[Federal Register Volume 63, Number 189 (Wednesday, September 30, 1998)]
[Notices]
[Pages 52289-52290]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-26217]


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INTERNATIONAL TRADE COMMISSION


Silicon Metal from Argentina, Brazil, and China; Dismissal of 
Request for Institution of a Section 751(b) Review Investigation

AGENCY: United States International Trade Commission (Commission).

ACTION: Dismissal of a request to institute a section 751(b) 
investigation concerning the Commission's affirmative determinations in 
investigations Nos. 731-TA-470-472 (Final): Silicon Metal from 
Argentina, Brazil, and China.

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SUMMARY: The Commission determines, pursuant to section 751(b) of the 
Tariff Act of 1930 (the Act) 1 and Commission rule 
207.45,2 that the subject request does not show changed 
circumstances sufficient to warrant institution of an investigation to 
review the Commission's affirmative determinations in investigations 
Nos. 731-TA-470-472 (Final): Silicon Metal from Argentina, Brazil, and 
China. Silicon metal is provided for in subheadings 2804.69.10 and 
2804.69.50 of the Harmonized Tariff Schedule of the United States 
(HTS).3
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    \1\ 19 U.S.C. 1675(b).
    \2\ 19 CFR 207.45.
    \3\ Semiconductor-grade silicon (silicon metal containing by 
weight not less than 99.9 percent of silicon and provided for in 
subheading 2804.61.00 of the HTS) is not subject to these 
investigations.

FOR FURTHER INFORMATION CONTACT: Fred Fischer (202-205-3179) or Vera 
Libeau (202-205-3176), Office of Investigations, U.S. International 
Trade Commission, 500 E Street SW, Washington, DC 20436. Hearing-
impaired persons can obtain information on this matter by contacting 
the Commission's TDD terminal on 202-205-1810. Persons with mobility 
impairments who will need special assistance in gaining access to the 
Commission should contact the Office of the Secretary at 202-205-2000. 
General information concerning the Commission may also be obtained by 
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accessing its internet server at http://www.usitc.gov.

Background INFORMATION: On June 23, 1998, the Commission received a 
request to review its affirmative determinations concerning silicon 
metal from Argentina, Brazil, and China (the request), in light of 
changed circumstances, pursuant to section 751(b) of the 
Act.4 The request was filed by counsel on behalf of General 
Motors Corp. (GM), Detroit, MI. GM is an importer of silicon metal.
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    \4\ 19 U.S.C. 1675(b).
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    The aluminum and chemical industries are the two major consumers of 
silicon metal. The aluminum industry adds silicon metal to aluminum 
alloys to reduce shrinkage and hot cracking, and to improve the 
castability, corrosion resistance, hardness, tensile strength, wear 
resistance, and weldability. The chemical industry uses silicon metal 
to produce silicones, silanes (silicon hydrides), and ultra-pure 
silicon for silicon memory chips.
    Pursuant to section 207.45(b) of the Commission's Rules of Practice 
and Procedure,5 the Commission published a notice in the 
Federal Register on July 21, 1998,6 requesting comments as 
to whether the alleged changed circumstances warranted the institution 
of review investigations. The Commission received comments in support 
of the request from two domestic importers/purchasers of silicon metal, 
Dow Corning Corp. and the General Electric Company, and the Aluminum 
Association, an association of domestic producers of primary- and 
secondary-aluminum ingot, mill products, and castings. Comments in 
opposition to the request were received from counsel on behalf of 
American Alloys, Inc., American Silicon Technologies, Elkem Metals Co., 
and Globe Metallurgical, Inc., domestic producers of silicon metal.
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    \5\ 19 CFR 207.45(b).
    \6\ 63 FR 39107.
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Analysis

    In considering whether to institute a review investigation under 
section 751(b), the Commission will not institute such an investigation 
unless it is persuaded there is sufficient information demonstrating:
    (1) That there are significant changed circumstances from those in 
existence at the time of the original investigations;
    (2) That those changed circumstances are not the natural and direct 
result of the imposition of the antidumping and/or countervailing duty 
orders, and;
    (3) That the changed circumstances, allegedly indicating that 
revocation of the order would not be likely to lead to continuation or 
recurrence of material injury to the domestic industry, warrant a full 
investigation.7
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    \7\ See, 19 U.S.C. 1675(b)(2)(A); Heavy Forged Handtools from 
the People's Republic of China, 62 FR 36305 (July 7, 1997); Certain 
Cold-Rolled Carbon Steel Flat Products from Germany and the 
Netherlands, 61 FR 17319 (April 19, 1996); A. Hirsh, Inc. v. United 
States, 737 F. Supp. 1186 (CIT 1990); Avesta AB v. United States, 
724 F. Supp. 974 (CIT 1989), aff'd 914 F.2d 232 (Fed. Cir. 1990); 
and Avesta AB v. United States, 689 F. Supp. 1173 (CIT 1988).
    In the Uruguay Round Agreements Act of 1994 (the URAA), Congress 
changed the substantive standard applicable to changed circumstances 
reviews from whether the domestic industry would be materially 
injured or threatened with material injury if the order were revoked 
to whether revocation of the order is likely to lead to the 
continuation or recurrence of material injury to the domestic 
industry.
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    After consideration of the request for review and the response to 
the notice inviting comments, the Commission has determined, pursuant 
to section 751(b) of the Act and Commission rule 207.45, that the 
information of record does not show changed circumstances sufficient to 
warrant institution of investigations to review the Commission's 
affirmative determinations in investigations Nos. 731-TA-470-472 
(Final): Silicon Metal from Argentina, Brazil, and China.
    The alleged changed circumstances include (1) structural changes in 
market demand, competition, and economic conditions, and (2) the extent 
to which alleged price-fixing activity may have affected the 
Commission's original silicon metal investigations.
    The information available on the record does not persuade us that 
an investigation is warranted based on the allegations contained in the 
request. In particular:

Structural Changes in Demand, Competition, and Economic Conditions

    The requester asserts that an increase in demand for silicon metal 
in the chemical-use segment of the market has caused a ``clear 
division'' between market segments served by domestic and imported 
silicon metal sources thereby reducing competition between domestic and 
imported sources. Additionally, the requester asserts that overall 
economic indicators such as capacity, production, shipments, 
investments, and prices have improved significantly since the original 
investigations as a result of the alleged structural changes, 
representing a changed circumstance sufficient to warrant a review.

Changes in Demand

    While there appears to have been an increase in demand for silicon 
metal in the chemical-use segment of the market, there also has been a 
similar, though smaller in magnitude increase in demand for 
metallurgical-use silicon metal. In the original investigations, there 
was a similar pattern of growth, and the Commission observed that 
demand patterns among the two market

[[Page 52290]]

segments moved independently of each other. Even though growth in the 
chemical-use segment of the market has been substantial, such growth 
does not appear to have significantly changed the structure of the 
market.

Changes in Competition Within the Industry

    During the original investigations, the Commission considered that 
the market for silicon metal was segmented into chemical-use and 
metallurgical-use segments. In the original investigations, the record 
reflected that domestic producers, while selling to both segments, 
focused greater efforts on the chemical-use market. Thus, the 
requester's assertion of the existence of a new competitive environment 
is not a changed circumstance, but rather represents an issue 
previously considered by the Commission in the original determinations. 
Moreover, even with the existence of a greater concentration of 
domestic sales in the chemical-use market, the requester has failed to 
provide persuasive evidence that the Commission's original finding of 
significant price competition among market segments has changed.

Changes in Economic Conditions in the Industry

    While the economic condition of the domestic silicon metal industry 
appears to have improved since the original investigations, such 
improvements coincide with a general improvement in the overall 
economy. Moreover, the domestic industry's capacity was substantially 
below overall consumption in the silicon metal market during the 
original investigations. Given this, the inability of the domestic 
producers to supply all of the market is not a circumstance that has 
changed since the original investigations.

Alleged Price-Fixing Activity

    The request asserts that key data and information provided to the 
Commission by the U.S. industry during the original investigations may 
have been distorted and misleading due to the alleged involvement of 
several U.S. producers in a price-fixing conspiracy. Despite making 
allegations of price-fixing activities among domestic producers, the 
requester and other interested parties in support of a review have 
failed to provide the Commission with any positive evidence of the 
existence of a price-fixing scheme within the silicon metal industry. 
As parties in support of a review, they bear the burden of providing 
such evidence'evidence that goes beyond mere conjecture and 
speculation. Moreover, the circumstances of these investigations are 
significantly different from those underlying the Commission's recent 
decision to institute changed circumstance reviews on ferrosilicon. 
Unlike the 751(b) request on ferrosilicon which provided the Commission 
with clear evidence of a conspiracy to fix prices among three U.S. 
producers (two companies pled guilty and one was found guilty), none of 
the silicon metal producers has pled guilty to or been convicted of 
fixing silicon metal prices or of participating in a conspiracy to fix 
silicon metal prices.8
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    \8\ SKW Metals & Alloys, Inc. (SKW), which was found guilty of 
conspiracy to fix prices on ferrosilicon, was acquitted of charges 
involving silicon metal. A federal judge found no preponderance of 
evidence showing the existence of a silicon metal conspiracy. See, 
brief of domestic producers at pp. 13-15 and exhibit 2.
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    In light of the above analysis, the Commission determines that 
institution of a review investigation under section 751(b) of the Act 
concerning the Commission's affirmative determinations in 
investigations Nos. 731-TA-470-472 (Final): Silicon Metal from 
Argentina, Brazil, and China, is not warranted.

    Issued: September 22, 1998.

    By order of the Commission.
Donna R. Koehnke,
Secretary.
[FR Doc. 98-26217 Filed 9-29-98; 8:45 am]
BILLING CODE 7020-02-P