Notice of Final Determination of Sales at Less Than Fair Value: Structural Steel Beams from South Africa

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of final determination of sales at less than fair value.

SUMMARY:

On December 28, 2001, the Department of Commerce published the preliminary determination of sales at less than fair value of structural steel beams from South Africa.. The period of investigation is April 1, 2000, through March 31, 2001.Based on our analysis of the comments received and certain findings from the verification, we have made changes in the margin calculations. Therefore, the final determination differs from the preliminary determination.We determine that structural steel beams from South Africa are being, or are likely to be, sold in the United States at less-than-fair-value prices as provided in section 735 of the Tariff Act of 1930, as amended. The estimated margins of sales at less than fair value are shown in the “Continuation of Suspension of Liquidation” section of this notice.

EFFECTIVE DATE:

May 20, 2002.

FOR FURTHER INFORMATION CONTACT:

J. David Dirstine, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, N.W., Washington, D.C. 20230; telephone: (202) 482-4033.

SUPPLEMENTARY INFORMATION:

The Applicable Statute and Regulations

Unless otherwise indicated, 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 (URAA). In addition, unless otherwise indicated, all citations to the Department of Commerce's (the Department's) regulations are to the provisions codified at 19 CFR Part 351 (April 2001).

Final Determination

We determine that structural steel beams (beams) from South Africa are being, or are likely to be, sold in the United States at less than fair value (LTFV) as provided in section 735 of the Act. The estimated margins of sales at LTFV are shown in the “Continuation of Suspension of Liquidation” section of this notice.

Scope of Investigation

The scope of this investigation covers doubly-symmetric shapes, whether hot- or cold-rolled, drawn, extruded, formed or finished, having at least one dimension of at least 80 mm (3.2 inches or more), whether of carbon or alloy (other than stainless) steel, and whether or not drilled, punched, notched, painted, coated, or clad. These structural steel beams include, but are not limited to, wide-flange beams (“W”shapes), bearing piles (“HP” shapes), standard beams (“S” or “I” shapes), and M-shapes. All the products that meet the physical and metallurgical descriptions provided above are within the scope of this investigation unless otherwise excluded. The following products are outside and/or specifically excluded from the scope of this investigation: (1) structural steel beams greater than 400 pounds per linear foot, (2) structural steel beams that have a web or section height (also known as depth) over 40 inches, and (3) structural steel beams that have additional weldments, connectors or attachments to I-sections, H-sections, or pilings; however, if the only additional weldment, connector, or attachment on the beam is a shipping brace attached to maintain stability during transportation, the beam is not removed from the scope definition by reason of such additional weldment, connector, or attachment.

Prior to the preliminary determination in this case, interested parties in this and the concurrent structural steel beams investigations requested that the following products be excluded from the scope of the investigations: (1) beams of grade A913/65 and (2) forklift mast profiles. We preliminarily found that both products fell within the scope of this investigation. Because we have received no further scope comments in this proceeding, we are making a final determination that these products fall within the scope of this investigation.

The merchandise subject to this investigation is classified in the Harmonized Tariff Schedule of the United States (HTSUS) at subheadings 7216.32.0000, 7216.33.0030, 7216.33.0060, 7216.33.0090, 7216.50.0000, 7216.61.0000, 7216.69.0000, 7216.91.0000, 7216.99.0000, 7228.70.3040, and 7228.70.6000. Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the merchandise under investigation is dispositive.

Case History

On June 20, 2001, the Department published a notice of initiation of the investigation of sales at LTFV of structural steel beams from South Africa (66 FR 33048). We published in the Federal Register the preliminary determination in this investigation on December 28, 2001. See Notice of Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Structural Steel Beams from South Africa, 66 FR 67213 (December 28, 2001) (Preliminary Determination). Since the publication of the Preliminary Determination, the following events have occurred.

On January 7, through 11, 2002, the Department conducted verification of the home- market sales of Highveld Steel and Vanadium Corporation, Ltd. (Highveld), the sole respondent in this investigation. See Memorandum from J. David Dirstine and Dunyako Ahmadu to the File, dated January 29, 2002, Re: Home-Market Verification of Highveld Steel and Vanadium Corporation. On February 11, through 15, 2002, the Department conducted a cost-of-production (COP) and constructed-value (CV) data verification of Highveld. See Memorandum from Laurens van Houten and Heidi Norris to Neal Halper, Director, Office of Accounting, dated March 18, 2002, Re: Verification Report on the Cost of Production and Constructed Value Data Submitted by Highveld Steel and Vanadium Corporation, Ltd. (Cost Verification Memorandum). On February 25, through 28, 2002, the Department conducted a U.S. sales data verification of Newco Steel Trading Co. (Newco), an affiliated U.S. reseller of merchandise produced by Highveld. See Memorandum from J. David Dirstine and Dunyako Ahmadu to the File, dated March 25, 2002, Re: United States Sales Verification of Highveld Steel and Vanadium Corporation.

On April 2, 2002, the petitioners, the Committee for the Fair Beam Imports and its individual members, and Highveld submitted their case briefs with respect to the verifications and the Preliminary Determination. On April 8, 2002, the petitioners and Highveld submitted rebuttal briefs with respect to the sales verifications and the Preliminary Determination. On April 9, 2002, we conducted a public hearing with a closed session with respect to the issues raised in the case briefs.

In a letter dated January 3, 2002, Highveld requested that the Department and Highveld enter into a suspension agreement pursuant 734(b) of the Act. The petitioners objected to Highveld's proposal in letters dated April 1, 2002, and February 14, 2002. After careful consideration and discussing the proposed agreement with the petitioners and Highveld, on April 15, 2002, the Department advised Highveld that it could not accept the proposed suspension agreement for various reasons.

Period of Investigation

The period of investigation (POI) is April 1, 2000, through March 31, 2001.

Analysis of Comments Received

All issues raised in the case briefs by parties to this investigation are addressed in a decision memorandum which is hereby adopted by this notice. See the Structural Steel Beams from South Africa Issues and Decisions Memorandum dated May 13, 2002 (Issues and Decision Memorandum). A list of the issues which parties raised, and to which we have responded, all of which are in the Issues and Decision Memorandum, is attached to this notice as an Appendix. Parties can find a complete discussion of all issues raised in this investigation and the corresponding recommendations in this public memorandum, which is on file in B-099. In addition, a complete version of the Decision Memorandum can be accessed directly on the internet at www.ita.doc.gov/import_admin/records/frn/. The paper copy and electronic version of the Decision Memorandum are identical in content.

Changes Since the Preliminary Determination

Based on our findings at verification and analysis of comments we received, we have made adjustments to the calculation methodology in calculating the final dumping margins for Highveld in this proceeding. See Final Analysis Memorandum for Highveld dated May 13, 2001 (Final Analysis Memorandum). These revisions are as follows:

1. We adjusted COP and CV with a credit for vanadium slag using a by-product methodology in the calculation of the total cost of manufacture. See Issues and Decision Memorandum at Comment 4 and Memorandum to the File from Laurens van Houten, Senior Accountant, Office of Accounting, dated May 13, 2002, Re: Cost of Production and Constructed Value Calculation Adjustments for the Final Determination (Office of Accounting COP and CV Memorandum).

2. We recalculated Highveld's reported fixed cost per ton. See Issues and Decision Memorandum at Comment 9 and Office of Accounting COP and CV Memorandum.

3. We revised the calculation of the general and administrative expense rate for Highveld based on information we obtained at the home-market Highveld verification. See Issues and Decision Memorandum at Comment 6 and Office of Accounting COP and CV Memorandum.

4. In accordance with the Department's long-standing practice, we recalculated Highveld's interest-expense ratio based on the net financing expenses and cost of sales from the audited fiscal-year financial statements of the highest level of consolidation which corresponds most closely to the POI, i.e., on the December 31, 2000, audited financial statements of Highveld's parent, Anglo American PLC. See Issues and Decision Memorandum at Comment 7 and Office of Accounting COP and CV Memorandum. 5. We eliminated equal angles and channels from both the home-market and U.S. sales databases as non-subject merchandise. See Final Analysis Memorandum.

6. Based on findings at verification at Highveld's offices in South Africa, we excluded certain sales reported incorrectly as export-price (EP) sales and included one EP sale that had been excluded incorrectly. See Highveld home-market sales verification report dated January 29, 2002 (Highveld home-market sales verification report).

7. Based on findings at the home-market verification, we used revised inventory carrying costs for this final determination. See Highveld home-market sales verification report.

8. Based on findings at the home-market verification, we used revised inland-freight expenses for certain EP sales. See Highveld home-market sales verification report.

9. Based on findings at the home-market verification we made a deduction from normal value for a per-ton levy paid to the South African Iron and Steel Institute applicable to home-market sales of structural beams. See Highveld home-market sales verification report.

Verification

As provided in section 782(i) of the Act, we verified the information submitted by Highveld for use in our final determination. We used standard verification procedures including examination of relevant accounting and production records, as well as original source documents provided by the respondents. For changes from the Preliminary Determination as a result of verification, see the “Changes Since the Preliminary Determination” section of this notice, above, and Final Analysis Memorandum.

Continuation of Suspension of Liquidation

In accordance with section 735(c)(1)(B)(ii) of the Act, we are directing the Customs Service to continue to suspend liquidation of all entries of subject merchandise from South Africa that are entered, or withdrawn from warehouses, for consumption on or after December 28, 2001, the date of publication of the preliminary determination in the Federal Register. The Customs Service shall continue to require a cash deposit or posting of a bond equal to the estimated amount by which the normal value exceeds the U.S. price as shown below. This suspension-of-liquidation instruction will remain in effect until further notice.

The weighted-average dumping margins are as follows:

ITC Notification

In accordance with section 735(d) of the Act, we have notified the International Trade Commission (ITC) of our determination. As our final determination is affirmative, the ITC will, within 45 days, determine whether these imports are materially injuring, or threaten material injury to, the U.S. industry. If the ITC determines that material injury or threat of material injury does not exist, the proceeding will be terminated and all securities posted will be refunded or canceled. If the ITC determines that such injury does exist, the Department will issue an antidumping duty order directing Customs officials to assess antidumping duties on all imports of the subject merchandise entered for consumption on or after the effective date of the suspension of liquidation.

This determination is issued and published in accordance with sections 735(d) and 777(i)(1) of the Act.

Appendix

Comment 1: Affiliation

Comment 2: Indirect Selling Expenses

Comment 3: Understated Cost of Production (COP)

Comment 4: Byproduct Methodology v. Coproduct Methodology

Comment 5: Unallocated Costs

Comment 6: General and Administrative Expenses

Comment 7: Financial Expense Ratio

Comment 8: South African Iron and Steel Institute Domestic Sales Levy

Comment 9: Minor Errors Discovered at the Cost Verification