Italian CTL Plate Exporter Vies for Quarterly Cost Methodology at CIT
The Commerce Department arbitrarily and capriciously found that exporter Officine Tecnosider failed to challenge the agency's decision to reject quarterly cost methodology in an antidumping review, the exporter argued in a Jan. 25 complaint at the Court of International Trade. Commerce further violated the law by rejecting quarterly cost methodology based on its review of the three largest inputs' quarterly average prices and by failing to calculate an accurate dumping margin, the brief said (Officine Tecnosider v. United States, CIT # 23-00001).
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The case concerns the 2020-21 administrative review of the antidumping duty order on carbon and alloy steel cut-to-length plate from Italy. During the review, Officine reported the quarterly cost for each of its cut-to-length plate, supplying Commerce with review period-average costs for the cost of production. This submission included an Excel pivot table that could generate quarterly average costs "with just a few clicks of a button," the complaint said. Officine submitted the monthly quantity and value for three types of steel slabs which stood as the three largest material inputs for the subject merchandise. The exporter also turned in its entire slab purchase data to Commerce, among other materials.
The agency then asked why the exporter calculated its cost-based data on quarterly pricing information. The respondent said it did so because the cost of slab varies greatly depending on the type and it fluctuates over time. In the review's preliminary results, Commerce found that quarterly cost methodology was not warranted, leading it to compare most of the respondent's U.S. sales to only two home market sales with much higher prices made closer to the end of the review period, distorting the dumping margin.
Officine said it submitted a case brief contesting this decision, showing that its cost of manufacturing jumped by over 25% during the review period and that its costs and net price are "reasonably correlated." Nevertheless, Commerce again rejected the quarterly cost methodology, claiming it didn't use the method since the exporter did not request that Commerce consider applying the methodology before the preliminary results.
Taking to the trade court, the exporter said that this was not the case. "[Commerce's explanation] is contrary to Commerce’s statement that it has already conducted such analysis before issuing the preliminary results," the brief said. "Moreover, Commerce has used its questionnaires and verification process to test the accuracy of the quarterly costs reported by OTS. Therefore, the fact that the record did not include the weighted average version of the quarterly costs was irrelevant for the purposes of testing accuracy of the reported costs."
In past AD reviews, Commerce has established a practice of using quarterly cost methodology, which employs the method when a respondent's cost of manufacturing has changed by over 25% during the review period and the cost of manufacturing and net price are reasonably correlated, Officine said. As both of these factors were true in Officine's case, the exporter said the agency should have used the quarterly cost methodology.