Certain Carbon and Alloy Steel Cut-to-Length Plate From the People's Republic of China: Final Affirmative Countervailing Duty Determination

AGENCY:

Enforcement and Compliance, International Trade Administration, Department of Commerce.

SUMMARY:

The Department of Commerce (the “Department”) determines that countervailable subsidies are being provided to producers and exporters of certain carbon and alloy steel cut-to-length plate (“CTL plate”) from the People's Republic of China (“PRC”). For information on the estimated subsidy rates, see the “Final Determination” section of this notice.

DATES:

Effective January 26, 2017.

FOR FURTHER INFORMATION CONTACT:

Ryan Mullen, AD/CVD Operations, Office V, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW., Washington, DC 20230; telephone (202) 482-5260.

SUPPLEMENTARY INFORMATION:

Background

The Department published the Preliminary Determination on September 13, 2016. A summary of the events that occurred since the preliminary analysis, as well as a full discussion of the issues raised by parties for this final determination, may be found in the Issues and Decision Memo. The Issues and Decision Memo is a public document and is on file electronically via Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (“ACCESS”). ACCESS is available to registered users at http://access.trade.gov,, and is available to all parties in the Central Records Unit, room B8024 of the main Department of Commerce building. In addition, a complete version of the Issues and Decision Memorandum can be accessed directly at http://trade.gov/enforcement. The signed Issues and Decision Memo and the electronic versions of the Issues and Decision Memo are identical in content.

Period of Investigation

The period of investigation for which we are measuring subsidies is January 1, 2015, through December 31, 2015.

Scope of the Investigation

The scope of this investigation covers CTL plate from the PRC. For a complete description of the scope of this investigation, see Appendix II.

Scope Comments

In accordance with the Preamble to the Department's regulations, the Initiation Notice set aside a period of time for parties to raise issues regarding product coverage, i.e., scope. Certain interested parties commented on the scope of the concurrent CTL plate investigations as it appeared in the Initiation Notice. For a summary of the product coverage comments and rebuttal responses submitted to the records of this and the concurrent CTL plate investigations, and a discussion and analysis of all comments timely received, see the Department's Preliminary Scope Decision Memorandum, the Department's Additional Preliminary Scope Decision Memorandum, and the Department's Final Scope Comment Decision Memorandum. The Department has modified the scope language as it appeared in the Initiation Notice to clarify the exclusion for stainless steel plate, corrected two tariff numbers that were misidentified in the Petitions and in the Initiation Notice, and modified language pertaining to existing steel plate and hot-rolled flat-rolled steel orders.

Methodology

The Department is conducting this countervailing duty (“CVD”) investigation in accordance with section 701 of the Tariff Act of 1930, as amended (the “Act”). For each of the subsidy programs found countervailable, we determine that there is a subsidy, i.e., a financial contribution by an “authority” that gives rise to a benefit to the recipient, and that the subsidy is specific. For a full description of the methodology underlying our conclusions, see the Issues and Decision Memo.

Analysis of Subsidy Programs and Comments Received

The subsidy programs under investigation and the issues raised in the case and rebuttal briefs by parties in this investigation are discussed in the Issues and Decision Memo. A list of the issues that parties raised, and to which we responded in the Issues and Decision Memo, is attached to this notice at Appendix I.

Adverse Facts Available

Section 776(a) of the Act provides that, subject to section 782(d) of the Act, the Department shall apply “facts otherwise available” if: (1) Necessary information is not on the record; or (2) an interested party or any other person (A) withholds information that has been requested, (B) fails to provide information within the deadlines established, or in the form and manner requested by the Department, subject to subsections (c)(1) and (e) of section 782 of the Act, (C) significantly impedes a proceeding, or (D) provides information that cannot be verified as provided by section 782(i) of the Act. Furthermore, section 776(b) of the Act provides that the Department may use an adverse inference in applying the facts otherwise available when a party fails to cooperate by not acting to the best of its ability to comply with a request for information.

In this final determination, as we did in the preliminary determination, we find that the application of AFA is warranted with respect to Jiangyin Xingcheng Special Steel Works Co. Ltd. (“Jiangyin Special”), Hunan Valin Xiangtan Iron & Steel (“Hunan Valin”) and Viewer Development Co., Ltd. (“Viewer Development”). For further information, see the section “Use of Facts Otherwise Available and Adverse Inferences” in the accompanying Issues and Decision Memo.

Changes Since the Preliminary Determination

Based on our review and analysis of the comments received from parties, we made certain changes to the subsidy rates since the Preliminary Determination. For a discussion of these changes, see the Issues and Decision Memo.

Final Determination

In accordance with section 705(c)(1)(B)(i) of the Act, we calculated an individual rate for each producer/exporter of the subject merchandise individually investigated. In accordance with section 705(c)(5)(A)(i) of the Act, for companies not individually investigated, we apply an “all-others” rate, which is normally calculated by weighting the subsidy rates of the individual companies selected as mandatory respondents by those companies' exports of the subject merchandise to the United States. Section 705(c)(5)(A)(ii) of the Act provides that if the countervailable subsidy rate established for all exporters and producers individually investigated are determined entirely in accordance with section 776 of the Act, the Department may use any reasonable method to establish an all-others rate for exporters and producers not individually investigated. In this case, the countervailable subsidy rate calculated for the investigated companies is based entirely on facts available under section 776 of the Act. There is no other information on the record upon which to determine an all-others rate. As a result, we have used the rate assigned for Jiangyin Special, Hunan Valin, and Viewer Development as the all-others rate. This method is consistent with the Department's past practice.

Continuation of Suspension of Liquidation

As a result of our Preliminary Determination, and pursuant to section 703(d)(1)(B) and (2) of the Act, we instructed U.S. Customs and Border Protection (“CBP”) to suspend liquidation of appropriate entries of merchandise under consideration from the PRC that were entered or withdrawn from warehouse, for consumption, on or after September 13, 2016, the date of publication of the Preliminary Determination in the Federal Register. In accordance with section 703(d) of the Act, on January 11, 2017, we have instructed CBP to discontinue the suspension of liquidation of all entries at that time.

If the U.S. International Trade Commission (“ITC”) issues a final affirmative injury determination, we will issue a CVD order and will reinstate the suspension of liquidation under section 706(a) of the Act and will require a cash deposit of estimated CVDs for such entries of subject merchandise in the amounts indicated above. If the ITC determines that material injury, or threat of material injury, does not exist, this proceeding will be terminated and all estimated duties deposited as a result of the suspension of liquidation will be refunded or canceled.

International Trade Commission Notification

In accordance with section 705(d) of the Act, we will notify the ITC of our determination. In addition, we are making available to the ITC all non-privileged and non-proprietary information relating to this investigation. We will allow the ITC access to all privileged and business proprietary information in our files, provided the ITC confirms that it will not disclose such information, either publicly or under an administrative protective order (“APO”), without the written consent of the Assistant Secretary for Enforcement and Compliance.

Notification Regarding Administrative Protective Orders

In the event the ITC issues a final negative injury determination, this notice will serve as the only reminder to parties subject to an APO of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of the return or destruction of APO materials, or conversion to judicial protective order, is hereby requested. Failure to comply with the regulations and terms of an APO is a violation subject to sanction.

This determination is issued and published pursuant to sections 705(d) and 777(i) of the Act and 19 CFR 351.210(c).

Appendix I

List of Topics Discussed in the Issues and Decision Memorandum

I. Summary

II. Background

III. Scope of the Investigation

IV. Application of the Countervailing Duty Law to Imports from the PRC

V. Subsidies Valuation

VI. Use of Facts Otherwise Available and Adverse Inferences

VII. Analysis of Comments

Comment 1: The Department's Continued Use of AFA for Jiangyin Special

Comment 2: The Department Cannot Countervail All Income Tax Programs Combined by More Than 25 Percent

Comment 3: The Department Should Exclude Terminated Programs from the Total AFA Subsidy Rate

Comment 4: The Department Should Amend the Selected AFA Rates for Certain Programs Consistent with its Stated Methodology

VIII. Recommendation

Appendix II

Scope of the Investigation

The products covered by this investigation are certain carbon and alloy steel hot-rolled or forged flat plate products not in coils, whether or not painted, varnished, or coated with plastics or other non-metallic substances (cut-to-length plate). Subject merchandise includes plate that is produced by being cut-to-length from coils or from other discrete length plate and plate that is rolled or forged into a discrete length. The products covered include (1) Universal mill plates (i.e., flat-rolled products rolled on four faces or in a closed box pass, of a width exceeding 150 mm but not exceeding 1250 mm, and of a thickness of not less than 4 mm, which are not in coils and without patterns in relief), and (2) hot-rolled or forged flat steel products of a thickness of 4.75 mm or more and of a width which exceeds 150 mm and measures at least twice the thickness, and which are not in coils, whether or not with patterns in relief. The covered products described above may be rectangular, square, circular or other shapes and include products of either rectangular or non-rectangular cross-section where such non-rectangular cross-section is achieved subsequent to the rolling process, i.e., products which have been “worked after rolling” (e.g., products which have been beveled or rounded at the edges).

For purposes of the width and thickness requirements referenced above, the following rules apply:

(1) Except where otherwise stated where the nominal and actual thickness or width measurements vary, a product from a given subject country is within the scope if application of either the nominal or actual measurement would place it within the scope based on the definitions set forth above; and

(2) where the width and thickness vary for a specific product (e.g., the thickness of certain products with non-rectangular cross-section, the width of certain products with non-rectangular shape, etc.), the measurement at its greatest width or thickness applies.

Steel products included in the scope of this investigation are products in which: (1) Iron predominates, by weight, over each of the other contained elements; and (2) the carbon content is 2 percent or less by weight.

Subject merchandise includes cut-to-length plate that has been further processed in the subject country or a third country, including but not limited to pickling, oiling, levelling, annealing, tempering, temper rolling, skin passing, painting, varnishing, trimming, cutting, punching, beveling, and/or slitting, or any other processing that would not otherwise remove the merchandise from the scope of the investigation if performed in the country of manufacture of the cut-to-length plate.

All products that meet the written physical description, are within the scope of this investigation unless specifically excluded or covered by the scope of an existing order. The following products are outside of, and/or specifically excluded from, the scope of this investigation:

(1) Products clad, plated, or coated with metal, whether or not painted, varnished or coated with plastic or other non-metallic substances;

(2) military grade armor plate certified to one of the following specifications or to a specification that references and incorporates one of the following specifications:

• MIL-A-12560,
• MIL-DTL-12560H,
• MIL-DTL-12560J,
• MIL-DTL-12560K,
• MIL-DTL-32332,
• MIL-A-46100D,
• MIL-DTL-46100-E,
• MIL-46177C,
• MIL-S-16216K Grade HY80,
• MIL-S-16216K Grade HY100,
• MIL-S-24645A HSLA-80;
• MIL-S-24645A HSLA-100,
• T9074-BD-GIB-010/0300 Grade HY80,
• T9074-BD-GIB-010/0300 Grade HY100,
• T9074-BD-GIB-010/0300 Grade HSLA80,
• T9074-BD-GIB-010/0300 Grade HSLA100, and
• T9074-BD-GIB-010/0300 Mod. Grade HSLA115,

except that any cut-to-length plate certified to one of the above specifications, or to a military grade armor specification that references and incorporates one of the above specifications, will not be excluded from the scope if it is also dual- or multiple-certified to any other non-armor specification that otherwise would fall within the scope of this order;

(3) stainless steel plate, containing 10.5 percent or more of chromium by weight and not more than 1.2 percent of carbon by weight;

(4) CTL plate meeting the requirements of ASTM A-829, Grade E 4340 that are over 305 mm in actual thickness;

(5) Alloy forged and rolled CTL plate greater than or equal to 152.4 mm in actual thickness meeting each of the following requirements:

(a) Electric furnace melted, ladle refined & vacuum degassed and having a chemical composition (expressed in weight percentages):

• Carbon 0.23-0.28,
• Silicon 0.05-0.20,
• Manganese 1.20-1.60,
• Nickel not greater than 1.0,
• Sulfur not greater than 0.007,
• Phosphorus not greater than 0.020,
• Chromium 1.0-2.5,
• Molybdenum 0.35-0.80,
• Boron 0.002-0.004,
• Oxygen not greater than 20 ppm,
• Hydrogen not greater than 2 ppm, and
• Nitrogen not greater than 60 ppm;

(b) With a Brinell hardness measured in all parts of the product including mid thickness falling within one of the following ranges:

(i) 270-300 HBW,

(ii) 290-320 HBW, or

(iii) 320-350 HBW;

(c) Having cleanliness in accordance with ASTM E45 method A (Thin and Heavy): A not exceeding 1.5, B not exceeding 1.0, C not exceeding 0.5, D not exceeding 1.5; and

(d) Conforming to ASTM A578-S9 ultrasonic testing requirements with acceptance criteria 2 mm flat bottom hole;

(6) Alloy forged and rolled steel CTL plate over 407 mm in actual thickness and meeting the following requirements:

(a) Made from Electric Arc Furnace melted, Ladle refined & vacuum degassed, alloy steel with the following chemical composition (expressed in weight percentages):

• Carbon 0.23-0.28,
• Silicon 0.05-0.15,
• Manganese 1.20-1.50,
• Nickel not greater than 0.4,
• Sulfur not greater than 0.010,
• Phosphorus not greater than 0.020,
• Chromium 1.20-1.50,
• Molybdenum 0.35-0.55,
• Boron 0.002-0.004,
• Oxygen not greater than 20 ppm,
• Hydrogen not greater than 2 ppm, and
• Nitrogen not greater than 60 ppm;

(b) Having cleanliness in accordance with ASTM E45 method A (Thin and Heavy): A not exceeding 1.5, B not exceeding 1.5, C not exceeding 1.0, D not exceeding 1.5;

(c) Having the following mechanical properties:

(i) With a Brinell hardness not more than 237 HBW measured in all parts of the product including mid thickness; and having a Yield Strength of 75ksi min and UTS 95ksi or more, Elongation of 18% or more and Reduction of area 35% or more; having charpy V at −75 degrees F in the longitudinal direction equal or greater than 15 ft. lbs (single value) and equal or greater than 20 ft. lbs (average of 3 specimens) and conforming to the requirements of NACE MR01-75; or

(ii) With a Brinell hardness not less than 240 HBW measured in all parts of the product including mid thickness; and having a Yield Strength of 90 ksi min and UTS 110 ksi or more, Elongation of 15% or more and Reduction of area 30% or more; having charpy V at −40 degrees F in the longitudinal direction equal or greater than 21 ft. lbs (single value) and equal or greater than 31 ft. lbs (average of 3 specimens);

(d) Conforming to ASTM A578-S9 ultrasonic testing requirements with acceptance criteria 3.2 mm flat bottom hole; and

(e) Conforming to magnetic particle inspection in accordance with AMS 2301;

(7) Alloy forged and rolled steel CTL plate over 407 mm in actual thickness and meeting the following requirements:

(a) Made from Electric Arc Furnace melted, ladle refined & vacuum degassed, alloy steel with the following chemical composition (expressed in weight percentages):

• Carbon 0.25-0.30,
• Silicon not greater than 0.25,
• Manganese not greater than 0.50,
• Nickel 3.0-3.5,
• Sulfur not greater than 0.010,
• Phosphorus not greater than 0.020,
• Chromium 1.0-1.5,
• Molybdenum 0.6-0.9,
• Vanadium 0.08 to 0.12,
• Boron 0.002-0.004,
• Oxygen not greater than 20 ppm,
• Hydrogen not greater than 2 ppm, and
• Nitrogen not greater than 60 ppm.

(b) Having cleanliness in accordance with ASTM E45 method A (Thin and Heavy): A not exceeding 1.0(t) and 0.5(h), B not exceeding 1.5(t) and 1.0(h), C not exceeding 1.0(t) and 0.5(h), and D not exceeding 1.5(t) and 1.0(h);

(c) Having the following mechanical properties: A Brinell hardness not less than 350 HBW measured in all parts of the product including mid thickness; and having a Yield Strength of 145ksi or more and UTS 160ksi or more, Elongation of 15% or more and Reduction of area 35% or more; having charpy V at −40 degrees F in the transverse direction equal or greater than 20 ft. lbs (single value) and equal or greater than 25 ft. lbs (average of 3 specimens);

(d) Conforming to ASTM A578-S9 ultrasonic testing requirements with acceptance criteria 3.2 mm flat bottom hole; and

(e) Conforming to magnetic particle inspection in accordance with AMS 2301.

The products subject to the investigation are currently classified in the Harmonized Tariff Schedule of the United States (HTSUS) under item numbers: 7208.40.3030, 7208.40.3060, 7208.51.0030, 7208.51.0045, 7208.51.0060, 7208.52.0000, 7211.13.0000, 7211.14.0030, 7211.14.0045, 7225.40.1110, 7225.40.1180, 7225.40.3005, 7225.40.3050, 7226.20.0000, and 7226.91.5000.

The products subject to the investigation may also enter under the following HTSUS item numbers: 7208.40.6060, 7208.53.0000, 7208.90.0000, 7210.70.3000, 7210.90.9000, 7211.19.1500, 7211.19.2000, 7211.19.4500, 7211.19.6000, 7211.19.7590, 7211.90.0000, 7212.40.1000, 7212.40.5000, 7212.50.0000, 7214.10.0000, 7214.30.0010, 7214.30.0080, 7214.91.0015, 7214.91.0060, 7214.91.0090, 7225.11.0000, 7225.19.0000, 7225.40.5110, 7225.40.5130, 7225.40.5160, 7225.40.7000, 7225.99.0010, 7225.99.0090, 7226.11.1000, 7226.11.9060, 7226.19.1000, 7226.19.9000, 7226.91.0500, 7226.91.1530, 7226.91.1560, 7226.91.2530, 7226.91.2560, 7226.91.7000, 7226.91.8000, and 7226.99.0180.

The HTSUS subheadings above are provided for convenience and customs purposes only. The written description of the scope of the investigation is dispositive.