Certain Corrosion-Resistant Carbon Steel Flat Products From the Republic of Korea: Preliminary Results of the Seventeenth Antidumping Duty Administrative Review, 55004-55010 [2011-22730]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 76, Number 172 (Tuesday, September 6, 2011)]
[Notices]
[Pages 55004-55010]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-22730]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-580-816]


Certain Corrosion-Resistant Carbon Steel Flat Products From the 
Republic of Korea: Preliminary Results of the Seventeenth Antidumping 
Duty Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: In response to timely requests, the Department of Commerce 
(the Department) is conducting the seventeenth administrative review of 
the antidumping order on corrosion-resistant carbon steel flat products 
(CORE) from the Republic of Korea \1\ (Korea). This review covers eight 
manufacturers and/or exporters (collectively, the respondents) of the 
subject merchandise: LG Chem., Ltd. (LG Chem); Haewon MSC Co. Ltd. 
(Haewon); Dongbu Steel Co., Ltd., (Dongbu); Hyundai HYSCO (HYSCO); 
Pohang Iron & Steel Co., Ltd. (POSCO) and Pohang Coated Steel Co., Ltd. 
(POCOS) (collectively, POSCO); Dongkuk Industries Co., Ltd. (Dongkuk); 
LG Hausys, Ltd. (Hausys); and Union Steel Manufacturing Co., Ltd. 
(Union). The period of review (POR) is August 1, 2009, through July 31, 
2010. We preliminarily determine that Union and Dongbu made sales of 
subject merchandise at less than normal value (NV). We preliminarily 
determine that HYSCO and POSCO have not made sales below NV.
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    \1\ See Initiation of Antidumping and Countervailing Duty 
Administrative Reviews and Request for Revocation in Part, 75 FR 
60076, 60077 (September 29, 2010) (Initiation Notice).
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    In addition, based on the preliminary results for the respondents 
selected for individual review, we have preliminarily determined a 
margin for those companies that were not selected for individual 
review. If these preliminary results are adopted in the final results 
of this administrative review, we will instruct U.S. Customs and Border 
Protection (CBP) to assess antidumping duties on all appropriate 
entries of subject merchandise during the POR.

DATES: Effective Date: September 6, 2011.

FOR FURTHER INFORMATION CONTACT: Victoria Cho (POSCO), Dennis McClure 
(Union), Christopher Hargett (HYSCO) or Cindy Robinson (Dongbu), AD/CVD 
Operations, Office 3, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
5075, (202) 482-5973, (202) 482-4161 and (202) 482-3797, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On August 19, 1993, the Department published the antidumping order 
on CORE from Korea. See Antidumping Duty Orders on Certain Cold-Rolled 
Carbon Steel Flat Products and Certain Corrosion-Resistant Carbon Steel 
Flat Products from Korea, 58 FR 44159 (August 19, 1993) (Orders on 
Certain Steel from Korea). On August 2, 2010, we published in the 
Federal Register the Antidumping or Countervailing Duty Order, Finding, 
or Suspended Investigation; Opportunity to Request Administrative 
Review, 75 FR 45094 (August 2, 2010). On August 30, and 31, 2010, 
respondents and petitioners \2\ requested a review of Dongbu, HYSCO, 
POSCO, Union, Dongkuk, Haewon, Hausys, and LG Chem. The Department 
initiated a review of each of the companies for which a review was 
requested. See Initiation Notice, 75 FR 60076, 60077.
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    \2\ Petitioners are the United States Steel Corporation (U.S. 
Steel), Nucor Corporation (Nucor), and Mittal Steel USA ISG, Inc. 
(Mittal Steel USA).
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    On October 29, 2010, the Department selected Dongbu, POSCO, HYSCO 
and Union as mandatory respondents in this review. See Memorandum from 
Dennis McClure, International Trade Compliance Analyst, through James

[[Page 55005]]

Terpstra, Program Manager, to Melissa Skinner, Director, Office 3, 
entitled ``17th Antidumping Duty Administrative Review of Corrosion-
Resistant Carbon Steel Flat Products from the Republic of Korea: 
Selection of Respondents for Individual Review,'' dated October 29, 
2010.
    During the most recently completed segments of the proceeding in 
which HYSCO, Dongbu, POSCO and Union participated,\3\ the Department 
disregarded sales below the cost of production (COP) for each of these 
companies. Therefore, pursuant to section 773(b)(2)(A)(ii) of the 
Tariff Act of 1930, as amended (the Act), we had reasonable grounds to 
believe or suspect that sales by these companies of the foreign like 
product under consideration for the determination of NV in this review 
were made at prices below the COP. We instructed HYSCO, Dongbu, POSCO 
and Union to respond to sections A through E of the initial 
questionnaire,\4\ which we issued on October 29, 2010.
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    \3\ See Certain Corrosion-Resistant Carbon Steel Flat Products 
from the Republic of Korea: Notice of Final Results of the Sixteenth 
Administrative Review, 76 FR 15291 (March 21, 2011) (CORE 16 Final 
Results); Certain Corrosion-Resistant Carbon Steel Flat Products 
from the Republic of Korea: Notice of Final Results of the Fifteenth 
Administrative Review, 75 FR 13490 (March 22, 2010) (CORE 15 Final 
Results); Certain Corrosion-Resistant Carbon Steel Flat Products 
from the Republic of Korea: Notice of Final Results of the 
Fourteenth Administrative Review and Partial Rescission, 74 FR 11082 
(March 16, 2009) (CORE 14 Final Results).
    \4\ Section A: Organization, Accounting Practices, Markets and 
Merchandise; Section B: Comparison Market Sales; Section C: Sales to 
the United States; Section D: Cost of Production and Constructed 
Value; Section E: Further Manufacturing.
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HYSCO

    On December 20, 2010, HYSCO submitted its section A response to the 
Department's initial questionnaire. On January 18, 2011, HYSCO 
submitted its sections B through D response to the Department's initial 
questionnaire. HYSCO submitted its response to the Department's 
supplemental questionnaires for sections A through D on May 22, 2011, 
sections A through C and July 20, 2011, and August 3, 2011.

Union

    On January 20, 2011, Union submitted its section A response to the 
initial questionnaire. On January 25, 2011, Union submitted its 
response to sections B through D of the Department's questionnaire. On 
April 21, 2011, and July 14, 2011, Union submitted its responses to the 
Department's supplemental questionnaires for sections A through C. On 
June 6, 2011, and July 21, 2011, Union submitted its response to the 
Department's supplemental questionnaire for section D.

POSCO

    On December 20, 2010 and January 5, 2011, POSCO submitted its 
sections A through D response to the Department's initial 
questionnaire. On May 4, 2011 and August 3, 2011, POSCO submitted its 
response to the Department's supplemental questionnaires for sections A 
through C, respectively. On April 1, 2011, POSCO submitted its response 
to the Department's supplemental questionnaire for section D.

Dongbu

    On December 20, 2010, and January 14, 2011, Dongbu submitted its 
section A and sections B through D responses to the Department's 
initial questionnaire. On February 22, 2011, Dongbu submitted its 
response to the Department's section D supplemental questionnaire. 
Dongbu submitted its response to the Department's first and second 
supplemental questionnaires for sections A through C on April 27, 2011, 
and July 12, 2011, respectively. On March 21, 2011, Dongbu submitted a 
reconciliation of its home market and U.S. sales databases.

Period of Review

    The POR covered by this review is August 1, 2009, through July 31, 
2010.

Scope of the Order

    This order covers flat-rolled carbon steel products, of rectangular 
shape, either clad, plated, or coated with corrosion-resistant metals 
such as zinc, aluminum, or zinc-, aluminum-, nickel- or iron-based 
alloys, whether or not corrugated or painted, varnished or coated with 
plastics or other nonmetallic substances in addition to the metallic 
coating, in coils (whether or not in successively superimposed layers) 
and of a width of 0.5 inch or greater, or in straight lengths which, if 
of a thickness less than 4.75 millimeters, are of a width of 0.5 inch 
or greater and which measures at least 10 times the thickness or if of 
a thickness of 4.75 millimeters or more are of a width which exceeds 
150 millimeters and measures at least twice the thickness, as currently 
classifiable in the Harmonized Tariff Schedule of the United States 
(HTSUS) under item numbers 7210.30.0030, 7210.30.0060, 7210.41.0000, 
7210.49.0030, 7210.49.0090, 7210.49.0091, 7210.49.0095, 7210.61.0000, 
7210.69.0000, 7210.70.6030, 7210.70.6060, 7210.70.6090, 7210.90.1000, 
7210.90.6000, 7210.90.9000, 7212.20.0000, 7212.30.1030, 7212.30.1090, 
7212.30.3000, 7212.30.5000, 7212.40.1000, 7212.40.5000, 7212.50.0000, 
7212.60.0000, 7215.90.1000, 7215.90.3000, 7215.90.5000, 7217.20.1500, 
7217.30.1530, 7217.30.1560, 7217.90.1000, 7217.90.5030, 7217.90.5060, 
and 7217.90.5090. Included in the order are flat-rolled products of 
non-rectangular cross-section where such cross-section is achieved 
subsequent to the rolling process including products which have been 
beveled or rounded at the edges (i.e., products which have been 
``worked after rolling''). Excluded from this order are flat-rolled 
steel products either plated or coated with tin, lead, chromium, 
chromium oxides, both tin and lead (``terne plate''), or both chromium 
and chromium oxides (``tin-free steel''), whether or not painted, 
varnished or coated with plastics or other nonmetallic substances in 
addition to the metallic coating. Also excluded from this order are 
clad products in straight lengths of 0.1875 inch or more in composite 
thickness and of a width which exceeds 150 millimeters and measures at 
least twice the thickness. Also excluded from this order are certain 
clad stainless flat-rolled products, which are three-layered corrosion-
resistant carbon steel flat-rolled products less than 4.75 millimeters 
in composite thickness that consist of a carbon steel flat-rolled 
product clad on both sides with stainless steel in a 20%-60%-20% ratio.
    These HTSUS item numbers are provided for convenience and customs 
purposes. The written descriptions remain dispositive.

Notice of Intent To Revoke Order, In Part

    On August 31, 2010, the POSCO Group requested revocation of the 
order on CORE from Korea as it pertains to its sales.
    Under section 751(d)(1) of the Act, the Department ``may revoke, in 
whole or in part'' an antidumping duty order upon completion of a 
review. Although Congress has not specified the procedures that the 
Department must follow in revoking an order, the Department has 
developed a procedure for revocation that is set forth at 19 CFR 
351.222. Under 19 CFR 351.222(b)(2), the Department may revoke an 
antidumping duty order in part if it concludes that (A) an exporter or 
producer has sold the merchandise at

[[Page 55006]]

not less than normal value for a period of at least three consecutive 
years, (B) the exporter or producer has agreed in writing to its 
immediate reinstatement in the order if the Secretary concludes that 
the exporter or producer, subsequent to the revocation, sold the 
subject merchandise at less than normal value, and (C) the continued 
application of the antidumping duty order is no longer necessary to 
offset dumping. Section 351.222(b)(3) of the Department's regulations 
states that, in the case of an exporter that is not the producer of 
subject merchandise, the Department normally will revoke an order in 
part under 19 CFR 351.222(b)(2) only with respect to subject 
merchandise produced or supplied by those companies that supplied the 
exporter during the time period that formed the basis for revocation.
    A request for revocation of an order in part for a company 
previously found dumping must address three elements. The company 
requesting the revocation must do so in writing and submit the 
following statements with the request: (1) The company's certification 
that it sold the subject merchandise at not less than normal value 
during the current review period and that, in the future, it will not 
sell at less than normal value; (2) the company's certification that, 
during each of the consecutive years forming the basis of the request, 
it sold the subject merchandise to the United States in commercial 
quantities; (3) the agreement to reinstatement in the order if the 
Department concludes that, subsequent to revocation, the company has 
sold the subject merchandise at less than normal value. See 19 CFR 
351.222(e)(1). We preliminarily determine that the request dated August 
31, 2010, from the POSCO Group meets all of the criteria under 19 CFR 
351.222(e)(1).
    With regard to the criteria of 19 CFR 351.222(b)(2), our 
preliminary margin calculations show that the POSCO Group sold CORE at 
not less than normal value during the current review period. See 
''Preliminary Results of Reviews'' section below. In addition, it sold 
CORE at not less than normal value in the two previous administrative 
reviews in which it was reviewed. See CORE 15 Final Results and also 
see CORE 16 Final Results. Based on our examination of the sales data 
submitted by the POSCO Group, we preliminarily determine that the POSCO 
Group sold the subject merchandise in the United States in commercial 
quantities in each of the consecutive years cited by the POSCO Group to 
support its request for revocation. See the POSCO Group's August 31, 
2011, Calculation Memorandum (the POSCO Group's Calc Memo). Thus, we 
preliminarily find that the POSCO Group had zero or de minimis dumping 
margins for the last three consecutive years and sold in commercial 
quantities all three years. Also, we preliminarily determine that 
application of the antidumping duty order to the POSCO Group is no 
longer warranted for the following reasons: (1) The company had zero or 
de minimis margins for a period of at least three consecutive years; 
(2) the company has agreed to immediate reinstatement of the order if 
we find that it has resumed making sales at less than fair value; (3) 
the continued application of the order is not otherwise necessary to 
offset dumping.
    Therefore, we preliminarily determine that the POSCO Group 
qualifies for revocation from the order on CORE from Korea pursuant to 
19 CFR 351.222(b)(2) and, thus, we preliminarily determine to revoke 
the order with respect to CORE from Korea exported and/or sold to the 
United States by the POSCO Group. If our intent to revoke results in 
revocation of the order in part with respect to merchandise exported 
and/or sold by the POSCO Group, the proposed effective date of the 
revocation is August 1, 2010.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
CORE products produced by the respondents, covered by the scope of the 
order, and sold in the home market during the POR to be foreign like 
products for the purpose of determining appropriate product comparisons 
to CORE sold in the United States.
    Where there were no sales in the ordinary course of trade of 
identical merchandise in the home market to compare to U.S. sales, we 
compared U.S. sales to the next most similar foreign like product on 
the basis of the characteristics listed in Appendix V of the 
Department's antidumping questionnaire. In making the product 
comparisons, we matched foreign like products based on the Appendix V 
physical characteristics reported by each respondent.

Normal Value Comparisons

    To determine whether sales of CORE by the respondents to the United 
States were made at less than NV, we compared the Export Price (EP) or 
Constructed Export Price (CEP) to the NV, as described in the ``Export 
Price/Constructed Export Price'' and ``Normal Value'' sections of this 
notice. In accordance with section 777A(d)(2) of the Act, we calculated 
monthly weighted-average prices for NV and compared these to individual 
U.S. transactions.

Export Price/Constructed Export Price

    For the price to the United States, we used, as appropriate, EP or 
CEP, in accordance with sections 772(a) and (b) of the Act. We 
calculated EP when the merchandise was sold by the producer or exporter 
outside of the United States directly to the first unaffiliated 
purchaser in the United States prior to importation and when CEP was 
not otherwise warranted based on the facts on the record. We calculated 
CEP for those sales where a person in the United States, affiliated 
with the foreign exporter or acting for the account of the exporter, 
made the sale to the first unaffiliated purchaser in the United States 
of the subject merchandise. We based EP and CEP on the packed prices 
and the applicable delivery terms to the first unaffiliated customer 
in, or for exportation to, the United States.
    In accordance with section 772(a) of the Act, we calculated EP for 
a number of Union's U.S. sales because these sales were made before the 
date of importation and were sales directly to unaffiliated customers 
in the United States, and because CEP methodology was not otherwise 
indicated. We made deductions for movement expenses in accordance with 
section 772(c)(2)(A) of the Act, which included, where appropriate, 
foreign inland freight to the port, foreign brokerage, international 
freight, marine insurance, U.S. inland freight from the port to 
warehouse, U.S. warehouse expenses, U.S. inland freight from the 
warehouse to the unaffiliated customer, U.S. brokerage and handling 
expenses, and U.S. customs duty.
    In accordance with section 772(b) of the Act, we calculated CEP 
where the record established that sales made by HYSCO, POSCO, Dongbu, 
and Union were made in the United States after importation. HYSCO's, 
POSCO's, Dongbu's and Union's respective affiliates in the United 
States (1) took title to the subject merchandise and (2) invoiced and 
received payment from the unaffiliated U.S. customers for their sales 
of the subject merchandise to those U.S. customers. Thus, where 
appropriate, the Department determined that these U.S. sales should be 
classified as CEP transactions under section 772(b) of the Act. Where 
appropriate, we made deductions from the starting price for foreign 
inland freight to the port, foreign brokerage, international freight, 
marine insurance, U.S. inland freight from the port to warehouse, U.S. 
warehouse expenses, U.S. inland freight from the

[[Page 55007]]

warehouse to the unaffiliated customer, U.S. brokerage and handling 
expenses, U.S. customs duty, credit expenses, warranty expenses, 
commissions, inventory carrying costs incurred in the United States, 
and other indirect selling expenses in the United States associated 
with economic activity in the United States. See sections 772(c)(2)(A) 
and 772(d)(1) of the Act. Pursuant to section 772(d)(3) of the Act, we 
made an adjustment for CEP profit. Where appropriate, we added interest 
revenue to the gross unit price.

HYSCO's Entries of Subject Merchandise That Were Further Manufactured 
and Sold as Non-Subject Merchandise in the United States

    In its section A questionnaire response, HYSCO requested that the 
Department excuse it from reporting information for certain POR sales 
of subject merchandise imported by its wholly owned U.S. subsidiary, 
HYSCO America Company (HAC), that were further manufactured after 
importation and sold as non-subject merchandise in the United States, 
claiming that determining CEP for sales through HAC would be 
unreasonably burdensome.
    Section 772(e) of the Act provides that when the value added in the 
United States by an affiliated party is likely to exceed substantially 
the value of the subject merchandise, the Department shall use one of 
the following prices to determine CEP if there is a sufficient quantity 
of sales to provide a reasonable basis of comparison and the use of 
such sales is appropriate: (1) The price of identical subject 
merchandise sold by the exporter or producer to unaffiliated person; or 
(2) the price of other subject merchandise sold by the exporter or 
producer to an unaffiliated person.
    The record evidence shows that the value added by the affiliated 
party to the subject merchandise after importation in the United States 
was significantly greater than the 65 percent threshold we use in 
determining whether the value added in the United States by an 
affiliated party substantially exceeds the value of the subject 
merchandise. See 19 CFR 351.402(c)(2). We then considered whether there 
were sales of identical subject merchandise or other subject 
merchandise sold in sufficient quantities by the exporter or producer 
to an unaffiliated person that could provide a reasonable basis of 
comparison. In addition to the sales to HAC that were further 
manufactured, HYSCO also had CEP sales of similar, but not identical, 
subject merchandise to unaffiliated customers in the United States in 
back-to-back transactions through another HYSCO affiliate in the United 
States, Hyundai HYSCO USA (HHU).
    The appropriate methodology for determining the CEP for sales whose 
value has been substantially increased through U.S. further 
manufacturing generally must be made on a case-by-case basis. In this 
instance, we find that there is a reasonable quantity of sales of 
subject merchandise to unaffiliated parties for comparison purposes. 
See HYSCO Calc Memo. Furthermore, there is no other reasonable 
methodology for determining CEP for HAC's CEP sales. Therefore, we 
relied on HYSCO's other sales of similar merchandise to unaffiliated 
parties in the United States as the basis for calculating CEP for 
HYSCO's sales through HAC, which is consistent with the previous 
administrative reviews of CORE from Korea.\5\
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    \5\ See, e.g., Certain Corrosion-Resistant Carbon Steel Flat 
Products From the Republic of Korea: Notice of Preliminary Results 
of the Sixteenth Antidumping Duty Administrative Review, 75 FR 55769 
(September 14, 2010) (unchanged in CORE 16 Final Results); Certain 
Corrosion-Resistant Carbon Steel Flat Products from the Republic of 
Korea: Notice of Preliminary Results of the Antidumping Duty 
Administrative Review, 74 FR 46110, 46112 (September 8, 2009) 
(unchanged in CORE 15 Final Results); Certain Corrosion-Resistant 
Carbon Steel Flat Products From the Republic of Korea: Notice of 
Preliminary Results of the Antidumping Duty Administrative Review, 
73 FR 52267, 52270 (September 9, 2008) (unchanged in CORE 14 Final 
Results).
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Normal Value

    Based on a comparison of the aggregate quantity of home market and 
U.S. sales, we determined that the quantity of the foreign like product 
sold 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. Therefore, in 
accordance with section 773(a)(1)(B)(i) of the Act, we based NV on the 
price at which the foreign like product was first sold for consumption 
in the home market, in the usual commercial quantities and in the 
ordinary course of trade. We increased NV by U.S. packing costs in 
accordance with section 773(a)(6)(A) of the Act.
    Where appropriate, we deducted inland freight from the plant to 
distribution warehouse, warehouse expense, inland freight from the 
plant/warehouse to customer, and packing, pursuant to section 
773(a)(6)(B) of the Act. Additionally, we made adjustments to NV, where 
appropriate, for credit and warranty expenses, in accordance with 
section 773(a)(6)(C)(iii) of the Act. Where appropriate, we added 
interest revenue and applied billing adjustments to the gross unit 
price.
    We also made adjustments for Union, in accordance with 19 CFR 
351.410(e), for indirect selling expenses incurred in the home market 
or the United States where commissions were granted on sales in one 
market but not in the other. Specifically, where commissions are 
incurred in one market, but not in the other, we will limit the amount 
of such allowance to the amount of either the selling expenses incurred 
in the one market or the commissions allowed in the other market, 
whichever is less. See 19 CFR 351.410(e).
    For purposes of calculating NV, section 771(16) of the Act defines 
``foreign like product'' as merchandise which is either (1) identical 
or (2) similar to the merchandise sold in the United States. When no 
identical products are sold in the home market, the products which are 
most similar to the product sold in the United States are identified. 
For the non-identical or most similar products which are identified 
based on the Department's product matching criteria, an adjustment is 
made to the NV for differences in cost attributable to differences in 
the actual physical differences between the products sold in the United 
States and the home market. See 19 CFR 351.411 and section 
773(a)(6)(C)(ii) of the Act.

Cost of Production

    As stated above, in the most recently completed segments of the 
proceeding in which HYSCO, POSCO, Dongbu and Union participated, the 
Department found and disregarded sales that failed the cost test for 
each of these companies. Therefore, for this review, the Department has 
reasonable grounds to believe or suspect that sales of the foreign like 
products under consideration for the determination of NV may have been 
made at prices below the COP as provided by section 773(b)(2)(A)(ii) of 
the Act. Pursuant to section 773(b)(1) of the Act, the Department 
conducted a COP investigation of sales in the home market by HYSCO, 
POSCO, Dongbu and Union.

A. Calculation of Cost of Production

    We calculated the COP based on the sum of the cost of materials and 
fabrication for the foreign like product, plus amounts for SG&A 
expenses and packing, in accordance with section 773(b)(3) of the Act.
    Except as noted below, the Department relied on the COP data 
submitted by HYSCO, POSCO, Union and Dongbu in their supplemental 
section D questionnaire responses for the COP calculation. For the 
purposes of calculating Union's general and

[[Page 55008]]

administrative (G&A) expense ratio, we excluded an item of non-
operating income. See Union Cost Calculation Memo at 3. For control 
numbers (CONNUMs) where there was no production during the POR and for 
which a surrogate CONNUM was not assigned by Union, we selected the 
next similar CONNUM, in accordance with our product characteristics 
outlined in Appendix V of the questionnaire.
    For POSCO, we adjusted the total manufacturing costs to include the 
beginning inventory variance associated with the semi-finished goods 
that reentered production during the POR. See Memorandum from Heidi K. 
Schriefer, Senior Accountant, to Neal M. Halper, Director, Office of 
Accounting, entitled ``Cost of Production and Constructed Value 
Calculation Adjustments for the Preliminary Results--Pohang Iron and 
Steel Co. Ltd. and Pohang Coated Steel Co., Ltd.,'' dated August 31, 
2011 (``POSCO Cost Calculation Memo'').
    We calculated temper rolling cost adjustment factors for both 
temper rolled and non-temper rolled products and applied them to 
HYSCO's reported cost. Finally we recalculated HYSCO's financial 
expense ratio to be based on the combined financial statements of 
Hyundai Motor Corporation. See HYSCO Cost Calculation Memo.
    Based on our review of the record evidence, neither Dongbu, HYSCO, 
POSCO, nor Union, appeared to experience significant changes in the 
cost of manufacturing during the POR. Therefore, we followed our normal 
methodology of calculating an annual weighted-average cost.

B. Test of Comparison Market Sales Prices

    As required under section 773(b)(2) of the Act, we compared the 
quarterly or POR, as appropriate, weighted-average COP to the per-unit 
price of the comparison market sales of the foreign like product to 
determine whether these sales had been made at prices below the COP 
within an extended period of time in substantial quantities, and 
whether such prices were sufficient to permit the recovery of all costs 
within a reasonable period of time. We determined the net comparison 
market prices for the below cost test by subtracting from the gross 
unit price any applicable movement charges, discounts, rebates, direct 
and indirect selling expenses (also subtracted from the COP), and 
packing expenses.

C. Results of the COP Test

    Pursuant to section 773(b)(2)(C)(i) of the Act, where less than 20 
percent of sales of a given product were at prices less than the COP, 
we did not disregard any below-cost sales of that product because we 
determined that the below-cost sales were not made in ``substantial 
quantities.'' Where 20 percent or more of the respondent's home market 
sales of a given model were at prices less than the COP, we disregarded 
the below-cost sales because: (1) They were made within an extended 
period of time in ``substantial quantities,'' in accordance with 
sections 773(b)(2)(B) and (C) of the Act; and (2) based on our 
comparison of prices to the weighted-average COPs, they were at prices 
which would not permit the recovery of all costs within a reasonable 
period of time, in accordance with section 773(b)(2)(D) of the Act.
    Therefore, for HYSCO, POSCO, Union and Dongbu, we disregarded 
below-cost sales of a given product of 20 percent or more and used the 
remaining sales as the basis for determining NV, in accordance with 
section 773(b)(1) of the Act. See HYSCO, POSCO, Union and Dongbu Cost 
Calculation Memos.

Calculation of NV Based on Comparison Market Prices

    For those comparison products for which there were sales at prices 
above the COP for HYSCO, POSCO, Union and Dongbu, we based NV on home 
market prices. In these preliminary results, we were able to match all 
U.S. sales to contemporaneous sales, made in the ordinary course of 
trade, of either an identical or a similar foreign like product, based 
on the matching characteristics identified in Appendix V of the 
original questionnaire. We calculated NV based on free on board (FOB) 
mill or delivered prices to unaffiliated customers, or prices to 
affiliated customers which were determined to be at arm's length (see 
discussion below regarding these arm's-length sales). We made 
deductions, where appropriate, from the starting price for billing 
adjustments, discounts, rebates, and inland freight. Additionally, we 
added interest revenue. In accordance with section 773(a)(6) of the 
Act, we deducted home market packing costs and added U.S. packing 
costs.
    In accordance with section 773(a)(6)(C)(iii) of the Act, we 
adjusted for differences in the circumstances of sale. These 
circumstances included differences in imputed credit expenses and other 
direct selling expenses, such as the expense related to bank charges 
and factoring. Id. We also made adjustments, where appropriate, for 
physical differences in the merchandise in accordance with section 
773(a)(6)(C)(ii) of the Act.

Arm's-Length Sales

    Dongbu, Union, HYSCO, and POSCO also reported that they made sales 
in the home market to affiliated parties. The Department calculates NV 
based on a sale to an affiliated party only if it is satisfied that the 
price to the affiliated party is comparable to the price at which sales 
are made to parties not affiliated with the producer or exporter, i.e., 
sales at arm's-length. See 19 CFR 351.403(c).
    To test whether these sales were made at arm's length, we compared 
the reported home market prices of sales to affiliated and unaffiliated 
customers with applied billing adjustments, including interest revenue 
and net of all movement charges, direct selling expenses, discounts, 
rebates, and packing. In accordance with the Department's current 
practice, if the prices charged to an affiliated party were, on 
average, between 98 and 102 percent of the prices charged to 
unaffiliated parties for merchandise identical or most similar to that 
sold to the affiliated party, we considered the sales to be at arm's-
length prices. See Notice of Preliminary Results and Partial Rescission 
of Antidumping Duty Administrative: Ninth Administrative Review of the 
Antidumping Duty Order on Certain Pasta from Italy, 71 FR 45017, 45020 
(August 8, 2006) (unchanged in Notice of Final Results of the Ninth 
Administrative Review of the Antidumping Duty Order on Certain Pasta 
from Italy, 72 FR 7011 (February 14, 2007)); 19 CFR 351.403(c). 
Conversely, where we found that the sales to an affiliated party did 
not pass the arm's-length test, then all sales to that affiliated party 
have been excluded from the NV calculation. See Antidumping 
Proceedings: Affiliated Party Sales in the Ordinary Course of Trade, 67 
FR 69186, 69187 (November 15, 2002); also see Dongbu, HYSCO, the POSCO 
Group, and Union's August 31, 2011, preliminary results calculation 
memorandums.

Level of Trade

    In accordance with section 773(a)(1)(B) of the Act, we determined 
NV based on sales in the comparison market at the same level of trade 
(LOT) as the EP or CEP sales, to the extent possible. When there were 
no sales at the same LOT, we compared U.S. sales to comparison market 
sales at a different LOT.
    Pursuant to 19 CFR 351.412, to determine whether EP or CEP sales 
and NV sales were at different LOTs, we

[[Page 55009]]

examined stages in the marketing process and selling functions along 
the chain of distribution between the producer and the unaffiliated (or 
arm's-length) customers. If the comparison market sales are at a 
different LOT and the differences affect price comparability, as 
manifested in a pattern of consistent price differences between sales 
at different LOTs in the country in which NV is determined, we will 
make an LOT adjustment under section 773(a)(7)(A) of the Act. For CEP 
sales, if the NV LOT is at a more advanced stage of distribution than 
the CEP LOT and the data available do not provide an appropriate basis 
to determine an LOT adjustment, we will grant a CEP offset, as provided 
in section 773(a)(7)(B) 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, 61732-33 (November 19, 1997).
    We did not make an LOT adjustment under 19 CFR 351.412(e) because 
there was only one home market LOT for each respondent and we were 
unable to identify a pattern of consistent price differences 
attributable to differences in LOTs. See 19 CFR 351.412(d). Under 
section 773(a)(7)(B) of the Act and 19 CFR 351.412(f), we are 
preliminarily granting a CEP offset for HYSCO, POSCO, Dongbu, and Union 
because the NV sales for each company are at a more advanced LOT than 
the LOT for the U.S. CEP sales.
    For a detailed description of our LOT methodology and a summary of 
company-specific LOT findings for these preliminary results, see 
Dongbu, HYSCO, and Union's August 31, 2011, preliminary results 
calculation memorandums.

Currency Conversion

    For purposes of these preliminary results, we made currency 
conversions in accordance with section 773A(a) of the Act, based on the 
official exchange rates published by the Federal Reserve Bank.

Preliminary Results of the Review

    As a result of this review, we preliminarily find that the 
following weighted-average dumping margins exist:
---------------------------------------------------------------------------

    \6\ This rate is based on the margins calculated for those 
companies that were selected for individual review, excluding de 
minimis margins or margins based entirely on adverse facts 
available.

------------------------------------------------------------------------
      Manufacturer/exporter                    Percent margin
------------------------------------------------------------------------
HYSCO............................  0.25% (de minimis).
POSCO............................  0.04% (de minimis).
Union............................  3.61%.
Dongbu...........................  4.92%.
Review-Specific Average Rate       4.27%.
 Applicable to the Following
 Companies: \6\ LG Chem, Haewon,
 Hausys, and Dongkuk.
------------------------------------------------------------------------

Comment

    The Department will disclose calculations performed within five 
days of the date of publication of this notice to the parties to this 
proceeding in accordance with 19 CFR 351.224(b). Interested parties may 
submit case briefs no later than 30 days after the date of publication 
of these preliminary results of review. See 19 CFR 351.309(c)(ii). 
Rebuttal briefs are limited to issues raised in the case briefs and may 
be filed no later than five days after the time limit for filing the 
case briefs. See 19 CFR 351.309(d). Parties submitting arguments in 
this proceeding are requested to submit with the argument: (1) A 
statement of the issue, (2) a brief summary of the argument, and (3) a 
table of authorities, in accordance with 19 CFR 351.309(d)(2). Further, 
parties submitting case and/or rebuttal briefs are requested to provide 
the Department with an additional electronic copy of the public version 
of any such comments on a computer diskette. Case and rebuttal briefs 
must be served on interested parties in accordance with 19 CFR 
351.303(f).
    An interested party may request a hearing within 30 days of 
publication of these preliminary results. See 19 CFR 351.310(c). Any 
hearing, if requested, ordinarily will be held two days after the due 
date of the rebuttal briefs in accordance with 19 CFR 351.310(d)(1). 
The Department will issue the final results of this administrative 
review, which will include the results of its analysis of issues raised 
in any such comments, or at a hearing, if requested, within 120 days of 
publication of these preliminary results, unless extended. See section 
751(a)(3)(A) of the Act and 19 CFR 351.213(h).

Assessment Rate

    Upon completion of the final results of this administrative review, 
the Department shall determine, and CBP shall assess, antidumping 
duties on all appropriate entries. Pursuant to 19 CFR 351.212(b)(1), 
the Department will calculate importer-specific assessment rates for 
each respondent based on the ratio of the total amount of antidumping 
duties calculated for the examined sales to the total entered value of 
those sales. Where the respondent did not report the entered value for 
U.S. sales, we have calculated importer-specific assessment rates for 
the merchandise in question by aggregating the dumping margins 
calculated for all U.S. sales to each importer and dividing this amount 
by the total quantity of those sales. To determine whether the duty 
assessment rates were de minimis, in accordance with the requirement 
set forth in 19 CFR 351.106(c)(2), we calculated importer-specific ad 
valorem rates based on the estimated entered value. Where the 
assessment rate is above de minimis, we will instruct CBP to assess 
duties on all entries of subject merchandise by that importer. Pursuant 
to 19 CFR 351.106(c)(2), we will instruct CBP to liquidate without 
regard to antidumping duties any entries for which the assessment rate 
is de minimis (i.e., less than 0.50 percent). The Department intends to 
issue assessment instructions directly to CBP 15 days after 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) (Automatic 
Assessment). This clarification will apply to entries of subject 
merchandise during the POR produced by the respondents subject to this 
review for which the reviewed companies did not know that the 
merchandise which it sold to an intermediary (e.g., a reseller, trading 
company, or exporter) 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

[[Page 55010]]

intermediary involved in the transaction. For a full discussion of this 
clarification, see Automatic Assessment.

Cash Deposit Requirements

    The following deposit rates will be effective upon publication of 
the final results of this administrative review for all shipments of 
CORE from Korea entered, or withdrawn from warehouse, for consumption 
on or after the publication date, as provided by section 751(a)(2)(C) 
of the Act: (1) The cash deposit rates for the companies listed above 
will be the rates established in the final results of this review, 
except if the rate is less than 0.5 percent and, therefore, de minimis, 
the cash deposit will be zero; (2) for previously reviewed or 
investigated companies not listed above, the cash deposit rate will 
continue to be the company-specific rate published for the most recent 
final results in which that manufacturer or exporter participated; (3) 
if the exporter is not a firm covered in this review, a prior review, 
or the original less-than-fair-value (LTFV) investigation, but the 
manufacturer is, the cash deposit rate will be the rate established for 
the most recent final results 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 17.70 percent, the all-others rate established in 
the LTFV. See Orders on Certain Steel from Korea. These cash deposit 
requirements, when imposed, shall remain in effect until further 
notice.

Notification to Importers

    This notice 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 duties occurred and the subsequent 
assessment of double antidumping duties.
    These preliminary results of review are issued and published in 
accordance with sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: August 29, 2011.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.
[FR Doc. 2011-22730 Filed 9-2-11; 8:45 am]
BILLING CODE 3510-DS-P