Commerce Drops PMS Adjustment for South Korean Steel Input in AD Case

The Commerce Department dropped its finding that a particular market situation distorted the price of a key input of circular welded non-alloy steel pipe, in Aug. 2 remand results submitted to the Court of International Trade in an antidumping duty case. Prior to this remand, Commerce had already dropped the PMS adjustment to one of the antidumping duty review's mandatory respondents but not the other. On remand for the fourth time in the action, the agency dropped the PMS adjustment for the remaining respondent, dropping non-selected respondent SeAH Steel Corp.'s dumping rate from 19.28% to 9.77% (Hyundai Steel Co. v. United States, CIT Consol. #18-00154).

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.

In the last opinion, the judge upheld the PMS drop for Hyundai but not for Husteel, looking at whether the PMS adjustment was based on substantial evidence. 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. On remand, the agency dropped the adjustment for Husteel, thus dropping the rate for SeAH. "In accordance with the Remand Order, under respectful protest, we, therefore, first recalculated the weighted-average dumping margin of Husteel with no adjustment to account for the particular market situation, for the sole purpose of recalculating SeAH’s rate," the brief said.