Heat-Treated Sheet With Proprietary Alloy Core Covered by Aluminum Sheet Duties, Commerce Says

Heat-treated aluminum sheet that is made from a proprietary alloy and otherwise meets all scope requirements is covered by antidumping and countervailing duties on common alloy aluminum sheet from China (A-570-073/C-570-074), the Commerce Department said in a recent scope ruling. The “core” layer in Valeo’s clad T-series aluminum sheet is unregistered with the Aluminum Association but can be considered 3-series alloy covered by the scope based on its magnesium content, the agency said.

“Here, we find that the chemical composition of the T-series aluminum sheet’s proprietary core matches the Aluminum Association’s 3xxx alloy group because Valeo indicated that the core alloy has a principal alloying element of manganese,” Commerce said. “Record information shows that an alloy with a principal alloying element corresponding to the Aluminum Association’s alloy series is generally referred to by the applicable series designation even in instances where the alloy is not registered with the Aluminum Association.”

Valeo imports the heat-treated T-series aluminum sheet for manufacturing automotive heat exchangers, as well as heat, ventilation and air conditioning systems. The sheet is manufactured from multiple layers of aluminum sheets, including a center layer of proprietary alloy with a major alloying agent of manganese that is unregistered with the Aluminum Association, and outer layers made from aluminum alloy 4045.

The scope of the AD/CVD orders on common alloy aluminum sheet covers not-clad sheet made from 1, 3 and 5-series alloys, as well as multi-alloy, clad aluminum sheet made “produced from a 3XXX-series core, to which cladding layers are applied to either one or both sides of the core.”

Valeo argued the sheet is not clad because during the heat treating process the layers diffuse into each other, resulting a product with distinct phases of alloys but without discrete layers. Were that the case, the T-series sheet may not have met the scope’s requirement that not-clad sheet be made from 1-, 3- or 5 series alloys. But Commerce disagreed, finding the T-series sheet is clad for AD/CVD scope purposes. The Aluminum Association’s standards say that cladding may be altered by diffusion between the core and cladding due to thermal treatment, the agency said.

“Valeo’s description of T-series aluminum sheet suggests that, while some diffusion may occur between the outer and center layers, these layers maintain their separate chemistries because the phases of diffused alloys have a larger manganese content toward the center of the product and a larger silicon content toward the surface of the product,” Commerce said. Given the Aluminum Association’s provision that some diffusion may occur, “the T-series aluminum sheet imported by Valeo can be considered to be a clad product rather than a heat-treated product,” Commerce said.

Commerce also found the proprietary core can be considered a 3-series alloy, despite Valeo’s contentions to the contrary. The Aluminum Association does set four-digit designations for aluminum alloys, but those are based on a general numbering system where the first digit is based on the major alloying element. Alloys with manganese as the major alloying element are designated with four-digit numbers beginning with the number three.

While “it would be incorrect to identify Valeo’s imports of T-series aluminum sheet with a specific registered four-digit 3xxx-series alloy (e.g., 3003 alloy or 3304 alloy) because T-series aluminum sheet does not have identical chemical properties to any specific registered four-digit 3xxx-series alloy,” the chemical composition of the alloy “matches the Aluminum Association’s 3xxx alloy group because Valeo indicated that the core alloy has a principal alloying element of manganese,” Commerce said. Alloys with a principal alloying element corresponding to an alloy series are “generally referred to by the applicable series designation even in instances where the alloy is not registered with the Aluminum Association,” Commerce said.

Finally, Valeo argued that the T-series sheet should be excluded because the AD/CVD orders exclude heat-treatable alloys. It said the Aluminum Association classifies 3XXX, 4XXX and 5XXX series alloys as non-heat treatable, and pointed to materials from the original investigation, including the ITC report, that say heat-treated aluminum sheet, such as that made from 6XXX series alloy, are not covered by the scope.

“However, Valeo has not demonstrated this statement was intended to create an exclusion for heat-treated aluminum sheet that otherwise meets the description in the scope of the Orders,” Commerce said. “We determine that T-series aluminum sheet is a clad product and not a heat-treated product. Also, we determine that the scope of the Orders does cover heat-treated or heat-treatable alloys if they otherwise meet the scope description.”