Wind Tower Exporters Say Cost Adjustment Needed to Account for Halt in Production

Exporters CS Wind Malaysia and CS Wind Korea filed a complaint at the Court of International Trade on Sept. 6 challenging the Commerce Department's 2021-22 review of the antidumping duty order on utility scale wind towers from Malaysia. The companies, collectively referred to as CS Wind, challenged Commerce's alleged failure to apply a cost adjustment to CS Wind's cost of manufacturing and decision to calculate the constructed value profit and selling expense ratios based on an average of two surrogate Malaysian companies (CS Wind Malaysia v. U.S., CIT # 24-00150).

CS Wind, acting as the sole mandatory respondent, told the agency it shuttered production on a date that was four months into the review period, and so it "had no production during most of the" review period. As a result, the company said its conversion costs of wind towers were "aberrational relative to the previous segment of the proceeding" due to the lowered production volumes and higher processing costs while the company wound down its operations.

The respondent calculated a cost adjustment to "mitigate the distortive effects of the abnormal production status" on the manufacturing costs.

Commerce rejected the suggested adjustment and also calculated constructed value profit and selling expenses using the 2022 financial statements of Malaysian firms Mycron Steel Berhad and Alpine Pipe Manufacturing Sdn Bhd. CS Wind argued administratively that the agency shouldn't use these companies' information since neither produces comparable merchandise. The respondent said Commerce should use its statements instead.

The result was an 18.02% AD rate for CS Wind.

The respondent contested both points, arguing that the failure to apply the cost adjustment was unreasonable and unsupported by evidence. The adjustment "would have fully eliminated the inaccuracies and distortions arising from the fact that CS Wind's books and records recorded high conversion costs but CS Wind had significantly curtailed production volumes that occurred only in the first four months of the 13.5 month" review period, the brief said.