CIT Sends Back PMS Adjustment for South Korean Steel Input in AD Case

The Court of International Trade in a June 15 opinion upheld the Commerce Department's decision to drop its particular market situation adjustment to antidumping duty respondent Hyundai Steel Corp.'s cost of production. However, Judge Jennifer Choe-Groves sent back the agency's decision to continue making a PMS adjustment to the other mandatory respondent Husteel Co.'s normal value when calculating non-examined respondent SeAH Steel Corp.'s dumping margin.

The case concerns the 2015-16 administrative review of the AD order on circular welded non-alloy steel pipe from South Korea in which Hyundai and Husteel served as the mandatory respondents. Through multiple court opinions, the court held that Commerce cannot make a PMS adjustment to the cost of production in a sales-below-cost test when calculating normal value (see 2107190029). This ruling was affirmed by a key U.S. Court of Appeals for the Federal Circuit case and appeared in the present matter (see 2112150025).

So, under protest, Commerce dropped the PMS adjustment for Hyundai and Husteel, leading to a rate drop from 30.85% to 12.92% for Hyundai. However, Commerce continued to make the adjustment for Husteel's normal value for transactions found to be based on constructed value when recalculating SeAH's rate, setting the stage for further argument at the trade court.

Choe-Groves first sustained Commerce's decision to drop the PMS adjustment for Hyundai. "In the third remand, Hyundai Steel obtains the relief it sought. In light of the U.S. Court of Appeals for the Federal Circuit’s decision in Hyundai Steel Co. v. United States, 19 F.4th 1346, 1352 (Fed. Cir. 2021), the Court sustains Commerce’s removal of the particular market situation adjustment of Hyundai Steel’s costs of production in the recalculation of Hyundai Steel’s weighted-average dumping margin for the Third Remand Results," the opinion said.

The judge then looked at whether the PMS adjustment as it pertains to SeAH's rate. As it had previously, Commerce based the PMS on five factors: "(1) subsidization by the Government of Korea of hot-rolled coil; (2) Chinese steel products that flooded the Korean market; (3) strategic alliances between certain Korean hot-rolled coil suppliers and CWP producers; (4) distortions in the Korean electricity market; and (5) the Government of Korea’s role in restructuring the private steel industry."

The judge went through each factor and found that they were not backed by substantial evidence. "The Court concludes that Commerce calculated SeAH’s dumping margin improperly using an average of dumping rates based in part on a particular market situation determination that is unsupported by substantial evidence, and remands for Commerce to recalculate SeAH’s dumping margin in accordance with this opinion," the judge said.

(Hyundai Steel Company v. United States, Slip Op. 22-67, CIT Consol. #18-00154, dated 06/15/22, Judge Jennifer Choe-Groves. Attorneys: J. David Park of Arnold & Porter for plaintiff Hyundai; Jeffrey Winton of Winton & Chapman for consolidated plaintiff SeAH; Patricia McCarthy for defendant U.S. government; Roger Schagrin of Schagrin Associates for defendant-intervenor Wheatland Tube Co.)