiliated customers in the home
market that were determined to be at arm's length. Where appropriate,
we made adjustments to the starting price for billing adjustments and
rebates. We made deductions, where appropriate, for pre-sale
warehousing expenses and inland freight (plant to internal or external
warehouse, and plant to customer) and insurance expenses, under section
773(a)(6)(B)(ii) of the Act.
For home market price-to-EP comparisons, we made circumstance-of-
sale adjustments for differences in credit expenses and warranty
expenses, pursuant to section 773(a)(6)(C)(iii) of the Act and 19 CFR
351.410.
For home market price-to-CEP comparisons, we made deductions for
home market credit and warranty expenses, pursuant to 773(a)(6)(C) of
the Act.
Furthermore, we made adjustments for differences in costs
attributable to differences in the physical characteristics of the
merchandise in accordance with section 773(a)(6)(C)(ii) of the Act and
19 CFR 351.411.
We also deducted home market packing costs and added U.S. packing
costs, in accordance with section 773(a)(6)(A) and (B) of the Act.
[[Page 39621]]
Currency Conversion
We made currency conversions into U.S. dollars in accordance with
section 773A of the Act and 19 CFR 351.415 based on the exchange rates
in effect on the dates of the U.S. sales as certified by the Federal
Reserve Bank.
Preliminary Results of the Review
We preliminarily determine that weighted-average dumping margins
exist for the respondents for the period July 1, 2007, through June 30,
2008, as follows:
------------------------------------------------------------------------
Manufacturer/Exporter Percent margin
------------------------------------------------------------------------
Hitachi Cable Limited..................... 0.00
Nippon Kinzoku Company Limited............ 0.23 (de minimis)
------------------------------------------------------------------------
Disclosure and Public Hearing
The Department will disclose to parties the calculations performed
in connection with these preliminary results within five days of the
date of publication of this notice. See 19 CFR 351.224(b). Pursuant to
19 CFR 351.309(c)(ii), interested parties may submit cases briefs not
later than 30 days after the date of publication of this notice.
Rebuttal briefs, limited to issues raised in the case briefs, may be
filed not later than five days after the date for filing case briefs.
See 19 CFR 351.309(d)(1). Parties who submit case briefs or rebuttal
briefs in this proceeding are encouraged to submit with each argument:
(1) A statement of the issue; (2) A brief summary of the argument; and
(3) a table of authorities.
Interested parties who wish to request a hearing or to participate
if one is requested must submit a written request to the Assistant
Secretary for Import Administration, Room 1870, within 30 days of the
date of publication of this notice. Requests should contain: (1) The
party's name, address and telephone number; (2) the number of
participants; and (3) a list of issues to be discussed. See 19 CFR
351.310(c). Issues raised in the hearing will be limited to those
raised in the respective case briefs.
The Department will issue the final results of this administrative
review, including the results of its analysis of issues raised in any
written briefs, not later than 120 days after the date of publication
of this notice, pursuant to section 751(a)(3)(A) of the Act.
Assessment Rates
Upon completion of the administrative review, the Department shall
determine, and CBP shall assess, antidumping duties on all appropriate
entries, in accordance with 19 CFR 351.212. The Department will issue
appropriate appraisement instructions for the companies subject to this
review directly to CBP 15 days after the date of publication of the
final results of this review.
For Hitachi Cable's U.S. sales and the majority of NKKN's U.S.
sales, we note that the respondents reported the entered value for the
U.S. sales in question. We will calculate importer-specific ad valorem
duty assessment rates based on the ratio of the total amount of
antidumping duties calculated for the examined sales to the total
entered value of the examined sales for that importer.
For some of NKKN's U.S. sales, we note that NKKN did not report the
entered value for the U.S. sales in question. We will calculate
importer-specific per-unit duty assessment rates by aggregating the
total amount of antidumping duties calculated for the examined sales
and dividing this amount by the total quantity of those sales. To
determine whether the duty assessment rates are de minimis, in
accordance with the requirement set forth in 19 CFR 351.106(c)(2), we
will calculate importer-specific ad valorem ratios based on the
estimated entered value.
We will instruct CBP to assess antidumping duties on all
appropriate entries covered by this review if any importer-specific
assessment rate calculated in the final results of this review is above
de minimis (i.e., at or above 0.50 percent). Pursuant to 19 CFR
351.106(c)(2), we will instruct CBP to liquidate without regard to
antidumping duties any entries for which the assessment rate is de
minimis (i.e., less than 0.50 percent). The final results of this
review shall be the basis for the assessment of antidumping duties on
entries of merchandise covered by the final results of this review and
for future deposits of estimated duties, where applicable.
The Department clarified its ``automatic assessment'' regulation on
May 6, 2003. See Antidumping and Countervailing Duty Proceedings:
Assessment of Antidumping Duties, 68 FR 23954 (May 6, 2003) (Assessment
Policy Notice). This clarification will apply to entries of subject
merchandise during the POR produced by companies included in these
final results of review for which the reviewed companies did not know
that the merchandise they sold to the intermediary (e.g., a reseller,
trading company, or exporter) was destined for the United States. In
such instances, we will instruct CBP to liquidate unreviewed entries at
the all-others rate effective during the POR (i.e., 40.18 percent) if
there is no rate for the intermediary involved in the transaction. See
Assessment Policy Notice for a full discussion of this clarification.
Cash Deposit Requirements
The following cash 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 of the
final results of this administrative review, as provided by section
751(a)(2)(C) of the Act: (1) The cash deposit rate for each specific
company listed above will be that established in the final results of
this review, except if the rate is less than 0.50 percent, and
therefore, de minimis within the meaning of 19 CFR 351.106(c)(1), in
which case the cash deposit rate will be zero; (2) for previously
reviewed or investigated companies not participating in this 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 prior review, or the original less-than-fair-
value (LTFV) investigation, but the manufacturer is, the cash deposit
rate will be the rate established for the most recent period for the
manufacturer of the merchandise; and (4) the cash deposit rate for all
other manufacturers or exporters will be 40.18 percent, the all-others
rate established in the LTFV investigation. These requirements, when
imposed, shall remain in effect until further notice.
Notification to Importers
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.
This administrative review and notice are published in accordance
with sections 751(a)(1) and 777(i)(1) of the Act and 19 CFR 351.221.
Dated: July 31, 2009.
John M. Andersen,
Acting Deputy Assistant Secretary for Antidumping and Countervailing
Duty Operations.
[FR Doc. E9-18959 Filed 8-6-09; 8:45 am]
BILLING CODE 3510-DS-P