[Federal Register Volume 75, Number 107 (Friday, June 4, 2010)]
[Notices]
[Page 31763]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-13454]
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DEPARTMENT OF COMMERCE
Foreign-Trade Zones Board
[Docket 20-2009]
Foreign-Trade Zone 29; Application for Subzone Authority; Dow
Corning Corporation; Invitation for Public Comment on Preliminary
Recommendation
The FTZ Board is inviting public comment on its staff's preliminary
recommendation pertaining to the application by the Louisville and
Jefferson County Riverport Authority to establish a subzone at the Dow
Corning Corporation (Dow Corning) facilities in Carrollton,
Elizabethtown and Shepherdsville, Kentucky (Docket 20-2009). The
staff's preliminary recommendation is for approval of the application
with a restriction prohibiting admission of foreign status silicon
metal subject to an anti-dumping duty (AD) or countervailing duty (CVD)
order. The bases for this finding are as follows:
Analysis of the application record indicates that full approval of
the request could negatively impact domestic silicon metal production.
This finding is based primarily on the potential impact to domestic
silicon metal prices from the volume of production involved and the
cumulative impact of multiple applications potentially involving
avoidance of AD/CVD duties on silicon metal used in export production.
Dow Corning is a major U.S. consumer of silicon metal, and access
to the material for its export production without the payment of AD/CVD
duties would decrease the average price of silicon metal paid by the
company, providing a new, lower benchmark to be used in supply
negotiations. Given the volume of silicon metal consumed by the company
in the U.S., the ripple effect on silicon metal suppliers could be
significant and the likely resulting impact would be a decline in the
U.S. price of silicon metal.
Currently, very little silicon metal subject to AD/CVD orders is
imported into the United States. However, due to the size of Dow
Corning's production in the U.S., and the amount of silicon metal
consumed by the company's operations, the potential increase in supply
to the U.S. market and resulting price effect would likely be
significant.
In part due to the AD/CVD duties in place, U.S. silicon metal
prices have increased. This has led to the recent restarting of a
shuttered silicon metal production facility in New York. A weakening of
the U.S. price of silicon metal could threaten the viability of this
facility as well as the continuation of production at other domestic
facilities.
The preliminary recommendation also reflects the cumulative effect
on domestic silicon metal prices and on the integrity of the domestic
silicon metal industry's AD/CVD relief should there be multiple
applications to avoid AD/CVD duties on silicon metal for export
production. In addition to the Dow Corning application, a similar
application is pending for REC Silicon in Moses Lake, Washington and we
have received indication that further requests are being prepared for
additional facilities.
Given the volume of silicon metal involved in the current and
anticipated applications, even a limit on the amount of silicon metal
subject to AD/CVD orders that could be used in the facilities for
export production could have a significant impact on the U.S. price of
silicon metal. The timing of that impact would also be occurring as
domestic silicon metal production facilities are recovering and
restarting, likely due (at least in part) to the relief provided
through the AD/CVD orders that are in place. The FTZ regulations
require that evaluations of manufacturing authority consider, ``whether
the approval is consistent with trade policy and programs, and whether
its net economic effect is positive'' (15 CFR 400.31(a)). In this case,
given the potential impact on the silicon metal industry and based on
the evidence currently on the record, the staff is unable to find that
the net (national) economic effect of approving the use of silicon
metal subject to AD/CVD orders for export production would be positive.
While unrestricted approval could have a negative impact, the
issues raised do not extend to silicon metal not subject to AD/CVD
orders. No arguments or evidence have been presented to the FTZ Board
in opposition to FTZ savings on silicon metal not subject to AD/CVD
orders and on other imported components. Such savings would allow for
duty deferral, inverted tariff, scrap and export savings on imported
silicon metal and other components not subject to AD/CVD orders. In
addition, the facilities could benefit from logistical savings involved
in FTZ operations. The savings from restricted approval would
constitute a significant portion of those projected in the application
and could help encourage continued production and employment at Dow
Corning's Kentucky facilities.
Public comment on the preliminary recommendation and the bases for
the finding is invited through July 12, 2010. Rebuttal comments may be
submitted during the subsequent 15-day period, until July 27, 2010.
Submissions (original and one electronic copy) shall be addressed to
the Board's Executive Secretary at: Foreign-Trade Zones Board, U.S.
Department of Commerce, Room 2111, 1401 Constitution Ave., NW.,
Washington, DC 20230.
For further information, contact Elizabeth Whiteman at
[email protected] or (202) 482-0473.
Dated: May 28, 2010.
Andrew McGilvray,
Executive Secretary.
[FR Doc. 2010-13454 Filed 6-3-10; 8:45 am]
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