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Nucor to CIT: Remand Probe of Off-Peak Sale of Electricity and Steel Scrap Inputs in CVD Calculations

The Court of International Trade should again remand the results of a countervailing duty investigation on carbon and alloy steel cut-to-length plate from South Korea to address allegations the Korean government provided off-peak electricity for less-than-adequate-remuneration, Nucor argued March 2 at the Court of International Trade. It also argued Commerce should reconsider whether to treat POSCO's affiliate, POSCO Plantec, as a cross-owned input supplier (Nucor v. U.S., CIT # 21-00182).

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Nucor alleged the Korean government effectively subsidized large industrial electricity consumers that shift their consumption to off-peak hours by charging below-cost prices during that time, while charging above-cost prices to on-peak consumers. Nucor said Commerce ignored its requirement to investigate an allegation of electrical price subsidies used by POSCO. Even if Nucor did not include a benchmark value for measuring the amount of benefit received by off-peak electricity rates, the agency "cannot lawfully decide not to investigate a subsidy," Nucor said.

The statute required Commerce to investigate the alleged subsidy, Nucor said. The remand results were "internally contradictory with respect to the initiation standard," Nucor said. The department confirmed it treated Nucor's allegation as "new" but then cited a previous determination that the Korean electricity system was "consistent with market principles" in defending its heightened initiation standard, Nucor said.

Commerce also continued on remand to find POSCO Plantec's scrap was primarily dedicated to construction of industrial plants rather than the production of POSCO's downstream steel product. But "Commerce has elsewhere found -- and the courts have affirmed -- that business focus is largely irrelevant where, as here, the supplier provides an input actually used in subject production," Nucor said.

Commerce has "repeatedly found steel scrap primarily dedicated to downstream steel production ... in cases involving POSCO's flat-rolled steel products," Nucor said. The agency's example of Korean cold-rolled steel products and fluid end blocks from Germany, intended to show that it does not always treat steel scrap as primarily dedicated to downstream steel production, fails because it "involved the same reasoning the Court found insufficient here," Nucor said.

On remand, Commerce created a distinction between processed and unprocessed steel scrap, stating the unprocessed scrap is an input used across multiple industries and products but failed to identify any other than downstream steel production, Nucor said. "Commerce has repeatedly found that steel scrap ... is primarily dedicated to downstream steel production."

In its January remand results, Commerce stood by its decision not to investigate the alleged off-peak sale of electricity and not to treat POSCO Plantec as a cross-owned input supplier of POSCO (see 2302010042). "Because Commerce's final remand results do not cure the flaws in the original agency decision, the Court should remand the decision for a second time," Nucor said.