[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