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Notice

Carbon and Certain Alloy Steel Wire Rod From Mexico: Initiation of Anti-Circumvention Inquiry of Antidumping Duty Order

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Information about this document as published in the Federal Register.

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AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

DATES:

Effective Date: June 8, 2011.

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FOR FURTHER INFORMATION CONTACT:

Jolanta Lawska or Eric B. Greynolds, AD/CVD Operations, Office 3, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-8362 and (202) 482-6071, respectively.

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SUPPLEMENTARY INFORMATION:

In separate submissions filed on February 11, 2011, ArcelorMittal USA LLC, Gerdau Ameristeel U.S. Inc., and Rocky Mountain Steel, a division of Evraz Inc. NA, (collectively ArcelorMittal USA, et al.) and Nucor Corporation and Cascade Steel Rolling Mills, Inc. (collectively, Nucor/Cascade) requested that the Department of Commerce (the Department) initiate a scope inquiry, under 19 CFR 351.225(k)(2) to determine whether wire rod with an actual diameter between 4.75 and 5.00 millimeters (mm) is within the scope of the antidumping (AD) order on carbon and certain alloy steel wire rod from Mexico.[1] See Notice of Antidumping Duty Orders: Carbon and Certain Alloy Steel Wire Rod from Brazil, Indonesia, Mexico, Moldova, Trinidad and Tobago, and Ukraine, 67 FR 65945 (October 29, 2002) (Wire Rod Order). Alternatively, petitioners argue that the Department should initiate an anti-circumvention inquiry with regard to two Mexican firms, Deacero S.A. de C.V. (Deacero) and Ternium Mexico S.A. de C.V. (Ternium), and find that wire rod with an actual diameter between 4.75 and 5.00 mm produced by these firms constitutes a “minor alteration” or a “later developed product” thereby resulting in shipments of such wire rod from Deacero and Ternium falling within the scope of the Wire Rod Order. See 19 CFR 351.225(i) and (j); see also sections 781(c) and (d) of the Tariff Act of 1930, as amended (the Act).

On March 14 and 23, 2011, Deacero filed comments rebutting petitioners' arguments. On March 24 and 25, 2011, petitioners responded to Deacero's comments. On March 25, 2011, Illinois Tool Works Inc. (ITW) filed comments objecting to petitioners' allegations. On March 28, 2011, the Department extended until May 16, 2011, the deadline for determining whether to initiate an inquiry into petitioners' allegations. On April 18, 2011, petitioners responded to the comments of ITW. On May 3, 2011, Deacero responded to the comments made in petitioners' March 24, and 25, 2011, submissions.

Scope of the Order

The merchandise subject to this order is certain hot-rolled products of carbon steel and alloy steel, in coils, of approximately round cross section, 5.00 mm or more, but less than 19.00 mm, in solid cross-sectional diameter.

Specifically excluded are steel products possessing the above-noted physical characteristics and meeting the Harmonized Tariff Schedule of the United States (HTSUS) definitions for (a) Stainless steel; (b) tool steel; (c) high nickel steel; (d) ball bearing steel; and (e) concrete reinforcing bars and rods. Also excluded are (f) free machining steel products (i.e., products that contain by weight one or more of the following elements: 0.03 percent or more of lead, 0.05 percent or more of bismuth, 0.08 percent or more of sulfur, more than 0.04 percent of phosphorus, more than 0.05 percent of selenium, or more than 0.01 percent of tellurium).

Also excluded from the scope are 1080 grade tire cord quality wire rod and 1080 grade tire bead quality wire rod. This grade 1080 tire cord quality rod is defined as: (i) Grade 1080 tire cord quality wire rod measuring 5.0 mm or more but not more than 6.0 mm in cross-sectional diameter; (ii) with an average partial decarburization of no more than 70 microns in depth (maximum individual 200 microns); (iii) having no inclusions greater than 20 microns; (iv) having a carbon segregation per heat average of 3.0 or better using European Method NFA 04-114; (v) having a surface quality with no surface defects of a length greater than 0.15 mm; (vi) capable of being drawn to a diameter of 0.30 mm or less with 3 or fewer breaks per ton, and (vii) containing by weight the following elements in the proportions shown: (1) 0.78 percent or more of carbon, (2) less than 0.01 percent of aluminum, (3) 0.040 percent or less, in the aggregate, of phosphorus and sulfur, (4) 0.006 percent or less of nitrogen, and (5) not more than 0.15 percent, in the aggregate, of copper, nickel and chromium.

This grade 1080 tire bead quality rod is defined as: (i) Grade 1080 tire bead quality wire rod measuring 5.5 mm or more but not more than 7.0 mm in cross-sectional diameter; (ii) with an average partial decarburization of no more than 70 microns in depth (maximum individual 200 microns); (iii) having no inclusions greater than 20 microns; (iv) having a carbon segregation per heat average of 3.0 or better using European Method NFA 04-114; (v) having a surface quality with no surface defects of a length greater than 0.2 mm; (vi) capable of being drawn to a diameter of 0.78 mm or larger with 0.5 or fewer breaks per ton; and (vii) containing by weight the following elements in the proportions shown: (1) 0.78 percent or more of carbon, (2) less than 0.01 percent of soluble aluminum, (3) 0.040 percent or less, in the aggregate, of phosphorus and sulfur, (4) 0.008 percent or less of nitrogen, and (5) either not more than 0.15 percent, in the aggregate, of copper, nickel and chromium (if chromium is not specified), or not more than 0.10 percent in the aggregate of copper and nickel and a chromium content of 0.24 to 0.30 percent (if chromium is specified).

The designation of the products as “tire cord quality” or “tire bead quality” indicates the acceptability of the product for use in the production of tire cord, tire bead, or wire for use in other rubber reinforcement applications such as hose wire. These quality designations are presumed to indicate that these products are being used in tire cord, tire bead, and other rubber reinforcement applications, and such merchandise intended for the tire cord, tire bead, or other rubber reinforcement applications is not included in the scope. However, should petitioners or other interested parties provide a reasonable basis to believe or suspect that there exists a pattern of importation of such products for other than those applications, end-use certification for the importation of such products may be required. Under such circumstances, only the importers of record would normally be required to certify the end use of the imported merchandise.

All products meeting the physical description of subject merchandise that are not specifically excluded are included in this scope.Start Printed Page 33219

The products within the scope of this order are currently classifiable under subheadings 7213.91.3010, 7213.91.3090, 7213.91.4510, 7213.91.4590, 7213.91.6010, 7213.91.6090, 7213.99.0031, 7213.99.0038, 7213.99.0090, 7227.20.0010, 7227.20.0020, 7227.20.0090, 7227.20.0095, 7227.90.6051, 7227.90.6053, 7227.90.6058, and 7227.90.6059 of the HTSUS. Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of this proceeding is dispositive.

Initiation of Minor Alterations Anti-Circumvention Proceeding

Section 781(c) of the Act provides that the Department may find circumvention of an AD order when products which are of the class or kind of merchandise subject to an AD order have been “altered in form or appearance in minor respects * * * whether or not included in the same tariff classification.” Based on the arguments and information contained in petitioners' allegation, we find that there is a sufficient basis to initiate an anti-circumvention inquiry pursuant to section 781(c) of the Act and 19 CFR 351.225(i) to determine whether wire rod with an actual diameter measuring between 4.75 mm and 5.00 mm results from a minor alteration, and thus, a change so insignificant as to render such wire rod subject to the Wire Rod Order. For a summary of the comments received from interested parties and further discussion of the Department's basis for initiating this minor alteration inquiry, see the accompanying Memorandum to Ronald K. Lorentzen, Deputy Assistant Secretary for Import Administration, “Initiation of Minor Alteration Circumvention Inquiry on Wire Rod With an Actual Diameter Between 4.75 and 5.00 Millimeters,” (Initiation Memorandum), of which the public version is on file in the Central Records Unit (CRU), Room 7046 of the main Department of Commerce building.

As explained in the Initiation Memorandum, the Department has declined to initiate on petitioners' allegation that the wire rod at issue constitutes a later-developed product as described under section 781(d) and 19 CFR 351.225(j). We based our determination on information submitted by Deacero that indicates that a Japanese firm made small-diameter wire rod (e.g., rod with diameters as narrow as 4.2 mm) commercially available prior to the filing of the petition.

In addition, we have declined to initiate a scope inquiry under 19 CFR 351.225(k)(2) as requested by petitioners. As explained in the Initiation Memorandum, we find that the petition from the underlying investigation as well as information from the International Trade Commission (ITC) referenced in the petition indicates that the diameters referenced in the scope of the Wire Rod Order pertain to actual diameters. Therefore, we find that wire rod with an actual diameter of less than 5.00 mm is not within the scope of the Wire Rod Order.

Our finding under 19 CFR 351.225 (k)(1), that wire rod with an actual diameter that is less than 5.00 mm is not within the scope of the Wire Rod Order, is consistent with our decision under 19 CFR 351.225(i) To initiate a minor alteration anti-circumvention inquiry concerning wire rod with an actual diameter between 4.75 mm and 5.00 mm. In Nippon Steel the Court of Appeals for the Federal Circuit (CAFC) found that the Department may be precluded from conducting a minor alteration inquiry in instances in which the product is well-known prior to the order and was specifically excluded from the investigation. See Nippon Steel Corp. v. United States, 219 F.3d 1348, 1356 (Fed. Cir. 2000) (Nippon Steel). The Wire Rod Order does not specifically exclude wire rod with an actual diameter between 4.75 mm and 5.00 mm and, thus, the conditions necessary to preclude a minor alteration inquiry are not present. The Department reached the same conclusion in this regard in the Wax Candles from the PRC Inquiry Prelim, which was upheld in the Wax Candles from the PRC Inquiry. See Later-Developed Merchandise Anticircumvention Inquiry of the Antidumping Duty Order on Petroleum Wax Candles from the People's Republic of China: Affirmative Preliminary Determination of Circumvention of the Antidumping Duty Order, 71 FR 32033, 32037 (June 2, 2006) (Wax Candles from the PRC Inquiry Prelim), see also Later-Developed Merchandise Anti-Circumvention Inquiry of the Antidumping Duty Order on Petroleum Wax Candles from the People's Republic of China: Affirmative Final Determination of Circumvention of the Anti-Dumping Duty Order, 71 FR 59076-59076 (October 6, 2006) (Wax Candles from the PRC Inquiry), and accompanying Issues and Decision Memorandum (Wax Candles from the PRC Inquiry Decision Memorandum).

We are initiating this minor alteration anti-circumvention inquiry on Deacero and Ternium, the Mexican firms identified by petitioners in their circumvention allegations. However, within 45 days of the issuance of the initiation of this inquiry, if the Department receives sufficient evidence that other Mexican manufacturers are involved in the production of wire rod with an actual diameter between 4.75 mm and 5.00 mm, we will consider examining such additional manufacturers.

In accordance with 19 CFR 351.225(l)(2), if the Department issues a preliminary affirmative determination, we will then instruct CBP to suspend liquidation and require a cash deposit of estimated duties on the merchandise from firms covered by the determination.

The Department will, following consultation with interested parties, establish a schedule for questionnaires and comments on the issues. The Department intends to issue its final determination within 300 days of the date of publication of this initiation.

This notice is published in accordance with sections 781(c) and 781(d) of the Act and 19 CFR 351.225(i).

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Dated: May 31, 2011.

Ronald K. Lorentzen,

Deputy Assistant Secretary for Import Administration.

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Footnotes

1.  The term petitioners refers collectively to ArcelorMittal USA, et. al. and Nucro/Cascade.

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[FR Doc. 2011-14047 Filed 6-7-11; 8:45 am]

BILLING CODE 3510-DS-P