Stainless Steel Wire Rods from India: Preliminary Results of Antidumping Duty Administrative Review and Notice of Intent to Rescind Antidumping Duty Administrative Review in Part, 52079-52083 [E7-17993]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 72, Number 176 (Wednesday, September 12, 2007)]
[Notices]
[Pages 52079-52083]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-17993]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-533-808]


Stainless Steel Wire Rods from India: Preliminary Results of 
Antidumping Duty Administrative Review and Notice of Intent to Rescind 
Antidumping Duty Administrative Review in Part

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: The Department of Commerce is conducting an 
administrativereview of the antidumping duty order on stainless steel 
wire rods from India in response to a request from an interested party. 
The review covers one manufacturer/exporter, Mukand Limited. The period 
of review is December 1, 2005, through November 30, 2006. We have 
preliminarily determined that Mukand Limited made sales at less than 
normal value.
    The Department of Commerce intends to rescind the administrative 
review

[[Page 52080]]

with respect to Sunflag Iron & Steel Co., Ltd. See ``Intent to Rescind 
Administrative Review'' section below. We invite interested parties to 
comment on these preliminary results. Parties who submit comments in 
this review are requested to submit with each argument a statement of 
each issue and a brief summary of the argument.

EFFECTIVE DATE: September 12, 2007.

FOR FURTHER INFORMATION CONTACT: George Callen, AD/CVD Enforcement, 
Office 5, Import Administration, International Trade Administration, 
U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, 
Washington, DC 20230, telephone: (202) 482-0180.

SUPPLEMENTARY INFORMATION:

Background

    On October 20, 1993, the Department of Commerce (the Department) 
published the antidumping duty order on certain stainless steel wire 
rods (wire rods) from India. See Antidumping Duty Order: Certain 
Stainless Steel Wire Rods from India, 58 FR 63335 (December 1, 1993). 
On December 1, 2006, the Department published in the Federal Register a 
notice of opportunity to request an administrative review of this 
antidumping duty order. See Antidumping or Countervailing Duty Order, 
Finding, or Suspended Investigation; Opportunity To Request 
Administrative Review, 71 FR 69543 (December 1, 2006).
    On December 29, 2006, in accordance with 19 CFR 351.213(b)(2), 
Mukand Limited (Mukand), a producer and exporter, requested an 
administrative review under section 751(a) of the Tariff Act of 1930, 
as amended (the Act), of the antidumping duty order on wire rods from 
India. On December 29, 2006, the Department of Commerce received a 
request to conduct an administrative review of the antidumping duty 
order on stainless steel wire rods from India from Sunflag Iron & Steel 
Co., Ltd. (Sunflag). On February 2, 2007, in accordance with 751(a) of 
the Act and 19 CFR 351.221(b)(1), we published in the Federal Register 
a notice of initiation of administrative review of this order. See 
Initiation of Antidumping and Countervailing Duty Administrative 
Reviews and Request for Revocation in Part, 72 FR 5005 (February 2, 
2007).
    The period of review (POR) is December 1, 2005, through November 
30, 2006. We are conducting this administrative review in accordance 
with section 751(a) of the Act.

Intent to Rescind Administrative Review

    Sunflag also requested a new-shipper review, which we initiated on 
March 20, 2007. See Stainless Steel Wire Rod from India: Notice of 
Initiation of Antidumping Duty New-Shipper Review, 72 FR 13088 (March 
20, 2007). Because we are proceeding with the new-shipper review and 
because the administrative review covers entries during the same period 
of time as the new-shipper review, we intend to rescind the 
administrative review pursuant to 19 CFR 351.214(j).

Scope of the Order

    The merchandise under review is wire rods, which are hot-rolled or 
hot-rolled annealed and/or pickled rounds, squares, octagons, hexagons 
or other shapes, in coils. Wire rods are made of alloy steels 
containing, by weight, 1.2 percent or less of carbon and 10.5 percent 
or more of chromium, with or without other elements. These products are 
only manufactured by hot-rolling and are normally sold in coiled form, 
and are of solid cross section. The majority of wire rods sold in the 
United States are round in cross-section shape, annealed, and pickled. 
The most common size is 5.5 millimeters in diameter.
    The wire rods subject to this order are currently classifiable 
under subheadings 7221.00.0005, 7221.00.0015, 7221.00.0030, 
7221.00.0045, and 7221.00.0075 of the Harmonized Tariff Schedule of the 
United States (HTSUS). Although the HTSUS subheadings are provided for 
convenience and customs purposes, the written description of the 
merchandise subject to the order is dispositive of whether or not the 
merchandise is covered by the review.

Comparison-Market Sales

    In order to determine whether there was a sufficient volume of 
sales of wire rods in the comparison market to serve as a viable basis 
for calculating the normal value, we compared the volume of the 
respondent's home-market sales of the foreign like product to its 
volume of the U.S. sales of the subject merchandise in accordance with 
section 773(a) of the Act. Mukand's quantity of sales in the home 
market was greater than five percent of its sales to the U.S. 
market.Based on this comparison of the aggregate quantities of the 
comparison-market (i.e., India) and U.S. sales and absent any 
information that a particular market situation in the exporting country 
did not permit a proper comparison, we determined that the quantity of 
the foreign like product sold by the respondent in the exporting 
country was sufficient to permit a proper comparison with the sales of 
the subject merchandise to the United States, pursuant to section 
773(a)(1) of the Act. Thus, we determined that Mukand's home market was 
viable during the POR. See section 773(a)(1) of the Act. Therefore, in 
accordance with section 773(a)(1)(B)(i) of the Act, we based normal 
value for the respondent on the prices at which the foreign like 
product was first sold for consumption in the exporting country in the 
usual commercial quantities and in the ordinary course of trade and, to 
the extent practicable, at the same level of trade as the U.S.-price 
sales.

Export Price

    We calculated export price in accordance with section 772(a) of the 
Act because Mukand sold the merchandise to the unaffiliated purchaser 
in the United States prior to importation. We based export price on the 
packed, delivered, duty unpaid price to the unaffiliated purchaser in 
the United States. We made deductions from the starting price for 
movement expenses in accordance with section 772(c)(2)(A) of the Act. 
No other adjustments were claimed.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products covered by the scope of the order which were produced and sold 
by Mukand in the home market during the POR to be foreign like products 
for the purpose of determining appropriate product comparisons to wire 
rods sold in the United States. We compared U.S. sales to sales made in 
the comparison market within the contemporaneous window period. Mukand 
had only one entry of subject merchandise during the POR and on January 
29, 2007, Mukand sought permission to report only home-market sales it 
made during the period July 2005 through December 2005, which covers 
the three months preceding and two months after this entry. We agreed 
to this request. See letter from Laurie Parkhill to Mukand dated 
February 26, 2007.
    Because there were no contemporaneous sales of identical 
merchandise in the comparison market made in the ordinary course of 
trade to compare to Mukand's U.S. sale, we compared its U.S. sale to 
sales of the most similar foreign like product made in the ordinary 
course of trade. In making product comparisons, we defined identical 
and most similar foreign like products based on the physical 
characteristics reported by

[[Page 52081]]

Mukand in the following order of importance: grade, diameter, and type 
of final finishing operation. For more information, page 2 of 
memorandum entitled ``Administrative Review of the Antidumping Duty 
Order on Stainless Steel Wire Rods from India - Preliminary Results 
Analysis Memorandum for Mukand'' dated August 30, 2007 (Prelim Memo).

Cost of Production

    In the most recently completed segment of this proceeding in which 
Mukand participated, we disregarded certain sales made by Mukand in the 
home market that failed the cost test and we excluded such sales from 
the calculation of normal value. See 69 FR 29923 (May 26, 2004). 
Therefore, consistent with Section 773 (b)(2)(A)(ii) of the Act we are 
conducting a cost-of-production investigation of Mukand's home-market 
sales.
    On January 29, 2007, Mukand sought permission to report cost-of-
production data for the prior POR (December 1, 2004 - November 30, 
2005) because the U.S. sale at issue involved merchandise that entered 
the United States during the current POR but was produced and shipped 
to the United States during the prior period. We agreed to that 
request. See letter from Laurie Parkhill to Mukand dated March 9, 2007.
    In accordance with section 773(b)(3) of the Act, we calculated the 
cost of production (COP) based on the sum of the costs of materials and 
fabrication employed in producing the foreign like product, the 
selling, general, and administrative (SG&A) expenses, and all costs and 
expenses incidental to packing the merchandise. In our COP analysis, we 
used the home-market sales and COP information provided by Mukand in 
its questionnaire responses, including its home-market and COP data 
bases. See Mukand's March 15, 2007, June 15, 2007, and July 30, 2007, 
responses and accompanying data bases. We relied on the COP data 
submitted by Mukand, except for the changes identified below:
    1. Under section 773(f)(3) of the Act (i.e., the ``Major Input 
Rule''), we increased Mukand's reported cost of direct materials based 
on the difference between its affiliated supplier's cost of grade 201 
and 410 billets and the transfer prices charged to Mukand for such 
billets.
    2. We increased Mukand's general and administrative expense ratio 
to include ``exceptional'' expenses recognized in Mukand's financial 
statements for fiscal year 2004-2005. See Prelim Memo at 2.
    After calculating the COP and in accordance with section 773(b)(1) 
of the Act, we tested home-market sales of the foreign like product to 
determine if they were made at prices below the COP within an extended 
period of time in substantial quantities and whether such prices 
permitted the recovery of all costs within a reasonable period of time. 
The home-market prices were exclusive of any applicable movement 
charges, billing adjustments, discounts, and indirect selling expenses. 
Pursuant to section 773(b)(2)(C) of the Act, where less than 20 percent 
of Mukand's sales of a given product were at prices less than the COP, 
we did not disregard any below-cost sales of that product because the 
below-cost sales were not made in substantial quantities within an 
extended period of time. Where 20 percent or more of Mukand's sales of 
a given product were at prices less than the COP, we disregarded the 
below-cost sales of that product because we determined that the below-
cost sales were made in substantial quantities within an extended 
period of time, pursuant to sections 773(b)(2)(B) and (C) of the Act 
and because, based on comparisons of prices to weighted-average COPs 
for the POR, we determined that these below-cost sales were made at 
prices which would not permit recovery of all costs within a reasonable 
period of time in accordance with section 773(b)(2)(D) of the Act. See 
Prelim Memo. Consequently, we disregarded Mukand's below-cost sales and 
used the remaining sales as the basis for determining normal value, in 
accordance with 773(b)(1) of the Act.

Normal Value

    We based normal value for Mukand on the prices of the foreign like 
products sold to its comparison-market customers. When applicable, we 
made adjustments for differences in packing and movement expenses in 
accordance with sections 773(a)(6)(A) and (B) of the Act. We also made 
adjustments for differences in cost attributable to differences in 
physical characteristics of the merchandise pursuant to section 
773(a)(6)(C)(ii) of the Act and 19 CFR 351.411. In addition, we made 
adjustments for differences in circumstances of sale in accordance with 
section 773(a)(6)(C)(iii) of the Act and 19 CFR 351.410. For 
comparisons to export price, we made circumstance-of-sale adjustments 
by deducting home-market direct selling expenses incurred on home-
market sales from, and adding U.S. direct selling expenses to, normal 
value. In accordance with section 773(a)(1)(B)(i) of the Act, we based 
normal value on sales at the same level of trade as the export price. 
See the ``Level of Trade'' section below.

Level of Trade

    In accordance with section 773(a)(1)(B)(i) of the Act, to the 
extent practicable, we determined normal value based on sales in the 
home market at the same level of trade as the export-price sales. The 
normal value level of trade is based on the starting price of the sales 
in the home market or, when normal value is based on constructed value, 
the starting price of the sales from which we derive SG&A expenses and 
profit. For export price sales, the U.S. level of trade is based on the 
starting price of the sales to the U.S. market.
    To determine whether normal value sales are at a different level of 
trade than the export- price sales, the Department examines stages in 
the marketing process and selling functions along the chain of 
distribution between the producer and the customer. If the comparison-
market sales are at a different level of trade than the export-price 
sales and the difference affects price comparability, as manifested by 
a pattern of consistent price differences between comparison-market 
sales at the normal value level of trade and comparison-market sales at 
the level of trade of the export transaction, the Department makes a 
level-of-trade adjustment under section 773(a)(7)(A) of the Act. See 
Notice of Final Determination of Sales at Less Than Fair Value: Certain 
Cut-to-Length Carbon Steel Plate from South Africa, 62 FR 61731, 61732 
(November 19, 1997).
    In determining whether Mukand made sales at different levels of 
trade, we obtained information from Mukand regarding the marketing 
stages for the reported U.S. and home-market sales, including a 
description of the selling activities it performed for each channel of 
distribution. Generally, if the reported levels of trade are the same, 
the selling functions and activities of the seller at each level should 
be similar. Conversely, if a party reports that levels of trade are 
different for different groups of sales, the selling functions and 
activities of the seller for each group should be dissimilar.
    In the home market, Mukand reported four levels of trade: sales to 
end-user via an agent, sales to end-users without an agent, sales to 
traders without an agent, and sales to traders with an agent. See 
Mukand's questionnaire response, dated March 15, 2007 (Mukand 
Response), at B-20. Mukand reported five channels of distribution: 
sales to traders or end-users, sales to distributors through a del 
credre agent

[[Page 52082]]

(similar to a consignment agent except that Mukand and agent finalize 
price with customer and Mukand ships directly to the customer), sales 
to end-users through consignment agents, sales through ``stock yards'' 
(i.e., warehouses) with an agent and sales through warehouses without 
an agent. See Mukand Response at A-7-8.
    We examined the chain of distribution and the selling activities 
associated with sales reported by Mukand to its five channels of 
distribution in the home market, and where appropriate, to distinct 
customer categories within these channels. We found that for sales to 
traders or end-users, sales to distributors through a del credre agent, 
and sales to end-users through consignment agents (distribution 
channels 1, 2, and 3), Mukand provided similar selling activities with 
respect to sales process, freight services, and warehousing services 
and, therefore, sales to these three channels constituted one distinct 
level of trade. We found that for sales through warehouses with an 
agent and sales through warehouses without an agent (distribution 
channels 4 and 5) Mukand provided similar selling activities with 
respect to sales process, freight services, and warehousing services 
and, therefore, sales to these two channels constituted another, 
distinct level of trade. Based upon our overall analysis in the home 
market, we found that these two levels of trade constituted two 
different levels of trade.
    Mukand reported one export-price sale through one channel of 
distribution. To the extent practicable, we compare normal value at the 
same level of trade as the sale to the United States. The export-price 
level of trade is similar to the first level of trade in the home 
market (channels 1, 2, and 3) with respect to sales process, freight 
services, and warehousing services. The export-price level of trade 
differed from the second level of trade in the home-market (channels 4 
and 5) with respect to freight, delivery, and warehousing. We matched 
the export-price sale to a home-market sale at the same level of trade 
and did not make a level-of-trade adjustment.

Currency Conversion

    Pursuant to section 773A(a) of the Act, we converted amounts 
expressed in foreign currencies into U.S. dollar amounts based on the 
exchange rates in effect on the date of the U.S. sale, as reported by 
the Federal Reserve Bank.

Preliminary Results of Review

    As a result of this review, we preliminarily determine that the 
weighted-average dumping margin on stainless steel wire rods from India 
for the period December 1, 2005, through November 30, 2006, for Mukand 
Limited is 11.56 percent.
    Public Comment
    We will disclose the calculations used in our analysis to parties 
in this review within five days of the date of publication of this 
notice. See 19 CFR 351.224(b). Any interested party may request a 
hearing within 30 days of the publication of this notice in the Federal 
Register. See 19 CFR 351.310(c). If a hearing is requested, the 
Department will notify interested parties of the hearing schedule.
    Interested parties are invited to comment on the preliminary 
results of this review. The Department will consider case briefs filed 
by interested parties within 30 days after the date of publication of 
this notice in the Federal Register. See 19 CFR 351.309(c)(1)(ii). 
Also, interested parties may file rebuttal briefs, limited to issues 
raised in the case briefs. See 19 CFR 351.309(d)(1). The Department 
will consider rebuttal briefs filed not later than five days after the 
time limit for filing case briefs. Parties who submit arguments are 
requested to submit with each argument a statement of the issue, a 
brief summary of the argument, and a table of authorities cited. 
Further, we request that parties submitting written comments provide 
the Department with a diskette containing an electronic copy of the 
public version of such comments.
    We intend to issue the final results of this administrative review, 
including the results of our analysis of issues raised in the written 
comments, within 120 days of publication of the preliminary results in 
the Federal Register. See section 751(c)(3) of the Act and 19 CFR 
351.213(h)(1).

Assessment Rates

    The Department shall determine, and U.S. Customs and Border 
Protection (CBP) shall assess, antidumping duties on all appropriate 
entries. In accordance with 19 CFR 351.212(b)(1), we calculated an 
importer-specific assessment rate for these preliminary results of 
review. Where the importer-specific assessment rate is above de minimis 
(i.e., 0.50 percent ad valorem or greater), we will instruct CBP to 
assess the importer-specific rate uniformly, as appropriate, on all 
entries of subject merchandise during the POR that were entered by the 
importer or sold to the customer. After 15 days of publication of the 
final results of review, the Department will issue instructions to CBP 
directing it to assess the final assessment rates (if above de minimis) 
uniformly on all entries of subject merchandise made by the relevant 
importer or sold to the relevant customer during the POR.
    The Department clarified its ``automatic assessment'' regulation on 
May 6, 2003 (68 FR 23954). This clarification applies to POR entries of 
subject merchandise produced by Mukand where Mukand did not know that 
its merchandise was destined for the United States. In such instances, 
we will instruct CBP to liquidate unreviewed entries at the all-others 
rate if there is no rate for the intermediate company(ies) involved in 
the transaction. For a full discussion of this clarification, see 
Antidumping and Countervailing Duty Proceedings: Assessment of 
Antidumping Duties, 68 FR 23954 (May 6, 2003).

Cash-Deposit Requirements

    The following cash-deposit requirements will be effective for all 
shipments of the subject merchandise entered, or withdrawn from 
warehouse, for consumption on or after the publication date of the 
final results of this administrative review, as provided by section 
751(a)(1) of the Act: (1) the cash-deposit rate for Mukand will be the 
rate established in the final results of this review (except that if 
the rate is de minimis, i.e., less than 0.50 percent, no cash deposit 
will be required); (2) for previously investigated or reviewed 
companies not listed above, the cash-deposit rate will continue to be 
the company-specific rate published for the most recent period; (3) if 
the exporter is not a firm covered in this review, a prior review, or 
the less-than-fair value (LTFV) investigation but the manufacturer is, 
the cash-deposit rate will be the rate established for the most recent 
period for the manufacturer of the subject merchandise; and (4) the 
cash-deposit rate for all other manufacturers or exporters will 
continue to be the ``all others'' rate of 48.80 percent, which is the 
``all others'' rate established in the LTFV investigation. These cash-
deposit rates, when imposed, shall remain in effect until further 
notice.
    Notification to Importers This notice also serves as a preliminary 
reminder to importers of their responsibility under 19 CFR 
351.402(f)(2) to file a certificate regarding the reimbursement of 
antidumping duties prior to liquidation of the relevant entries during 
this review period. Failure to comply with this requirement could 
result in the Secretary's presumption that reimbursement of antidumping 
occurred and the subsequent assessment of double antidumping duties.

[[Page 52083]]

    We are issuing and publishing this notice in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act.

    September 4, 2007.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E7-17993 Filed 9-11-07; 8:45 am]
BILLING CODE 3510-DS-S