Light-Walled Rectangular Pipe and Tube from Turkey; Notice of Preliminary Results of Antidumping Duty Administrative Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

In response to a request from Noksel Celik Boru Sanayi A.S., (Noksel), the Department of Commerce (the Department) is conducting an administrative review of the antidumping duty order on light-walled rectangular pipe and tube from Turkey. Atlas Tube, Inc. and Searing Industries, Inc. are petitioners in this case. The review covers exports of the subject merchandise to the United States produced and exported by Noksel. The period of review (POR) is May 1, 2009, through April 30, 2010.

We preliminarily find that Noksel did not make sales at less than normal value (NV) during the POR. If these preliminary results are adopted in our final results of this review, we will instruct U.S. Customs and Border Protection (CBP) to assess appropriate antidumping duties on any entries made by Noksel during the POR and to set the cash deposit rate for Noksel to zero.

DATES:

Effective Date: June 8, 2011

FOR FURTHER INFORMATION CONTACT:

Tyler Weinhold or Robert James, 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) 482-1121 or (202) 482-0649, respectively.

SUPPLEMENTARY INFORMATION:

Background

The Department published the antidumping duty order on light-walled rectangular ripe and tube from Turkey on May 30, 2008. See Notice of Antidumping Duty Order: Light-Walled Rectangular Pipe and Tube from Turkey, 73 FR 31065 (May 30, 2008). On May 3, 2010, the Department published the notice of opportunity to request an administrative review of light-walled rectangular pipe and tube from Turkey for the period January 30, 2009, through April 30, 2010. See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity To Request Administrative Review, 75 FR 23236 (May 3, 2010)

On May 28, 2010, Noksel requested an administrative review for this period. On June 30, 2010, the Department published in the Federal Register a notice of initiation of this antidumping duty administrative review. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Requests for Revocation in Part, 75 FR 37759 (June 30, 2010). On July 15, 2010, the Department issued its antidumping questionnaire to Noksel.

As discussed in detail, below, on August 9, 2010, Noksel submitted a letter requesting that the reporting period be modified to cover only the period of October 1, 2009, through April 30, 2010, and that it be excused from reporting certain home market sales of “second quality” merchandise for which Noksel claimed it lacked sufficient records to allow it to respond fully to the Department's questionnaire or to identify foreign like product. On August 13, 2010, the Department sent Noksel a supplemental questionnaire requesting additional information about Noksel's request for limited reporting of home market sales. On August 16, 2010, the Department sent Noksel a letter accepting Noksel's limited reporting of home market sales to the period October 1, 2009, to April 30, 2010, and tentatively excusing Noksel from reporting the sales of certain “second quality” merchandise for which Noksel claimed it lacked sufficient records. Noksel submitted its response to the Department's supplemental questionnaire regarding limited reporting on August 20, 2010 (Noksel's August 20, 2010 Response).

Noksel submitted its response to section A of the Department's antidumping questionnaire on August 16, 2010 (Noksel's Section A Response). Noksel submitted its response to sections B and C of the antidumping questionnaire on September 7, 2010 (Noksel's Sections B and C Response).

On November 12, 2010, the Department issued a supplemental questionnaire to Noksel regarding Noksel's Section A Response and Noksel's Sections B and C Response and Nokel's Limited Reporting Questionnaire Response. Noksel submitted its response to the Department's supplemental questionnaire on December 20, 2010 (Noksel's December 20, 2010 Response).

On March 4, 2011, the Department issued a second supplemental questionnaire to Noksel regarding its prior questionnaire responses. Noksel submitted its response to the Department's second supplemental questionnaire on March 23, 2011 (Noksel's March 23, 2011 Response).

Scope of the Order

The merchandise subject to this order is certain welded carbon quality light-walled steel pipe and tube, of rectangular (including square) cross section, having a wall thickness of less than 4 mm. The term carbon-quality steel includes both carbon steel and alloy steel which contains only small amounts of alloying elements. Specifically, the term carbon-quality includes products in which none of the elements listed below exceeds the quantity by weight respectively indicated: 1.80 percent of manganese, or 2.25 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 0.10 percent of molybdenum, or 0.10 percent of niobium, or 0.15 percent vanadium, or 0.15 percent of zirconium. The description of carbon-quality is intended to identify carbon-quality products within the scope. The welded carbon-quality rectangular pipe and tube subject to this order is currently classified under the Harmonized Tariff Schedule of the United States (HTSUS) subheadings 7306.61.50.00 and 7306.61.70.60. While HTSUS subheadings are provided for convenience and CBP's customs purposes, our written description of the scope of the order is dispositive.

Limited Home Market Reporting

As explained above, Noksel requested that the reporting period for home market sales be limited to the period October 1, 2009, to April 30, 2010. Noksel reported U.S. sales which were invoiced in only one calendar month of the POR. Noksel reported that it had no other U.S. sales during the POR. See, e.g., Noksel's August 9, 2010, letter. Noksel also requested that the Department excuse it from reporting home-market sales of certain “second quality” merchandise for which Noksel claimed it lacked sufficient records. See Noksel's August 9, 2010, letter.

Regarding Noksel's request that we limit the home market reporting period, our past practice in other cases in which respondents made sales of subject merchandise in only a portion of the POR has been to allow respondents to limit their home market sales reporting period to those home market sales which are contemporaneous with their U.S. sales. See, e.g., Certain Hot-Rolled Carbon Steel Flat Products From India: Preliminary Results of Antidumping Duty Administrative Review, 71 FR 2018 (January 12, 2006) (unchanged in Certain Hot-Rolled Carbon Steel Flat Products From India: Final Results of Antidumping Duty Administrative Review, 71 FR 40694); Certain Hot-Rolled Flat-Rolled Carbon Quality Steel Products from Brazil; Preliminary Results of Antidumping Duty Administrative Review, 70 FR 17406 (April 6, 2005) (unchanged in Notice of Final Results of Antidumping Duty Administrative Review: Certain Hot-Rolled Flat-Rolled Carbon Quality Steel Products From Brazil, 70 FR 58683); and Light-Walled Rectangular Pipe and Tube from Turkey; Notice of Final Results of Antidumping Duty Administrative Review, 75 FR 61127 (October 4, 2010). For this reason, we have permitted Noksel to limit its reporting of home market sales to those months which are contemporaneous with its U.S. sales. In our margin calculations, U.S. sales made in January 2010 could potentially be compared to the prices of home market sales at any time between October 2009 and March 2010; U.S. sales made in February 2010 could potentially be compared to the prices of home market sales made between November 2009 and April 2010. U.S. sales made in January 2010 or February 2010 could not match to home market sales made in any months outside of these periods. Therefore, to ensure that we would have the necessary home market sales, regardless of our choice of date of sale, we allowed Noksel to limit its reporting of home market sales to those sales made during the period October 2009 through April 2010.

Our analysis indicated, based on record evidence, that the appropriate date of sale of Noksel's U.S. sales might properly be a date in February 2010. See, e.g., Exhibit C-2 of Noksel's Section B and C response, at page 2 and Exhibit SB-8 of Noksel's December 20, 2010 Response at page 4. Therefore, to allow the Department to use the date of sale methodology deemed most appropriate, and to ensure completeness, we asked Noksel to report home market sales made in May 2010 as well. See the Department's March 4, 2011, supplemental questionnaire and Noksel's March 23, 2011 Response. Accordingly, for these preliminary results, we have limited the reporting period for home market sales to the period of October 1, 2009, through May 31, 2010.

As noted, Noksel also reported that it had made sales of certain “second quality” merchandise for which Noksel claimed it lacked complete sales records. See Noksel's August 9, 2010, letter. Noksel further explained that it could not differentiate the sales of these products according to product type. We excused Noksel from reporting these sales in its sales home market database, but we also subsequently asked Noksel to report whatever information if maintained about these sales. See the Department's March 4, 2011, supplemental questionnaire. Noksel complied. See Noksel's March 23, 2011 Response. Based on the information on the record, we preliminarily determine that these are sales of “second quality” merchandise that would not be suitable for matching to the prime quality pipe Noksel sold in the United States.

Fair Value Comparisons

To determine whether sales of light-walled rectangular pipe and tube from Turkey in the United States were made at less than NV, we compared U.S. price to NV, as described in the “Export Price” and “Normal Value” sections of this notice. In accordance with section 777A(d)(2) of the Tariff Act of 1930, as amended (the Act), we calculated monthly weighted-average NVs and compared these to individual U.S. transactions. Because we determined Noksel made only EP sales during the POR, we used EP as the basis for U.S. price in all of our comparisons.

In accordance with 19 CFR 351.410(i), the Department “normally” will use invoice date as the date of sale unless “a different date better reflects the date on which the exporter or producer establishes the material terms of sale.” Based on evidence on the record, we preliminarily determine that the material terms of sale for U.S. sales were established at the time of the issuance of the purchase order/contract. Noksel explained that quantity can vary between the purchase order date and the invoice date. Noksel reports that a quantity tolerance is permitted from the quantity stated on the purchase order, and that quantity can vary after the date of the purchase order, up until production is completed. See Noksel's Section A Response at page A-18 and page 1 of Exhibit A-8; Noksel's Sections B and C Response at pages C-12, and Noksel's December 20, 2010 Response at pages S-62 to S-64 and Noksel's March 23, 2011 Response at pages 14 to 15. However, in the case of Noksel's U.S. sale, neither quantity nor unit price varied between purchase order and invoice. See Noksel's Section A Response at Exhibit A-8.

Based on record evidence, we also determine that the material terms of sale for home market sales were established at the time the purchase order. Therefore, we used the purchase order date, as recorded in Noksel's normal books and records, as the date of sale for Noksel's U.S. and home market sales. See Memorandum from Tyler Weinhold to the File, “Analysis of Data Submitted by Noksel Celik Boru Sanayi A.S., (Noksel) in the Preliminary Results of the 2009-2010 Administrative Review of Light-Walled Rectangular Pipe and Tube from Turkey,” dated May 31, 2011 (Preliminary Analysis Memorandum).

Product Comparisons

In accordance with section 771(16) of the Act, we considered all products produced by Noksel covered by the description in the “Scope of the Order” section, above, and sold in the home market during the POR, to be foreign like products for purposes of determining appropriate product comparisons to U.S. sales. As mentioned above, we limited the reporting period for home market sales to the period of October 1, 2009, through May 31, 2010. We relied on six characteristics to match U.S. sales of subject merchandise to home market sales of the foreign like product (listed in order of priority): (1) Steel input type; (2) metallic coating; (3) painted/non-painted; (4) perimeter; (5) wall thickness; and (6) shape. See the antidumping questionnaire at Appendix 5. In our normal practice where there are no contemporaneous sales of identical merchandise in the home market to compare to U.S. sales, we compare U.S. sales to contemporaneous sales of the next most similar foreign like product on the basis of these product characteristics and the reporting instructions listed in the antidumping questionnaire. See Preliminary Analysis memorandum at page 2. For these preliminary results, we compared U.S. sales to identical foreign like products. In our normal practice, where there are no sales of identical or similar merchandise in the home market suitable for comparison to U.S. sales, we compare U.S. sales to constructed value (CV). For these preliminary results, because there were sales of identical merchandise in the home market suitable for comparison to each U.S. sale, we compared no U.S. sales to CV in these preliminary results.

Export Price

Section 772(a) of the Act defines Export Price (EP) as “the price at which the subject merchandise is first sold (or agreed to be sold) before the date of importation by the producer or exporter of subject merchandise outside of the United States to an unaffiliated purchaser in the United States or to an unaffiliated purchaser for exportation to the United States,” as adjusted under section 772(c). In accordance with section 772(a) of the Act, we used EP for all of Noksel's U.S. sales. We preliminarily find that these sales are properly classified as EP sales because these sales were made before the date of importation and were made directly to unaffiliated U.S. customers, and because our CEP methodology was not otherwise warranted.

We based EP on the prices to unaffiliated customers in the United States. We made adjustments for duty drawback. We also made deductions for movement expenses in accordance with section 772(c)(2)(A) of the Act, which included, where appropriate, foreign inland freight, foreign brokerage and handling, international freight, and exporter's association fee. See Preliminary Analysis memorandum at page 7. Additionally, we made adjustments for direct selling expenses (credit expenses, banking charges) in accordance with section 772(c)(2)(A) of the Act. Id.

Noksel originally stated that it reported its U.S. sales and per-unit adjustments according to Turkish Customs weigh station weights, as recorded on the Turkish customs exit declaration. However, Noksel later clarified that it had mistakenly mis-represented the quantity reported in its U.S. sales databases as coming from Turkish Customs weigh station weights, when in fact it was taken from the weights from Noksel's normal books and records, recorded during packing of the subject merchandise. See Noksel's March 23, 2011 Response at page 14 and Noksel's December 20, 2010 Response at page S-94. Noksel explained that it weighed individual bundles of foreign like product and subject merchandise during packing, and was able to tie the recorded weights of individual bundles of pipe to specific home market and U.S. sales invoices. See Noksel's December 20, 2010 Response at pages S-88 to S-98, and S-113. We relied upon this information for these preliminary results.

Noksel reported that it collected rebates of import duties for purchases of raw materials, based on its exports of merchandise (duty drawback), under the Turkish Inward Processing Regime (IPR). Noksel reported that these rebates were dependent upon its exports of subject merchandise. See Noksel's Sections B and C Response at pages C-31 to C-32. Noksel also demonstrated the quantity of imports of materials for which Noksel received rebates of import duties were sufficient to cover the quantity of exports made under the IPR. See Noksel's December 20, 2010 Response at pages S-117 to S-119, and Noksel's March 23, 2011 Response at pages 16 to 23. Therefore in accordance with section 772(c)(1)(B) of the Act, we made an upward adjustment to U.S. price for duty drawback. See, e.g., Certain Welded Carbon Steel Pipe and Tube From Turkey: Notice of Final Antidumping Duty Administrative Review, 75 FR 64250 (October 19, 2010). See also Preliminary Analysis Memorandum at page 6.

Normal Value

A. Selection of Comparison Market

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 (i.e., the aggregate volume of home market sales of the foreign like product was equal to or greater than five percent of the aggregate volume of U.S. sales), we compared Noksel's volume of home market sales of the foreign like product to the volume of U.S. sales of the subject merchandise, in accordance with section 773(a)(1) of the Act. Because Noksel's aggregate volume of home market sales of the foreign like product was greater than five percent of its aggregate volume of U.S. sales of the subject merchandise, we determined the home market was viable. Therefore, we have based NV on home market sales in the usual commercial quantities and in the ordinary course of trade.

B. Price-to-Price Comparisons

We calculated NV based on prices to unaffiliated customers. We made adjustments for billing adjustments, where appropriate. We made deductions, where appropriate, for foreign inland freight, pursuant to section 773(a)(6)(B) of the Act. In addition, when comparing sales of similar merchandise, we made adjustments for differences in cost (i.e., DIFMER), where those differences were attributable to differences in physical characteristics of the merchandise, pursuant to section 773(a)(6)(C)(ii) of the Act and section 351.411 of the Department's regulations. We also made adjustments for differences in circumstances of sale (COS) in accordance with section 773(a)(6)(C)(iii) of the Act and section 351.410 of the Department's regulations. We made COS adjustments for imputed credit expenses. See PreliminaryAnalysis Memorandum at page 3. Finally, we deducted home market packing costs and added U.S. packing costs in accordance with sections 773(a)(6)(A) and (B) of the Act.

Level of Trade

In accordance with section 773(a)(1)(B) of the Act, to the extent practicable, we base NV on sales made in the comparison market at the same level of trade (LOT) as the export transaction. The NV LOT is based on the starting price of sales in the home market or, when NV is based on CV, on the LOT of the sales from which SG&A expenses and profit are derived.

To determine whether NV sales are at a different LOT than EP sales, we examine stages in the marketing process and selling functions along the chain of distribution between the producer and the 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 a LOT adjustment under section 773(a)(7)(A) of the Act. We expect that if the claimed LOTs are the same, the functions and activities of the seller should be similar. Conversely, if a party claims the 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.

Noksel reported that it sold light-walled rectangular pipe and tube at only one level of trade and in only one channel of distribution in the home market and at one level of trade and in one channel of distribution in the U.S. market. See Noksel's Section A Response at ExhibitA-7 and Noksel's Section B Response at pages B-12 to B-13 and B-24.

Based on our analysis of the record evidence provided by Noksel, we preliminarily determine that a single LOT exists in the home market. We obtained information from Noksel regarding the marketing stages involved in making its reported home market and U.S. sales. Noksel described all selling activities performed, and provided a table comparing the selling functions performed in both markets. See Noksel's Section A response at Exhibit A-7. We find Noksel performed virtually the same level of customer support services on its EP sales as it did on its home market sales and that the minor differences that do exist do not establish distinct and separate levels of trade. The record evidence supports a finding that in both markets, Noksel performs essentially the same level of services. While we found minor differences between the home and U.S. markets, based on our analysis of the selling functions performed on EP sales in the United States, and its sales in the home market, we determine that the EP and the starting price of home market sales represent the same stage in the marketing process, and are thus at the same LOT. For this reason, we preliminarily find that a LOT adjustment is not appropriate for Noksel.

Currency Conversions

In accordance with section 773A(a) of the Act, we made Turkish lira-U.S. dollar currency conversions, where appropriate, based on the exchange rates in effect on the dates of the U.S. sales, as collected by Dow Jones Reuters Business Interactive LLC (marketed as Factiva) and as published on the Import Administration's Web site ( http://ia.ita.doc.gov/exchange/index.html ).

Preliminary Results of Review

As a result of our review, we preliminarily find the following weighted-average dumping margin exists for the period May 1, 2009, through April 30, 2010:

Disclosure and Public Hearing

The Department will disclose calculations performed within five days of the date of publication of this notice in accordance with section 351.224(b) of the Department's regulations. An interested party may request a hearing within thirty days of publication. See section 351.310(c) of the Department's regulations. Any hearing, if requested, will be held 37 days after the date of publication, or the first business day thereafter, unless the Department alters the date pursuant to section 351.310(d) of the Department's regulations. Requests should contain the party's name, address, and telephone number, the number of participants, and a list of the issues to be discussed. At the hearing, each party may make an affirmative presentation only on issues raised in that party's case brief and may make rebuttal presentations only on arguments included in that party's rebuttal brief.

Comments

Interested parties may submit case briefs no later than 30 days after the date of publication of these preliminary results of review. See 19 CFR 351.309(c). Rebuttal briefs, limited to issues raised in the case briefs, may be filed no later than 35 days after the date of publication of this notice. See 19 CFR 351.309(d). Parties who submit 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. Further, parties submitting written comments should provide the Department with an additional copy of the public version of any such comments on diskette. The Department will issue final results of this administrative review, including the results of our analysis of the issues in any such written comments or at a hearing, within 120 days of publication of these preliminary results.

Assessment Rates

The Department shall determine, and CBP shall assess, antidumping duties on all appropriate entries. Upon completion of this administrative review, pursuant to section 351.212(b) of the Department's regulations, the Department will calculate an assessment rate on all appropriate entries. Noksel has reported entered values for all of its sales of subject merchandise to the United States during the POR. Therefore, in accordance with section 351.212(b)(1) of the Department's regulations, we will calculate importer-specific duty assessment rates on the basis of the ratio of the total amount of antidumping duties calculated for the examined sales to the total entered value of the examined sales of that importer. These rates will be assessed uniformly on all entries the respective importers made during the POR. Where the assessment rate is above de minimis, we will instruct CBP to assess duties on all entries of subject merchandise by that importer. The Department intends to issue appropriate assessment instructions directly to CBP fifteen days after publication of the final results of review.

The Department clarified its “automatic assessment” regulation on May 6, 2003. See Antidumping and Countervailing Duty Proceedings: Assessment of Antidumping Duties, 68 FR 23954 (May 6, 2003). This clarification will apply to entries of subject merchandise during the POR produced by the respondent for which it did not know its merchandise was destined for the United States. In such instances, we will instruct CBP to liquidate un-reviewed entries at the all-others rate if there is no rate for the intermediate company involved in the transaction. Id.

Cash Deposit Requirements

Furthermore, the following deposit requirements will be effective upon completion of the final results of this administrative review for all shipments of light-walled rectangular pipe and tube from Turkey 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 Noksel will be the rate established in the final results of review; (2) if the exporter is not a firm covered in this review or the less-than-fair-value (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 (3) 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 the all-others rate of 27.04 percent ad valorem from the LTFV investigation. See Notice of Antidumping Duty Order: Light-Walled Rectangular Pipe and Tube From Turkey, 73 FR 31065 (May 30, 2008). These deposit requirements, when imposed, shall remain in effect until further notice.

Notification to Importers

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 the antidumping duties.

We are issuing and publishing this notice in accordance with sections 751(a)(1) and 777(i)(1) of the Act.