Circular Welded Non-Alloy Steel Pipe From the Republic of Korea: Preliminary Results of the Antidumping Duty Administrative Review, 76369-76374 [2011-31432]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 76, Number 235 (Wednesday, December 7, 2011)]
[Notices]
[Pages 76369-76374]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-31432]


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

DEPARTMENT OF COMMERCE

International Trade Administration

[A-580-809]


Circular Welded Non-Alloy Steel Pipe From the Republic of Korea: 
Preliminary Results of the Antidumping Duty Administrative Review

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

SUMMARY: In response to requests from interested parties, the 
Department of Commerce (``the Department'') is conducting an 
administrative review of the antidumping duty order on circular welded 
non-alloy steel pipe (``CWP'') from the Republic of Korea (``Korea''), 
covering the period November 1, 2009, through October 31, 2010. We 
preliminarily determine the exporters/producers covered by this review 
made sales of the subject merchandise at prices below normal value 
(``NV''). If these preliminary results are adopted in our final 
results, we will instruct U.S. Customs and Border Protection (``CBP'') 
to assess antidumping duties on all appropriate entries. Interested 
parties are invited to comment on these preliminary results.

DATES: Effective Date: December 7, 2011.

FOR FURTHER INFORMATION CONTACT: Mary Kolberg, or Jennifer Meek, AD/CVD 
Operations, Office 1, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue NW., Washington, DC 20230; telephone (202) 482-1785 
or (202) 482-2778, respectively.

SUPPLEMENTARY INFORMATION: 

Background

    On November 2, 1992, the Department published an antidumping duty 
order on CWP from Korea. See Notice of Antidumping Duty Orders: Certain 
Circular Welded Non-Alloy Steel Pipe from Brazil, the Republic of Korea 
(Korea), Mexico, and Venezuela, and Amendment to Final Determination of 
Sales at Less Than Fair Value: Certain Circular Welded Non-Alloy Steel 
Pipe from Korea, 57 FR 49453 (November 2, 1992) (``CWP Order'').
    On November 30, 2010, both Hyundai HYSCO (``HYSCO'') and SeAH Steel 
Corporation (``SeAH'') timely requested an administrative review of 
this order for the period November 1, 2009, through October 31, 2010. 
Also, on November 30, 2010, United States Steel Corporation (``U.S. 
Steel''), a manufacturer of the domestic like product, requested a 
review of the following producers/exporters of subject merchandise: 
SeAH; HYSCO; Husteel Co., Ltd. (``Husteel''); Nexteel Co., Ltd. 
(``Nexteel''); Kumkang Industrial Co., Ltd. (``Kumkang''); and A-JU 
Besteel Co., Ltd. (``Besteel''). Likewise, on November 30, 2010, 
Wheatland Tube Company, a domestic producer of circular welded pipe, 
requested a review of the subject merchandise sales made by SeAH, 
HYSCO, Husteel, Nexteel, Dongbu Steel Co., Ltd. (``Dongbu''), and 
Kumkang. On December 28, 2010, we initiated an administrative review. 
See Initiation of Antidumping and Countervailing Duty Administrative 
Reviews and Request for Revocation in Part, 75 FR 81565 (December 28, 
2010) (``Initiation Notice'').
    In our initiation notice, we indicated that we would select 
mandatory respondents for review based upon CBP data, and that we would 
limit the respondents selected for individual review in accordance with 
section 777A(c)(2) of the Tariff Act of 1930, as amended (``the Act''). 
See Initiation Notice, 75 FR at 81565. On January 10, 2011, we received 
comments on the issue of respondent selection from HYSCO.
    On February 4, 2011, after considering the resources available to 
the Department, we determined that it was not practicable to examine 
all producers/exporters of subject merchandise for which a review was 
requested. As a result, we selected the two largest producers/exporters 
of CWP from Korea during the POR for individual review in this segment 
of this proceeding, pursuant to section 777A(c)(2)(B) of the Act. These 
mandatory respondents were HYSCO and SeAH. See Memorandum from Mary 
Kolberg and Jennifer Meek, International Trade Analysts, AD/CVD 
Operations, Office 1, to Susan H. Kuhbach, Director, AD/CVD Operations, 
Office 1, ``Respondent Selection: Antidumping Duty Administrative 
Review: Certain Circular Welded Non-Alloy Steel Pipe from the Republic 
of Korea,'' dated February 4, 2011.
    On January 25, 2011, Wheatland submitted a request for a duty 
absorption determination for a number of producers or exporters subject 
to this review, including SeAH, HYSCO, Husteel, Nexteel, Dongbu, 
Kumkang, and Besteel. The Court of Appeals for the Federal Circuit 
found that the Department lacks authority to conduct two-and four-year 
duty absorption inquiries for transitional orders (orders in effect 
before January 1, 1995). See FAG Italia S.p.A. v. United States, 291 
F.3d 806, 819 (Fed. Cir. 2002). Since the order for this case is from 
1992, we have not conducted a duty absorption inquiry in this 
proceeding.
    On February 9, 2011, we issued the antidumping questionnaire to 
HYSCO and SeAH.
    On July 11, 2011, we published in the Federal Register an extension 
of the time limit for the completion of the preliminary results of this 
review until no later than November 30, 2011, in accordance with 
section 751(a)(3)(A) of the Act, and 19 CFR 351.213(h)(2). See Circular 
Welded Non-Alloy Steel Pipe From the Republic of Korea: Extension of 
Time Limit for Preliminary Results of

[[Page 76370]]

the Antidumping Duty Administrative Review, 76 FR 40689 (July 11, 
2011).
    On July 13, 2011, Wheatland withdrew its request for review of 
Husteel, Nexteel, Kumkang, and Dongbu. U.S. Steel also withdrew its 
request for review of Husteel, Nexteel, Kumkang, and Besteel on July 
13, 2011. On August 16, 2011, we rescinded the administrative review 
for Husteel, Nexteel, Kumkang, Dongbu, and Besteel for November 1, 
2009, through October 31, 2010. See Circular Welded Non-Alloy Steel 
Pipe From the Republic of Korea:
    Partial Rescission of Antidumping Duty Administrative Review, 76 FR 
52636 (August 23, 2011).

Scope of the Order

    The merchandise subject to this review is circular welded non-alloy 
steel pipe and tube, of circular cross-section, not more than 406.4mm 
(16 inches) in outside diameter, regardless of wall thickness, surface 
finish (black, galvanized, or painted), or end finish (plain end, 
beveled end, threaded, or threaded and coupled). These pipes and tubes 
are generally known as standard pipes and tubes and are intended for 
the low-pressure conveyance of water, steam, natural gas, air, and 
other liquids and gases in plumbing and heating systems, air-
conditioning units, automatic sprinkler systems, and other related 
uses. Standard pipe may also be used for light load-bearing 
applications, such as for fence tubing, and as structural pipe tubing 
used for framing and as support members for reconstruction or load-
bearing purposes in the construction, shipbuilding, trucking, farm 
equipment, and other related industries. Unfinished conduit pipe is 
also included in this review.
    All carbon-steel pipes and tubes within the physical description 
outlined above are included within the scope of this review except line 
pipe, oil-country tubular goods, boiler tubing, mechanical tubing, pipe 
and tube hollows for redraws, finished scaffolding, and finished 
conduit.\1\
---------------------------------------------------------------------------

    \1\ See Final Negative Determination of Scope Inquiry on Certain 
Circular Welded Non-Alloy Steel Pipe and Tube From Brazil, the 
Republic of Korea, Mexico, and Venezuela, 61 FR 11608 (March 21, 
1996). In accordance with this determination, pipe certified to the 
API 5L line-pipe specification and pipe certified to both the API 5L 
line-pipe specifications and the less-stringent ASTM A-53 standard-
pipe specifications, which falls within the physical parameters as 
outlined above, and entered as line pipe of a kind used for oil and 
gas pipelines is outside of the scope of the antidumping duty order.
---------------------------------------------------------------------------

    Imports of these products are currently classifiable under the 
following Harmonized Tariff Schedule (``HTS'') subheadings: 
7306.30.10.00, 7306.30.50.25, 7306.30.50.32, 7306.30.50.40, 
7306.30.50.55, 7306.30.50.85, and 7306.30.50.90. Although the HTS 
subheadings are provided for convenience and customs purposes, our 
written description of the scope of this proceeding is dispositive.

Date of Sale

    The Department normally will use the date of invoice, as recorded 
in the producer's or exporter's records kept in the ordinary course of 
business, as the date of sale, but may use a date other than the 
invoice date if the Department is satisfied that a different date 
better reflects the date on which the material terms of sale are 
established. See 19 CFR 351.401(i).

(A) SeAH

    For its home market sales, SeAH has reported the date the billing 
document is created in its accounting system as the date of sale. This 
is the date when the final price and quantity are set and is, in most 
cases, the same as the date of the shipping invoice.
    For its U.S. sales, SeAH reported the earlier of the date of 
shipment from Korea or the date of Pusan Pipe America Inc.'s (``PPA'') 
(SeAH's U.S. affiliate) invoice to the unaffiliated U.S. customer as 
the date of sale. SeAH explained that all U.S. sales are produced to 
order and, while the price is set with the customer's order, the 
quantity is subject to change between order and shipment. We are 
relying on the sale dates reported by SeAH for both home market and 
U.S. sales.

(B) HYSCO

    For its home market sales, HYSCO reported the date of sale as the 
earlier of the date of shipment from HYSCO's factory or the date on 
which HYSCO issued its tax and commercial invoice. HYSCO noted that 
quantity can change up until shipment from HYSCO's factory, and price 
can change up until HYSCO's issuance of its tax and commercial invoice.
    For its U.S. sales, HYSCO reported the date of shipment from Korea 
as the date of sale because the quantity and price for its U.S. sales 
can change up until the date of shipment from its factory in Korea. 
(Invoicing to the unaffiliated customer always occurs after shipment 
from Korea.) In support of its claimed date of sale for the U.S. 
market, HYSCO provided sales documentation regarding changes to the 
material terms of sale after order date and its quantity allowances. We 
intend to seek further information regarding HYSCO's U.S. date of sale 
for the final results, but are relying on the sale dates reported by 
HYSCO for these preliminary results.

Comparisons to Normal Value

    To determine whether SeAH's and HYSCO's sales of CWP from Korea to 
the United States were made at less than normal value (``NV''), we 
compared constructed export price (``CEP'') to NV, as described in the 
``Constructed Export Price'' and ``Normal Value'' sections of this 
notice below.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced by SeAH and HYSCO that are covered by the description 
contained in the ``Scope of the Order'' section above and were sold in 
the home market during the POR to be the foreign like product for 
purposes of determining appropriate product comparisons to U.S. sales.
    We have relied on five criteria to match U.S. sales of subject 
merchandise to comparison market sales of the foreign like product: (1) 
Grade; (2) nominal pipe size; (3) wall thickness; (4) surface finish; 
and (5) end-finish. For SeAH, we used actual pipe size in millimeters 
instead of nominal pipe size because SeAH works with actual outside 
diameter measurements in the ordinary course of business. Where there 
were no sales of identical merchandise in the comparison market made in 
the ordinary course of trade 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 above.

Level of Trade/Constructed Export Price Offset

    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 EP or CEP transaction. The LOT 
in the comparison market is the LOT of the starting-price sales or, 
when NV is based on CV, the LOT of the sales from which we derive 
selling, general and administrative (``SG&A'') expenses and profit. For 
CEP, the LOT is that of the constructed sale from the exporter to the 
affiliated importer. See 19 CFR 351.412(c)(ii). See also Micron 
Technology, Inc. v. United States, 243 F.3d 1301, 1314 (Fed. Cir. 
2001).
    Where it is not possible to make comparisons at the same LOT, the 
statute permits the Department to account for the different levels. See 
section 773(a)(7)(A) of the Act. Specifically, if the comparison market 
sales are made at multiple LOTs, and

[[Page 76371]]

the difference in LOTs 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, the Department makes an upward or downward LOT adjustment 
in accordance with section 773(a)(7)(A) of the Act. See Notice of 
Preliminary Determination of Sales at Less Than Fair Value: Light-
Walled Rectangular Pipe and Tube From Mexico, 73 FR 5515, 5522 (January 
30, 2008) (``LWR Pipe from Mexico''). Alternatively, for CEP sales, if 
the NV LOT is at a more advanced stage of distribution than the LOT of 
the CEP, but the data available do not provide an appropriate basis to 
determine a LOT adjustment, we reduce NV by the amount of indirect 
selling expenses incurred in the foreign comparison market on sales of 
the foreign like product, but by no more than the amount of the 
indirect selling expenses incurred for CEP sales. See section 
773(a)(7)(B) of the Act (the CEP offset provision) and LWR Pipe from 
Mexico, 73 FR at 5522.
    To determine whether sales are made at different LOTs, we examine 
stages in the marketing process and selling functions along the chain 
of distribution between the producer and the unaffiliated customer. 
See, e.g., Notice of Preliminary Determination of Sales at Not Less 
Than Fair Value: Polyethylene Terephthalate Film, Sheet, and Strip from 
Thailand, 73 FR 24565 (May 5, 2008); and LWR Pipe from Mexico, 
unchanged in Notice of Final Determination of Sales at Less Than Fair 
Value: Light-Walled Rectangular Pipe and Tube from Mexico, 73 FR 35649 
(June 24, 2008). In particular, we analyze whether different selling 
activities are performed, and whether any price differences (other than 
those for which other allowances are made under the Act) are shown to 
be wholly or partly due to a difference in LOT between the CEP and NV. 
In analyzing differences in selling functions, we determine whether the 
LOTs identified by the respondent are meaningful. See Antidumping 
Duties; Countervailing Duties, Final Rule, 62 FR 27296, 27371 (May 19, 
1997). If the claimed LOTs are the same, we expect that the functions 
and activities of the seller should be similar. Conversely, if a party 
claims that LOTs are different for different groups of sales, the 
functions and activities of the seller should be dissimilar. See 
Porcelain-on-Steel Cookware From Mexico: Final Results of Antidumping 
Duty Administrative Review, 65 FR 30068 (May 10, 2000), and 
accompanying Issues and Decision Memorandum at Comment 6.

(A) SeAH

    SeAH reported two channels of distribution in the comparison 
market, Korea: (1) Direct sales to unaffiliated end-users and 
distributors; and (2) sales to affiliated companies. In the U.S. 
market, SeAH reported one channel of distribution corresponding to the 
CEP sales made through its affiliated company in the United States, 
PPA. SeAH stated that its U.S. sales were made at a different, less 
advanced LOT than its comparison market sales. Because it had no 
comparison market sales that were at the same LOT as the U.S. CEP 
sales, SeAH is not seeking a LOT adjustment. Instead, it claims that a 
CEP offset is warranted.
    In evaluating SeAH's claim, we examined its activities in each 
channel of distribution relating to four different types of selling 
functions: sales process and marketing support, freight and delivery, 
inventory maintenance and warehousing, and warranty and technical 
services. Based on our analysis, we preliminarily determine that SeAH's 
selling activities in the comparison market did not vary significantly 
by channel of distribution. Therefore, we preliminary determine that 
SeAH sold at one LOT in the comparison market. We further determine 
preliminarily that SeAH sold at one LOT in the U.S. market since there 
is only one channel of distribution in this market, and the marketing 
process and selling functions are the same for all of SeAH's cutomers 
in the United States.
    We then compared the selling functions performed by SeAH for its 
U.S. sales to the selling functions performed for the single LOT in the 
comparison market. Record evidence indicates that SeAH undertakes 
significant activities in the comparison market related to the sales 
process and marketing support, as well as warehousing and warranty 
services that it does not undertake for its U.S. CEP sales. See 
Memorandum from Jennifer Meek to the File, Re: Preliminary Results 
Calculation Memorandum, dated November 30, 2011 (``SeAH Preliminary 
Sales Calculation Memo''). These differences in selling functions 
performed for comparison and U.S. market transactions indicate that 
SeAH's comparison market sales are made at a more advanced stage of 
distribution than its U.S. sales. Consequently, we preliminarily 
determine that SeAH's comparison and U.S. market sales are at different 
LOTs.

(B) HYSCO

    HYSCO reported one channel of distribution in the comparison 
market, Korea: sales directly to customers, which were unaffiliated 
distributors and both affiliated and unaffiliated end users. In the 
U.S. market, HYSCO reported two channels of distribution: (1) Sales to 
affiliate Hyundai HYSCO USA, Inc. (``HHU''), which, in turn sold the 
merchandise to unaffiliated customers in the United States; and (2) 
sales through another party to unaffiliated U.S. customers. HYSCO 
reported that the home market LOT was more advanced than the LOT for 
its U.S. sales. HYSCO is not seeking a LOT adjustment. Instead, it 
claims that a CEP offset is warranted. See HYSCO's Section A 
Questionnaire Response at A-19.
    In evaluating HYSCO's claim, we examined its activities in each 
channel of distribution relating to 24 different types of selling 
functions. Based on our analysis, we preliminarily determine that 
HYSCO's selling activities in the U.S. market did not vary 
significantly by channel of distribution. Therefore, we preliminarily 
determine that HYSCO sold at one LOT in the U.S. market. We further 
determine preliminarily that HYSCO sold at one LOT in the comparison 
market since there is only one channel of distribution in this market, 
and the marketing process and selling functions are the same for all of 
HYSCO's customers in the home market.
    We then compared the selling functions performed by HYSCO for its 
U.S. sales to the selling functions performed for the single LOT in the 
comparison market. Record evidence indicates that HYSCO undertakes 
significant activities in the comparison market in 10 of the 24 selling 
functions, including sales forecasting, strategic/economic planning, 
packing, sales/marketing support, etc. See Memorandum from Mary Kolberg 
to the File, Re: Preliminary Results Calculation Memorandum, dated 
November 30, 2011 (``HYSCO Preliminary Sales Calculation Memo''). These 
differences in selling functions performed for the comparison and U.S. 
markets indicate that HYSCO's comparison market sales are made at a 
more advanced stage of distribution than its U.S. sales. Consequently, 
we preliminarily determine that HYSCO's comparison market and U.S. 
sales are at different LOTs.
    As discussed above, the Department will make a LOT adjustment in 
these circumstances when the information exists to do so. We have found 
different

[[Page 76372]]

LOTs between the comparison and U.S. markets for SeAH and HYSCO. 
However, since there is only one LOT in the comparison market for each 
company, there is no basis upon which to determine whether there is a 
pattern of consistent price differences between LOTs in the comparison 
market. Further, we do not have information that would allow us to 
examine the price patterns of SeAH's and HYSCO's sales of other similar 
products, and there is no other record evidence upon which a LOT 
adjustment could be based. Therefore, we have not made a LOT adjustment 
for either company.
    Instead, in accordance with section 773(a)(7)(B) of the Act, we 
preliminarily determine that a CEP offset is appropriate for SeAH and 
HYSCO to reflect that their comparison market sales are at a more 
advanced stage than the LOT of their respective U.S. sales. We based 
the amount of the CEP offset on comparison market indirect selling 
expenses and limited the deduction to the amount of the indirect 
selling expenses deducted from CEP under section 772(d)(1)(D) of the 
Act. For a detailed discussion, see SeAH Preliminary Sales Calculation 
Memo and HYSCO Preliminary Sales Calculation Memo.

Constructed Export Price

    In accordance with section 772(b) of the Act, CEP is 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.

(A) SeAH

    For purposes of this review, SeAH classified all of its sales of 
CWP to the United States as CEP sales. During the POR, SeAH made sales 
in the United States through its U.S. affiliate, PPA, which then resold 
the merchandise to unaffiliated customers in the United States. We 
calculated CEP based on the packed, delivered prices to unaffiliated 
purchasers in the United States, net of billing adjustment and 
discounts. We adjusted these prices for movement expenses, including 
foreign inland freight, international freight, marine insurance, 
foreign and U.S. brokerage and handling, bill of lading charges, and 
U.S. customs duties, in accordance with section 772(c)(2)(A) of the 
Act.
    In accordance with section 772(d)(1) of the Act, we deducted from 
the starting price those selling expenses that were incurred in selling 
the subject merchandise in the United States, including imputed credit 
expenses, warranty expenses, and indirect selling expenses. We also 
made an adjustment for profit in accordance with section 772(d)(3) of 
the Act. See SeAH's Preliminary Sales Calculation Memo.

(B) HYSCO

    For purposes of this review, HYSCO classified all of its export 
sales of CWP to the United States as CEP sales. During the POR, HYSCO 
made sales in the United States through two channels, including through 
affiliate HHU and another party, which then resold the merchandise to 
unaffiliated customers in the United States. We calculated CEP based on 
the packed, delivered price to unaffiliated purchasers in the United 
States. We adjusted these prices for movement expenses, including 
foreign inland freight, international freight, marine insurance, 
foreign and U.S. brokerage and handling, and U.S. customs duties, in 
accordance with section 772(c)(2)(A) of the Act.
    In accordance with section 772(d)(1) of the Act, we deducted from 
the starting price those selling expenses that were incurred in selling 
the subject merchandise in the United States, including warranty 
expenses, imputed credit expenses, and indirect selling expenses. We 
also made an adjustment for profit in accordance with section 772(d)(3) 
of the Act. See HYSCO Preliminary Sales Calculation Memo.

Normal Value

A. Selection of Comparison Market

    To determine whether there was a sufficient volume of sales in 
Korea to serve as a viable basis for calculating NV, we compared SeAH's 
and HYSCO's volume of home market sales of the foreign like product to 
their respective U.S. sales volumes of the subject merchandise, in 
accordance with section 773(a)(1)(B) of the Act. Because the aggregate 
home market sales volumes of the foreign like product were greater than 
five percent of their aggregate U.S. sales volumes of the subject 
merchandise, we determine that the home market was viable for 
comparison purposes for both SeAH and HYSCO.

B. Affiliated Party Transactions and Arm's Length Test

    SeAH and HYSCO reported sales of the foreign like product to 
affiliated and unaffiliated customers in the comparison market. 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 the sales to affiliates were made at arm's 
length prices, we compared on a model-specific basis, the starting 
prices of sales to affiliated and unaffiliated customers net of all 
movement charges, direct selling expenses, 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 and included such sales in the calculation 
of NV. See 19 CFR 351.403(c). Conversely, where sales to the affiliated 
party did not pass the arm's length test, all sales to that affiliated 
party were excluded from the NV calculation. See Antidumping 
Proceedings: Affiliated Party Sales in the Ordinary Course of Trade, 67 
FR 69186, 69194 (November 15, 2002).

C. Cost of Production Analysis

    The Department disregarded sales below the COP in the last 
completed reviews in which SeAH and HYSCO participated. See Circular 
Welded Non-Alloy Steel Pipe from the Republic Korea: Final Results of 
the Antidumping Duty Administrative Review, 75 FR 34980 (June 21, 2010) 
and Circular Welded Non-Alloy Steel Pipe from Korea: Final Results of 
Antidumping Duty Administrative Review, 69 FR 32492 (June 10, 2004), 
respectively. Thus, in accordance with section 773(b)(2)(A)(ii) of the 
Act, there are reasonable grounds to believe or suspect that SeAH and 
HYSCO made sales of the subject merchandise in their comparison market 
at prices below the COP in the current review period. Pursuant to 
section 773(b)(1) of the Act, we initiated a COP investigation of sales 
by SeAH and HYSCO.
1. 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 selling, 
general and administrative (``SG&A'') expenses, in accordance with 
section 773(b)(3) of the Act.
    Except as noted below, we relied on the COP data submitted by HYSCO 
and SeAH in their questionnaire responses for the COP calculation.
    During the POR, HYSCO purchased hot-rolled coil from its 
affiliates. We analyzed HYSCO's affiliated transactions in accordance 
with section

[[Page 76373]]

773(f)(3) of the Act, and adjusted HYSCO's cost of manufacturing to 
reflect the higher of market or transfer price, or the affiliate's COP. 
See Memorandum from Ji Young Oh to Neal M. Halper, Director of Office 
of Accounting, ``Cost of Production and Constructed Value Calculation 
Adjustments for the Preliminary Results--Hyundai HYSCO,'' dated 
November 30, 2011.
    Based on our review of the record evidence, neither HYSCO nor SeAH 
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.
2. Test of Comparison Market Sales Prices
    As required under section 773(b)(2) of the Act, we compared the POR 
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.
3. 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 a 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.
    Our cost test for HYSCO and SeAH indicated that for home market 
sales of certain models, more than 20 percent were sold at prices below 
the COP within an extended period of time and were at prices which 
would not permit the recovery of all costs within a reasonable period 
of time. Thus, in accordance with section 773(b)(1) of the Act, we 
excluded these below-cost sales from our analysis and used the 
remaining above-cost sales to determine NV.

D. Constructed Value

    In accordance with section 773(e) of the Act, we calculated CV 
based on the sum of SeAH's and HYSCO's respective material and 
fabrication costs, SG&A expenses, profit, and U.S. packing costs. We 
calculated the COP component of CV as described above in the ``Cost of 
Production Analysis'' section of this notice. In accordance with 
section 773(e)(2)(A) of the Act, we based SG&A expenses and profit on 
the amounts incurred and realized by the respondents in connection with 
the production and sale of the foreign like product in the ordinary 
course of trade, for consumption in the foreign country.

E. Calculation of Normal Value Based on Comparison Market Prices

    We found the method that HYSCO used to calculate the rate of its 
home market short-term borrowing during the period of review did not 
properly reflect the actual rates it received in borrowing. In a 
supplemental response, HYSCO submitted an alternative calculation for 
its home market short-term borrowing rate. We have used the rate 
calculated by this alternative method to recalculate HYSCO's reported 
home market credit expenses and home market inventory carrying costs.
    For those comparison products for which there were sales at prices 
above the COP for HYSCO and SeAH, we based NV on home market prices. We 
calculated NV based on packed prices to unaffiliated customers in 
Korea, or prices to affiliated customers which were determined to be at 
arm's length (see discussion above on the arm's length test). We 
adjusted the starting price for billing adjustments and interest 
revenue (both HYSCO only) and by deducting for foreign inland freight, 
including warehousing (HYSCO only) pursuant to section 773(a)(6)(B)(ii) 
of the Act. We made adjustments for differences in packing, in 
accordance with section 773(a)(6)(A) and 773(a)(6)(B)(i) of the Act, 
and in circumstances of sale (for imputed credit and warranty expenses 
(HYSCO only)) under section 773(a)(6)(c)(iii) of the Act and 19 CFR 
351.410.
    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 products and subject merchandise. See 19 CFR 
351.411(b).

F. Price-to-CV Comparison

    Where we were unable to find a home market match of such or similar 
merchandise, in accordance with section 773(a)(4) of the Act, we based 
NV on CV. Where appropriate, we made adjustments to CV in accordance 
with section 773(a)(8) of the Act.

Currency Conversion

    Pursuant to 19 CFR 351.415 and section 773A of the Act, we made 
currency conversions based on the exchange rates in effect on the date 
of the U.S. sale, as certified by the Federal Reserve Bank. See Import 
Administration Web site at: https://ia.ita.doc.gov/exchange/.

Preliminary Results of the Review

    We preliminarily determine that a weighted-average dumping margin 
exists for the respondents for the period November 1, 2009, through 
October 31, 2010.

------------------------------------------------------------------------
                                                       Weighted -average
                Manufacturer/exporter                        margin
                                                           (percent)
------------------------------------------------------------------------
SeAH Steel Corporation...............................               2.31
Hyundai HYSCO........................................               0.59
------------------------------------------------------------------------

Public 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). Any interested party 
may request a hearing within 30 days of the publication of this notice 
in the Federal Register. See 19 CFR 351.310. If a hearing is requested, 
the Department will notify interested parties of the hearing schedule. 
Issues raised in the hearing will be limited to those raised in the 
case briefs.
    Interested parties are invited to comment on the preliminary 
results of this review. The Department will consider case briefs filed 
by interested parties within 30 days after the date of publication of 
this notice in the Federal Register. See 19 CFR 351.309(c). Interested 
parties may file rebuttal briefs, limited to issues raised in the case 
briefs. See 19 CFR 351.309(d). The Department will consider rebuttal 
briefs filed not later than five days after the time limit for filing 
case briefs. Parties

[[Page 76374]]

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).
    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 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 Rates

    The Department shall determine, and CBP shall assess, antidumping 
duties on all appropriate entries, in accordance with 19 CFR 
351.212(b)(1). The Department will issue appropriate appraisement 
instructions for the companies subject to this review directly to CBP 
15 days after the date of publication of the final results of this 
review.
    For HYSCO and SeAH, we will calculate importer-specific ad valorem 
duty assessment rates based on the ratio of the total amount of 
antidumping duties calculated for the examined sales to the total 
entered value of the sales, as reported by HYSCO and SeAH. See 19 CFR 
351.212(b)(1). 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 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) 
(``Assessment Policy Notice''). 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 that the merchandise they sold to the 
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 intermediary involved in the transaction. See Assessment 
Policy Notice for a full discussion of this clarification.

Cash Deposit Requirements

    The following deposit rates will be effective upon publication of 
the final results of this administrative review for all shipments of 
CWP 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 4.80 percent, the ``all others'' rate established 
in the LTFV investigation. See CWP Order. 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.

Notification to Interested Parties

    This notice serves as the only reminder to parties subject to 
administrative protective order (``APO'') of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with 19 CFR 351.305(a)(3). Timely written 
notification of return/destruction of APO materials or conversion to 
judicial protective order is hereby requested. Failure to comply with 
the regulations and the terms of an APO is a sanctionable violation.
    These preliminary results of review are issued and published in 
accordance with sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: November 30, 2011.
Paul Piquado,
Assistant Secretary for Import Administration.
[FR Doc. 2011-31432 Filed 12-6-11; 8:45 am]
BILLING CODE 3510-DS-P