[Federal Register Volume 74, Number 62 (Thursday, April 2, 2009)]
[Notices]
[Pages 14957-14959]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-7437]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-201-830]


Notice of Preliminary Results of Antidumping Duty Changed 
Circumstances Review: Carbon and Certain Alloy Steel Wire Rod From 
Mexico

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: On November 12, 2008, the Department of Commerce (the 
Department) published in the Federal Register a notice of initiation of 
a changed circumstances review of the antidumping duty order of carbon 
and certain alloy steel wire rod (wire rod) from Mexico in order to 
determine whether Ternium Mexico, S.A. de C.V. (Ternium) is the 
successor-in-interest to Hylsa S.A. de C.V. (Hylsa) for purposes of 
determining antidumping duty liability. See Notice of Initiation of 
Antidumping Duty Changed Circumstances Review: Carbon and Certain Alloy 
Steel Wire Rod from Mexico, (73 FR 66839) November 12, 2008 (Notice of 
Initiation). We have preliminarily determined that Ternium is the 
successor-in-interest to Hylsa, for purposes of determining antidumping 
duty liability in this proceeding. Interested parties are invited to 
comment on these preliminary results.

DATES: Effective Date: April 2, 2009.

FOR FURTHER INFORMATION CONTACT: Jolanta Lawska, Office of AD/CVD 
Operations, Office 3, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th and Constitution 
Avenue, NW, Washington, DC 20230; telephone: (202) 482-8362.

Background

    On October 29, 2002, the Department published in the Federal 
Register the antidumping duty order on wire rod from Mexico. 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). On September 
3, 2008, Ternium requested that the Department conduct a changed 
circumstances review of the antidumping duty order on wire rod from 
Mexico claiming that it is the successor-in-interest to Hylsa, in 
accordance with section 751(b) of the Tariff Act of 1930, as amended 
(the Act) and 19 CFR 351.216. In its request, Ternium indicated that 
effective April 1, 2008, the production and sales operations of Hylsa 
were transferred to Ternium.\1\ In response to this request the 
Department initiated a changed circumstances review of the antidumping 
duty order on wire rod from Mexico. See Notice of Initiation. On 
November 18, 2008, the Department issued a questionnaire to Ternium 
requesting additional information regarding its successor-in-interest 
changed circumstances review request. On December 10, 2008, Ternium 
submitted its response to the Department's questionnaire (Questionnaire 
Response). In our Notice of Initiation we invited interested parties to 
comment. We did not receive any comments.
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    \1\ Prior to the reorganization effective April 1, 2008, Ternium 
was a holding company and did not have any production or sales 
operations.
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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; (e) concrete 
reinforcing bars and rods; and (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 non-deformable inclusions greater than 20 microns and no 
deformable inclusions greater than 35 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 non-deformable inclusions greater than 20 
microns and no deformable inclusions greater than 35 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).
    For purposes of the grade 1080 tire cord quality wire rod and the 
grade 1080 tire bead quality wire rod, an inclusion will be considered 
to be deformable if its ratio of length

[[Page 14958]]

(measured along the axis--that is, the direction of rolling--of the 
rod) over thickness (measured on the same inclusion in a direction 
perpendicular to the axis of the rod) is equal to or greater than 
three. The size of an inclusion for purposes of the 20 microns and 35 
microns limitations is the measurement of the largest dimension 
observed on a longitudinal section measured in a direction 
perpendicular to the axis of the rod. This measurement methodology 
applies only to inclusions on certain grade 1080 tire cord quality wire 
rod and certain grade 1080 tire bead quality wire rod that are entered, 
or withdrawn from warehouse, for consumption on or after July 24, 2003.
    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 the 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.
    The products subject to this order are currently classifiable under 
subheadings 7213.91.3011, 7213.91.3015, 7213.91.3092, 7213.91.4500, 
7213.91.6000, 7213.99.0030, 7213.99.0090, 7227.20.0000, 7227.90.6010, 
and 7227.90.6080 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.

Preliminary Results

    In making a successor-in-interest determination, the Department 
typically examines several factors including, but not limited to, 
changes in: (1) Management; (2) production facilities; (3) supplier 
relationships; and (4) customer base. See, e.g., Notice of Final 
Results of Changed Circumstances Antidumping Duty Administrative 
Review: Polychloroprene Rubber From Japan, 67 FR 58 (Jan. 2, 2002); 
Brass Sheet and Strip from Canada: Final Results of Antidumping Duty 
Administrative Review, 57 FR 20460, 20462 (May 13, 1992). While no 
single factor or combination of factors will necessarily provide a 
dispositive indication of a successor-in-interest relationship, the 
Department will generally consider the new company to be the successor 
to the previous company if the new company's resulting operation is not 
materially dissimilar to that of its predecessor. See, e.g., Fresh and 
Chilled Atlantic Salmon from Norway; Final Results of Changed 
Circumstances Antidumping Duty Administrative Review, 64 FR 9979 (March 
1, 1999); Industrial Phosphoric Acid from Israel; Final Results of 
Changed Circumstances Review, 59 FR 6944 (February 14, 1994). Thus, if 
the evidence demonstrates that, with respect to the production and sale 
of the subject merchandise, the new company operates as the same 
business entity as the former company, the Department will accord the 
new company the same antidumping treatment as its predecessor.
    In accordance with 19 CFR 351.221(c)(3)(i), we preliminarily 
determine that Ternium is the successor-in-interest to Hylsa. In its 
September 3, 2008, and December 10, 2008, submissions Ternium provided 
evidence supporting its claim to be the successor-in-interest to 
Hylsa.\2\ Documentation attached to Ternium's September 3, 2008, and 
December 10, 2008, submissions shows that the transfer of production 
and sales operations from Hylsa to Ternium resulted in little or no 
change in management, production facilities, supplier relationships, or 
customer base. This documentation consists of: (1) A copy of 
documentation of merger of Hylsamex \3\ into Ternium; (2) diagram 
depicting the organizational structure of Hylsa and Ternium; (3) tables 
depicting the management structure of Hylsa as of November 30, 2007, 
and the current management structure of Ternium as of July 2008; (4) 
listings of Hylsa's suppliers of major inputs for production of subject 
merchandise in 2007 and of Ternium's suppliers of inputs for production 
of subject merchandise in the second quarter of 2008 (after the 
transfer took effect); (5) a list of Hylsa's and Ternium's facilities 
at which subject merchandise is produced; (6) listings of Hylsa's wire 
rod customers in the home and U.S. markets in 2007 and of Ternium's 
wire rod customers in the home and U.S. markets in the second quarter 
of 2008 (after the transfer took effect). The documentation described 
above demonstrates that there was little to no change in management 
structure, supplier relationships, production facilities, or customer 
base. For these reasons, we preliminarily find that Ternium is the 
successor-in-interest to Hylsa and, thus, should receive the same 
antidumping duty treatment with respect to steel wire rod from Mexico 
as Hylsa.
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    \2\ In our Notice of Initiation, we referred to Ternium's 
request as a name change, however, as explained above it is related 
to the transfer of production and sales functions from Hylsa to 
Ternium. Effective April 1, 2008, Hylsa exists solely as a service 
company which employs workers at the former Hylsa facilities and 
provides its services to Ternium on a contract basis.
    \3\ Hylsamex is the former parent company of Hylsa. On February 
12, 2008, Ternium merged with Hylsamex into Ternium Grupo IMSA SAB 
de C.V. (GISA).
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Public Comment

    Any interested party may request a hearing within 10 days of 
publication of this notice. Any hearing, if requested, will be held no 
later than 37 days after the date of publication of this notice, or the 
first workday thereafter. Case briefs from interested parties may be 
submitted not later than 14 days after the date of publication of this 
notice. Rebuttal briefs, limited to the issues raised in those 
comments, may be filed not later than 21 days after the date of 
publication of this notice. All written comments shall be submitted in 
accordance with 19 CFR 351.303. Persons interested in attending the 
hearing, if one is requested, should contact the Department for the 
date and time of the hearing. In accordance with 19 CFR 351.216(e), the 
Department will issue the final results of its antidumping duty changed 
circumstances review not later than 270 days after the date on which 
the review is initiated.
    During the course of this antidumping duty changed circumstances 
review, deposit requirements for the subject merchandise exported and 
manufactured by Ternium will continue to be the all others rate 
established in the investigation. 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, 65947 
(October 29, 2002). The cash deposit rate will be altered, if 
warranted, pursuant only to the final results of this review.
    We are issuing and publishing these preliminary results and notice 
in accordance with sections 751(b)(1) and 777(i)(1) and (2) of the Act 
and 19 CFR 351.216.


[[Page 14959]]


    Dated: March 26, 2009.
Ronald K. Lorentzen,
Acting Assistant Secretary for Import Administration.
 [FR Doc. E9-7437 Filed 4-1-09; 8:45 am]
BILLING CODE 3510-DS-P