Carbon and Certain Alloy Steel Wire Rod from Canada; Initiation and Preliminary Results of Antidumping Duty Changed Circumstances Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of Initiation and Preliminary Results of Antidumping Duty Changed Circumstances Review.

SUMMARY:

In order to clarify the meaning of the exclusion of the Stelco Group (Stelco, Inc. and Stelwire Ltd.) from the antidumping duty order, the Department of Commerce (the Department) is initiating a changed circumstances review of the antidumping duty order on carbon and certain alloy steel wire rod from Canada (steel wire rod) (see Notice of Amended Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order: Carbon and Certain Alloy Steel Wire Rod from Canada, 67 FR 65944 (October 29, 2002) (Antidumping Order)) and issuing this notice of preliminary results. We have preliminarily determined that only merchandise both produced and exported by the Stelco Group is excluded from the order.

EFFECTIVE DATE:

February 25, 2004.

FOR FURTHER INFORMATION CONTACT:

Daniel O'Brien or Constance Handley, at (202) 482-1376 or (202) 482-0631, respectively; AD/CVD Enforcement Office V, Group II, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street & Constitution Avenue, NW, Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

Background:

The Stelco Group received a de minimis margin in the investigation and was excluded from the antidumping duty order. Several months after the publication of the antidumping duty order, the Department received requests for clarification regarding the Stelco Group's exclusion from the order. See Memorandum to the File from Daniel O'Brien, International Trade Compliance Analyst, Regarding Inquiries Concerning Stelco's Exclusion from the Order, dated February 11, 2004. Specifically, parties have inquired as to whether all products produced by the Stelco Group, or only those both produced and exported by the Stelco Group, are excluded from the antidumping order. These inquiries result from inconsistent language in the order and in our instructions to U.S. Customs and Border Protection (CBP), then known as the U.S. Customs Service, regarding the order. The order states that the Department will instruct CBP to suspend liquidation on:

all merchandise, with the exception of the merchandise produced by Stelco, entered, or withdrawn from warehouse, for consumption, on or after the date of publication of this antidumping duty order in the Federal Register. Antidumping Order, 67 FR at 65945.

The corrected instructions to CBP regarding the order¹ read:

... [B]ecause the Stelco Group had a de minimis margin, it is excluded from the antidumping duty order. The Customs Service should discontinue suspension of liquidation with regard to entries made by Stelco Inc. and Stelwire Ltd., effective October 29, 2002.

Scope of the Review

The merchandise covered by this order is certain hot-rolled products of carbon steel and alloy steel, in coils, of approximately round cross section, 5.00 mm or more, but less than 19.00 mm, in solid cross-sectional diameter.

Specifically excluded are steel products possessing the above-noted physical characteristics and meeting the Harmonized Tariff Schedule of the United States (HTSUS) definitions for (a) stainless steel; (b) tool steel; (c) high nickel steel; (d) ball bearing steel; and (e) concrete reinforcing bars and rods. Also excluded are (f) free machining steel products (i.e., products that contain by weight one or more of the following elements: 0.03 percent or more of lead, 0.05 percent or more of bismuth, 0.08 percent or more of sulfur, more than 0.04 percent of phosphorus, more than 0.05 percent of selenium, or more than 0.01 percent of tellurium).

Also excluded from the scope are 1080 grade tire cord quality wire rod and 1080 grade tire bead quality wire rod. This grade 1080 tire cord quality rod is defined as: (i) grade 1080 tire cord quality wire rod measuring 5.0 mm or more but not more than 6.0 mm in cross-sectional diameter; (ii) with an average partial decarburization of no more than 70 microns in depth (maximum individual 200 microns); (iii) having no inclusions greater than 20 microns; (iv) having a carbon segregation per heat average of 3.0 or better using European Method NFA 04-114; (v) having a surface quality with no surface defects of a length greater than 0.15 mm; (vi) capable of being drawn to a diameter of 0.30 mm or less with 3 or fewer breaks per ton, and (vii) containing by weight the following elements in the proportions shown: (1) 0.78 percent or more of carbon, (2) less than 0.01 percent of aluminum, (3) 0.040 percent or less, in the aggregate, of phosphorus and sulfur, (4) 0.006 percent or less of nitrogen, and (5) not more than 0.15 percent, in the aggregate, of copper, nickel and chromium.

This grade 1080 tire bead quality rod is defined as: (i) grade 1080 tire bead quality wire rod measuring 5.5 mm or more but not more than 7.0 mm in cross-sectional diameter; (ii) with an average partial decarburization of no more than 70 microns in depth (maximum individual 200 microns); (iii) having no inclusions greater than 20 microns; (iv) having a carbon segregation per heat average of 3.0 or better using European Method NFA 04-114; (v) having a surface quality with no surface defects of a length greater than 0.2 mm; (vi) capable of being drawn to a diameter of 0.78 mm or larger with 0.5 or fewer breaks per ton; and (vii) containing by weight the following elements in the proportions shown: (1) 0.78 percent or more of carbon, (2) less than 0.01 percent of soluble aluminum, (3) 0.040 percent or less, in the aggregate, of phosphorus and sulfur, (4) 0.008 percent or less of nitrogen, and (5) either not more than 0.15 percent, in the aggregate, of copper, nickel and chromium (if chromium is not specified), or not more than 0.10 percent in the aggregate of copper and nickel and a chromium content of 0.24 to 0.30 percent (if chromium is specified).

The designation of the products as “tire cord quality” or “tire bead quality” indicates the acceptability of the product for use in the production of tire cord, tire bead, or wire for use in other rubber reinforcement applications such as hose wire. These quality designations are presumed to indicate that these products are being used in tire cord, tire bead, and other rubber reinforcement applications, and such merchandise intended for the tire cord, tire bead, or other rubber reinforcement applications is not included in the scope. However, should petitioners or other interested parties provide a reasonable basis to believe or suspect that there exists a pattern of importation of such products for other than those applications, end-use certification for the importation of such products may be required. Under such circumstances, only the importers of record would normally be required to certify the end use of the imported merchandise.

All products meeting the physical description of subject merchandise that are not specifically excluded are included in this scope.

The products subject to this order are currently classifiable under subheadings 7213.91.3010, 7213.91.3090, 7213.91.4510, 7213.91.4590, 7213.91.6010, 7213.91.6090, 7213.99.0031, 7213.99.0038, 7213.99.0090, 7227.20.0010, 7227.20.0020, 7227.20.0090, 7227.20.0095, 7227.90.6051, 7227.90.6053, 7227.90.6058, and 7227.90.6059 of the HTSUS. Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of this proceeding is dispositive.

Initiation and Preliminary Results of Changed Circumstances Review

Pursuant to section 751(b)(1) of the Tariff Act of 1930, as amended (the Act), the Department will conduct a changed circumstances review upon receipt of information concerning, or a request from an interested party for a review of, an antidumping duty order which shows changed circumstances sufficient to warrant a review of the order. As indicated in the Background section, we have received information from CBP and an outside party indicating that the nature of the Stelco Group's exclusion from the order is unclear, because the order could be read to indicate that all products produced by the Stelco Group, whether exported by the Stelco Group or not, are excluded from the order. As explained below, the order was intended to exclude only steel wire rod both produced and exported by the Stelco Group. Thus, the new information to the effect that this may not be clear to CBP and outside parties constitutes changed circumstances warranting a review of the order. Therefore, in accordance with section 751(b)(1) of the Act, we are initiating a changed circumstances review based upon the information received from outside parties.

Section 351.221(c)(3)(ii)(2003) of the regulations permits the Department to combine the notice of initiation of a changed circumstances review and the notice of preliminary results in a single notice if the Department concludes that expedited action is warranted. In this instance, because we already have on the record all the information necessary to make a preliminary finding, we find that expedited action is warranted and have combined the notice of initiation and the notice of preliminary results.

We preliminarily find that only merchandise produced and exported by the Stelco Group is excluded from the antidumping duty order. During the investigation, the Department analyzed only sales of merchandise both produced and exported by the Stelco Group.² Therefore, the determination that the Stelco Group had not made sales at less than fair value was based on sales with respect to which the Stelco Group was the potential price discriminator. There was no determination regarding sales with respect to which a third party would have been responsible for any price discrimination in setting the price to U. S. customers. Sales of Stelco Group merchandise to unaffiliated Canadian parties who resold merchandise to the United States are not within the ambit of the Stelco Group exclusion. Thus, consistent with the Department's practice, merchandise produced but not exported by the Stelco Group is not excluded from the order. See, e.g., Notice of Final Determination of Sales at Less Than Fair Value: Polyethylene Terephthalate Film, Sheet, and Strip From India, 67 FR 34899 (May 16, 2002) (excluding from the order only merchandise “produced and exported” by a zero margin respondent).

If these preliminary results are adopted in the final results of this changed circumstances review, we will instruct CBP to continue to exclude shipments of subject merchandise produced and exported by the Stelco Group from the order and, for all merchandise produced but not exported by the Stelco Group to collect a cash deposit equal to the rate established for the exporter, or if the exporter does not have its own rate, the “all others” rate of 8.11 percent, effective as of the date of the final results of this changed circumstances review. Furthermore, for the period prior to the effective date of the final results of this changed circumstances review, we will instruct CBP to liquidate any entries of merchandise produced by Stelco, regardless of exporter, without regard to antidumping duties.

Public Comment

Any interested party may request a hearing within 30 days of publication of this notice. See 19 CFR 351.310(c). Any hearing, if requested, will be held 44 days after the date of publication of this notice, or the first working day thereafter. Interested parties may submit case briefs and/or written comments not later than 30 days after the date of publication of this notice. Rebuttal briefs and rebuttals to written comments, which must be limited to issues raised in such briefs or comments, may be filed not later than 37 days after the date of publication of this notice. Parties who submit arguments are requested to submit with the argument (1) a statement of the issue, (2) a brief summary of the argument, and (3) a table of authorities.

Consistent with section 351.216(e) of the Department's regulations, we will issue the final results of this changed circumstances review no later than 270 days after the date on which this review was initiated, or within 45 days if all parties agree to our preliminary finding. We are issuing and publishing this finding and notice in accordance with sections 751(b)(1) and 777(i)(1) of the Act and sections 351.216 and 351.221(c)(3) of the Department's regulations.