[Federal Register Volume 75, Number 113 (Monday, June 14, 2010)]
[Notices]
[Pages 33578-33584]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-14278]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-533-502]
Certain Welded Carbon Steel Standard Pipes and Tubes from India:
Preliminary Results of Antidumping Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce (the Department) is conducting an
administrative review of the antidumping duty order on welded carbon
steel standard pipes and tubes from India. This review covers nine
exporters/producers. The period of review (POR) is May 1, 2008, through
April 30, 2009.
We have preliminarily found that sales of the subject merchandise
have been made at prices below normal value. If these preliminary
results are adopted in our final results, 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 these
preliminary results. We will issue the final results not later than 120
days after the date of publication of this notice.
DATES: Effective Date: June 14, 2010.
FOR FURTHER INFORMATION CONTACT: Michael A. Romani or Minoo Hatten, AD/
CVD Operations, Office 5, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW, Washington DC 20230; telephone (202) 482-0198
or (202) 482-1690, respectively.
SUPPLEMENTARY INFORMATION:
[[Page 33579]]
Background
On May 12, 1986, the Department of Commerce (the Department)
published in the Federal Register the antidumping duty order on certain
welded carbon steel standard pipes and tubes (pipes and tubes) from
India. See Antidumping Duty Order; Certain Welded Carbon Steel Standard
Pipes and Tubes from India, 51 FR 17384 (May 12, 1986). On May 1, 2009,
the Department published in the Federal Register a notice of
``Opportunity to Request Administrative Review'' of the order. See
Antidumping or Countervailing Duty Order, Finding, or Suspended
Investigation; Opportunity To Request Administrative Review, 74 FR
20278 (May 1, 2009). On June 24, 2009, in response to a request from
the Wheatland Tube Company (the petitioner) and in accordance with 19
CFR 351.213(g) and 19 CFR 351.221(b)(1), we published a notice of
initiation of an administrative review with respect to 10 companies.\1\
See Initiation of Antidumping and Countervailing Duty Administrative
Reviews and Requests for Revocation in Part, 74 FR 30052 (June 24,
2009). We are conducting this review in accordance with section 751(a)
of the Tariff Act of 1930, as amended (the Act).
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\1\ We initiated the review on the following companies: Lloyds
Metals and Engineers Limited, Lloyds Steel Industries Limited,
Jindal Industries Ltd., Maharashtra Seamless Limited, Jindal Pipes
Limited, Makalu Trading Pvt. Ltd., Ratnamani Metals Tubes Ltd.,
Universal Tube and Plastic Ind., Ushdev International Ltd., and
Uttam Galva Steels Ltd.
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We received a letter from the petitioner withdrawing its request
for review of the order with respect to Jindal Industries Ltd.
(Jindal). Because we received no other requests for review of Jindal,
pursuant to 19 CFR 351.213(d)(1), we rescinded the review in part with
respect to pipes and tubes from India produced and/or exported by
Jindal. See Certain Welded Carbon Steel Standard Pipes and Tubes From
India: Rescission of Antidumping Duty Administrative Review in Part, 74
FR 55817 (October 29, 2009).
Since initiation of the review, we extended the due date for
completion of these preliminary results from January 31, 2010, to May
3, 2010. See Extension of Time Limit for Certain Welded Carbon Steel
Standard Pipes and Tubes from India: Preliminary Results of Antidumping
Duty Administrative Review, 74 FR 68586 (December 28, 2009).
As explained in the February 12, 2010, memorandum from the Deputy
Assistant Secretary for Import Administration, the Department has
exercised its discretion to toll Import Administration deadlines for
the duration of the closure of the Federal Government from February 5
through February 12, 2010. Thus, the deadline in this segment of the
proceeding was extended by seven days. This revised deadline for the
preliminary results of this administrative review was May 10, 2010. See
Memorandum to the Record from Ronald Lorentzen, DAS for Import
Administration, regarding ``Tolling of Administrative Deadlines As a
Result of the Government Closure During the Recent Snowstorm,'' dated
February 12, 2010.
On May 4, 2010, in accordance with section 751(a)(3)(A) of the Act,
the Department extended the due date for the notice of preliminary
results by an additional 28 days from the revised due date of May 10,
2010, to June 7, 2010. See Certain Welded Carbon Steel Standard Pipes
and Tubes from India: Extension of Time Limit for Preliminary Results
of Antidumping Duty Administrative Review, 75 FR 23672 (May 4, 2010).
Scope of the Order
The products covered by the order include certain welded carbon
steel standard pipes and tubes with an outside diameter of 0.375 inch
or more but not over 16 inches. These products are commonly referred to
in the industry as standard pipes and tubes produced to various
American Society for Testing Materials (ASTM) specifications, most
notably A-53, A-120, or A-135.
The antidumping duty order on certain welded carbon steel standard
pipes and tubes from India, published on May 12, 1986, included
standard scope language which used the import classification system as
defined by Tariff Schedules of the United States, Annotated (TSUSA).
The United States developed a system of tariff classification based on
the international harmonized system of customs nomenclature. On January
1, 1989, the U.S. tariff schedules were fully converted from the TSUSA
to the Harmonized Tariff Schedule (HTS). See, e.g., Certain Welded
Carbon Steel Standard Pipes and Tubes from India; Preliminary Results
of Antidumping Duty Administrative Reviews, 56 FR 26650, 26651 (June
10, 1991). As a result of this transition, the scope language we used
in the 1991 Federal Register notice is slightly different from the
scope language of the original final determination and antidumping duty
order.
Until January 1, 1989, such merchandise was classifiable under item
numbers 610.3231, 610.3234, 610.3241, 610.3242, 610.3243, 610.3252,
610.3254, 610.3256, 610.3258, and 610.4925 of the TSUSA. This
merchandise is currently classifiable under HTS item numbers
7306.30.1000, 7306.30.5025, 7306.30.5032, 7306.30.5040, 7306.30.5055,
7306.30.5085, 7306.30.5090. As with the TSUSA numbers, the HTS numbers
are provided for convenience and customs purposes. The written product
description remains dispositive.
Selection of Respondents
Due to the large number of firms for which a review was requested
and the resulting administrative burden to examine each company for
which a request was made, the Department exercised its authority to
limit the number of respondents selected for individual examination.
Where it is not practicable to individually examine all known
exporters/producers of subject merchandise because of the large number
of such companies, section 777A(c)(2) of the Act permits the Department
to limit its examination to either a sample of exporters, producers, or
types of products that is statistically valid based on the information
available at the time of selection or exporters and producers
accounting for the largest volume of subject merchandise from the
exporting country that can be examined reasonably. Accordingly, on July
28, 2009, after considering our resources, we determined that it was
not practicable to examine all ten exporters/producers of subject
merchandise for which a review was requested. See Memorandum entitled
``Antidumping Duty Order on Certain Welded Carbon Steel Standard Pipes
and Tubes from India Respondent Selection'' dated July 28, 2009. As a
result, we selected the two largest producers/exporters of pipes and
tubes from India during the POR (i.e., Lloyds Metals & Engineers Ltd.
(LMEL) and Jindal) for individual examination in this segment of the
proceeding.
As explained above, after our selection of Jindal for individual
examination, we rescinded the review in part with respect to Jindal
because the sole request for such a review was withdrawn.
No-Knowledge/No-Shipments Respondents
Subsequent to the initiation of the review, Makalu Trading Pvt.
Ltd. (Makalu), Uttam Galva Steels Ltd. (Uttam), and Ushdev
International Ltd. (Ushdev) stated that, although individually acting
as resellers of subject pipe and tube, each had only one (and the same)
supplier which had
[[Page 33580]]
knowledge that all sales by these resellers of subject merchandise were
destined for the United States. See letter from LMEL containing
responses from Makalu, Ushdev, and Uttam dated March 25, 2010. In fact,
according to the March 25 submission, the producer had knowledge
because it had concluded the sale with the U.S. customer on its own.
In accordance with our practice, the supplier is the proper party
to review because the supplier's sale to the unaffiliated trading
companies is the point in the sales chain at which merchandise ``is
first sold (or agreed to be sold), before the date of importation, by
the producer or exporter of the subject merchandise outside of the
United States to an unaffiliated purchaser in the United States, or to
an unaffiliated purchaser for exportation to the United States `` See
section 772(a) of the Act and Antifriction Bearings (Other Than Tapered
Roller Bearings) and Parts Thereof From the Federal Republic of
Germany; Final Resuls of Antidumping Duty Administrative Review, 56 FR
31692, 31747 (July 11, 1991), at Section 18, Comment 30. Because the
producers knew that the merchandise they sold was destined for the
United States, we find that Makalu, Utam, and Ushdev did not have
shipments of their own subject to this review.
On July 16, 2009, the Department received a letter from Universal
Tube and Plastic Ind. (UTP) indicating that it made no shipments from
India to the United States and that it was not an Indian producer of
subject merchandise. We have not received any comments on UTP's
submission. We confirmed UTP's claim of no shipments by issuing a no-
shipments inquiry to CBP and by reviewing electronic CBP data. See
Letter to Wheatland Tube Company soliciting comments on CBP data, dated
June 29, 2009, in which we enclosed CBP entry data for the companies
subject to this review (CBP entry data).
In its January 14, 2010, submission at 2, Lloyds Steel Industries
Ltd. (LSIL) (responding concurrently with LMEL) stated that it never
produced pipe for the open market. We confirmed LSIL's claim of no
shipments by issuing a no-shipments inquiry to CBP and by reviewing
electronic CBP data. See CBP entry data.
With regard to the absence of shipments by UTP and LSIL, our
practice following implementation of the 1997 regulations concerning
no-shipment respondents was to rescind the administrative review if the
respondent certifies that it had no shipments and we have confirmed
through our examination of CBP data that there were no shipments of
subject merchandise during the POR. See Antidumping Duties;
Countervailing Duties, 62 FR 27296, 27393 (May 19, 1997) (implementing
the 1997 regulations), and Oil Country Tubular Goods from Japan:
Preliminary Results of Antidumping Duty Administrative Review and
Partial Rescission of Review, 70 FR 53161, 53162 (September 7, 2005),
unchanged in Oil Country Tubular Goods from Japan: Final Results and
Partial Rescission of Antidumping Duty Administrative Review, 71 FR 95
(January 3, 2006). As a result, in such circumstances, we would
normally instruct CBP to liquidate any entries from the no-shipment
company at the deposit rate in effect on the date of entry.
In our May 6, 2003, automatic-assessment clarification, we
explained that, where respondents in an administrative review
demonstrate that they had no knowledge of sales through resellers to
the United States, we would instruct CBP to liquidate such entries at
the all-others rate applicable to the proceeding. See Antidumping and
Countervailing Duty Proceedings: Assessment of Antidumping Duties, 68
FR 23954 (May 6, 2003) (Assessment of Antidumping Duties).
Because ``as entered'' liquidation instructions under our earlier
practice concerning no-shipment respondents do not alleviate the
concerns which the May 2003 clarification was intended to address, we
find it appropriate in this case to instruct CBP to liquidate any
entries during the POR of merchandise produced by UTP or LSIL and
exported by other parties at the all-others rate should we continue to
find at the time of our final results that UTP and LSIL had no
shipments of subject merchandise from India. See Magnesium Metal From
the Russian Federation: Preliminary Results of Antidumping Duty
Administrative Review, 75 FR 26922, 26933 (May 13, 2010). See also
Certain Frozen Warmwater Shrimp from India: Partial Rescission of
Antidumping Duty Administrative Review, 73 FR 77610, 77612 (December
19, 2008). In addition, the Department finds that it is more consistent
with the May 2003 clarification not to rescind the review in part in
these circumstances but, rather, to complete the review with respect to
Makalu, Utam, Ushdev, UTP, and LSIL and issue instructions to CBP to
liquidate entries at the rate applicable to the producer or the all-
others rate, as appropriate. See the ``Assessment Rates'' section of
this notice below.
Duty Absorption
On July 22, 2009, the petitioner requested that the Department
determine whether antidumping duties had been absorbed during the POR
by the companies under review. Section 751(a)(4) of the Act and 19 CFR
351.213(j) provide for the Department to determine, if requested,
during an administrative review initiated between the first and second
or third and fourth anniversary of the publication of the order,
whether antidumping duties have been absorbed by a foreign producer or
exporter if the subject merchandise is sold in the United States
through an affiliated importer.
We find that the petitioner's request is misplaced. The Court of
Appeals for the Federal Circuit found that the Department lacks
authority to conduct two- and four-year duty-absorption inquiries for
reviews of transitional orders (orders in effect before January 1,
1995). See FAG Italia S.p.A. v. United States, 291 F.3d 806, 819 (Fed.
Cir. 2002). Because the order for this case went into effect in 1986,
we have not conducted a duty-absorption inquiry in this segment of the
proceeding.
Decisions Regarding Affiliation and Collapsing
LMEL produced subject merchandise in its pipe and tube
manufacturing facility at Murbad during the POR until November 1, 2008.
As of November 1, 2008, the manufacturing facility was ``de-merged''
and the ownership was transferred to a new company, Lloyds Line Pipe
Ltd. (LLPL). As a result, as of November 1, 2008, LMEL no longer
produced subject merchandise but sold subject merchandise produced by
LLPL under the LMEL brand name.
We have determined that LMEL and LLPL are affiliated under sections
771(33)(E) and (F) of the Act and 19 CFR 351.102(b)(3). We have
determined that three family members are affiliated and are jointly in
a position to control LMEL and LLPL. Because the respondent has claimed
business-proprietary treatment of the information we have examined see
Memorandum entitled ``Certain Welded Carbon Steel Standard Pipes and
Tubes From India Affiliation and Whether to Collapse Two Separate
Entities'' dated June 7, 2010 (Affiliation Memo). As a result of our
analysis and pursuant to section 771(33)(F) of the Act and 19 CFR
351.102(b)(3), we find that LMEL, LLPL and LSIL are affiliated. For a
detailed discussion of our treatment of these companies with respect to
affiliation and collapsing see Affiliation Memo.
[[Page 33581]]
Additionally, we have determined that LMEL and LLPL should be
collapsed and treated as a single entity for antidumping-duty purposes
but that LSIL should not be collapsed with LMEL/LLPL. LLPL produced the
subject merchandise which LMEL sold after November 1, 2008. Based on
these facts as well as the ownership and joint-management control of
LMEL and LLPL, we find there is a significant potential for
manipulation of price and production of the subject merchandise between
these two companies. In such circumstance, we find it appropriate to
treat these companies as a single entity. See Notice of Final
Determination of Sales at Less Than Fair Value: Certain Frozen and
Canned Warmwater Shrimp From Brazil, 69 FR 76910 (December 23, 2004),
and accompanying Issues and Decision Memorandum at Comment 5.
With respect to LSIL, a production company affiliated with LMEL/
LLPL, pursuant to 19 CFR 351.401(f)(1) we find that substantial
retooling of LSIL's facilities would be necessary for it to restructure
its manufacturing priorities in order to produce any diameter of
foreign like product or subject merchandise in quantities of any
significance. Currently, LSIL only has the ability to manufacture a
very limited range of diameters of merchandise under consideration and
only with tooling that is not dedicated to the purpose. LMEL did not
produce any merchandise under consideration in the limited range that
LSIL could produce. When LSIL needed foreign like product for internal
consumption during the POR it purchased it from LMEL/LLPL. LSIL is not
involved in the sale of subject merchandise on the open market. For
these reasons, we preliminarily determine to treat LMEL/LLPL and LSIL
as separate entities, in accordance with 19 CFR 351.401(f)(1). For a
detailed discussion of our treatment of these companies with respect to
affiliation and collapsing, see Affiliation Memo.
Because we have not collapsed LMEL/LLPL and LSIL into a single
entity for these preliminary results, we have continued to value the
hot-rolled coil that LMEL/LLPL purchases from LSIL as a factor of its
production subject to the major-input rule under section 773(f)(3) of
the Act. See Memorandum entitled ``Cost of Production and Constructed
Value Calculation Adjustments for the Preliminary Results Lloyds Metals
and Engineers Limited and Lloyds Line Pipe Limited'' (June 7, 2010)
(Cost Calculation Memo).
Verification
As provided in section 782(i) of the Act, we have verified sales
information and certain cost information directly related to selling,
general, and administrative expenses (SG&A) and constructed-value (CV)
profit provided by LMEL using standard verification procedures,
including on-site inspection of the manufacturer's facilities, the
examination of relevant sales and financial records, and the selection
of original documentation containing relevant information. Our
verification results are outlined in the public version of the
Memorandum to the File entitled ``Verification of the Sales Response of
Lloyds Metals and Engineers Limited in the May 1, 2008, through April
30, 2009, Administrative Review of Certain Welded Carbon Steel Standard
Pipes and Tubes from India'' (June 7, 2010) (Verification Report),
which is on file in the Central Records Unit, room 1117 of the main
Commerce building.
Date of Sale
The Department's regulations at 19 CFR 351.401(i) state that the
Department normally will use the date of invoice, as recorded in the
producer's or exporter's records kept in the ordinary course of
business, as the date of sale. The regulation provides further that the
Department may use a date other than the date of the invoice if the
Secretary is satisfied that a different date better reflects the date
on which the material terms of sale are established. The Department has
a long-standing practice of finding that, where shipment date precedes
invoice date, shipment date better reflects the date on which the
material terms of sale are established. See Notice of Final
Determination of Sales at Less Than Fair Value and Negative Final
Determination of Critical Circumstances: Certain Frozen and Canned
Warmwater Shrimp From Thailand, 69 FR 76918 (December 23, 2004), and
accompanying Issues and Decision Memorandum at Comment 10; see also
Notice of Final Determination of Sales at Less Than Fair Value:
Structural Steel Beams From Germany, 67 FR 35497 (May 20, 2002), and
accompanying Issues and Decision Memorandum at Comment 2.
With respect to LMEL's sales to the United States, Indian law
requires that all merchandise be accompanied by an invoice when it
leaves the factory. A commercial invoice follows the factory invoice at
a later date. We have preliminarily determined that the material terms
of sale are set on the date of shipment from the factory because
shipment occurs at the same time as or before the invoice date (factory
invoice or commercial invoice, as applicable). See Memorandum to the
File ``Certain Welded Carbon Steel Standard Pipes and Tubes From India:
Lloyds Metals & Engineers Limited Analysis Memorandum for the
Preliminary Results of the Administrative Review of the Antidumping
Duty Order (5/1/08 - 4/30/09)'' (June 7, 2010) (Analysis Memo).
Fair-Value Comparisons
To determine whether sales of the subject merchandise sold by LMEL
and exported to the United States were made at less than normal value,
we compared export price to the normal value, as described in the
``Export Price'' and ``Normal Value'' sections of this notice.
Export Price
We based the United States price on export price, as defined in
section 772(a) of the Act, because the merchandise was sold directly by
the respondent to unaffiliated U.S. purchasers prior to importation or
sold to unaffiliated purchasers in India for exportation to the United
States and constructed export price was not otherwise indicated by the
facts of record.
We calculated export price based on packed, forwarding agent's
certificate of receipt, Cost and Freight, or Cost, Insurance, and
Freight prices to the first unaffiliated customer in the United States
or an unaffiliated Indian trading company. We made deductions, where
applicable, for brokerage and handling expenses, freight expenses, and
other direct selling expenses in accordance with section 772(c)(2) of
the Act.
LMEL used the U.S. prime lending rate in its calculation of imputed
credit expense. We replaced the U.S. prime lending rate with the short-
term interest rate calculated in accordance with our practice. See
Policy Bulletin 98.2 Imputed Credit Expenses and Interest Rates dated
February 23, 1998, available at http://ia.ita.doc.gov. We calculated a
simple average of the quarterly statistic (where all sample statistics
were for five days) of ``All C&I Loans 31 365 days'' from the Federal
Reserve Statistical Release E2 Survey of Business Lending. We
recalculated imputed credit expense for LMEL's direct sales to the
United States for the appropriate period from factory-invoice date
(date of sale) to payment date with an interest rate that is in
accordance with our practice. Additionally, we disregarded LMEL's
reported imputed-credit expense for sales through trading companies
[[Page 33582]]
because there is no definable period for which LMEL extended credit to
its customer, the Indian trading company. See Analysis Memo.
With respect to one sale to an Indian trading company, in its May
14, 2010, U.S. sales database, LMEL reported information regarding this
sale based on a post-delivery (to the final U.S. customer)
renegotiation of price due to a warranty claim. In the original
questionnaire we instructed LMEL to report price adjustments and
warranty expenses separately from prices reflected in the agreement of
sale. In other cases where LMEL granted credits to its customers based
on warranty redemptions, it reported its price information in
accordance with the Department's instructions. For the sale in
question, we have replaced the information LMEL reported in its U.S.
sales database with information in the Verification Report that
identifies the correct contract date, date of sale, and gross price in
the local currency. Additionally, we have adjusted the total warranty-
expense calculation to reflect the credit that LMEL granted on the sale
in question. This affects the warranty-expense allocation for all
sales. See Analysis Memo.
Normal Value
After testing comparison-market viability, we calculated normal
value as stated in the ``Constructed Value'' section of this notice.
1. Comparison-Market Viability
Section 773(a)(1) of the Act directs that normal value be based on
the price at which the foreign like product is sold in the comparison
market, provided that the merchandise is sold in sufficient quantities
(or value, if quantity is inappropriate) and that there is no
particular market situation that prevents a proper comparison with the
export price. Section 773(a)(1)(C) of the Act contemplates that
quantities (or values) will normally be considered insufficient if they
are less than five percent of the aggregate quantity (or value) of
sales of the subject merchandise to the United States.
In order to determine whether there was a sufficient volume of
sales in the home market or third country to serve as a viable basis
for calculating normal value, we compared the respondent's volume of
home-market and third-country sales of the foreign like product to the
volume of U.S. sales of the subject merchandise in accordance with
sections 773(a)(1)(B) and (C) of the Act. LMEL's aggregate volume of
sales of foreign like product in its home market was not greater than
five percent of its sales of subject merchandise to the United States.
Therefore, this market is not viable as a comparison market. LMEL's
sales of foreign like product to one third-country market were greater
than five percent of its sales of subject merchandise to the United
States. Therefore, this market is viable as a comparison market.
Upon analysis of LMEL's viable third-country market, we determined
that all sales to this market were of non-prime merchandise and as such
are not contemporaneous sales of comparable merchandise to LMEL's sales
of subject merchandise in the United States that consisted of all prime
merchandise. See Notice of Final Results of the Eleventh Administrative
Review of the Antidumping Duty Order on Certain Corrosion-Resistant
Carbon Steel Flat Products from the Republic of Korea, 71 FR 7513
(February 13, 2006), and accompanying Issues and Decision Memorandum at
Comment 13. Pursuant to sections 773(a)(4) and (e) of the Act and 19
CFR 351.405(a), we may determine normal value by constructing a value
based on the cost of manufacture (COM), SG&A, and profit where there
are no contemporaneous sales of comparable merchandise in the
comparison market. See Memorandum entitled ``Certain Welded Carbon
Steel Standard Pipes and Tubes From India Normal Value'' dated April
19, 2010.
2. Cost-Averaging Methodology
The Department's normal practice is to calculate an annual
weighted-average cost for the POR. See, e.g., Certain Pasta From Italy:
Final Results of Antidumping Duty Administrative Review, 65 FR 77852
(December 13, 2000), and accompanying Issues and Decision Memorandum at
Comment 18, and Notice of Final Results of Antidumping Duty
Administrative Review: Carbon and Certain Alloy Steel Wire Rod from
Canada, 71 FR 3822 (January 24, 2006), and accompanying Issues and
Decision Memorandum at Comment 5 (explaining the Department's practice
of computing a single weighted-average cost for the entire period). We
recognize that possible distortions may result if we use our normal
annual-average cost method during a period of significant cost changes.
In determining whether to deviate from our normal methodology of
calculating an annual weighted-average cost, we evaluate the case-
specific record evidence using two primary factors: (1) the change in
the COM recognized by the respondent during the POR must be deemed
significant; (2) the record evidence must indicate that sales during
the shorter averaging periods could be reasonably linked with the cost
of production (COP) or CV during the same shorter averaging periods.
See, e.g., Stainless Steel Sheet and Strip in Coils From Mexico; Final
Results of Antidumping Duty Administrative Review, 75 FR 6627 (February
10, 2010) (SSSS from Mexico), and accompanying Issues and Decision
Memorandum at Comment 6 and Stainless Steel Plate in Coils From
Belgium: Final Results of Antidumping Duty Administrative Review, 73 FR
75398 (December 11, 2008), and accompanying Issues and Decision
Memorandum at Comment 4 (SSPC from Belgium).
We requested that LMEL provide pertinent information for Grade A
control numbers with the five highest volumes sold in the United States
over the twelve months of the POR. LMEL provided this information in
its April 29, 2010, response.
3. Significance of Cost Changes
In prior cases, we established 25 percent as the threshold (between
the high- and low- quarter COM) for determining that the changes in COM
are significant enough to warrant a departure from our standard annual-
cost approach. See SSPC from Belgium at Comment 4. In the instant case,
record evidence shows that LMEL experienced significant changes (i.e.,
changes that exceeded 25 percent) between the high and low quarterly
COM during the POR for two product grades that use the same input grade
of hot-rolled coil, i.e., Grade A hot-rolled coil. LMEL sold three
product grades of subject merchandise to the United States. This change
in COM for Grade A hot-rolled coil is attributable primarily to the
price volatility for this single type of hot-rolled coil used in the
manufacture of two product grades. Hot-rolled coil is the only major
input consumed in the production of certain welded carbon steel
standard pipes and tubes. See Cost Calculation Memo. We found that
prices for hot-rolled coil changed significantly throughout the POR
and, as a result, directly affected the cost of the material inputs
consumed by LMEL. See Cost Calculation Memo. Specifically, the record
data show that the percentage difference between the high and the low
quarterly COM clearly exceeded the 25-percent threshold for all five of
the Grade A control numbers with the highest volume sold in the United
States during the POR. See Cost Calculation Memo.
[[Page 33583]]
4. Linkage between Cost and Sales Information
Consistent with past precedent, because we found the changes in
costs to be significant, we evaluated whether there is evidence of a
linkage between the cost changes and the sales prices during the POR.
The Department's definition of ``linkage'' does not require direct
traceability between specific sales and their specific production costs
but, rather, relies on whether there are elements that would indicate a
reasonable correlation between the underlying costs and the final sales
prices levied by the company. See SSPC from Belgium at Comment 4. These
correlative elements may be measured and defined in a number of ways
depending on the associated industry and the overall production and
sales processes. To determine whether a reasonable correlation existed
between the sales prices and their underlying costs during the POR, we
compared weighted-average quarterly prices to the corresponding
quarterly COM for the five Grade A control numbers with the highest
volume of sales to the United States. After reviewing this information
and determining that there is a trend of sales and costs for the vast
majority of the quarters, we preliminarily determine that there is
linkage between LMEL's changing costs and sales prices during the POR.
See Cost Calculation Memo. See, e.g., SSSS from Mexico at Comment 6 and
SSPC from Belgium at Comment 4.
Because we have found significant cost changes in COM as well as
reasonable linkage between costs and sales prices, we have
preliminarily determined that a quarterly costing approach leads to
more appropriate comparisons in our antidumping duty calculation for
LMEL concerning two of its three product grades.
5. Constructed Value
In accordance with section 773(e) of the Act, we calculated CV
based on the sum of the respondent's cost of materials and fabrication
for the foreign like product, plus amounts for SG&A, profit, and U.S.
packing costs. We relied on the respondent's submitted materials and
fabrication costs, general and administrative (G&A) expenses, and U.S.
packing costs. We made the following adjustments to the reported CV
information:
a. We recalculated LMEL's claimed adjustment factor for hot-rolled
coil, which accounts for yield loss, scrap offsets, and the conversion
of actual to theoretical quantities, to use a denominator that is on
the same basis as the per-unit coil cost to which the rate is applied.
b. We revised the byproduct offset claimed for metal scrap sold to
affiliated parties to reflect an arm's-length value in accordance with
the transactions-disregarded rule in section 773(f)(2) of the Act.
c. We revised the reported G&A expense rate to reflect the rate
obtained at the sales verification. See Verification Report.
Additionally, we adjusted the total G&A expenses to include the cost-
of-sales items identified as G&A expenses and to exclude foreign-
exchange losses and home-market selling expenses. We also adjusted the
denominator of the rate to exclude G&A and packing expenses and to
include scrap offsets.
d. We revised the financial-expense rate to reflect the rate obtained
at the sales verification. Additionally, we adjusted the net financial
expenses to include foreign-exchange gains and losses. We also adjusted
the denominator of the calculation to exclude G&A and packing expenses
and to include scrap offsets.
e. We find that the information necessary to calculate an accurate and
otherwise reliable margin is not available on the record with respect
to products sold but not produced during the POR. For the preliminary
results, pursuant to section 776(a)(1) of the Act, we have used the
cost for the most similar product as facts available.
We calculated selling expenses and profit in accordance with
section 773(e)(2)(B)(i) of the Act, as detailed in the Cost Calculation
Memo. Because we determined for purposes of these preliminary results
that LMEL does not have a viable home market, we could not determine
selling expenses and profit concerning home-market sales under section
773(e)(2)(A) of the Act. Although LMEL has a viable third-country
market, we do not have such information for sales to that market
because we are not investigating whether LMEL made sales at below-cost
prices in that market. Therefore, we relied on section 773(e)(2)(B) of
the Act to determine these selling expenses and profit. Specifically,
we used the selling-expense and profit rates derived from LMEL's home-
market sales of line pipe, merchandise that is within the same general
category of products as the subject merchandise. See Cost Calculation
Memo. The statute does not establish a hierarchy for selecting among
the alternative methodologies provided in section 773(e)(2)(B) of the
Act for determining selling expenses and profit. See Statement of
Administrative Action Accompanying the Uruguay Round Agreements Act,
H.R. Doc. No. 103-316, vol. 1, at 840 (1994). Alternative (i) of
section 773(e)(2)(B) of the Act specifies that selling expenses and
profit may be calculated based on ``actual amounts incurred by the
specific exporter or producer * * * on merchandise in the same general
category'' as the subject merchandise. Therefore, we calculated LMEL's
selling expenses and profit based on alternative (i) of section
773(e)(2)(B) of the Act, which is to use the respondent's expenses on
sales of merchandise in the same general category, i.e., LMEL's home-
market sales of line pipe.
Currency Conversion
Pursuant to 19 CFR 351.415, we converted amounts expressed in
foreign currencies into U.S. dollar amounts based on the exchange rates
in effect on the dates of the relevant U.S. sales, as certified by the
Federal Reserve Bank.
Preliminary Results of the Review
As a result of our review, we preliminarily determine that the
following weighted-average dumping margins on certain welded carbon
steel standard pipes and tubes from India exist for the period May 1,
2008, through April 30, 2009:
------------------------------------------------------------------------
Manufacturer/Exporter Margin (percent)
------------------------------------------------------------------------
Lloyds Metals & Engineers Limited (LMEL)/Lloyds Line 10.29
Pipe Ltd. (LLPL)...................................
Lloyds Steel Industries Limited (LSIL).............. *
Jindal Pipes Limited................................ 10.29
Maharashtra Seamless Limited........................ 10.29
Makalu Trading Pvt. Ltd............................. **
Ratnamani Metals Tubes Ltd.......................... 10.29
Universal Tube and Plastic Ind...................... *
Ushdev International Ltd............................ **
Uttam Galva Steels Ltd.............................. **
------------------------------------------------------------------------
* No shipments or sales subject to this review. The firm has no
individual rate from any segment of this proceeding.
** No shipments or sales subject to this review. This company reported
that its supplier had knowledge that its merchandise was destined for
the United States.
Disclosure and Public Comment
We will disclose the calculations used in our analysis to parties
in this review within five days of the date of publication of this
notice in accordance with 19 CFR 351.224(b). Any interested party may
request a hearing within 30 days of the publication of this notice in
the Federal Register. See 19 CFR
[[Page 33584]]
351.310. If a hearing is requested, the Department will notify
interested parties of the hearing schedule.
Interested parties are invited to comment on the preliminary
results of this review. Interested parties may submit case briefs
within 30 days of the date of publication of this notice. Rebuttal
briefs, which must be limited to issues raised in the case briefs, may
be filed not later than five days after the time limit for filing the
case brief. See 19 CFR 351.309(c) and (d). Parties who submit case
briefs or rebuttal briefs in this review are requested to submit with
each argument (1) a statement of the issue and (2) a brief summary of
the argument with an electronic version included.
We intend to issue the final results of this administrative review,
including the results of our analysis of issues raised in the written
comments, within 120 days of publication of these preliminary results
in the Federal Register. See section 751(a)(3)(A) of the Act.
Assessment Rates
The Department shall determine, and CBP shall assess, antidumping
duties on all appropriate entries.
For these preliminary results, we divided the total dumping margins
(calculated as the difference between normal value and export price)
for LMEL/LLPL's importers or customers by the total number of metric
tons LMEL/LLPL sold to the importer or customer. We will direct CBP to
assess the resulting per-metric-ton dollar amount against each metric
ton of merchandise in each importer's/customer's entries during the
review period. Additionally, because we have collapsed LMEL and LLPL,
we will instruct CBP to liquidate entries of LLPL-produced merchandise
at the LMEL/LLPL rate.
The Department clarified its automatic-assessment regulation on May
6, 2003. This clarification will apply to entries of subject
merchandise during the POR produced by LMEL for which LMEL did not know
its merchandise was destined for the United States. In such instances,
we will instruct CBP to liquidate unreviewed entries of merchandise
produced by LMEL at the all-others rate if there is no rate for the
intermediate company(ies) involved in the transaction. For a full
discussion of this clarification, see Assessment of Antidumping Duties.
Consistent with Assessment of Antidumping Duties, for companies
which claimed they had no shipments of subject merchandise to the
United States, i.e., LSIL and UTP, if there are any entries of subject
merchandise produced by these entities into the United States, we will
instruct CBP to liquidate the unreviewed entries of merchandise at the
all-others rate.
With respect to entries by companies that were not selected for
individual examination, i.e., Jindal Pipes Limited, Maharashtra
Seamless Limited and Ratnamani Metals Tubes Ltd., we will instruct CBP
to liquidate entries of merchandise produced and/or exported by these
firms at the rate established for LMEL/LLPL.
For companies which reported that their supplier (LMEL) had
knowledge that its merchandise was destined for the United States,
i.e., Makalu, Uttam, and Ushdev, and otherwise had no shipments or
sales of their own, we will instruct CBP to liquidate these entries at
the rate applicable to LMEL/LLPL.
The Department intends to issue assessment instructions to CBP 15
days after the date of publication of the final results of review.
Cash-Deposit Requirements
The following deposit requirements will be effective upon
publication of the notice of final results of administrative review for
all shipments of certain welded carbon steel standard pipes and tubes
from India entered, or withdrawn from warehouse, for consumption on or
after the date of publication, as provided by section 751(a)(2)(C) of
the Act: (1) the cash-deposit rate for companies under review will be
the rate 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, a prior review, or the less-than-fair-value
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) if neither the exporter nor the manufacturer has
its own rate, the cash-deposit rate will be the all-others rate for
this proceeding, 7.08 percent. See Antidumping Duty Order; Certain
Welded Carbon Steel Standard Pipes and Tubes from India, 51 FR 17384
(May 12, 1986). These deposit 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 Department's presumption that
reimbursement of antidumping duties occurred and the subsequent
assessment of doubled antidumping duties.
These preliminary results of administrative review are issued and
published in accordance with sections 751(a)(1) and 777(i)(1) of the
Act.
Dated: June 7, 2010.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.
[FR Doc. 2010-14278 Filed 6-11-10; 8:45 am]
BILLING CODE 3510-DS-S