Galvanized Steel Wire From Mexico: Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination, 68422-68428 [2011-28656]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 76, Number 214 (Friday, November 4, 2011)]
[Notices]
[Pages 68422-68428]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-28656]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-201-840]


Galvanized Steel Wire From Mexico: Preliminary Determination of 
Sales at Less Than Fair Value and Postponement of Final Determination

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

DATES: Effective Date: November 4, 2011.

SUMMARY: The Department of Commerce (the Department) preliminarily 
determines that galvanized steel wire (galvanized wire) from Mexico is 
being, or is likely to be, sold in the United States at less than fair 
value (LTFV), as provided in section 733(b) of the Tariff Act of 1930, 
as amended (the Act). The estimated dumping margins are listed in the 
``Suspension of Liquidation'' section of this notice. Interested 
parties are invited to comment on this preliminary determination. 
Pursuant to requests from interested parties, we are postponing for 60 
days the final determination and extending provisional measures from a 
four-month period to not more than six months. Accordingly, we will 
make our final determination not later than 135 days after publication 
of the preliminary determination.

FOR FURTHER INFORMATION CONTACT: Patrick Edwards or Ericka Ukrow, AD/
CVD Operations, Office 7, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-
8029 or (202) 482-0405, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On April 20, 2011, the Department initiated the antidumping duty 
investigation on galvanized wire from Mexico. See Galvanized Steel Wire 
from the People's Republic of China and Mexico: Initiation of 
Antidumping Duty Investigations, 76 FR 23548 (April 27, 2011) 
(Initiation Notice). The Petitioners in this investigation are Davis 
Wire Corporation, Johnstown Wire Technologies, Inc., Mid-South Wire 
Company, Inc., National Standard, LLC, and Oklahoma Steel & Wire 
Company, Inc. (collectively, Petitioners). Since the Initiation Notice, 
the following events have occurred.
    The Department set aside a period of time for parties to raise 
issues regarding product coverage and encouraged all

[[Page 68423]]

parties to submit comments within 20 calendar days of publication of 
the Initiation Notice. See Initiation Notice, 76 FR at 23548; see also 
Antidumping Duties; Countervailing Duties, 62 FR 27296, 27323 (May 19, 
1997) (Preamble). For further details, see the ``Scope Comments'' 
section of this notice, below. The Department also set aside a time for 
parties to comment on product characteristics for use in the 
antidumping duty questionnaire. See Initiation Notice, 76 FR at 23548-
49; see also Preamble, 62 FR at 27323.
    On April 29, 2011, the Department notified all interested parties 
of its intent to select mandatory respondents for this investigation 
based on U.S. import data obtained from U.S. Customs and Border 
Protection (CBP). The Department set aside a period of time for parties 
to comment on the potential respondent selection and encouraged all 
parties to submit comments within five calendar days from the date of 
that memorandum. See Memorandum from Angelica Mendoza, Program Manager, 
to All Interested Parties, dated April 29, 2011. On May 4, 2011, we 
received comments regarding the Department's respondent selection, 
based on the U.S. import data obtained from CBP, from Petitioners and 
one Mexican manufacturer/exporter of the subject merchandise, Aceros 
Camesa (Camesa).
    On May 6, 2011, based on requests received from Camesa and an 
additional Mexican manufacturer of the subject merchandise, Deacero 
S.A. de C.V. (Deacero), the Department granted a two-day extension of 
time for interested parties to submit comments regarding the 
appropriate product characteristics to be used in the Department's 
antidumping duty questionnaire. See Letter from Angelica Mendoza, 
Program Manager, to All Interested Parties, dated May 10, 2011.
    On May 10, 2011, we received scope comments from certain 
respondents in the companion antidumping and countervailing duty 
investigations involving China, as well as from two U.S. purchasers of 
galvanized wire. Additionally, we received rebuttal comments regarding 
the scope of the investigation from Petitioners on June 22, 2011. For 
further information, see the ``Scope Comments'' section below.
    On May 12, 2011, the Department received comments regarding 
physical product characteristics from Petitioners, Deacero, and Camesa, 
as well as comments filed on behalf of several Chinese respondents. On 
May 19, 2011, we received rebuttal comments concerning product 
characteristics from the same four parties. For an explanation of the 
product comparison criteria used in this investigation, see the 
``Product Comparisons'' section of this notice, below.
    On May 20, 2011, the United States International Trade Commission 
(USITC) published its affirmative preliminary determination that there 
is a reasonable indication that an industry in the United States is 
materially injured or threatened with material injury, by reason of 
imports from the People's Republic of China and Mexico of galvanized 
wire, and the USITC notified the Department of its finding. See 
Galvanized Steel Wire from China and Mexico, 76 FR 29266 (May 20, 
2011); see also USITC Publication 4234 (May 2011), titled ``Galvanized 
Steel Wire from China and Mexico: Investigation Nos. 701-TA-479 and 
731-TA-1183-1184 (Preliminary).''
    On June 1, 2011, we selected Deacero and Camesa as the mandatory 
respondents in this investigation and issued the Department's 
antidumping duty questionnaire to both respondents the following day. 
See Memorandum to Christian Marsh, Deputy Assistant Secretary for 
Antidumping Countervailing Duty Operations, from Richard O. Weible, 
Director, Office 7, titled ``Antidumping Duty Investigation of 
Galvanized Steel Wire from Mexico: Respondent Selection Memorandum,'' 
dated June 1, 2011.
    Deacero and Camesa submitted responses to section A of the 
Department's antidumping duty questionnaire on July 11, 2011. See 
Deacero's Response to Section A of the Department's Antidumping Duty 
Questionnaire, dated July 11, 2011 (Deacero AQR); Camesa's Response to 
Section A of the Department's Antidumping Duty Questionnaire, dated 
July 11, 2011 (Camesa AQR).
    On July 13, 2011, Petitioners made a timely request pursuant to 
section 733(c)(1)(A) of the Act and 19 CFR 351.205(e) for a 50-day 
postponement of the preliminary determination. Pursuant to section 
733(c)(1)(A) of the Act, the Department postponed the preliminary 
determination of this investigation until October 27, 2011. See 
Galvanized Steel Wire from the People's Republic of China and Mexico: 
Postponement of Preliminary Determinations of Antidumping Duty 
Investigations, 76 FR 47150 (August 4, 2011).
    On August 9, 2011, both Deacero and Camesa submitted their 
responses to sections B (covering comparison market sales) and C 
(covering U.S. sales) of the Department's questionnaire. See Deacero's 
Responses to Sections B and C of the Department's Antidumping Duty 
Questionnaire, dated August 9, 2011 (Deacero BQR and Deacero CQR); 
Camesa's Responses to Sections B and C of the Department's Antidumping 
Duty Questionnaire, dated August 9, 2011 (Camesa BQR and Camesa CQR).
    The Department received Camesa's and Deacero's section D response 
to the questionnaire (i.e., the section covering the cost of production 
(COP) and constructed value (CV)) on August 2, 2011, and August 4, 
2011, respectively. See Camesa's Response to Section D of the 
Department's Antidumping Duty Questionnaire, dated August 2, 2011 
(Camesa DQR); Deacero's Response to Section D of the Department's 
Antidumping Duty Questionnaire, dated August 4, 2011 (Deacero DQR). 
Also on August 4, 2011, Camesa filed its sales and cost reconciliation, 
pursuant to sections B through D of the Department's questionnaire. 
Deacero also filed its sales reconciliation on August 4, 2011, but 
submitted its cost reconciliation on August 9, 2011. We issued a 
supplemental questionnaire concerning the section D responses of 
Deacero and Camesa on August 31, 2011, and September 1, 2011, 
respectively.
    In their respective section A sales responses, both Deacero and 
Camesa reported certain data and gave a narrative description of 
subject sales which were further manufactured, and subsequently resold, 
in the United States. See Deacero AQR at 26-28 and Exhibit A-15; Camesa 
AQR at 32-34 and Exhibits A-17, A-18, and A-19. Both parties requested 
exemption from reporting their respective company's further 
manufactured sales in a response to section E of the Department's 
antidumping duty questionnaire. After analyzing these data, the 
Department determined that Camesa, pursuant to 19 CFR 351.402(c), did 
not need to file a section E response. See Letter from Angelica 
Mendoza, Program Manager, to Camesa, dated July 22, 2011. However, 
pursuant to 19 CFR 351.402(c), the Department determined, based on its 
analysis of information provided in the section A response, that 
Deacero was required to respond to section E of the Department's 
questionnaire.\1\ See Letter from Angelica Mendoza, Program Manager, to 
Deacero, titled ``Antidumping Duty Investigation of Galvanized Steel 
Wire from Mexico:

[[Page 68424]]

Request to Submit Response to Section E Further-Manufacturing or 
Assembly of the Subject Merchandise in the United States Section of the 
Antidumping Duty Questionnaire,'' dated August 22, 2011.
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    \1\ The Department first determined that Deacero needed to alter 
its methodology used in calculating the value-added of its further 
manufacturing costs and resubmit the requisite exhibits from its 
section A response for further evaluation. See Memorandum to the 
File from Patrick Edwards, Analyst, titled ``Reporting of Further-
Manufactured Sales,'' dated July 22, 2011. Deacero submitted its 
revised calculations and exhibits on July 26, 2011. See Letter from 
Deacero, titled ``Exhibit A-15 of Deacero's Section A Response,'' 
dated July 26, 2011.
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    On September 15, 2011, the Department issued a supplemental 
questionnaire concerning Camesa's sections A through C sales responses. 
On September 16, 2011, Deacero submitted its response to section E of 
the Department's questionnaire, per the Department's request. See 
Deacero's Response to Section E of the Department's Antidumping Duty 
Questionnaire, dated September 16, 2011 (Deacero EQR).
    On September 19, 2011, and September 20, 2011, respectively, we 
issued two supplemental sales questionnaires to Deacero covering its 
sections A through C responses and Deacero's reporting of certain 
product characteristics, in-scope merchandise and further manufacturing 
information.
    On September 26, 2011, and September 28, 2011, we received the 
supplemental cost (i.e., section D) responses from Deacero and Camesa, 
respectively. See Supplemental Cost Responses from Deacero, dated 
September 26, 2011 (Deacero SDQR) and Supplemental Cost Response from 
Camesa, dated September 28, 2011 (Camesa SDQR). Deacero submitted its 
responses to the Department's first and second supplemental sales 
questionnaires on October 7, 2011. See First Supplemental Sales 
Responses from Deacero, dated October 7, 2011 (Deacero SQR); Second 
Supplemental Sales Responses from Deacero, dated October 7, 2011 
(Deacero SSQR). We also received Camesa's supplemental sales response 
on October 7, 2011. See Supplemental Sales Responses from Camesa, dated 
October 7, 2011 (Camesa SQR).
    On September 27, 2011, and October 18, 2011, Camesa and Deacero, 
respectively, requested that, in the event of an affirmative 
preliminary determination in this investigation, the Department: (1) 
Postpone its final determination by 60 days, in accordance with section 
735(a)(2)(A) of the Act and 19 CFR 351.210(b)(2)(ii); and (2) extend 
the application of the provisional measures prescribed under section 
733(d) of the Act and 19 CFR 351.210(e)(2) from a four month period to 
a six month period. For further discussion, see the ``Postponement of 
Final Determination and Extension of Provisional Measures'' section of 
this notice, below.
    On September 28, 2011, we issued a supplemental section E 
questionnaire to Deacero. On October 5, 2011, we issued a second 
section D supplemental questionnaire to Camesa. On October 12, 2011, 
Deacero submitted its response to the section E supplemental 
questionnaire (SEQR). Also on October 12, 2011, Camesa submitted a 
partial response to the Department's second section D supplemental 
questionnaire, and the remaining portion of the response on October 14, 
2011 (collectively, Camesa SSDQR). Also on October 14, 2011, we issued 
a second section D supplemental questionnaire to Deacero, to which 
Deacero submitted its response on October 20, 2011 (Deacero SSDQR).\2\
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    \2\ In its SSDQR, Deacero submitted a SAS dataset supporting the 
previously submitted weight-average cost database (i.e., database 
``deacop03,'' submitted on October 7, 2011). However, we note that 
the database provided only underlying cost of production information 
to the data reported in ``deacop03.'' As such we did not incorporate 
Deacero's SSDQR database in our antidumping analysis. The previously 
submitted weight-average cost database, ``deacop03,'' is used for 
our margin calculation in this preliminary determination.
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Period of Investigation

    The period of investigation (POI) is January 1, 2010, to December 
31, 2010. This period corresponds to the four most recent fiscal 
quarters prior to the month of the filing of the petition. See 19 CFR 
351.204(b)(1).

Scope of Investigation

    The scope of this investigation covers galvanized steel wire which 
is a cold-drawn carbon quality steel product in coils, of solid, 
circular cross section with an actual diameter of 0.5842 mm (0.0230 
inch) or more, plated or coated with zinc (whether by hot-dipping or 
electroplating).
    Steel products to be included in the scope of this investigation, 
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 
two 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
--0.02 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.
    Specifically excluded from the scope of this investigation is 
galvanized steel wire in coils of 15 feet or less which is pre-packed 
in individual retail packages. The products subject to this 
investigation are currently classified in subheadings 7217.20.30 and 
7217.20.45 of the HTSUS which cover galvanized wire of all diameters 
and all carbon content. Galvanized wire is reported under statistical 
reporting numbers 7217.20.3000, 7217.20.4510, 7217.20.4520, 
7217.20.4530, 7217.20.4540, 7217.20.4550, 7217.20.4560, 7217.20.4570, 
and 7217.20.4580. These products may also enter under HTSUS subheadings 
7229.20.0015, 7229.20.0090, 7229.90.5008, 7229.90.5016, 7229.90.5031, 
and 7229.90.5051. Although the HTSUS subheadings are provided for 
convenience and Customs purposes, the written description of the 
merchandise is dispositive.

Scope Comments

    In accordance with the preamble to the Department's regulations, 
see Preamble, 62 FR at 27323, in our Initiation Notice we set aside a 
period of time for parties to raise issues regarding product coverage, 
and encouraged all parties to submit comments within 20 calendar days 
of publication of the Initiation Notice.
    On May 10, 2011, we received comments from Qingdao Ant Hardware 
Manufacturing, Co., Ltd. (AHM) concerning the scope of this 
investigation. See Letter from Qingdao Ant Hardware Manufacturing Co., 
Ltd. to the Department, titled ``Scope Comments in the Antidumping and 
Countervailing Duty Investigations of Galvanized Steel Wire from China 
and Mexico,'' dated May 10, 2011 (AHM Scope Comments). In its 
submission, AHM requested that the Department exclude from the scope of 
the investigation certain steel wire pre-packed in retail packaging. 
Id. at 2. AHM stated that this type of wire is typically sold in pre-
packed, retail packages having inner diameters of 2.25 to 8 inches and 
with lengths of 25 to 250 feet and, furthermore, is generally sold in 
retail stores that do not carry industrial or commercial building 
products. AHM further commented that pre-packed retail steel wire of 
the afore mentioned lengths is not contemplated to be within the scope 
of this investigation, as the wire is non-industrial, retail-ready and 
for individual/home use. Specifically, AHM requested that the 
Department exclude from the scope of this investigation ``galvanized 
steel wire * * * sold in

[[Page 68425]]

retail packaging where the pre-packaged length is no more than 300 
feet, regardless of the diameter (gauge) of the wire.'' \3\ Id. at 4.
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    \3\ In the AHM Scope Comments, AHM had originally and 
inadvertently specified a maximum pre-packed length of 30 feet. AHM 
subsequently filed an additional submission on June 17, 2011, 
correcting this language, and clarifying that the reference to ``30 
feet'' was intended to reference ``300 feet.'' AHM requested that 
these products also be excluded from the scope of the antidumping 
investigation covering galvanized wire from the People's Republic of 
China.
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    Also on May 10, 2011, we received scope comments from Shanghai Bao 
Zhang Industry Co., Ltd., Anhui Bao Zhang Metal Products Co., Ltd., and 
B&Z Galvanized Wire Industry (collectively, Baozhang), requesting that 
the Department exclude from the scope of the investigation galvanized 
steel wire with a diameter of less than one millimeter. See Letter from 
Baozhang to the Department, titled ``Comments on Scope Issues: 
Investigation of the Galvanized Steel Wire from the People's Republic 
of China,'' dated May 10, 2011 (Baozhang Scope Comments). In its 
comments, Baozhang states that it has been a reliable source of this 
smaller-gauged wire to U.S. producers of stucco netting because the 
U.S. galvanized wire industry does not offer this gauge wire with a 
diameter of less than one milimeter. As such, Baozhang requests that 
the Department exclude from the scope of this investigation such 
material since any alleged injury experienced by the U.S. industry 
cannot be related to imports of this product. Id. at 2.
    On May 10, 2011, the Department also received comments from two 
U.S. producers of stucco netting, Tree Island Wire (USA), Inc. (Tree 
Island) and Preferred Wire Products, Inc., (Preferred Wire) both 
supporting the position that galvanized steel wire less than 1 
millimeter in diameter be excluded from the scope of the investigation. 
See Letter from Tree Island to the Department, titled ``Scope Comments 
in the Investigation of Galvanized Steel Wire from China,'' dated May 
10, 2011; Letter from Preferred Wire to the Department, titled ``Scope 
Comments in the Investigation of Galvanized Steel Wire from China,'' 
dated May 10, 2011.
    Petitioners filed rebuttal comments regarding the scope exclusion 
requests by AHM and Baozhang on June 22, 2011. See Letter from 
Petitioners to the Department, titled ``Galvanized Steel Wire from 
Mexico and China--Petitioners' Comments on Respondents' Scope 
Requests,'' dated June 22, 2011 (Rebuttal Scope Comments). In its 
comments, Petitioners state that despite AHM's contention that retail-
ready, shorter strands of galvanized wire are purely for non-
industrial, personal use, this galvanized wire is covered by the scope 
of this investigation. We preliminarily determine that the material 
described by AHM is subject to the scope of this investigation and 
constitutes a product for which Petitioners are seeking relief. 
However, Petitioners state that galvanized wire in coils of 15 feet or 
less, which are pre-packed in individual retail packages, may be 
excluded from the scope of the investigation as they are not seeking 
relief for this specific product. Accordingly, and as noted above, we 
have excluded such merchandise from the scope of this investigation.
    Finally, with regard to the remaining comments concerning the 
exclusion of galvanized wire of a diameter less than one millimeter, 
Petitioners state a diameter less than one millimeter is covered by the 
scope of this investigation. We preliminarily find that such 
merchandise is subject to the scope of this investigation and is a 
product for which Petitioners are seeking relief.

Product Comparisons

    We have taken into account the comments that were submitted by the 
interested parties concerning product comparison criteria. In 
accordance with section 771(16) of the Act, all products produced by 
the respondents covered by the description in the ``Scope of 
Investigation'' section, above, and sold in Mexico during the POI are 
considered to be foreign like product for purposes of determining 
appropriate product comparisons to U.S. sales. We have relied on four 
criteria to match U.S. sales of subject merchandise to comparison 
market sales of the foreign like product: (1) Maximum specified carbon 
level, (2) wire diameter, (3) minimum specified coating weight, and (4) 
maximum tensile strength. Where there were no sales of identical 
merchandise in the home market made in the ordinary course of trade to 
compare to U.S. sales, we compared U.S. sales to sales of the next most 
similar foreign like product on the basis of the characteristics listed 
above, which were made in the ordinary course of trade.

Fair Value Comparisons

    To determine whether respondents' sales of galvanized wire from 
Mexico to the United States were made at LTFV, we compared the 
constructed export price (CEP) \4\ to normal value (NV), as described 
in the ``Constructed Export Price'' and ``Normal Value'' sections of 
this notice. In accordance with section 777A(d)(1)(A)(i) of the Act, we 
compared POI weighted-average CEPs to POI weighted-average NVs.
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    \4\ Both respondents reported only CEP sales in their U.S. 
databases.
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Constructed Export Price

    For the price to the United States, we used CEP, in accordance with 
section 772(b) of the Act. 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. 
See section 772(b) of the Act. We based CEP on the packed prices 
charged to the first unaffiliated customer in the United States and the 
applicable terms of sale.
    In accordance with section 772(b) of the Act, we calculated CEP 
where the record established that sales made by Deacero and Camesa were 
made in the United States after the date of importation by or for the 
account of the producer or exporter, or by a seller affiliated with the 
producer or exporter, to a purchaser not affiliated with the producer 
or exporter.

Deacero

    In accordance with section 772(c)(2)(A) of the Act, and where 
appropriate, we made deductions from the starting price for certain 
billing adjustments, early payment discounts, quantity discounts, and 
certain other discounts, including rebates. See Deacero CQR at 21-26. 
We also made further deductions to price for certain movement expenses 
(offset for reported freight revenue), where appropriate, for foreign 
inland freight, foreign warehousing expenses, foreign brokerage, U.S. 
inland freight, U.S. warehouse expenses, certain other transportation 
expenses incurred on U.S. and further manufactured sales, and U.S. 
brokerage and handling expenses, pursuant to section 772(c)(2)(A) of 
the Act.
    Pursuant to section 772(d)(1) of the Act, we made additional 
adjustments to CEP for commissions, credit expenses, inventory carrying 
costs incurred in Mexico and the United States, and other indirect 
selling expenses in the United States associated with economic activity 
in the United States. We also made an adjustment to price for the cost 
of any further manufacturing or assembly, in accordance with section 
772(d)(2) of the Act. Pursuant to section 772(d)(3) of the Act, we made 
an adjustment for CEP profit. For a detailed discussion of these 
adjustments, see Memorandum to The File, through Angelica Mendoza, 
Program Manager, from Patrick Edwards and Ericka Ukrow, International 
Trade

[[Page 68426]]

Analysts, titled ``Analysis Memorandum for the Preliminary 
Determination of the Antidumping Duty Investigation of Galvanized Steel 
Wire from Mexico: Deacero S.A. de C.V.,'' dated October 27, 2011 
(Deacero Preliminary Analysis Memorandum).

Camesa

    In accordance with section 772(c)(2)(A) of the Act, and where 
appropriate, we made deductions from the starting price for certain 
movement expenses including foreign inland freight, foreign brokerage, 
foreign inland insurance (covering shipments to all markets), U.S. 
inland freight, and U.S. brokerage and handling expenses. Pursuant to 
section 772(d)(1) of the Act, we made additional adjustments to CEP for 
commissions, credit expenses, warranty expenses, inventory carrying 
costs incurred in Mexico and the United States, and other indirect 
selling expenses in the United States associated with economic activity 
in the United States. Pursuant to section 772(d)(3) of the Act, we made 
an adjustment for CEP profit. For a detailed discussion of these 
adjustments, see Memorandum to The File, through Angelica Mendoza, 
Program Manager, from Patrick Edwards and Ericka Ukrow, International 
Trade Analysts, titled ``Analysis Memorandum for the Preliminary 
Determination of the Antidumping Duty Investigation of Galvanized Steel 
Wire from Mexico: Aceros Camesa, S.A. de C.V.,'' dated October 27, 2011 
(Camesa Preliminary Analysis Memorandum).

Normal Value

A. Home Market Viability and Comparison Market Selection
    To determine whether there is a sufficient volume of sales in the 
home market to serve as a viable basis for calculating NV (i.e., the 
aggregate volume of home market sales of the foreign like product is 
equal to or greater than five percent of the aggregate volume of U.S. 
sales), we compared respondents' volume of home market sales of the 
foreign like product to its volume of U.S. sales of the subject 
merchandise. See section 773(a)(1)(C) of the Act. Based on this 
comparison, we determined that respondents had a viable home market 
during the POI. Consequently, we based NV on home market sales.
B. Level of Trade
    In accordance with section 773(a)(1)(B) 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 the export price or CEP. Pursuant to 
19 CFR 351.412(c)(1)(iii), the NV LOT is based on the starting price of 
the sales in the comparison market or, when NV is based on constructed 
value, the starting price of the sales from which we derive selling, 
general and administrative expenses, and profit. For CEP sales (which 
constituted all sales by both Deacero and Camesa), the U.S. LOT is 
based on the starting price of the U.S. sales, as adjusted under 
section 772(d) of the Act, which is from the exporter to the importer. 
See 19 CFR 351.412(c)(1)(ii).
    To determine whether NV sales are at a different LOT than CEP 
sales, we examine stages in the marketing process and selling functions 
along the chain of distribution between the producer and the 
unaffiliated customer. See 19 CFR 351.412(c)(2). 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 773(a)(7)(A) of the Act. For CEP sales, if the 
NV level is more remote from the factory than the CEP level and there 
is no basis for determining whether the difference in levels between NV 
and CEP affects price comparability, we adjust NV under section 
773(a)(7)(B) of the Act (the CEP-offset provision). 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) (applying the CEP offset analysis under section 773(a)(7)(B).
    In this investigation, we obtained information from Deacero and 
Camesa regarding the marketing stages involved in both parties making 
their reported home market and U.S. market sales, including a 
description of the selling activities performed by the respondents and/
or their affiliates for each channel of distribution. See Deacero BQR 
at 26; Deacero CQR at 26; and Camesa AQR at 19-23. We did not make an 
LOT adjustment under section 773(a)(7)(A) of the Act and 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 both Deacero and Camesa because 
the NV sales for each company are at a more advanced LOT than the LOT 
for their U.S. CEP sales.
    For a detailed description of our LOT methodology and a summary of 
the company-specific LOT findings for this preliminary determination, 
see Deacero Preliminary Analysis Memorandum and Camesa Preliminary 
Analysis Memorandum.
C. Cost of Production Analysis
    Based on our analysis of the Petitioners' sales-below-cost 
allegation in the petition, we found reasonable grounds to believe or 
suspect that galvanized wire sales were made in Mexico at prices below 
the COP, and initiated a country-wide cost investigation. See section 
773(b)(2)(A)(i) of the Act and Initiation Notice, 76 FR at 23552. 
Accordingly, we conducted a sales-below-cost investigation to determine 
whether Deacero's and Camesa's sales were made at prices below their 
COP.
1. Calculation of COP
    In accordance with section 773(b)(3) of the Act, we calculated COP 
based on the sum of the cost of materials and fabrication for the 
foreign like product, plus an amount for general and administrative 
expenses (G&A) and financial expenses. See ``Test of Home Market Sales 
Prices'' section below for treatment of home market selling expenses 
and packing costs. We relied on the COP data submitted by Deacero and 
Camesa in their respective DQRs and cost supplemental responses, except 
where noted below.
    Deacero:
    1. We adjusted the G&A expense rate to include Employee Profit 
Sharing expenses and the losses from routine sales of property, plant 
and equipment.
    2. We set Deacero's negative financial expense ratio to zero.
    Because the data on which we base our analysis contains business 
proprietary information, a detailed analysis is included in the 
Memorandum to Neal M. Halper, titled ``Cost of Production and 
Constructed Value Calculation Adjustments for the Preliminary 
Determination: Deacero S.A. de C.V.,'' dated October 27, 2011 (Deacero 
Preliminary Cost Memorandum).
    Camesa:
    1. We increased fixed overhead to include depreciation on the fixed 
asset revaluation that is required by Mexican GAAP.
    See Memorandum to Neal M. Halper, titled ``Cost of Production and 
Constructed Value Calculation Adjustments for the Preliminary 
Determination: Aceros Camesa,'' dated October 27, 2011 (Camesa 
Preliminary Cost Memorandum).

[[Page 68427]]

    For the preliminary determination, we have relied upon the POI 
weighted-average COP reported by Deacero and Camesa, as adjusted above. 
Based on the review of record evidence, Deacero and Camesa did not 
appear to experience significant changes in cost of manufacturing 
during the POI. Therefore, we followed our normal methodology of 
calculating an annual weighted-average cost.
2. Test of Home Market Sales Prices
    On a product-specific basis, we compared the adjusted weighted-
average COP to the home market sales prices of the foreign like 
product, as required under section 773(b) of the Act, to determine 
whether the sale prices were below the COP. The sales prices were 
exclusive of any applicable discounts, movement charges, direct and 
indirect selling expenses, and packing expenses. For purposes of this 
comparison, we used the COP exclusive of selling and packing expenses.
3. Results of the COP Test
    Pursuant to section 773(b)(2)(C)(i) of the Act, where less than 20 
percent of the respondent's sales of a given product during the POI are 
at prices less than the COP, we do 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 sales of a given product during the POI were at prices 
less than the COP, we determine that such sales have been made in 
``substantial quantities.'' See section 773(b)(2)(C) of the Act. 
Further, we determine that the sales were made within an extended 
period of time, in accordance with section 773(b)(2)(B) of the Act, 
because we examine below-cost sales occurring during the entire POI. In 
accordance with section 773(b)(2)(D) of the Act, we compare prices to 
the POI-average costs to determine whether the prices permit recovery 
of costs within a reasonable period of time.
    In this case, we found that, for certain products, more than 20 
percent of Deacero's and Camesa's sales were made at prices less than 
the COP and, in addition, such sales did not provide for the recovery 
of costs within a reasonable period of time. See Deacero Preliminary 
Cost Memorandum and Camesa Preliminary Cost Memorandum. We, therefore, 
excluded these sales and used the remaining sales as the basis for 
determining NV, in accordance with section 773(b)(1) of the Act.
D. Calculation of Normal Value Based on Comparison-Market Prices
    We calculated NV for Deacero and Camesa on the reported packed, ex-
factory or delivered prices to comparison market customers. We made 
deductions from the starting price, where appropriate, for billing 
adjustments, early payment and certain other discounts, other revenues 
received, inland freight, and warehousing expenses, pursuant to section 
773(a)(6)(B)(ii) of the Act.
    Pursuant to section 773(a)(6)(C)(iii) of the Act and 19 CFR 
351.410(b), we made, where appropriate, circumstance-of-sale 
adjustments. We added U.S. packing costs and deducted home market 
packing costs, in accordance with sections 773(a)(6)(A) and (B)(i) of 
the Act. Finally, we made a CEP offset pursuant to section 773(a)(7)(B) 
of the Act and 19 CFR 351.412(f). We calculated the CEP offset as the 
lesser of the indirect selling expenses incurred on the home market 
sales or the indirect selling expenses deducted from the starting price 
in calculating CEP.
    When comparing U.S. sales with comparison market sales of similar, 
but not identical, merchandise, we also made adjustments for physical 
differences in the merchandise in accordance with section 
773(a)(6)(C)(ii) of the Act and 19 CFR 351.411. We based this 
adjustment on the difference in the variable cost of manufacturing for 
the foreign like product and subject merchandise. See 19 CFR 
351.411(b).

Currency Conversion

    We made currency conversions into U.S. dollars in accordance with 
section 773A(a) of the Act and 19 CFR 351.415(a) based on the exchange 
rates in effect on the dates of the U.S. sales as certified by the 
Federal Reserve Bank.

Verification

    As provided in section 782(i)(1) of the Act, we intend to verify 
the information relied upon in making our preliminary determination for 
Deacero and Camesa.

Suspension of Liquidation

    In accordance with section 733(d)(2) of the Act, we will direct CBP 
to suspend liquidation of all entries of galvanized wire from Mexico 
that are entered, or withdrawn from warehouse, for consumption on or 
after the date of publication of this notice in the Federal Register. 
We will also instruct CBP to require a cash deposit or the posting of a 
bond equal to the weighted-average dumping margins, as indicated in the 
chart below. These suspension of liquidation instructions will remain 
in effect until further notice.
    The weighted-average dumping margins are as follows:

------------------------------------------------------------------------
                                                             Weighted-
                                                              average
                  Manufacturer/exporter                       margin
                                                             (percent)
------------------------------------------------------------------------
Deacero S.A. de C.V.....................................           61.54
Aceros Camesa S.A. de C.V...............................           37.87
All-Others..............................................           59.37
------------------------------------------------------------------------

All-Others Rate

    Section 735(c)(5)(A) of the Act provides that the estimated ``all-
others'' rate shall be an amount equal to the weighted average of the 
estimated weighted average dumping margins established for exporters 
and producers individually investigated, excluding any zero or de 
minimis margins, and any margins determined entirely under section 776 
of the Act. Deacero and Camesa are the only respondents in this 
investigation for which the Department has calculated a company-
specific rate that is not zero or de minimis. Therefore, for purposes 
of determining the ``all-others'' rate and pursuant to section 
735(c)(5)(A) of the Act, we are using the weighted average of the 
dumping margins calculated for Deacero and Camesa for the ``all-
others'' rate, as referenced in the ``Suspension of Liquidation'' 
section, above.\5\
---------------------------------------------------------------------------

    \5\ When there are only two relevant weighted-average dumping 
margins available to determine the ``all-others'' rate, the 
Department may use a simple average so as to avoid disclosure of 
business proprietary information. See Seamless Refined Copper Pipe 
and Tube From Mexico: Final Determination of Sales at Less Than Fair 
Value, 75 FR 60723, 60724 (October 1, 2010). However, in this 
preliminary determination, the Department has determined an ``all-
others'' rate using Deacero's and Camesa's ranged, public U.S. sales 
quantities, which also avoids disclosure of business proprietary 
information. See Ball Bearings and Parts Thereof From France, 
Germany, Italy, Japan, and the United Kingdom: Final Results of 
Antidumping Duty Administrative Reviews, Final Results of Changed-
Circumstances Review, and Revocation of an Order in Part, 75 FR 
53661 (September 1, 2010), and accompanying Issues and Decision 
Memorandum at Comment 1.
---------------------------------------------------------------------------

Disclosure

    The Department will disclose to parties the calculations performed 
in connection with this preliminary determination within five days of 
the date of publication of this notice. See 19 CFR 351.224(b).

Postponement of Final Determination and Extension of Provisional 
Measures

    Section 735(a)(2) of the Act provides that a final determination 
may be postponed until not later than 135 days after the date of the 
publication of the preliminary determination if, in the event of an 
affirmative preliminary

[[Page 68428]]

determination, a request for such postponement is made by exporters, 
who account for a significant proportion of exports of the subject 
merchandise, or in the event of a negative preliminary determination, a 
request for such postponement is made by the petitioner. The 
Department's regulations, at 19 CFR 351.210(e)(2), require that 
requests by respondents for postponement of a final determination be 
accompanied by a request for extension of provisional measures from a 
four-month period to not more than six months.
    On September 27, 2011, and October 18, 2011, Camesa and Deacero, 
respectively, requested that in the event of an affirmative preliminary 
determination in this investigation, the Department postpone its final 
determination by 60 days (135 days after publication of the preliminary 
determination) and extend the application of the provisional measures 
prescribed under section 733(d) of the Act and 19 CFR 351.210(e)(2), 
from a four month period to a six month period. In accordance with 
section 735(a)(2)(A) of the Act and 19 CFR 351.210(b)(2)(ii), because 
(1) our preliminary determination is affirmative; (2) the requesting 
producers/exporters account for a significant proportion of exports of 
the subject merchandise; and (3) no compelling reasons for denial 
exist, we are granting this request and are postponing the final 
determination until no later than 135 days after the publication of 
this notice in the Federal Register. Suspension of liquidation will be 
extended accordingly. We are also granting the request to extend the 
application of the provisional measures prescribed under section 733(d) 
of the Act and 19 CFR 351.210(e)(2) from a four month period to a six 
month period.

USITC Notification

    In accordance with section 733(f) of the Act, we have notified the 
USITC of the Department's preliminary affirmative determination. If the 
Department's final determination is affirmative, the USITC will 
determine before the later of 120 days after the date of this 
preliminary determination or 45 days after our final determination 
whether imports of galvanized wire from Mexico are materially injuring, 
or threatening material injury to, the U.S. industry. See section 
735(b)(2) of the Act. Because we are postponing the deadline for our 
final determination to 135 days from the date of the publication of 
this preliminary determination, the USITC will make its final 
determination no later than 45 days after our final determination.

Public Comment

    Interested parties are invited to comment on the preliminary 
determination. 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)(i). 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 19 CFR 351.309(d)(2). A list of authorities used, a 
table of contents, and an executive summary of issues should accompany 
any briefs submitted to the Department. Executive summaries should be 
limited to five pages total, including footnotes.
    In accordance with section 774(1) of the Act, the Department will 
hold a public hearing, if timely 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. See also 19 CFR 351.310. If a timely request for a 
hearing is made in this investigation, we intend to hold the hearing 
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 within 30 days of the publication of this 
notice in the Federal Register to the Assistant Secretary for Import 
Administration, U.S. Department of Commerce, pursuant to the 
Department's e-filing regulations. See https://iaaccess.trade.gov/help/IA%20ACCESS%20User%20Guide.pdf. 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. At the 
hearing, oral presentations will be limited to issues raised in the 
briefs. See 19 CFR 351.310(c).
    This determination is issued and published pursuant to sections 
733(f) and 777(i)(1) of the Act.

    Dated: October 27, 2011.
Paul Piquado,
Assistant Secretary for Import Administration.
[FR Doc. 2011-28656 Filed 11-3-11; 8:45 am]
BILLING CODE 3510-DS-P