Carbon Steel Wire Rope From Mexico: Preliminary Results of Antidumping Duty Administrative Review

DEPARTMENT OF COMMERCE

International Trade Administration

[A-201-806]

Carbon Steel Wire Rope From Mexico: 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: The Department of Commerce (``the Department'') is conducting

an administrative review of the antidumping duty order on carbon steel

wire rope from Mexico in response to requests by respondent, Aceros

Camesa S.A. de C.V. (``Camesa''), and petitioner, the Committee of

Domestic Steel Wire Rope and Specialty Cable Manufacturers (``the

Committee''). This review covers exports of subject merchandise to the

United States during the period March 1, 1997 through February 28,

1998.

We have preliminarily determined that sales have not been made

below normal value (``NV''). If these preliminary results are adopted

in our final results, we will instruct the U.S. Customs Service to

liquidate appropriate entries without regard to antidumping duties.

Interested parties are invited to comment on these preliminary results.

Parties who submit comments are requested to submit with each comment a

statement of the issue and a brief summary of the comment.

EFFECTIVE DATE: March 8, 1999.

FOR FURTHER INFORMATION CONTACT: Mark Hoadley, (202) 482-4106, Laurel

LaCivita, (202) 482-4236, or Maureen Flannery, (202) 482-3020, AD/CVD

Enforcement, Import Administration, International Trade Administration,

U.S. Department of Commerce, 14th Street and Constitution Avenue, NW,

Washington DC 20230.

Applicable Statute and Regulations

Unless otherwise stated, all citations to the statute are

references to the provisions effective January 1, 1995, the effective

date of the amendments made to the Tariff Act of 1930 (the Act) by the

Uruguay Round Agreements Act. In addition, unless otherwise stated, all

citations to the Department's regulations are references to the

regulations as codified at 19 CFR Part 351 (April 1998).

SUPPLEMENTARY INFORMATION:

Background

The Department published in the Federal Register the antidumping

duty order on steel wire rope from Mexico on March 25, 1993 (58 FR

16173). On March 11, 1998 we published in the Federal Register (63 FR

11868) a notice of opportunity to request an administrative review of

the antidumping duty order on steel wire rope from Mexico covering the

period March 1, 1997 through February 28, 1998.

In accordance with 19 CFR 351.213(b)(2), Camesa requested that we

conduct an administrative review of Camesa's sales. The Committee also

requested a review of Camesa's sales, in accordance with 19 CFR

351.213(b)(1). We published a notice of initiation of this antidumping

duty administrative review on April 24, 1998 (63 FR 20378).

On May 22, 1998, Camesa requested that it be allowed to limit its

sales reporting to sales involving identical or nearly identical

merchandise. This request was opposed by the Committee in a letter

dated June 19, 1998, but was granted by the Department on June 24,

1998. On June 26, 1998, the Committee submitted a letter objecting to

the Department's decision. On September 25, 1998, the Department issued

an amendment to its decision, expanding Camesa's reporting requirements

while still allowing some limitation to the sales reported. For further

information, see the ``Product Comparisons'' section below.

On September 1, 1998, the Department, in accordance with section

773(b)(2)(A)(ii), initiated an investigation of sales below cost. The

Department determined to initiate this inquiry because, during the

first administrative review of this proceeding, the Department

disregarded some of Camesa's below-cost sales. The final results of the

first administrative review were published on September 2, 1998 (63 FR

46753). We received cost data from Camesa on October 21, 1998.

During this review, the Department did not conduct a verification

of the information provided by Camesa.

Scope of the Review

The product covered by this review is carbon steel wire rope. Steel

wire rope encompasses ropes, cables, and cordage of iron or carbon

steel, other than stranded wire, not fitted with fittings or made up

into articles, and not made up of brass plated wire. Imports of these

products are currently classifiable under the following Harmonized

Tariff Schedule (HTS) subheadings: 7312.10.9030, 7312.10.9060 and

7312.10.9090.

Excluded from this review is stainless steel wire rope, which is

classifiable under the HTS subheading 7312.10.6000, and all forms of

stranded wire, with the following exception.

Based on the affirmative final determination of circumvention of

the antidumping duty order, 60 FR 10831 (Feb. 28, 1995), the Department

has determined that steel wire strand, when manufactured in Mexico by

Camesa and imported into the United States for use in the production of

steel wire rope, falls within the scope of the antidumping duty order

on steel wire rope from Mexico. Such merchandise is currently

classifiable under subheading 7312.10.3020 of the HTS.

Although HTS subheadings are provided for convenience and Customs

purposes, the written description of the scope of this order remains

dispositive.

This review covers one manufacturer and exporter, Camesa, and the

period March 1, 1997 through February 28, 1998.

Product Comparisons

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

products produced by Camesa covered by the description in the ``Scope

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

period of review (POR) to be foreign like products for the purposes of

determining appropriate

[[Page 10980]]

product comparisons with U.S. sales. In the Product Concordance section

(Appendix V) of the questionnaire, we provided the following hierarchy

of product characteristics to be used for reporting identical and most

similar comparisons of merchandise: (1) Type of steel wire (finishing

type); (2) diameter of wire rope; (3) type of core; (4) class of wire

rope; (5) grade of steel; (6) number of wires per strand; (7) design of

strands; and (8) lay of rope.

Camesa requested that we limit its reporting of home market sales

of steel wire rope during the POR because it made contemporaneous sales

of models of rope in its home market that were identical to all of its

models sold in the United States. Thus, it argued, the Department could

conduct its analysis with these identical matches alone, and any other

reported sales would be superfluous. We told Camesa that it could limit

its reporting of home market sales to identical and a range of similar

foreign like products sold during the POR, but that we might, at a

later date, require the reporting of additional home market sales at

short notice.\1\ Petitioners objected, both before and after our

decision, arguing that allowing limited reporting would prevent the

identification of all possible matches of home market sales to U.S.

sales. We later requested that Camesa expand its home market sales and

cost reporting to include information on all models of steel wire rope

belonging to the classes of rope sold in the United States. See

memorandum to the file, dated September 25, 1998.

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\1\ Specifically, we originally asked for sales of all

``merchandise that is: (1) identical to the U.S. product; or (2)

that is identical except that the merchandise is in the millimeter

size just above or just below the size of the U.S. merchandise; and/

or (3) that is identical to the U.S. product with respect to all

product characteristics other than wire lay.'' See letter from

Edward Yang, dated June 24, 1998.

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United States Price

We based United States price on export price (EP), as defined in

section 772(a) of the Act, because the merchandise was sold directly by

the exporter to unaffiliated U.S. purchasers prior to the date of

importation, and because constructed export price was not indicated by

other facts of record.

The Department calculated EP for Camesa based on packed, delivered

prices to customers in the United States. We made deductions, where

applicable, for domestic and foreign inland freight expenses, inland

insurance, U.S. customs duties, and brokerage and handling in

accordance with section 772(c)(2)(A). We added to U.S. price an amount

for duty drawback received by Camesa.

Normal Value

Based on a comparison of the aggregate quantity of home market and

U.S. sales, we determined, pursuant to section 773(a)(1)(B) of the Act,

that the quantity of foreign like product sold in the home market was

sufficient to permit a proper comparison with sales of the subject

merchandise to the United States. Therefore, in accordance with section

773(a)(1)(B)(i) of the Act, we based NV on the price (exclusive of

value-added tax (VAT)) at which the foreign like product was first sold

for consumption in the home market, in the usual commercial quantities,

and in the ordinary course of trade. Camesa made sales of subject

merchandise both to unaffiliated and affiliated home market customers.

None of the sales used for matches were sales to affiliated parties.

Therefore, none of these sales were used in the margin calculation.

Camesa originally submitted its home market sales database on July

7, 1998. In response to our supplemental questionnaire, Camesa

resubmitted the database on October 20, 1998. In our supplemental

questionnaire we asked Camesa to revise its reporting of its database

in two ways: (1) Expand its sales reporting as described above in the

``Product Camparisons'' section of this Notice; and (2) revise its home

market database to include additional details regarding the physical

characteristics of each product. We did not ask Camesa to recalculate

any of the figures reported in the database. The October 20, 1998

submission, however, contained numerous discrepancies with data that

had already been reported in the July 7th submission.

Because sufficient sales of identical merchandise reported in the

original, July 7th submission, were found to be above cost, we did not

need to rely on sales of similar merchandise reported in the October

20th submission in order to calculate a margin. Therefore, it was not

necessary to rely on the expanded sales reporting of the October 20th

database.

Because we did not need the additional sales reported in the

October 20th database and because that database contained changes not

requested by the Department,\2\ we relied solely on the July 7th

database for our calculations. We relied on the product characteristics

reported in Appendix SB-4 of Camesa's October 20th submission to

confirm that the home market products reported in the July 7th

submission were in fact identical to those products sold to the United

States.

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\2\ Section 351.301(b)(2) provides that with respect to

administrative reviews, submission of unsolicited factual

information is due no later than 140 days after the last day of the

anniversary month. Included within respondents submission of October

20 was additional information not requested by the Department.

Because this information was not requested and was untimely we

rejected it.

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Cost of Production Analysis

Section 773(b)(1) requires the Department to conduct a sales-below-

cost investigation if it has reasonable grounds to believe or suspect

sales below cost in the respondent's home market. According to section

773(b)(2)(A)(ii) of the Act, there are reasonable grounds to believe or

suspect that sales in the home market have been made at below cost if

sales were disregarded in a previous administrative review for having

been at prices below cost. Therefore, because some of Camesa's home

market sales were excluded from the margin calculation in the last

review, after having been found to be at prices below cost, Carbon

Steel Wire Rope from Mexico, Final Results of Antidumping Duty

Administrative Review, 63 FR 46753 (Sept. 2, 1998), the Department is

required to conduct a sales-below-cost investigation before determining

a margin in this review. Accordingly, we requested and obtained from

Camesa the cost data necessary to determine whether below-cost home

market sales occurred during the current POR. Before making any NV

comparisons for Camesa, we conducted the cost of production (COP)

analysis described below.

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

weighted-average COP for each model sold in the home market based on

the sum of Camesa's cost of materials and fabrication for the foreign

like product (i.e., cost of manufacturing (COM)), plus amounts for home

market general and administrative expenses (GNA), interest expenses,

and indirect selling expenses. We relied on the COP data submitted by

Camesa in its cost questionnaire response.

Camesa submitted cost data for each model reported for each month

of the review period. For each model, we calculated a single weighted-

average figure by weighting monthly COMs by the amount produced in each

month.

We compared the weighted-average COPs for Camesa to home market

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

the Act, in order to determine whether these sales had been made at

prices below cost. On a product-specific basis, we compared COPs to

home market prices, less discounts, movement expenses, direct selling

expenses, and packing costs.

[[Page 10981]]

In determining whether to disregard home market sales made at

prices below cost, we examined whether such sales were made: (1) Within

an extended period of time in substantial quantities; and (2) at prices

which permitted the recovery of all costs within a reasonable period of

time in the normal course of trade, in accordance with sections

773(b)(1)(A) and (B) of the Act. In accordance with section

773(b)(2)(C), where 20 percent or more of home market sales during the

POR of a particular model were made at prices below cost we disregard

the below-cost sales for the model because the sales were made in

substantial quantities within an extended period and at prices that

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.

When making price comparisons with U.S. sales, in accordance with

section 771(16) of the Act, the Department considers all products sold

in the home market within the ``Scope of Review'' and in the ordinary

course of trade. If sales of identical merchandise in the home market

are disregarded because they are sold below cost, or because they are

otherwise not made in the ordinary course of trade, we compare U.S.

sales to home market sales of the most similar foreign like products

made in the ordinary course of trade. Product similarity is based on

the characteristics listed in Sections B and C of our antidumping

questionnaires. See also the section entitled ``Product Comparisons''

in this Notice.

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 U.S. transaction. The NV LOT is

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

is based on constructed value, that of the sales from which we derive

selling, general and administrative 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 a 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 NV and CEP levels 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 (November 19, 1997).

Camesa did not claim a LOT adjustment; however, we requested

information concerning Camesa's distribution system, including classes

of customers, selling functions, and selling expenses, to determine

whether such an adjustment was necessary. Camesa reported that all

sales to the United States during the POR were to distributors, and

sales in the comparison market, the home market in this case, were to

industrial end users and distributors. After reviewing Camesa's

response to our questions involving its sales functions in both

channels of distribution in its home market and the United States, we

preliminarily determine that sales in the home market and sales in the

United States are at the same LOT, and that no adjustment is warranted.

See Memorandum to the File (``Analysis Memo''), dated March 2, 1999.

Price-to-Price Comparisons

Pursuant to section 777A(d)(2), we compared the EPs of individual

transactions to the monthly weighted-average prices (NV) of sales of

the foreign like product made in the ordinary course of business. We

based NVs on packed, delivered prices to unaffiliated purchasers in the

home market. We made adjustments, where applicable, in accordance with

section 773(a)(6) of the Act. Where applicable, we made adjustments to

home market prices for discounts and inland movement expenses. We also

made circumstance-of-sale adjustments for differences in credit and

warranty expenses, pursuant to section 773(a)(6)(C)(iii) of the Act, by

adding to NVs the amounts of U.S. credit and warranty expenses for each

U.S. sale and subtracting the home market credit and warranty expenses.

Similarly, in order to adjust for differences in packing expenses

between the two markets, we increased home market price by U.S. packing

costs and reduced it by home market packing costs. Prices were reported

net of VAT and, therefore, no deduction for VAT was necessary.

Sales of Strand to a U.S. Affiliate

Pursuant to the affirmative final determination of circumvention of

this antidumping duty order (see Steel Wire Rope from Mexico:

Affirmative Final Determination Circumvention of Antidumping Duty

Order, 60 FR 10831 (Feb. 28, 1995)), steel wire strand, when

manufactured in Mexico by Camesa and imported into the United States

for use in the production of steel wire rope, falls within the scope of

the antidumping duty order on steel wire rope from Mexico.

In its October 20, 1998 supplemental questionnaire response, Camesa

reported that during the POR all of its exports of steel wire strand to

the United States were made to its U.S. subsidiary, Camesa, Inc. These

strands consisted of three product types: prestressed concrete strand,

post-tension tendon, and oilfield strands (DYCAM and swab lines).

Camesa reports that these strands are not used by Camesa Inc. in the

manufacture of steel wire rope and that they fall outside the scope of

the circumvention order; thus we have preliminarily determined that

they do not fall within the types of steel wire rope strand covered by

the 1995 circumvention determination.

Preliminary Results of the Review

As a result of our comparison of EPs and NVs, we preliminarily

determine that the following weighted-average dumping margin exists:

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

Weighted-

average

Exporter/manufacturer margin

percentage

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

Aceros Camesa S.A. de C.V.................................. 0.00

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Parties to the proceeding may request disclosure within 5 business

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

may request a hearing within 30 days of publication. Pursuant to 19 CFR

351.310(d), any hearing, if requested, will be held 37 days after the

publication of this notice, or the first workday thereafter. Interested

parties may submit case briefs within 30 days of the date of

publication of this notice. Rebuttal briefs, which must be limited to

issues raised in the case briefs, may be filed not later than 35 days

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

final results of this administrative review, which will include the

results of its analysis of issues raised in any such comments, not

later than 120 days after the date of publication of this notice.

[[Page 10982]]

Upon issuance of the final results of review, the Department shall

determine, and the Customs Service shall assess, antidumping duties on

all appropriate entries. If these preliminary results are adopted in

our final results, we will instruct the U.S. Customs Service not to

assess antidumping duties on the merchandise subject to review. Upon

completion of this review, the Department will issue appraisement

instructions directly to the Customs Service.

Furthermore, the following deposit rates will be effective upon

publication of the final results of this administrative review for all

shipments of steel wire rope products from Mexico entered, or withdrawn

from warehouse, for consumption on or after the publication date, as

provided for by section 751(a)(2)(c) of the Act: (1) the cash deposit

rate for the reviewed company will be the rate established in the final

results of this review; (2) for merchandise exported by manufacturers

or exporters not covered in this review but covered in the original

investigation of sales at less than fair value (LTFV) or a previous

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

published for the most recent period; (3) if the exporter is not a firm

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

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

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

the merchandise; and (4) for all other producers and/or exporters of

this merchandise, the cash deposit rate shall be 111.68 percent, the

``all others'' rate established in the LTFV investigation (58 FR 7531,

February 8, 1993).

These deposit rates, when imposed, shall remain in effect until

publication of the final results of the next administrative review.

This notice also serves as a preliminary reminder to importers of

their responsibility under 19 CFR 351.402(f) to file a certificate

regarding the reimbursement of antidumping duties prior to liquidation

of the relevant entries during this review period. Failure to comply

with this requirement could result in the Secretary's presumption that

reimbursement of antidumping duties occurred and the subsequent

assessment of double antidumping duties.

This administrative review and notice are issued and published in

accordance with sections 751(a)(1) of the Act (19 U.S.C. 1675(a)) and

19 CFR 351.213.

Dated: February 26, 1999.

Robert S. LaRussa,

Assistant Secretary for Import Administration.

[FR Doc. 99-5629 Filed 3-5-99; 8:45 am]

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