[Federal Register Volume 70, Number 22 (Thursday, February 3, 2005)]
[Notices]
[Pages 5606-5609]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-2187]


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DEPARTMENT OF COMMERCE

International Trade Administration

A-570-896


Affirmative Preliminary Determination of Critical Circumstances: 
Magnesium Metal From the People's Republic of China

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

EFFECTIVE DATE: February 3, 2005.

FOR FURTHER INFORMATION CONTACT: Laurel LaCivita or Robert Bolling, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC. 20230; telephone: (202) 482-4243 or (202) 482-3434.

SUPPLEMENTARY INFORMATION:

Preliminary Determination of Critical Circumstances

    Based on allegations contained in the petitioners' \1\ December 28, 
2004, amendment to the February 27, 2004 petition, we preliminarily 
find, pursuant to section 733(e) of the Tariff Act of 1930, as amended 
(``the Act''), and section 351.206 of the Department of Commerce 
(``Department'') regulations, that critical circumstances exist with 
regard to imports of magnesium metal from the People's Republic of 
China (``PRC'') for the following entities: Tianjin Magnesium 
International Co., Ltd. (``Tianjin''), mandatory respondent, Guangling 
Jinghua Science and Technology Co , Ltd. (``Guangling''), the sole 
Section A respondent, and the PRC-wide entity. Critical circumstances 
do not exist with regard to imports magnesium metal from the PRC for 
the RSM companies (``RSM'') \2\.
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    \1\ The petitioners in this antidumping duty investigation are 
the U.S. Magnesium LLC, United Steelworkers of America, Local 8319 
and Glass, Molders, Pottery, Plastics & Allied Workers 
International, Local 374 (``petitioners'').
    \2\ The company reported that ``RSM'' is the trade name of a 
group of companies, some of which produced and exported the subject 
merchandise during the period of investigation (``POI''). RSM 
reported that the following companies are in the RSM group: Nanjing 
Yunhai Special Metals Co., Ltd. (``Yunhai Special''), Nanjing Welbow 
Metals Co., Ltd. (``Welbow''), Nanjing Yunhai Magnesium Co., Ltd. 
(``Yunhai Magnesium''), Shanxi Wenxi Yunhai Metals Co., Ltd. 
(``Wenxi Yunhai''), Shanxi Wenxi Bada Magnesium Co., Ltd. (``Bada 
Magnesium''), Yuncheng Wenxi Welfare Magnesium Plant (``Welfare 
Magnesium), and Nanjing Yunhai Metals Plant (``Yunhai Metals'').
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Background

    Petitioners filed a timely allegation of critical circumstances on 
December 28, 2004, in accord and with section 733(e)(1) of the Act and 
section 351.206(c)(1) of the Department's regulations. None of the 
parties to the proceeding submitted comments in response to this 
allegation in accord with section 351.301(c) of the Department's 
regulations. On January 11, 2005, the Department requested the RSM 
Companies, Tianjin, and Guangling to report their shipments of subject 
merchandise to the United States on a monthly basis during the period 
January 2003 through December 2004. On January 19, 2005, the RSM 
Companies and Tianjin provided the requested information. Guangling did 
not respond to the Department's request for information.\3\
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    \3\ See the memorandum to the file from Laurel LaCivita, 
Antidumping Investigation of Magnesium Metal from the People's 
Republic of China: Shipment Data With Respect to the Critical 
Circumstances Allegation with Respect to Beijing Guangling Jinghua 
Science and Technology Co , Ltd., dated January 19, 2005.
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Period of Investigation

    The POI is July 1, 2003, through December 31, 2003. This period 
corresponds to the two most recent fiscal quarters prior to the month 
of the filing of the petition (February 27, 2003). See Section 
351.204(b)(1) of the Department's regulations.

Scope of Investigation

    The products covered by this investigation are primary and 
secondary alloy magnesium metal, regardless of chemistry, raw material 
source, form, shape, or size. Magnesium is a metal or alloy containing 
by weight primarily the element magnesium. Primary magnesium is 
produced by decomposing raw materials into magnesium metal. Secondary 
magnesium is produced by recycling magnesium-based scrap into magnesium 
metal. The magnesium covered by this investigation includes blends of 
primary and secondary magnesium.
    The subject merchandise includes the following alloy magnesium 
metal products made from primary and/or secondary magnesium including, 
without limitation, magnesium cast into ingots, slabs, rounds, billets, 
and other shapes, and magnesium ground, chipped, crushed, or machined 
into raspings, granules, turnings, chips, powder, briquettes, and other 
shapes; products that contain 50 percent or greater, but less than 99.8 
percent, magnesium, by weight, and that have been entered into the 
United States as conforming to an ``ASTM Specification for Magnesium 
Alloy'' \4\ and thus are outside the scope of the existing antidumping 
orders on magnesium from the PRC (generally referred to as ``alloy'' 
magnesium).
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    \4\ The meaning of this term is the same as that used by the 
American Society for Testing and Materials in its Annual Book of 
ASTM Standards: Volume 01.02 Aluminum and Magnesium Alloys.
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    The scope of this investigation excludes the following merchandise: 
(1) All forms of pure magnesium, including chemical combinations of 
magnesium and other material(s) in which the pure magnesium content is 
50 percent or greater, but less that 99.8 percent, by weight, that do 
not conform to an ``ASTM Specification for Magnesium Alloy'' \5\; (2) 
magnesium that is in liquid or molten form; and (3) mixtures containing 
90 percent or less magnesium in granular or powder form, by weight, and 
one or more of certain non-magnesium granular materials to make 
magnesium-based reagent mixtures, including lime, calcium metal, 
calcium silicon, calcium carbide, calcium carbonate, carbon, slag 
coagulants, fluorspar, nephaline syenite, feldspar, alumina (Al203), 
calcium aluminate, soda ash, hydrocarbons, graphite, coke, silicon, 
rare earth metals/mischmetal, cryolite, silica/fly ash, magnesium 
oxide, periclase, ferroalloys, dolomite lime, and colemanite.\6\
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    \5\ This material is already covered by existing antidumping 
orders. See Antidumping Duty Orders: Pure Magnesium from the 
People's Republic of China, the Russian Federation and Ukraine; 
Amended Final Determination of Sales at Less Than Fair Value: 
Antidumping Duty Investigation of Pure Magnesium from the Russian 
Federation, 60 FR 25691 (May 12, 1995); Antidumping Duty Order: Pure 
Magnesium in Granular Form from the People's Republic of China, 66 
FR 57936 (Nov. 19, 2001).
    \6\ This third exclusion for magnesium-based reagent mixtures is 
based on the exclusion for reagent mixtures in the 2000-2001 
investigations of magnesium from the PRC, Israel, and Russia. See 
Final Determination of Sales at Less Than Fair Value: Pure Magnesium 
in Granular Form From the People's Republic of China, 66 FR 49345 
(September 27, 2001); Final Determination of Sales at Less Than Fair 
Value: Pure Magnesium From Israel, 66 FR 49349 (September 27, 2001); 
Final Determination of Sales at Not Less Than Fair Value: Pure 
Magnesium From the Russian Federation, 66 FR 49347 (September 27, 
2001). These mixtures are not magnesium alloys because they are not 
chemically combined in liquid form and cast into the same ingot.

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[[Page 5607]]

    The merchandise subject to this investigation is classifiable under 
items 8104.19.00 and 8104.30.00 of the Harmonized Tariff Schedule of 
the United States (``HTSUS''). Although the HTSUS items are provided 
for convenience and customs purposes, the written description of the 
merchandise under investigation is dispositive.

Critical Circumstances

    On December 28, 2004, petitioners alleged that there is a 
reasonable basis to believe or suspect critical circumstances exist 
with respect to the antidumping investigation of magnesium metal from 
the PRC. Because petitioners submitted critical circumstances 
allegations more than 30 days before the scheduled date of the final 
determination but later than 20 days before the preliminary 
determination, the Department must issue a preliminary determination of 
critical circumstances within 30 days after petitioners submitted the 
allegation. See Section 351.206(c)(2)(ii) of the Department's 
regulations. Section 733(e)(1) of the Act provides that, upon receipt 
of a timely allegation of critical circumstances, the Department will 
determine whether there is a reasonable basis to believe or suspect 
that: (A)(i) There is a history of dumping and material injury by 
reason of dumped imports in the United States or elsewhere of the 
subject merchandise or (ii) the person by whom, or for whose account, 
the merchandise was imported knew or should have known that the 
exporter was selling the subject merchandise at less than its fair 
value and that there was likely to be material injury by reason of such 
sales, and (B) there have been massive imports of the subject 
merchandise over a relatively short period.
    Section 351.206(h)(1) of the Department's regulations provides 
that, in determining whether imports of the subject merchandise have 
been ``massive,'' the Department normally will examine (i) the volume 
and value of the imports, (ii) seasonal trends, and (iii) the share of 
domestic consumption accounted for by the imports. In addition, Section 
351.206(h)(2) of the Department's regulations provides that, ``In 
general, unless the imports during the `relatively short period' * * * 
have increased by at least 15 percent over the imports during an 
immediately preceding period of comparable duration, the Secretary will 
not consider the imports massive.''
    Section 351.206(i) of the Department's regulations defines 
``relatively short period'' as generally the period beginning on the 
date the proceeding begins (i.e., the date the petition is filed) and 
ending at least three months later. This section provides further that, 
if the Department ``finds that importers, or exporters or producers, 
had reason to believe, at some time prior to the beginning of the 
proceeding, that a proceeding was likely,'' then the Department may 
consider a period of not less than three months from that earlier time.
    In determining whether the above statutory criteria have been 
satisfied, we examined the following information: (1) The evidence 
presented in the petitioners' December 28, 2004, submission; (2) 
evidence obtained since the initiation of the less-than-fair-value 
(``LTFV'') investigation (i.e., import statistics released by the U.S. 
Census Bureau); and (3) the International Trade Commission's (``ITC'') 
preliminary material injury determination. See Investigation Nos. 731-
TA-1071-1072 (Preliminary), Magnesium from China and Russia, 69 FR 
29329 (May 21, 2004) (``ITC Preliminary Determination'').
    In determining whether a history of dumping and material injury 
exists, the Department generally considers current or previous 
antidumping duty orders on subject merchandise from the country in 
question in the United States and current orders in any other country 
with regard to imports of magnesium metal from the PRC. Petitioners 
made no statement concerning a history of dumping magnesium metal from 
the PRC. We are not aware of any other antidumping order in the United 
States or in any country on magnesium metal from the PRC. Therefore, 
the Department finds no history of injurious dumping of magnesium metal 
from the PRC pursuant to section 733(e)(1)(A)(i) of the Act.
    In determining whether an importer knew or should have known that 
the exporter was selling subject merchandise at LTFV, the Department 
must rely on the facts before it at the time the determination is made. 
The Department generally bases its decision with respect to knowledge 
on the margins calculated in the preliminary antidumping duty 
determination.
    The Department normally considers margins of 25 percent or more for 
export price (``EP'') sales and 15 percent or more for constructed 
export price (``CEP'') sales sufficient to impute importer knowledge of 
sales at LTFV. See, e.g., Carbon and Alloy Steel Wire Rod From Germany, 
Mexico, Moldova, Trinidad and Tobago, and Ukraine: Preliminary 
Determination of Critical Circumstances, 67 FR 6224, 6225 (February 11, 
2002). Our preliminary determination found margins of 117.41 percent 
for the RSM companies, 117.41 percent for China National Nonferrous 
Metals I/E Corp., Jiangsu Branch (``Jiangsu''), and 177.62 percent for 
Tianjin, the mandatory respondents in this investigation. See 
Preliminary Determination of Sales at Less Than Fair Value and 
Postponement of the Final Determination: Magnesium Metal from the 
People's Republic of China, 69 FR 59187 (``Preliminary Determination'') 
(September 24, 2004). The sole Section A respondent, Guangling, 
preliminarily received a separate rate margin of 140.09 percent based 
on the weighted-average margins of the RSM companies and Tianjin. See 
Preliminary Determination. The PRC-wide entity received a margin of 
177.62 percent. See Preliminary Determination. In addition, see the 
memorandum from Laurie Parkhill, Office Director, China/NME Group, to 
Barbara E. Tillman, Acting Deputy Assistant Secretary, Import 
Administration, Antidumping Duty Investigation of Magnesium Metal from 
the People's Republic of China (the ``PRC'')--Affirmative Preliminary 
Determination of Critical Circumstances, dated January 28, 2005 
(``Preliminary Critical Circumstances Memorandum'') at Attachment II.
    In determining whether an importer knew or should have known that 
there was likely to be material injury caused by reason of such 
imports, the Department normally will look to the preliminary injury 
determination of the ITC. If the ITC finds a reasonable indication of 
present material injury to the relevant U.S. industry, the Department 
will determine that a reasonable basis exists to impute importer 
knowledge that material injury is likely by reason of such imports. See 
Final Determination of Sales at Less Than Fair Value: Certain Cut-To-
Length Carbon Steel Plate from the People's Republic of China, 62 FR 
61964 (November 20, 1997). In the present case, the ITC preliminarily 
found a reasonable indication that an industry in the United States is 
materially injured by imports of magnesium metal from the PRC. See ITC 
Preliminary Determination.
    Based on the ITC's preliminary determination of material injury and 
the preliminary dumping margins for the RSM companies, Jiangsu, 
Tianjin, the Section A respondent, and the PRC-wide entity, the 
Department preliminarily finds that there is a reasonable basis to 
believe or suspect that the importers knew or should have known that 
there was likely to be material injury by means of sales at LTFV of 
subject merchandise from the PRC from these respondents.

[[Page 5608]]

    Pursuant to Section 351.206(h) of the regulations, we will not 
consider imports to be massive unless imports in the comparison period 
have increased by at least 15 percent during a relatively ``short 
period'' over imports in the base period. The Department normally 
considers a ``relatively short period'' as the period beginning on the 
date the proceeding begins and ending at least three months later. See 
section 351.206(i) of the Department's regulations. According to the 
regulations, ``if the Secretary finds that importers, or exporters or 
producers, had reason to believe, at some time prior to the beginning 
of the proceeding, that a proceeding was likely, then the Secretary may 
consider a time period of not less than three months from that earlier 
time.'' The Department normally compares the import volumes of the 
subject merchandise for at least three months immediately preceding the 
filing of the petition (i.e., the ``base period'') to a comparable 
period of at least three months following the filing of the petition 
(i.e., the ``comparison period''). Imports normally will be considered 
massive when imports during the comparison period have increased by 15 
percent or more compared to imports during the base period. See Section 
351.206(c)(2) of the regulations.
    Petitioners based their allegation of critical circumstances in 
this investigation on the increase in imports of magnesium metal that 
began with the filing of the antidumping duty petition on February 27, 
2004, and continued through the preliminary determination on September 
24, 2004. According to Section 351.206(i) of the Department's 
regulations, the comparison period normally should be at least three 
months; the Department's practice is to rely upon the longest period 
for which information is available from the month that the petition was 
filed through the date of the preliminary determination. See 
Preliminary Determination of Sales at Less Than Fair Value, 
Postponement of Final Determination, and Affirmative Preliminary 
Determination of Critical Circumstances: Certain Color Television 
Receivers From the People's Republic of China, 68 FR 66800 (November 
28, 2003). Therefore, we have chosen a period of six-months, as the 
comparison period in determining preliminarily whether imports of the 
subject merchandise have been massive. A six-month period reflects the 
``relatively short period'' commanded by the statute for determining 
whether imports have been massive. See Section 733(e)(1)(B) of the Act. 
Therefore, in applying the six-month period, we used a base period of 
March 2004 through August 2004 and a comparison period of August 2003 
through January 2004. The Department requested that the respondents in 
this investigation provide monthly shipment data for 2003 and 2004. See 
Letter to parties dated January 11, 2005. In addition, the Department 
obtained U.S. import data for subject merchandise for 2003 and 2004 as 
reported at the ITC's Web site, http://dataweb.usitc.gov.
    On January 19, 2004, the Department received company-specific data 
from Tianjin, the RSM companies, and Jinagsu. When we compared these 
companies' import data during the base period with the comparison 
period, we found that the volume of imports of magnesium metal from 
Tianjin increased by more than 15 percent and the volume of imports 
from the RSM companies and Jiangsu decreased over the base period. See 
Preliminary Critical Circumstances Memorandum at Attachment I. 
Therefore, we find the imports for Tianjin, whose volume of exports 
increased over the base period by more 15 percent, to be massive.
    Because the PRC NME entity did not respond to the Department's 
antidumping questionnaire, we were unable to obtain shipment data from 
the PRC NME entity for purposes of our critical circumstances analysis 
and there is therefore no verifiable information on the record with 
respect to its export volumes. Section 776(a)(2) of the Act provides 
that, if an interested party or any other person (A) withholds 
information that has been requested by the administering authority or 
the Commission under this title, (B) fails to provide such information 
by the deadlines for submission of the information or in the form and 
manner requested, subject to subsections (c)(1) and (e) of section 782, 
(C) significantly impedes a proceeding under this title, or (D) 
provides such information but the information cannot be verified as 
provided in section 782(i), the administering authority and the 
Commission shall, subject to section 782(d), use the facts otherwise 
available in reaching the applicable determination under this title. 
Furthermore, Section 776(b) of the Act provides that, if a party has 
failed to act to the best of its ability, the Department may apply an 
adverse inference.
    The PRC NME entity did not respond to the Department's request for 
information, at all. Thus, we are using adverse facts available, in 
accordance with section 776(a) of the Act, in preliminarily determining 
whether there were massive imports of merchandise produced by the PRC 
NME entity. Accordingly, an adverse inference is warranted.
    The only reliable source of publicly available data from which to 
measure whether imports from the PRC entity were massive is the 
aggregate import statistics from the PRC, as reported on the ITC 
DataWeb site (http://dataweb.usitc.gov). Therefore, we have used these 
statistics to determine whether imports from the PRC entity were 
massive during the comparison period. Section 776(c) of the Act 
provides that, when the Department selects from among the facts 
otherwise available and relies on ``secondary information,'' the 
Department shall, to the extent practicable, corroborate that 
information from independent sources reasonably at the Department's 
disposal. The Statement of Administrative Action (``SAA''), 
accompanying the URAA, H.R. Doc. No. 316, 103d Cong., 2d Sess. (1994), 
states that ``corroborate'' means to determine that the information 
used has probative value. See SAA at 870. The aggregate import 
statistics from the ITC DataWeb are publicly available data by which 
the Department can determine import volumes of magnesium metal into the 
United States on a month-by-month basis. Furthermore, this data is 
reported on a U.S. government Web site, enhancing its reliability.
    Our analysis of the import statistics indicate that shipments in 
the comparison period increased by at least 15 percent over those for 
the base period. In comparing import statistics from the base period to 
the comparison period, imports of magnesium metal have increased by 
21.63 percent (from 6,874,595 kgs. to 8,361,875 kgs.). See Preliminary 
Critical Circumstances Memorandum at Attachment III. This comparison is 
based on one of the two HTSUS numbers identified in the scope of the 
investigation, HTS 8104.19.00. See Initiation of Antidumping Duty 
Investigation: Magnesium Metal from the People's Republic of China, 69 
FR 15293 (March 25, 2004). We did not evaluate imports under HTS 
8104.30.00, the only other HTS number containing merchandise subject to 
this investigation, because it includes imports of subject and non-
subject merchandise and, thus, cannot indicate reliably whether imports 
of subject merchandise have increased during the comparison period. As 
a result of our analysis, we determine that there were massive imports 
from the PRC-wide entity during the applicable relatively short period 
of time.
    The sole Section A Respondent in this investigation, Guangling, did 
not respond to our request for information concerning monthly shipment 
data for

[[Page 5609]]

the purposes of determining critical circumstances. Therefore, for the 
reasons expressed above with respect to the PRC-wide entity, we 
determine that the increase in imports from Guangling were massive 
during the applicable relatively short period of time.
    We preliminarily determine for the RSM companies and Jiangsu that 
no critical circumstances exist because we do not find massive imports 
over a relatively short period.
    We will issue a final determination concerning critical 
circumstances for all producers/exporters of subject merchandise from 
the PRC when we issue our final determination in this investigation, 
which will be on February 16, 2005.
    Case briefs or other written comments may be submitted to the 
Assistant Secretary for Import Administration no later than three days 
after the publication of the preliminary determination of critical 
circumstances in this proceeding. Rebuttal briefs limited to issues 
raised in the aforementioned case briefs will be due no later than two 
days after the deadline date for case briefs.

Suspension of Liquidation

    With respect to Tianjin, Guangling and the PRC-wide entity for 
magnesium metal we will direct U.S. Customs and Border Protection 
(``CBP'') to suspend liquidation of all unliquidated entries of 
magnesium metal from the PRC that were entered, or withdrawn from 
warehouse, for consumption on or after 90 days prior to the date of 
publication in the Federal Register of our preliminary determination in 
these investigation. In accordance with section 733(d) of the Act, with 
respect to the RSM companies and Jiangsu, we will make no changes to 
our instructions to the CBP with respect to the suspension of 
liquidation of all entries of subject merchandise entered, or withdrawn 
from warehouse, for consumption on or after the date of publication of 
our preliminary determination in the Federal Register.
    This determination is issued and published in accordance with 
Sections 733(f) and 777(i)(1) of the Act.

    Dated: January 28, 2005.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 05-2187 Filed 2-2-05; 8:45 am]
BILLING CODE: 3510-DS-P