Suspended Production Lines Were Not G&A Costs, Korean Steel Producers Argue

Costs incurred by South Korean pipe producer Nexteel's suspended production lines should not have been treated as general and administrative costs by the Commerce Department during an antidumping duty review on welded line pipe from South Korea, Nexteel told the Court of International Trade in its April 5 comments on Commerce's remand results (Nexteel Co. v. U.S., CIT # 20-03898).

Nexteel said that Commerce's allocation of costs associated with suspended production line losses was unreasonable and that Commerce's treatment of those losses is inconsistent with the law. Commerce continued to treat costs associated with suspended production as part of Nexteel’s general and administrative costs, despite the fact that the costs were not recorded as such in Nexteel’s normal books and were not costs associated with producing the subject merchandise in the period of review, the company said. Nexteel said that Commerce "did not sufficiently address why Nexteel's reporting was not reasonably reflective of the costs associated with the production and sale of line pipe" as required by the court on its previous remand.

Nexteel argued that Commerce's decision to allocate costs to G&A based on the timing of the shutdowns was "entirely arbitrary" and depended on the particular review period at issue. Nexteel further argued that regardless of the line shutdowns, Commerce is required to accept Nexteel's costs as reported. The statute, Nexteel said, forces Commerce to rely on a company's normal books and records when they are prepared under the home country's generally accepted accounting principles, as Nexteel's were.

Hyundai Steel submitted its own comments agreeing with Nexteel. Commerce applied only Nexteel’s calculated weighted-average dumping margin to non-examined respondents, including Hyundai Steel.

In its remand results, Commerce said that the losses of four product lines were "actual costs incurred by the company" that need to be recovered when setting prices despite only one of the lines producing subject merchandise during the period of investigation (see 2303060060).