United States Court of International Trade

Slip Op. 22-116

Before the Court in Nucor Corp. v. United States, Court No. 21-00182, Slip Op. 22-116 (October, 05, 2022) was plaintiff Nucor’s challenge to the U.S. Department of Commerce’s final results in the 2018 administrative review of the countervailing duty order on certain carbon and alloy steel cut-to-length plate from the Republic of Korea. Commerce determined not to initiate an investigation into the alleged provision of off-peak electricity for less than adequate remuneration. Nucor contended that Commerce impermissibly based its decision on the absence of information that was not reasonably available to Nucor, such as actual electricity generation costs. The agency also determined that mandatory respondent and its affiliate did not meet the requirements necessary to find a cross-owned input supplier relationship. For the following reasons, the Court sustained in part and remanded in part Commerce’s Final Results.  

First, the court answered the question of whether Commerce should reconsider or further explain its decision not to investigate off-peak electricity in the affirmative. Nucor’s allegation centered on what is characterized as the cross-subsidization of the steel industry through the charging of below-cost prices during off-peak hours that are offset by above-cost prices charged to peak consumers. This allegation raised two questions for the court: whether the pricing of off-peak electricity could constitute a subsidy program distinct from Nucor’s previous allegation regarding the sale of electricity for less than adequate remuneration, and whether Nucor’s allegation met the threshold for initiating an investigation into any such program. Commerce’s determination focused on Nucor’s asserted failure to provide a suitable benchmark to compare to the off-peak electricity prices POSCO paid. The court remanded this issue.

With respect to subsidy attribution, the analysis was twofold. The first issue turned on whether Commerce should treat Plantec as a cross-owner input supplier. Commerce decided not to attribute subsidies received by Plantec in connection with POSCO’s purchase of steel scrap and other equipment because it deemed Plantec’s production to be primarily dedicated to the production of downstream product, and the inputs provided by Plantec not inputs primarily dedicated to the production of the subject merchandise. The agency declined to attribute subsidies received by Plantec to POSCO because Plantec generated the scrap as a byproduct and sold the scrap to POSCO, which in turn, resold the scrap to POSCO. The court viewed this determination as impermissibly arbitrary and held that Commerce must reconsider its decision regarding scrap and for it to explain the basis for its decisions with clear rationale and supported by substantial evidence. Commerce’s determinations with respect to the equipment, however, was sustained in part and remanded in part. The court found that Commerce’s determination regarding the nature of the equipment and its uses was supported by substantial evidence and did not require remand.