[Federal Register Volume 61, Number 90 (Wednesday, May 8, 1996)]
[Notices]
[Pages 20792-20795]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-11491]



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[[Page 20793]]


DEPARTMENT OF COMMERCE
[A-351-820]


Ferrosilicon From Brazil; Preliminary Results of Antidumping Duty 
Administrative Review

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

ACTION: Notice of Preliminary Results of Antidumping Duty 
Administrative Review.

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SUMMARY: In response to requests from one manufacturer/exporter, 
Companhia de Ferro Ligas da Bahia (Ferbasa), and from AIMCOR, Elkem 
Metals Company and SKW Metals & Alloys, Inc. (petitioners), the 
Department of Commerce (the Department) has conducted an administrative 
review of the antidumping duty order on ferrosilicon from Brazil. This 
notice of preliminary results covers one manufacturer/exporter, 
Ferbasa, for the period August 16, 1993 through February 28, 1995. The 
review indicates that there were no dumping margins during this period.
    We have preliminarily determined that sales have been made below 
normal value (NV). If these preliminary results are adopted in the 
final results of our administrative review, we will instruct U.S. 
Customs to assess antidumping duties equal to the difference between 
the United States price (USP) and the NV. Interested parties are 
invited to comment on these preliminary results. Parties who submit 
argument in this proceeding are requested to submit with the argument 
(1) a statement of the issue and (2) a brief summary of the argument.

EFFECTIVE DATE: May 8, 1996.

FOR FURTHER INFORMATION CONTACT:
Laurel LaCivita, or Thomas F. Futtner, Office of Antidumping 
Compliance, Import Administration, International Trade Administration, 
U.S. Department of Commerce, 14th Street and Constitution Avenue, N.W., 
Washington, D.C. 20230, telephone: (202) 482-5253

SUPPLEMENTARY INFORMATION:

The Applicable Statute

    Unless otherwise indicated, all citations to the statue are 
references to the provisions effective January 1, 1995, the effective 
date of the amendments made to the Tariff Act of 1930 (the Act) by the 
Uruguay Round Agreements Act (URAA). In addition, unless otherwise 
indicated, all citations to the Department's regulations are to the 
current regulations, as amended by the interim regulations published in 
the Federal Register on May 11, (60 FR 25130).

Background

    The Department published an antidumping duty order on ferrosilicon 
from Brazil on March 14, 1994 (59 FR 11769). The Department published a 
notice of ``Opportunity to Request an Administrative Review'' of the 
antidumping duty order for the 1993 through 1995 period on March 7, 
1995 (60 FR 12540). On March 21, 1995, we received a request for review 
from Companhia de Ferro Ligas da Bahia (Ferbasa) covering the period 
August 16, 1993 through February 28, 1995. On March 31, 1995, 
petitioners requested a review for Companhia Brasilerira Carbureto de 
Calcio (CBCC), Companhia Ferroligas Minas Geras (Minasligas), 
Italmagnesio S.A. Industria e Comercio (Italmagnesio) and Ferbasa for 
the same period. Petitioners withdrew their request for review for 
Itralmagnesio on April 11, 1995. We initiated an administrative review 
on CBCC and Ferbasa on April 14, 1995 (60 FR 19017) and on Minasligas 
on May 15, 1995 (60 FR 25886). Petitioners subsequently withdrew their 
request for review of Minasligas and CBCC on July 15, 1995 and the 
Department published in the Federal Register a Termination in Part of 
Antidumping Duty Administrative Review for those companies (60 FR 
52366). Consequently, this review covers only one manufacturer/
exporter, Ferbasa.
    The Department extended the time limits for the deadlines for the 
preliminary and final results of review because of the additional time 
required for the development of a new questionnaire in accordance with 
the adoption of the URAA. See Antidumping Duty Administrative Reviews; 
Time Limits, 60 FR 56141 (November 7, 1995). Deadlines were further 
extended as a result of the 28-day shutdown of the federal government.
    The Department is now conducting this administrative review in 
accordance with section 751(a) of the Act.
    On October 5, 1995, petitioners requested that the Department 
conduct an investigation to determine if Ferbasa made sales at prices 
below its cost of production (COP) during the 1993-1995 review period. 
On February 9, 1996, based on petitioners' allegation and the totality 
of evidence on the record, the Department determined that there were 
reasonable grounds to believe or suspect that Ferbasa made sales at 
prices below its COP, in accordance with section 773 (b)(2)(A)(i) of 
the Act, and initiated a COP investigation for Ferbasa, pursuant to 
section 773(b)(1) of the Act. See the Department's memorandum to the 
file, Ferrosilicon from Brazil--Home Market Sales Below Cost Allegation 
for Companhia de Ferro Ligas da Bahia, February 9, 1996.

Scope of the Order

    The merchandise subject to this review is ferrosilicon, a 
ferroalloy generally containing, by weight, not less than four percent 
iron, more than eight percent but not more than 96 percent silicon, not 
more than 10 percent chromium, not more than 30 percent manganese, not 
more than three percent phosphorous, less than 2.75 percent magnesium, 
and not more than 10 percent calcium or any other element.
    Ferrosilicon is a ferroalloy produced by combining silicon and iron 
through smelting in a submerged-arc furnace. Ferrosilicon is used 
primarily as an alloying agent in the production of steel and cast 
iron. It is also used in the steel industry as a deoxidizer and a 
reducing agent, and by cast iron producers as an inoculant.
    Ferrosilicon is differentiated by size and by grade. The sizes 
express the maximum and minimum dimensions of the lumps of ferrosilicon 
found in a given shipment. Ferrosilicon grades are defined by the 
percentages by weight of contained silicon and other minor elements. 
Ferrosilicon is most commonly sold to the iron and steel industries in 
standard grades of 75 percent and 50 percent ferrosilicon. Calcium 
silicon, ferrocalcium silicon, and magnesium ferrosilicon are 
specifically excluded from the scope of this review.
    Calcium silicon is an alloy containing, by weight, not more than 
five percent iron, 60 to 65 percent silicon, and 28 to 32 percent 
calcium. Ferrocalcium silicon is a ferroalloy containing, by weight, 
not less than four percent iron, 60 to 65 percent silicon, and more 
than 10 percent calcium. Magnesium ferrosilicon is a ferroalloy 
containing, by weight, not less than four percent iron, not more than 
55 percent silicon, and not less than 2.75 percent magnesium.
    Ferrosilicon is currently classifiable under the following 
subheadings of the Harmonized Tariff Schedule of the United States 
(HTSUS): 7202.21.1000, 7202.21.5000, 7202.21.7500, 7202.21.9000, 
7202.29.0010, and 7202.29.0050. Although the HTSUS subheadings are 
provided for convenience and customs purposes, our written description 
of the scope of this review is dispositive.
    Ferrosilicon in the form of slag is included within the scope of 
this review

[[Page 20794]]

if it meets, in general, the chemical content definition stated above 
and is capable of being used as ferrosilicon. Parties that believe 
their importations of slag do not meet these definitions should contact 
the Department and request a scope determination.

Level of Trade

    As set forth in section 773(a)(1)(B)(i) of the Act and in the 
Statement of Administrative Action (SAA) accompanying the Uruguay Round 
Agreements Act, at 829-831, see H.R. Doc. No. 316, 103d Cong., 2d Sess. 
829-831(1994), to the extent practicable, the Department will calculate 
NV based on sales at the same level of trade as the U.S. sale. The SAA 
makes clear that there cannot be two different levels of trade where 
the selling functions are the same. When the Department is unable to 
find sale(s) in the comparison market at the same level of trade as the 
U.S. sale(s), the Department may compare sales in the U.S. and foreign 
markets at a different level of trade.
    Ferbasa made only one U.S. sale during the period of review, which 
was to an unaffiliated reseller in the U.S. market. It made sales to 
unaffiliated resellers and to steel producers in the home market. The 
selling functions for the U.S. sale and for all home market sales are 
identical. The selling functions include invoicing, order 
acknowledgment, order processing, quality control, marketing, and price 
negotiation. Therefore, we conclude that home market and U.S. sales 
were all made at the same level of trade.

United States Price (USP)

    In calculating USP for Ferbasa, we used export price, as defined in 
section 772(a) of the Act, because the merchandise was sold to 
unaffiliated U.S. purchasers prior to the date of importation and 
because no other circumstances indicated that constructed export price 
(CEP) was appropriate. Ferbasa reported that export price was based on 
the unpacked, FOB price to unaffiliated purchasers in the United 
States. We made deductions for brokerage and handling charges, and 
inland freight from the plant to the port, in accordance with section 
772(c)(2)(A) of the Act, because these expenses were incident to 
bringing the subject merchandise from the original place of shipment in 
the exporting country to the place of delivery in the United States.
    Ferbasa reported inventory carrying costs and indirect selling 
expenses which were attributed to sales in the U.S. market. We did not 
make adjustments for these expenses since these are indirect selling 
expenses which do not fall within the adjustments applicable to export 
price under section 772(c) of the Act.
    No other adjustments to USP were claimed or allowed.

Normal Value (NV)

A. Viability

    In order to determine whether there was a sufficient volume of 
sales in the home market to serve as a viable basis for calculating NV, 
we compared Ferbasa's volume of home market sales of the foreign like 
product to the volume of U.S. sales of the subject merchandise, in 
accordance with section 773(a)(1)(B) of the Act. Because Ferbasa's 
aggregate volume of home market sales of the foreign like product was 
greater than five percent of its aggregate volume of U.S. sales for the 
subject merchandise, we determined that the home market provides a 
viable basis for calculating NV for Ferbasa.

B. Cost of Production Analysis

    As stated above in the Background section, the Department initiated 
a ``cost of production'' investigation for Ferbasa. The term ``cost of 
production'' is defined in section 773(b) of the Act.
    Before making any fair value comparisons, we conducted the COP 
analysis described below.
a. Calculation of COP
    We calculated COP based on the sum of the costs of materials and 
fabrication employed in producing the foreign like product, plus 
selling, general, and administrative expenses (SG&A), and the cost of 
all expenses incidental to placing the foreign like product in 
condition packed ready for shipment to the United States, in accordance 
with section 773(b)(3) of the Act. In making our calculations, we 
relied on the home market sales and COP information for the six-month 
period surrounding Ferbasa's sale to the United States.
b. Test of Home Market Prices
    In accordance with section 773(b)(1) of the Act, in order to 
determine whether to disregard home market sales made at prices below 
the COP, we examined whether such sales were made in substantial 
quantities within an extended period of time, and whether such sales 
were made at prices which permit the recovery of all costs within a 
reasonable period of time.
    We used the respondent's weighted-average COP for the six-month 
period for which home market sales were reported. We compared the 
weighted-average COP figures to home market sales of the foreign like 
product as required under section 773(b) of the Act. We compared the 
COP to the home market prices, less any applicable price adjustments 
for quantity changes.
c. Results of COP Test
    Pursuant to section 773(b)(2)(C) of the Act, where less than 20 
percent of respondent's sales were at prices less than the COP, we did 
not disregard any below-cost sales of that product because we 
determined that the below-cost sales were not made in ``substantial 
quantities.'' Where 20 percent or more of a respondent's sales of a 
given product during the six-month period were at prices less than the 
COP, we disregarded the below-cost sales because we determined that the 
below-cost sales were made within an extended period of time in 
``substantial quantities'' in accordance with section 773(b)(2)(B) and 
(C) of the Act, and because we determined that the below-cost sales of 
the product were at prices which would not permit recovery of all costs 
within a reasonable period of time, in accordance with section 
773(b)(2)(D) of the Act.

C. Model Match

    We have determined that all the products covered by this review 
constitute a single category of like merchandise. All sales in the home 
market are considered to be identical to the sales in the United 
States. Therefore, we made no adjustments for similar characteristics 
and uses pursuant to section 771(10) of the Act.

D. Price-to-Price Comparisons

    We based NV on the price at which the foreign like product was 
first sold for consumption in the exporting country, in the usual 
commercial quantities and in the ordinary course of trade, and at the 
same level of trade as the export price, as defined by section 
773(a)(1)(B)(i) of the Act. We reduced NV for home market credit in 
accordance with section 773(a)(6)(C)(iii), due to differences in 
circumstances of sale. We also reduced NV by packing costs incurred in 
the home market, in accordance with section 773(a)(6)(B)(i). In 
addition, we increased NV for U.S. packing costs, in accordance with 
section 773(a)(6)(A). We made further adjustments to account for 
commissions, bank fees and U.S. credit in accordance with section 
773(a)(6)(C)(iii) of the Act.
    No other adjustments to NV were claimed or allowed.

Currency Conversion

    The Department's preferred source for daily exchange rates is the 
Federal

[[Page 20795]]

Reserve Bank. However, the Federal Reserve Bank does not track or 
publish exchange rates for Brazilian currency. Therefore, we made 
currency conversions based on the daily exchange rates from the Dow 
Jones Business Information Service, as published in the Wall Street 
Journal.
    Section 773A(a) directs the Department to use a daily exchange rate 
in order to convert foreign currencies into U.S. dollars, ignoring any 
``fluctuations.'' We determine that a fluctuation exists when the daily 
exchange rate differs from a benchmark rate by 2.25 percent or more. 
The benchmark rate is defined as the rolling average of the rates for 
the past 40 business days. When we determined that a fluctuation 
existed, we substituted the benchmark rate for the daily rate. For a 
complete discussion of the Department's exchange rate methodology, See, 
``Change in Policy Regarding Currency Conversions'' (61 FR 9434, March 
8, 1996).

Preliminary Results

    As a result of this review, we preliminarily determine that the 
following weighted-average dumping margin exists for the period August 
16, 1993 through February 28, 1995:

------------------------------------------------------------------------
                                                                Margin  
               Manufacturer/producer/exporter                 (percent) 
------------------------------------------------------------------------
Companhia de Ferro Ligas da Bahia..........................         0.00
------------------------------------------------------------------------

    Parties to this proceeding may request disclosure within five days 
of the publication of this notice and any interested party may request 
a hearing within 10 days of publication. Any hearing, if requested, 
will be held 44 days after the date of publication, or the first 
working day thereafter. Interested parties may submit case briefs and/
or written comments no later than 30 days after the date of 
publication. Rebuttal briefs and rebuttals to written comments, limited 
to issues raised in such briefs or comments, may be filed no later than 
37 days after the date of publication. The Department will publish a 
notice of the final results of the administrative review, which will 
include the results of its analysis of issues raised in any such 
written comments or at the hearing, within 180 days from the issuance 
of these preliminary results.
    The Department shall determine, and Customs shall assess, 
antidumping duties on all appropriate entries. Individual differences 
between USP and NV may vary from the percentages stated above. The 
Department will issue appraisement instructions directly to Customs. 
The final results of this review shall be the basis for the assessment 
of antidumping dumping duties on entries of merchandise covered by the 
determination and for future deposits of estimated duties.
    Furthermore, the following deposit requirements will be effective 
upon completion of the final results of these administrative reviews 
for all shipments of ferrosilicon from Brazil entered, or withdrawn 
from warehouse, for consumption on or after the publication date of the 
final results of these administrative reviews, as provided by section 
751(a)(1) of the Act: (1) the cash deposit rate for Ferbasa will be the 
rate established in the final results of administrative review; (2) for 
merchandise exported by manufacturers or exporters not covered in these 
reviews but covered in the original LTFV investigation or a previous 
review, the cash deposit will continue to be the most recent rate 
published in the final determination or final results for which the 
manufacturer or exporter received a company-specific rate; (3) if the 
exporter is not a firm covered in these reviews, or the original 
investigation, but the manufacturer is, the cash deposit rate will be 
that established for the manufacturer of the merchandise in the final 
results of these reviews, or the LTFV investigation; and (4) if neither 
the exporter nor the manufacturer is a firm covered in these or any 
previous reviews, the cash deposit rate will be 35.95 percent, the 
``all others'' rate established in the antidumping duty order (59 FR 
11769, March 14, 1994).
    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 353.26(b) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this review period. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This administrative review and notice are in accordance with 
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)).

    Dated: April 29, 1996.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 96-11491 Filed 5-7-96; 8:45 am]
BILLING CODE 3510-DS-M