[Federal Register Volume 59, Number 80 (Tuesday, April 26, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-10067]


[[Page Unknown]]

[Federal Register: April 26, 1994]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-570-832, A-570-833, A-821-805, A-821-806, A-823-806, A-823-807]

 

Initiation of Antidumping Duty Investigations: Pure and Alloy 
Magnesium From the People's Republic of China, the Russian Federation, 
and Ukraine

AGENCY: Import Administration, International Trade Administration, 
Commerce.

EFFECTIVE DATE: April 26, 1994.

FOR FURTHER INFORMATION CONTACT:
Ellen Grebasch or Erik Warga, Office of Antidumping Investigations, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue NW., 
Washington, DC 20230; telephone (202) 482-3773 or 482-0922.

Initiation of Investigations

The Petitions

    On March 31, 1994, we received petitions filed in proper form by 
Magnesium Corporation of America (``Magcorp''), the International Union 
of Operating Engineers, Local 564, and the United Steelworkers of 
America, Local 8319 (collectively, the ``petitioners''). The 
petitioners submitted additional information supporting their 
allegations on April 7 and 14, 1994. In accordance with 19 CFR 353.12, 
the petitioners allege that imports of pure and alloy magnesium from 
the People's Republic of China (``PRC''), the Russian Federation, and 
Ukraine are being, or are likely to be, sold in the United States at 
less than fair value within the meaning of section 731 of the Tariff 
Act of 1930, as amended (the Act), and that such imports are materially 
injuring, or threatening material injury to, a U.S. industry.
    The petitioners stated that they have standing to file the petition 
because they are interested parties, as defined under sections 
771(9)(C) and 771(9)(D) of the Act, and the petition is filed on behalf 
of the U.S. industry producing the product subject to this 
investigation. If any interested party, as described under paragraphs 
(C), (D), (E), or (F) of section 771(9) of the Act, wishes to register 
support for, or opposition to, this petition, it should file a written 
notification with the Assistant Secretary for Import Administration.

Scope of Investigations

    For purposes of these initiations we are considering the products 
covered by these petitions to be two classes or kinds of merchandise, 
i.e., pure magnesium and alloy magnesium. See, Concurrence Memo which 
is on file in the Central Records Unit, room B-099 of the Main Commerce 
Building. Petitioners contend that primary magnesium constitutes a 
single class or kind of merchandise under the Act. Petitioners argue 
that although the Department divided magnesium products into two 
classes or kinds (pure and alloy) in the final determination of Pure 
and Alloy Magnesium from Canada (July 13, 1992, 57 FR 30939), the 
imported merchandise in these investigations is different from that in 
the Canadian investigation. We invite interested parties to comment on 
this issue by May 13, 1994.

A. Pure Magnesium

    The products covered by these investigations are imports of pure 
primary magnesium regardless of chemistry, form or size, unless 
expressly excluded from the scope of these investigations. Primary 
magnesium is a metal or alloy containing by weight primarily the 
element magnesium and produced by decomposing raw materials into 
magnesium metal.
    Pure primary magnesium encompasses all products that contain at 
least 99.95% primary magnesium, by weight (generally referred to as 
``ultra-pure'' magnesium), as well as products containing less than 
99.95% but not less than 99.8% primary magnesium, by weight (generally 
referred to as ``pure'' magnesium). Products that have the 
aforementioned primary magnesium content, but that do not conform to 
ASTM Specifications or other industry or customer-specific 
specifications, are included in the scope of these investigations.
    Pure primary magnesium is cast and sold in various physical forms 
and sizes, including ingots, slabs, rounds, billets and other shapes.
    Excluded from the scope of these investigations are 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 course 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) of 1 inch or less.
    The products subject to these investigations are classifiable under 
subheadings 8104.11.00 and 8104.20.00 of the HTSUS. Although the HTSUS 
subheadings are provided for convenience and customs purposes, our 
written description of the scope is dispositive.

B. Alloy Magnesium

    The products covered by these investigations are imports of alloy 
primary magnesium regardless of chemistry, form or size, unless 
expressly excluded from the scope of these investigations. Primary 
magnesium is a metal or alloy containing by weight primarily the 
element magnesium and produced by decomposing raw materials into 
magnesium metal.
    These investigations cover alloy primary magnesium products which 
contain 50% or greater, but less than 99.8%, primary magnesium, by 
weight. Products with the aforementioned primary magnesium content that 
do not conform to ASTM Specifications or other industry or customer-
specific specifications are included in the scope of this 
investigation. In addition to primary magnesium, ``alloy'' magnesium 
generally contains one or more of the following items in amounts less 
than the primary magnesium itself: (1) Other elements deliberately 
added to the primary magnesium; (2) magnesium scrap or secondary 
magnesium; (3) oxidized magnesium; and (4) other elements present as 
impurities.
    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 these investigations are 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 then 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) of 1 inch or less.
    The products subject to these investigations 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.

United States Price and Foreign Market Value

A. Non-Market Economy Determination

    The PRC, the Russian Federation, and Ukraine have all been 
determined to be non-market economy (NME) countries within the meaning 
of sections 771(18)(A) and (C) of the Act in previous investigations 
and the presumption of NME status continues for the initiation of these 
investigations. See, e.g., Final Determination of Sales at Less Than 
Fair Value: Certain Compact Ductile Iron Waterworks Fittings and 
Accessories Thereof from the PRC, 58 FR 37908 (July 14, 1993); Final 
Determination of Sales at Less Than Fair Value: Ferrosilicon from the 
Russian Federation, 58 FR 29192 (May 19, 1993); Preliminary 
Determinations of Sales at Less Than Fair Value: Ferrosilicon from 
Kazakhstan, the Russian Federation, and Ukraine, 57 FR 61876 (December 
29, 1992).
    In accordance with section 773(c) of the Act, foreign market value 
(FMV) in NME cases is based on NME producers' factors of production, 
valued in a market economy country. Absent evidence that a particular 
NME country government determines which of its factories shall produce 
for export to the United States, we intend, for purposes of this 
investigation, to base FMV only on those factories that produced pure 
and/or alloy magnesium sold to the United States during the period of 
investigations (POI).
    In the course of these investigations, parties will have the 
opportunity to address these NME determinations and provide relevant 
information and argument on these issues. In addition, parties will 
have the opportunity in these investigations to submit comments on 
whether FMV should be based on prices or costs in the respective NME.

B. Pure Magnesium

    For the PRC, the Russian Federation, and Ukraine, petitioners based 
United States price (USP) on 1993 country-specific Customs unit values 
for entries of pure primary magnesium.
    For all three countries, petitioners contend that the FMV of 
imports subject to these investigations must be determined in 
accordance with section 773(c) of the Act, which concerns NME countries 
(see ``Non-Market Economy Determination'' section of the notice, 
above). Accordingly, petitioners calculated FMV on the basis of the 
valuation of the factors of production. The factors of production used 
by petitioners were based on Magcorp's experience with a production 
process similar to that used in the PRC, the Russian Federation, and 
Ukraine.
    Petitioners' FMV consisted of the sum of materials, labor, energy, 
overhead, general expenses, profit, and packing. To value the factors 
of production, petitioners relied where possible on publicly available 
information from an appropriate surrogate country. Where such 
information was unavailable, petitioners resorted to publicly available 
information from the United States and proprietary information based on 
their own experience. For one production factor, petitioners also 
relied on an export price from the PRC.
    For purposes of these initiations, we have accepted, pursuant to 
section 773(c)(4) of the Act, petitioners' view that India (for the 
PRC) and Brazil (for the Russian Federation and Ukraine) are 
appropriate surrogate countries. We have disregarded factor values 
based on prices in the United States because (1) petitioners have 
failed to follow the Department's established hierarchy with respect to 
factor valuation, and (2) petitioners provide no basis for determining 
that United States values are representative of the appropriate 
surrogate country values. In addition, we have disregarded the factor 
value based on an export price in the PRC since the PRC is an NME and 
cannot be an appropriate surrogate to value factors of production.
    Pursuant to section 773(c)(1) of the Act, petitioners added to the 
labor and material costs the percentage for overhead based on their own 
experience and the statutory minima of ten percent for general expenses 
and eight percent for profit, as well as an amount for packing (which, 
because it was based on U.S. values, was disallowed).

C. Alloy Magnesium

    For the PRC, the Russian Federation, and Ukraine, petitioners based 
USP on 1993 country-specific Customs unit values for entries of alloy 
primary magnesium. For each country, petitioners calculated FMV for 
alloy primary magnesium using the same factors of production as were 
used for pure primary magnesium. Petitioners contend that the pure 
primary magnesium must be manufactured and then mixed with an alloy to 
create alloy primary magnesium, and that this process involves 
additional cost. Therefore, the use of the pure primary magnesium 
factor values to determine an alloy primary magnesium FMV produces a 
conservative estimate. See, e.g., Final Affirmative Determination; 
Rescission of Investigation and Partial Dismissal of Petition: Pure and 
Alloy Magnesium from Canada, 57 FR 30939 (July 13, 1992).

Fair Value Comparisons

A. Pure Magnesium

    Based on a comparison of USP and FMV, petitioners' alleged dumping 
margins, as corrected by the Department for methodological errors and/
or unsupported data, are as follows:

------------------------------------------------------------------------
              Country                           Revised range           
------------------------------------------------------------------------
PRC................................  75.67% to 92.01%.                  
Russian Federation.................  43.37% to 64.12%.                  
Ukraine............................  40.15% to 53.99%.                  
------------------------------------------------------------------------

B. Alloy Magnesium

    Based on a comparison of USP and FMV, petitioners' alleged dumping 
margins, as corrected by the Department for methodological errors and/
or unsupported data, are as follows:

------------------------------------------------------------------------
              Country                           Revised range           
------------------------------------------------------------------------
PRC................................  46.14% to 47.44%.                  
Russian Federation.................  48.49% to 107.89%.                 
Ukraine............................  21.10%.                            
------------------------------------------------------------------------

Initiations of Investigations

    We have examined the petitions on pure and alloy magnesium and have 
found that they meet the requirements of section 732(b) of the Act. 
Therefore, we are initiating antidumping duty investigations to 
determine whether imports of pure and alloy magnesium from the PRC, the 
Russian Federation, and Ukraine are being, or are likely to be, sold in 
the United States at less than fair value.

ITC Notification

    Section 732(d) of the Act requires us to notify the International 
Trade Commission (ITC) of these actions, and we have done so.

Preliminary Determination by the ITC

    The ITC will determine by May 16, 1994, whether there is a 
reasonable indication that imports of pure and alloy magnesium from the 
PRC, the Russian Federation, and Ukraine are materially injuring, or 
threaten material injury to, a U.S. industry. Any ITC determination 
which is negative will result in the respective investigation being 
terminated; otherwise, these investigations will proceed according to 
statutory and regulatory time limits.
    This notice is published pursuant to section 732(c)(2) of the Act 
and 19 CFR 353.13(b).

    Dated: April 20, 1994.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 94-10067 Filed 4-25-94; 8:45 am]
BILLING CODE 3510-DS-M