Notice of Initiation of Antidumping Duty Investigation: Certain Aluminum Plate From South Africa

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Initiation of Antidumping Duty Investigation.

EFFECTIVE DATE:

November 12, 2003.

FOR FURTHER INFORMATION CONTACT:

Kate Johnson at (202) 482-4929 or Rebecca Trainor at (202) 482-4007, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230.

Initiation of Investigation

The Petition

On October 16, 2003, the Department of Commerce (the Department) received a petition filed in proper form by Alcoa Inc. (the petitioner). The Department received supplements to the petition on October 29, and November 3, 2003.

In accordance with section 732(b)(1) of the Tariff Act of 1930 (the Act), as amended, the petitioner alleges that imports of certain aluminum plate from South Africa are being, or are likely to be, sold in the United States at less-than-fair-value (LTFV) within the meaning of section 731 of the Act, and that imports from South Africa are materially injuring, or are threatening to materially injure, an industry in the United States.

The Department finds that the petitioner filed this petition on behalf of the domestic industry because it is an interested party as defined in section 771(9)(C) of the Act and it has demonstrated sufficient industry support with respect to the antidumping investigation that it is requesting the Department to initiate. See infra, “Determination of Industry Support for the Petition.”

Scope of Investigation

The merchandise covered by this investigation is 6000 series aluminum alloy, flat surface, rolled plate, whether in coils or cut-to-length forms, that is rectangular in cross section with or without rounded corners and with a thickness of more than 6.3 millimeters. 6000 Series Aluminum Rolled Plate is defined by the Aluminum Association, Inc.

Excluded from the scope of this investigation are extruded aluminum products and tread plate.

The merchandise subject to this investigation is classifiable under subheading 7606.12.3030 of the Harmonized Tariff Schedule of the United States (HTS). Although the HTS subheadings are provided for convenience and customs purposes, our written description of the scope of this investigation is dispositive.

As discussed in the preamble to the Department's regulations (Antidumping Duties; Countervailing Duties; Final Rule, 62 FR 27296, 27323 (May 19, 1997)), we are setting aside a period for parties to raise issues regarding product coverage. The Department encourages all parties to submit such comments within 20 calendar days of publication of this notice. Comments should be addressed to Import Administration's Central Records Unit, Room 1870, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230. The period of scope consultations is intended to provide the Department with ample opportunity to consider all comments and consult with parties prior to the issuance of the preliminary determination.

Period of Investigation

The anticipated period of investigation is October 1, 2002, through September 30, 2003.

Determination of Industry Support for the Petition

Section 732(b)(1) of the Act requires that a petition be filed on behalf of the domestic industry. Section 732(c)(4)(A) of the Act provides that the Department's industry support determination, which is to be made before the initiation of the investigation, be based on whether a minimum percentage of the relevant industry supports the petition. A petition meets this requirement if the domestic producers or workers who support the petition account for: (1) At least 25 percent of the total production of the domestic like product; and (2) more than 50 percent of the production of the domestic like product produced by that portion of the industry expressing support for, or opposition to, the petition. Moreover, section 732(c)(4)(D) of the Act provides that, if the petition does not establish support of domestic producers or workers accounting for more than 50 percent of the total production of the domestic like product, the Department shall: (i) Poll the industry or rely on other information in order to determine if there is support for the petition, as required by subparagraph (A), or (ii) determine industry support using a statistically valid sampling method.

Section 771(4)(A) of the Act defines the “industry” as the producers of a domestic like product. Thus, to determine whether a petition has the requisite industry support, the statute directs the Department to look to producers and workers who produce the domestic like product. The International Trade Commission (“ITC”), which is responsible for determining whether “the domestic industry” has been injured, must also determine what constitutes a domestic like product in order to define the industry. While both the Department and the ITC must apply the same statutory definition regarding the domestic like product (section 771(10) of the Act), they do so for different purposes and pursuant to a separate and distinct authority. In addition, the Department's determination is subject to limitations of time and information. Although this may result in different definitions of the like product, such differences do not render the decision of either agency contrary to the law.

Section 771(10) of the Act defines the domestic like product as “a product which is like, or in the absence of like, most similar in characteristics and uses with, the article subject to an investigation under this title.” Thus, the reference point from which the domestic like product analysis begins is “the article subject to an investigation,” i.e., the class or kind of merchandise to be investigated, which normally will be the scope as defined in the petition.

With regard to the definition of domestic like product, the petitioner does not offer a definition of domestic like product distinct from the scope of the investigation. Based on our analysis of the information presented by the petitioner, we have determined that there is a single domestic like product, aluminum plate, which is defined in the “Scope of Investigation” section above, and we have analyzed industry support in terms of this domestic like product.

The petition identifies additional U.S. companies engaged in the production of aluminum plate. In the October 29, 2003, supplemental petition submission, one of these companies, Kaiser Aluminum and Chemical Corporation, provides a letter indicating its support of the petition. In addition, the petitioner's November 3, 2003 supplemental petition submission contains a letter in support of the petition from the United Steelworkers of America, which claims to represent virtually all the workers engaged in the production of the domestic like product.

Our review of the data provided in the petition indicates that the petitioner has established industry support representing over 50 percent of total production of the domestic like product, requiring no further action by the Department pursuant to section 732(c)(4)(D) of the Act. In addition, the Department received no opposition to the petition from the remaining domestic producer of the like product. Therefore, the domestic producers or workers who support the petition account for at least 25 percent of the total production of the domestic like product, and the requirements of section 732(c)(4)(A)(i) of the Act are met. Furthermore, the domestic producers or workers who support the petition account for more than 50 percent of the production of the domestic like product produced by that portion of the industry expressing support for or opposition to the petition. Thus, the requirements of section 732(c)(4)(A)(ii) of the Act also are met. Accordingly, the Department determines that the petition was filed on behalf of the domestic industry within the meaning of section 732(b)(1) of the Act. See also Import Administration AD/CVD Enforcement Initiation Checklist (“Initiation Checklist”), Industry Support section, dated November 5, 2003, on file in the Central Records Unit of the main Department of Commerce building.

Export Price and Normal Value

The following is a description of the allegation of sales at LTFV upon which the Department based its decision to initiate this investigation. The sources of data for the deductions and adjustments relating to U.S. price and normal value (NV) are discussed in greater detail in the Initiation Checklist. Should the need arise to use any of this information as facts available under section 776 of the Act in our preliminary or final determination, we may re-examine the information and revise the margin calculations, if appropriate.

Export Price

The petitioner alleged that the subject aluminum plate produced in South Africa by Hulett Aluminum (Pty) Limited (Hulett) (i.e., the only company that has exported subject merchandise to the United States from South Africa during the most recent twelve months) was sold to Empire Resources, Inc., an unaffiliated U.S. trading company, prior to importation of the merchandise into the United States. Therefore, the petitioner based U.S. price on export price (EP). The petitioner based EP prices for aluminum plate on a price quote for Alloy 6061 T651 aluminum plate adjusted for inland freight charges from Hulett's plant in Pietermaritzburg, South Africa to the port of Durban, international freight expenses from Durban, South Africa to U.S. East Coast ports, as well as a U.S. importer/distributor markup and a U.S. reseller markup.

Normal Value

The petitioner based NV on two price quotes for Alloy 6082 T6 from a South African distributor of aluminum products. The petitioner alleged that, while Hulett does not sell identical grades of merchandise to the United States and home markets, grade Alloy 6082 T6, sold to the home market, and grade Alloy 6061 T651, sold to the United States, are functionally equivalent, have minimal differences in chemistry, and have no meaningful differences in production costs. The petitioner adjusted the NV for movement charges in the home market and differences in direct selling expenses (imputed credit) between the United States and the home market. The petitioner did not adjust NV for packing expenses because it is the petitioner's understanding that the packing form and materials are the same in both markets.

The estimated dumping margins in the petition based on a comparison between EP and NV range from 80.19 percent to 106.77 percent.

Fair Value Comparisons

Based on the data provided by the petitioner, there is reason to believe that imports of certain aluminum plate from South Africa are being, or are likely to be, sold at LTFV.

Allegations and Evidence of Material Injury and Causation

The petitioner alleges that the U.S. industry producing the domestic like product is being materially injured, or is threatened with material injury, by reason of imports from South Africa of the subject merchandise sold at less than NV.

The petitioner contends that the industry's injured condition is evident in the sales volume and market share lost to unfair imports, as well as rapidly declining and depressed U.S. prices. The allegations of injury and causation are supported by relevant evidence including U.S. import data, lost sales, and pricing information. We have assessed the allegations and supporting evidence regarding material injury and causation, and we have determined that these allegations are properly supported by adequate evidence and meet the statutory requirements for initiation. See the Initiation Checklist.

Initiation of Antidumping Investigation

Based upon our examination of the petition on certain aluminum plate from South Africa, we have found that it meets the requirements of section 732 of the Act. Therefore, we are initiating an antidumping duty investigation to determine whether imports of certain aluminum plate from South Africa are being, or are likely to be, sold in the United States at LTFV. Unless this deadline is extended pursuant to section 733(b)(1)(A) of the Act, we will make our preliminary determination no later than 140 days after the date of this initiation.

Distribution of Copies of the Petition

In accordance with section 732(b)(3)(A) of the Act, a copy of the public version of the petition has been provided to the representatives of the Government of South Africa. We will attempt to provide a copy of the public version of the petition to each exporter named in the petition, as provided for under 19 CFR 351.203(c)(2).

ITC Notification

We have notified the ITC of our initiation as required by section 732(d) of the Act.

Preliminary Determination by the ITC

The ITC will preliminarily determine no later than December 1, 2003, whether there is a reasonable indication that imports of certain aluminum plate from South Africa are causing material injury, or threatening to cause material injury, to a U.S. industry. A negative ITC determination will result in the investigation being terminated, otherwise, this investigation will proceed according to statutory and regulatory time limits.

This notice is issued and published pursuant to section 777(i) of the Act.