Import Administration, International Trade Administration, Department of Commerce.
In response to requests from interested parties, the Department of Commerce (“the Department”) is conducting an administrative review of the antidumping duty order on pure magnesium from the People's Republic of China (“PRC”), covering the period May 1, 2007, through April 30, 2008. This administrative review covers one exporter of the subject merchandise.
We have preliminarily determined that the respondent in this administrative review made sales in the United States at prices below normal value during the period of review (“POR”). If these preliminary results are adopted in our final results of this review, we will instruct U.S. Customs and Border Protection (“CBP”) to assess antidumping duties on entries of subject merchandise during the POR for which the importer-specific assessment rates are above de minimis.
We invite interested parties to comment on these preliminary results. Parties who submit comments are requested to submit with each argument a summary of the argument. We intend to issue the final results no later than 120 days from the date of publication of this notice, pursuant to section 751(a)(3)(A) of the Tariff Act of 1930, as amended (“the Act”).
June 8, 2009.Start Further Info
FOR FURTHER INFORMATION CONTACT:
Katharine Huang or Eugene Degnan, AD/CVD Operations, Office 8, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-1271 and (202) 482-0414, respectively.End Further Info End Preamble Start Supplemental Information
On May 12, 1995, the Department published in the Federal Register the antidumping duty order on pure magnesium from the PRC.1 On May 5, 2008, the Department published a notice of opportunity to request an administrative review of the antidumping duty order on pure magnesium from the PRC for the period May 1, 2007, through April 30, 2008.2 On May 29, 2008, in accordance with 19 CFR 351.213(b)(2), Tianjin Magnesium International, Co. Ltd. (“TMI”), a foreign exporter of the subject merchandise requested that the Department review its sales of subject merchandise. On May 30, 2008, US Magnesium LLC (“Petitioner”) also requested that the Department conduct an administrative review of TMI's exports of subject merchandise. On July 1, 2008, the Department initiated an administrative review of the order on pure magnesium from the PRC for the POR with respect to TMI. On September 11, 2008, the Department issued its antidumping duty questionnaire to TMI.3 On October 14, 2008, TMI submitted its Section A questionnaire response (“TMI's AQR”). On October 29, 2008, TMI submitted its Section C and D questionnaire responses (“TMI's CQR” and “TMI's DQR,” respectively). On November 12, 2008, Petitioner submitted comments on TMI's AQR, CQR, and DQR. On February 23, 2009, Petitioner submitted comments concerning TMI's request for by-product offsets. On March 16, 2009, the Department issued the first supplemental questionnaire to TMI. On April 6, 2009, TMI submitted its response to the Section A and Section C supplemental questionnaire (“TMI's 1st SAQR” and “TMI's 1st SCQR,” respectively). On April 8, 2009, TMI submitted its response to the Section D supplemental questionnaire (“TMI's 1st SDQR”). On May 4, 2009, the Department issued the second supplemental questionnaire to TMI and the Department received a response on May 11, 2009 (“TMI's 2nd SQR”).
On February 9, 2009, the Department extended the time period for completion Start Printed Page 27091of the preliminary results of this review by 120 days until May 31, 2009.4
On February 6, 2009, the Department requested that the Office of Policy provide a list of surrogate countries for this review.5 On February 20, 2009, the Office of Policy issued its list of surrogate countries.6 On February 20, 2009, the Department issued a letter to interested parties seeking comments on surrogate country selection and surrogate values. On March 6, 2009, Petitioner and TMI submitted comments on surrogate country selection (“Petitioner's Surrogate Country Selection Letter” and “TMI's Surrogate Country Selection Letter,” respectively). On March 20, 2009, Petitioner and TMI submitted surrogate value comments (“Petitioner's 3/20/2009 Surrogate Value Comments” and “TMI's 3/20/2009 Surrogate Value Comments,” respectively). On March 30, 2009, TMI and Petitioner submitted additional and rebuttal surrogate value information (“TMI's 3/30/2009 Surrogate Value Comments” and “Petitioner's 3/30/2009 Surrogate Value Comments,” respectively). On April 9, 2009, TMI submitted additional rebuttal surrogate value information (“TMI's 4/9/2009 Surrogate Value Comments”).
On April 13, 2009, the Department found that Exhibit 5 of the Petitioner's 3/20/2009 Surrogate Value Comments did not conform to the requirements of 19 CFR 351.301(c)(3) of the Department's regulations, which provides for the submission of only “publicly available information to value factors.”7 Accordingly, the Department rejected this submission.8 The Department allowed Petitioner to re-submit its surrogate value comments as a public document without business proprietary information, and with no substantive changes to the document other than to delete or make public the bracketed information contained in Exhibit 5 of Petitioner's 3/20/2009 Surrogate Value Submission. On April 16, 2009, Petitioner re-submitted its surrogate value comments and made public the previously bracketed information contained in Exhibit 5 (“Petitioner's 4/16/2009 Surrogate Value Comments”). On May 8, 2009, Petitioner submitted comments concerning the upcoming preliminary results (“Petitioner's 5/8/2009 Comments Concerning the Preliminary Results”). On May 13, 2009, TMI submitted a letter, requesting the Department reject Petitioner's 5/8/2009 Comments Concerning the Preliminary Results.9
Period of Review
The POR is May 1, 2007, through April 30, 2008.
Scope of Order
Merchandise covered by this order is pure magnesium regardless of chemistry, form or size, unless expressly excluded from the scope of this order. Pure magnesium is a metal or alloy containing by weight primarily the element magnesium and produced by decomposing raw materials into magnesium metal. Pure primary magnesium is used primarily as a chemical in the aluminum alloying, desulfurization, and chemical reduction industries. In addition, pure magnesium is used as an input in producing magnesium alloy. Pure magnesium encompasses products (including, but not limited to, butt ends, stubs, crowns and crystals) with the following primary magnesium contents:
(1) Products that contain at least 99.95% primary magnesium, by weight (generally referred to as “ultra pure” magnesium);
(2) Products that contain less than 99.95% but not less than 99.8% primary magnesium, by weight (generally referred to as “pure” magnesium); and
(3) Products that contain 50% or greater, but less than 99.8% primary magnesium, by weight, and that do not conform to ASTM specifications for alloy magnesium (generally referred to as “off-specification pure” magnesium).
“Off-specification pure” magnesium is pure primary magnesium containing magnesium scrap, secondary magnesium, oxidized magnesium or impurities (whether or not intentionally added) that cause the primary magnesium content to fall below 99.8% by weight. It generally does not contain, individually or in combination, 1.5% or more, by weight, of the following alloying elements: aluminum, manganese, zinc, silicon, thorium, zirconium and rare earths.
Excluded from the scope of this order are alloy primary magnesium (that meets specifications for alloy magnesium), primary magnesium anodes, granular primary magnesium (including turnings, chips and powder) having a maximum physical dimension (i.e., length or diameter) of one inch or less, secondary magnesium (which has pure primary magnesium content of less than 50% by weight), and remelted magnesium whose pure primary magnesium content is less than 50% by weight.
Pure magnesium products covered by this order are currently classifiable under Harmonized Tariff Schedule of the United States (“HTSUS”) subheadings 8104.11.00, 8104.19.00, 8104.20.00, 8104.30.00, 8104.90.00, 3824.90.11, 3824.90.19 and 9817.00.90. Although the HTSUS subheadings are provided for convenience and customs purposes, our written description of the scope is dispositive.
Non-Market Economy Country Status
The Department has treated the PRC as a non-market economy (“NME”) country in all past antidumping duty investigations and administrative reviews and continues to do so in this case.10 The Department has previously examined the PRC's market economy status and determined that NME status should continue for the PRC.11 In accordance with section 771(18)(C)(i) of the Act, any determination that a foreign country is an NME country shall remain in effect until revoked by the administering authority.12 No interested party to this proceeding has contested such treatment. Accordingly, we calculated normal value (“NV”) in accordance with section 773(c) of the Act, which applies to NME countries.Start Printed Page 27092
When the Department is investigating imports from an NME country, section 773(c)(1) of the Act directs it to base NV on the NME producer's factors of production (“FOPs”). The Act further instructs that valuation of the FOPs shall be based on the best available information in a surrogate market economy country or countries considered to be appropriate by the Department.13 When valuing the FOPs, the Department shall utilize, to the extent possible, the prices or costs of FOPs in one or more market economy countries that are: (1) at a level of economic development comparable to that of the NME country; and (2) significant producers of comparable merchandise.14 Further, the Department normally values all FOPs in a single surrogate country.15 The sources of surrogate value are discussed under the “Normal Value” section below and in the Factor Valuation Memorandum, which is on file in the Central Records Unit, Room 1117 of the main Department building.16
In examining which country to select as its primary surrogate country for this proceeding, the Department first determined that India, Indonesia, the Philippines, Columbia, Thailand, and Peru are countries comparable to the PRC in terms of economic development.17 In Petitioner's Surrogate Country Selection Letter, Petitioner contends that the Department should continue to select India as the surrogate country for this administrative review, as it has in previous proceedings. Also, Petitioner maintains that to the best of its knowledge, there are no magnesium producers currently operating in any of the six countries identified in the Surrogate Country Memorandum. Petitioner states that Southern Magnesium & Chemicals Ltd. (“Southern Magnesium”), which is located in India, has either downsized or ceased its magnesium production operations.18 Petitioner argues, however, that India is a significant producer of aluminum and the Department has “routinely determined that aluminum is a product comparable to magnesium production.”19 Petitioner states that India has five major producers of aluminum.20 Additionally, Petitioner contends that the Department determined that zinc is the only other merchandise that the Department had found to be comparable to magnesium,21 and India is a significant producer of zinc.22 Finally, Petitioner contends that India is the best available surrogate country for this proceeding because India is known to have complete, up-to-date, and reliable publicly available information for all raw material factors of production. Petitioner states that India is the only potential surrogate country that can be a source for surrogate financial ratios because India is a significant producer of aluminum and zinc.
In TMI's Surrogate Country Selection Letter, TMI contends that India is the most appropriate surrogate country for the PRC in this review. TMI reiterates the reasons that the Department used in its determination to use India as the appropriate surrogate country in the 06-07 administrative review of pure magnesium from the PRC: (1) India is at a level of economic development comparable to the PRC; (2) India is a significant producer of comparable merchandise; and (3) the Department has reliable data to use from India. Both Petitioner and TMI submitted Indian sourced data to value FOPs.
After evaluating interested parties' comments, the Department has determined that India is the appropriate surrogate country to use in this review in accordance with section 773(c)(4) of the Act. The Department based its decision on the following facts: (1) India is at a level of economic development comparable to that of the PRC; (2) India is a significant producer of comparable merchandise, i.e., aluminum and zinc; and (3) India provides the best opportunity to use quality, publicly available data to value the FOPs. On the record of this review, we have usable surrogate financial data from India, but no such surrogate financial data from any other potential surrogate country. Additionally, all the data submitted by both Petitioner and TMI for our consideration as potential surrogate values are sourced from India.
Therefore, because India best represents the experience of producers of comparable merchandise operating in a surrogate country, we have selected India as the surrogate country and, accordingly, have calculated NV using Indian prices to value TMI' FOPs, when available and appropriate. We have obtained and relied upon publicly available information wherever possible.
In accordance with 19 CFR 351.301(c)(3)(ii), interested parties may submit publicly available information to value the FOPs within 20 days after the date of publication of the preliminary determination.23
In proceedings involving NME countries, the Department has a rebuttable presumption that all companies within the country are subject to government control and thus should be assessed a single antidumping duty rate. It is the Department's policy to assign all exporters of subject merchandise in an NME country this single rate unless an exporter can demonstrate that it is sufficiently independent so as to be entitled to a separate rate. Exporters can demonstrate this independence through the absence of both de jure and de facto governmental control over export activities. The Department analyzes each entity exporting the subject merchandise under a test arising from the Notice of Final Determination of Sales at Less Than Fair value: Sparklers from the People's Republic of China, 56 FR 20588 (May 6, 1991) (“Sparklers”), Start Printed Page 27093as further developed in Notice of Final Determination of Sales at Less Than Fair Value: Silicon Carbide from the People's Republic of China, 59 FR 22585 (May 2, 1994) (“Silicon Carbide”). However, if the Department determines that a company is wholly foreign-owned or located in a market economy, then a separate rate analysis is not necessary to determine whether it is independent from government control.
Separate Rate Recipients
TMI is the only respondent in this administrative review. TMI reported that it is a wholly Chinese-owned company. Therefore, the Department must analyze whether it can demonstrate the absence of both de jure and de facto government control over export activities.
a. Absence of De Jure Control
The Department considers the following de jure criteria in determining whether an individual company may be granted a separate rate: (1) an absence of restrictive stipulations associated with an individual exporter's business and export licenses; (2) any legislative enactments decentralizing control of companies; and (3) other formal measures by the government decentralizing control of companies.24
The evidence provided by TMI supports a preliminary finding of de jure absence of government control based on the following: (1) an absence of restrictive stipulations associated with its business and export licenses; (2) there are applicable legislative enactments decentralizing control of companies; and (3) and there are formal measures by the government decentralizing control of companies.25
b. Absence of De Facto Control
Typically the Department considers four factors in evaluating whether each respondent is subject to de facto government control of its export functions: (1) whether the export prices are set by or are subject to the approval of a government agency; (2) whether the respondent has authority to negotiate and sign contracts and other agreements; (3) whether the respondent has autonomy from the government in making decisions regarding the selection of management; and (4) whether the respondent retains the proceeds of its export sales and makes independent decisions regarding disposition of profits or financing of losses.26 The Department has determined that an analysis of de facto control is critical in determining whether respondents are, in fact, subject to a degree of governmental control which would preclude the Department from assigning separate rates.
The evidence provided by TMI supports a preliminary finding of de facto absence of government control based on the following: (1) the absence of evidence that the export prices are set by or are subject to the approval of a government agency;27 (2) the respondent has authority to negotiate and sign contracts and other agreements;28 (3) the respondent has autonomy from the government in making decisions regarding the selection of management29 and (4) the respondent retains the proceeds of its export sales and makes independent decisions regarding disposition of profits or financing of losses.30
Therefore, the evidence placed on the record of this review by TMI demonstrates an absence of de jure and de facto government control with respect to TMI's exports of the merchandise under review, in accordance with the criteria identified in Sparklers and Silicon Carbide. Accordingly, we have determined that TMI has demonstrated its eligibility for a separate rate.
Fair Value Comparisons
To determine whether sales of pure magnesium to the United States by TMI were made at less than fair value (“LTFV”), we compared Export Price (“EP”) to NV, as described in the “Export Price” and “Normal Value” sections of this notice.
In accordance with section 772(a) of the Act, EP is the price at which the subject merchandise is first sold (or agreed to be sold) before the date of importation by the producer or exporter of the subject merchandise outside of the United States to an unaffiliated purchaser in the United States or to an unaffiliated purchaser for exportation to the United States, as adjusted under section 772(c) of the Act. In accordance with section 772(a) of the Act, we have used EP for TMI's U.S. sales because the subject merchandise was sold directly to the unaffiliated customers in the United States prior to importation and because Constructed Export Price was not otherwise warranted.
We have based the EP on delivered prices to unaffiliated purchasers in the United States. In accordance with section 772(c)(2)(A) of the Act, we have made deductions from the starting price for movement expenses, including expenses for foreign inland freight from the plant to the port of exportation, domestic brokerage and handling, international freight, marine insurance, brokerage and handling expenses incurred in the U.S. and the U.S. customs duty. No other adjustments to EP were reported or claimed.31
Section 773(c)(1) of the Act provides that, the Department shall determine NV using an FOP methodology if the the merchandise is exported from an NME country and the Department finds available information does not permit the calculation of NV using home-market prices, third-country prices, or constructed value under section 773(a) of the Act. When determining NV in an NME context, the Department will base NV on FOPs because the presence of government controls on various aspects of these economies renders price comparisons and the calculation of production costs invalid under our normal methodologies. The Department's questionnaire requires that TMI provide information regarding the weighted-average FOPs across all of the company's plants that produce the subject merchandise, not just the FOPs from a single plant. This methodology ensures that the Department's calculations are as accurate as possible.32
In accordance with 19 CFR 351.408(c)(1), the Department will normally use publicly available information to find an appropriate SV to value FOPs, but when a producer sources an input from a market economy and pays for it in market-economy currency, the Department may value the factor using the actual price paid for the input.33 TMI reported that Start Printed Page 27094it did not purchase any inputs from market economy suppliers for the production of the subject merchandise.34
We calculated NV based on FOPs in accordance with section 773(c)(3) and (4) of the Act and 19 CFR 351.408(c). The FOPs include but are not limited to: (1) hours of labor required; (2) quantities of raw materials employed; (3) amounts of energy and other utilities consumed; and (4) representative capital costs. The Department used FOPs reported by TMI for materials, energy, labor, by-products, and packing.
TMI stated that two by-products, i.e., cement clinker and waste magnesium, are generated from the production process of subject merchandise,35 and provided the Department with the receipts of sales of cement clinker and waste magnesium generated during the POR.36 Therefore, for these preliminary results, we have granted TMI's requested by-product offsets for cement clinker and waste magnesium in our NV calculation.37
In accordance with section 773(c) of the Act, the Department calculated NV based on FOPs reported by TMI for the POR. To calculate NV, the Department multiplied the reported per-unit factor consumption quantities by publicly available Indian surrogate values. In selecting the surrogate values, the Department considered the quality, specificity, and contemporaneity of the data. The Department adjusted input prices by including freight costs to make them delivered prices, as appropriate. Specifically, the Department added to Indian import surrogate values a surrogate freight cost using the shorter of the reported distance from the domestic supplier to the factory or the distance from the nearest seaport to the factory of production. This adjustment is in accordance with the decision of the U.S. Court of Appeals for the Federal Circuit in Sigma Corp. v. United States, 117 F.3d 1401, 1407-08 (Fed. Cir.1997). A detailed description of all surrogate values used to value TMI's reported FOPs can be found in the Factor Valuation Memorandum.
The Department calculated surrogate values for the majority of reported FOPs purchased from NME sources using the contemporaneous, weighted-average unit import value derived from the Monthly Statistics of the Foreign Trade of India, as published by the Directorate General of Commercial Intelligence and Statistics of the Ministry of Commerce and Industry, Government of India in the World Trade Atlas, available at http://www.gtis.com/wta.htm (“WTA Indian Import Statistics”).38 WTA Indian Import Statistics were reported in rupees and are contemporaneous with the POR to calculate surrogate values for TMI's material inputs. In selecting the best available information for valuing FOPs in accordance with section 773(c)(1) of the Act, the Department's practice is to select, to the extent practicable, surrogate values which are non-export average values, most contemporaneous with the POI, product-specific, and tax-exclusive.39
In those instances where the Department could not obtain publicly available information contemporaneous with the POR with which to value FOPs, the Department adjusted the surrogate values using the Indian Wholesale Price Index (“WPI”), as published in the International Financial Statistics of the International Monetary Fund.40
Furthermore, with regard to Indian import-based surrogate values, we have disregarded prices that we have reason to believe or suspect may be subsidized, such as those from Indonesia, South Korea, and Thailand. We have found in other proceedings that these countries maintain broadly available, non-industry-specific export subsidies and, therefore, it is reasonable to infer that all exports to all markets from these countries may be subsidized.41 We are also guided by the statute's legislative history that explains that it is not necessary to conduct a formal investigation to ensure that such prices are not subsidized.42 Rather, the Department was instructed by Congress to base its decision on information that is available to it at the time it is making its determination. Therefore, we have not used prices from these countries in calculating the Indian import-based surrogate values.
The Department used WTA Indian Import Statistics to calculate surrogate values for raw materials, including ferrosilicon, fluorite, sulphur powder and sulfuric acid and for packing materials, including steel bands and plastic bags. For dolomite, in reviewing the record evidence of this proceeding, we continue to find, as we did in the previous segments of this proceeding, that it is reasonable to conclude that WTA data represent prices of imported dolomite in the high-end value-added product range while the dolomite used to produce subject merchandise is the high-bulk, low-value commodity.43 Therefore, we have determined to value dolomite using the purchase price paid by Tata Sponge Iron Ltd. (“Tata Sponge Iron”), an Indian producer of sponge iron, as recorded in Tata Sponge Iron's 2007-2008 financial statements. We have determined not to use the purchase price paid by Nova Iron & Steel Limited (“Nova Iron & Steel”), another Indian producer of iron and steel, because the company is registered as a Sick Industrial Company, as recorded in Nova Iron & Steel's 2007-2008 financial statements.44 Finally, we have determined not to use the purchase price from Tata Steel because this represents an average price for both dolomite and limestone.45
We have determined to value TMI's by-product of clinker using the purchase price paid by Madras Cements Ltd. (“Madras Cements”), an Indian producer of cement. Our examination of the record evidence, including the description of TMI's production process, leads us to preliminarily conclude that the by-product clinker, like the dolomite from which it is generated, is also a high-bulk, low-value commodity, and that WTA Indian Import Statistics would similarly be inappropriate to value this material. Start Printed Page 27095Accordingly, and to be consistent with the valuation of dolomite, we have valued this by-product using the purchase price paid by Madras Cements.
We valued TMI's by-product of waste magnesium using WTA Indian Import Statistics, in part, because, unlike the case for dolomite and clinker, there is no domestic purchase price for waste magnesium on the record. We will continue to analyze TMI's waste magnesium to determine the best information available to use for the final results.
We valued flux No.2, which consists of magnesium chloride, potassium chloride and sodium chloride, using data from Chemical Weekly. We consider both Chemical Weekly and WTA Indian Import Statistics reliable sources that the Department has used in past cases to value chemical component inputs. In the instant case, however, we have determined that Chemical Weekly is the best information available for valuing magnesium chloride because the quantity of the total imports of magnesium chloride in the WTA Indian Import Statistics is very small and thus does not appear to represent commercial quantities.
We valued brokerage and handling using a simple average of the brokerage and handling costs that were reported in public submissions that were filed in three antidumping duty cases. Specifically, we averaged the public brokerage and handling expenses reported by Navneet Publications (India) Ltd. in the 2007-2008 administrative review of certain lined paper products from India, Essar Steel Limited in the 2006-2007 antidumping duty administrative review of hot-rolled carbon steel flat products from India, and Himalya International Ltd. in the 2005-2006 administrative review of certain preserved mushrooms from India. We inflated the brokerage and handling rate using the appropriate WPI inflator.
For direct labor, indirect labor, and packing labor, consistent with 19 CFR 351.408(c)(3), the Department used the PRC regression-based wage rate as reported on Import Administration's website.46 Because this regression-based wage rate does not separate the labor rates into different skill levels or types of labor, the Department has applied the same wage rate to all skill levels and types of labor reported by TMI. If the NME wage rates are updated by the Department prior to issuance of the final determination, we will use the updated wage rate in the final results.
We valued electricity using price data for small, medium, and large industries, as published
by the Central Electricity Authority of the Government of India in its publication titled “Electricity Tariff & Duty and Average Rates of Electricity Supply in India,” dated July 2006. These electricity rates represent actual country-wide, publicly-available information on tax-exclusive electricity rates charged to industries in India.
We valued truck freight expenses using an Indian per-unit average rate calculated from data on the following Web site http://www.infobanc.com/logistics/logtruck.htm. The logistics section of this Web site contains inland freight truck rates between many large Indian cities. Since this rate is not contemporaneous with the POR we deflated the rate using WPI.
Since TMI reports using non-coking coal with useful heat value (“UHV”) of 5500 kcal/kg,47 we valued steam coal using Teri Energy Data Directory & Yearbook (“TERI Data”), which categorizes non-coking coal into different grades from A to G based on UHV and the selling prices for categories B and C of non-coking coal reported by Coal India Ltd., which we retrieved from its website on May 22, 2009.
We valued marine insurance using the price quote retrieved from http://www.rjgconsultants.com/163.html, a market-economy provider of marine insurance.
Section 351.408(c)(4) of the Department's regulations directs the Department to value overhead, general and administrative expenses (“SG&A”), and profit using non-proprietary information gathered from producers of identical or comparable merchandise in the surrogate country. In this proceeding, Petitioners and TMI placed the 2007-2008 financial statements on the record from nine Indian companies: Madras Aluminum Company Ltd. (“Malco”), Hindalco Industries Limited (“Hindalco”), National Aluminium Company Limited (“Nalco”), Hindustan Zinc Limited (“Hindustan Zinc”), Binani Zinc (“Binani Zinc”), Sudal Industries Ltd. (“Sudal”), Centure Extrusions Ltd. (“Century”), Bhoruka Aluminum (“Bhoruka”) and Man Aluminum Ltd. (“Man”). However, we have preliminarily determined that none of financial statements on the record is usable for various reasons, as explained in detail below. Therefore, as the best available information, we have used Malco's 2006-2007 audited financial statements, which we used in the 2006-2007 administrative review.48
We have determined not to use the 2007-2008 financial statements of Malco because they are incomplete.49 We have determined not to rely on the 2007-2008 financial statements of Hindalco because they indicate that Hindalco received “Export and Other Incentives” i.e., Duty Free Import Entitlement Scheme (“EPCG Scheme”) under “Operating Revenues.”50 Similarly, Nalco's financial statements indicate that Nalco received “Export Incentives” under Duty Entitlement Pass Book (“DEPB Premium”) as “Other Income.”51 Also, we have determined not to use the 2007-2008 financial statements of Binani Zinc because it too made use of the DEPB Premium.52 India's EPCG Scheme and DEPB Premiums each have been found by the Department to provide a countervailable subsidy.53 Consistent with the Department practice, we do not use financial statements of a company we have reason to believe or suspect may have received subsidies, because financial ratios derived from that company's financial statements do not constitute the best available information with which to value financial ratios.54Start Printed Page 27096
Additionally, we have determined not to use the 2007-2008 financial statements of Hindustan Zinc because Hindustan Zinc has four captive mines, which indicates it is an integrated producer and so would not accurately reflect TMI's production. Furthermore, we have determined not use the 2007-2008 financial statements of Sudal, Century, Bhoruka and Man because we find that the production of these companies is not comparable to TMI's. Record evidence shows that these companies are secondary aluminum extrusion manufacturers that buy aluminum metals from primary producers or alternatively import metal and manufacture aluminum extrusions. In contrast, TMI's producers are producers of primary pure magnesium that extract magnesium from dolomite rocks through an electrolytic process. Century reports that it is an important secondary aluminum extrusion manufacturer in India. Sudal, Bhoruka and Man utilize aluminum ingots, aluminum billets and/or aluminum scrap and aluminum alloy as raw materials.55 Since TMI's producers and these secondary aluminum extrusion manufacturers start their production processes at different stages, we have determined not to include the financial data from these secondary aluminum extrusion manufacturers in our surrogate financial ratio calculation.
For a complete listing of all the inputs and a detailed discussion about our surrogate value selections, see Factor Valuation Memorandum.
The Department made currency conversions into U.S. dollars, in accordance with section 773A(a) of the Act, based on the exchange rates in effect as certified by the Federal Reserve Bank on the dates of the U.S. sales.
As provided in section 782(i)(3) of the Act, we intend to verify the information from TMI upon which we will rely in making our final determination.
Weighted-Average Dumping Margins
The preliminary weighted-average dumping margin is as follows:
|Exporter||Weighted-Average Margin (percentage)|
|Tianjin Magnesium International Co. Ltd.||9.1%|
The Department will disclose calculations performed for these preliminary results to the parties within five days of the date of publication of this notice in accordance with 19 CFR 351.224(b). Any interested party may request a hearing within 30 days of publication of these preliminary results.56 If a hearing is requested, the Department will announce the hearing schedule at a later date. Interested parties may submit case briefs and/or written comments no later than seven days after the release of the verification report issued in this review.57 Rebuttal briefs and rebuttals to written comments, limited to issues raised in such briefs or comments, may be filed no later than five days after the time limit for filing the case briefs.58 Further, we request that parties submitting written comments provide the Department with an additional copy of those comments on diskette or CD ROM. The Department intends to issue the final results of this administrative review, which will include the results of its analysis of issues raised in any comments, and at a hearing, within 120 days of publication of these preliminary results, pursuant to section 751(a)(3)(A) of the Act.
The Department will determine, and CBP shall assess, antidumping duties on all appropriate entries of subject merchandise in accordance with the final results of this review. For assessment purposes, we calculated importer- or customer specific assessment rates for merchandise subject to this review.59 We calculated an ad valorem rate for each importer or customer by dividing the total dumping margins for reviewed sales to that party by the total entered values associated with those transactions. For duty-assessment rates calculated on this basis, we will direct CBP to assess the resulting ad valorem rate against the entered customs values for the subject merchandise. Where appropriate, we calculated a per-unit rate for each importer or customer by dividing the total dumping margins for reviewed sales to that party by the total sales quantity associated with those transactions. For duty-assessment rates calculated on this basis, we will direct CBP to assess the resulting per-unit rate against the entered quantity of the subject merchandise. Where an importer- (or customer-) specific assessment rate is de minimis (i.e., less than 0.50 percent) in accordance with the requirement of 19 CFR 351.106)c)(2), the Department will instruct CBP to assess that importer's (or customer's) entries of subject merchandise without regard to antidumping duties. We intend to instruct CBP to liquidate entries containing subject merchandise exported by the PRC-wide entity at the PRC-wide rate we determine in the final results of this review. The Department intends to issue appropriate assessment instructions directly to CBP 15 days after publication of the final results of this review.
Cash Deposit Requirements
The following cash deposit requirements will be effective upon publication of the final results of this administrative review for shipments of the subject merchandise from the PRC entered, or withdrawn from warehouse, for consumption on or after the publication date, as provided by sections 751(a)(2)(C) of the Act: (1) for TMI, which has a separate rate, the cash deposit rate will be that established in the final results of this review (except, if the rate is zero or de minimis, zero cash deposit will be required); (2) for previously investigated or reviewed PRC and non-PRC exporters not listed above that received a separate rate in a prior segment of this proceeding the cash deposit rate will continue to be the exporter-specific rate; (3) for all PRC exporters of subject merchandise that have not been found to be entitled to a separate rate, the cash deposit rate will be the PRC-wide rate of 108.26 percent; and (4) for all non-PRC exporters of subject merchandise which have not received their own rate, the cash deposit rate will be the rate applicable to the PRC exporter that supplied that non-PRC exporter. These deposit requirements, when imposed, shall remain in effect until further notice.
Notification to Importers
This notice serves as a preliminary reminder to importers of their responsibility under 19 CFR Start Printed Page 27097351.402(f)(2) 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 sections 751(a)(1) and 777(i) of the Act and 19 CFR 351.213.Start Signature
Dated: June 1, 2009.
Ronald K. Lorentzen,
Acting Assistant Secretary for Import Administration.
1. See Notice of Antidumping Duty Orders: Pure Magnesium From the People's Republic of China, the Russian Federation and Ukraine, 60 FR 25691 (May 12, 1995).Back to Citation
2. See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation: Opportunity to Request Administrative Review, 73 FR 24532 (May 5, 2008).Back to Citation
3. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Requests for Revocation in Part, 73 FR 37409 (July 1, 2008).Back to Citation
4. See Pure Magnesium from the People's Republic of China: Extension of Time for the Preliminary Results of the Antidumping Duty Administrative Review, 74 FR 6365 (February 9, 2009).Back to Citation
5. See Memorandum “Request for Surrogate-Country Selection: 2007-2008 Administrative Review of the Antidumping Duty Order on Pure Magnesium from the People's Republic of China” (February 6, 2009)Back to Citation
6. See Memorandum “Request for Surrogate-Country Selection: 2007-2008 Administrative Review of the Antidumping Duty Order on Pure Magnesium from the People's Republic of China” (February 20, 2009) (“Surrogate Country List”).Back to Citation
7. See Letter from Robert Bolling to All Interested Parties, Re: Antidumping Duty Administrative Review of Pure Magnesium from the People's Republic of China, dated February 20, 2009.Back to Citation
8. See Letter from Wendy J. Frankel, Office Director, to Stephen Jones, Petitioner's counsel, Re: Rejection of Petitioner's 3/20/2009 Surrogate Value Submission, dated April 13, 2009.Back to Citation
9. On May 28, 2009, the Department placed a memorandum on the file, stating the reasons that the Department would not reject Petitioner's 5/8/2009 Comments Concerning the Preliminary Results as TMI requested.Back to Citation
10. See 771(18)(C) of the Act; see, e.g., Pure Magnesium from the People's Republic of China: Final Results of Antidumping Duty Administrative Review, 73 FR 76336 (December 16, 2008); and Frontseating Service Valves From the People's Republic of China: Final Determination of Sales at Less Than Fair Value and Final Negative Determination of Critical Circumstances, 74 FR 10886 (March 13, 2009).Back to Citation
11. See Memorandum from the Office of Policy to David M. Spooner, Assistant Secretary for Import Administration, regarding the People's Republic of China Status as a Non-Market Economy, dated May 15, 2006. This document is available online at: http://ia.ita.doc.gov/download/prc-nme-status/prc-nme-status-memo.pdf.Back to Citation
12. See section 771(18)(c)(i) of the Act.Back to Citation
13. See section 773(c)(1) of the Act.Back to Citation
14. See section 773(c)(4) of the Act.Back to Citation
16. See Memorandum to the File, Preliminary Results of the 2007-2008 Administrative Review of the Antidumping Duty Order on Pure Magnesium from the People's Republic of China: Surrogate Value Memorandum, dated June 1, 2009 (“Factor Valuation Memorandum”).Back to Citation
17. See Memorandum to Robert Bolling, Program Manager, From Ron Lorentzen, Director, Office of Policy, Re: Administrative Review of Pure Magnesium from the People's Republic of China: Request for a List of Surrogate Countries, dated December 20, 2008 (“Surrogate Country Memorandum”).Back to Citation
18. See 2002 Annual Report of Southern Magnesium, contained in Petitioner's Surrogate Country Selection Letter, at 3 and Exhibit 2.Back to Citation
19. See Petitioner's Surrogate Country Selection Letter, at 3, citing the Final Results of 2006-2007 Administrative Review of Pure Magnesium from the People's Republic of China (December 16, 2008), and accompanying Issue and Decision Memorandum at Comment 6.D.Back to Citation
20. See Petitioner's Surrogate Country Selection Letter, at 5, citing The Mineral Industry of India - 2006, at Table 2, U.S. Geological Survey (“USGS”), contained in Exhibit 3; also, citing USGS Minerals Yearbook, Zinc-2006 at Table 16, contained in Exhibit 4.Back to Citation
21. See Petitioner's Surrogate Country Selection Letter, at 5, citing Pure Magnesium From the Russian Federation, 66 FR 49347 (September 27, 2001), at Comment 1.Back to Citation
22. See Petitioner's Surrogate Country Selection, at 5, citing USGS Minerals Yearbook, Zinc - 2006, at Table 16, contained in Exhibit 4.Back to Citation
23. In accordance with 19 CFR 351.301(c)(1), for the final determination of this review, interested parties may submit factual information to rebut, clarify, or correct factual information submitted by an interested party less than ten days before, on, or after the applicable deadline for submission of such factual information. However, the Department notes that 19 CFR 351.301(c)(1) permits new information only insofar as it rebuts, clarifies, or corrects information recently placed on the record. The Department generally cannot accept the submission of additional, previously absent-from-the-record alternative SV information pursuant to 19CFR 351.301(c)(1). See Glycine from the People's Republic of China: Final Results of Antidumping Duty Administrative Review and Final Rescission, in Part, 72 FR 58809 (October 17, 2007), and accompanying Issues and Decision Memorandum at Comment 2.Back to Citation
24. See Sparklers, 56 FR at 20589.Back to Citation
25. See Sparklers, 56 FR at 20589.Back to Citation
26. See Silicon Carbide, 59 FR at 22586-87; see also Notice of Final Determination of Sales at Less Than Fair Value: Furfuryl Alcohol From the People's Republic of China, 60 FR 22544, 22545 (May 8, 1995).Back to Citation
27. See TMI's AQR, at 7; see also the contract and the purchase order between TMI and a U.S. Customer contained in TMI's AQR at Exhibit A-6.Back to Citation
28. See the purchase contracts between TMI and its producers contained in TMI's 1st SAQR at Exhibit SA-6A and Exhibit SA-6B.Back to Citation
29. See TMI's AQR at 8-9.Back to Citation
30. See TMI's AQR at 8-9.Back to Citation
31. See Memorandum “Analysis for the Preliminary Results of Pure Magnesium from the People's Republic of China: Tianjin Magnesium International, Co. Ltd.” (“TMI's Analysis Memorandum”), dated June 1, 2009.Back to Citation
32. See, e.g., Final Determination of Sales at Less Than Fair Value and Critical Circumstances: Certain Malleable Iron Pipe Fittings From the People's Republic of China, 68 FR 61395 (October 28, 2003), and accompanying Issue and Decision Memorandum at Comment 19.Back to Citation
33. See 19 CFR 351.408(c)(1); see also Shakeproof Assembly Components Div of Ill v. United States, 268 F. 3d 1376, 1382-1383 (Fed. Cir. 2001) (affirming the Department's use of market-based prices to value certain FOPs).Back to Citation
34. See TMI's DQR at D-5.Back to Citation
35. Id. at D-13.Back to Citation
36. See TMI 1st SDQR at Exhibit 5.Back to Citation
37. For further discussion of TMI's by-product offsets, see TMI's Analysis Memorandum and Factor Valuation Memorandum.Back to Citation
38. See Factor Valuation Memorandum at attachment 1.Back to Citation
39. See, e.g., Notice of Preliminary Determination of Sales at Less Than Fair Value, Negative Preliminary Determination of Critical Circumstances and Postponement of Final Determination: Certain Frozen and Canned Warmwater Shrimp From the Socialist Republic of Vietnam, 69 FR 42672, 42682 (July 16, 2004), unchanged in Final Determination of Sales at Less Than Fair Value: Certain Frozen and Canned Warmwater Shrimp from the Socialist Republic of Vietnam, 69 FR 71005 (December 8, 2004).Back to Citation
40. See Factor Valuation Memorandum at Attachment 2.Back to Citation
41. See Certain Frozen Fish Fillets from the Socialist Republic of Vietnam: Notice of Preliminary Results and Preliminary Partial Rescission of Antidumping Duty Administrative Review, 70 FR 54007, 54011 (September 13, 2005), unchanged in Certain Frozen Fish Fillets from the Socialist Republic of Vietnam: Final Results of the First Administrative Review, 71 FR 14170 (March 21, 2006); and China National Machinery Import & Export Corporation v. United States, 293 F. Supp. 2d 1334 (CIT 2003), affirmed 104 Fed. Appx. 183 (Fed. Cir. 2004).Back to Citation
42. See H.R. Rep. No. 100-576 at 590 (1988).Back to Citation
43. See Pure Magnesium from the People's Republic of China: Final Results of 2006-2007Antidumping Duty Administrative Review, 73 FR 76336 (December 16, 2008), and accompanying Issues and Decision Memorandum at Comment 1.Back to Citation
44. See 16th Annual Report 2007-2008, Nova Iron & Steel Limited, at 14 contained in TMI's Initial Surrogate Value Comments at Exhibit SV-2D.Back to Citation
45. See 101st Annual Report 2007-2008, Tata Steel Limited, at 183 contained in Petitioner's 1st Rebuttal Surrogate Value Comments at Exhibit SV-1.Back to Citation
46. See Expected Wages of Selected NME Countries, revised in May 2008, available at http://ia.ita.doc.gov/wages. The source of these wage-rate data is the Yearbook of Labour Statistics 2006, ILO (Geneva: 2006), Chapter 5B: Wages in Manufacturing. The years of the reported wage rates are from 2004 and 2005.Back to Citation
47. See TMI's DQR at D-12.Back to Citation
48. See, e.g., Notice of 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) (“Granular Magnesium”).Back to Citation
49. The 2007-2008 financial statements of Malco are missing schedules for “turnover” and “other income.” The Department does not use incomplete financial statements. See Frontseating Service Valves From the People's Republic of China, 74 FR 10886 (March 13, 2009), and accompanying Issues and Decision Memorandum at Comment 1.Back to Citation
50. See Annual Report 2007-2008, Hindalco, at 94 contained in Petitioner's 4/16/2009 Surrogate Value Comments at Exhibit 8.Back to Citation
51. See 27th Annual Report 2007-2008, Nalco, at 71 contained in Petitioner's 4/16/2009 Surrogate Value Comments at Exhibit 9.Back to Citation
52. See Annual Report 2007-2008, Binani Zic, at 24 contained in Petitioner's 4/16/2009 Surrogate Value Comments at Exhibit 12.Back to Citation
53. See, e.g., Certain Iron-Metal Castings From India: Preliminary Results and Partial Rescission of Countervailing Duty Administrative Review, 64 FR 61592 (November 12, 1999); unchanged in Certain Iron-Metal Castings From India: Final Results of Countervailing Duty Administrative Review 65 FR 31515 (May 18, 2000); see also http://ia.ita.doc.gov/esel/eselframes.html and Notice of Final Affirmative Countervailing Duty Determination and Final Negative Critical Circumstances Determination: Certain Lined Paper Products from India, 71 FR 45034 (August 8, 2006), and accompanying Issues and Decision Memorandum at “Benchmarks for Loans and Discount Rate.”Back to Citation
54. See Freshwater Crawfish Tail Meat from the People's Republic of China: Notice of Final Results And Rescission, In Part, of 2004/2005 Antidumping Duty Administrative and New Shipper Reviews, 72 FR 19174 (April 17, 2007) (“Crawfish from the PRC”), and accompanying Issues and Decision Memorandum at Comment 1.Back to Citation
55. See Annual Report 2007-2008, Century, at 16 contained in TMI's 3/20/2009 Surrogate Value Comments at Exhibit 13B. See also 29th Annual Report 2007-2008, Sudal, at 29 contained in TMI's 3/20/2009 Surrogate Value Comments at Exhibit 13A. See also 28th Annual Report 2007-2008, Bhoruka, at 35 contained in TMI's 3/20/2009 Surrogate Value Comments at Exhibit 13C. See also Annual Report 2007-2008, Man, at 30 contained in TMI's 3/20/2009 Surrogate Value Comments at Exhibit 13D.Back to Citation
59. See 19 CFR, 351.212(b)(c).Back to Citation
[FR Doc. E9-13344 Filed 6-5-09; 8:45 am]
BILLING CODE 3510-DS-S