Certain Steel Threaded Rod from the People's Republic of China: Final Determination of Sales at Less Than Fair Value

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

EFFECTIVE DATE:

February 27, 2009.

SUMMARY:

The Department of Commerce (“Department”) has determined that certain steel threaded rod (“STR”) from the People's Republic of China (“PRC”) is being, or is likely to be, sold in the United States at less than fair value (“LTFV”) as provided in section 735 of the Tariff Act of 1930, as amended (“Act”). The final dumping margins for this investigation are listed in the “Final Determination Margins” section below.

FOR FURTHER INFORMATION CONTACT:

Bobby Wong or Toni Dach, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone (202) 482-0409 or (202) 482-1655, respectively.

SUPPLEMENTARY INFORMATION:

Case History

On October 8, 2008, the Department published in the Federal Register its preliminary determination. See Certain Steel Threaded Rod from the People's Republic of China: Preliminary Determination of Sales at Less Than Fair Value, 73 FR 58931 (October 8, 2008) (“Preliminary Determination”). On October 27, 2008, the Department published in the Federal Register its amended preliminary determination that STR from the PRC are being, or are likely to be, sold in the United States at LTFV. See Certain Steel Threaded Rod from the People's Republic of China: Amended Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination, 73 FR 63693 (October 27, 2008) (“Amended Preliminary Determination”). As provided in section 782(i) of the Act, we verified the information submitted by: 1) RMB Fasteners Ltd. and IFI & Morgan Ltd. (the “RMB/IFI Group”) from November 3-4, 2008, and Jiaxing Brother Standard Part Co. (“Jiaxing Brother”), its affiliated producer from November 6-7, 2008; 2) Ningbo Yinzhou Foreign Trade Co., Ltd. (“Ningbo Yinzhou”) from November 13-14, 2008, and Haiyan Zhonghuan Fastener Factory (“Zhonghuan”), one of Ningbo Yingzhou's manufacturers, and Zhejiang Guorui Industry Co., Ltd. (“Guorui”), one of Ningbo Yinzhou's suppliers from November 10-12, 2008; and 3) Shanghai Prime Machinery Co., Ltd.⁶ (“Shanghai Prime”), a separate rate respondent, on November 17, 2008. On December 12, 2008, Vulcan Threaded Products (“Petitioner”) and the RMB/IFI Group placed new factual information on the record regarding surrogate valuation, and submitted rebuttal comments on December 22, 2008. In accordance with 19 CFR 351.309(c)(i), we invited parties to comment on our Preliminary Determination. On January 16, 2009, the Department received case briefs from the RMB/IFI Group, Ningbo Yinzhou, and Petitioner. On January 23, 2009, we received rebuttal briefs from Petitioner and the RMB/IFI Group. On November 6 and 7, 2008, Petitioner and the RMB/IFI Group submitted requests for a hearing, respectively. On January 22, 2009, Petitioner and the RMB/IFI Group withdrew their requests for a hearing.

Analysis of Comments Received

All issues raised in the case and rebuttal briefs by the parties to this investigation are addressed in the “Certain Steel Threaded Rod from the People's Republic of China: Issues and Decision Memorandum for the Final Determination of Sales at Less than Fair Value,” dated concurrently with this notice, which is hereby adopted by this notice in its entirety (“Issues and Decision Memorandum”). A list of the issues which parties raised and to which we respond in the Issues and Decision Memorandum is attached to this notice as an Appendix. The Issues and Decision Memorandum is a public document and is on file in the Central Records Unit in the main Commerce building, Room 1117, and is accessible on the Web at http://www.trade.gov/ia. The paper copy and electronic version of the Issues and Decision Memorandum are identical in content.

Period of Investigation

The period of investigation (“POI”) is July 1, 2007, through December 31, 2007.

Scope of Investigation

The merchandise covered by this investigation is steel threaded rod. Steel threaded rod is certain threaded rod, bar, or studs, of carbon quality steel, having a solid, circular cross section, of any diameter, in any straight length, that have been forged, turned, cold drawn, cold rolled, machine straightened, or otherwise cold finished, and into which threaded grooves have been applied. In addition, the steel threaded rod, bar, or studs subject to this investigation are non headed and threaded along greater than 25 percent of their total length. A variety of finishes or coatings, such as plain oil finish as a temporary rust protectant, zinc coating (i.e., galvanized, whether by electroplating or hot-dipping), paint, and other similar finishes and coatings, may be applied to the merchandise.

Included in the scope of this investigation are steel threaded rod, bar, or studs, in which: (1) iron predominates, by weight, over each of the other contained elements; (2) the carbon content is 2 percent or less, by weight; and (3) none of the elements listed below exceeds the quantity, by weight, respectively indicated:

• 1.80 percent of manganese, or
• 1.50 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
• 0.012 percent of boron, or
• 0.10 percent of molybdenum, or
• 0.10 percent of niobium, or
• 0.41 percent of titanium, or
• 0.15 percent of vanadium, or
• 0.15 percent of zirconium.

Steel threaded rod is currently classifiable under subheading 7318.15.5050 and 7318.15.5090 of the HTSUS. Although the HTSUS subheading is provided for convenience and customs purposes, the written description of the merchandise is dispositive.

Excluded from the scope of the investigation are: (a) threaded rod, bar, or studs which are threaded only on one or both ends and the threading covers 25 percent or less of the total length; and (b) threaded rod, bar, or studs made to American Society for Testing and Materials (“ASTM”) A193 Grade B7, ASTM A193 Grade B7M, ASTM A193 Grade B16, or ASTM A320 Grade L7.

Scope-HTSUS Modification

On September 22, 2008, U.S. Customs and Border Protection (“CBP”) informed the Department that on July 1, 2008, it amended the United States Harmonized Tariff Schedule (“HTSUS”) category 7318.15.5060, and replaced the category with two new HTSUS categories: 7318.15.5050 and 7318.15.5090. Therefore, the Department has modified the scope to reflect the new HTSUS categories.

Changes Since the Preliminary Determination

Based on our findings at verification, and additional information placed on the record of this investigation, we have made changes since the Amended Preliminary Determination. As discussed further below, we have applied total adverse facts available (“AFA”) to Ningbo Yinzhou for purposes of this final determination. See Issues and Decision Memorandum at Comment 5.

Based on our analysis of information on the record of this investigation, and comments received from the interested parties, we have made changes to the margin calculations for the RMB/IFI Group. We have revalued certain surrogate values used in the Amended Preliminary Determination. The values that were modified for this final determination are those for surrogate financial ratios, packing strips, buckles, and coal. For further details see I&D Memo at Comment 6, and Memorandum to the File from Bobby Wong, through Scot T. Fullerton, Program Manager, AD/CVD Operations, Office 9, and James C. Doyle, Director, AD/CVD Operations, Office 9; Certain Steel Threaded Rod from the People's Republic of China: Surrogate Values for the Final Determination, dated February 20, 2009 (“Final Surrogate Value Memo”).

In addition, we have made certain company-specific changes since the Amended Preliminary Determination. Specifically, we have incorporated, where applicable, post-preliminary clarifications based on a post-preliminary supplemental questionnaire and verification for the RMB/IFI Group. For further details on these company-specific changes, see Memorandum to the File, through Scot T. Fullerton, Program Manager, AD/CVD Operations, Office 9, from Bobby Wong, Senior International Trade Analyst, AD/CVD Operations, Office 9, regarding “Program Analysis for the Final Determination of Antidumping Duty Investigation of Certain Steel Threaded Rod from the People's Republic of China,” dated February 20, 2009 (“The RMB/IFI Group Analysis Memorandum”).

Adverse Facts Available

Section 776(a)(2) of the Act provides that the Department shall apply “facts otherwise available” if, inter alia, 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 or 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. Section 776(b) of the Act provides further that the Department may use an adverse inference when a party has failed to cooperate by not acting to the best of its ability to comply with a request for information.

Pursuant to sections 776(a)(2)(A), (B), (C), and (D) of the Act, we are applying facts otherwise available to Ningbo Yinzhou because it withheld certain information that had been requested by the Department which significantly impeded the Department's investigation. Ningbo Yinzhou failed to provide information regarding certain factors of production (“FOP”) in the form and manner requested by the Department. Ningbo Yinzhou withheld certain information that was specifically requested by the Department and significantly impeded the proceeding by not providing accurate or complete responses to the Department's questions regarding certain FOPs and the sales reconciliation. See Verification of the Sales Response of Ningbo Yinzhou Foreign Trade Co., Ltd. in the Antidumping Duty Investigation of Certain Steel Threaded Rod from the People's Republic of China, dated January 6, 2009 at 2, 6-8, and 10-11; and Ningbo Yinzhou's response to the Department's First Supplemental Sections C and D Questionnaire, dated September 8, 2008, at 19. Additionally, information discovered at verification directly contradicted information contained in Ningbo Yinzhou's questionnaire responses.⁷ Significant delays were experienced by the Department in completing verification procedures, which prevented the completion of some verification procedures. Due to the insufficiency of the respondent's record keeping, numerous verification procedures could not be completed. For these reasons, the Department was unable to verify certain statements in Ningbo Yinzhou's questionnaire responses for which the Department sought verification. See Ningbo Yinzhou Verification Report and Zhonghuan/Guorui Verification Report.

Furthermore, based on the record evidence and pursuant to section 776(b) of the Act, the Department has determined that Ningbo Yinzhou did not cooperate to the best of its ability to comply with the Department's requests for information. In particular, the Department gave specific instructions in our questionnaires and the verification outline as to the purpose of and directions for submission and verification of the reconciliation of Ningbo Yinzhou's U.S. sales database to Ningbo Yinzhou's accounting records, and proper reporting of all FOPs for all models. Despite these extensive instructions, provided numerous times over the course of the investigation, Ningbo Yinzhou failed to provide the Department with adequate information and supporting documentation to fully verify its responses to the Department's questionnaires. In addition, despite multiple opportunities presented by the Department, Ningbo Yinzhou failed to report certain FOPs and failed to report FOPs for each model in the U.S. sales database. For a detailed description of each of the deficiencies, see Issues and Decision Memorandum at Comment 5.

Surrogate Country

In the Preliminary Determination and unchanged in the Amended Preliminary Determination, we stated that we had selected India as the appropriate surrogate country to use in this investigation for the following reasons: (1) it is a significant producer of comparable merchandise; (2) it is at a level of economic development comparable to that of the PRC; and (3) we have reliable data from India that we can use to value FOPs. See Preliminary Determination. We received no comments on our surrogate country selection. Accordingly, for the final determination, we made no changes to our finding with respect to the selection of India as a surrogate country.

Separate Rates

In proceedings involving non-market economy (“NME”) countries, the Department begins with a rebuttable presumption that all companies within the country are subject to government control and, thus, should be assigned a single antidumping duty deposit rate. It is the Department's policy to assign all exporters of merchandise subject to an investigation in an NME country this single rate unless an exporter can demonstrate that it is sufficiently independent so as to be entitled to a separate rate. See Final Determination of Sales at Less Than Fair Value: Sparklers from the People's Republic of China, 56 FR 20588, 20589 (May 6, 1991), as amplified by Notice of Final Determination of Sales at Less Than Fair Value: Silicon Carbide from the People's Republic of China, 59 FR at 22585, 22587 (May 2, 1994), and 19 CFR 351.107(d).

In the Preliminary Determination and unchanged in the Amended Preliminary Determination, we found that Shanghai Recky, Suntec Industries, Hangzhou Grand, Shanghai Prime, Jianxing Xinyue, CPII, Jiashan Zhongsheng, Haiyan Dayu, and New Oriental (hereinafter referred to as “Separate Rate Companies”), and Ningbo Yinzhou, a mandatory respondent, have provided company-specific information to demonstrate that they operate independently of de jure and de facto government control, and therefore satisfy the standards for the assignment of a separate rate.

No party has commented on the eligibility of these companies for separate rate status. For the final determination, we continue to find that the evidence placed on the record of this investigation by these companies demonstrates both a de jure and de facto absence of government control with respect to their exports of the merchandise under investigation. Thus, we continue to find that they are eligible for separate rate status. Normally, the separate rate is determined based on the estimated weighted-average dumping margins established for exporters and producers individually investigated, excluding de minimis margins or margins based entirely on AFA. See section 735(c)(5)(A) of the Act.

In the Preliminary Determination and unchanged in the Amended Preliminary Determination, the Department stated that it could not deny the RMB/IFI Group separate rate status because the Department did not ask specifically for information relating to the RMB/IFI Group's separate rate eligibility. However, subsequent to the Preliminary Determination, on October 22, 2008, in response to the Department's inquiry, the RMB/IFI Group reported that it is a wholly foreign-owned company, and at verification the Department found no discrepancies in the RMB/IFI Group's responses to the Department's separate rate questions. As the RMB/IFI Group is wholly foreign-owned, a separate rate analysis is not necessary to determine whether it is independent from government control. See Notice of Final Determination of Sales at Less Than Fair Value: Creatine Monohydrate From the People's Republic of China, 64 FR 71104, 71105 (December 20, 1999) (the respondent was wholly foreign-owned, and thus, qualified for a separate rate). Consequently, for the final determination we find that the evidence placed on the record of this investigation by the RMB/IFI Group demonstrates that it is eligible for a separate rate.

In the Preliminary Determination and unchanged in the Amended Preliminary Determination, the Department assigned to nine exporter/producer combinations that qualified for a separate rate a weighted-average margin based on the experience of the mandatory respondents, excluding any de minimis or zero rates or rates based on total AFA. See Preliminary Determination. For the final determination, because the Department based the rate for Ningbo Yinzhou on total AFA, the Department has applied the RMB/IFI Group's calculated rate for purposes of establishing a separate rate. See section 735(c)(5)(A) of the Act. Therefore, the Department will assign the RMB/IFI Group's calculated rate as the separate rate for the nine exporter/producer combinations. This rate is corroborated, to the extent practicable, for the reasons stated below. See “Corroboration” section below.

The PRC-Wide Rate

In the Preliminary Determination and unchanged in the Amended Preliminary Determination, the Department found that certain companies did not respond to our requests for information. See Preliminary Determination, 73 FR at 58936. In the Preliminary Determination we treated these PRC producers/exporters as part of the PRC-wide entity because they did not demonstrate that they operate free of government control over their export activities. Because these producers/exporters did not provide information regarding their export activities, the Department has determined that application of facts available (“FA”) is warranted. No additional information was placed on the record with respect to these companies after the Preliminary Determination. Therefore, pursuant to section 776(a)(2)(A) of the Act, the Department continues to find that the use of FA is appropriate to determine the PRC-wide rate.

Section 776(b) of the Act provides that, in selecting from among the facts otherwise available, the Department may employ an adverse inference if an interested party fails to cooperate by not acting to the best of its ability to comply with requests for information. See Notice of Final Determination of Sales at Less Than Fair Value: Certain Cold-Rolled Flat-Rolled Carbon-Quality Steel Products From the Russian Federation, 65 FR 5510, 5518 (February 4, 2000). See also Statement of Administrative Action accompanying the URAA, H.R. Rep. No. 103-316, vol. 1, at 870 (1994) (“SAA”). We determined that, because the PRC-wide entity did not respond to our request for information, it has failed to cooperate to the best of its ability. Therefore, the Department finds that, in selecting from among the facts otherwise available, an adverse inference is appropriate for the PRC-wide entity.

Because we begin with the presumption that all companies within an NME country are subject to government control and because only the companies listed under the “Final Determination Margins” section below have overcome that presumption, we are applying a single antidumping rate (i.e., the PRC-wide entity rate) to all other exporters of subject merchandise from the PRC. Such companies did not demonstrate entitlement to a separate rate. See, e.g., Synthetic Indigo From the People's Republic of China; Notice of Final Determination of Sales at Less Than Fair Value, 65 FR 25706 (May 3, 2000). The PRC-wide entity rate applies to all entries of subject merchandise except for entries from the respondents which are listed in the “Final Determination Margins” section below.

In the Preliminary Determination and unchanged in the Amended Preliminary Determination, we assigned to the PRC-wide entity the highest rate calculated from the petition, 206.00 percent. See Preliminary Determination, 73 FR at 58936. We received no comments on this rate. Therefore, for the final determination, we have continued to assign to the PRC-wide entity the rate of 206.00 percent.

Corroboration

Section 776(c) of the Act provides that, when the Department relies on secondary information in using the facts otherwise available, it must, to the extent practicable, corroborate that information from independent sources that are reasonably at its disposal. We have interpreted “corroborate” to mean that we will, to the extent practicable, examine the reliability and relevance of the information submitted. See Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From Japan, and Tapered Roller Bearings, Four Inches or Less in Outside Diameter, and Components Thereof, From Japan; Preliminary Results of Antidumping Duty Administrative Reviews and Partial Termination of Administrative Reviews, 61 FR 57391, 57392 (November 6, 1996), unchanged in Notice of Final Determination of Sales at Less Than Fair Value: Certain Cold-Rolled Flat-Rolled Carbon-Quality Steel Products From Brazil, 65 FR 5554, 5568 (February 4, 2000); see, e.g., Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From Japan, and Tapered Roller Bearings, Four Inches or Less in Outside Diameter, and Components Thereof, From Japan; Final Results of Antidumping Duty Administrative Reviews and Termination in Part, 62 FR 11825 (March 13, 1997).

To corroborate the AFA margin we have selected, we compared that margin to the margins calculated for the RMB/IFI Group. We found that the margin of 206.00 percent has probative value because it is in the range of margins calculated for the RMB/IFI Group. See October 1, 2008, Memorandum to the File, From Bobby Wong, Through Scot T. Fullerton, regarding: Antidumping Duty Investigation of Certain Steel Threaded Rod from the People's Republic of China: RMB/IFI Program Analysis for the Preliminary Determination, at 1. Accordingly, we find that the rate of 206.00 percent is corroborated within the meaning of section 776(c) of the Act.

Combination Rates

In the Preliminary Determination, the Department stated that it would calculate combination rates for the respondents that are eligible for a separate rate in this investigation. See Preliminary Determination, 73 FR at 58931. This change in practice is described in Policy Bulletin 05.1, available at http://ia.ita.doc.gov/. Policy Bulletin 05.1, states:

{w}hile continuing the practice of assigning separate rates only to exporters, all separate rates that the Department will now assign in its NME investigations will be specific to those producers that supplied the exporter during the period of investigation. Note, however, that one rate is calculated for the exporter and all of the producers which supplied subject merchandise to it during the period of investigation. This practice applies both to mandatory respondents receiving an individually calculated separate rate as well as the pool of non-investigated firms receiving the weighted-average of the individually calculated rates. This practice is referred to as the application of “combination rates” because such rates apply to specific combinations of exporters and one or more producers. The cash-deposit rate assigned to an exporter will apply only to merchandise both exported by the firm in question and produced by a firm that supplied the exporter during the period of investigation.

See Policy Bulletin 05.1, “Separate Rates Practice and Application of Combination Rates in Antidumping Investigations Involving Non-Market Economy Countries.”

Final Determination Margins

We determine that the following percentage weighted-average margins exist for the POI:

Disclosure

We will disclose the calculations performed within five days of the date of publication of this notice to parties in this proceeding in accordance with 19 CFR 351.224(b).

Continuation of Suspension of Liquidation

We will instruct U.S. Customs and Border Protection (“CBP”) to continue the suspension of liquidation required by section 735(c)(1)(B) of the Act, of all entries of subject merchandise from the RMB/IFI Group, Ningbo Yinzhou, the Separate Rate Companies, and the PRC-wide entity entered, or withdrawn from warehouse, for consumption on or after October 8, 2008, the date of publication of the Preliminary Determination. CBP shall continue to require a cash deposit or the posting of a bond equal to the estimated amount by which the NV exceeds the U.S. price as shown above. See section 735(c)(1)(B)(ii) of the Act. The suspension of liquidation instructions will remain in effect until further notice.

International Trade Commission Notification

In accordance with section 735(d) of the Act, we have notified the International Trade Commission (“ITC”) of our final determination of sales at LTFV. As our final determination is affirmative, in accordance with section 735(b)(2) of the Act, within 45 days the ITC will determine whether the domestic industry in the United States is materially injured, or threatened with material injury, by reason of imports or sales (or the likelihood of sales) for importation of the subject merchandise. If the ITC determines that material injury or threat of material injury does not exist, the proceeding will be terminated and all securities posted will be refunded or canceled. If the ITC determines that such injury does exist, the Department will issue an antidumping duty order directing CBP to assess, upon further instruction by the Department, antidumping duties on all imports of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the effective date of the suspension of liquidation.

Notification Regarding APO

This notice also serves as a reminder to the parties subject to administrative protective order (“APO”) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305. Timely notification of return or destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation.

This determination is issued and published in accordance with sections 735(d) and 777(i)(1) of the Act.

Appendix

I. General Issues:

Comment 1: Surrogate Financial Ratios

Comment 2: Treatment of Drawing Power as a Direct Material Input

Comment 3: Wire Rod & Round Bar

Comment 4: Hydrochloric Acid and Trisodium Phosphate

II. Ningbo Yinzhou Issues

Comment 5: Application of Facts Available for Ningbo Yinzhou

Comment 6: Ningbo Yinzhou and Zhonghuan/Guorui Verification Report

Comment 7: Surrogate Value Selection Galvanizing Surrogate Value

III. RMB/IFI Issues

Comment 8: Surrogate Values Packing Strips, Buckles, and Coal

Comment 9: Limits to By-Product Offset

Comment 10: Minor Corrections for the RMB/IFI Group