Certain Hot-Rolled Flat-Rolled Carbon Quality Steel Products from Brazil: Preliminary Results of Antidumping Duty Administrative Review and Extension of Time Limit for the Final Results, 19369-19376 [2010-8558]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 75, Number 71 (Wednesday, April 14, 2010)]
[Notices]
[Pages 19369-19376]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-8558]


-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

International Trade Administration

[A-351-828]


Certain Hot-Rolled Flat-Rolled Carbon Quality Steel Products from 
Brazil: Preliminary Results of Antidumping Duty Administrative Review 
and Extension of Time Limit for the Final Results

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: In response to requests by interested parties, the Department 
of Commerce (the Department) is conducting an administrative review of 
the antidumping duty order on certain hot-rolled flat-rolled carbon 
quality steel products (hot-rolled steel) from Brazil. The review 
covers Usinas Siderurgicas de Minas Gerais (USIMINAS) and its 
subsidiary Companhia Siderurgica Paulista (COSIPA) (hereafter referred 
to as USIMINAS/COSIPA). The period of review (POR) is March 1, 2008, 
through February 28, 2009.
    We preliminarily determine that the sale of hot-rolled steel from 
Brazil has been made below normal value (NV) by USIMINAS/COSIPA during 
the POR. If these preliminary results are adopted in our final results 
of administrative review, we will issue appropriate assessment 
instructions to U.S. Customs and Border Protection (CBP). Interested 
parties are invited to comment on these preliminary results. See 
``Preliminary Results of Review,'' below. The Department intends to 
issue the final results no later than 180 days from the date of 
publication of this notice, pursuant to section 751(a)(3)(A) of the 
Tariff Act of 1930, as amended (the Act). See ``Extension of the Time 
Limits for the Final Results'' below.

DATES: Effective Date: April 14, 2010.

FOR FURTHER INFORMATION CONTACT: Patrick Edwards or Dena Crossland, AD/
CVD Operations, Office 7, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Room 7850, Washington, DC 20230; telephone: 
(202) 482-8029 or (202) 482-3362, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On March 12, 2002, the Department published the antidumping duty 
order on hot-rolled steel from Brazil. See Antidumping Duty Order: 
Certain Hot-Rolled Flat-Rolled Carbon Quality Steel Products from 
Brazil, 67 FR 11093 (March 12, 2002) (Antidumping Order).

[[Page 19370]]

On March 2, 2009, the Department published in the Federal Register its 
notice of opportunity to request an administrative review of this 
order. See Antidumping or Countervailing Duty Order, Finding, or 
Suspended Investigation; Opportunity To Request Administrative Review, 
74 FR 9077 (March 2, 2009). In response, on March 31, 2009, USIMINAS/
COSIPA requested that the Department conduct an administrative review 
of their sales of subject merchandise for the period March 1, 2008, 
through February 28, 2009.
    On April 27, 2009, the Department initiated an administrative 
review of USIMINAS/COSIPA. See Initiation of Antidumping and 
Countervailing Duty Administrative Reviews and Request for Revocation 
in Part, 74 FR 5821 (April 27, 2009) (Initiation Notice).
    On April 28, 2009, United States Steel Corporation (petitioner) 
submitted a letter of appearance. On April 30, 2009, and May 1, 2009, 
respectively, domestic interested parties Nucor Corporation and 
ArcelorMittal USA Inc. also submitted letters of appearance.
    On May 8, 2009, the Department issued sections A, B, and C of the 
antidumping questionnaire to respondents USIMINAS/COSIPA. On June 9, 
2009, USIMINAS/COSIPA filed their response to section A of the 
Department's questionnaire (AQR), and on June 29, 2009, USIMINAS/COSIPA 
filed their responses to sections B and C of the Department's 
questionnaire (BCQR).
    On June 17, 2009, the Department issued section D (Cost of 
Production/Constructed Value) of the Department's antidumping duty 
questionnaire to respondents, to which USIMINAS/COSIPA responded on 
July 30, 2009 (DQR).
    On August 18, 2009, petitioner submitted factual information 
regarding USIMINAS/COSIPA for the Department to consider prior to 
issuing supplemental questionnaires to respondents.
    On September 1, 2009, the Department issued its first sections A 
through C supplemental questionnaire to USIMINAS/COSIPA, and on 
September 11, 2009, the Department issued its first section D 
supplemental questionnaire to USIMINAS/COSIPA. On September 23, 2009, 
USIMINAS/COSIPA responded to the Department's first sections A through 
C supplemental questionnaire (SQR), and on October 7, 2009, USIMINAS/
COSIPA responded to the Department's first section D supplemental 
questionnaire (DSQR).\1\
---------------------------------------------------------------------------

    \1\ On October 9, 2009, USIMINAS/COSIPA submitted an English 
translation of the audited financial statements for one of their 
affiliated comparison market customers, Dufer, S.A. USIMINAS/COSIPA 
inadvertently omitted this translation from their October 7, 2009, 
section D supplemental questionnaire response.
---------------------------------------------------------------------------

    On November 18, 2009, the Department issued its second sections A 
through C supplemental questionnaire to USIMINAS/COSIPA, to which 
USIMINAS/COSIPA responded on December 17, 2009 (SSQR).
    On December 1, 2009, the Department fully extended the deadline for 
the preliminary results of this review from December 1, 2009, to March 
31, 2010. See Certain Hot-Rolled Flat-Rolled Carbon Quality Steel 
Products From Brazil; Notice of Extension of Time Limits for 
Preliminary Results of Antidumping Duty Administrative Review, 74 FR 
62744 (December 1, 2009).
    On December 18, 2009, the Department issued a second section D 
supplemental questionnaire, to which USIMINAS/COSIPA responded on 
January 7, 2010 (DSSQR).
    On January 4, 2010, the Department issued its third sections A 
through C supplemental questionnaire, to which USIMINAS/COSIPA 
responded on January 13, 2010 (TSQR).

Tolling of Deadlines

    As explained in the memorandum from the Deputy Assistant Secretary 
(DAS) for Import Administration, the Department exercised its 
discretion to toll deadlines for the duration of the closure of the 
Federal Government from February 5, through February 12, 2010. Thus, 
all deadlines in this segment of the proceeding were extended by seven 
days. See Memorandum to the Record from Ronald Lorentzen, DAS for 
Import Administration, regarding ``Tolling of Administrative Deadlines 
As a Result of the Government Closure During the Recent Snowstorm,'' 
dated February 12, 2010. Therefore, the deadline for the preliminary 
results of this review became April 7, 2010.

Period of Review

    The POR covered by this review is March 1, 2008, through February 
28, 2009.

Scope of the Order

    For purposes of this order, the products covered are certain hot-
rolled flat-rolled carbon-quality steel products of a rectangular 
shape, of a width of 0.5 inch or greater, neither clad, plated, nor 
coated with metal and whether or not painted, varnished, or coated with 
plastics or other non-metallic substances, in coils (whether or not in 
successively superimposed layers) regardless of thickness, and in 
straight lengths, of a thickness less than 4.75 mm and of a width 
measuring at least 10 times the thickness. Universal mill plate (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, not in coils and without patterns in relief) of a 
thickness not less than 4.0 mm is not included within the scope of this 
order.
    Specifically included in this scope are vacuum degassed, fully 
stabilized (commonly referred to as interstitial-free (IF)) steels, 
high strength low alloy (HSLA) steels, and the substrate for motor 
lamination steels. IF steels are recognized as low carbon steels with 
micro-alloying levels of elements such as titanium and/or niobium added 
to stabilize carbon and nitrogen elements. HSLA steels are recognized 
as steels with micro-alloying levels of elements such as chromium, 
copper, niobium, titanium, vanadium, and molybdenum. The substrate for 
motor lamination steels contains micro-alloying levels of elements such 
as silicon and aluminum.
    Steel products to be included in the scope of this order, 
regardless of Harmonized Tariff Schedule of the United States (HTSUS) 
definitions, are products 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.
    All products that meet the physical and chemical description 
provided above are within the scope of this order unless otherwise 
excluded. The following products, by way of example, are outside and/or 
specifically excluded from the scope of this order:
     Alloy hot-rolled steel products in which at least one of 
the chemical elements exceeds those listed above

[[Page 19371]]

(including, e.g., ASTM specifications A543, A387, A514, A517, and 
A506).
     SAE/AISI grades of series 2300 and higher.
     Ball bearing steels, as defined in the HTSUS.
     Tool steels, as defined in the HTSUS.
     Silico-manganese (as defined in the HTSUS) or silicon 
electrical steel with a silicon level exceeding 1.50 percent.
     ASTM specifications A710 and A736.
     USS Abrasion-resistant steels (USS AR 400, USS AR 500).
     Hot-rolled steel coil which meets the following chemical, 
physical and mechanical specifications:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                C Cu                          Mn Ni                     P                      S                      Si                     Cr
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.10-0.14%.........................  0.90% Max.............  0.025% Max............  0.005% Max...........  0.30-0.50%...........  0.50-.70%
0.20-0.40%.........................  0.20% Max.............
--------------------------------------------------------------------------------------------------------------------------------------------------------
Width = 44.80 inches maximum; Thickness = 0.063-0.198 inches; Yield Strength = 50,000 ksi minimum; Tensile Strength = 70,000-88,000 psi.

     Hot-rolled steel coil which meets the following chemical, 
physical and mechanical specifications:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                C Cu                          Mn Ni                   P Mo                     S                      Si                     Cr
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.10-0.16%.........................  0.70-0.90%............  0.025% Max............  0.006% Max...........  0.30-0.50%...........  0.50-0.70%
0.25% Max..........................   0.20% Max............   0.21% Max............
--------------------------------------------------------------------------------------------------------------------------------------------------------
Width = 44.80 inches maximum; Thickness = 0.350 inches maximum; Yield Strength = 80,000 ksi minimum; Tensile Strength = 105,000 psi Aim.

     Hot-rolled steel coil which meets the following chemical, 
physical and mechanical specifications:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                C Cu                          Mn Ni                 P V(wt.)                  S Cb                    Si                     Cr
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.10-0.14%.........................  1.30-1.80%............  0.025% Max............  0.005% Max...........  0.30-0.50%...........  0.50-0.70%
0.20-0.40%.........................  0.20% Max.............  0.10 Max..............  0.08% Max............
--------------------------------------------------------------------------------------------------------------------------------------------------------
Width = 44.80 inches maximum; Thickness = 0.350 inches maximum; Yield Strength = 80,000 ksi minimum; Tensile Strength = 105,000 psi Aim.

     Hot-rolled steel coil which meets the following chemical, 
physical and mechanical specifications:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                C Cu                          Mn Ni                   P Nb                    S Ca                  Si Al                    Cr
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.15% Max..........................  1.40% Max.............  0.025% Max............  0.010% Max...........  0.50% Max............  1.00% Max
0.50% Max..........................  0.20% Max.............  0.005% Min............  Treated..............  0.01-0.07%.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Width = 39.37 inches; Thickness = 0.181 inches maximum; Yield Strength = 70,000 psi minimum for thicknesses <= 0.148 inches and 65,000 psi minimum for
  thicknesses > 0.148 inches; Tensile Strength = 80,000 psi minimum.

     Hot-rolled dual phase steel, phase-hardened, primarily 
with a ferritic-martensitic microstructure, contains 0.9 percent up to 
and including 1.5 percent silicon by weight, further characterized by 
either (i) tensile strength between 540 N/mm\2\ and 640 N/mm\2\ and an 
elongation percentage 26 percent for thicknesses of 2 mm and above, or 
(ii) a tensile strength between 590 N/mm\2\ and 690 N/mm\2\ and an 
elongation percentage 25 percent for thicknesses of 2 mm and above.
     Hot-rolled bearing quality steel, SAE grade 1050, in 
coils, with an inclusion rating of 1.0 maximum per ASTM E 45, Method A, 
with excellent surface quality and chemistry restrictions as follows:
     0.012 percent maximum phosphorus, 0.015 percent maximum 
sulfur, and 0.20 percent maximum residuals including 0.15 percent 
maximum chromium.
    --Grade ASTM A570-50 hot-rolled steel sheet in coils or cut 
lengths, width of 74 inches (nominal, within ASTM tolerances), 
thickness of 11 gauge (0.119 inch nominal), mill edge and skin passed, 
with a minimum copper content of 0.20%.
    The merchandise subject to this order is classified in the HTSUS at 
subheadings: 7208.10.15.00, 7208.10.30.00, 7208.10.60.00, 
7208.25.30.00, 7208.25.60.00, 7208.26.00.30, 7208.26.00.60, 
7208.27.00.30, 7208.27.00.60, 7208.36.00.30, 7208.36.00.60, 
7208.37.00.30, 7208.37.00.60, 7208.38.00.15, 7208.38.00.30, 
7208.38.00.90, 7208.39.00.15, 7208.39.00.30, 7208.39.00.90, 
7208.40.60.30, 7208.40.60.60,

[[Page 19372]]

7208.53.00.00, 7208.54.00.00, 7208.90.00.00, 7210.70.30.00, 
7210.90.90.00, 7211.14.00.30, 7211.14.00.90, 7211.19.15.00, 
7211.19.20.00, 7211.19.30.00, 7211.19.45.00, 7211.19.60.00, 
7211.19.75.30, 7211.19.75.60, 7211.19.75.90, 7212.40.10.00, 
7212.40.50.00, 7212.50.00.00. Certain hot-rolled flat-rolled carbon-
quality steel covered by this order, including: vacuum degassed, fully 
stabilized; high strength low alloy; and the substrate for motor 
lamination steel may also enter under the following tariff numbers: 
7225.11.00.00, 7225.19.00.00, 7225.30.30.50, 7225.30.70.00, 
7225.40.70.00, 7225.99.00.90, 7226.11.10.00, 7226.11.90.30, 
7226.11.90.60, 7226.19.10.00, 7226.19.90.00, 7226.91.50.00, 
7226.91.70.00, 7226.91.80.00, and 7226.99.01.80.
    Although the HTSUS subheadings are provided for convenience and 
Customs purposes, the written description of the merchandise under this 
order is dispositive.

Verification

    As provided in section 782(i) of the Act, and 19 CFR 
351.222(f)(2)(ii), we conducted cost and sales verifications of the 
questionnaire responses of USIMINAS/COSIPA on March 1-5, 2010, and 
March 8-12, 2010, respectively. We used standard verification 
procedures for each verification. The Department's cost and sales 
verification results will be outlined in forthcoming memoranda. Due to 
subsequent rescheduling of the verifications caused by the inclement 
weather, as noted in the ``Tolling of Deadlines'' section above, the 
verifications were conducted late in this proceeding and, as such, 
there was insufficient time to issue the verification reports prior to 
these preliminary results. Upon their issuance after these preliminary 
results, interested parties may comment on these memoranda in their 
case briefs, see ``Disclosure and Public Comment'' section below.

Affiliated Respondents

    Under section 771(33)(E) of the Act, if one party owns, directly or 
indirectly, five percent or more of the other, such parties are 
considered to be affiliated for purposes of the antidumping law. 
Furthermore, it is the Department's practice to collapse affiliated 
producers for purposes of calculating a margin when they have 
production facilities for similar or identical products that would not 
require substantial retooling in order to restructure manufacturing 
priorities and the facts demonstrate that there is significant 
potential for manipulation of pricing or production. In the final 
determination of the investigation of hot-rolled steel from Brazil, the 
Department determined that USIMINAS and COSIPA were affiliated parties, 
and collapsed these entities. See Notice of Final Determination of 
Sales at Less Than Fair Value; Certain Hot-Rolled Flat-Rolled Carbon-
Quality Steel Products From Brazil, 64 FR 38756, 38759 (July 19, 1999).
    In response to our questions concerning this issue, USIMINAS/COSIPA 
have indicated that during the POR, COSIPA was wholly owned by 
USIMINAS, and post-POR COSIPA was legally dissolved and absorbed into 
USIMINAS. Moreover, USIMINAS/COSIPA have indicated that the Department 
should follow its prior determination on this issue. We preliminarily 
determine that there are no new facts on the record to indicate that 
the parties are unaffiliated, nor that the Department's basis for 
collapsing these entities has changed. Therefore, we have preliminarily 
determined to collapse these entities for purposes of this review. For 
a more detailed discussion of our collapsing analysis, see Memorandum 
to the File, through Angelica Mendoza, Program Manager, from Patrick 
Edwards and Dena Crossland, Analysts, titled ``Analysis of Data 
Submitted by Usinas Siderurgicas de Minas Gerais and Companhia 
Siderurgica Paulista for the Preliminary Results of the Antidumping 
Duty Administrative Review of Hot-Rolled Flat-Rolled Carbon-Quality 
Steel Products From Brazil (A-351-828),'' dated April 7, 2010 
(Preliminary Analysis Memo).

Fair Value Comparisons

    To determine whether sales of subject merchandise were made in the 
United States at less than fair value, we compared the export price 
(EP) to the NV, as described in the ``Export Price'' and ``Normal 
Value'' sections of this notice. In accordance with section 777A(d)(2) 
of the Act, we compared the EP of sales within the POR to the monthly 
weighted-average normal value of the foreign like product where there 
were sales made in the ordinary course of trade, as discussed in the 
``Cost of Production'' section below.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
sales of hot-rolled steel covered by the description in the ``Scope of 
the Order'' section of this notice, supra, which were sold in the 
comparison market (i.e., Brazil) during the POR to be the foreign like 
product for the purpose of determining appropriate product comparisons 
to hot-rolled steel sold in the United States. For our discussion of 
home market viability, see the ``Normal Value'' section of this notice, 
infra. We matched products based on the physical characteristics 
reported by USIMINAS/COSIPA in response to the Department's antidumping 
questionnaire. The Department has relied on eleven characteristics to 
match the U.S. sales of the subject merchandise to comparison market 
sales of the foreign like product according to product hierarchy: 
paint, quality, carbon content, yield strength, thickness, width, form, 
tempering, pickling, edge trim, and whether or not with patterns in 
relief. The Department compared prime merchandise to prime merchandise, 
consistent with our practice. Since there were sales of identical 
merchandise in the comparison market in the same month as the date of 
the U.S. sale, we did not have to compare the U.S. sale to the next 
most similar foreign like product on the basis of the characteristics 
and reporting instructions listed in the Department's antidumping 
questionnaire.

Level of Trade

    In accordance with section 773(a)(1)(B)(i) of the Act, to the 
extent practicable, we determine NV based on sales in the comparison 
market at the same level of trade (LOT) as EP or the constructed export 
price (CEP). The NV LOT is based on the starting price of the sales in 
the comparison market or, when NV is based on CV, that of the sales 
from which we derive selling, general and administrative expenses and 
profit. See also 19 CFR 351.412(c)(1)(iii). For CEP, it is the level of 
the constructed sale from the exporter to an affiliated importer after 
the deductions required under section 772(d) of the Act. See 19 CFR 
351.412(c)(1)(ii). For EP, it is the starting price, which is usually 
from exporter to importer. See 19 CFR 351.412(c)(1)(i). In this review, 
USIMINAS/COSIPA claimed its sale to the United States was an EP sale.
    To determine whether NV sales are at a different LOT than EP, we 
examine stages in the marketing process and selling functions along the 
chain of distribution between the producer and the unaffiliated 
customer. If the comparison market sales are at a different LOT and the 
difference affects price comparability, as manifested in a pattern of 
consistent price differences between the sales on which NV is based and 
comparison market sales at the LOT of the export transaction, we make 
an LOT adjustment under section

[[Page 19373]]

773(a)(7)(A) of the Act and 19 CFR 351.412. See, e.g., Notice of Final 
Determination of Sales at Less Than Fair Value: Certain Cut-to-Length 
Carbon Steel Plate from South Africa, 62 FR 61731 (November 19, 1997).
    We obtained information from USIMINAS/COSIPA regarding the 
marketing stages involved in making their reported comparison market 
and U.S. sales to unaffiliated customers. USIMINAS/COSIPA provided a 
description of all selling activities performed, along with a table 
comparing the LOTs among each channel of distribution and customer 
category for both markets. See SQR at Exhibit S-10.
    For the U.S. market, USIMINAS/COSIPA reported one LOT, with one 
channel of distribution, for its EP sale. See AQR at A-16. USIMINAS/
COSIPA stated that the U.S. sale was made to an unaffiliated trading 
company. Id. at A-19. Based on our analysis of USIMINAS/COSIPA's 
selling functions for its sale to the United States, we determine that 
there was one LOT, i.e., the EP LOT (LOTU1), for its U.S. sale.
    For the comparison market, USIMINAS/COSIPA reported two LOTs, 
comprised of two channels of distribution: (1) Direct mill sales to 
unaffiliated and affiliated distributors and OEM customers, and (2) 
indirect sales made through affiliated resellers to unaffiliated 
customers (i.e., the downstream sales channel). USIMINAS/COSIPA further 
reported that the downstream sales through its affiliated resellers 
were made at a distinct LOT, resulting in two LOTs in the comparison 
market. We reviewed the level at which USIMINAS/COSIPA performed each 
of the claimed selling functions with respect to each claimed channel 
of distribution. For USIMINAS/COSIPA's sales made through the 
downstream sales channel, we consider the relevant functions to be the 
selling functions of both the producer and the reseller (i.e., the 
cumulative selling functions along the chain of distribution). Based on 
our analysis, we determined USIMINAS/COSIPA's comparison market sales 
were made at two distinct LOTs: mill direct sales from USIMINAS/COSIPA 
to distributors and OEM customers (LOTH1), and the downstream sales 
channel from USIMINAS/COSIPA through their affiliated resellers to 
unaffiliated customers (LOTH2). For further discussion, see the ``Level 
of Trade'' section in the Preliminary Analysis Memo.
    As USIMINAS/COSIPA's U.S. sales were made at one LOT (LOTU1), we 
conducted an analysis of whether LOTU1 was comparable to that of LOTH1 
and/or LOTH2. USIMINAS/COSIPA stated that the U.S. sale was made at the 
same LOT as its comparison market direct mill sales (LOTH1). Based on 
our analysis of record evidence, we find that the U.S. sale is at the 
same LOT as USIMINAS/COSIPA's comparison market direct mill sales 
(i.e., LOTH1). We further preliminarily find that the degree of selling 
activities provided by USIMINAS/COSIPA and their affiliated resellers 
in the comparison market when selling to unaffiliated customers are at 
a more advanced and frequent degree than those services provided by 
USIMINAS/COSIPA in LOTH1. For further discussion, see the ``Level of 
Trade'' section in the Preliminary Analysis Memo. Therefore, we matched 
the EP sale to sales at the same LOT in the comparison market, which is 
LOTH1, and did not make a LOT adjustment. See section 773(a)(7)(A) of 
the Act. A complete and detailed explanation of our level of trade 
analysis can be found in the ``Level of Trade'' section of the 
Preliminary Analysis Memo.

Date of Sale

    19 CFR 351.401(i) states that the Department normally will use the 
date of invoice, as recorded in the exporter's or producer's records 
kept in the ordinary course of business, as the date of sale, but may 
use a date other than the date of invoice if it better reflects the 
date on which the material terms of sale are established. The 
Department has a long-standing practice of finding that, where shipment 
date precedes invoice date, shipment date better reflects the date on 
which the material terms of sale are established. See, e.g., Notice of 
Final Determination of Sales at Less Than Fair Value and Negative Final 
Determination of Critical Circumstances: Certain Frozen and Canned 
Warmwater Shrimp From Thailand, 69 FR 76918 (December 23, 2004), and 
accompanying Issues and Decision Memorandum at Comment 10.
    With respect to USIMINAS/COSIPA's U.S. sale, USIMINAS/COSIPA 
reported the amended contract date as the date of sale for its U.S. 
sale. See AQR at A-31 and BCQR at C-15. For purposes of this review, we 
examined whether invoice date or another date better represents the 
date on which the material terms of sale were established. The 
Department examined sales documentation, including contracts and 
invoices, provided by USIMINAS/COSIPA for its U.S. sales and found that 
the material terms of sale were set on the amended contract date and 
did not change from the amended contract to the invoice. Therefore, we 
preliminarily determine that amended contract date is the appropriate 
date of sale for the U.S. sales in this administrative review because 
it better represents the date upon which the material terms were 
established. See Preliminary Analysis Memo for a further discussion of 
this issue.
    With respect to USIMINAS/COSIPA's comparison market sales, shipment 
date occurs on the same date as the nota fiscal (or invoice) date. 
Furthermore, based on record evidence, all material terms of sale are 
subject to change up until the date of the nota fiscal. See BCQR at U-
20 and C-20; see also, AQR at 30-31 and exhibit A-7. Therefore, for 
USIMINAS/COSIPA's comparison market sales, we have preliminarily used 
the nota fiscal date as the date of sale. See Preliminary Analysis Memo 
for a further discussion of this issue.

Export Price

    Section 772(a) of the Act defines EP as ``the price at which the 
subject merchandise is first sold (or agreed to be sold) before the 
date of importation by the producer or exporter of subject merchandise 
outside of the United States to an unaffiliated purchaser in the United 
States or to an unaffiliated purchaser for exportation to the United 
States, as adjusted under subsection (c).'' Section 772(b) of the Act 
defines CEP as ``the price at which the subject merchandise is first 
sold (or agreed to be sold) in the United States before or after the 
date of importation by or for the account of the producer or exporter 
of such merchandise or by a seller affiliated with the producer or 
exporter, to a purchaser not affiliated with the producer or 
exporter,'' as adjusted under sections 772(c) and (d). USIMINAS/COSIPA 
have classified their U.S. sale as an EP sale because it was made 
before the date of importation directly to an unaffiliated purchaser in 
the U.S. market. For purposes of these preliminary results, we accepted 
this classification and calculated EP in accordance with section 772(a) 
of the Act because the merchandise was sold prior to importation by the 
exporter or producer outside the United States to the first 
unaffiliated purchaser in the United States and because CEP was not 
otherwise warranted. See AQR at A-32 and Exhibit A-6. We calculated EP 
based on cost-plus-freight (CFR), packed and delivered prices charged 
to the first unaffiliated U.S. customer. We used the amended contract 
date as the date of sale.\2\ We made deductions for movement expenses 
in accordance with section 772(c)(2)(A) of the Act,

[[Page 19374]]

including foreign inland freight from the plant to the port of 
exportation, brokerage and handling expenses incurred in the comparison 
market, and international freight.
---------------------------------------------------------------------------

    \2\ See Preliminary Analysis Memo for a further discussion of 
this issue.
---------------------------------------------------------------------------

Normal Value

A. Home Market Viability

    To determine whether there was a sufficient volume of sales of hot-
rolled steel in the home market to serve as a viable basis for 
calculating normal value, we compared the volume of respondents' home 
market sales of the foreign like product to the volume of their U.S. 
sales of the subject merchandise in accordance with section 773(a) of 
the Act. Pursuant to section 773(a)(1)(B) of the Act, because 
respondents' aggregate volume of home market sales of the foreign like 
product was greater than five percent of its aggregate volume of their 
U.S. sales of the subject merchandise, we have preliminarily determined 
that the home market was viable for comparison purposes.

B. Arm's-Length Test

    USIMINAS/COSIPA reported that they made sales in the comparison 
market to affiliated and unaffiliated customers. Those affiliated 
customers included affiliated resellers as well as affiliated OEM 
customers who consumed the subject merchandise. Because the volume of 
these affiliated party sales were greater than five percent of 
USIMINAS/COSIPA's home market sales, USIMINAS/COSIPA also reported the 
downstream sales from their affiliated resellers to the first 
unaffiliated customers, which we used in our analysis and calculation 
of normal value.
    Where prices to an affiliated party are, on average, within a range 
of 98 to 102 percent of the price of the same or comparable merchandise 
sold to unaffiliated parties at the same LOT, we determine that the 
sales made to the affiliated party are at arm's-length and we use these 
sales in our analysis. See Antidumping Proceedings--Affiliated Party 
Sales in the Ordinary Course of Trade, 67 FR 69186, 69187 (November 15, 
2002). Where sales made to affiliated customers in the comparison 
market are not made at arm's-length, we exclude them from our analysis. 
See 19 CFR 351.403(c). To test whether these sales were made at arm's-
length, we compared the starting prices of sales to affiliated and 
unaffiliated customers net of all billing adjustments, taxes, movement 
charges, imputed credit, direct selling expenses, and packing expenses. 
Here, we determined that there were sales to affiliated OEM customers 
that were not made at arm's-length. See Preliminary Analysis Memo for a 
further discussion of this issue.

C. Cost of Production Analysis

    In previous segments of this proceeding, the Department disregarded 
sales made by USIMINAS/COSIPA that were found to be below their cost of 
production (COP). See Notice of Preliminary Determination of Sales at 
Less Than Fair Value: Hot-Rolled Flat-Rolled Carbon-Quality Steel 
Products From Brazil, 64 FR 8299 (February 19, 1999); see also Certain 
Hot-Rolled Flat-Rolled Carbon Quality Steel Products From Brazil: 
Preliminary Results of Antidumping Duty Administrative Review of the 
Suspension Agreement, 66 FR 41500 (August 8, 2001). Therefore, pursuant 
to section 773(b)(2)(A)(ii) of the Act, there were reasonable grounds 
to believe or suspect that respondents made sales of the foreign like 
product in the comparison market at prices below the COP within the 
meaning of section 773(b) of the Act, as below cost sales made by 
USIMINAS were disregarded in the most recently completed review. 
Accordingly, on June 17, 2009, the Department requested that USIMINAS/
COSIPA respond to Section D (Cost of Production/Constructed Value) of 
the Department's antidumping duty questionnaire.
    We calculated the COP on a product-specific basis, based on the sum 
of the respondents' costs of materials and fabrication for the foreign 
like product plus amounts for general and administrative (G&A) 
expenses, interest expenses, and the costs of all expenses incidental 
to preparing the foreign like product for shipment in accordance with 
section 773(b)(3) of the Act. After analyzing USIMINAS and COSIPA's 
record evidence, we found that USIMINAS and COSIPA did not experience 
significant changes in the total cost of manufacturing (COM) during the 
POR to warrant a departure from our standard annual costing approach. 
Therefore, we calculated USIMINAS/COSIPA's COP using an annual 
weighted-average cost for the POR rather than using an alternative cost 
methodology.
    We relied on the COP information provided by USIMINAS/COSIPA except 
for the following adjustments:
    1. We recalculated the cost of COSIPA's control number (CONNUM) 
sold in the U.S. market to include world-wide production.
    2. We recalculated USIMINAS/COSIPA's G&A expenses by dividing the 
G&A expenses by their respective cost of goods sold. In addition, we 
adjusted USIMINAS' G&A expense ratio to exclude revenues and expenses 
related to the sale of investments.
    3. We adjusted the consolidated financial expense ratio of 
USIMINAS/COSIPA to disallow the interest income from long-term 
deposits.
    For further details regarding these adjustments, see Memorandum to 
Neal M. Halper, Director, Office of Accounting, through Michael P. 
Martin, Lead Accountant, from Laurens van Houten, Senior Accountant, 
titled ``Cost of Production and Constructed Value Adjustments for the 
Preliminary Results--Usinas Siderurgicas de Minas Gerais (USIMINAS) and 
Companhia Siderurgica Paulista (COSIPA),'' dated April 7, 2010, which 
is on file in the Central Records Unit (CRU) in room 1117 of the main 
Commerce Department building.
    On a product-specific basis, we compared the adjusted weighted-
average COP figures for the POR to the comparison market sales of the 
foreign like product, as required under section 773(b) of the Act, to 
determine whether these sales were made at prices below the COP. The 
prices were exclusive of any applicable movement charges, packing 
expenses, warranties, and indirect selling expenses. In determining 
whether to disregard comparison market sales made at prices below their 
COP and in accordance with sections 773(b)(2)(B), (C), and (D) of the 
Act, we examined whether such sales were made within an extended period 
of time in substantial quantities and at prices which permitted the 
recovery of all costs within a reasonable period of time.
    We found that, for certain products, more than 20 percent of 
respondents' comparison market sales were at prices below the COP and 
these below-cost sales were made within an extended period of time in 
substantial quantities. In addition, these sales were made at prices 
that did not permit the recovery of costs within a reasonable period of 
time. Therefore, we disregarded these sales and used the remaining 
sales of the same product as the basis for determining normal value in 
accordance with section 773(b)(1) of the Act.

D. Price-to-Price Comparisons

    We based NV on comparison market prices to unaffiliated parties 
that passed the cost tests. We adjusted gross unit price for billing 
adjustments and taxes. We made adjustments, where applicable, for 
inland freight, warehousing, and inland insurance, in accordance with 
section 773(a)(6)(B) of the Act. Where appropriate, we made 
circumstance-of-sale adjustments for

[[Page 19375]]

imputed credit, warranties, interest revenue, and commissions pursuant 
to section 773(a)(6)(C)(iii) of the Act and 19 CFR 351.410. Finally, we 
deducted home market packing costs and added U.S. packing costs in 
accordance with sections 773(a)(6)(A) and (B) of the Act. For more 
information, see Preliminary Analysis Memo. Next, we matched the U.S. 
sales to NV sales.

Currency Conversions

    The Department's preferred source for daily exchange rates is the 
Federal Reserve Bank. See Preliminary Results of Antidumping Duty 
Administrative Review: Stainless Steel Sheet and Strip in Coils from 
France, 68 FR 47049, 47055 (August 7, 2003), unchanged in Notice of 
Final Results of Antidumping Duty Administrative Review: Stainless 
Steel Sheet and Strip in Coils From France, 68 FR 69379 (December 12, 
2003). However, the Federal Reserve Bank does not track or publish 
exchange rates for the Brazilian Real. Therefore, pursuant to section 
773A of the Act, we made currency conversions from Brazilian reais to 
U.S. dollars based on the daily exchange rates from Factiva, a Dow 
Jones & Reuters Retrieval Service. Factiva publishes exchange rates for 
Monday through Friday only. We used the rate of exchange on the most 
recent Friday for conversion dates involving Saturday through Sunday 
where necessary.

Preliminary Results of Review

    As a result of our review, we preliminarily determine the following 
weighted-average dumping margin exists for the period March 1, 2008, 
through February 28, 2009:

------------------------------------------------------------------------
                                                             Weighted-
                  Manufacturer/Exporter                   Average Margin
                                                             (percent)
------------------------------------------------------------------------
Usinas Siderurgicas de Minas Gerais (USIMINAS)/Companhia            4.93
 Siderurgica Paulista (COSIPA)..........................
------------------------------------------------------------------------

Disclosure and Public Comments

    The Department will disclose calculations performed within five 
days of the date of publication of this notice in accordance with 19 
CFR 351.224(b). As stated in the ``Verification'' section above, the 
Department will release the cost and sales verification memoranda to 
parties for comment after the publication of these preliminary results 
in the Federal Register. Therefore, interested parties may submit case 
briefs to the Department no later than seven days after the date of the 
issuance of the last verification report in this proceeding. See 19 CFR 
351.309(c)(1)(ii). Rebuttal briefs, the content of which is limited to 
the issues raised in the case briefs, must be filed within five days 
from the deadline date for the submission of case briefs. See 19 CFR 
351.309(d)(1) and (2). Parties who submit arguments in these 
proceedings are requested to submit with the argument: (1) A statement 
of the issues, (2) a brief summary of the argument, and (3) a table of 
authorities. Executive summaries should be limited to five pages total, 
including footnotes. Further, parties submitting case briefs, rebuttal 
briefs, and written comments should provide the Department with an 
additional copy of the public version of any such argument on diskette.
    In accordance with section 774 of the Act, the Department will hold 
a public hearing, if requested, to afford interested parties an 
opportunity to comment on arguments raised in case or rebuttal briefs, 
provided that such a hearing is requested by an interested party. If a 
request for a hearing is made in this review, the hearing will 
tentatively be held two days after the rebuttal brief deadline date at 
the U.S. Department of Commerce, 14th Street and Constitution Avenue, 
NW., Washington, DC 20230, at a time and in a room to be determined. 
Parties should confirm by telephone, the date, time, and location of 
the hearing 48 hours before the scheduled date. Interested parties who 
wish to request a hearing, or to participate in a hearing if one is 
requested, must submit a written request to the Assistant Secretary for 
Import Administration, U.S. Department of Commerce, Room 1870, within 
30 days of the publication of this notice. Requests should contain: (1) 
The party's name, address, and telephone number; (2) the number of 
participants; and (3) a list of the issues to be discussed.
    See 19 CFR 351.310(c). At the hearing, oral presentations will be 
limited to issues raised in the briefs.

Extension of the Time Limit for the Final Results

    Section 751(a)(3)(A) of the Act requires that the Department issue 
the final results of an administrative review within 120 days after the 
date on which the preliminary results are published. If it is not 
practicable to complete the review within that time period, section 
751(a)(3)(A) of the Act allows the Department to extend the deadline 
for the final results to a maximum of 180 days after the date on which 
the preliminary results are published.
    In this proceeding, the Department requires additional time to 
complete the final results of this administrative review. As noted 
above, because the Department had to reschedule its sales verification 
due to inclement weather and the late scheduling of the cost 
verification, the verification reports will not be issued until after 
these preliminary results. Upon issuance of the verification reports, 
it may be necessary for the Department to request revised sales and 
cost databases pursuant to the findings during the cost and/or sales 
verifications. In order to ensure that interested parties have 
sufficient time to analyze the reports and comment on these preliminary 
results, as well as any new information that may be received after 
these preliminary results, it is not practicable to complete this 
administrative review within the original time limit. Consequently, the 
Department is extending the time limit for completion of the final 
results of this review by 60 days, in accordance with section 
751(a)(3)(A) of the Act. The final results are now due no later 180 
days after the publication date of these preliminary results.

Assessment

    The Department shall determine, and CBP shall assess, antidumping 
duties on all appropriate entries. In accordance with 19 CFR 
351.212(b)(1), because entered values were reported for all sales 
examined, we calculated importer-specific, ad valorem assessment rates 
for these preliminary results of review. We divided the total dumping 
margins for the reviewed sales by the total entered value of those 
reviewed sales for each reported importer. We will instruct CBP to 
assess the importer-specific rate uniformly, as appropriate, on all 
entries of subject merchandise made by the relevant importer during the 
POR. See 19 CFR 351.212(b). Where the duty assessment rates are above 
de minimis, we will instruct CBP to assess duties on all entries of 
subject merchandise by that importer in accordance with the 
requirements set forth in 19 CFR 351.106(c)(2). The Department intends 
to issue importer-specific assessment instructions to CBP 15 days after 
the date of publication of the final results of this review.
    The Department clarified its ``automatic assessment'' regulation on 
May 6, 2003. See Antidumping and Countervailing Duty Proceedings: 
Assessment of Antidumping Duties, 68 FR 23954 (May 6, 2003). This 
clarification will apply to entries of subject merchandise during the 
period of review produced by companies included in these final results 
of review for which the reviewed companies did not know their 
merchandise was destined for the United States. In such

[[Page 19376]]

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.

Cash Deposit Requirements

    The following cash deposit requirements will be effective upon 
completion of the final results of this administrative review for all 
shipments of hot-rolled steel from Brazil 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 the companies 
covered by this review (i.e., USIMINAS/COSIPA) will be the rate 
established in the final results of review; (2) for any previously-
reviewed or investigated company 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 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 merchandise; and (4) 
if neither the exporter nor the manufacturer is a firm covered in this 
or any previous review conducted by the Department, the cash deposit 
rate will be 42.12 percent, the all-others rate established in the LTFV 
investigation. See Antidumping Duty Order, 67 FR at 11094. These cash 
deposit requirements, 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) 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 duties occurred and the subsequent 
assessment of double antidumping duties.
    We are issuing and publishing this notice in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: April 7, 2010.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.
[FR Doc. 2010-8558 Filed 4-13-10; 8:45 am]
BILLING CODE 3510-DS-P