[Federal Register Volume 59, Number 214 (Monday, November 7, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-27435]


[[Page Unknown]]

[Federal Register: November 7, 1994]


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DEPARTMENT OF COMMERCE
International Trade Administration
[A-823-806]

 

Preliminary Determination of Sales at Less Than Fair Value and 
Postponement of Final Determination: Pure Magnesium From Ukraine

AGENCY: Import Administration, International trade Administration, 
Department of Commerce.

EFFECTIVE DATE: November 7, 1994.

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

PRELIMINARY DETERMINATION: We preliminarily determine that imports of 
pure magnesium from Ukraine are being, or are likely to be, sold in the 
Untied States at less than fair value (``LTFV''), as provided in 
section 733 of the Tariff Act of 1930, as amended (``the Act''). The 
estimated margins are shown in the ``Suspension of Liquidation'' 
section of this notice.

Case History

    Since the initiation of this investigation on April 20, 1994, (59 
FR 21748, April 26, 1994), the following events have occurred.
    On May 16, 1994, the U.S. International Trade Commission (ITC) 
notified the Department of Commerce (the Department) of its preliminary 
determination that there is a reasonable indication that an industry in 
the United States is materially injured, or threatened with material 
injury, by reason of imports of pure magnesium from Ulkraine. The ITC 
also determined in the companion investigation of alloy magnesium from 
Ukraine that there is not a likelihood that a U.S. domestic industry is 
materially injured, or threatened with material injury, by reason of 
imports of alloy magnesium from Ukraine, thereby terminating that 
investigation.
    On June 13, 1994, we sent the antidumping questionnaire to the 
Ukrainian Embassy and the two Ukrainian manufacturers of pure 
magnesium, Concern Chlorvinyl and Zaporozhye Titanium and Magnesium 
Plant. (The antidumping questionnaire was divided into three sections: 
section A requesting general information on each company; section C 
requesting information on, and a listing of, U.S. sales made during the 
period of investigation (``POI''); and, section D requesting 
information on the production process, including specific amounts of 
each input used in manufacturing pure magnesium.) We requested the 
Embassy's assistance in forwarding the questionnaire to all exporters 
and producers of pure magnesium from Ukraine and submitting complete 
questionnaire responses on their behalf.
    On August 8, 1994, the Department postponed its preliminary 
determination until October 27, 1994 (59 FR 42200, August 17, 1994).
    On August 10, 1994, the Department provided interested parties with 
the opportunity to submit published, publicly-available information for 
consideration in valuing factor inputs. Petitioners submitted 
information on September 7, 1994; respondents submitted information on 
September 22, 1994.

Respondent Selection

    In addition to sending the Ukrainian Embassy the questionnaire, the 
Department independently attempted to identify other possible exporters 
of Ukrainian pure magnesium to the United States during the POI based 
on information obtained from petitioners, and through examination of 
PIERS data and other sources of information. Our efforts consisted of 
issuing an August 8, 1994, survey requesting information on exports to 
the United States of the subject merchandise; issuing the antidumping 
questionnaires (limited to Sections A and C) to trading companies 
operating in various European countries (on August 19, September 7, and 
September 13, 1994); and a September 15, 1994, follow-up letter to 
unresponsive questionnaire recipients.
    We sent either the survey, the questionnaire, or both documents to 
56 companies, with the following results.
     Two companies, Gerald Metals and MG Metals, provided 
responses to Sections A and C of the questionnaire.
     Twenty-five other companies, meanwhile, indicated that 
they did not export the subject merchandise to the United States during 
the POI. The companies that did not export were Intreid; Kemokomplex; 
Nobel Trading; Raba Company; Alamet; Compagnie de Mines et Metals; 
Expromptorg; Fred Lonner & Co., Inc.; Metal Exchange Corporation; 
Minmeta S.A., Minmetals Canada, Inc.; Scandinavian Steel AB; Stena 
Metall Atervinning AB; Sinex AG; Maks Trade Kft.; Sassoon Metals and 
Chemicals; Seleb; Weko Food Trading; IMEX Consulting Sprl; W&O 
Bergmann; Steinweg Handelsveem; A. Hartrodt; C. Steinweg Handelsveem 
B.V.; J. Oosterom & Zoom; and Siegfried Kahn AG.
     Seven companies indicated that they were related to 
companies who had provided information as to whether or not they had 
made U.S. sales.
     Eighteen companies provided either no response or an 
inadequate response. The Department received no response from the 
following 16 contacted companies: Derek Raphael & Co. Ltd.; Marco 
Trading; Wogen Group Ltd.; Alex; Mages; and 11 other companies whose 
names cannot be disclosed in this notice because their identities has 
been deemed business proprietary information. We have designated these 
11 companies as companies ``A'' through ``K'' in the ``Suspension of 
Liquidation'' section of this notice, below. We will, however, identify 
them to the Customs Service for enforcement of this determination. 
Additionally, F&S and Alusuisse-Lonza indicated that they made POI 
sales to the United States, but provided inadequate responses to our 
requests for information.
     Finally, surveys or questionnaires sent to four companies 
were returned as undeliverable.
    From July to October 1994, the Department received responses to 
sections A and D from Concern Chlorvinyl, which indicated that it had 
made no sales of the subject merchandise directly to the United States 
during the POI. Zaporozhye responded to section A but did not reply to 
subsequent deficiency letters.
    During September and October 1994, the Department also requested 
clarifications of the information submitted by Concern Chlorvinyl, 
Gerald Metals, MG Metals, and Alusuisse-Lonza. Alusuisse-Lonza did not 
respond to the supplemental request. Because of the deadlines 
established for responses to these supplemental requests, certain 
information submitted by Gerald Metals and MG Metals was not considered 
for this preliminary determination.

Postponement of Final Determination

    Pursuant to section 735(a)(2)(A) of the Act, on October 24, 1994, 
Gerald Metals, a reseller accounting for a significant proportion of 
the merchandise in this proceeding, requested that, in the event of an 
affirmative preliminary determination in this investigation, the 
Department postpone the final determination to 135 days after the date 
of publication of the affirmative preliminary determination in the 
Federal Register. Concern Chlorvinyl, a producer accounting for a 
significant proportion of merchandise in this proceeding, made a 
similar request on October 26, 1994. Therefore, we are postponing the 
final determination until the 135th day after the publication of this 
notice in the Federal Register.

Scope of Investigation

    The product covered by this investigation is pure primary 
magnesium, regardless of chemistry, form or size, unless expressly 
excluded from the scope of this investigation. Primary magnesium is a 
metal or alloy containing by weight primarily the element magnesium and 
produced by decomposing raw materials into magnesium metal.
    Pure primary magnesium encompasses all products that contain at 
least 99.95% primary magnesium, by weight (generally referred to as 
``ultra-pure'' magnesium), as well as products containing less than 
99.95% but not less than 99.8% primary magnesium, by weight (generally 
referred to as ``pure'' magnesium). Products that have the 
aforementioned primary magnesium content, but that do not conform to 
ASTM specifications or other industry or customer-specific 
specifications, are included in the scope of this investigation.
    Pure primary magnesium is cast and sold in various physical forms 
and sizes, including ingots, slabs, rounds, billets and other shapes.
    Excluded from the scope of this investigation are primary magnesium 
anodes, granular primary magnesium (including turnings and powder), and 
secondary magnesium.
    Granular magnesium, turnings, and powder are currently classifiable 
under Harmonized Tariff Schedule of the United States (HTSUS) 
subheading 8104.30.00. Magnesium granules and turnings (also referred 
to as chips) are produced by grinding and/or crushing primary magnesium 
and thus have the same chemistry as primary magnesium. Although not 
susceptible to precise measurement because of their irregular shapes, 
turnings or chips are typically produced in coarse shapes and have 
maximum length of less than 1 inch. Although sometimes produced in 
larger sizes, granules are more regularly shaped than turnings or 
chips, and have a typical size of 2 mm in diameter or smaller.
    Powders are also produced from grinding and/or crushing primary 
magnesium and have the same chemistry as primary magnesium, but are 
even smaller than granules or turnings. Powders are defined by the 
Section Notes to Section XV, the section of the HTSUS in which 
subheading 8104.30.00 appears, as products of which 90 percent or more 
by weight will pass through a sieve having a mesh aperture of 1 mm. 
(See HTSUS, Section XV, Base Metals and Articles of Base Metals, Note 
6(b).) Accordingly, the exclusion of magnesium turnings, granules and 
powder from the scope includes products having a maximum physical 
dimension (i.e., length or diameter) of 1 inch or less.
    The products subject to this investigation are currently 
classifiable under subheadings 8104.11.00 and 8104.20.00 of the HTSUS. 
Although the HTSUS subheadings are provided for convenience and customs 
purposes, our written description of the scope is dispositive.

Nonmarket Economy Status

    Ukraine has been treated as a nonmarket economy (``NME'') country 
in all past antidumping proceedings (see, e.g., Final Determination of 
Sales at Less Than Fair Value: Uranium from Ukraine (58 FR 36640, July 
8, 1993)). No information has been provided in this proceeding that 
would lead us to overturn this designation. Therefore, in accordance 
with section 771(18)(c) of the Act, we have treated Ukraine as an NME 
for purposes of this investigation.

Period of Investigation

    The POI is October 1, 1993, through March 31, 1994.

Fair Value Comparisons

A. Participating Respondents

    To determine whether sales by Gerald Metals and MG Metals of pure 
magnesium from Ukraine to the United States were made at less than fair 
value, we compared the United States price (``USP'') to the foreign 
market value (``FMV''), as specified in the ``United States Price'' and 
``Foreign Market Value'' sections of this notice.

B. Non-Participating Respondents

    All companies to which a questionnaire was issued are considered 
mandatory respondents in this proceeding. We consider those mandatory 
respondents that did not respond to the questionnaire to be 
uncooperative respondents and have based the less-than-fair-value 
margin for those companies on the best information available (``BIA''). 
We consider the following companies to be uncooperative respondents: 
Alusuisse-Lonza; Derek Raphael & Co. Ltd.; Marco Trading; Wogen Group 
Ltd.; Alex; Mages; F&S and the 11 companies whose names cannot be 
disclosed because their identities are deemed business proprietary 
information. Accordingly, we have based these companies' LTFV margin on 
an uncooperative BIA rate.
    In determining what to use as BIA, the Department follows a two-
tiered methodology, whereby the Department normally assigns lower 
margins to those respondents that cooperated in an investigation and 
margins based on more adverse assumptions for those respondents which 
did not cooperate in an investigation. As outlined in the Final 
Determination of Sales at Less Than Fair Value; Certain Hot-Rolled 
Carbon Steel Flat Products, Certain Cold-Rolled Carbon Steel Flat 
Products, and Certain Cut-to-Length Carbon Steel Plate From Belgium, 58 
FR 37083 (July 9, 1993), when a company refuses to provide the 
information requested in the form required, or otherwise significantly 
impedes the Department's investigation, it is appropriate for the 
Department to assign to that company the higher of (a) the highest 
margin alleged in the petition, or (b) the highest calculated rate of 
any respondent in the investigation. Here, since these companies failed 
to respond to our questionnaire, we are deeming them uncooperative and 
are assigning them a BIA margin of 53.99 percent. This margin 
represents the highest margin in the petition, as recalculated by the 
Department at the time of the initiation to account for errors in 
arithmetic and/or methodology.

C. All Other Companies

    We are basing the LTFV margins for all other companies, including 
those companies which reported that they did not sell the subject 
merchandise to the United States during the POI, on a simple average of 
the rates calculated for the mandatory respondents, including rates 
based on BIA but excluding zero and de minimis margins, if any.

United States Price

    We based USP on purchase price sales, in accordance with section 
772(b) of the Act, because the subject merchandise was sold directly by 
the exporters to unrelated parties in the United States prior to 
importation into the United States and because exporter's sales price 
methodology was not indicated by other circumstances.
    For those exporters that responded to the Department's 
questionnaire, we calculated purchase price based on packed, CIF or FOB 
foreign-port prices to unrelated purchasers in the United States. In 
addition, for CIF prices, we made the following deductions (where 
appropriate): for MG Metals, we deducted foreign brokerage, ocean 
freight, marine insurance, U.S. duty, U.S. inland freight, U.S. inland 
insurance and U.S. brokerage and repacking cost; for Gerald Metals, we 
deducted foreign brokerage, ocean freight, U.S. Duty, U.S. inland 
freight, U.S. insurance and U.S. brokerage.
    From each exporter's U.S. price, we calculated and then deducted 
foreign inland freight between the factory and the reported 
intermediate destination. We based our calculation on the per-ton 
foreign inland freight amount reported in the petition as best 
information available because the exporters failed to report 
information on this area in their questionnaire responses.

Foreign Market Value

A. Surrogate Country Selection

    In accordance with section 773(c)(4) of the Act, we must, to the 
extent possible, value the factors of production in one or more market 
economy countries that (1) are at a level of economic development 
comparable to that of the non-market economy country, and (2) are 
significant producers of comparable merchandise. There are no countries 
economically comparable to Ukraine that are significant producers of 
magnesium. Accordingly, we considered as potential surrogates countries 
that are economically comparable that produce comparable merchandise. 
In these investigations, we have determined that aluminum should be 
considered comparable merchandise. Although the material inputs used to 
produce magnesium and aluminum are different, according to both U.S. 
Bureau of Mines and Department of Commerce experts, aluminum is 
comparable to magnesium in that both (1) are light metals in terms of 
molecular weight; (2) are electricity-intensive products; (3) are 
produced using an electrolytic process, and (4) share some common end 
uses (e.g., dye casting).
    We have determined that Indonesia and Egypt are both economically 
comparable to Ukraine (see October 21, 1994, Memorandum from the Office 
of Policy to the File.) In addition, both countries are significant 
producers of aluminum. Because we were able to obtain more information 
from Indonesia than from Egypt, we have used Indonesia as our primary 
surrogate. However, we have resorted to Egypt for certain surrogate 
values where values in Indonesia were either unavailable or out of 
date. We have obtained and relied upon published, publicly available 
information, wherever possible.

B. Factors of Production

    In accordance with section 773(c)(1), we used factors of production 
as the fair value benchmark for the U.S. price of sales of Concern 
Chlorvinyl-produced merchandise by Gerald Metals and MG Metals. In the 
case of U.S. sales of Zaporozhye-produced merchandise for which we did 
not receive factors of production data, a BIA margin was assigned using 
the higher of (a) the highest adjusted alleged margin cited in our 
initiation notice or (b) the highest margin calculated for a sale of 
Concern Chlorvinyl-produced merchandise. The factors used to produce 
pure magnesium include materials, labor, and energy. To calculate FMV, 
the reported quantities were multiplied by the appropriate surrogate 
values for the different inputs. (For a complete analysis of surrogate 
values, see our calculation memorandum.) We then added amounts for 
factor overhead, general expenses and profit, the cost of containers 
and coverings, and other expenses incident to placing the merchandise 
in condition packed and ready for shipment to the United States.
    To value the raw materials, we used publicly available information 
from Indonesia in the UN Trade Commodity Statistics (``UN Trade 
Statistics'') for January through December 1993 and the 1992 Indonesia 
Foreign Trade Statistics. No adjustment for inflation was necessary 
since the 1993 UN Trade Statistics for Indonesia reported data for a 
portion of the POI. For values taken from Indonesian Foreign Trade 
Statistics, we made appropriate adjustments to account for inflation. 
For one energy input, we used data from the 1992 UN Trade Statistics 
for Egypt since the unit value from the 1993 UN Trade Statistics for 
Indonesia was based on an extremely small quantity and appeared to be 
aberrational. The 1992 Egyptian value for this input was inflated to 
the POI. For one raw material, we used information from the petition as 
best available information because we were unable to find a value in 
either Indonesia or Egypt.
    To adjust material input values to account for source-to-factory 
freight, we used Indonesia freight rates from a 1991 cable from the 
U.S. Embassy in Jakarta. (See Final Determination of Sales at Less Than 
Fair Value: Certain Carbon Steel Butt-Weld Pipe Fittings from the 
People's Republic of China (57 FR 21058, May 18, 1992).
    To value labor amounts for production and packing, we used labor 
data for Egypt, as reported in the International Labor Office's 1993 
Yearbook of Labor Statistics because the labor value available for 
Egypt was more up-to-date (1987) than was the labor value available for 
Indonesia (1986). We adjusted labor wage rates to account for inflation 
using world price indices for Egypt as reported in the International 
Monetary Funds' International Financial Statistics (IFS).
    To value heavy oil and diesel fuel, we used 1993 data for Indonesia 
from the Energy Information Administration's International Energy 
Annual. Although we are unable to adjust these values for taxes 
included in the published prices, they are the only data found for 
heavy oil and diesel fuel in Indonesia.
    To value electricity, we used information for Indonesia from the 
Asian Development Bank's 1993 Electric Utilities Data Book for Asian 
and Pacific Region.
    Because we were unable to find surrogate values for factory 
overhead from either Indonesia or Egypt, we used factory overhead rates 
from the petition.
    We used the statutory minima of ten percent for selling, general 
and administrative expenses and eight percent for profit because no 
surrogate country information reflected percentages for those amounts 
that were above the statutory minima.
    To value packing materials, we used data from the 1993 UN Trade 
Statistics for Indonesia. Because information for certain packing 
materials was incompletely reported, we were unable to calculate a unit 
factor value for these materials. Therefore, we included data from the 
petition to account for the cost of these packing materials.

Verification

    As provided in section 776(b) of the Act, we will verify all 
information determined to be acceptable for use in making our final 
determination.

Suspension of Liquidation

    In accordance with section 733(d)(1) of the Act, we are directing 
the Customs Service to suspend liquidation of all imports of the 
subject merchandise that are entered, or withdrawn from warehouse, from 
consumption on or after the date of publication of this notice in the 
Federal Register. The Customs Service shall require a cash deposit or 
posting of a bond equal to the estimated amount by which the FMV 
exceeds the USP as shown below. We will also inform Customs of the 
identities of those companies, identified below by a code letter, whose 
names we are unable to disclose. These suspension of liquidation 
instructions will remain in effect until further notice.
    The weighted-average dumping margins are as follows:

------------------------------------------------------------------------
                                                               Weighted-
                                                                average 
               Manufacturer/producer/exporter                   margin  
                                                              percentage
------------------------------------------------------------------------
Gerald Metals...............................................       52.21
MG Metals...................................................       36.05
Alusuisse Lonza.............................................       53.99
Derek Raphael & Co., Ltd....................................       53.99
Marco Trading...............................................       53.99
Wogen Group Ltd.............................................       53.99
Alex........................................................       53.99
Mages.......................................................       53.99
F&S.........................................................       53.99
Company A...................................................       53.99
Company B...................................................       53.99
Company C...................................................       53.99
Company D...................................................       53.99
Company E...................................................       53.99
Company F...................................................       53.99
Company G...................................................       53.99
Company H...................................................       53.99
Company I...................................................       53.99
Company J...................................................       53.99
Company K...................................................       53.99
All Others..................................................       53.00
------------------------------------------------------------------------

ITC Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of our determination. If our final determination is affirmative, 
the ITC will determine before the later of 120 days after the date of 
this preliminary determination or 45 days after our final determination 
whether these imports are materially injuring, or threaten material 
injury to, the U.S. industry.

Public Comment

    In accordance with 19 CFR 353.38, case briefs or other written 
comments in at least ten copies must be submitted to the Assistant 
Secretary for Import Administration no later than February 10, 1995, 
and rebuttal briefs, no later than February 17, 1995. In accordance 
with 19 CFR 353.38(b), we will hold a public hearing, if requested, to 
afford interested parties an opportunity to comment on arguments raised 
in case or rebuttal briefs. Tentatively, the hearing will be held on 
February 21, 1995, at 10:00 a.m. at the U.S. Department of Commerce, 
Room 3708, 14th Street and Constitution Avenue, NW., Washington, DC 
20230. Parties should confirm by telephone the time, date, and place of 
the hearing 48 hours before the scheduled time.
    Interested parties who wish to request a hearing, or to participate 
if one is requested, must submit a written request to the Assistant 
Secretary for Import Administration, U.S. Department of Commerce, Room 
B-099, within ten days of the publication of this notice. Requests 
should contain: (1) The party's name, address, and telephone number; 
(2) the number of participants; and (3) a list of the issues to be 
discussed. In accordance with 19 CFR 353.38(b), oral presentations will 
be limited to issues raised in the briefs. If this investigation 
proceeds normally, we will make our final determination by the 135th 
day after the date of publication of the affirmative preliminary 
determination in the Federal Register.
    This determination is published pursuant to section 733(f) of the 
Act and 19 CFR 353.15(a)(4).

    Dated: October 27, 1994.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 94-27435 Filed 11-4-94, 8:45 am]
BILLING CODE 3510-PS-P