[Federal Register Volume 69, Number 191 (Monday, October 4, 2004)]
[Notices]
[Pages 59187-59197]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E4-2478]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-896]
Preliminary Determination of Sales at Less Than Fair Value and
Postponement of the Final Determination: Magnesium Metal From the
People's Republic of China
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: October 4, 2004.
FOR FURTHER INFORMATION CONTACT: Lilit Astvatsatrian or Laurel
LaCivita, Import Administration, International Trade
[[Page 59188]]
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
6412 or 482-4243.
Preliminary Determination
We preliminarily determine that magnesium metal from the People's
Republic of China (``PRC'') is being, or is likely to be, sold in the
United 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 of sales at LTFV are shown in the ``Suspension of
Liquidation'' section of this notice.
Case History
On February 27, 2004, the Department of Commerce (``Department'')
received a petition on imports of magnesium metal from the PRC, filed
in proper form by the U.S. Magnesium Corporation LLC, United
Steelworkers of America, Local 8319, and Glass, Molders, Pottery,
Plastics & Allied Workers International, Local 374 (collectively,
``Petitioners'') on behalf of the domestic industry and workers
producing magnesium metal. See Petition for the Imposition of
Antidumping Duties: Magnesium Metal from the People's Republic of
China, dated February 27, 2004 (``the Petition''). This investigation
was initiated on March 25, 2004. See Initiation of Antidumping Duty
Investigation: Magnesium Metal from the People's Republic of China, 69
FR 15293 (March 25, 2004) (``Notice of Initiation'').
On April 16, 2004, and April 26, 2004, the Department requested
quantity and value (``Q&V'') information from a total of one hundred
and forty-two producers of magnesium metal in the PRC which were
identified in the petition and for which the Department was able to
locate contact information. On April 16, 2004, the Department also sent
the Government of the PRC a letter requesting assistance in locating
all known Chinese producers/exporters of magnesium metal who exported
magnesium metal to the United States during the period of investigation
(``POI''), July 1, 2003, through December 31, 2003.
On April 26, 2004, the Department received Q&V responses from two
Chinese producers/exporters of magnesium metal, the RSM companies
(``RSM'') and Tianjin Magnesium International Co., Ltd. (``Tianjin'').
The Government of the PRC did not respond to the Department's April 16,
2004, letter requesting assistance in identifying producers and
exporters of the subject merchandise in the PRC.
On April 30, 2004, the Department determined that India, Pakistan,
Indonesia, Sri Lanka, the Philippines, Morocco, and Egypt are countries
comparable to the PRC in terms of economic development. See Memorandum
from Ron Lorentzen, Acting Director, Office of Policy to Robert
Bolling, Program Manager, Group III, Office 9: Antidumping Duty
Investigation of Magnesium Metal from the People's Republic of China
(PRC): Request for a List of Surrogate Countries, dated April 30, 2004
(``Office of Policy Surrogate Countries Memorandum'').
On May 6, 2004, we issued Sections A, C, D, and E of our
questionnaire to Tianjin and RSM, the only two companies that responded
to our request for Q&V information. In addition, on May 6, 2004, we
issued a Section A, C, D, and E questionnaire to the Government of the
PRC through the Ministry of Commerce and the Chinese Embassy in
Washington, DC.
On May 17, 2004, the United States International Trade Commission
(``ITC'') issued its affirmative preliminary determination that there
is a reasonable indication that an industry in the United States is
materially injured by reason of imports from China and Russia of pure
magnesium and magnesium alloy. The ITC's determination was published in
the Federal Register on May 21, 2004. See Investigation Nos. 731-TA-
1071-1072 (Preliminary), Magnesium from China and Russia, 69 FR 29329
(May 21, 2004).
On May 19, 2004, the Department issued its respondent selection
memorandum, officially selecting RSM and Tianjin as the two mandatory
respondents in this investigation. See Memorandum from Laurel LaCivita,
Senior Case Analyst, Office IX, to Edward Yang, Office Director, Office
IX, Antidumping Duty Investigation of Magnesium Metal from the People's
Republic of China: Selection of Respondents for the Antidumping Duty
Investigation of Magnesium Metal from the People's Republic of China,
dated May 19, 2004 (``Respondent Selection Memorandum'').
On May 10, 2004, the Department requested that the parties submit
comments on surrogate country selection. On May 24, 2004, we received
comments regarding our selection of a surrogate country from the
Petitioners. On June 2, 2004, we received comments regarding our
selection of a surrogate country from RSM and Tianjin. Petitioners
argued that India is the appropriate surrogate country for this
investigation because India is at a comparable level of economic
development with the PRC based on gross national income (``GNI'') and
contains the only producer of primary magnesium located in any of the
countries identified by the Department as surrogate countries.
RSM and Tianjin provided information identifying Kazakhstan,
Russia, and Brazil as potential surrogate countries in this
investigation and contended that, according to the World Bank,
Kazakhstan, Russia, and Brazil each have a per-capita GNI comparable to
that of the PRC. RSM and Tianjin stated further that, according to the
World Bank, neither India nor any of the other countries named in the
Office of Policy Surrogate Countries Memorandum is at a stage of
economic development comparable to the PRC.
We received rebuttal comments concerning the selection of a
surrogate country from Petitioners and respondents on June 14, 2004,
June 28, 2004, and July 9, 2004.
We provided a one-week extension until June 1, 2004 to all
interested parties that requested an extension for submitting a
response to our Section A questionnaire. Additionally, we provided an
extension until June 16, 2004, to all mandatory respondents to respond
to sections C, D, and E of the questionnaire. For a detailed discussion
on specific mandatory respondent extensions, please see the company-
specific section for each mandatory respondent below.
On June 3, 2004, we received a Section A questionnaire response
from Beijing Guangling Jinghua Science & Technology Co., Ltd.
(``Guangling''), which requested a separate rate.
On June 2, 2004, and June 4, 2004, we received a request from
Petitioners, RSM, and Tianjin, respectively, to extend the deadline for
supplying surrogate-value information until two weeks after the
submission of Section D data. On July 6, 2004, we extended the time
period for interested parties to provide surrogate values for factors
of production until July 12, 2004. On July 8, 2004, RSM and Tianjin
requested an extension until two weeks after the Department decided the
surrogate country to submit their surrogate-value information.
On June 17, 2004, RSM requested that the Department excuse it from
reporting certain U.S. further-manufacturing activities. On June 21,
2004, we informed RSM that we did not have sufficient information on
the record to exempt it from reporting sales and cost for merchandise
further manufactured in the United States and requested RSM to report
the further-manufactured
[[Page 59189]]
downstream sales of its affiliate by June 28, 2004. On June 22, 2004,
RSM requested additional guidance concerning the information the
Department required it to provide in order to grant RSM an exemption
from responding to the Section E questionnaire (for a detailed
discussion of this issue, please see the RSM company-specific section
below).
On June 28, 2004, Petitioners made a timely request pursuant to 19
CFR 351.205(e) for a fifty-day postponement of the preliminary
determination or until September 24, 2004. On July 21, 2004, the
Department published a postponement of the preliminary antidumping duty
determination on magnesium metal from the PRC. See Notice of
Postponement of the Preliminary Determinations in Antidumping Duty
Investigations of Magnesium Metal from the People's Republic of China
and the Russian Federation 69 FR 43561 (July 21, 2004).
On August 3, 2004, the Department determined that India was the
appropriate surrogate country to use in this investigation. See
Memorandum to Laurie Parkhill, Office Director, from Laurel LaCivita
and Lilit Astvatsatrian, Case Analysts, through Robert Bolling, Program
Manager: Antidumping Duty Investigation on Magnesium Metal from the
People's Republic of China, dated August 3, 2004 (``Surrogate-Country
Selection Memorandum''). We received comments regarding our selection
of India as the surrogate country from interested parties (for a
detailed discussion of the comments regarding the surrogate country,
please see the ``Surrogate Country'' section below). On August 3, 2004,
we informed Petitioners, RSM, and Tianjin that the due date for
submitting surrogate-value information was August 10, 2004. On August
6, 2004, RSM and Tianjin requested that the Department extend the
deadline for submitting surrogate-value information until September 1,
2004. On August 9, 2004, we extended the deadline for submitting
surrogate-value information until August 17, 2004. We then extended the
deadline for submitting surrogate-value information until August 19,
2004. On August 19, 2004, Petitioners, RSM and Tianjin submitted
surrogate-value comments. Petitioners filed rebuttal comments
concerning RSM and Tianjin Magnesium's August 19, 2004, submission on
August 30, 2004. RSM and Tianjin submitted additional, unsolicited
surrogate-value information on September 10, 2004, and September 13,
2004. On September 10, 2004, and September 14, 2004, Petitioners
objected to RSM's and Tianjin's September 10, 2004, and September 13,
2004, submissions of surrogate-value information, and requested that
the Department withdraw them from the record. On September 16, 2004, we
responded that we would not use RSM's and Tianjin's surrogate-value
submissions of September 10, 2004, and September 13, 2004, for the
preliminary determination of this investigation, but would consider the
information for the final determination. See Memorandum to The File
from Laurel LaCivita Senior Case Analyst, Through Robert Bolling,
Program Manager, AD/CVD Enforcement, Magnesium Metal from the People's
Republic of China: Untimely Submissions of Surrogate Value Information,
dated September 16, 2004.
Company-Specific Chronology
As described above, the Department staggered its issuance of
sections of the antidumping questionnaire to the mandatory respondents.
Upon receipt of the various responses, the Petitioners provided
comments and the Department issued supplemental questionnaires. The
chronology of this stage of the investigation varies by respondent.
Therefore, the Department has separated by company the following
discussion of its information-gathering process after issuance of the
questionnaire.
RSM
RSM submitted its Section A questionnaire response on June 4, 2004.
On June 17, 2004, RSM requested that the Department excuse it from
reporting certain further-manufacturing activities in the United
States, arguing that the value added in the United States ``exceeds
substantially'' the value of the imported subject merchandise and that
there were sufficient sales to unaffiliated U.S. customers upon which
to conduct a constructed-export-price (``CEP'') analysis. On June 21,
2004, the Department responded that it did not have sufficient
information to exempt RSM from reporting its sales of further-
manufactured merchandise in the United States. On June 22, 2004, RSM
requested further guidance concerning the types of information that the
Department needed to grant its request. Petitioners submitted comments
concerning RSM's June 22, 2004, request on June 23, 2004, claiming that
RSM did not explain fully its affiliations with Toyota Tsusho America,
Inc. (``TAI''), its affiliated reseller in the United States, and its
further-manufacturer in the United States. Petitioners claimed further
that RSM applied an incorrect methodology to determine the value added
in the United States. On June 25, 2004, RSM responded that it need only
address the value-added arguments in Petitioners' June 23, 2004,
submission. RSM submitted its Section C and D questionnaire responses
on June 21, 2004. On June 25, 2004, Petitioners submitted comments on
RSM's Section A response. RSM submitted its Section E questionnaire
response on June 29, 2004. Petitioners submitted deficiency comments on
RSM's Section C and D questionnaire responses on July 2, 2004, and on
RSM's Section E questionnaire response on July 13, 2004. The Department
issued a supplemental questionnaire concerning Sections A-E of RSM's
questionnaire responses on July 23, 2004. RSM submitted a supplemental
section A through E questionnaire response on August 20, 2004. The
Department issued a second supplemental questionnaire covering RSM on
September 2, 2004. RSM provided its second supplemental questionnaire
response on September 15, 2004. On September 21, 2004, the Department
provided a memorandum to the file explaining that, although it was not
rejecting RSM's September 15, 2004, submission, it would not be able to
use the information provided in its second supplemental questionnaire
response for the preliminary determination. See Memorandum from Laurel
LaCivita, Senior Case Analyst, to the File, through Robert Bolling,
Program Manager, AD/CVD Enforcement, Magnesium Metal from the People's
Republic of China: The Use of RSM's September 14, 2004 Second
Supplemental Section A, C & D Questionnaire Response for the
Preliminary Determination, dated September 20, 2004.
Tianjin
On June 4, 2004, Tianjin submitted its Section A questionnaire
response. On June 18, 2004, Tianjin submitted its response to Section C
of the Department's May 6, 2004, questionnaire. On June 21, 2004,
Tianjin submitted its response to Section D of the Department's
questionnaire. On July 2, 2004, Petitioners submitted deficiency
comments on Tianjin's responses to Sections A, C, and D of the
questionnaire. On July 23, 2004, the Department issued a supplemental
Sections A, C, and D questionnaire. On August 13, 2004, Tianjin
submitted its response to the supplemental Sections A, C, and D
questionnaire. On August 23, 2004, the Department issued a second
supplemental Sections A, C, and D questionnaire. On September 2, 2004,
Tianjin submitted its response to the second supplemental Sections A,
C, and D questionnaire. On September 3, 2004,
[[Page 59190]]
Tianjin provided corrected versions of certain exhibits included in its
September 2, 2004, submission. On September 13, 2004, Tianjin submitted
electronic copies of its supplemental Sections A-D questionnaire
responses.
Guangling Jinghua
Guangling Jinghua submitted its Section A response on June 3, 2004.
Petitioners provided comments on Guangling Jinghua's Section A response
on July 8, 2004. The Department issued a supplemental Section A
questionnaire on August 12, 2004. Guangling provided its supplemental
Section A response on August 26, 2004.
Postponement of Final Determination
Section 735(a) of the Act provides that a final determination may
be postponed until no later than 135 days after the date of the
publication of the preliminary determination if, in the event of an
affirmative preliminary determination, a request for such postponement
is made by exporters who account for a significant proportion of
exports of the subject merchandise or, in the event of a negative
preliminary determination, a request for such postponement is made by
the Petitioners. The Department's regulations at 19 CFR 351.210(e)(2)
require that requests by respondents for postponement of a final
determination be accompanied by a request for an extension of the
provisional measures from a four-month period to not more than six
months.
On September 14, 2004, RSM requested that, in the event of an
affirmative preliminary determination in this investigation, the
Department postpone its final determination by 60 days until 135 days
after the publication of the preliminary determination. Accordingly,
because we have made an affirmative preliminary determination and the
requesting parties account for a significant proportion of the exports
of the subject merchandise, we have postponed the final determination
until no later than 135 days after the date of publication of the
preliminary determination and are extending the provisional measures
accordingly.
Period of Investigation
The period of investigation (``POI'') is July 1, 2003, through
December 31, 2003. This period corresponds to the two most recent
fiscal quarters prior to the month of the filing of the petition
(February 27, 2003). See 19 CFR 351.204(b)(1).
Scope of Investigation
The products covered by this investigation are primary and
secondary alloy magnesium metal, regardless of chemistry, raw material
source, form, shape, or size. Magnesium is a metal or alloy containing
by weight primarily the element magnesium. Primary magnesium is
produced by decomposing raw materials into magnesium metal. Secondary
magnesium is produced by recycling magnesium-based scrap into magnesium
metal. The magnesium covered by this investigation includes blends of
primary and secondary magnesium.
The subject merchandise includes the following alloy magnesium
metal products made from primary and/or secondary magnesium including,
without limitation, magnesium cast into ingots, slabs, rounds, billets,
and other shapes, and magnesium ground, chipped, crushed, or machined
into raspings, granules, turnings, chips, powder, briquettes, and other
shapes: products that contain 50 percent or greater, but less than 99.8
percent, magnesium, by weight, and that have been entered into the
United States as conforming to an ``ASTM Specification for Magnesium
Alloy'' \1\ and thus are outside the scope of the existing antidumping
orders on magnesium from the PRC (generally referred to as ``alloy''
magnesium).
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\1\ The meaning of this term is the same as that used by the
American Society for Testing and Materials in its Annual Book of
ASTM Standards: Volume 01.02 Aluminum and Magnesium Alloys.
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The scope of this investigation excludes the following merchandise:
(1) All forms of pure magnesium, including chemical combinations of
magnesium and other material(s) in which the pure magnesium content is
50 percent or greater, but less that 99.8 percent, by weight, that do
not conform to an ``ASTM Specification for Magnesium Alloy'' \2\; (2)
magnesium that is in liquid or molten form; and (3) mixtures containing
90 percent or less magnesium in granular or powder form, by weight, and
one or more of certain non-magnesium granular materials to make
magnesium-based reagent mixtures, including lime, calcium metal,
calcium silicon, calcium carbide, calcium carbonate, carbon, slag
coagulants, fluorspar, nephaline syenite, feldspar, alumina (Al203),
calcium aluminate, soda ash, hydrocarbons, graphite, coke, silicon,
rare earth metals/mischmetal, cryolite, silica/fly ash, magnesium
oxide, periclase, ferroalloys, dolomite lime, and colemanite.\3\
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\2\ This material is already covered by existing antidumping
orders. See Antidumping Duty Orders: Pure Magnesium from the
People's Republic of China, the Russian Federation and Ukraine;
Amended Final Determination of Sales at Less Than Fair Value:
Antidumping Duty Investigation of Pure Magnesium from the Russian
Federation, 60 FR 25691 (May 12, 1995); Antidumping Duty Order: Pure
Magnesium in Granular Form from the People's Republic of China, 66
FR 57936 (Nov. 19, 2001).
\3\ This third exclusion for magnesium-based reagent mixtures is
based on the exclusion for reagent mixtures in the 2000-2001
investigations of magnesium from the PRC, Israel, and Russia. See
Final Determination of Sales at Less Than Fair Value: Pure Magnesium
in Granular Form From the People's Republic of China, 66 FR 49345
(September 27, 2001); Final Determination of Sales at Less Than Fair
Value: Pure Magnesium From Israel, 66 FR 49349 (September 27, 2001);
Final Determination of Sales at Not Less Than Fair Value: Pure
Magnesium From the Russian Federation, 66 FR 49347 (September 27,
2001). These mixtures are not magnesium alloys because they are not
chemically combined in liquid form and cast into the same ingot.
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The merchandise subject to this investigation is classifiable under
items 8104.19.00 and 8104.30.00 of the Harmonized Tariff Schedule of
the United States (``HTSUS''). Although the HTSUS items are provided
for convenience and customs purposes, the written description of the
merchandise under investigation is dispositive.
Selection of Respondents
Section 777A(c)(1) of the Act directs the Department to calculate
individual dumping margins for each known exporter and producer of the
subject merchandise. Section 777A(c)(2) of the Act gives the Department
discretion, when faced with a large number of exporters/producers, to
limit its examination to a reasonable number of such companies if it is
not practicable to examine all companies. Where it is not practicable
to examine all known producers/exporters of subject merchandise, this
provision permits the Department to investigate either (1) a sample of
exporters, producers, or types of products that is statistically valid
based on the information available to the Department at the time of
selection or (2) exporters/producers accounting for the largest volume
of the merchandise under investigation that can reasonably be examined.
Only two of the twenty-four exporters identified in the petition
responded to the Department's questionnaire. Therefore, the Department
determined that it has the resources available to investigate all
responding parties in this investigation and that there is no reason to
limit the number of respondents to be examined in this investigation
pursuant to section 777A(c)(2) of the Act. See Respondent Selection
Memorandum at 3. Consequently, in this investigation, we have examined
both Tianjin and RSM,
[[Page 59191]]
the only two exporters of subject merchandise who responded to the
Department's Q&V questionnaire. The two Chinese producers/exporters
(Tianjin and RSM) accounted for a significant percentage of all exports
of the subject merchandise from the PRC during the POI and were
selected as mandatory respondents. See Respondent Selection Memorandum
at 3.
Non-Market-Economy Country
For purposes of initiation, the Petitioners submitted LTFV analyses
for the PRC as a non-market economy. See Notice of Initiation at 15295.
In every case conducted by the Department involving the PRC, the PRC
has been treated as an Non-Market-Economy (``NME'') country. In
accordance with section 771(18)(C)(i) of the Act, any determination
that a foreign country is an NME country shall remain in effect until
revoked by the administering authority. See also Tapered Roller
Bearings and Parts Thereof, Finished and Unfinished, From the People's
Republic of China: Preliminary Results 2001-2002 Administrative Review
and Partial Rescission of Review, 68 FR 7500 (February 14, 2003).
Therefore, we have treated the PRC as an NME country for purposes of
this preliminary determination.
Surrogate Country
When the Department is investigating imports from an NME, section
773(c)(1) of the Act directs it to base normal value (``NV''), in most
circumstances, on the NME producer's factors of production valued in a
surrogate market-economy country or countries considered to be
appropriate by the Department. In accordance with section 773(c)(4) of
the Act, in valuing the factors of production, the Department shall
utilize, to the extent possible, the prices or costs of factors of
production in one or more market-economy countries that are at a level
of economic development comparable to that of the NME country and are
significant producers of comparable merchandise. The sources of the
surrogate values we have used in this investigation are discussed under
the NV section below.
The Department determined that India, Pakistan, Indonesia, Sri
Lanka, the Philippines, Morocco, and Egypt are countries comparable to
the PRC in terms of economic development. See Office of Policy
Surrogate Countries Memorandum. Customarily, we select an appropriate
surrogate country based on the availability and reliability of data
from the countries.
The Department received arguments from interested parties on the
surrogate country. Petitioners argue that India is the appropriate
surrogate country for this investigation because India is at a
comparable level of economic development with the PRC based on gross
national income (``GNI''). Petitioners contend that the Department has
consistently found that India meets these statutory requirements for a
surrogate country for the PRC, citing Pure Magnesium and Alloy
Magnesium at 55425 and 55426 and Pure Magnesium From the People's
Republic of China: Preliminary Results of Antidumping Duty New Shipper
Administrative Review, 62 FR 55215, 55217 (October 23, 1997).
Petitioners argue that India is a significant producer of aluminum,
which the Department has determined previously to be the product most
comparable product to magnesium, citing Pure Magnesium and Alloy
Magnesium From the People's Republic Of China: Final Results of
Antidumping Duty New Shipper Administrative Review, 63 FR 3085, 3087
(January 21, 1998) (``Pure Magnesium New Shipper Review'').
Respondents identified Kazakhstan, Russia, and Brazil as potential
surrogate countries for the PRC in this investigation. Respondents
argue that neither India nor the other countries identified in the
Office of Policy's List of Surrogate Countries produce the subject
merchandise nor comparable merchandise. Respondents claim further that,
among the developing countries other than China, only Kazakhstan,
Russia, and Brazil are significant producers and exporters of magnesium
and magnesium alloys. See the Selection of a Surrogate Country
Memorandum dated August 3, 2004, for a complete description of the
interested parties surrogate-country arguments.
The Department found that none of the countries on the List of
Surrogate Countries are significant producers of the subject
merchandise, magnesium metal. In past cases, the Department has
determined that aluminum is comparable merchandise to magnesium. See
Pure Magnesium and Alloy Magnesium at 55425 and 55426 and Pure
Magnesium From the People's Republic of China: Preliminary Results of
Antidumping Duty New Shipper Administrative Review, 62 FR 55215, 55217
(October 23, 1997). The Department also adopted this decision in Pure
Magnesium From the People's Republic of China: Final Results of
Antidumping Duty New Shipper Administrative Review, 63 FR 3085, 3088
(January 21, 1998). In Pure Magnesium and Alloy Magnesium, the
Department explained that, ``{a{time} lthough the material inputs used
to produce magnesium and aluminum are different, according to both U.S.
Bureau of Mines and Department of Commerce experts, 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., die casting).'' Similarly, in the 1998 new
shipper review of Pure Magnesium we determined that aluminum
constituted comparable merchandise in the context of surrogate
selection for magnesium for the reasons specified in Pure Magnesium and
Alloy Magnesium, supra.
Consequently, we have made the following determination about the
use of India as a surrogate country: (1) It is a significant producer
of comparable merchandise, aluminum; (2) it is at a similar level of
economic development pursuant to 733(c)(4) of the Act; and (3) we have
reliable data from India that we can use to value the factors of
production. See Selection of a Surrogate Country Memorandum. Thus, we
have calculated NV using Indian prices when available and appropriate
to value the factors of production of the magnesium metal producers. We
have obtained and relied upon publicly available information wherever
possible. See Memorandum to the File from Laurel LaCivita, Lilit
Astvatsatrian and Steven Winkates, Case Analysts, through Robert
Bolling, Program Manager, and Laurie Parkhill, Office Director:
Magnesium Metal from the People's Republic of China: Factors Valuation
Memorandum for the Preliminary Determination, dated September 24, 2004
(``Factor-Valuation Memorandum'').
In accordance with 19 CFR 351.301(c)(3)(i), for the final
determination in an antidumping investigation, interested parties may
submit publicly available information to value the factors of
production within 40 days after the date of publication of the
preliminary determination.
Affiliation
Section 771(33) of the Act states that the Department considers the
following entities to be affiliated: (A) Members of a family, including
brothers and sisters (whether by whole or half blood), spouse,
ancestors, and lineal descendants; (B) Any officer or director of an
organization and such organization; (C) Partners; (D) Employer and
employee; (E) Any person directly or indirectly owning, controlling, or
holding with power to vote, 5 percent or more of the outstanding voting
stock or shares of any organization and such
[[Page 59192]]
organization; (F) Two or more persons directly or indirectly
controlling, controlled by, or under common control with, any person;
and (G) Any person who controls any other person and such other person.
For purposes of affiliation, section 771(33) of the Act states that
a person shall be considered to control another person if the person is
legally or operationally in a position to exercise restraint or
direction over the other person. In order to find affiliation between
companies, the Department must find that at least one of the criteria
listed above is applicable to the respondents.
The Statement of Administrative Action accompanying the Uruguay
Round Agreements Act (``SAA''), H.R. Doc. 103-316 (1994), indicates
that stock ownership is not the only evidentiary factor that the
Department may consider to exercise restraint or direction to determine
whether a person is in a position to control and that control may be
established through corporate or family groupings. See SAA at 838.
Thus, the statute and the SAA expressly envision affiliation based on
family shareholdings, consistent with our practice. See e.g., Certain
Fresh Cut Flowers from Colombia; Final Results of Antidumping Duty
Administrative Review, 61 FR 42833, 42853 (August 19, 1996), and
Certain Welded Carbon Steel Pipes and Tubes from Thailand: Final
Results of Antidumping Duty Administrative Review, 62 FR 53808, 53810
(October 16, 1997). Moreover, as stated in its final regulations, the
Department examines issues of affiliation by family groupings closely.
See Certain Welded Carbon Steel Pipes and Tubes From Thailand: Final
Results of Antidumping duty Administrative Review, 62 FR 53808, 53810
(October 16, 1997).
To the extent that the affiliation provisions in section 771(33) of
the Act do not conflict with the Department's application of separate
rates and the statutory NME provisions in section 773(c) of the Act,
the Department will determine that exporters and/or producers are
affiliated if the facts of the case support such a finding. See Certain
Preserved Mushrooms From the People's Republic of China: Preliminary
Results of Sixth New Shipper Review and Preliminary Results and Partial
Rescission of Fourth Antidumping Duty Administrative Review, 69 FR
10410, 10413 (March 5, 2004) (``Mushrooms'').
Following these guidelines, we have considered whether we should
determine that the seven members of the RSM Group (``RSM''): Nanjing
Yunhai Special Metals Co., Ltd. (``Yunhai Special''), Nanjing Welbow
Metals Co., Ltd. (``Welbow''), Nanjing Yunhai Magnesium Co., Ltd.
(``Yunhai Magnesium''), Shanxi Wenxi Yunhai Metals Co., Ltd. (``Wenxi
Yunhai''), Shanxi Wenxi Bada Magnesium Co., Ltd. (``Bada Magnesium''),
Yuncheng Wenxi Welfare Magnesium Plant (``Welfare Magnesium''), and
Nanjing Yunhai Metals Plant (``Yunhai Metals'') are affiliated and
should be collapsed. Moreover, we considered whether these companies
should be collapsed with China National Nonferrous Metals I/E Corp.,
Jiangsu Branch (``Jiangsu Metals''), and TAI, thus considering these
companies as a single entity for the purposes of the antidumping
investigation of magnesium metal from the People's Republic of China
(``PRC''). See Memorandum to Laurie Parkhill, Director, Office 8, NME/
China Group, Through Robert Bolling, Program Manager, From Laurel
LaCivita, Senior Case Analyst, Antidumping Duty Investigation of
Magnesium Metal From the People's Republic of China: Affiliation and
Collapsing of Members of the RSM Group and Its Affiliated U.S.
Reseller, Toyota Tsusho America, Inc., dated September 24, 2004
(``Collapsing Memorandum'').
In its original questionnaire responses, RSM also reported that its
affiliated reseller in the United States made sales of subject
merchandise to an affiliated further-manufacturer in the United States
that incorporated the subject merchandise into steering wheel
armatures. In its supplemental questionnaire response, RSM argued that
TAI was not affiliated with its downstream further-manufacturer.
Therefore, we considered whether TAI and its downstream further-
manufacturer are affiliated for the purposes of this investigation. See
the proprietary Memorandum to Laurie Parkhill, Director, Office 8, NME/
China Group, Through Robert Bolling, Program Manager, From Laurel
LaCivita, Senior Case Analyst, Antidumping Duty Investigation of
Magnesium Metal From the People's Republic of China: Affiliation and
Collapsing of Members of the RSM Group and Its Affiliated U.S.
Reseller, Toyota Tsusho America, Inc., dated September 24, 2004
(``Affiliation Memorandum'').
RSM reported that the members of RSM Group that produced or
exported the subject merchandise are Yunhai Special, Welbow, Yunhai
Magnesium, Wenxi Yunhai, Bada Magnesium, Welfare Magnesium, and Yunhai
Metals. In addition, in its original questionnaire response, RSM
claimed that it was affiliated with its U.S. reseller, TAI, during the
POI and that all of the U.S. sales made through TAI should be treated
as CEP sales. In its supplemental response, however, RSM argued that
TAI was affiliated with only one member of the RSM group, Yunhai
Magnesium, through TAI's parent company. Consequently, RSM reclassified
all of its U.S. sales, except those originating with Yunhai Magnesium,
as export-price (``EP'') sales.
Based on our examination of the evidence presented in RSM's
questionnaire responses, we have determined that Yunhai Special, Wenxi
Yunhai, Welbow, Yunhai Magnesium, Bada Magnesium, Welfare Magnesium,
and Yunhai Metals are affiliated under sections 771(33)(B), (E), (F),
and (G) of the Act. We found, however, that only Yunhai Special,
Welbow, Yunhai Magnesium, and Wenxi Yunhai either produced the subject
merchandise during the POI, or were capable of producing the subject
merchandise. Thus, we determined that Yunhai Special, Welbow, Wenxi
Yunhai, and Yunhai Magnesium are affiliated and should be collapsed and
treated as a single entity for purposes of calculating a dumping margin
in this investigation for the following reasons: (1) Yunhai Special
controls a majority or near-majority of Welbow, Wenxi Yunhai, and
Yunhai Magnesium based on stock-ownership; (2) Yunhai Special, Welbow,
Wenxi Yunhai, and Yunhai Magnesium share the same general manager and a
common board member; and (3) RSM reported that the operations of Yunhai
Special and Welbow cannot be distinguished since the two companies
share the same general manager, production facilities, and employees.
We also determined that Jiangsu Metals is affiliated with the RSM
Group, under sections 771(33)(E) and (F) of the Act, because RSM
reported that Jiangsu Metals, an exporter of the subject merchandise,
held more than 5 percent of the outstanding stock in Yunhai Magnesium
and is therefore affiliated with Yunhai Magnesium pursuant to section
771(33)(E) of the Act. In addition, we found that Jiangsu Metals and
Yunhai Special both own shares of Yunhai Magnesium as joint-venture
partners. Consequently, we determined that Jiangsu Metals and Yunhai
Special are affiliated in accord with section 771(33)(F) of the Act.
We determined further that, in contrast to RSM's arguments in its
supplemental questionnaire response, TAI is also affiliated with the
RSM Group under sections 771(33)(E) and (F) of the Act because the role
that TAI and its parent corporation play in RSM's sales process
indicates that TAI is
[[Page 59193]]
legally and operationally in a position to exercise control over the
RSM Group in accordance with section 771(33)(F) of the Act.
We did not analyze whether Jiangsu Metals, an affiliated exporter,
meets the criteria for collapsing with the RSM group because the
company did not produce the subject merchandise during the POI. As a
result, we have not collapsed Jiangsu Metals with the members of the
RSM group for the purposes of calculating the antidumping duty margin.
We have considered Jiangsu Metals for a separate rate in its own right.
We examined the information on the record with respect to TAI and
its further-manufacturer and determined that TAI was affiliated with
its downstream further-manufacturer, under section 771(33)(E) and (F)
of the Act, for several reasons. RSM reported that TAI and its further-
manufacturer are both subsidiaries of the same parent corporation in
Japan and, thus, are affiliated in accord with section 771(33)(E) of
the Act. See the proprietary discussion of this issue in the
Affiliation Memorandum at 3. RSM demonstrated further that the parent
corporation's ownership share held a very substantial stock ownership
share in both TAI and its further-manufacturer, and is therefore in a
position to exercise control over both entities. Because we determined
that TAI and its further-manufacturer are affiliated under sections
771(33)(E) and (F) of the Act, we have not used the sales of subject
merchandise from TAI to its affiliated further-manufacturer in our
margin analysis because such sales do not represent the sales to the
first unaffiliated customer in the United States. See Affiliation
Memorandum. We did not examine the downstream sales of the subject
merchandise made by the affiliated further-manufacturer because we
determined that the subject merchandise sold to the further-
manufacturer was incorporated into products whose value exceeded
substantially the value of the imported subject merchandise. See
Memorandum to the File, through Laurie Parkhill, Director, Office 8,
NME/China Unit, and Robert Bolling, Program Manager, From Laurel
LaCivita, Senior Case Analyst, Magnesium Metal From the People's
Republic of China: The Use of RSM's Sales of Further-Manufactured
Merchandise in the U.S. Market for the Preliminary Determination, dated
September 24, 2004.
Separate Rates
In proceedings involving NME countries, the Department begins with
a rebuttable presumption that all companies within the country are
subject to government control and, thus, should be assigned a single
antidumping duty deposit rate. It is the Department's policy to assign
all exporters of merchandise subject to investigation in an NME country
this single rate unless an exporter can demonstrate that it is
sufficiently independent so as to be entitled to a separate rate. The
two mandatory respondents and the Section A respondent have provided
company-specific information and each has stated that it meet the
standards for the assignment of a separate rate.
We have considered whether each company based in the PRC is
eligible for a separate rate. The Department's separate-rate test to
determine whether the exporters are independent from government control
does not consider, in general, macroeconomic/border-type controls,
e.g., export licenses, quotas, and minimum export prices, particularly
if these controls are imposed to prevent dumping. The test focuses,
rather, on controls over the investment, pricing, and output decision-
making process at the individual firm level. See Certain Cut-to-Length
Carbon Steel Plate From Ukraine: Final Determination of Sales at Less
Than Fair Value, 62 FR 61754, 61757 (November 19, 1997), and Tapered
Roller Bearings and Parts Thereof, Finished and Unfinished, From the
People's Republic of China: Final Results of Antidumping Duty
Administrative Review, 62 FR 61276, 61279 (November 17, 1997).
To establish whether a firm is sufficiently independent from
government control of its export activities to be entitled to a
separate rate, the Department analyzes each entity exporting the
subject merchandise under a test arising from the Final Determination
of Sales at Less Than Fair Value: Sparklers from the People's Republic
of China, 56 FR 20588 (May 6, 1991) (``Sparklers''), as amplified by
Final Determination of Sales at Less Than Fair Value: Silicon Carbide
From the People's Republic of China, 59 FR 22585 (May 2, 1994)
(``Silicon Carbide''). In accordance with the separate-rates criteria,
the Department assigns separate rates in NME cases only if respondents
can demonstrate the absence of both de jure and de facto governmental
control over export activities.
1. Absence of De Jure Control
The Department considers the following de jure criteria in
determining whether an individual company may be granted a separate
rate: (1) An absence of restrictive stipulations associated with an
individual exporter's business and export licenses; (2) any legislative
enactments decentralizing control of companies; and (3) other formal
measures by the government decentralizing control of companies. See
Sparklers, 56 FR at 20589.
Our analysis shows that the evidence on the record supports a
preliminary finding of de jure absence of governmental control for
Tianjin, Guangling Jinghua, Jiangsu Metals, and the RSM companies
consisting of Yunhai Special, Welbow, Wenxi Yunhai, and Yunhai
Magnesium based on the criteria listed above. See Memorandum to Laurie
Parkhill, Office Director, China/NME Group, through Robert Bolling,
Program Manager, from Laurel LaCivita, Senior Case Analyst and Lilit
Astvatsatrian, Case Analyst, Magnesium Metal from the People's Republic
of China: Separate Rates Memorandum (``Separate-Rates Memorandum''),
dated September 24, 2004.
2. Absence of De Facto Control
Typically the Department considers the following four factors in
evaluating whether each respondent is subject to de facto governmental
control of its export functions: (1) Whether the export prices are set
by or are subject to the approval of a governmental agency; (2) whether
the respondent has authority to negotiate and sign contracts and other
agreements; (3) whether the respondent has autonomy from the government
in making decisions regarding the selection of management; and (4)
whether the respondent retains the proceeds of its export sales and
makes independent decisions regarding disposition of profits or
financing of losses. See Silicon Carbide, 59 FR at 22586-87; see also
Final Determination of Sales at Less Than Fair Value: Furfuryl Alcohol
From the People's Republic of China, 60 FR 22544, 22545 (May 8, 1995).
The Department has determined that an analysis of de facto control is
critical in determining whether respondents are, in fact, subject to a
degree of governmental control which would preclude the Department from
assigning separate rates.
We determine that, for Tianjin, Guangling Jinghua, Jiangsu Metals,
and the RSM companies consisting of Yunhai Special, Welbow, Wenxi
Yunhai, and Yunhai Magnesium, the evidence on the record supports a
preliminary finding of de facto absence of governmental control based
on record statements and supporting documentation showing the
following:
[[Page 59194]]
(1) Each exporter sets its own export prices independent of the
government and without the approval of a government authority; (2) each
exporter retains the proceeds from its sales and makes independent
decisions regarding disposition of profits or financing of losses; (3)
each exporter has the authority to negotiate and sign contracts and
other agreements; and (4) each exporter has autonomy from the
government regarding the selection of management.
Therefore, the evidence placed on the record of this investigation
by Tianjin, Guangling Jinghua, Jiangsu Metals, and the RSM companies
consisting of Yunhai Special, Welbow, Wenxi Yunhai, and Yunhai
Magnesium demonstrates an absence of government control, both in law
and in fact, with respect to each of the exporter's exports of the
merchandise under investigation in accordance with the criteria
identified in Sparklers and Silicon Carbide. As a result, for the
purposes of this preliminary determination, we have granted separate,
company-specific rates to the mandatory respondents and the Section A
respondent which shipped magnesium metal to the United States during
the POI. For a full discussion of this issue, please see the Separate-
Rates Memorandum.
PRC-Wide Rate
The Department has data that indicates there were more exporters of
magnesium metal from the PRC during the POI than those which responded
to the Q&V questionnaire. See Respondent Selection Memorandum at 1.
Although we issued the Q&V questionnaire to 142 known Chinese exporters
of the subject merchandise, we received only two Q&V questionnaire
responses, which were from the two mandatory respondents. Also, on May
6, 2004, we issued our complete questionnaire to the Chinese Government
(i.e., Ministry of Commerce). Although all exporters were given an
opportunity to provide information showing they qualify for separate
rates, not all of these other exporters provided a response to either
the Department's Q&V questionnaire or its Section A questionnaire.
Therefore, the Department determines preliminarily that there were
exports of the merchandise under investigation from PRC producers/
exporters that did not respond to the Department's questionnaire. We
treated these PRC producers/exporters as part of the countrywide
entity. Further, the Government of the PRC did not respond to the
Department's questionnaire.
Section 776(a)(2) of the Act provides that, if an interested party
(A) withholds information that has been requested by the Department,
(B) fails to provide such information in a timely manner or in the form
or manner requested, subject to subsections 782(c)(1) and (e) of the
Act, (C) significantly impedes a proceeding under the antidumping
statute, or (D) provides such information but the information cannot be
verified, the Department shall, subject to subsection 782(d) of the
Act, use facts otherwise available in reaching the applicable
determination.
Pursuant to section 782(e) of the Act, the Department shall not
decline to consider submitted information if all of the following
requirements are met: (1) The information is submitted by the
established deadline; (2) the information can be verified; (3) the
information is not so incomplete that it cannot serve as a reliable
basis for reaching the applicable determination; (4) the interested
party has demonstrated that it acted to the best of its ability; and
(5) the information can be used without undue difficulties.
Information on the record of this investigation indicates that
there are numerous producers/exporters of magnesium metal in the PRC.
As described above, all exporters were given the opportunity to respond
to the Department's questionnaire. Based upon our knowledge of the
volume of imports of subject merchandise from the PRC and the fact that
information indicates that the responding companies did not account for
all imports into the United States from the PRC, we have preliminarily
determined that certain PRC exporters of magnesium metal failed to
respond to our questionnaires. As a result, use of adverse facts
available (``AFA'') pursuant to section 776(a)(2)(A) of the Act is
appropriate. Additionally, in this case, the Government of the PRC did
not respond to the Department's questionnaire, thereby necessitating
the use of AFA to determine the PRC-wide rate. See Preliminary
Determination of Sales at Less Than Fair Value, Affirmative Preliminary
Determination of Critical Circumstances and Postponement of Final
Determination: Certain Frozen Fish Fillets from the Socialist Republic
of Vietnam, 68 FR 4986 (January 31, 2003).
Section 776(b) of the Act provides that, in selecting from among
the facts available, the Department may employ adverse inferences if an
interested party fails to cooperate by not acting to the best of its
ability to comply with requests for information. See Final
Determination of Sales at Less Than Fair Value: Certain Cold-Rolled
Flat-Rolled Carbon-Quality Steel Products from the Russian Federation,
65 FR 5510, 5518 (February 4, 2000). See also ``Statement of
Administrative Action'' accompanying the URAA, H.R. Rep. No. 103-316,
870 (1994) (``SAA''). We find that, because the PRC-wide entity did not
respond to our request for information, it has failed to cooperate to
the best of its ability. Therefore, the Department preliminarily finds
that, in selecting from among the facts available, an adverse inference
is appropriate.
Section 776(b) of the Act authorizes the Department to use AFA
information derived from the petition, the final determination from the
LTFV investigation, a previous administrative review, or any other
information placed on the record. As AFA, we have assigned to the PRC-
wide entity a margin based on a calculated margin derived from
information obtained in the course of the investigation and placed on
the record of this proceeding. In this case, we have applied a rate of
177.62 percent.
Consequently, we are applying a single antidumping rate--the PRC-
wide rate--to producers/exporters that failed to respond to the Q&V
questionnaire or Section A questionnaire. This rate will also apply to
exporters which did not demonstrate entitlement to a separate rate.
See, e.g., Final Determination of Sales at Less Than Fair Value:
Synthetic Indigo from the People's Republic of China, 65 FR 25706,
25707 (May 3, 2000). The PRC-wide rate applies to all entries of the
merchandise under investigation except for entries from the two
mandatory respondents and the Section A respondent.
Because this is a preliminary margin, the Department will consider
all margins on the record at the time of the final determination for
the purpose of determining the most appropriate final PRC-wide margin.
See Preliminary Determination of Sales at Less Than Fair Value:
Saccharin from the People's Republic of China, 67 FR 79049, 79054
(December 27, 2002).
Margin for Section A Respondent
Guangling Jinghua, the only exporter which submitted a response to
Section A of the Department's antidumping questionnaire and had sales
of the subject merchandise to the United States during the POI but was
not selected as mandatory respondent in this investigation (``Section A
respondent''), has applied for a separate rate and provided information
for the Department to consider for this purpose. Therefore, we have
established a weighted-average margin based on the rate we have
calculated for the two mandatory respondents, excluding any
[[Page 59195]]
rates that are zero, de minimis, or based entirely on adverse facts
available. That rate is 140.09 percent. Guangling Jinghua is identified
by name in the ``Suspension of Liquidation'' section of this notice.
Date of Sale
Section 351.401(I) of the Department's regulations state that, ``in
identifying the date of sale of the subject merchandise or foreign like
product, the Secretary normally will use the date of invoice, as
recorded in the exporter or producer's records kept in the normal
course of business.'' After examining the sales documentation placed on
the record by the mandatory respondents, we preliminarily determine
that date of purchase order is the most appropriate date of sale for
RSM and Tianjin. In their submissions, RSM and Tianjin stated that they
establish the date of sale on their purchase order date because all of
their sales terms are finalized by the purchase order date.
Additionally, RSM and Tianjin provided no evidence to suggest that
their sales terms changed after the purchase order was established.
Based on record evidence, we have determined that RSM's and Tianjin's
sales terms did not change after the purchase-order date, and thus we
have used purchase order date as the date of sale for the preliminary
determination for RSM and Tianjin.
The Department intends to examine the date-of-sale issue at
verification thoroughly and may reconsider its position for the final
determination based on the results of verification.
Fair Value Comparisons
To determine whether sales of magnesium metal to the United States
by the two mandatory respondents were made at less than fair value, we
compared EP or CEP to NV, as described in the ``Export Price,'' ``U.S.
Price,'' and ``Normal Value'' sections of this notice.
U.S. Price
In accordance with section 772(a) of the Act, we used EP for
Tianjin, as appropriate, because the subject merchandise was first sold
(or agreed to be sold) before the date of importation by the producer
or exporter of the subject merchandise outside the United States to an
unaffiliated purchaser in the United States or to an unaffiliated
purchaser for exportation to the United States and because the use of
CEP was not otherwise indicated. In accordance with section 772(b) of
the Act, we used CEP for RSM and Jiangsu Metals because the subject
merchandise was sold in the United States after the date of importation
by a U.S. reseller affiliated with the producer. In addition, we did
not use sales made by the U.S. reseller to an affiliated further-
manufacturer because RSM reported that all of those sales were destined
for further manufacturing in the United States where the value added
substantially exceeded the value of the merchandise imported. See
Memorandum to The File, Through Laurie Parkhill, Director, Office 8,
NME/China Unit, and Robert Bolling, Program Manager, From Laurel
LaCivita, Senior Case Analyst, Magnesium Metal from the People's
Republic of China: The Use of RSM's Sales of Further-Manufactured
Merchandise in the U.S. Market for the Preliminary Determination, dated
September 24, 2004.
We calculated EP and CEP based on the packed F.O.B., C.I.F., or
delivered price to unaffiliated purchasers in, or for exportation to,
the United States. We made deductions, as appropriate, for any movement
expenses (e.g., foreign inland freight from the plant to the port of
exportation, domestic brokerage, ocean freight, marine insurance, U.S.
brokerage, and inland freight from warehouse to unaffiliated U.S.
customer) in accordance with section 772(c)(2)(A) of the Act. For a
detailed description of all adjustments, see Memorandum to The File
Through Robert Bolling, Program Manager, China/NME Group, from Lilit
Astvatsatrian, Case Analyst, Analysis for the Preliminary Determination
of Magnesium Metal from the People's Republic of China: Tianjin
Magnesium International Co., Ltd. (``Tianjin''), dated September 24,
2004, and Memorandum to the File Through Robert Bolling, Program
Manager, China/NME Group, From Laurel LaCivita, Senior Case Analyst,
Analysis for the Preliminary Determination of Magnesium Metal from the
People's Republic of China: the RSM Companies, dated September 24,
2004.
In accordance with section 772(d)(1) of the Act and the SAA at 823-
824, we calculated the CEP by deducting selling expenses associated
with economic activities occurring in the United States, for which RSM
includes U.S. customs duty.
We compared NV to weighted-average EPs and CEPs in accordance with
section 777A(d)(1) of the Act. For RSM, in accordance with sections
772(d)(3) and 772(f) of the Act, we deducted CEP profit. For a detailed
description of all adjustments, see the Company-Specific Analysis
Memoranda dated September 24, 2004.
Normal Value
Section 773(c)(1) of the Act provides that the Department shall
determine the NV using a factors-of-production methodology if the
merchandise is exported from an NME and the information does not permit
the calculation of NV using home-market prices, third-country prices,
or constructed value under section 773(a) of the Act. The Department
bases NV on the factors of production because the presence of
government controls on various aspects of these economies renders price
comparisons and the calculation of production costs invalid under its
normal methodologies.
The Department's questionnaire requires that the respondent provide
information regarding the weighted-average factors of production across
all of the company's plants that produce the subject merchandise, not
just the factors of production from a single plant. This methodology
ensures that the Department's calculations are as accurate as possible.
See e.g., Final Determination of Sales at Less Than Fair Value and
Critical Circumstances: Certain Malleable Iron Pipe Fittings From the
People's Republic of China, 68 FR 61395 (Oct. 28, 2003); Issues and
Decision Memorandum, Comment 19 (Oct. 20, 2003). Therefore, for
Tianjin, the Department calculated the factors of production using the
weighted-average factor values for all of the facilities involved in
producing the subject merchandise. For RSM and Jiangsu Metals, the
Department used the weighted-average factor values reported for the RSM
group members which it determined were affiliated and which it
collapsed. See the Collapsing Memorandum.
Factor Valuations
In accordance with section 773(c) of the Act, we calculated NV
based on factors of production reported by respondents for the POI. To
calculate NV, we multiplied the reported per-unit factor-consumption
rates by publicly available Indian surrogate values (except as
discussed below). In selecting the surrogate values, we considered the
quality, specificity, and contemporaneity of the data. As appropriate,
we adjusted input prices by including freight costs to make them
delivered prices. Specifically, we added to Indian import surrogate
values a surrogate freight cost using the shorter of the reported
distance from the domestic supplier to the factory or the distance from
the nearest seaport to the factory where appropriate. This adjustment
is in accordance with the
[[Page 59196]]
Court of Appeals for the Federal Circuit's decision in Sigma Corp. v.
United States, 117 F. 3d 1401 (Fed. Cir. 1997).
For this preliminary determination, in accordance with past
practice, we used data from the Indian Import Statistics in order to
calculate surrogate values for the mandatory respondents' material
inputs. In selecting the best available information for valuing factors
of production in accordance with section 773(c)(1) of the Act, the
Department's practice is to select, to the extent practicable,
surrogate values which are non-export average values, most
contemporaneous with the POI, product-specific, and tax-exclusive. The
record shows that data in the Indian Import Statistics represents
import data, is contemporaneous with the POI, is product-specific, and
is tax-exclusive. See Manganese Metal From the People's Republic of
China; Final Results and Partial Rescission of Antidumping Duty
Administrative Review, 63 FR 12441, 12442 (March 13, 1998).
Additionally, there is no record evidence which indicates that any of
the factors being valued are of low value compared to other items in
the basket categories; thus, our use of these statistics does not
result in a distortion in favor of higher values. Further, the Indian
Import Statistics contain values at both ends of the spectrum (i.e.,
high value and low value), indicating further that the Indian Import
values are not distorted when taken as an average, as we are doing in
this case. Therefore, we determined that the Indian Import Statistics
provide the best available information for valuing the factors of
production. Consequently, we valued raw material inputs for each
mandatory respondent using the weighted-average unit import values
derived from the World Trade Atlas[reg] online (``Indian Import
Statistics''), published by the DGCI&S, Ministry of Commerce of India,
which were reported in rupees and are contemporaneous with POI. See
Factor-Valuation Memorandum. Where we could not obtain publicly
available information contemporaneous to the POI with which to value
factors, we adjusted the surrogate values using, where appropriate, the
Indian Wholesale Price Index (``WPI'') or the Indian Producer Price
Index (``PPI'') as published in the International Financial Statistics
of the International Monetary Fund.
Furthermore, with regard to both the Indian import-based surrogate
values and the market-economy input values, we have disregarded prices
that we have reason to believe or suspect may be subsidized. We have
reason to believe or suspect that prices of inputs from Indonesia,
South Korea, and Thailand may have been subsidized. We have found in
other proceedings that these countries maintain broadly available, non-
industry-specific export subsidies and, therefore, it is reasonable to
infer that all exports to all markets from these countries are
subsidized. See Amended Final Determination of Sales at Less Than Fair
Value: Automotive Replacement Glass Windshields From the People's
Republic of China, 67 FR 11670 (March 15, 2002). We are also directed
by the legislative history not to conduct a formal investigation to
ensure that such prices are not subsidized. See H.R. Rep. 100-576 at
590 (1988). Rather, Congress directed the Department to base its
decision on information that is available to it at the time it makes
its determination. Therefore, we have not used prices from these
countries either in calculating the Indian import-based surrogate
values or in calculating market-economy input values. In instances
where a market-economy input was obtained solely from suppliers located
in these countries, we used Indian import-based surrogate values to
value the input. See Final Determination of Sales at Less Than Fair
Value: Certain Automotive Replacement Glass Windshields From The
People's Republic of China, 67 FR 6482 (February 12, 2002), and
accompanying Issues and Decision Memorandum at Comment 1.
We used the Indian Import Statistics to value the following raw
material inputs, energy, by-products, and packing materials that RSM
and Tianjin used to produce the subject merchandise during the POI:
Ferrosilicon, dolomite, No.2 flux, fluorite powder, sulfur powder,
primary magnesium, magnesium scrap, zinc, AlBe5, AlBe1, manganese
powder, magnesium, aluminum-magnesium alloy, sulfuric acid manganese
chip, magnesium chloride, potassium chloride, barium chloride,
aluminum, sulfur dioxide, nitrogen, argon, coal, bituminous coal,
anthracite, liquified petroleum gas (``LPG''), propane, steel strap,
LDPE sheet, printing ink, printing ink solvent, particle board, pallet,
little steel sheet, steel band, and plastic bags. For a detailed
description of all surrogate values used for respondents, see Factor-
Valuation Memorandum.
To value electricity, we used data from the International Energy
Agency (``IEA'') Key World Energy Statistics (2003 edition), submitted
by the Petitioners in Exhibit 5 of their August 19, 2004, submission.
Because the value was not contemporaneous with the POI, we adjusted the
rate for inflation. See Factor-Valuation Memorandum.
To value heavy oil and diesel fuel, we used data from IEA's Key
World Energy Statistics (2003 edition) which was submitted by
Petitioners in their August 19, 2004, submission. Because the value was
not contemporaneous with the POI, we adjusted the rate for inflation.
See Factor-Valuation Memorandum.
For direct, indirect, and packing labor, consistent with 19 CFR
351.408(c)(3), we used the PRC regression-based wage rate as reported
on Import Administration's home page, Import Library, Expected Wages of
Selected NME Countries, revised in September 2003, http://ia.ita.doc.gov/wages/01wages/01wages.html. The source of these wage-
rate data on the Import Administration's Web site is the Yearbook of
Labour Statistics 2002, ILO (Geneva: 2002), Chapter 5B: Wages in
Manufacturing. Because this regression-based wage rate does not
separate the labor rates into different skill levels or types of labor,
we have applied the same wage rate to all skill levels and types of
labor reported by the respondent.
The respondents also reported packing inputs. We used Indian Import
Statistics data from the period July 2003 to December 2003 to value
these inputs. See Factor-Valuation Memorandum.
RSM reported magnesium alloy slag as by-product of the production
process. We used Indian Import Statistics data from the period July
2003 to December 2003 to value this by-product. See Factor-Valuation
Memorandum.
We used Indian transport information in order to value the
transportation of raw materials. To calculate domestic inland freight
for trucking services, we selected freight values from Chemical Weekly.
Some inputs were transported by market-economy transportation firms and
paid for in a market-economy currency. Where this was the case, we
added the actual market-economy transportation expense to the valuation
of the factor of production.
We used Indian rail freight information in order to value the
transportation of raw materials. To value the rail freight, we used two
price quotes from November 1999 for steel shipments within India.
Because the value was not contemporaneous with the POI, we adjusted the
rate for inflation. See Factor-Valuation Memorandum.
To value factory overhead, selling, general, and administrative
expenses, and profit, we used the audited financial statements for the
fiscal year ending March 31, 2003, from the following aluminum
producers in India: National Aluminium Company Limited;
[[Page 59197]]
Indian Aluminium Company; Limited, Bharat Aluminium Company Limited;
the Madras Aluminium Company Limited; and HINDALCO Industries Limited.
See Factor-Valuation Memorandum for a full discussion of the
calculation of these ratios from these financial statements.
Currency Conversion
We made currency conversions into U.S. dollars, in accordance with
section 773A(a) of the Act, based on the exchange rates in effect on
the dates of the U.S. sales as certified by the Federal Reserve Bank.
Verification
As provided in section 782(I)(1) of the Act, we intend to verify
the information upon which we will rely in making our final
determination.
Preliminary Determination
The weighted-average dumping margins are as follows:
Magnesium Metal From the PRC
------------------------------------------------------------------------
Weighted-
average
Manufacturer/exporter margin
(percent)
------------------------------------------------------------------------
Tianjin.................................................... 177.62
RSM........................................................ 128.11
Jiangsu Metals............................................. 117.41
Guangling.................................................. 140.09
China-Wide Rate............................................ 177.62
------------------------------------------------------------------------
Disclosure
We will disclose the calculations performed within five days of the
date of publication of this notice to parties in this proceeding in
accordance with 19 CFR 351.224(b).
Suspension of Liquidation
In accordance with section 733(d) of the Act, we will instruct U.S.
Customs and Border Protection (``CBP'') to suspend liquidation of all
entries of subject merchandise, entered, or withdrawn from warehouse,
for consumption on or after the date of publication of this notice in
the Federal Register. We will instruct CBP to require a cash deposit or
the posting of a bond equal to the weighted-average amount by which the
normal value exceeds U.S. price, as indicated above. The suspension of
liquidation will remain in effect until further notice.
International Trade Commission Notification
In accordance with section 733(f) of the Act, we have notified the
ITC of our preliminary affirmative determination of sales at less than
fair value. Because we have postponed the deadline for our final
determination to 135 days from the date of publication of this
preliminary determination, section 735(b)(2) of the Act requires the
ITC to make its final determination as to whether domestic industry in
the United States is materially injured, or threatened with material
injury, by reason of imports of wooden bedroom furniture, or sales (or
the likelihood of sales) for importation, of the subject merchandise
within 45 days of our final determination.
Public Comment
Case briefs or other written comments may be submitted to the
Assistant Secretary for Import Administration no later than seven days
after the date of the final verification report is issued in this
proceeding and rebuttal briefs limited to issues raised in case briefs
no later than five days after the deadline date for case briefs. A list
of authorities used and an executive summary of issues should accompany
any briefs submitted to the Department. This summary should be limited
to five pages total, including footnotes.
In accordance with section 774 of the Act, we will hold a public
hearing, if requested, to afford interested parties an opportunity to
comment on arguments raised in case or rebuttal briefs. If a request
for a hearing is made, we intend to hold the hearing three days after
the deadline of submission of rebuttal briefs at the U.S. Department of
Commerce, 14th Street and Constitution Avenue, NW., Washington, DC
20230, at a time and location to be determined. Parties should confirm
by telephone the date, time, and location of the hearing two days
before the scheduled date.
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
1870, within 30 days after the date of publication of this notice. See
19 CFR 351.310(c). Requests should contain the party's name, address,
and telephone number, the number of participants, and a list of the
issues to be discussed. At the hearing, each party may make an
affirmative presentation only on issues raised in that party's case
brief and may make rebuttal presentations only on arguments included in
that party's rebuttal brief.
We will make our final determination no later than 135 days after
the date of publication of this preliminary determination, pursuant to
section 735(a)(2) of the Act.
This determination is issued and published in accordance with
sections 733(f) and 777(i)(1) of the Act.
Dated: September 24, 2004.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. E4-2478 Filed 10-1-04; 8:45 am]
BILLING CODE 3510-DS-P