Steel Concrete Reinforcing Bar From Mexico and Turkey: Initiation of Antidumping Duty Investigations

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

DATES:

Effective October 2, 2013.

FOR FURTHER INFORMATION CONTACT:

Stephanie Moore at (202) 482-3692 (Mexico); George McMahon at (202) 482-1167 (Turkey), AD/CVD Operations, Office 8, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

The Petitions

On September 4, 2013, the Department of Commerce (the “Department”) received antidumping duty (“AD”) petitions concerning imports of steel concrete reinforcing bar (“rebar”) from Mexico and Turkey filed in proper form on behalf of the Rebar Trade Action Coalition (“RTAC”) and its individual members (collectively, “Petitioners”). Petitioners are domestic producers of rebar. On September 10-11, 2013, the Department requested additional information and clarification of certain areas of the Petitions. Petitioners filed responses to these requests on September 13, 2013.

In accordance with section 732(b) of the Tariff Act of 1930, as amended (the “Act”), Petitioners allege that imports of rebar from Mexico and Turkey are being, or are likely to be, sold in the United States at less than fair value within the meaning of section 731 of the Act and that such imports are materially injuring, or threatening material injury to, an industry in the United States. Also, consistent with section 732(b)(1) of the Act, the Petitions are accompanied by information reasonably available to Petitioners supporting their allegations.

The Department finds that Petitioners filed these Petitions on behalf of the domestic industry because Petitioners are interested parties as defined in sections 771(9)(C), (E), and (F) of the Act. The Department also finds that Petitioners have demonstrated sufficient industry support with respect to the initiation of the AD investigations that Petitioners are requesting. See the “Determination of Industry Support for the Petitions” section below.

Period of Investigation

Because the Petitions were filed on September 4, 2013, the period of investigation (“POI”) for the Mexico and Turkey investigations is July 1, 2012, through June 30, 2013.

Scope of the Investigations

The product covered by these investigations is steel concrete reinforcing bar from Mexico and Turkey. For a full description of the scope of the investigations, see the “Scope of the Investigations,” in the Appendix of this notice. Petitioners note that, in addition to the Harmonized Tariff Schedule of the United States (“HTSUS”) subheadings included in the scope, it is possible that rebar previously entered under HTSUS numbers 7222.30.0011 and 7222.11.0056; however, these HTSUS numbers are no longer in effect.

Comments on Scope of Investigations

During our review of the Petitions, we discussed the scope with Petitioners to ensure that it is an accurate reflection of the product for which the domestic industry is seeking relief. Moreover, as discussed in the preamble to the regulations, we are setting aside a period for interested parties to raise issues regarding product coverage.

All comments must be filed on the record of both the Mexico and the Turkey AD investigations and the companion Turkey Countervailing Duty rebar investigation by 5:00 p.m. Eastern Daylight Time on Tuesday, October 15, 2013. All comments and submissions to the Department must be filed electronically using Import Administration's Antidumping Countervailing Duty Centralized Electronic Service System (“IA ACCESS”). An electronically filed document must be received successfully in its entirety by the Department's electronic records system, IA ACCESS, by the time and date noted above. Documents excepted from the electronic submission requirements must be filed manually (i.e., in paper form) with Import Administration's APO/Dockets Unit, Room 1870, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230, and stamped with the date and time of receipt by the deadline noted above.

The period of scope comments is intended to provide the Department with ample opportunity to consider all comments and to consult with parties prior to the issuance of the preliminary determinations.

Comments on Product Characteristics for Antidumping Questionnaires

The Department requests comments from interested parties regarding the appropriate physical characteristics of rebar to be reported in response to the Department's AD questionnaires. This information will be used to identify the key physical characteristics of the subject merchandise in order to report the relevant factors and costs of production accurately as well as to develop appropriate product-comparison criteria.

Interested parties may provide any information or comments that they feel are relevant to the development of an accurate list of physical characteristics. Specifically, they may provide comments as to which characteristics are appropriate to use as: (1) General product characteristics and (2) product-comparison criteria. We note that it is not always appropriate to use all product characteristics as product-comparison criteria. We base product-comparison criteria on meaningful commercial differences among products. In other words, while there may be some physical product characteristics utilized by manufacturers to describe steel concrete reinforcing bar, it may be that only a select few product characteristics take into account commercially meaningful physical characteristics. In addition, interested parties may comment on the order in which the physical characteristics should be used in matching products. Generally, the Department attempts to list the most important physical characteristics first and the least important characteristics last.

In order to consider the suggestions of interested parties in developing and issuing the AD questionnaires, we must receive comments on product characteristics by October 15, 2013. Rebuttal comments must be received by October 25, 2013. All comments and submissions to the Department must be filed electronically using IA ACCESS, as referenced above.

Determination of Industry Support for the Petitions

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 a petition meets this requirement if the domestic producers or workers who support the petition account for: (i) At least 25 percent of the total production of the domestic like product; and (ii) 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 to poll the industry.

Section 771(4)(A) of the Act defines the “industry” as the producers as a whole 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 U.S. 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, 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 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 domestic like product, Petitioners do not offer a definition of domestic like product distinct from the scope of the investigations. Based on our analysis of the information submitted on the record, we have determined that rebar, as defined in the scope of the investigations, constitutes a single domestic like product and we have analyzed industry support in terms of that domestic like product.

In determining whether Petitioners have standing under section 732(c)(4)(A) of the Act, we considered the industry support data contained in the Petitions with reference to the domestic like product as defined in the “Scope of Investigations” section above. To establish industry support, Petitioners provided their production of the domestic like product in 2012, and compared this to the estimated total production of the domestic like product for the entire domestic industry. Petitioners estimated total 2012 production of the domestic like product using their knowledge of the industry and data from the ITC. We have relied upon data Petitioners provided for purposes of measuring industry support.

Based on information provided in the Petitions, supplemental submission, and other information readily available to the Department, we determine that Petitioners have met the statutory criteria for industry support under section 732(c)(4)(A)(i) of the Act because the domestic producers (or workers) who support the Petitions account for at least 25 percent of the total production of the domestic like product. Based on information provided in the Petitions, the domestic producers (or workers) have met the statutory criteria for industry support under section 732(c)(4)(A)(ii) of the Act because the domestic producers (or workers) who support the Petitions 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 Petitions. Accordingly, the Department determines that the Petitions were filed on behalf of the domestic industry within the meaning of section 732(b)(1) of the Act.

The Department finds that Petitioners filed the Petitions on behalf of the domestic industry because they are interested parties as defined in sections 771(9)(C), (E), and (F) of the Act and they have demonstrated sufficient industry support with respect to the antidumping duty investigations that they are requesting the Department initiate.

Allegations and Evidence of Material Injury and Causation

Petitioners allege that the U.S. industry producing the domestic like product is being materially injured, or is threatened with material injury, by reason of the imports of the subject merchandise sold at less than normal value (“NV”). In addition, Petitioners allege that subject imports exceed the negligibility threshold provided for under section 771(24)(A) of the Act.

Petitioners contend that the industry's injured condition is illustrated by reduced market share; underselling and price depression or suppression; lost sales and revenues; hindered production efforts, shipments, and capacity utilization; and decline in financial performance. We have assessed the allegations and supporting evidence regarding material injury, threat of material injury, and causation, and we have determined that these allegations are properly supported by adequate evidence and meet the statutory requirements for initiation.

Allegations of Sales at Less Than Fair Value

The following is a description of the allegations of sales at less-than-fair-value upon which the Department based its decision to initiate an investigation of imports of rebar from Mexico and Turkey. The sources of data for the deductions and adjustments relating to U.S. price and NV are discussed in greater detail in the Mexico AD Initiation Checklist and the Turkey AD Initiation Checklist.

Export Price

Mexico

Petitioners calculated export prices (“EP”) based on sales-specific information that is contemporaneous with the POI. To derive the ex-factory prices, Petitioners made deductions to U.S. price for foreign inland freight charges, Mexican brokerage and handling, international freight and insurance, and U.S. inland freight expenses, where such expenses were incurred by the seller.

Turkey

Petitioners calculated EP based on sales-specific information that is contemporaneous with the POI. The data serving as the basis for EP are based on transactions which represent an ex-factory export price. To be conservative, Petitioners made no adjustments for movement expenses, customs duties, brokerage and handling, or port expenses in estimating the ex-factory EP.

Normal Value

Mexico

Petitioners provided home market prices for rebar in Mexico. Petitioners calculated home market prices based on sales information that is contemporaneous with the POI. To derive the ex-factory price, Petitioners made deductions from the delivered prices for inland freight charges and brokerage and handling.

Turkey

Petitioners calculated home market prices based on price quotes for rebar produced by Habaş Sinai ve Tibbi Gazlar Istihsal Endüstrisi A.S. (“Habas”) and Icdas Celik Enerji Tersane ve Ulasim San AS (“ICDAS”), and sold or offered for sale to customers in Turkey during the POI. To calculate the ex-factory normal value (“NV”), Petitioners deducted from the delivered prices inland freight charges and value-added tax, where applicable.

Turkey

Sales-Below-Cost Allegation

Petitioners provided information demonstrating reasonable grounds to believe or suspect that sales of rebar in the Turkish market were made at prices below the fully-absorbed cost of production (“COP”), within the meaning of section 773(b) of the Act, and requested that the Department conduct a country-wide sales-below-cost investigation. The Statement of Administrative Action (“SAA”) accompanying the Uruguay Round Agreements Act, states that an allegation of sales below COP need not be specific to individual exporters or producers. The SAA states that “Commerce will consider allegations of below-cost sales in the aggregate for a foreign country, just as Commerce currently considers allegations of sales at less than fair value on a country-wide basis for purposes of initiating an antidumping investigation.” Further, the SAA provides that section 773(b)(2)(A) of the Act retains the requirement that the Department have “reasonable grounds to believe or suspect” that below-cost sales have occurred before initiating such an investigation. Reasonable grounds exist when an interested party provides specific factual information on costs and prices, observed or constructed, indicating that sales in the foreign market in question are at below-cost prices.

Cost of Production

Pursuant to section 773(b)(3) of the Act, COP consists of the cost of manufacturing (“COM”); selling, general and administrative (“SG&A”) expenses; financial expenses; and packing expenses. Petitioners calculated COM (except factory overhead) and packing expenses based on the input factors of production from a U.S. producer of rebar adjusted for known differences between the Turkish and U.S. industries during the prospective POI. The input factors of production were valued using publicly-available data on costs specific to Turkey.

To determine factory overhead, SG&A, and financial expense rates, Petitioners relied on the fiscal year (“FY”) ended December 31, 2012 audited financial statements of a Turkish producer of comparable merchandise. We revised Petitioners' overhead expense rate because it appears Petitioners may have double counted energy costs by including them as a part of the overhead rate calculated from the Turkish producer's financial statements and also including energy costs as a distinct line item in the calculation of the COP and constructed value (“CV”). To be conservative and avoid the possibility of double counting energy costs, we recalculated the overhead rate from the Turkish producer's financial statements.

Based upon a comparison of the prices of the foreign like product in the home market to the calculated COP of the most comparable product, we find reasonable grounds to believe or suspect that sales of the foreign like product were made below the COP, within the meaning of section 773(b)(2)(A)(i) of the Act. Accordingly, the Department is initiating a country-wide cost investigation.

Normal Value Based on Constructed Value

Because they alleged sales below cost, pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act, Petitioners calculated NV based on CV. Petitioners calculated CV using the same average COM, SG&A, financial expense, and packing figures used to compute the COP. Petitioners relied on the same FY ended December 31, 2012 audited financial statements used as the basis for the factory overhead, SG&A, and financial expense rates to calculate the profit rate.

Fair Value Comparisons

Based on the data provided by Petitioners, there is reason to believe that imports of rebar in Mexico and Turkey are being, or are likely to be, sold in the United States at less than fair value. Based on comparisons of EP to home market prices for Mexico and EP to CV for Turkey, in accordance with section 773(a)(4) of the Act, the estimated dumping margins for rebar from Mexico and Turkey range from 48.82-66.70 percent, and 35.01-36.99 percent, respectively.

Initiation of Antidumping Investigations

Based upon the examination of the Petitions on rebar from Mexico and Turkey, we find that the Petitions meet the requirements of section 732 of the Act. Therefore, we are initiating AD investigations to determine whether imports of concrete reinforcing bar from Mexico and Turkey are being, or are likely to be, sold in the United States at less than fair value. In accordance with section 733(b)(1)(A) of the Act and 19 CFR 351.205(b)(1), unless postponed, we will make our preliminary determinations no later than 140 days after the date of this initiation.

Respondent Selection

Following standard practice in AD investigations involving market economy countries, in the event the Department determines that the number of known exporters or producers for this investigation is large, the Department may select respondents based on U.S. Customs and Border Protection (“CBP”) data for U.S. imports of rebar from Mexico or Turkey under all Harmonized Tariff Schedule of the United States subheadings identified in Scope of the Investigation. We intend to release the CBP data under Administrative Protective Order (“APO”) to all parties with access to information protected by APO within five days of publication of this Federal Register notice.

The Petitions identified 10 producers and/or exporters of rebar in Mexico, and 41 producers and/or exporters of rebar in Turkey.

We intend to make our decision regarding respondent selection within 20 days of publication of this notice. The Department invites comments regarding the CBP data and respondent selection within seven days of publication of this Federal Register notice for Mexico and Turkey.

Distribution of Copies of the Petitions

In accordance with section 732(b)(3)(A) of the Act and 19 CFR 351.202(f), copies of the public version of the Petitions have been provided to the Governments of Mexico and Turkey via IA ACCESS. To the extent practicable, we will attempt to provide a copy of the public version of the Petitions to each exporter named in the Petitions, as provided 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 Determinations by the ITC

The ITC will preliminarily determine no later than October 21, 2013, whether there is a reasonable indication that imports of rebar from Mexico and Turkey are materially injuring, or threatening material injury to, a U.S. industry. A negative ITC determination for any country will result in the investigation being terminated with respect to that country; otherwise, these investigations will proceed according to statutory and regulatory time limits.

Submission of Factual Information

On April 10, 2013, the Department published Definition of Factual Information and Time Limits for Submission of Factual Information: Final Rule, 78 FR 21246 (April 10, 2013), which modified two regulations related to AD and countervailing duty (“CVD”) proceedings: the definition of factual information (19 CFR 351.102(b)(21)), and the time limits for the submission of factual information (19 CFR 351.301). The final rule identifies five categories of factual information in 19 CFR 351.102(b)(21), which are summarized as follows: (i) evidence submitted in response to questionnaires; (ii) evidence submitted in support of allegations; (iii) publicly available information to value factors under 19 CFR 351.408(c) or to measure the adequacy of remuneration under 19 CFR 351.511(a)(2); (iv) evidence placed on the record by the Department; and (v) evidence other than factual information described in (i)-(iv). The final rule requires any party, when submitting factual information, to specify under which subsection of 19 CFR 351.102(b)(21) the information is being submitted and, if the information is submitted to rebut, clarify, or correct factual information already on the record, to provide an explanation identifying the information already on the record that the factual information seeks to rebut, clarify, or correct. The final rule also modified 19 CFR 351.301 so that, rather than providing general time limits, there are specific time limits based on the type of factual information being submitted. These modifications are effective for all proceeding segments initiated on or after May 10, 2013, and thus are applicable to these investigations. Please review the Final Rule, available at http://ia.ita.doc.gov/frn/2013/1304frn/2013-08227.txt prior to submitting factual information in these investigations.

Notification to Interested Parties

Interested parties must submit applications for disclosure under administrative protective order in accordance with 19 CFR 351.305. On January 22, 2008, the Department published Antidumping and Countervailing Duty Proceedings: Documents Submission Procedures; APO Procedures, 73 FR 3634 (January 22, 2008). Parties wishing to participate in these investigations should ensure that they meet the requirements of these procedures (e.g., the filing of letters of appearance as discussed at 19 CFR 351.103(d)).

Any party submitting factual information in an AD or CVD proceeding must certify to the accuracy and completeness of that information. Parties are hereby reminded that the Department issued a final rule with respect to certification requirements, effective August 16, 2013. Parties are hereby reminded that revised certification requirements are in effect for company/government officials as well as their representatives. All segments of any antidumping duty or countervailing duty proceedings initiated on or after August 16, 2013, should use the formats for the revised certifications provided at the end of the Final Rule. The Department intends to reject factual submissions if the submitting party does not comply with the applicable revised certification requirements.

This notice is issued and published pursuant to section 777(i) of the Act and 19 CFR 351.203(c).

Appendix I

Scope of the Investigations

The merchandise subject to these investigations is steel concrete reinforcing bar imported in either straight length or coil form (“rebar”) regardless of metallurgy, length, diameter, or grade. The subject merchandise is classifiable in the Harmonized Tariff Schedule of the United States (“HTSUS”) primarily under item numbers 7213.10.0000, 7214.20.0000, and 7228.30.8010. The subject merchandise may also enter under other HTSUS numbers including 7215.90.1000, 7215.90.5000, 7221.00.0015, 7221.00.0030, 7221.00.0045, 7222.11.0001, 7222.11.0057, 7222.11.0059, 7222.30.0001, 7227.20.0080, 7227.90.6085, 7228.20.1000, and 7228.60.6000. Specifically excluded are plain rounds (i.e., non-deformed or smooth rebar). HTSUS numbers are provided for convenience and customs purposes; however, the written description of the scope remains dispositive.