[Federal Register Volume 59, Number 214 (Monday, November 7, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-27435]
[[Page Unknown]]
[Federal Register: November 7, 1994]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-823-806]
Preliminary Determination of Sales at Less Than Fair Value and
Postponement of Final Determination: Pure Magnesium From Ukraine
AGENCY: Import Administration, International trade Administration,
Department of Commerce.
EFFECTIVE DATE: November 7, 1994.
FOR FURTHER INFORMATION CONTACT:
Ellen Grebasch or Erik Warga, Office of Antidumping Investigations,
Import Administration, International Trade Administration, U.S.
Department of Commerce, 14th Street and Constitution Avenue NW.,
Washington, DC 20230; telephone: (202) 482-3773 or (202) 482-0922,
respectively.
PRELIMINARY DETERMINATION: We preliminarily determine that imports of
pure magnesium from Ukraine are being, or are likely to be, sold in the
Untied States at less than fair value (``LTFV''), as provided in
section 733 of the Tariff Act of 1930, as amended (``the Act''). The
estimated margins are shown in the ``Suspension of Liquidation''
section of this notice.
Case History
Since the initiation of this investigation on April 20, 1994, (59
FR 21748, April 26, 1994), the following events have occurred.
On May 16, 1994, the U.S. International Trade Commission (ITC)
notified the Department of Commerce (the Department) of its preliminary
determination that there is a reasonable indication that an industry in
the United States is materially injured, or threatened with material
injury, by reason of imports of pure magnesium from Ulkraine. The ITC
also determined in the companion investigation of alloy magnesium from
Ukraine that there is not a likelihood that a U.S. domestic industry is
materially injured, or threatened with material injury, by reason of
imports of alloy magnesium from Ukraine, thereby terminating that
investigation.
On June 13, 1994, we sent the antidumping questionnaire to the
Ukrainian Embassy and the two Ukrainian manufacturers of pure
magnesium, Concern Chlorvinyl and Zaporozhye Titanium and Magnesium
Plant. (The antidumping questionnaire was divided into three sections:
section A requesting general information on each company; section C
requesting information on, and a listing of, U.S. sales made during the
period of investigation (``POI''); and, section D requesting
information on the production process, including specific amounts of
each input used in manufacturing pure magnesium.) We requested the
Embassy's assistance in forwarding the questionnaire to all exporters
and producers of pure magnesium from Ukraine and submitting complete
questionnaire responses on their behalf.
On August 8, 1994, the Department postponed its preliminary
determination until October 27, 1994 (59 FR 42200, August 17, 1994).
On August 10, 1994, the Department provided interested parties with
the opportunity to submit published, publicly-available information for
consideration in valuing factor inputs. Petitioners submitted
information on September 7, 1994; respondents submitted information on
September 22, 1994.
Respondent Selection
In addition to sending the Ukrainian Embassy the questionnaire, the
Department independently attempted to identify other possible exporters
of Ukrainian pure magnesium to the United States during the POI based
on information obtained from petitioners, and through examination of
PIERS data and other sources of information. Our efforts consisted of
issuing an August 8, 1994, survey requesting information on exports to
the United States of the subject merchandise; issuing the antidumping
questionnaires (limited to Sections A and C) to trading companies
operating in various European countries (on August 19, September 7, and
September 13, 1994); and a September 15, 1994, follow-up letter to
unresponsive questionnaire recipients.
We sent either the survey, the questionnaire, or both documents to
56 companies, with the following results.
Two companies, Gerald Metals and MG Metals, provided
responses to Sections A and C of the questionnaire.
Twenty-five other companies, meanwhile, indicated that
they did not export the subject merchandise to the United States during
the POI. The companies that did not export were Intreid; Kemokomplex;
Nobel Trading; Raba Company; Alamet; Compagnie de Mines et Metals;
Expromptorg; Fred Lonner & Co., Inc.; Metal Exchange Corporation;
Minmeta S.A., Minmetals Canada, Inc.; Scandinavian Steel AB; Stena
Metall Atervinning AB; Sinex AG; Maks Trade Kft.; Sassoon Metals and
Chemicals; Seleb; Weko Food Trading; IMEX Consulting Sprl; W&O
Bergmann; Steinweg Handelsveem; A. Hartrodt; C. Steinweg Handelsveem
B.V.; J. Oosterom & Zoom; and Siegfried Kahn AG.
Seven companies indicated that they were related to
companies who had provided information as to whether or not they had
made U.S. sales.
Eighteen companies provided either no response or an
inadequate response. The Department received no response from the
following 16 contacted companies: Derek Raphael & Co. Ltd.; Marco
Trading; Wogen Group Ltd.; Alex; Mages; and 11 other companies whose
names cannot be disclosed in this notice because their identities has
been deemed business proprietary information. We have designated these
11 companies as companies ``A'' through ``K'' in the ``Suspension of
Liquidation'' section of this notice, below. We will, however, identify
them to the Customs Service for enforcement of this determination.
Additionally, F&S and Alusuisse-Lonza indicated that they made POI
sales to the United States, but provided inadequate responses to our
requests for information.
Finally, surveys or questionnaires sent to four companies
were returned as undeliverable.
From July to October 1994, the Department received responses to
sections A and D from Concern Chlorvinyl, which indicated that it had
made no sales of the subject merchandise directly to the United States
during the POI. Zaporozhye responded to section A but did not reply to
subsequent deficiency letters.
During September and October 1994, the Department also requested
clarifications of the information submitted by Concern Chlorvinyl,
Gerald Metals, MG Metals, and Alusuisse-Lonza. Alusuisse-Lonza did not
respond to the supplemental request. Because of the deadlines
established for responses to these supplemental requests, certain
information submitted by Gerald Metals and MG Metals was not considered
for this preliminary determination.
Postponement of Final Determination
Pursuant to section 735(a)(2)(A) of the Act, on October 24, 1994,
Gerald Metals, a reseller accounting for a significant proportion of
the merchandise in this proceeding, requested that, in the event of an
affirmative preliminary determination in this investigation, the
Department postpone the final determination to 135 days after the date
of publication of the affirmative preliminary determination in the
Federal Register. Concern Chlorvinyl, a producer accounting for a
significant proportion of merchandise in this proceeding, made a
similar request on October 26, 1994. Therefore, we are postponing the
final determination until the 135th day after the publication of this
notice in the Federal Register.
Scope of Investigation
The product covered by this investigation is pure primary
magnesium, regardless of chemistry, form or size, unless expressly
excluded from the scope of this investigation. Primary magnesium is a
metal or alloy containing by weight primarily the element magnesium and
produced by decomposing raw materials into magnesium metal.
Pure primary magnesium encompasses all products that contain at
least 99.95% primary magnesium, by weight (generally referred to as
``ultra-pure'' magnesium), as well as products containing less than
99.95% but not less than 99.8% primary magnesium, by weight (generally
referred to as ``pure'' magnesium). Products that have the
aforementioned primary magnesium content, but that do not conform to
ASTM specifications or other industry or customer-specific
specifications, are included in the scope of this investigation.
Pure primary magnesium is cast and sold in various physical forms
and sizes, including ingots, slabs, rounds, billets and other shapes.
Excluded from the scope of this investigation are primary magnesium
anodes, granular primary magnesium (including turnings and powder), and
secondary magnesium.
Granular magnesium, turnings, and powder are currently classifiable
under Harmonized Tariff Schedule of the United States (HTSUS)
subheading 8104.30.00. Magnesium granules and turnings (also referred
to as chips) are produced by grinding and/or crushing primary magnesium
and thus have the same chemistry as primary magnesium. Although not
susceptible to precise measurement because of their irregular shapes,
turnings or chips are typically produced in coarse shapes and have
maximum length of less than 1 inch. Although sometimes produced in
larger sizes, granules are more regularly shaped than turnings or
chips, and have a typical size of 2 mm in diameter or smaller.
Powders are also produced from grinding and/or crushing primary
magnesium and have the same chemistry as primary magnesium, but are
even smaller than granules or turnings. Powders are defined by the
Section Notes to Section XV, the section of the HTSUS in which
subheading 8104.30.00 appears, as products of which 90 percent or more
by weight will pass through a sieve having a mesh aperture of 1 mm.
(See HTSUS, Section XV, Base Metals and Articles of Base Metals, Note
6(b).) Accordingly, the exclusion of magnesium turnings, granules and
powder from the scope includes products having a maximum physical
dimension (i.e., length or diameter) of 1 inch or less.
The products subject to this investigation are currently
classifiable under subheadings 8104.11.00 and 8104.20.00 of the HTSUS.
Although the HTSUS subheadings are provided for convenience and customs
purposes, our written description of the scope is dispositive.
Nonmarket Economy Status
Ukraine has been treated as a nonmarket economy (``NME'') country
in all past antidumping proceedings (see, e.g., Final Determination of
Sales at Less Than Fair Value: Uranium from Ukraine (58 FR 36640, July
8, 1993)). No information has been provided in this proceeding that
would lead us to overturn this designation. Therefore, in accordance
with section 771(18)(c) of the Act, we have treated Ukraine as an NME
for purposes of this investigation.
Period of Investigation
The POI is October 1, 1993, through March 31, 1994.
Fair Value Comparisons
A. Participating Respondents
To determine whether sales by Gerald Metals and MG Metals of pure
magnesium from Ukraine to the United States were made at less than fair
value, we compared the United States price (``USP'') to the foreign
market value (``FMV''), as specified in the ``United States Price'' and
``Foreign Market Value'' sections of this notice.
B. Non-Participating Respondents
All companies to which a questionnaire was issued are considered
mandatory respondents in this proceeding. We consider those mandatory
respondents that did not respond to the questionnaire to be
uncooperative respondents and have based the less-than-fair-value
margin for those companies on the best information available (``BIA'').
We consider the following companies to be uncooperative respondents:
Alusuisse-Lonza; Derek Raphael & Co. Ltd.; Marco Trading; Wogen Group
Ltd.; Alex; Mages; F&S; and the 11 companies whose names cannot be
disclosed because their identities are deemed business proprietary
information. Accordingly, we have based these companies' LTFV margin on
an uncooperative BIA rate.
In determining what to use as BIA, the Department follows a two-
tiered methodology, whereby the Department normally assigns lower
margins to those respondents that cooperated in an investigation and
margins based on more adverse assumptions for those respondents which
did not cooperate in an investigation. As outlined in the Final
Determination of Sales at Less Than Fair Value; Certain Hot-Rolled
Carbon Steel Flat Products, Certain Cold-Rolled Carbon Steel Flat
Products, and Certain Cut-to-Length Carbon Steel Plate From Belgium, 58
FR 37083 (July 9, 1993), when a company refuses to provide the
information requested in the form required, or otherwise significantly
impedes the Department's investigation, it is appropriate for the
Department to assign to that company the higher of (a) the highest
margin alleged in the petition, or (b) the highest calculated rate of
any respondent in the investigation. Here, since these companies failed
to respond to our questionnaire, we are deeming them uncooperative and
are assigning them a BIA margin of 53.99 percent. This margin
represents the highest margin in the petition, as recalculated by the
Department at the time of the initiation to account for errors in
arithmetic and/or methodology.
C. All Other Companies
We are basing the LTFV margins for all other companies, including
those companies which reported that they did not sell the subject
merchandise to the United States during the POI, on a simple average of
the rates calculated for the mandatory respondents, including rates
based on BIA but excluding zero and de minimis margins, if any.
United States Price
We based USP on purchase price sales, in accordance with section
772(b) of the Act, because the subject merchandise was sold directly by
the exporters to unrelated parties in the United States prior to
importation into the United States and because exporter's sales price
methodology was not indicated by other circumstances.
For those exporters that responded to the Department's
questionnaire, we calculated purchase price based on packed, CIF or FOB
foreign-port prices to unrelated purchasers in the United States. In
addition, for CIF prices, we made the following deductions (where
appropriate): for MG Metals, we deducted foreign brokerage, ocean
freight, marine insurance, U.S. duty, U.S. inland freight, U.S. inland
insurance and U.S. brokerage and repacking cost; for Gerald Metals, we
deducted foreign brokerage, ocean freight, U.S. Duty, U.S. inland
freight, U.S. insurance and U.S. brokerage.
From each exporter's U.S. price, we calculated and then deducted
foreign inland freight between the factory and the reported
intermediate destination. We based our calculation on the per-ton
foreign inland freight amount reported in the petition as best
information available because the exporters failed to report
information on this area in their questionnaire responses.
Foreign Market Value
A. Surrogate Country Selection
In accordance with section 773(c)(4) of the Act, we must, to the
extent possible, value the factors of production in one or more market
economy countries that (1) are at a level of economic development
comparable to that of the non-market economy country, and (2) are
significant producers of comparable merchandise. There are no countries
economically comparable to Ukraine that are significant producers of
magnesium. Accordingly, we considered as potential surrogates countries
that are economically comparable that produce comparable merchandise.
In these investigations, we have determined that aluminum should be
considered comparable merchandise. Although the material inputs used to
produce magnesium and aluminum are different, according to both U.S.
Bureau of Mines and Department of Commerce experts, aluminum is
comparable to magnesium in that both (1) are light metals in terms of
molecular weight; (2) are electricity-intensive products; (3) are
produced using an electrolytic process, and (4) share some common end
uses (e.g., dye casting).
We have determined that Indonesia and Egypt are both economically
comparable to Ukraine (see October 21, 1994, Memorandum from the Office
of Policy to the File.) In addition, both countries are significant
producers of aluminum. Because we were able to obtain more information
from Indonesia than from Egypt, we have used Indonesia as our primary
surrogate. However, we have resorted to Egypt for certain surrogate
values where values in Indonesia were either unavailable or out of
date. We have obtained and relied upon published, publicly available
information, wherever possible.
B. Factors of Production
In accordance with section 773(c)(1), we used factors of production
as the fair value benchmark for the U.S. price of sales of Concern
Chlorvinyl-produced merchandise by Gerald Metals and MG Metals. In the
case of U.S. sales of Zaporozhye-produced merchandise for which we did
not receive factors of production data, a BIA margin was assigned using
the higher of (a) the highest adjusted alleged margin cited in our
initiation notice or (b) the highest margin calculated for a sale of
Concern Chlorvinyl-produced merchandise. The factors used to produce
pure magnesium include materials, labor, and energy. To calculate FMV,
the reported quantities were multiplied by the appropriate surrogate
values for the different inputs. (For a complete analysis of surrogate
values, see our calculation memorandum.) We then added amounts for
factor overhead, general expenses and profit, the cost of containers
and coverings, and other expenses incident to placing the merchandise
in condition packed and ready for shipment to the United States.
To value the raw materials, we used publicly available information
from Indonesia in the UN Trade Commodity Statistics (``UN Trade
Statistics'') for January through December 1993 and the 1992 Indonesia
Foreign Trade Statistics. No adjustment for inflation was necessary
since the 1993 UN Trade Statistics for Indonesia reported data for a
portion of the POI. For values taken from Indonesian Foreign Trade
Statistics, we made appropriate adjustments to account for inflation.
For one energy input, we used data from the 1992 UN Trade Statistics
for Egypt since the unit value from the 1993 UN Trade Statistics for
Indonesia was based on an extremely small quantity and appeared to be
aberrational. The 1992 Egyptian value for this input was inflated to
the POI. For one raw material, we used information from the petition as
best available information because we were unable to find a value in
either Indonesia or Egypt.
To adjust material input values to account for source-to-factory
freight, we used Indonesia freight rates from a 1991 cable from the
U.S. Embassy in Jakarta. (See Final Determination of Sales at Less Than
Fair Value: Certain Carbon Steel Butt-Weld Pipe Fittings from the
People's Republic of China (57 FR 21058, May 18, 1992).
To value labor amounts for production and packing, we used labor
data for Egypt, as reported in the International Labor Office's 1993
Yearbook of Labor Statistics because the labor value available for
Egypt was more up-to-date (1987) than was the labor value available for
Indonesia (1986). We adjusted labor wage rates to account for inflation
using world price indices for Egypt as reported in the International
Monetary Funds' International Financial Statistics (IFS).
To value heavy oil and diesel fuel, we used 1993 data for Indonesia
from the Energy Information Administration's International Energy
Annual. Although we are unable to adjust these values for taxes
included in the published prices, they are the only data found for
heavy oil and diesel fuel in Indonesia.
To value electricity, we used information for Indonesia from the
Asian Development Bank's 1993 Electric Utilities Data Book for Asian
and Pacific Region.
Because we were unable to find surrogate values for factory
overhead from either Indonesia or Egypt, we used factory overhead rates
from the petition.
We used the statutory minima of ten percent for selling, general
and administrative expenses and eight percent for profit because no
surrogate country information reflected percentages for those amounts
that were above the statutory minima.
To value packing materials, we used data from the 1993 UN Trade
Statistics for Indonesia. Because information for certain packing
materials was incompletely reported, we were unable to calculate a unit
factor value for these materials. Therefore, we included data from the
petition to account for the cost of these packing materials.
Verification
As provided in section 776(b) of the Act, we will verify all
information determined to be acceptable for use in making our final
determination.
Suspension of Liquidation
In accordance with section 733(d)(1) of the Act, we are directing
the Customs Service to suspend liquidation of all imports of the
subject merchandise that are entered, or withdrawn from warehouse, from
consumption on or after the date of publication of this notice in the
Federal Register. The Customs Service shall require a cash deposit or
posting of a bond equal to the estimated amount by which the FMV
exceeds the USP as shown below. We will also inform Customs of the
identities of those companies, identified below by a code letter, whose
names we are unable to disclose. These suspension of liquidation
instructions will remain in effect until further notice.
The weighted-average dumping margins are as follows:
------------------------------------------------------------------------
Weighted-
average
Manufacturer/producer/exporter margin
percentage
------------------------------------------------------------------------
Gerald Metals............................................... 52.21
MG Metals................................................... 36.05
Alusuisse Lonza............................................. 53.99
Derek Raphael & Co., Ltd.................................... 53.99
Marco Trading............................................... 53.99
Wogen Group Ltd............................................. 53.99
Alex........................................................ 53.99
Mages....................................................... 53.99
F&S......................................................... 53.99
Company A................................................... 53.99
Company B................................................... 53.99
Company C................................................... 53.99
Company D................................................... 53.99
Company E................................................... 53.99
Company F................................................... 53.99
Company G................................................... 53.99
Company H................................................... 53.99
Company I................................................... 53.99
Company J................................................... 53.99
Company K................................................... 53.99
All Others.................................................. 53.00
------------------------------------------------------------------------
ITC Notification
In accordance with section 733(f) of the Act, we have notified the
ITC of our determination. If our final determination is affirmative,
the ITC will determine before the later of 120 days after the date of
this preliminary determination or 45 days after our final determination
whether these imports are materially injuring, or threaten material
injury to, the U.S. industry.
Public Comment
In accordance with 19 CFR 353.38, case briefs or other written
comments in at least ten copies must be submitted to the Assistant
Secretary for Import Administration no later than February 10, 1995,
and rebuttal briefs, no later than February 17, 1995. In accordance
with 19 CFR 353.38(b), we will hold a public hearing, if requested, to
afford interested parties an opportunity to comment on arguments raised
in case or rebuttal briefs. Tentatively, the hearing will be held on
February 21, 1995, at 10:00 a.m. at the U.S. Department of Commerce,
Room 3708, 14th Street and Constitution Avenue, NW., Washington, DC
20230. Parties should confirm by telephone the time, date, and place of
the hearing 48 hours before the scheduled time.
Interested parties who wish to request a hearing, or to participate
if one is requested, must submit a written request to the Assistant
Secretary for Import Administration, U.S. Department of Commerce, Room
B-099, within ten days of the publication of this notice. Requests
should contain: (1) The party's name, address, and telephone number;
(2) the number of participants; and (3) a list of the issues to be
discussed. In accordance with 19 CFR 353.38(b), oral presentations will
be limited to issues raised in the briefs. If this investigation
proceeds normally, we will make our final determination by the 135th
day after the date of publication of the affirmative preliminary
determination in the Federal Register.
This determination is published pursuant to section 733(f) of the
Act and 19 CFR 353.15(a)(4).
Dated: October 27, 1994.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 94-27435 Filed 11-4-94, 8:45 am]
BILLING CODE 3510-PS-P
