[Federal Register Volume 60, Number 61 (Thursday, March 30, 1995)]
[Notices]
[Pages 16437-16440]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-7776]
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DEPARTMENT OF COMMERCE
[A-570-832 and A-570-833]
Notice of Final Determinations of sales at Less Than Fair Value:
Pure Magnesium and Alloy Magnesium From the People's Republic of China
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: March 30, 1995.
FOR FURTHER INFORMATION CONTACT:
David J. Goldberger or Louis Apple, Office of Antidumping
Investigations, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue NW., Washington, D.C. 20230; telephone: (202) 482-
4136 or (202) 482-1769, respectively.
Final Determinations
The Department of Commerce (the Department) determines that pure
magnesium and alloy magnesium from the People's Republic of China (PRC)
are being, or are likely to be, sold in the United States at less than
fair value (LTFV), as provided in section 735 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 Department announced its preliminary determinations on
October 27, 1994, (59 FR 55424, November 7, 1994) the following events
have occurred:
On October 19, 1994, Min He Magnesium (Min He), a producer and
exporter of the subject merchandise, and Xiamen Xing Xia Co. Ltd (Xing
Xia), an exporter of the subject merchandise, requested that we
postpone our final determinations by 60 days pursuant to 19 CFR
353.20(b)(1). On November 7, 1994, we published a notice postponing the
final determinations (59 FR 55424).
In January, 1995, we conducted verification of the questionnaire
responses at Min He and Xing Xia. On February 10, 1995, petitioner
filed a case brief. On February 17, 1995, respondents filed a rebuttal
brief and petitioner withdrew its request for a public hearing.
Scopes of Investigations
The scopes of these investigations have been modified since the
preliminary determination in order to clarify the distinctions between
pure magnesium and alloy magnesium. See Comment 1 in the ``Interested
Party Comments'' section of this notice, below.
A. Pure Magnesium
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
is used primarily as a chemical in the aluminum alloying,
desulfurization, and chemical reduction industries. In addition, pure
primary magnesium is used as an input in producing magnesium alloy.
Pure primary magnesium encompasses:
(1) Products that contain at least 99.95% primary magnesium, by
weight (generally referred to as ``ultra-pure'' magnesium);
(2) Products containing less than 99.95% but not less than 99.8%
primary magnesium, by weight (generally referred to as ``pure''
magnesium); and
(3) Products (generally referred to as ``off-specification pure''
magnesium) that contain 50% or greater, but less than 99.8% primary
magnesium, by weight, and that do not conform to ASTM specifications
for alloy magnesium.
``Off-specification pure'' magnesium is pure primary magnesium
containing magnesium scrap, secondary magnesium, oxidized magnesium or
impurities (whether or not intentionally added) that cause the primary
magnesium content to fall below 99.8% by weight. It generally does not
contain, individually or in combination, 1.5% or more, by weight, of
the following alloying elements: aluminum, manganese, zinc, silicon,
thorium, zirconium and rare earths.
Excluded from the scope of this investigation are alloy primary
magnesium, primary magnesium anodes, granular primary magnesium
(including turnings and powder), and secondary magnesium.
Granular magnesium, turnings, and powder are 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 a 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 2mm 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 classifiable under
subheadings 8104.11.00, 8104.19.00 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.
B. Alloy Magnesium
The product covered by this investigation is alloy 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.
Alloy magnesium products are produced by adding alloying elements
to pure magnesium in order to alter the mechanical and physical
properties of the magnesium to make it suitable for use as a structural
material. Alloy magnesium is used primarily for casting or in wrought
form. It is harder and [[Page 16438]] stronger than pure magnesium and
may possess a higher corrosion resistance.
This investigation covers alloy primary magnesium which contains
50% or greater, but less than 99.8%, primary magnesium, by weight, and
one or more of the following: aluminum, manganese, zinc, silicon,
thorium, zirconium and rare earths in amounts which, individually or in
combination, constitute not less than 1.5% of the material, by weight.
Products that meet the aforementioned description but do not conform to
ASTM specifications for alloy magnesium are not included in the scope
of this investigation. In addition to primary magnesium, alloy
magnesium may contain magnesium scrap, secondary magnesium, or oxidized
magnesium in amounts less than the primary magnesium itself.
Alloy 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 pure primary
magnesium, primary magnesium anodes, granular primary magnesium
(including turnings and powder), and secondary magnesium.
Granular magnesium, turnings, and powder are 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 2mm 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 1mm. (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 include products having a maximum physical dimension
(i.e., length or diameter) or 1 inch or less.
The products subject to this investigation are classifiable under
subheadings 8104.19.00 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.
Periods of Investigation
The period of investigation (POI) for pure magnesium is April 1,
1993 through March 31, 1994. The POI for alloy magnesium is September
1, 1992 through March 31, 1994.
Best Information Available (BIA)
The Department's antidumping questionnaire was sent to seven
companies located in the PRC, in addition to the copy sent to the
Ministry of Foreign Trade and Economic Cooperation. Of these seven
companies, responses were received from only one, Min He. Two
companies, Luoyang Copper Working Plant and Northeast Light Alloy
Fabrication Plant, replied that they did not export the subject
merchandise. Two companies, Harbin Non-Ferrous Metal Smelter and Fushun
Aluminum Smelter, did not respond to the questionnaires at all and the
questionnaires sent to the other two companies, Yingkou Magnesium Works
and Tongling Copper Smelter, were returned as undeliverable. Another
company, Xing Xia, was accepted by the Department as a voluntary
respondent.
In investigations involving imports from non-market economy
countries, unless respondents request and qualify for separate rates,
we apply the same rate to all exports from that country and treat
responses from individual companies as single consolidated response.
Since none of the respondents requested a separate rate in either the
pure magnesium or alloy magnesium investigation, all respondents are
treated as one entity for the purposes of assigning an antidumping
margin in each investigation.
At the time of the preliminary determination, it was unclear
whether there were nonresponding potential exporters during the POI.
Since the preliminary determination, we have identified nonresponding
potential exporters. The required consolidated response in this case is
incomplete because these companies failed to respond to the
Department's questionnaire. Moreover, the portion of the response that
was submitted, (i.e. Min He and Xing Xia) failed to verify. (see
verification reports dated February 3, 1995)
Although the participating respondents, Min He and Xing Xia, did
attempt to cooperate with the Department's requests for documentation
during their respective verifications, they were not able to do so and
the Department was unable to verify the accuracy and completeness of
the information reported in their questionnaire responses. Therefore,
the Department must assign an antidumping margin on the basis of BIA
pursuant to section 776 (b) and (c) of the Act.
In determining what to use as BIA, the Department follows a two-
tiered methodology, whereby the Department normally assigns less
adverse margins to those respondents that cooperated in an
investigation and more adverse margins to those respondents that did
not cooperate in an investigation. The Department's two-tiered
methodology for assigning BIA has been upheld by the U.S. Court of
Appeals for the Federal Circuit. (See Allied Signal v. United States,
996 F.2d 1185 (Fed. Cir. 1993) (June 22, 1993)). In this case, the
Department has determined that the respondent, a single entity as
explained above, is uncooperative because known exporters did not
respond to the Department's questionnaire. This fact impeded
significantly the Department's investigation.
When a respondent is uncooperative, the Department normally uses as
BIA the higher of 1) the highest margin in the petition; 2) the highest
margin calculated for any other respondent within the same country for
the same class or kind of merchandise; or 3) the estimated margin found
for the affected firm in the preliminary determination. (See Final
Determination of Sales at Less Than Fair Value: Antifriction Bearings
(other than Tapered Roller Bearings) and Parts Thereof from the Federal
Republic of Germany, 54 FR 1892, 19033 (1989)). In this investigation,
the preliminary determination margins are higher than the petition
margins, as revised in the initiation notice. (See Initiation of
Antidumping Duty Investigations: Pure and Alloy Magnesium From the
People's Republic of China, the Russian Federation, and Ukraine (59 FR
21748, April 26, 1994). Therefore, as BIA, we are assigning to all
exporters of PRC pure magnesium and ally magnesium the rates calculated
in the preliminary determinations. (see 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 Plated From Belgium (58 FR 37083, July 9, 1993).
(For further discussion of BIA, see Comment 2) [[Page 16439]]
Verification
As provided in section 776(b) of the Act, we attempted to verify
all information submitted by respondents for use in our final
determinations. We used standard verification procedures, including
examination of relevant accounting records and original source
documents provided by respondents. However, as noted above, we were not
able to verify the accuracy and completeness of the respondents'
submissions.
Interested Party Comments
Comment 1
Petitioners contend that the Department should clarify the scopes
in these proceedings. Petitioners argue that ``off-specification'' pure
magnesium (i.e., magnesium that is less than 99.8% pure magnesium but
that otherwise can be and is considered pure magnesium by consumers)
should be considered within the scope of the pure magnesium proceeding
instead of within the scope of the alloy magnesium proceeding.
Petitioners propose revised scopes to achieve this end.
Respondents argued that petitioners' request for ``clarification''
of scope was untimely. They further argued that petitioners concerns
about circumvention are merely speculative because no order yet exists
as a result of this investigation. Furthermore, respondents stated that
petitioners should have their concerns addressed in a request for scope
review or an anticircumvention investigation.
DOC Position
We agree with petitioners that some magnesium, despite not meeting
the normal definition (based on magnesium content) of pure magnesium,
nevertheless may be used in applications that normally require pure
magnesium. In fact, the record in this case show sales of such
magnesium were supplied to fulfill orders for pure magnesium.
We therefore have revised the scopes of these investigations to
include this off-specification pure magnesium within the definition of
pure magnesium, described as any product (1) that is 50 percent or more
primary magnesium, and (2) that does not meet any ASTM definition of
alloy magnesium (based on specific percentages of one or more alloying
agents).
We not that our consultations with the Bureau of Mines established
that the industry standards for alloy magnesium are ASTM standards.
(See Final Calculation Memorandum of the concurrent investigations of
pure magnesium and alloy magnesium from the Russian Federation and ally
magnesium from the Ukraine). Consequently, we have not adopted
petitioner's proposed scope language that would describe off-
specification pure magnesium as any product, inter alia, that does not
meet ASTM standards or other industry standards.
Although ASTM standards define pure magnesium as not less than 99.8
percent magnesium, metal with a primary magnesium content below that
level should be captured in the scope of the pure magnesium
investigations if it cannot legitimately be defined as a specific ASTM
alloy magnesium.
The fact that both scopes capture only merchandise with primary
magnesium content of 50 percent or greater means that merchandise
composed of 50 percent or more secondary magnesium would not fall
within either scope.
Comment 2
Petitioners state that the Department should base the dumping
margins for all producers and exporters of magnesium from the PRC on
BIA, and argue that the BIA rate should be calculated using the factors
data found at verification and the lowest United States price in the
petition. At verification we found discrepancies in the factor usage
data, the additional unreported factors, as well as, mis-reported data
on labor and electricity. However, if the suggested methodology is not
used, petitioners argue that the Department should not use as BIA a
rate lower than the highest rate alleged in the petition.
Min He and Xing Xia argue that, although that they were unable to
provide all of the information requested by the Department, they were
cooperative and provided timely responses. In view of this cooperation,
they argue the Department should not resort to the punitive first tier
BIA. Instead, the Department should base its BIA rate on the margins
alleged in the petition. They also argue that since the Department was
unable to verify the information reported, it must revert to BIA from
the petition and publicly available sources, and thus not use facts
found at verification to calculate the foreign market value.
DOC Position
The Department does not agree that respondents should be granted
cooperative BIA rates. As stated above, because no exporter is being
granted a separate dumping margin, we are assigning one country-wide
margin in each of the investigations. Given that certain exporters
failed to respond to our questionnaire, we are assigning an
uncooperative BIA rate, pursuant to our long-standing practice.
Petitioners have asked the Department to depart from its standard
practice and adjust this BIA rate based on information discovered at
verification. Petitioners are essentially asking the Department to
adjust the BIA rate to make it more accurate. However, it is a
generally accepted principle that BIA ``is not necessarily accurate
information, * * * [but rather is] * * * information which becomes
usable because respondent has failed to provide accurate information.''
(See Association Columbiana de Exportadoras de Flores v. United States,
704 F. Supp. 1114, 1126 (Ct. Int'l Trade 1989), rev'd in part on
remand, 717 F. Supp. 834 (Ct. Int'l Trade 1989), aff'd on other
grounds, 901 F.2d 1089 (Fed Cir. 1990) cert. denied, 111 S. Ct. 136
(1990)). The Department's practice is to apply, as BIA, the highest
margin already calculated and not to engage in the exercise of
attempting to calculate the highest possible margin. The purpose of
resorting to BIA is not to be punitive but to encourage respondents to
properly respond to the Department's requests for information. The
Department believes that the 108.26% rate for pure magnesium and 79.38%
rate for alloy magnesium accomplish this purpose.
Continuation of Suspension of Liquidation
In accordance with sections 733(d)(1) of the Act, we are directing
the Customs Service to continue to suspend liquidation of all entries
of pure magnesium and alloy magnesium from the PRC that are entered, or
withdrawn from warehouse, from consumption on or after November 7,
1994, which is the date of publication of our notice of preliminary
determination in the Federal Register. The Customs Service shall in
each proceeding, require a cash deposit or posting of a bond equal to
108.26 percent ad valorem on all entries of certain pure magnesium from
the PRC and 79.38 percent ad valorem on all entries of certain alloy
magnesium from the PRC. This suspension of liquidation will remain in
effect until further notice.
ITC Notification
In accordance with section 735(d) of the Act, we have notified the
ITC of our determinations. As our final determinations are affirmative,
the ITC will within 45 days determine whether imports of either product
are materially injuring, or threaten material injury to, the U.S.
industry. In each proceeding, if the ITC determines that material
injury, or threat of material injury does not [[Page 16440]] exist,
that proceeding will be terminated and all securities posted will be
refunded or cancelled. If, in either proceeding, the ITC determines
that such injury does exist, the Department will issue an antidumping
duty order for the appropriate proceeding directing Customs officials
to assess antidumping duties on all imports of the subject merchandise
entered for consumption on or after the effective date of the
suspension of liquidation.
These determinations are published pursuant to section 735(d) of
the Act and 19 CFR 353.20(a)(4).
Dated: March 22, 1995.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 95-7776 Filed 3-29-95; 8:45 am]
BILLING CODE 3510-DS-P
