[Federal Register Volume 70, Number 60 (Wednesday, March 30, 2005)]
[Notices]
[Pages 16220-16223]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-1399]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-588-866]


Initiation of Antidumping Duty Investigation: Superalloy Degassed 
Chromium From Japan

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

DATES: Effective Dates: March 30, 2005.

FOR FURTHER INFORMATION CONTACT: Susan Lehman or Minoo Hatten, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 
20230; telephone: (202) 482-0180 or (202) 482-1690, respectively.

SUPPLEMENTARY INFORMATION:

The Petition

    On March 4, 2005, the Department of Commerce (the Department) 
received a petition on imports of superalloy degassed chromium from 
Japan filed in proper form by Eramet Marietta Inc. and Paper, Allied-
Industrial, Chemical and Energy Workers International Union (the 
petitioners). On March 10, 2005, the Department issued a supplemental 
questionnaire requesting additional information and clarification of 
certain areas of the petition. The Department also requested additional 
information in March 16, 2005, and March 17, 2005, telephone calls with 
counsel to the petitioners. See Memoranda from Meredith Wood through 
Norbert O.

[[Page 16221]]

Gannon to the File dated March 16, 2005, and March 17, 2005. The 
petitioners filed supplements to the petition on March 7, 2005, March 
14, 2005, March 18, 2005, and March 22, 2005.
    In accordance with section 732(b) of the Tariff Act of 1930, as 
amended (the Act), the petitioners allege that imports of superalloy 
degassed chromium are being, or are likely to be, sold in the United 
States at less than fair value within the meaning of section 731 of the 
Act and that such imports are materially injuring and threaten to 
injure an industry in the United States.
    The Department finds that the petitioners filed this petition on 
behalf of the domestic industry because they are interested parties as 
defined in section 771(9)(c) of the Act and the petitioners have 
demonstrated sufficient industry support with respect to the 
investigation that the petitioners are requesting the Department to 
initiate (see ``Determination of Industry Support for the Petition'' 
below).

Scope of Investigation

    The product covered by this investigation is all forms, sizes, and 
grades of superalloy degassed chromium from Japan. Superalloy degassed 
chromium is a high-purity form of chrome metal that generally contains 
at least 99.5 percent, but less than 99.95 percent, chromium. 
Superalloy degassed chromium contains very low levels of certain 
gaseous elements and other impurities (typically no more than 0.005 
percent nitrogen, 0.005 percent sulphur, 0.05 percent oxygen, 0.01 
percent aluminum, 0.05 percent silicon, and 0.35 percent iron). 
Superalloy degassed chromium is generally sold in briquetted form, as 
``pellets'' or ``compacts,'' which typically are 1\1/2\ inches x 1 inch 
x 1 inch or smaller in size and have a smooth surface. Superalloy 
degassed chromium is currently classifiable under subheading 8112.21.00 
of the Harmonized Tariff Schedule of the United States (HTSUS). This 
investigation covers all chromium meeting the above specifications for 
superalloy degassed chromium regardless of tariff classification.
    Certain higher-purity and lower-purity chromium products are 
excluded from the scope of this investigation. Specifically, the 
investigation does not cover electronics-grade chromium, which contains 
a higher percentage of chromium (typically not less than 99.95 
percent), a much lower level of iron (less than 0.05 percent), and 
lower levels of other impurities than superalloy degassed chromium. The 
investigation also does not cover ``vacuum melt grade'' (VMG) chromium, 
which normally contains at least 99.4 percent chromium and contains a 
higher level of one or more impurities (nitrogen, sulphur, oxygen, 
aluminum and/or silicon) than specified above for superalloy degassed 
chromium.
    Although the HTSUS subheading is provided for convenience and 
customs purposes, the written description of the scope of this 
investigation is dispositive.
    During our review of the petition, we discussed the scope with the 
petitioners to ensure that it is an accurate reflection of the products 
for which the domestic industry is seeking relief. Moreover, as 
discussed in the preamble to the regulations (Antidumping Duties, 
Countervailing Duties, Final Rule, 62 FR 27296, 27323, May 19, 1997), 
we are setting aside a period for interested parties to raise issues 
regarding product coverage. The Department encourages all interested 
parties to submit such comments within 20 calendar days of publication 
of this notice. Comments should be addressed to Import Administration's 
Central Records Unit at Room 1870, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW., Washington, DC 20230. The period 
of scope consultations is intended to provide the Department with ample 
opportunity to consider all comments and consult with parties prior to 
the issuance of the preliminary determination.

Determination of Industry Support for the Petition

    Section 732(b)(1) of the Act requires that a petition be filed on 
behalf of the domestic industry. Section 732(c)(4)(A) of the Act 
provides that a petition meets this requirement if the domestic 
producers or workers who support the petition account for (1) at least 
25 percent of the total production of the domestic like product and (2) 
more than 50 percent of the production of the domestic like product 
produced by that portion of the industry expressing support for, or 
opposition to, the petition.
    Section 771(4)(A) of the Act defines the ``industry'' as the 
producers as a whole of a domestic like product. Thus, to determine 
whether the petition has the requisite industry support, the statute 
directs the Department to look to producers and workers who produce the 
domestic like product. The International Trade Commission (ITC) is 
responsible for determining whether ``the domestic industry'' has been 
injured and must also determine what constitutes a domestic like 
product in order to define the industry. While the Department and the 
ITC must apply the same statutory definition regarding the domestic 
like product, they do so for different purposes and pursuant to 
separate and distinct authority. See section 771(10) of the Act. In 
addition, the Department's determination is subject to limitations of 
time and information. Although this may result in different definitions 
of the domestic like product, such differences do not render the 
decision of either agency contrary to law.\1\
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    \1\ See USEC, Inc. v. United States, 132 F. Supp. 2d 1, 8 (CIT 
2001), citing Algoma Steel Corp. v. United States, 688 F. Supp. 639, 
642-44 (CIT 1988).
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    Section 771(10) of the Act defines the domestic like product as ``a 
product which is like, or in the absence of like, most similar in 
characteristics and uses with, the article subject to an investigation 
under this subtitle.'' Thus, the reference point from which the 
domestic like product analysis begins is ``the article subject to an 
investigation,'' i.e., the class or kind of merchandise to be 
investigated, which normally will be the scope as defined in the 
petition.
    With regard to the definition of domestic like product, the 
petitioners do not offer a definition of domestic like product distinct 
from the scope of the investigation. Based on our analysis of the 
information presented by the petitioners, we have determined that there 
is a single domestic like product, superalloy degassed chromium, which 
is defined in the ``Scope of Investigation'' section above, and we have 
analyzed industry support in terms of the domestic like product.
    We received no opposition to this petition. The petitioners account 
for 100 percent of the total production of the domestic like product, 
and the requirements of section 732(c)(4)(A)(i) are met. Accordingly, 
the Department determines that the petition was filed on behalf of the 
domestic industry within the meaning of section 732(b)(1) of the Act. 
See Attachment I of the March 24, 2005, Initiation Checklist 
(Initiation Checklist) on file in the Central Records Unit, Room B-099 
of the Department of Commerce.

Period of Investigation

    The anticipated period of investigation is January 1, 2004, through 
December 31, 2004.

U.S. Price and Normal Value

    The following is a description of the allegation of sales at less 
than fair value upon which the Department based its decision to 
initiate this investigation. The sources of data for the deductions and 
adjustments relating to U.S. price and normal value are discussed in 
greater detail in the Initiation Checklist.

[[Page 16222]]

Should the need arise to use any of this information as facts available 
under section 776 of the Act, we may reexamine the information and 
revise the margin calculation, if appropriate.
    The petition identified one producer of superalloy degassed 
chromium in Japan. See March 4, 2005, petition at page 24. Although the 
petitioners provide estimates of U.S. price based on U.S. import data 
(from the U.S. Bureau of the Census) and Japanese export data (see 
petition at pages 25-28 and Exhibit 7B), we have relied on a price 
quote provided by the petitioners (see petition at pages 28-29 and 
Exhibits 7B and 7D(i) and supplement to the petition dated March 14, 
2005, at page 5 and Attachment 4). This price quote is for superalloy 
degassed chromium from Japan sold to a large customer in the United 
States during 2004. It is for the subject merchandise which is 
comparable to the merchandise in the home-market price quote provided 
by the petitioners and in the constructed value (CV) the petitioners 
calculated (see supplement to the petition dated March 18, 2005, at 
pages 1-3).
    The petitioners deducted an amount for U.S. customs duty and 
freight and five percent for selling expenses in the United States from 
the price quote on which we relied. We examined the information 
provided regarding U.S. price and have determined that it represents 
information reasonably available to the petitioners and have reviewed 
it for adequacy and accuracy. See Initiation Checklist.
    To calculate normal value, the petitioners obtained information 
regarding the price at which the Japanese producer identified in the 
petition is believed to have sold superalloy degassed chromium to an 
end-user in Japan in 2004. The price obtained was inclusive of delivery 
charges and exclusive of taxes. We reviewed the normal-value 
information the petitioners provided and have determined that it 
represents information reasonably available to the petitioners. We have 
also reviewed it for adequacy and accuracy. See Initiation Checklist.
    The petitioners also compared the home-market price to Eramet's 
cost of production (COP), adjusted for known cost differences between 
Japan and the United States, to support a sales-below-cost allegation. 
The Statement of Administrative Action (SAA) accompanying the Uruguay 
Round Agreements Act states that an allegation of sales below COP need 
not be specific to individual exporters or producers. See SAA, H.R. 
Doc. No. 103-316 at 833 (1994). The SAA states that ``Commerce will 
consider allegations of below-cost sales in the aggregate for a foreign 
country, just as Commerce currently considers allegations of sales at 
less than fair value on a country-wide basis for purposes of initiating 
an antidumping investigation.'' Id.
    Further, the SAA provides that the ``new section 773(b)(2)(A) 
retains the current requirement that Commerce have `reasonable grounds 
to believe or suspect' that below cost sales have occurred before 
initiating such an investigation. `Reasonable grounds' * * * exist when 
an interested party provides specific factual information on costs and 
prices, observed or constructed, indicating that sales in the foreign 
market in question are at below-cost prices.'' Id.
    Pursuant to section 773(b)(3) of the Act, COP consists of the cost 
of manufacture (COM) and selling, general, and administrative (SG&A) 
expenses (including financial expenses). The petitioners calculated COP 
based on Eramet's own experience as a U.S. producer during 2004 and its 
knowledge of the particular production processes used by the Japanese 
producer, adjusted for known differences between costs incurred to 
manufacture superalloy degassed chromium in the United States and in 
Japan. The publicly available data the petitioners used were 
contemporaneous with the prospective POI. See Initiation Checklist.
    Based upon a comparison of the home-market price of the foreign 
like product to the calculated COP of the product, we find reasonable 
grounds to believe or suspect that sales of the foreign like product 
were made below the COP within the meaning of section 773(b)(2)(A)(i) 
of the Act. Accordingly, the Department is initiating a country-wide 
cost investigation.
    Pursuant to sections 773(a)(4) and 773(e) of the Act, the 
petitioners calculated normal value based on CV. Consistent with 
section 773(e)(2)(B)(iii) of the Act, the petitioners included in CV an 
amount for profit. For profit, the petitioners relied upon amounts 
reported in the 2004 consolidated financial statements of JFE Material 
Co., Ltd., the potential respondent's parent company.
    We reviewed the CV information the petitioners provided and have 
determined that it represents information reasonably available to the 
petitioners.

Fair-Value Comparison

    Based on a comparison of a U.S. price quote to adjusted CV, the 
dumping margin is 129.32 percent for superalloy degassed chromium from 
Japan. Therefore, based on the data provided by the petitioners, there 
is reason to believe that imports of superalloy degassed chromium are 
being, or are likely to be, sold in the United States at less than fair 
value.

Allegations and Evidence of Material Injury and Causation

    The petitioners allege that the U.S. industry producing the 
domestic like product is being materially injured and is threatened 
with material injury by reason of the imports of the subject 
merchandise sold at less than normal value. The petitioners contend 
that the industry's injured condition is evidenced by reduced market 
share, lost sales, reduced production, capacity, and capacity 
utilization rates, decreased U.S. shipments and inventories, decline in 
prices, lost revenue, reduced employment, decrease in capital 
expenditures, decreased investment in research and development, and 
decline in financial performance.
    These allegations are supported by relevant evidence including 
import data, lost sales, and pricing information. We assessed the 
allegations and supporting evidence regarding material injury, threat 
of material injury, and causation and we have determined that these 
allegations are supported by accurate and adequate evidence and meet 
the statutory requirements for initiation. See Initiation Checklist.

Initiation of Antidumping Investigation

    Based upon the examination of the petition on superalloy degassed 
chromium from Japan and other information reasonably available to the 
Department, the Department finds that the petition meets the 
requirements of section 732 of the Act. Therefore, we are initiating an 
antidumping duty investigation to determine whether imports of 
superalloy degassed chromium from Japan are being, or are likely to be, 
sold in the United States at less than fair value. Unless postponed, we 
will make our preliminary determination no later than 140 days after 
the date of this initiation.

Distribution of Copies of the Petition

    In accordance with section 732(b)(3)(A) of the Act, a copy of the 
public version of the petition has been provided to the representatives 
of the government of Japan. We will attempt to provide a copy of the 
public version of the petition to the producer named in the petition.

[[Page 16223]]

International Trade Commission Notification

    We have notified the ITC of our initiation, as required by section 
732(d) of the Act.

Preliminary Determination by the International Trade Commission

    The ITC will preliminarily determine, no later than April 18, 2005, 
whether there is a reasonable indication that imports of superalloy 
degassed chromium are causing material injury, or threatening to cause 
material injury, to a U.S. industry. A negative ITC determination will 
result in the investigation being terminated; otherwise, this 
investigation will proceed according to statutory and regulatory time 
limits.
    This notice is issued and published pursuant to section 777(i) of 
the Act.

    Dated: March 24, 2005.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. E5-1399 Filed 3-29-05; 8:45 am]
BILLING CODE 3510-DS-P