Daily Rules, Proposed Rules, and Notices of the Federal Government
The Department published a notice of opportunity to request an administrative review of the order on LWR pipe and tube from Mexico on August 1, 2011.
Both Maquilacero and Regiopytsa submitted responses to the Department's antidumping questionnaire and responses to subsequent requests for additional information. The petitioner filed no comments on these responses.
On May 10, 2012, the Department published a notice extending the time limit for issuing the preliminary results of review by 120 days.
The period of review is August 1, 2010, through July 31, 2011.
The merchandise that is the subject of the order is certain welded carbon-quality light-walled steel pipe and tube, of rectangular (including square) cross section, having a wall thickness of less than 4 mm.
The term carbon-quality steel includes both carbon steel and alloy steel which contains only small amounts of alloying elements. Specifically, the term carbon-quality includes products in which none of the elements listed below exceeds the quantity by weight respectively indicated: 1.80 percent of manganese, or 2.25 percent of silicon, or 1.00 percent of copper, or 0.50 percent of aluminum, or 1.25 percent of chromium, or 0.30 percent of cobalt, or 0.40 percent of lead, or 1.25 percent of nickel, or 0.30 percent of tungsten, or 0.10 percent of molybdenum, or 0.10 percent of niobium, or 0.15 percent vanadium, or 0.15 percent of zirconium. The description of carbon-quality is intended to identify carbon-quality products within the scope. The welded carbon-quality rectangular pipe and tube subject to the order is currently classified under the Harmonized Tariff Schedule of the United States (HTSUS) subheadings 7306.61.50.00 and 7306.61.70.60. While HTSUS subheadings are provided for convenience and customs purposes, our written description of the scope of the order is dispositive.
Under section 771(33)(E) of the Tariff Act of 1930, as amended (the Act), if one party owns, directly or indirectly, five percent or more of another party, such parties are considered to be affiliated for purposes of the antidumping law. Furthermore, pursuant to 19 CFR 351.403, the Department may require a respondent to report the downstream sales of its affiliated customer to the first unaffiliated customer if: (1) The respondent's sales to all affiliated customers account for five percent or more of the respondent's total sales of foreign-like product in the comparison market, and (2) those sales to the affiliated customer are determined to have not been made at arm's-length.
In past segments of this proceeding, the Department found that Maquilacero should report the downstream sales of an affiliated home-market customer pursuant to section 771(33)(E) of the Act.
Regiopytsa also reported sales to an affiliated home-market reseller during the period of review but, as the value of the sales constituted less than five percent of Regiopytsa's total home-market sales during the period, we did not request that Regiopytsa report the downstream sales of this affiliate.
To determine if sales of subject merchandise were made in the United States at less than fair value (LTFV), we compared the price of U.S. sales to normal value, as described in the “U.S. Price” and “Normal Value” sections of this notice. For these preliminary results, the Department applied the methodology for calculation of a weighted-average dumping margin recently adopted in
In accordance with section 771(16) of the Act, we considered all products covered by the description in the “Scope of the Order” section above and that were produced by Maquilacero and Regiopytsa and sold in the home market during the period of review, to be foreign like product for purposes of determining appropriate product comparisons to subject merchandise sold in the United States. We relied on the following six product characteristics to identify identical subject merchandise and foreign like product: (1) Steel input type; (2) whether the product was metallic-coated or not; (3) whether the product was painted or not; (4) product perimeter; (5) wall thickness; and (6) shape. Where there were no sales of identical merchandise in the home market to compare to subject merchandise sold in the United States, we compared the U.S. sales to home-market sales of the most-similar, foreign like product on the basis of the reported product characteristics and instructions provided in our antidumping questionnaire.
In accordance with section 773(a)(1)(B) of the Act and to the extent practicable, we determine normal value based on sales made in the home market at the same level of trade as the export price or the constructed export price. The normal-value level of trade is based on the starting prices of sales in the home market or, when normal value is based on constructed value, those of the sales from which we derived selling, general, and administrative expenses and profit.
To determine if home-market sales are made at a different level of trade than export-price sales, we examine stages in the marketing process and the selling functions performed along the chain of distribution between the producer and the unaffiliated customer.
In response to section A of the antidumping questionnaire and in supplemental responses to the questionnaire, Maquilacero reported one level of trade with one channel of distribution for its export-price sales. Based on our analysis of the selling functions performed by Maquilacero on its sales to the United States, we
For the home market, Maquilacero identified two channels of distribution in its section A response as follows: (1) Direct sales made by Maquilacero, and (2) indirect sales made by its affiliated reseller to the first unaffiliated customer. Maquilacero reported that the sales in both channels were made at one level of trade. Based on our analysis of all of Maquilacero's home-market selling functions, we found that the sales made in both channels of distribution were made at one level of trade, the normal-value level of trade.
We then compared the selling functions performed for the sales at the normal-value level of trade to those performed for sales at the export-price level of trade. Based on this analysis, we preliminarily determined that the starting price of Maquilacero's home-market sales and its export price represented different stages in the marketing process and were thus at different levels of trade. However, because Maquilacero only sold at one level of trade in the home market, there is no basis on which to determine if there was a pattern of consistent price differences between two levels of trade in that market. Furthermore, there is no other record evidence on which to base a level-of-trade adjustment. Therefore, although the normal-value level of trade differed from the export-price level of trade, we are unable to make a level-of-trade adjustment to normal value for Maquilacero.
In its initial and supplemental responses to section A, Regiopytsa reported one channel of distribution for its home-market sales made to two types of customers (
In the U.S. market, Regiopytsa reported one level of trade for which there was one channel of distribution to two types of customers (
Next we compared the selling functions associated with the sales at the normal-value level of trade to those associated with the export-price level of trade and, based on our analysis of record evidence, we found that the degree and number of selling functions provided by Regiopytsa for its customers in the home market was greater than the degree to which it provided some of those selling functions to U.S. customers. However, as with Maquilacero, we were unable to calculate a level-of-trade adjustment because we found only one level of trade in Regiopytsa's home market and there is no other record evidence on which to base an adjustment. Therefore, for these preliminary results, we matched the export-price sales to home-market sales without making a level-of-trade adjustment to normal value.
The Department will normally use invoice date, as recorded in the exporter's or producer's records kept in the ordinary course of business, as the date of sale, but may use a date other than the invoice date if it better reflects the date on which the material terms of sale are established.
Section 772(a) of the Act defines export price as “the price at which the subject merchandise is first sold (or agreed to be sold) before the date of importation by the producer or exporter of 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, as adjusted under subsection (c).”
For purposes of these preliminary results, we calculated the U.S. price as the export price for Maquilacero and Regiopytsa in accordance with section 772(a) of the Act, because the merchandise was sold, prior to importation by the producer, outside of the United States to the first unaffiliated purchaser in the United States. For each company, we calculated export price based on the packed price that was charged to the first unaffiliated U.S. customer. We made deductions for movement expenses, where appropriate, in accordance with section 772(c)(2)(A) of the Act, including deductions for foreign inland freight (plant/warehouse to the border), U.S. inland freight (border to the unaffiliated customer), country of manufacture inland insurance, and brokerage and handling. We also made adjustments, where appropriate, for imputed credit, certain direct selling expenses (including commissions), and billing adjustments.
To determine if there was a sufficient volume of sales of LWR pipe and tube in the home market during the period of review to serve as a viable basis for calculating normal value, we compared Maquilacero and Regiopytsa's quantity of home-market sales of the foreign like product to the quantity of each company's respective U.S. sales of the subject merchandise, in accordance with section 773(a) of the Act. Because both Maquilacero and Regiopytsa's aggregate quantity of home-market sales of the foreign like product was greater than five percent of their aggregate quantity of U.S. sales for subject merchandise, we determined that the home market was viable for comparison purposes for both companies, pursuant to section 773(a)(1)(B) of the Act.
Sales to affiliated customers in the home market that were not made at
Both respondents have had home-market sales disregarded in prior reviews on the basis that they had sales priced below the cost of production (COP), which were made within an extended period of time, in substantial quantities, and at prices which permitted the recovery of all costs within a reasonable period of time.
Based on a review of the cost information provided, neither company appeared to experience significant changes in its cost of manufacturing (COM) throughout the period of review. Thus, we followed our normal methodology of calculating a review-period, weighted-average cost for each product. We relied on the COP information provided by Maquilacero and Regiopytsa except, in accordance with section 773(f)(2) of the Act, we made an adjustment to Maquilacero's affiliated-party-supplied labor costs to reflect the higher of the transfer price or COP. Because the record did not provide market prices for these services in the market under consideration, we used the COP of the affiliate as a proxy for the amount representing the value of labor costs usually reflected in the market under consideration.
On a product-specific basis, we compared the adjusted, weighted-average COP figures to the prices of home-market sales of the foreign like product in order to determine if these sales were made at prices below the COP. The prices were exclusive of any applicable movement charges, packing expenses, warranty expenses, or indirect selling expenses. In determining whether to disregard home-market sales made at prices below their COP, we examined if such sales were made within an extended period of time, in substantial quantities, and at prices which permitted the recovery of all costs within a reasonable period of time.
We found that, for certain products for Maquilacero and Regiopytsa, more than 20 percent of the home-market sales were made at prices below the COP and that these below-cost sales were made within an extended period of time and in substantial quantities. In addition, the sales were made at prices that did not permit the recovery of costs within a reasonable period of time. Thus, for both Maquilacero and Regiopytsa, in accordance with section 773(b)(1) of the Act, we disregarded these below-cost sales, and used only the remaining sales of the same product as the basis for determining normal value.
We calculated the weighted-average normal value based on prices to unaffiliated customers and those to affiliated customers that passed the arm's-length test.
For more detailed information on the calculation of normal value,
The Department's preferred source for daily exchange rates is the Federal Reserve Bank.
As a result of our review, we preliminarily determine the following weighted-average dumping margins exist for the period August 1, 2010, through July 31, 2011:
The Department will disclose the calculations we used in our analysis to interested parties to this review within five days of the date of publication of this notice in accordance with 19 CFR 351.224(b). An interested party may request a hearing within 30 days of publication of these preliminary results.
Parties are reminded that any requests or other submissions must be filed electronically using Import Administration's Antidumping and Countervailing Duty Centralized Electronic Service System, in compliance with the procedures set forth in
The Department intends to issue the final results of this administrative review, including the results of our analysis of the issues in any such argument or at a hearing, within 120 days of the date of publication of this notice.
Upon completion of this administrative review, the Department shall determine, and CBP shall assess, antidumping duties on all appropriate entries. If either Maquilacero's or Regiopytsa's weighted-average dumping margin is above
The Department clarified its “automatic assessment” regulation on May 6, 2003.
In accordance with 19 CFR 356.8(a), the Department intends to issue assessment instructions to CBP on or after 41 days following the publication of the final results of this review.
The following cash-deposit requirements will be effective, upon completion of the final results of this administrative review, for all shipments of LWR pipe and tube from Mexico entered or withdrawn from warehouse, for consumption, on or after the date of publication of the final results of review, as provided by section 751(a)(1) of the Act: (1) The cash-deposit rates for the companies covered by this review (
This notice serves as a preliminary reminder to importers of their responsibility under 19 CFR 351.402(f)(2) to file a certificate regarding the reimbursement of
These preliminary results are issued and published in accordance with sections 751(a)(1) and 777(i)(1) of the Act.