Ferrosilicon From Brazil: Notice of Partial Termination and Preliminary Results of Antidumping Duty Administrative Review

DEPARTMENT OF COMMERCE

International Trade Administration

[A-351-820]

Ferrosilicon From Brazil: Notice of Partial Termination and

Preliminary Results of Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of Preliminary Results of Antidumping Duty

Administrative Review.

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SUMMARY: In response to timely requests for administrative review, the

Department of Commerce has conducted an administrative review of the

antidumping duty order on ferrosilicon from Brazil. Because we

determined that Companhia Brasileria Carbureto de Calcio had no

shipment of the subject merchandise, we are terminating this review

with regard to that firm. This notice of preliminary results covers one

manufacturer/exporter, Companhia de Ferro Ligas da Bahia, for the

period March 1, 1996, through February 28, 1997. The review indicates

that there was no dumping margin during this period. If these

preliminary results are adopted for purposes of the final results of

our administrative review, we will instruct the Customs Service to

assess antidumping duties of zero on entries during the period of

review. Interested parties are invited to comment on these preliminary

results. Parties who submit arguments in this proceeding are requested

to submit with the arguments (1) a statement of the issues, and (2) a

brief summary of each argument.

EFFECTIVE DATE: January 16, 1998.

FOR FURTHER INFORMATION CONTACT: Wendy Frankel or Sal Tauhidi, AD/CVD

Enforcement Group II, Office Four, Import Administration, International

Trade Administration, U.S. Department of Commerce, 14th Street and

Constitution Avenue, N.W., Washington, D.C. 20230; telephone: (202)

482-5849 or (202) 482-4851, respectively.

SUPPLEMENTAL INFORMATION:

The Applicable Statute and Regulations

Unless otherwise indicated, all citations to the Tariff Act of

1930, as amended (the Act) are references to the provisions effective

January 1, 1995, the effective date of the amendments to the Act by the

Uruguay Round Agreements Act (URAA). In addition, unless otherwise

indicated, all references to the Department of Commerce's (the

Department's) regulations are to the regulations as codified at 19 CFR

Part 353 (1997). Where appropriate, we have cited the Department's new

regulations, codified at 19 CFR Part 351 (62 FR 27296, May 19, 1997).

While not binding on this review, the new regulations serve as a

restatement of the Department's policies.

Background

On March 7, 1997 (62 FR 10521), the Department published in the

Federal Register a notice of ``Opportunity to Request an Administrative

Review'' of the antidumping duty order on Ferrosilicon from Brazil

covering the period March 1, 1996, through February 28, 1997. In

accordance with 19 CFR 353.22(a)(2), in March 1997, Companhia de Ferro

Ligas da Bahia (Ferbasa), Companhia Brasileira Carbureto De Calcio

(CBCC), and Companhia Ferroligas Minas Gerais (Minasligas) requested

that the Department conduct an administrative review of their

respective shipments of ferrosilicon to the United States during this

period. On April 24, 1997, the Department published a notice of

initiation of administrative review (62 FR 19988). The Department is

now conducting this administrative review in accordance with section

751 of the Act.

On May 14, 1997, the Department issued an antidumping duty

questionnaire to Ferbasa, CBCC, and Minasligas. On June 20, 1997, CBCC

submitted a letter to the Department stating that it had no shipments

or sales of the subject merchandise to the United States during the

period of review (POR). On June 25, 1997, we requested the Customs

Service (Customs) to confirm that CBCC had no shipments of the subject

merchandise during the POR. On June 27, 1997, Customs did so.

Therefore, because we determined that CBCC had no shipments of the

subject merchandise during the POR, we are terminating this review with

respect to CBCC. Further, on July 7, 1997, Minasligas requested that it

be allowed to withdraw its request for review and that the review be

terminated pursuant to 19 CFR 353.22(a)(5). On July 29, 1997, the

Department published a partial termination notice of the administrative

review on ferrosilicon from Brazil with respect to Minasligas. (See

Ferrosilicon From Brazil: Partial Termination of Antidumping Duty

Administrative Review (62 FR 40501) (July 29, 1997).)

Ferbasa submitted its response to the questionnaire on July 11,

1997. The Department issued supplemental questionnaires on August 13,

1997, and October 14, 1997. We received Ferbasa's

[[Page 2662]]

responses to the supplemental questionnaires on September 2, 1997, and

October 24, 1997, respectively. Under section 751(a)(3)(A) of the Act,

the Department may extend the deadline for completion of a preliminary

determination if it determines that it is not practicable to complete

the review within the statutory time limit. On September 15, 1997, the

Department published an extension of the time limits for the

preliminary results. (See Ferrosilicon from Brazil: Extension of Time

Limits of Antidumping Duty Administrative Review, (62 FR 48218).)

Verification

In accordance with section 782(i) of the Act, we verified the sales

and cost questionnaire responses of Ferbasa from November 3, 1997 to

November 11, 1997. We conducted verification of home market and U.S.

sales information provided by Ferbasa using standard verification

procedures, including on-site inspection of the company's sales and

production facility, the examination of relevant sales and financial

records, and original documentation containing relevant information.

Scope of Review

The merchandise subject to this review is ferrosilicon, a ferro

alloy generally containing, by weight, not less than four percent iron,

more than eight percent but not more than 96 percent silicon, not more

than 10 percent chromium, not more than 30 percent manganese, not more

than three percent phosphorous, less than 2.75 percent magnesium, and

not more than 10 percent calcium or any other element. Ferrosilicon is

a ferro alloy produced by combining silicon and iron through smelting

in a submerged-arc furnace. Ferrosilicon is used primarily as an

alloying agent in the production of steel and cast iron. It is also

used in the steel industry as a deoxidizer and a reducing agent, and by

cast iron producers as an inoculant.

Ferrosilicon is differentiated by size and by grade. The sizes

express the maximum and minimum dimensions of the lumps of ferrosilicon

found in a given shipment. Ferrosilicon grades are defined by the

percentages by weight of contained silicon and other minor elements.

Ferrosilicon is most commonly sold to the iron and steel industries in

standard grades of 75 percent and 50 percent ferrosilicon. Calcium

silicon, ferrocalcium silicon, and magnesium ferrosilicon are

specifically excluded from the scope of this review. Calcium silicon is

an alloy containing, by weight, not more than five percent iron, 60 to

65 percent silicon, and 28 to 32 percent calcium. Ferrocalcium silicon

is a ferro alloy containing, by weight, not less than four percent

iron, 60 to 65 percent silicon, and more than 10 percent calcium.

Magnesium ferrosilicon is a ferro alloy containing, by weight, not less

than four percent iron, not more than 55 percent silicon, and not less

than 2.75 percent magnesium. Ferrosilicon is currently classifiable

under the following subheadings of the Harmonized Tariff Schedule of

the United States (HTSUS): 7202.21.1000, 7202.21.5000, 7202.21.7500,

7202.21.9000, 7202.29.0010, and 7202.29.0050. The HTSUS subheadings are

provided for convenience and customs purposes. Our written description

of the scope of this review is dispositive.

Ferrosilicon in the form of slag is included within the scope of

this order if it meets, in general, the chemical content definition

stated above and is capable of being used as ferrosilicon. Parties that

believe their importations of ferrosilicon slag do not meet these

definitions should contact the Department and request a scope

determination.

Product Comparisons

In accordance with section 771(16) of the Act, we considered all

products produced by Ferbasa, covered by the description in the ``Scope

of the Review'' section, above, and sold in the home market during the

POR, to be foreign like products for purposes of determining

appropriate product comparisons to the U.S. sale. During the month of

the U.S. sale, Ferbasa had home market sales of identical merchandise;

therefore, pursuant to section 771(16) of the Act we used those sales

for comparison purposes and made no adjustments for differences in

merchandise.

Level of Trade

In accordance with section 773(a)(1)(B) of the Act, to the extent

practicable, we determine normal value (NV) based on sales in the

comparison market at the same level of trade (LOT) as the export price

(EP) or constructed export price (CEP) transaction. The NV LOT is that

of the starting-price sales in the comparison market or, when NV is

based on constructed value (CV), that of the sales from which we derive

selling, general and administrative (SG&A) expenses and profit. For EP,

the U.S. LOT is also the level of the starting-price sale, which is

usually from exporter to importer. For CEP, it is the level of the

constructed sale from the exporter to the importer.

To determine whether NV sales are at a different LOT than EP or

CEP, we examine stages in the marketing process and selling functions

along the chain of distribution between the producer and the

unaffiliated customer. If the comparison-market sales are at a

different LOT, and the difference affects price comparability, as

manifested in a pattern of consistent price differences between the

sales on which NV is based and comparison-market sales at the LOT of

the export transaction, we make an LOT adjustment under section

773(a)(7)(A) of the Act. Finally, 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 the 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 (November 19, 1997).

In implementing these principles in this review, we obtained

information from Ferbasa regarding the marketing stages involved in the

reported home market and U.S. sales, including a description of the

selling activities performed by Ferbasa for each channel of

distribution. Pursuant to section 773(a)(1)(B)(i) of the Act and the

SAA at 827, in identifying levels of trade for EP and home market sales

we considered the selling functions reflected in the starting prices

before any adjustments. Ferbasa made only one U.S. sale during the

period of review, which was to an unaffiliated reseller in the U.S.

market. It made sales to unaffiliated resellers and to steel producers

in the home market. The selling functions for the U.S. sale and for all

home market sales are almost identical. The selling functions include

invoicing, order acknowledgment, order processing, quality control,

marketing, and price negotiation. With regard to the U.S. sale, Ferbasa

also incurred freight expenses for movement of the subject merchandise

from the factory to the port of embarkation. This does not represent a

significant difference in selling functions. Thus, based on our

analysis of the selling functions performed by Ferbasa, we conclude

that a single level of trade exists in each market and that home market

sales and the U.S. sale were all made at the same level of trade.

Therefore, we have not made a level of trade adjustment because the

price comparison is at the same level of trade and an adjustment

pursuant to section

[[Page 2663]]

773(a)(7)(A) of the Act is not appropriate.

Export Price

We calculated EP, in accordance with subsections 772(a) and (c) of

the Act, because the subject merchandise was sold directly to the first

unaffiliated purchaser in the United States prior to importation and

constructed export price was not otherwise warranted based on the facts

of record. We calculated EP based on the packed FOB prices to Ferbasa's

unaffiliated customer in the United States. In accordance with section

772(c)(2)(A) of the Act, we made deductions, where appropriate, for

foreign inland freight from the plant to the port and for brokerage and

handling, because these expenses were incident to bringing the subject

merchandise from the original place of shipment in the exporting

country to the place of delivery. No other adjustments to EP were

claimed or allowed.

Normal Value

Viability

In order to determine whether there was a sufficient volume of

sales in the home market to serve as a viable basis for calculating NV,

we compared Ferbasa's volume of home market sales of foreign like

product to the volume of U.S. sales of the subject merchandise in

accordance with section 773(a)(1)(C)(ii) of the Act. Since the

aggregate volume of home market sales of the foreign like product was

greater than five percent of the aggregate volume of U.S. sales of the

subject merchandise, we determined that the home market was viable for

Ferbasa. Therefore, in accordance with section 773(a)(1)(B)(i) of the

Act, we based NV on the prices at which the foreign like products were

first sold for consumption in the exporting country. We calculated NV

as noted in the ``Price-to-Price Comparisons'' section of this notice,

below.

Cost of Production (COP) Analysis

Because we disregarded sales below the COP in the last completed

segment of the proceeding for Ferbasa (i.e., Ferrosilicon from Brazil;

Final Results of Administrative Review (61 FR 59407) (November 22,

1996)), we had reasonable grounds to believe or suspect that sales of

the foreign product under consideration for the determination of NV in

this review may have been made at prices below the COP, as provided by

section 773(b)(2)(A)(ii) of the Act. Therefore, pursuant to section

773(b)(1) of the Act, we initiated a COP investigation of sales by

Ferbasa in the home market.

1. Calculation of COP

In accordance with section 773(b)(3) of the Act, we calculated the

COP based on the sum of Ferbasa's cost of materials and fabrication

employed in producing the foreign like product, plus amounts for

general and administrative expenses (G&A). We adjusted Ferbasa's

reported costs to calculate the cost of manufacturing for the months

corresponding to the company's sales reporting period. We further

adjusted Ferbasa's reported net interest expense calculations to

account for certain items of income or expense that were improperly

excluded or included in the company's calculation.

2. Net Home Market Prices for Comparison to COP

We calculated net price by reducing the gross unit price by amounts

for IPI and ICMS taxes, indirect selling expenses, home market packing

expenses, direct selling expenses, and billing adjustments. We also

made upward adjustments to the home market prices for interest revenue

and packing revenue earned by Ferbasa. We adjusted Ferbasa's reported

home market packing costs for errors found at verification.

3. Test of Home Market Prices

We used Ferbasa's weighted-average COP, as adjusted (see above),

for the period September 1996, through February 1997. We compared the

weighted-average COP figure to the net home-market sales prices (see

above) of the foreign like product as required under section 773(b) of

the Act. In determining whether to disregard home market sales made at

prices below the COP, we examined whether (1) within an extended period

of time, such sales were made in substantial quantities, and (2) such

sales were made at prices which permitted the recovery of all costs

within a reasonable period of time. On a product-specific basis, we

compared the COP to the home market prices (which did not include value

added taxes) (VAT) less any applicable movement charges, discounts, and

rebates. Since the COP did not contain VAT, for purposes of our sales-

below-cost analysis, we used home market prices which were exclusive of

VAT.

4. Results of the COP Test

In accordance with section 773(b)(2)(C), where less than 20 percent

of Ferbasa's sales of ferrosilicon were at prices below 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 Ferbasa's sales during the

POR were at prices less than the COP, we determined such sales to have

been made in ``substantial quantities'' within an extended period of

time in accordance with section 773(b)(2)(B) of the Act, and not at

prices which would permit recovery of all costs within a reasonable

period of time, in accordance with section 773(b)(2)(D) of the Act.

Therefore, we disregarded such below-cost sales of Ferbasa.

Fair Value Comparisons

To determine whether sales of ferrosilicon by Ferbasa to the United

States were made at less than fair value, we compared the EP to the NV,

as described in the ``Export Price'' and ``Normal Value'' sections of

this notice. In accordance with section 777A(d)(2) of the Act, we

calculated a monthly weighted-average price for NV and compared this to

the U.S. transaction.

Price to Price Comparisons

We based NV on the price at which the foreign like product was

first sold for consumption in the exporting country, in the usual

commercial quantities and in the ordinary course of trade, and at the

same level of trade as the export price, as defined by section

773(a)(1)(B)(i) of the Act. We increased NV by U.S. packing costs in

accordance with section 773(a)(6)(A) and reduced it by home market

packing costs and ICMS and IPI taxes in accordance with 773(a)(6)(B)

(i) and (iii) of the Act. We adjusted Ferbasa's reported U.S. and home

market packing costs to correct for errors found at verification. In

addition, we increased NV for packing revenue and interest revenue

earned by Ferbasa and decreased NV for billing adjustments reported by

Ferbasa. We made a circumstance of sale adjustment for credit expenses

under 773(a)(6)(C)(iii). Further, in accordance with 19 CFR

353.56(a)(2), we made an offset to NV for U.S. commissions. No other

adjustments to NV were claimed or allowed.

Currency Conversion

We made currency conversions in accordance with section 773(A) of

the Act. Currency conversions were made based on the rates certified by

the Federal Reserve Bank. Section 773(A) directs the Department to use

a daily exchange rate to convert foreign currencies into U.S. dollars

unless the daily rate involves a ``fluctuation.'' It is our practice to

find that a fluctuation exists when the daily exchange rate differs

from a benchmark rate by 2.25 percent. See Preliminary Results of

Antidumping Duty Administrative Review: Certain Welded Carbon Steel

[[Page 2664]]

Pipe and Tube from Turkey (61 FR 35188, 35192) (July 5, 1996). The

benchmark rate is defined as the rolling average of the rates for the

past 40 business days.

Preliminary Results of the Review

As a result of this review, we preliminarily determine that the

weighted-average dumping margin for Ferbasa is zero percent for the

period March 1, 1996, through February 28, 1997.

Parties to the proceeding may request disclosure within 5 days of

the date of publication of this notice. Any interested party may

request a hearing within 10 days of the date of publication. Any

hearing, if requested, will be held 44 days after the publication of

this notice, or the first workday thereafter. Interested parties are

invited to comment on the preliminary results. Parties who submit

arguments in this proceeding are requested to submit with each

argument: (1) A statement of the issue and (2) a brief summary of the

argument. All case briefs must be submitted within 30 days of the date

of publication of this notice. Rebuttal briefs, which are limited to

issues raised in the case briefs, may be filed not later than 37 days

after the date of publication. The Department will publish a notice of

the final results of this administrative review, which will include the

results of its analysis of issues raised in any such written comments

within 120 days from the publication of these preliminary results.

The Department shall determine, and Customs shall assess,

antidumping duties on all appropriate entries. Upon completion of this

review, the Department will issue appraisement instructions directly to

Customs. The final results of this review shall be the basis for the

assessment of antidumping duties on entries of merchandise covered by

the determination and for future deposits of estimated duties. For duty

assessment purposes, because this review covers only one importer, we

will divide the total dumping margin (calculated as the difference

between NV and EP) by the total number of metric tons imported. We will

direct Customs to assess the resulting per-metric ton dollar amount

against each metric ton of subject merchandise entered by the importer

during the POR. Furthermore, the following deposit requirements will be

effective upon completion of the final results of this administrative

review for all shipments of ferrosilicon from Brazil entered, or

withdrawn from warehouse, for consumption on or after the publication

date of the final results of this administrative review, as provided by

section 751(a)(1) of the Act: (1) The cash deposit rate for Ferbasa

will be the rate established in the final results of this

administrative review, except if the rate is less than 0.5 percent, ad

valorem and, therefore, de minimis within the meaning of 19 CFR 353.6,

the cash deposit rate will be zero; (2) for merchandise exported by

manufacturers or exporters not covered in this review but covered in

the original less than fair value (LTFV) investigation or a previous

review, the cash deposit rate will continue to be the company-specific

rate published in the most recent period; (3) if the exporter is not a

firm covered in this review, a previous review, or the LTFV

investigation, but the manufacturer is, the cash deposit rate will be

the rate established for the most recent period for the manufacturer of

the merchandise; (4) if neither the exporter nor the manufacturer is a

firm covered in this or any previous reviews, the cash deposit rate

will be 35.95 percent, the ``All Others'' rate made effective by the

antidumping duty order (59 FR 11769, March 14, 1994) and; (5)

consistent with our practice in previous reviews of this order, for

those companies that did not have shipments of the subject merchandise

during the POR but which had previously been reviewed or investigated,

their cash deposit rate will continue to be the company-specific rate

published for the most recently reviewed period. These requirements,

when imposed, shall remain in effect until publication of the final

results of the next administrative review.

This notice serves as a preliminary reminder to importers of their

responsibility under 19 CFR 353.26 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.

This administrative review and notice are in accordance with

section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR 353.22.

Dated: January 12, 1998.

Robert S. LaRussa,

Assistant Secretary for Import Administration.

[FR Doc. 98-1157 Filed 1-15-98; 8:45 am]

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