Commerce Again Defends Methodology in Korean Steel CVD Case Despite CAFC Opinion

The Commerce Department continues to find that the South Korean government did not provide a countervailable subsidy to producers of hot-rolled steel by way of cheap electricity despite a U.S. Court of Appeals for the Federal Circuit opinion to the contrary, in July 6 remand results. Filing the second remand results of its kind in a second, separate Court of International Trade case brought by POSCO, Commerce held that POSCO's countervailing duty in an investigation into carbon and alloy steel cut-to-length plate from Korea will remain unchanged (POSCO v. United States, CIT #17-00137).

Commerce initially received a petition from several producers alleging that Korean steel producers were receiving a countervailable benefit through the provision of electricity. To investigate, the agency questioned the Korean government about the Korean electricity industry and market, which included the Korean Electricity Corporation (KEPCO) and the Korean Power Exchange, an entity owned by KEPCO. Commerce claims it conducted a "tier three analysis" to examine how KEPCO calculated its electricity tariff prices for each classification of customer through its price setting system (see 2106140051).

By including costs and return on investment in its electricity prices, KEPCO did not treat Korean producers differently from other electricity users and charged the producers a tariff rate that was in line with their customer classification level, Commerce said. CIT sustained this final determination on Dec. 6, 2018, after a challenge from POSCO. The case was then brought to the Federal Circuit, where the appellate court found fault with Commerce's benefit analysis and failure to investigate the role of KPX in the Korean electricity market.

In very similar remand results, Commerce continued to argue to the contrary, saying that the appeals court's opinion mischaracterized many facts of the countervailing duty case. If the remand results are sustained, POSCO's CVD rate from the final determination, 4.31%, will stand for its CTL plate entries in 2015.