Certain Magnesia Carbon Bricks From

China and Mexico

Investigation Nos. 701-TA-468 and 731-TA-1166-1167 (Final)

Publication 4182 September 2010

Washington, DC 20436
U.S. International Trade Commission

COMMISSIONERS

Deanna Tanner Okun, Chairman

Daniel R. Pearson

Charlotte R. Lane

Shara L. Aranoff

Irving A. Williamson

Dean A. Pinkert

Robert B. Koopman

Acting Director of Operations

Staff assigned

Elizabeth Haines, Investigator

Michelle Koscielski, Industry Analyst

Vince DeSapio, Industry Analyst

Craig Thomsen, Economist

Charles Yost, Accountant

Michael Haldenstein, Attorney

Steven Hudgens, Statistician

James McClure, Supervisor Investigator

Address all communications to

Secretary to the Commission

United States International Trade Commission

Washington, DC 20436
U.S. International Trade Commission

Washington, DC 20436

www.usitc.gov

Certain Magnesia Carbon Bricks From 

China and Mexico

Investigation Nos. 701-TA-468 and 731-TA-1166-1167 (Final)

Publication 4182 September 2010
 
TABLE OF CONTENTS

Page

Determination .................................................................. 1

Views of the Commission ......................................................... 3

Separate and dissenting views of Chairman Deanna Tanner Okun, Commissioner Daniel R.

 Pearson, and Commissioner Shara L. Aranoff .................................... 27

Part I: Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1

Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1

Statutory criteria and organization of the report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-2

Statutory criteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-2

Organization of the report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-3

U.S. market summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-3

Summary data and data sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-3

Previous and related Title VII investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-3

Nature and extent of subsidies and sales at LTFV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-4

Subsidies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-4

Sales at LTFV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-4

The subject merchandise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-6

Commerce’s scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-6

Tariff treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-6

The product . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8

Description and applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8

Manufacturing processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-10

Domestic like product issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-14

Part II: Conditions of competition in the U.S. market ................................ II-1

U.S. market characteristics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1

Channels of distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1

Purchaser characteristics ........................................................ II-2

Supply and demand considerations ................................................ II-5

Supply ................................................................... II-5

Demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-9

Substitutability issues .......................................................... II-13

Knowledge of country sources ................................................ II-13

Factors affecting purchasing decisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-14

Comparison of U.S.-produced and imported MCB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-17

Elasticity estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-21

U.S. supply elasticity ........................................................ II-21

U.S. demand elasticity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-21

Substitution elasticity ....................................................... II-21

i
TABLE OF CONTENTS

Page

Part III: U.S. producers’ production, shipments, and employment ...................... III-1

U.S. producers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-1

U.S. capacity, production, and capacity utilization ................................... III-2

U.S. producers’ shipments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-3

U.S. producers’ inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-6

U.S. producers’ imports and purchases ............................................. III-7

U.S. employment, wages, and productivity ......................................... III-7

Part IV: U.S. imports, apparent consumption, and market shares . . . . . . . . . . . . . . . . . . . . . . IV-1

U.S. importers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1

U.S. imports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1

Cumulation considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-4

Negligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-5

Apparent U.S. consumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-5

U.S. market shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-8

Ratio of imports to U.S. production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-8

Critical circumstances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-11

Part V: Pricing and related information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1

Factors affecting prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1

Raw material costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1

U.S. inland transportation costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1

Other refractory products and services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1

Pricing practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-2

Pricing methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-2

Lead times . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-2

Sales terms and discounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-3

Price data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-3

Price trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-4

Price comparisons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-11

Lost sales and lost revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-12

Part VI: Financial experience of U.S. producers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-1

Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-1

Operations on MCB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-1

Capital expenditures and research and development expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-5

Assets and return on investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-5

Capital and investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-6

Actual negative effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-6

Anticipated negative effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-6

ii
TABLE OF CONTENTS

Page

Part VII: Threat considerations and information on nonsubject countries ............... VII-1

The industry in China .......................................................... VII-2

The industry in Mexico ......................................................... VII-5

U.S. importers’ inventories of MCB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-6

U.S. importer’s current orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-6

Antidumping and countervailing duty investigations in third-country markets .............. VII-6

Information on producers in nonsubject countries .................................... VII-8

Appendixes

A. Federal Register notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1

B. Hearing witnesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1

C. Summary data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1

Note.–Information that would reveal confidential operations of individual concerns may not be

published and therefore has been deleted from this report. Such deletions are indicated by

asterisks.

iii

UNITED STATES INTERNATIONAL TRADE COMMISSION

Investigation Nos. 701-TA-468 and 731-TA-1166-1167 (Final)

CERTAIN MAGNESIA CARBON BRICKS FROM CHINA AND MEXICO

DETERMINATIONS

On the basis of the record1

 developed in the subject investigations, the United States International

Trade Commission (Commission) determines, pursuant to section 705(b) and 735(b) of the Tariff Act of

1930 (19 U.S.C. § 1671d(b)) and 19 U.S.C. § 1673d(b)) (the Act), that an industry in the United States is

materially injured by reason of imports from China and Mexico of certain magnesia carbon bricks,

provided for in subheadings 6902.10.10, 6902.10.50, 6815.91.99, and 6815.99.00 of the Harmonized

Tariff Schedule of the United States, that have been found by the Department of Commerce (Commerce)

to be subsidized by the Government of China and to be sold in the United States at less than fair value

(LTFV).2 3

BACKGROUND

The Commission instituted these investigations effective July 29, 2009, following receipt of a

petition filed with the Commission and Commerce by Resco Products Inc., Pittsburgh, PA. The final

phase of the investigations was scheduled by the Commission following notification of preliminary

determinations by Commerce that imports of certain magnesia carbon bricks from China were being

subsidized within the meaning of section 703(b) of the Act (19 U.S.C. § 1671b(b)) and that imports of

certain magnesia carbon bricks from China and Mexico were being sold at LTFV within the meaning of

section 733(b) of the Act (19 U.S.C. § 1673b(b)). Notice of the scheduling of the final phase of the

Commission’s investigations and of a public hearing to be held in connection therewith was given by

posting copies of the notice in the Office of the Secretary, U.S. International Trade Commission,

Washington, DC, and by publishing the notice in the Federal Register of April 23, 2010 (75 FR 21346). 

The hearing was held in Washington, DC, on July 27, 2010, and all persons who requested the

opportunity were permitted to appear in person or by counsel.

 1 The record is defined in sec. 207.2(f) of the Commission’s Rules of Practice and Procedure (19 CFR § 207.2(f)).

 2

 The Commission also finds that imports subject to Commerce's affirmative critical circumstances determination

are not likely to undermine seriously the remedial effect of the antidumping duty order on China.

 3

 Chairman Deanna Tanner Okun, and Commissioners Daniel R. Pearson and Shara L. Aranoff determine that an

industry in the United States is threatened with material injury by reason of imports of certain magnesia carbon

bricks from China and determine that an industry in the United States is not materially injured or threatened with

material injury, or that the establishment of an industry in the United States is materially retarded, by reason of

imports from Mexico of certain magnesia carbon bricks. 

VIEWS OF THE COMMISSION

Based on the record in the final phase of these investigations, we find that an industry in the

United States is materially injured1

 or threatened with material injury2 by reason of imports of magnesia

carbon bricks (“MCBs” or “MCB”) from China that are sold in the United States at less than fair value

and subsidized by the Government of China and imports of MCBs from Mexico that are sold in the

United States at less than fair value. We also determine that critical circumstances do not exist with

respect to the subject imports from China covered by the Department of Commerce’s (“Commerce”)

affirmative critical circumstances determination.

I. BACKGROUND

The antidumping and countervailing duty petitions in these investigations were filed on July 29,

2009, by Resco Products, Inc. (“Resco”), a domestic producer of MCBs.3

 Representatives of the

petitioner and ANH Refractories Company (“ANH”), also a domestic producer, appeared at the hearing

accompanied by counsel. Resco filed prehearing and posthearing briefs, and ANH filed a posthearing

brief. Chinese producer RHI Refractories Liaoning Co. Ltd., Mexican producer RHI-Refmex S.A. de

C.V. (“RHI-Refmex”), and importer Veitsch-Radex America, Inc. (collectively, the “RHI Respondents”)

appeared at the hearing and were represented by counsel; they also filed joint prehearing and posthearing

briefs. Importer Vesuvius USA Corporation and Chinese producer Yingkou Bayuquan Refractories Co.,

Ltd. (collectively, the “Vesuvius Respondents”) filed joint prehearing and posthearing briefs.

Domestic firms that account for the vast majority of domestic production of MCBs – Resco,

ANH, and Magnesita Refractories – provided financial and trade information to the Commission.4

 The

Commission also received questionnaire responses from importers representing 60 percent of U.S.

imports from China and 100 percent of imports from Mexico.5

 Seven Chinese producers, which are

estimated to have accounted for approximately *** percent of Chinese exports of MCBs to the United

States during 2009, returned questionnaires providing information to the Commission.6

 The Commission

also received a completed questionnaire from the only Mexican producer of the subject product, RHIRefmex.7

 1 Commissioner Charlotte R. Lane, Commissioner Irving A. Williamson, and Commissioner Dean A. Pinkert

determine that a domestic industry is materially injured by reason of subject imports of MCBs from China and

Mexico.

 2

 Chairman Deanna Tanner Okun, Commissioner Daniel R. Pearson, and Commissioner Shara L. Aranoff

determine that an industry in the United States is threatened with material injury by reason of subject imports from

China and that an industry in the United States is not materially injured or threatened with material injury by reason

of subject imports from Mexico. They join the Commission opinion through Section V(B), except as noted herein. 

See Separate and Dissenting Views of Chairman Deanna Tanner Okun, Commissioner Daniel R. Pearson, and

Commissioner Shara L. Aranoff.

 3

 Petition at 2.

 4

 Confidential Staff Report, INV-HH-080 (August 13, 2010) (“CR”), Public Staff Report (“PR”) at VI-1. The

three firms accounted for *** percent of domestic production in 2009. CR/PR at III-1.

 5

 CR/PR at IV-1.

 6

 CR at VII-3, PR at VII-2.

 7

 CR at VII-7, PR at VII-5.

3
II. DOMESTIC LIKE PRODUCT

A. In General

In determining whether an industry in the United States is materially injured or threatened with

material injury by reason of imports of the subject merchandise, the Commission first defines the

“domestic like product” and the “industry.”8

 Section 771(4)(A) of the Tariff Act of 1930, as amended

(“the Tariff Act”), defines the relevant domestic industry as the “producers as a {w}hole of a domestic

like product, or those producers whose collective output of a domestic like product constitutes a major

proportion of the total domestic production of the product.”9

 In turn, the Tariff Act defines “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 . . . .”10

The decision regarding the appropriate domestic like product(s) in an investigation is a factual

determination, and the Commission has applied the statutory standard of “like” or “most similar in

characteristics and uses” on a case-by-case basis.11 No single factor is dispositive, and the Commission

may consider other factors it deems relevant based on the facts of a particular investigation.12 The

Commission looks for clear dividing lines among possible like products and disregards minor variations.13

Although the Commission must accept the determination of Commerce as to the scope of the imported

merchandise that is subsidized or sold at less than fair value,14 the Commission determines what domestic

product is like the imported articles Commerce has identified.15 The Commission must base its domestic

like product determination on the record in these investigations. The Commission is 

 8 19 U.S.C. § 1677(4)(A).

 9

 19 U.S.C. § 1677(4)(A).

 10 19 U.S.C. § 1677(10).

 11 See, e.g., Cleo, Inc. v. United States, 501 F.3d 1291, 1299 (Fed. Cir. 2007); NEC Corp. v. Department of

Commerce, 36 F. Supp. 2d 380, 383 (Ct. Int’l Trade 1998); Nippon Steel Corp. v. United States, 19 CIT 450, 455

(1995); Torrington Co. v. United States, 747 F. Supp. 744, 749 n.3 (Ct. Int’l Trade 1990), aff’d, 938 F.2d 1278 (Fed.

Cir. 1991) (“every like product determination ‘must be made on the particular record at issue’ and the ‘unique facts

of each case’”). The Commission generally considers a number of factors including the following: (1) physical

characteristics and uses; (2) interchangeability; (3) channels of distribution; (4) customer and producer perceptions

of the products; (5) common manufacturing facilities, production processes, and production employees; and, where

appropriate, (6) price. See Nippon, 19 CIT at 455 n.4; Timken Co. v. United States, 913 F. Supp. 580, 584 (Ct. Int’l

Trade 1996).

 12 See, e.g., S. Rep. No. 96-249 at 90-91 (1979).

 13 Nippon, 19 CIT at 455; Torrington, 747 F. Supp. at 748-49; see also S. Rep. No. 96-249 at 90-91 (1979)

(Congress has indicated that the like product standard should not be interpreted in “such a narrow fashion as to

permit minor differences in physical characteristics or uses to lead to the conclusion that the product and article are

not ‘like’ each other, nor should the definition of ‘like product’ be interpreted in such a fashion as to prevent

consideration of an industry adversely affected by the imports under consideration.”).

 14 See, e.g., USEC, Inc. v. United States, 34 Fed. Appx. 725, 730 (Fed. Cir. 2002) (“The ITC may not modify the

class or kind of imported merchandise examined by Commerce.”); Algoma Steel Corp. v. United States, 688 F.

Supp. 639, 644 (Ct. Int’l Trade 1988), aff’d, 865 F.3d 240 (Fed. Cir.), cert. denied, 492 U.S. 919 (1989).

 15 Hosiden Corp. v. Advanced Display Mfrs., 85 F.3d 1561, 1568 (Fed. Cir. 1996) (the Commission may find a

single like product corresponding to several different classes or kinds defined by Commerce); Cleo, 501 F.3d at 1298

n.1 (“Commerce’s {scope} finding does not control the Commission’s {like product} determination.”); Torrington,

747 F. Supp. at 748-52 (affirming the Commission’s determination defining six like products in investigations where

Commerce found five classes or kinds).

4
not bound by prior determinations, even those pertaining to the same imported products, but may draw

upon previous determinations in addressing pertinent domestic like product issues.16

B. Product Description

Commerce in its final determinations defined the scope of the imported merchandise under

investigation as follows: 

certain chemically-bonded (resin or pitch), magnesia carbon bricks with a magnesia

component of at least 70 percent magnesia (“MgO”) by weight, regardless of the source

of raw materials for the MgO, with carbon levels ranging from trace amounts to 30

percent by weight, regardless of enhancements (for example, magnesia carbon bricks can

be enhanced with coating, grinding, tar impregnation or coking, high temperature heat

treatments, anti-slip treatments or metal casing) and regardless of whether or not

antioxidants are present (for example, antioxidants can be added to the mix from trace

amounts to 15 percent by weight as various metals, metal alloys, and metal carbides).17

As Commerce indicated in its final determinations, the merchandise at issue in these

investigations consists of certain refractory products that are made from a combination of magnesia and

carbon. Refractory products maintain their strength at high temperatures because they are made from

specialized materials.18 Refractory products are used to provide thermal and corrosion resistance in

operations involving high temperatures and harsh operating conditions, such as in the production of iron

and steel.19 The scope of the investigations includes only chemically bonded MCBs in which the

magnesia component is at least 70 percent and the carbon levels range up to 30 percent.20

MCBs are used in steel production as refractory linings for ladles, electric arc furnaces, and basic

oxygen furnaces. They are used to line lower sidewalls, upper sidewalls, slag lines, and roofs of ladles

and ladle metallurgy furnaces involved in steel production where MCBs come in contact with both molten

steel and molten slag.21 Ladles account for the largest share of MCBs used by the steel industry, followed

by electric arc furnaces. Basic oxygen furnaces account for a relatively small share of MCB sales.22

MCBs are consumed in the steelmaking process and their rate of replacement depends upon the

application.23

 16 See, e.g., Acciai Speciali Terni S.p.A. v. United States, 118 F. Supp. 2d 1298, 1304-05 (Ct. Int’l Trade 2000);

Nippon, 19 CIT at 455; Asociacion Colombiana de Exportadores de Flores v. United States, 693 F. Supp. 1165,

1169 n.5 (Ct. Int’l Trade 1988); Citrosuco Paulista, S.A. v. United States, 704 F. Supp. 1075, 1087-88 (Ct. Int’l

Trade 1988).

 17 Certain Magnesia Carbon Bricks from the People’s Republic of China; Final Determination of Sales at Less

Than Fair Value and Critical Circumstances, 75 Fed. Reg. 45467 (Aug. 2, 2010); Certain Magnesia Carbon Bricks

From the People's Republic of China: Final Affirmative Countervailing Duty Determination, 75 Fed. Reg. 45472

(Aug. 2, 2010); Certain Magnesia Carbon Bricks from Mexico: Notice of Final Determination of Sales at Less Than

Fair Value, 75 Fed. Reg. 45097 (Aug. 2, 2010). The subject merchandise is provided for under subheadings

6902.10.1000, 6902.10.5000, 6815.91.0000, 6815.99.2000 and 6815.99.4000 of the Harmonized Tariff Schedule of

the United States (HTS).

 18 CR at I-9, PR at I-8.

 19 CR at I-9, PR at I-8.

 20 See CR at I-7, PR at I-6.

 21 CR at I-9, PR at I-8.

 22 CR at I-9 n.14, PR at I-8. n.14; Conference Tr. at 24.

 23 Conference Tr. at 55.

5
C. Analysis and Conclusion

In the preliminary phase of these investigations, the Commission defined a single like product

that was coterminous with the scope of the investigations as defined by Commerce.24 The Commission

found that the record indicated that MCBs are not used interchangeably with other refractory products.25

The Commission noted that, compared with other refractory products, MCBs have distinct uses, differ in

physical characteristics, are priced higher, and may require different production processes.26 Based on

this evidence and absent any arguments to the contrary, the Commission defined the domestic like

product as consisting of all MCBs.27

In this final phase of the investigations, Petitioner Resco maintains the Commission should again

define a single like product that is coterminous with Commerce’s scope.28 The RHI Respondents indicate

that they accept the definition of the domestic like product defined by the Commission in the preliminary

phase of the investigations, although they note that refractory bricks of different compositions are

competitive with MCBs in some applications.29 No party, however, objects to defining the domestic like

product as coterminous with the scope of the investigations. 

Physical Characteristics and Uses. MCBs are used to line lower sidewalls, upper sidewalls, slag

lines, and roofs of ladles and ladle furnaces involved in steel production, where they come in contact with

both molten steel and molten slag.30 Other types of refractory brick also have high thermal resistance and

some are used in steelmaking applications, but MCBs are considered to be the most durable refractory

bricks on the market for ladle linings, especially around the slag line.31

Interchangeability. Other refractory bricks are not used interchangeably with MCBs, because

MCBs have certain physical and chemical properties that are required for more demanding applications.32

Channels of distribution. The record indicates that MCBs, as well as other refractory bricks, are

sold directly to the end users, steel producers.33

Common Manufacturing Facilities, Production Processes, and Production Employees. MCBs

and other refractory bricks are made by the same manufacturers, but the manufacturing processes for

MCBs and other refractory bricks often differ.34

Producer/Customer Perceptions. MCBs are perceived to be a distinct refractory product. 

Producers display MCBs separately from other refractory bricks in company brochures, on their websites,

on pricing materials, and in purchase orders and technical guidelines.35

Price. The average unit net sales value for U.S.-produced MCBs in 2009 was $*** per ton,

$150-$500 more per ton than other refractory products.36

Conclusion. Given MCBs’ distinct uses, distinct physical characteristics, limited

interchangeability with other refractory products, higher prices, and generally distinct production

 24 Certain Magnesia Carbon Bricks From China and Mexico, Inv. Nos. 701-TA-468 and 731-TA-1166-1167

(Preliminary), USITC Pub. 4100 (Sept. 2009) (“USITC Pub. 4100")at 7.

 25 USITC Pub. 4100 at 6-7.

 26 USITC Pub. 4100 at 6-7.

 27 USITC Pub. 4100 at 6-7.

 28 Resco’s Prehearing Brief at 4-5.

 29 RHI Respondents’ Prehearing Brief at 8.

 30 CR at I-9, PR at I-8.

 31 CR at I-9, PR at I-8.

 32 CR at I-9, PR at I-8. The RHI Respondents note that other refractory bricks may be competitive with MCBs

for some applications. RHI Respondents’ Prehearing Brief at 8.

 33 CR/PR at II-1 and Table II-1.

 34 Conference Tr. at 47-48, 62-63 (Mazard, Copp).

 35 Conference Tr. at 47 (Mazard).

 36 See CR/PR at Table C-1; Conference Tr. at 48 (Mazard).

6
processes, we again define the domestic like product as MCBs that are within the scope of the

investigations.

III. DOMESTIC INDUSTRY

A. In General

The domestic industry is defined as the domestic “producers as a whole of a domestic like

product, or those producers whose collective output of a domestic like product constitutes a major

proportion of the total domestic production of the product.”37 In defining the domestic industry, the

Commission’s general practice has been to include in the industry producers of all domestic production of

the like product, whether toll-produced, captively consumed, or sold in the domestic merchant market. 

Based on our definition of the domestic like product, we define the domestic industry as all domestic

producers of MCBs.

We must also determine whether any producer of the domestic like product should be excluded

from the domestic industry pursuant to 19 U.S.C. § 1677(4)(B). Subsection 1677(4)(B) allows the

Commission, if appropriate circumstances exist, to exclude from the domestic industry producers that are

related to an exporter or importer of subject merchandise or which are themselves importers.38 Exclusion

of such producers is within the Commission’s discretion based upon the facts presented in each

investigation.

B. Background

In the preliminary phase of these investigations, the Commission considered whether to exclude

*** as related parties from the definition of the domestic industry.39 Both had imported subject

merchandise during the period examined.40 The Commission, however, declined to exclude either

company as a related party.41

In the final phase of the investigations, the same two U.S. producers, ***, reported that they

imported subject MCBs during the period examined.42 Thus, they may be excluded from the industry if

appropriate circumstances exist.43 Resco argues that appropriate circumstances do not exist to exclude

*** from the definition of the domestic industry in the final phase of the investigations.44 It contends that

the Commission should not exclude ***.45 The RHI Respondents agree with Resco, arguing that although

*** imported subject MCBs from China during the period, their primary interests still lie in domestic

production, and therefore they should not be excluded from the domestic industry.46

 37 19 U.S.C. § 1677(4)(A).

 38 19 U.S.C. § 1677(4)(B). 

 39 USITC Pub. 4100 at 8.

 40 USITC Pub. 4100 at 7.

 41 USITC Pub. 4100 at 8.

 42 CR/PR at Table III-5a.

 43 19 U.S.C. § 1677(4)(B). 

 44 Resco’s Prehearing Brief at 6-8. Resco did not address ***.

 45 Resco’s Prehearing Brief at 6.

 46 RHI Respondents’ Prehearing Brief at 11.

7
C. Analysis and Conclusion

*** domestic producer of MCBs, accounting for approximately *** of all domestic production in

2009.47 Its importations were greatest during 2008, and its imports of subject merchandise as a ratio to

domestic production were relatively modest, peaking in 2009 at *** percent.48 The record therefore

indicates that its primary interest lies in domestic production. That it is the *** and that it *** in these

investigations further indicate that its primary interest has remained that of a domestic producer. 

Additionally, *** does not appear to have been shielded from any injury from the subject imports as a

result of its importations, as it did ***.49 50 We therefore do not exclude *** from the domestic industry

under the statute’s related party provision.51

*** accounted for *** percent of domestic production in 2009.52 The ratio of its imports to its

production fell from *** percent in 2007 to just *** percent in 2009.53 The *** amounts that it imported,

the fact that its importations ***, and its status as *** all suggest that its primary interest lies in domestic

production. *** also reported *** than the industry as a whole, suggesting that it was not shielded from

the effects of the subject imports.54 We therefore find that it is not appropriate to exclude *** from the

definition of the domestic industry as a related party.

Accordingly, we define the domestic industry as all U.S. producers of MCBs.

IV. CUMULATION

A. Legal Framework

For purposes of evaluating the volume and price effects for a determination of material injury by

reason of the subject imports, section 771(7)(G)(i) of the Tariff Act requires the Commission to cumulate

subject imports from all countries as to which petitions were filed and/or investigations self-initiated by

Commerce on the same day, if such imports compete with each other and the domestic like product in the

U.S. market.55 In assessing whether subject imports compete with each other and with the domestic like

product, the Commission has generally considered four factors, including the following:

 47 CR/PR at Table III-1.

 48 CR/PR at Table III-5.

 49 CR/PR at Table VI-2.

 50 Consistent with her practice in past investigations and reviews, Commissioner Aranoff does not rely on

individual-company operating income margins, which reflect a domestic producer’s financial operations related to

production of the domestic like product, in assessing whether a related party has benefitted from importation of

subject merchandise. Rather, she determines whether to exclude a related party based principally on its ratio of

subject imports to domestic production and whether its primary interests lie in domestic production or importation.

 51 Commissioner Pinkert has considered the financial performances of *** and *** in these final phase

investigations as a factor in determining whether to exclude either company from the domestic industry. He has

done so because the Commission gathered data on each company's combined subject import and domestic

production operations as well as its domestic production operations alone. CR/PR at Table VI-2, Table C-4; CR at

VI-12 to VI-13, nn.11 &14, PR at VI-3, nn.11 &14. He finds that the operating margin for each company's

combined subject import/domestic operations does not differ sufficiently from the margin for its domestic operations

to conclude that either company derived a substantial benefit from subject imports. 

 52 CR/PR at Table III-1.

 53 CR/PR at Table III-5a.

 54 CR/PR at Table VI-2.

 55 19 U.S.C. § 1677(7)(G)(i).

8
(1) the degree of fungibility between the subject imports from different countries and

between imports and the domestic like product, including consideration of specific

customer requirements and other quality related questions;56

(2) the presence of sales or offers to sell in the same geographic markets of subject

imports from different countries and the domestic like product;

(3) the existence of common or similar channels of distribution for subject imports

from different countries and the domestic like product; and

(4) whether the subject imports are simultaneously present in the market.57

Although no single factor is necessarily determinative, and the list of factors is not exclusive, these factors

are intended to provide the Commission with a framework for determining whether the subject imports

compete with each other and with the domestic like product.58 Only a “reasonable overlap” of

competition is required.59

B. Parties’ Arguments

The RHI Respondents argue that there was only limited competition between the subject imports

from China and Mexico during the period because they were sold in different geographic markets.60

According to the RHI Respondents, *** percent of subject imports from Mexico were concentrated in the

Southwest and Southeast.61 The RHI Respondents maintain that the limited pricing data for subject

imports from Mexico also confirm the limited competition between subject imports from the two

countries.62 They also contend that subject imports from Mexico entered the market in far smaller

volumes than those from China.63

Petitioner Resco disagrees with the RHI Respondents, arguing that the geographic markets of the

subject imports and the domestic like product overlap. It asserts that the geographic market for MCBs

from both China and Mexico is the entire continental United States.64

 56 Commissioner Lane notes that, with respect to fungibility, her analysis does not require such similarity of

products that a perfectly symmetrical fungibility is required, and she notes that this factor would be better described

as an analysis of whether subject imports from each country and the domestic like product could be substituted for

each other. See Separate Views of Commissioner Charlotte R. Lane, Certain Lightweight Thermal Paper from

China, Germany, and Korea, Invs. Nos. 701-TA-451 and 731-TA-1126 to 1128 (Prelim.), USITC Pub. 3964 (Nov.

2007).

 57 See Certain Cast-Iron Pipe Fittings from Brazil, the Republic of Korea, and Taiwan, Invs. Nos. 731-TA-278 to

280 (Final), USITC Pub. 1845 (May 1986), aff’d, Fundicao Tupy, S.A. v. United States, 678 F. Supp. 898 (Ct. Int’l

Trade), aff’d, 859 F.2d 915 (Fed. Cir. 1988).

 58 See, e.g., Wieland Werke, AG v. United States, 718 F. Supp. 50 (Ct. Int’l Trade 1989).

 59 The Statement of Administrative Action (“SAA”) states that “the new section will not affect current

Commission practice under which the statutory requirement is satisfied if there is a reasonable overlap of

competition.” SAA on Uruguay Round Agreements Act (“URAA”), H.R. Rep. 103-316, Vol. I at 848 (1994) (citing

Fundicao Tupy, S.A. v. United States, 678 F. Supp. 898, 902 (Ct. Int’l Trade 1988)), aff’d, 859 F.2d 915 (Fed. Cir.

1988). See also, e.g., Goss Graphic Sys., Inc. v. United States, 33 F. Supp. 2d 1082, 1087 (Ct. Int’l Trade 1998)

(“cumulation does not require two products to be highly fungible”); Wieland Werke, AG, 718 F. Supp. at 52

(“Completely overlapping markets are not required.”).

 60 RHI Respondents’ Prehearing Brief at 12-13.

 61 RHI Respondents’ Prehearing Brief at 13 and Exhibit 4. 

 62 RHI Respondents’ Prehearing Brief at 9-10.

 63 RHI Respondents’ Prehearing Brief at 12. 

 64 Resco’s Prehearing Brief at 14.

9
C. Discussion

In these investigations, the threshold criterion for cumulation is satisfied because the petitioner

filed the antidumping duty petitions with respect to China and Mexico, as well as the countervailing duty

petition with respect to China, on the same day. None of the cumulation exceptions apply.65 Subject

imports from China and Mexico are therefore eligible for cumulation. We consequently examine whether

there is a reasonable overlap of competition between subject imports from China and Mexico, as well as

between subject imports and the domestic like product.

Fungibility. The record indicates a reasonable degree of fungibility among the subject imports

from each country and the domestic like product. The questionnaire responses show that market

participants perceive domestic MCBs and the subject imports to be interchangeable. Nine of ten

responding purchasers indicated that subject imports from China are always or frequently interchangeable

with subject imports from Mexico.66 Sixteen of nineteen responding purchasers indicated that subject

imports from China are always or frequently interchangeable with domestic MCBs, and ten of twelve

responding purchasers indicated that subject imports from Mexico are always or frequently

interchangeable with domestic MCBs.67 Further, six of seven responding importers indicated that subject

imports from China are always interchangeable with subject imports from Mexico.68

Geographic Overlap. The RHI Respondents contend that Mexican MCBs are sold to end users in

the Central Southwest and Southeast regions of the United States, while subject imports from China serve

the North Central portion of the United States where steel production is concentrated.69 Subject imports

from China and domestic MCBs compete nationwide, however, and thus there is an overlap in sales in the

Southwest and Southeast.70 

Furthermore, the record indicates that purchasers of Mexican MCBs are located in areas other

than the Central Southwest and Southeast. MCBs are purchased by large steel companies, but the sales

are typically made at the steel plant level.71 The seven firms that purchased Mexican product reported a

total of sixteen plant locations, many of which are located in the Midwest (seven plants in Ohio, Illinois,

Michigan, Indiana, and Kentucky) and Northeast (three plants in Pennsylvania).72 Only two plants of the

responding purchasers that purchased subject imports from Mexico were located in the Central Southwest

(Texas and Arizona), and only four plants were located in the Southeast (Alabama, North Carolina and

South Carolina).73 We therefore conclude that there is a sufficient geographic overlap between the subject

imports from China and Mexico and the domestic product for purposes of finding a reasonable overlap of

competition.

Simultaneous Presence in the Market. Domestically produced MCBs were present in the market

throughout the period for which information was gathered, as were subject imports from China and

Mexico.74 Further, the pricing data indicate that subject imports were sold in all quarters for which data

 65 See 19 U.S.C. § 1677(7)(G)(ii).

 66 CR/PR at Table II-8.

 67 CR/PR at Table II-8.

 68 CR/PR at Table II-8.

 69 Respondents have not suggested that the U.S. market for MCBs should be divided into regional markets under

the regional industry provision, 19 U.S.C.§ 1677(4)(C).

 70 ***, indicate their sales are nationwide. Questionnaire Responses at III-11; CR/PR at Table IV-1.

 71 Tr. at 160 (Beschel).

 72 CR at II-7, PR at II-5.

 73 CR at II-7, PR at II-5.

 74 See CR/PR at Tables IV-2a and IV-3a. Respondents’ argument that the volume of subject imports from

Mexico was too low to be cumulated is incorrect for purposes of our analysis of present material injury. RHI

Respondents’ Prehearing Brief at 12-13. Assuming that imports are not negligible under the statute, consideration of

whether the volume of subject imports from one country is smaller than that from another subject country is not

10
were collected.75 We therefore conclude that domestically produced MCBs and subject imports from

China and Mexico were simultaneously present in the United States.

Channels of Distribution. Virtually all shipments of domestically produced merchandise and all

of the subject imports were shipped directly to end users.76

Conclusion. Questionnaire responses indicate that the domestic like product and subject imports

from China and Mexico are generally interchangeable and were sold in overlapping geographic markets

and through the same channels of distribution during the period examined. We thus find a reasonable

overlap of competition between the domestic like product and subject imports from China and Mexico

and cumulate the subject imports for purposes of assessing material injury.

V. MATERIAL INJURY BY REASON OF SUBJECT IMPORTS 77

A. Legal Standards

In the final phase of antidumping and countervailing duty investigations, the Commission

determines whether an industry in the United States is materially injured or threatened with material

injury by reason of the imports under investigation.78 In making this determination, the Commission must

consider the volume of subject imports, their effect on prices for the domestic like product, and their

impact on domestic producers of the domestic like product, but only in the context of U.S. production

operations.79 The statute defines “material injury” as “harm which is not inconsequential, immaterial, or

unimportant.”80 In assessing whether the domestic industry is materially injured by reason of subject

imports, we consider all relevant economic factors that bear on the state of the industry in the United

States.81 No single factor is dispositive, and all relevant factors are considered “within the context of the

business cycle and conditions of competition that are distinctive to the affected industry.”82

Although the statute requires the Commission to determine whether the domestic industry is

“materially injured by reason of” unfairly traded imports,83 it does not define the phrase “by reason of,”

indicating that this aspect of the injury analysis is left to the Commission’s reasonable exercise of its

discretion.84 In identifying a causal link, if any, between subject imports and material injury to the

domestic industry, the Commission examines the facts of record that relate to the significance of the

volume and price effects of the subject imports and any impact of those imports on the condition of the

permissible. The URAA removed “negligibility” as an exception to cumulation in this context. See, e.g. SAA at

847, 849.

 75 See CR/PR at Tables V-1 to V-6.

 76 CR/PR at II-1.

 77 Negligibility under 19 U.S.C. § 1677(24) is not an issue in these investigations, and no party made arguments

concerning this issue. Based on importer questionnaire responses, during the most recent 12-month period preceding

the filing of the petition for which data are available (July 2008 - June 2009), subject imports from China accounted

for *** percent of total imports of MCBs, and subject imports from Mexico accounted for *** percent of total

imports of MCBs. CR at IV-8, PR at IV-5.

 78 19 U.S.C. §§ 1671d(b), 1673d(b).

 79 19 U.S.C. § 1677(7)(B)( i). The Commission “may consider such other economic factors as are relevant to the

determination” but shall “identify each {such} factor ... and explain in full its relevance to the determination.” 

19 U.S.C. § 1677(7)(B).

 80 19 U.S.C. § 1677(7)(A).

 81 19 U.S.C. § 1677(7)(C)(iii).

 82 19 U.S.C. § 1677(7)(C)(iii).

 83 19 U.S.C. §§ 1671d(a), 1673d(a).

 84 Angus Chemical Co. v. United States, 140 F.3d 1478, 1484-85 (Fed. Cir. 1998) (“{T}he statute does not

‘compel the commissioners’ to employ {a particular methodology}.”), aff’d, 944 F. Supp. 943, 951 (Ct. Int’l Trade

1996).

11
domestic industry. This evaluation under the “by reason of” standard must ensure that subject imports are

more than a minimal or tangential cause of injury and that there is a sufficient causal, not merely a

temporal, nexus between subject imports and material injury.85

In many investigations, there are other economic factors at work, some or all of which may also

be having adverse effects on the domestic industry. Such economic factors might include non-subject

imports; changes in technology, demand, or consumer tastes; competition among domestic producers; or

management decisions by domestic producers. The legislative history explains that the Commission must

examine factors other than subject imports to ensure that it is not attributing injury from other factors to

the subject imports, thereby inflating an otherwise tangential cause of injury into one that satisfies the

statutory material injury threshold.86 In performing its examination, however, the Commission need not

isolate the injury caused by other factors from injury caused by unfairly traded imports.87 Nor does the

“by reason of” standard require that unfairly traded imports be the “principal” cause of injury or

contemplate that injury from unfairly traded imports be weighed against other factors, such as non-

 85 The Federal Circuit, in addressing the causation standard of the statute, observed that “{a}s long as its effects

are not merely incidental, tangential, or trivial, the foreign product sold at less than fair value meets the causation

requirement.” Nippon Steel Corp. v. USITC, 345 F.3d 1379, 1384 (Fed. Cir. 2003). This was further ratified in

Mittal Steel Point Lisas Ltd. v. United States, 542 F.3d 867, 873 (Fed. Cir. 2008), where the Federal Circuit, quoting

Gerald Metals, Inc. v. United States, 132 F.3d 716, 722 (Fed. Cir. 1997), stated that “this court requires evidence in

the record ‘to show that the harm occurred “by reason of” the LTFV imports, not by reason of a minimal or

tangential contribution to material harm caused by LTFV goods.’” See also Nippon Steel Corp. v. United States,

458 F.3d 1345, 1357 (Fed. Cir. 2006); Taiwan Semiconductor Industry Ass’n v. USITC, 266 F.3d 1339, 1345 (Fed.

Cir. 2001).

 86 SAA” at 851-52 (1994) (“{T}he Commission must examine other factors to ensure that it is not attributing

injury from other sources to the subject imports.”); S. Rep. 96-249 at 75 (1979) (the Commission “will consider

information which indicates that harm is caused by factors other than less-than-fair-value imports.”); H.R. Rep. 96-

317 at 47 (1979) (“in examining the overall injury being experienced by a domestic industry, the ITC will take into

account evidence presented to it which demonstrates that the harm attributed by the petitioner to the subsidized or

dumped imports is attributable to such other factors;” those factors include “the volume and prices of nonsubsidized

imports or imports sold at fair value, contraction in demand or changes in patterns of consumption, trade restrictive

practices of and competition between the foreign and domestic producers, developments in technology and the

export performance and productivity of the domestic industry”); accord Mittal Steel, 542 F.3d at 877.

 87 SAA at 851-52 (“{T}he Commission need not isolate the injury caused by other factors from injury caused by

unfair imports.”); Taiwan Semiconductor Industry Ass’n v. USITC, 266 F.3d 1339, 1345 (Fed. Cir. 2001) (“{T}he

Commission need not isolate the injury caused by other factors from injury caused by unfair imports ... . Rather, the

Commission must examine other factors to ensure that it is not attributing injury from other sources to the subject

imports.” (emphasis in original)); Asociacion de Productores de Salmon y Trucha de Chile AG v. United States, 180

F. Supp. 2d 1360, 1375 (Ct. Int’l Trade 2002) (“{t}he Commission is not required to isolate the effects of subject

imports from other factors contributing to injury” or make “bright-line distinctions” between the effects of subject

imports and other causes.); see also Softwood Lumber from Canada, Invs. Nos. 701-TA-414 and 731-TA-928

(Remand), USITC Pub. 3658 at 100-01 (Dec. 2003) (Commission recognized that “{i}f an alleged other factor is

found not to have or threaten to have injurious effects to the domestic industry, i.e., it is not an ‘other causal factor,’

then there is nothing to further examine regarding attribution to injury”), citing Gerald Metals, Inc. v. United States,

132 F.3d 716, 722 (Fed. Cir. 1997) (the statute “does not suggest that an importer of LTFV goods can escape

countervailing duties by finding some tangential or minor cause unrelated to the LTFV goods that contributed to the

harmful effects on domestic market prices.”).

12
subject imports, which may be contributing to overall injury to an industry.88 It is clear that the existence

of injury caused by other factors does not compel a negative determination.89

Assessment of whether material injury to the domestic industry is “by reason of” subject imports

“does not require the Commission to address the causation issue in any particular way” as long as “the

injury to the domestic industry can reasonably be attributed to the subject imports” and the Commission

“ensure{s} that it is not attributing injury from other sources to the subject imports.”90 91 Indeed, the

Federal Circuit has examined and affirmed various Commission methodologies and has disavowed “rigid

adherence to a specific formula.”92

The Federal Circuit’s decisions in Gerald Metals, Bratsk, and Mittal Steel all involved cases

where the relevant “other factor” was the presence in the market of significant volumes of pricecompetitive non-subject imports. The Commission interpreted the Federal Circuit’s guidance in Bratsk as

requiring it to apply a particular additional methodology following its finding of material injury in cases

involving commodity products and a significant market presence of price-competitive non-subject

imports.93 The additional “replacement/benefit” test looked at whether non-subject imports might have

replaced subject imports without any benefit to the U.S. industry. The Commission applied that specific

additional test in subsequent cases, including the Carbon and Certain Alloy Steel Wire Rod from Trinidad

and Tobago determination that underlies the Mittal Steel litigation.

Mittal Steel clarifies that the Commission’s interpretation of Bratsk was too rigid and makes clear

that the Federal Circuit does not require the Commission to apply an additional test nor any one specific

methodology; instead, the court requires the Commission to have “evidence in the record” to “show that

the harm occurred ‘by reason of’ the LTFV imports,” and requires that the Commission not attribute

injury from non-subject imports or other factors to subject imports.94 Accordingly, we do not consider

 88 S. Rep. 96-249 at 74-75; H.R. Rep. 96-317 at 47.

 89 See Nippon Steel Corp., 345 F.3d at 1381 (“an affirmative material-injury determination under the statute

requires no more than a substantial-factor showing. That is, the ‘dumping’ need not be the sole or principal cause of

injury.”).

 90 Mittal Steel, 542 F.3d at 877-78; see also id. at 873 (“While the Commission may not enter an affirmative

determination unless it finds that a domestic industry is materially injured ‘by reason of’ subject imports, the

Commission is not required to follow a single methodology for making that determination ... {and has} broad

discretion with respect to its choice of methodology.”) citing United States Steel Group v. United States, 96 F.3d

1352, 1362 (Fed. Cir. 1996) and S. Rep. 96-249 at 75.

 91 Commissioner Pinkert does not join this paragraph or the following three paragraphs. He points out that the

Federal Circuit, in Bratsk, 444 F.3d 1369, and Mittal, held that the Commission is required, in certain circumstances

when considering present material injury, to undertake a particular kind of analysis of non-subject imports, albeit

without reliance upon presumptions or rigid formulas. Mittal explains as follows:

What Bratsk held is that “where commodity products are at issue and fairly traded, price-competitive, nonsubject imports are in the market,” the Commission would not fulfill its obligation to consider an important

aspect of the problem if it failed to consider whether non-subject or non-LTFV imports would have

replaced LTFV subject imports during the period of investigation without a continuing benefit to the

domestic industry. 444 F.3d at 1369. Under those circumstances, Bratsk requires the Commission to

consider whether replacement of the LTFV subject imports might have occurred during the period of

investigation, and it requires the Commission to provide an explanation of its conclusion with respect to

that factor.

542 F.3d at 878.

 92 Nucor Corp. v. United States, 414 F.3d 1331, 1336, 1341 (Fed. Cir. 2005); see also Mittal Steel, 542 F.3d at

879 (“Bratsk did not read into the antidumping statute a Procrustean formula for determining whether a domestic

injury was ‘by reason’ of subject imports.”).

 93 Mittal Steel, 542 F.3d at 875-79.

 94 Mittal Steel, 542 F.3d at 873 (quoting from Gerald Metals, 132 F.3d at 722), 875-79 & n.2 (recognizing the

Commission’s alternative interpretation of Bratsk as a reminder to conduct a non-attribution analysis).

13
ourselves required to apply the replacement/benefit test that was included in Commission opinions

subsequent to Bratsk.

The progression of Gerald Metals, Bratsk, and Mittal Steel clarifies that, in cases involving

commodity products where price-competitive non-subject imports are a significant factor in the U.S.

market, the Court will require the Commission to give full consideration, with adequate explanation, to

non-attribution issues when it performs its causation analysis.95 96

The question of whether the material injury threshold for subject imports is satisfied

notwithstanding any injury from other factors is factual, subject to review under the substantial evidence

standard.97 Congress has delegated this factual finding to the Commission because of the agency’s

institutional expertise in resolving injury issues.98

B. Conditions of Competition and the Business Cycle

The following conditions of competition inform our analysis in the final phase of these

investigations.

1. Demand Considerations

MCBs are mainly used in the production of steel, and therefore demand for MCBs is driven by

the level of steel production.99 In the United States, raw steel production fluctuated between January

2007 and August 2008, increasing overall by 14.9 percent, and then decreased 56.2 percent between

August 2008 and April 2009.100 Between April 2009 and April 2010, steel production increased 83.0

percent.101 Nonetheless, domestic steel production has yet to return to its pre-recession level of early

2008.102

Apparent U.S. consumption of MCBs followed a path similar to that of steel production,

increasing *** percent between 2007 and 2008, and then declining *** percent between 2008 and

2009.103 In January-March 2010, apparent U.S. consumption was *** percent higher than during the 

 95 Commissioner Lane also refers to her dissenting views in Polyethylene Terephthalate Film, Sheet, and Strip

from Brazil, China, Thailand, and the United Arab Emirates, Invs. Nos. 731-TA-1131 to 1134 (Final), USITC Pub.

4040 (Oct. 2008), for further discussion of Mittal Steel.

 96 To that end, after the Federal Circuit issued its decision in Bratsk, the Commission began to present published

information or send out information requests in final phase investigations to producers in non-subject countries that

accounted for substantial shares of U.S. imports of subject merchandise (if, in fact, there were large non-subject

import suppliers). In order to provide a more complete record for the Commission’s causation analysis, these

requests typically seek information on capacity, production, and shipments of the product under investigation in the

major source countries that export to the United States. The Commission plans to continue utilizing published or

requested information in final phase investigations in which there are substantial levels of non-subject imports.

 97 We provide in our respective discussions of volume, price effects, and impact a full analysis of other factors

alleged to have caused any material injury experienced by the domestic industry.

 98 Mittal Steel, 542 F.3d at 873; Nippon Steel Corp., 458 F.3d at 1350, citing U.S. Steel Group, 96 F.3d at 1357;

S. Rep. 96-249 at 75 (“The determination of the ITC with respect to causation is ... complex and difficult, and is a

matter for the judgment of the ITC.”).

 99 CR at II-14, PR at II-9; Conference Tr. at 31, 34 (Magrath); Tr. at 124 (Brown); Tr. at 239 (Beschel).

 100 CR at II-14, PR at II-9.

 101 CR at II-14, PR at II-9.

 102 See CR/PR at Fig. II-1.

 103 CR at II-14, PR at II-10.

14
same period of 2009.104 Given the level of apparent U.S. consumption in the first quarter of 2010, it

appears that demand for MCBs has recovered more quickly than steel production.

2. Supply Conditions

Both domestic producers and importers make most of their sales directly to end users. The

domestic producers often sell MCBs as part of a package of refractory products.105

The domestic industry was the largest source of supply for the U.S. market during the period

examined, although its share of the market declined. Domestic producers’ U.S. market share decreased

from *** percent in 2007 to *** percent in 2008, and then to *** percent in 2009.106 It was *** percent

in interim 2009 (January-March 2009) and *** percent in interim 2010 (January-March 2010).107 U.S.

producers’ production capacity was unchanged at *** short tons during the period examined and

exceeded domestic demand.108

The U.S. market share of cumulated subject imports increased overall from *** percent in 2007

to *** percent in 2008 and *** percent in 2009, and was *** percent in interim 2009 and *** percent in

interim 2010.109 Nonsubject imports generally declined and served a relatively small portion of the

market, accounting for no more than *** percent of U.S. apparent consumption throughout the period

examined.110 China and Mexico are the largest foreign suppliers of MCBs to the United States,

accounting for *** percent and *** percent, respectively, of the quantity of total imports in 2009.111

3. Substitutability and Other Factors

The parties disagreed as to whether MCBs are commodity products. Resco claims that they are

commodity-type products, as price is a “paramount factor in purchasing decisions” provided that

availability is equal and suppliers meet basic quality standards.112 Resco acknowledges, however, that it

uses about 150 different formulations for MCBs and that it sells MCBs in about 3,000 different shapes.113

Nonetheless, it reports that about half of the market consists of standardized shapes and sizes of MCBs.114

The Vesuvius and RHI Respondents argue that the price-to-performance ratio, rather than price alone, is

the primary factor in MCB purchasing decisions, and thus MCB is not a commodity-type product.115

 104 CR at II-14, PR at II-10.

 105 CR at V-2, PR at V-1; Conference Tr. at 47, 62-63 (Mazard, Copp). Some MCB sales also take place as part

of cost-per-ton or cost-per-heat programs. These are referred to as “program sales” or “project sales,” and may

include other related services such as installation and technical assistance, in which case these types of contracts may

also be called “full-line service” arrangements. These sales, however, accounted for a relatively small portion of the

domestic sales during the period, and importers entered into these agreements as well. CR at III-5 n.10, PR at III-3

n.10; CR/PR at V-2, n.5. 

 106 CR/PR at Table IV-4a.

 107 CR/PR at Table IV-4a.

 108 CR/PR at Table III-2a.

 109 CR/PR at Table IV-4a.

 110 CR/PR at Table IV-4a.

 111 CR/PR at Table IV-2a.

 112 Resco’s Prehearing Brief at 14.

 113 Conference Tr. at 50, 72 (Brown).

 114 Conference Tr. at 52 (Brown).

 115 RHI Respondents’ Prehearing Brief at 17; Vesuvius Respondents’ Prehearing Brief at 2.

15
For products of the same type, there is a relatively high degree of substitutability between the

domestic like product and subject imports.116 Nine of ten responding purchasers indicated that subject

imports from China are always or frequently interchangeable with subject imports from Mexico.117

Sixteen of nineteen responding purchasers indicated that subject imports from China are always or

frequently interchangeable with domestic MCBs, and ten of twelve responding purchasers indicated that

subject imports from Mexico are always or frequently interchangeable with domestic MCBs.118

 Purchasers are sensitive to price to some degree, and 9 of 20 purchasers reported that they

usually or always purchase the lowest-priced MCBs.119 Purchasers indicated that price is second only to

quality in purchasing decisions.120 Purchasers reported that the level of performance of MCBs relative to

price was their paramount consideration, and they try to achieve the lowest overall cost per ton of steel

produced rather than simply purchase the lowest priced MCBs.121 MCBs generally make up a small

share of the final cost of steel products that they are used to produce. Nine purchasers reported cost

shares of 2 percent or less, although one purchaser reported a cost share of 10 percent.122 Due to its low

cost share in its end use and the lack of commercially viable substitutes, demand for MCBs is relatively

inelastic.123

Magnesia is the primary raw material used in the production of MCBs, and raw material costs

accounted for approximately 74 percent of U.S. producers’ total cost of goods sold (“COGS”) during

2007-2009.124 Raw material costs increased by 26 percent between 2007 and 2008, but they have since

decreased and were 9.4 percent lower in the first quarter of 2010 than the first quarter of 2009.125 126

C. Volume of Subject Imports127

Section 771(7)(C)(i) of the Act provides that the “Commission shall consider whether the volume

of imports of the merchandise, or any increase in that volume, either in absolute terms or relative to

production or consumption in the United States, is significant.”128

Subject imports were already present in substantial volumes and market share at the beginning of

the period and remained a significant presence in the U.S. market throughout the period. The quantity of

subject imports in the U.S. market increased by *** percent from *** short tons in 2007 to *** short tons

in 2008, before falling to *** short tons in 2009.129 They were higher in interim 2010, at *** short tons, 

 116 CR at II-19, PR at II-13.

 117 CR/PR at Table II-8.

 118 CR/PR at Table II-8.

 119 CR at II-21, PR at II-14.

 120 CR/PR at Tables II-6 and II-7.

 121 Tr. at 158-59 (Beschel), 229 (Thomas). Virtually all purchasers reported that the price performance ratio for

MCBs was very important. CR at II-22, PR at II-15.

 122 CR at II-17, PR at II-11.

 123 CR at II-31, PR at II-21.

 124 CR/PR at V-1.

 125 CR/PR at V-1.

 126 Chairman Deanna Tanner Okun, Commissioner Daniel R. Pearson, and Commissioner Shara L. Aranoff do

not join the remainder of this opinion.

 127 We base our analysis of subject import volume on importers’ questionnaire responses, which were received

from all firms believed to be large importers of MCBs from China and Mexico. See CR at IV-3, n.7, PR at IV-1 n.7.

 128 19 U.S.C. § 1677(7)(C)(i).

 129 See CR/PR at Table IV-2a.

16
than in interim 2009, at *** short tons.130 U.S. shipments of subject imports increased their market share

from *** percent in 2007 to *** percent in 2008 and *** percent in 2009.131

Subject imports increased their share of the U.S. market both when apparent U.S. consumption

was increasing (from 2007 to 2008) and when it was declining (from 2008 to 2009).132 Nonsubject

imports, however, generally trended downward.133 Their market share was *** percent in 2007, ***

percent in 2008, and *** percent in 2009.134

The significant increase in subject imports’ market share came almost entirely at the expense of

the domestic industry, as subject imports increasingly displaced domestic shipments in the U.S. market. 

The U.S. producers’ market share decreased from *** percent in 2007 to *** percent in 2008 and ***

percent in 2009.135 Their market share recovered to *** percent in interim 2010 from *** percent in

interim 2009.136

The increasing presence of subject imports in the U.S. market during the period of investigation is

also apparent when subject imports are considered relative to U.S. production. The ratio of subject

imports to domestic production was *** percent in 2007, *** percent in 2008, and *** percent in 2009,

before falling to *** percent in interim 2010 from *** percent in interim 2009.137

We find that the volume and market share of the subject imports were significant during the

period of investigation, both in absolute terms and relative to consumption and production in the United

States. We also find that the increase in subject import shipments and market share over the period

examined was significant.138

D. Price Effects of the Subject Imports

Section 771(C)(ii) of the Act provides as follows with respect to evaluating the price effects of

subject imports:

 130 See CR/PR at Table IV-2a.

 131 CR/PR at Table IV-4a.

 132 See CR/PR at Table C-1.

 133 See CR/PR at Table C-1.

 134 CR/PR at Table IV-4a.

 135 See CR/PR at Table IV-4a.

 136 See CR/PR at Table IV-4a. 

 137 CR/PR at Table IV-5a.

 138 In final phase investigations, the statutory provision governing the Commission's treatment of post-petition

information, 19 U.S.C. § 1677(7)(I), states that "the Commission shall consider whether any change in the volume,

price effects, or impact of imports of the subject merchandise since the filing of the petition in an investigation . . . is

related to the pendency of the investigation and, if so, the Commission may reduce the weight accorded to the data

for the period after the filing of the petition in making its determination of material injury . . . ." The petitions, as

noted above, were filed July 29, 2009. Prior to the filing of the petitions, subject imports had steadily increased their

U.S. market share; however, subject imports' market share, in terms of quantity, declined in the second half of 2009

to *** percent from *** percent in the first half of 2009, and was lower in interim 2010 at *** percent than in

interim 2009 at *** percent. Although subject imports increased from *** short tons in the first half of 2009 to ***

short tons in the second half, this increase slowed significantly between the interim periods, and the increase in U.S.

consumption outstripped the increase in shipments of subject imports. CR/PR at Table IV-5b. Subject imports were

only *** percent higher in interim 2010 (*** short tons) than in interim 2009 (*** short tons), while apparent U.S.

consumption was *** percent higher in interim 2010 than in interim 2009. CR/PR at Table IV-5a and Table IV-4a. 

We thus find that the filing of the petitions had an effect on the subject imports' market share in this investigation,

particularly in the first quarter of 2010, as shipments of subject imports did not increase as quickly as apparent U.S.

consumption. Accordingly, we reduce the weight we accord to trends in the data after the filing of the petition.

17
the Commission shall consider whether – (I) there has been significant price underselling

by the imported merchandise as compared with the price of domestic like products of the

United States, and (II) the effect of imports of such merchandise otherwise depresses 

prices to a significant degree or prevents price increases, which otherwise would have

occurred, to a significant degree.139

As addressed in section V.B.3 above, the record indicates that there is a relatively high degree of

substitutability between subject imports and the domestic like product, with purchasers generally using

them interchangeably.140 Price is an important consideration for purchasers.141

The Commission collected quarterly f.o.b. pricing data for five MCB products.142 Three domestic

producers, nine importers of MCBs from China, and one importer of MCBs from Mexico provided usable

pricing data for sales of the requested products, although not all firms reported pricing for all products for

all quarters during the period examined, January 2007 through March 2010.143 Subject imports undersold

the domestic like product in 77 of 91 quarterly pricing comparisons by an average margin of 15.6

percent.144 Underselling margins ranged from 1.0 percent to 35.1 percent.145 Given the consistent

underselling by the subject imports, we find that underselling was significant during the period examined.

Prices for domestically produced MCBs generally increased as the domestic industry’s input costs

increased during the period examined. Weighted-average sales prices for the five U.S.-produced pricing

products selected by the Commission increased by 10.0 percent, 20.8 percent, 28.9 percent, 31.3 percent

and 25.4 percent between the first quarter of 2007 and the first quarter of 2010.146 The weighted-average

sales prices for pricing products 2, 4 and 5 imported from China and Mexico increased by smaller

margins, with the exception of subject imports of product 1, which increased by a greater amount than the

U.S.-produced product.147 Prices for subject imports of product 3 fell overall during the period.148 In light

of the increase in prices for U.S.-produced MCBs, we do not find significant price depression by reason

of subject imports.

We do find, however, that subject import competition has suppressed domestic like product prices

during the period examined to a significant degree. Although domestic producers were able to increase

prices over the period examined, they were not always able to increase them sufficiently to fully cover

increased COGS.

 139 19 U.S.C. § 1677(7)(C)(ii).

 140 CR/PR at Table II-8. See also CR at II-19, PR at II-13 (high degree of substitutability).

 141 CR/PR at Table II-6.

 142 CR at V-5, PR at V-3. Product 1 is resin-bonded magnesia carbon brick for electric arc furnaces with a

carbon content of 13 percent, fused grain and antioxidant additions that corresponds to Resco's brand Nuline 10-99. 

Product 2 is resin-bonded magnesia carbon brick for electric arc furnaces with a carbon content of 15 percent, fused

grain and antioxidant additions that corresponds to Resco's brand Nuline 15 DF. Product 3 is resin-bonded magnesia

carbon brick for steel ladles with a carbon content of 8 percent, 50 percent sintered and 50 percent fused grain, and

antioxidant additions that corresponds to RHI's brand Ancarbon AC51 CE. Product 4 is resin-bonded magnesia

carbon brick for steel ladles with a carbon content of 10 percent, fused grain and antioxidant additions that

corresponds to RHI's brand Ancarbon AC72 CE. Product 5 is resin-bonded magnesia carbon brick for steel ladles

with a carbon content of 13 percent, fused grain and antioxidant additions that corresponds to Resco's brand Nuline

2-99.

 143 CR at V-5, PR at V-3. The Commission’s pricing data accounted for approximately *** percent of U.S.

producers’ shipments of MCBs, *** percent of U.S. shipments of subject imports from China, and *** percent of

U.S. shipments of subject imports from Mexico during the period examined. CR at V-6, PR at V-3 to V-4.

 144 CR/PR at Table V-19.

 145 CR/PR at Table V-19.

 146 CR/PR at Table V-6.

 147 CR/PR at Table V-6.

 148 CR/PR at Table V-6.

18
From 2007 to 2009, the domestic industry’s net sales values increased by a smaller percentage

than its unit COGS. The domestic industry’s unit COGS increased by $***, or *** percent, from 2007 to

2009.149 The average unit COGS was $***, or *** percent, lower in interim 2010 than in interim 2009.150

These increases in unit COGS were largely attributable to increased raw material costs.151 The domestic

producers’ unit net sales value increased by $***, or *** percent, from 2007 to 2009, and was $***, or

*** percent, lower in interim 2010 than in interim 2009.152 As a result of the larger increases in unit

COGS, the domestic industry’s COGS-to-net sales ratio increased overall from *** percent in 2007 to

*** percent in 2009.153

The price suppressing effects of the subject imports are most apparent in 2008, when demand

remained relatively strong. As subject imports increased to their highest annual level in 2008 in terms of

quantity, the domestic industry’s unit COGS increased by $*** per short ton, or *** percent, from 2007

to 2008, yet the industry’s unit net sales value increased by only $*** per short ton, or *** percent.154 As

a result, the domestic industry’s COGS-to-net sales ratio increased from *** percent in 2007 to ***

percent in 2008.155 This occurred as the domestic industry increased its U.S. shipments and at a time

when apparent U.S. consumption was increasing by *** percent – before the *** percent drop in apparent

U.S. consumption that occurred in 2009.156

The rise in the COGS-to-net sales ratio, combined with the surge in subject imports, indicates that

by 2008, due to the significant volumes of lower-priced subject imports entering the U.S. market, the

domestic producers were unable to raise their prices sufficiently to fully cover increased costs. Although

there are indications that the cost-price squeeze eased during the latter half of 2009 and the first quarter of

2010 as raw material cost increases subsided, the industry suffered from reduced profitability during 2008

and 2009 due to its inability to raise prices.157 Accordingly, we find that the subject imports had

significant price suppressing effects.158

 In light of the above, we find that the significant volume of subject imports, through their

significant underselling during the period examined, had a significant adverse effect on domestic

producers’ prices by preventing price increases that otherwise would have occurred.

 149 CR/PR at Tables VI-1a and C-1. 

 150 CR/PR at Table VI-1a. Unit COGS was $*** in 2007, $*** in 2008, $*** in 2009, $*** in interim 2009, and

$*** in interim 2010. Id. Unit net sales value was $*** in 2007, $*** in 2008, $*** in 2009, $*** in interim 2009,

and $*** in interim 2010. CR/PR at Table V1-1a.

 151 CR/PR at Table VI-1a.

 152 CR/PR at Tables VI-1a and C-1. 

 153 CR/PR at Table VI-1a.

 154 See CR/PR at Table VI-1a.

 155 CR/PR at Table VI-1a.

 156 CR/PR at Table C-1.

 157 See CR/PR at Table VI-2.

 158 Additional support for our finding of adverse price effects by subject imports is provided by the confirmed

lost sales alleged by the ***. CR at V-20, PR at V-12. Six purchasers agreed or at least partly agreed that domestic

producers lost $5.0 million in sales to the subject imports during the period examined. Id. None of the domestic

producers’ five lost revenue allegations, however, was confirmed. Id.

19
E. Impact of the Subject Imports159

Section 771(7)(C)(iii) of the Act provides that the Commission, in examining the impact of the

subject imports on the domestic industry, “shall evaluate all relevant economic factors which have a

bearing on the state of the industry.”160 These factors include output, sales, inventories, capacity

utilization, market share, employment, wages, productivity, profits, cash flow, return on investment,

ability to raise capital, research and development, and factors affecting domestic prices. No single factor

is dispositive and all relevant factors are considered “within the context of the business cycle and

conditions of competition that are distinctive to the affected industry.”161

We have carefully examined the performance of the domestic industry producing MCBs, the

effects of the subject imports, and the impact of the recession and resulting downturn in consumption. 

We find that the domestic industry’s performance was materially and adversely affected by the subject

imports over the period examined. As a result of the significant volumes of subject imports and their

significant underselling, the domestic industry experienced declines in market share, employment, and

capacity utilization in 2008 when apparent U.S. consumption was relatively strong. These declines

predate the recession-driven decline in consumption, as well as the filing of the petitions. Furthermore,

the industry was unable to increase its prices sufficiently to fully cover its increased costs due to the

increased presence of subject imports, resulting in steep declines in operating income, return on

investment, and capital expenditures. 

The domestic industry’s production, shipment, and sales data reflect substantial declines from

2007 and 2009, although the declines were most pronounced after the impact of the recession was felt in

2009. Nonetheless, the subject imports’ impact on the industry’s production and shipments is evident

from 2007 through 2009.162 The industry’s production fell from 73,552 short tons in 2007 to 72,258 short

tons in 2008 and 49,997 short tons in 2009.163 Its production was 82.2 percent higher in interim 2010, at

17,286 short tons, than in interim 2009, at 9,485 short tons, reflecting an improvement in demand as well

as the impact of the filing of the petitions.164 The industry’s U.S. shipments increased from 59,403 short

tons in 2007 to 63,789 short tons in 2008, before falling to 42,243 short tons in 2009, but they were

higher in interim 2010, at 15,198 short tons, than in interim 2009, at 8,989 short tons.165

 159 In its final determination of sales at less than fair value for China, Commerce found the following weightedaverage dumping margins: 128.10 percent for fourteen specific producer and exporter combinations and 236.00

percent for all others. CR at I-7, PR at I-5; 75 Fed. Reg. 45471 (Aug. 2, 2010). With respect to Mexico, Commerce

found a weighted average margin of dumping of 57.90 percent for RHI–Refmex S.A. de C.V. and all others. CR at

I-6, PR at I-4; 75 Fed. Reg. 45098 (Aug. 2, 2010).

 160 19 U.S.C. § 1677(7)(C)(iii); see also SAA at 851 and 885 (“In material injury determinations, the Commission

considers, in addition to imports, other factors that may be contributing to overall injury. While these factors, in

some cases, may account for the injury to the domestic industry, they also may demonstrate that an industry is facing

difficulties from a variety of sources and is vulnerable to dumped or subsidized imports.”)

 161 19 U.S.C. § 1677(7)(C)(iii); see also SAA at 851, 885; Live Cattle from Canada and Mexico, Inv. Nos. 701-

TA-386, 731-TA-812-813 (Prelim.), USITC Pub. 3155 at 25 n.148 (Feb. 1999).

 162 For instance, due to the *** percent increase in subject imports from 2007 to 2008, the domestic industry’s

U.S. shipments increased by just *** percent when apparent consumption increased by *** percent. Similarly, U.S.

shipments fell by *** percent from 2008 to 2009, when apparent U.S. consumption fell by *** percent and subject

imports fell by only *** percent. See CR/PR at Table C-1.

 163 CR/PR at Table III-2a.

 164 CR/PR at Table III-2a.

 165 CR/PR at Table III-3a. Domestic producers’ inventories increased absolutely and relative to production from

2007 to 2009. Inventories were higher in interim 2010 than in interim 2009. CR/PR at Table III-4a. 

20
Domestic production capacity remained unchanged during the period at 114,241 short tons.166

The industry’s rate of capacity utilization, however, decreased from 64.4 percent in 2007 to 63.3 percent

in 2008 and 43.8 percent in 2009.167 Its capacity utilization was higher in interim 2010, at 60.5 percent,

than in interim 2009, at 33.2 percent.168

The domestic industry’s number of production and related workers declined from 110 in 2007 to

102 in 2008 and then to 92 in 2009.169 Wages paid fell slightly from $6.44 million in 2007 to $6.42

million in 2008 and 5.2 million in 2009.170 Productivity increased from 307.7 short tons per 1,000 hours

to 318.3 short tons per 1,000 hours in 2008, before declining to 279.3 short tons per 1,000 hours in

2009.171

The domestic industry’s share of apparent U.S. consumption fell both when apparent U.S.

consumption was increasing and when it was decreasing. Its market share fell from *** percent in 2007

to *** percent in 2008 and then to just *** percent in 2009 as the subject imports continued to undersell

and capture market share.172 The domestic industry was able to recover some market share in interim

2010, when apparent U.S. consumption increased by *** percent over interim 2009, as shipments of

subject imports did not increase as much as domestic producers’ shipments.173 The domestic industry’s

market share was *** percent in interim 2009 and *** percent in interim 2010.174

The quantity of U.S. producers’ net sales decreased during the period, particularly from 2008 to

2009.175 Although the value of U.S. producers’ net sales increased from 2008 to 2009, that increase was

attributable to increased unit values, which, as noted above, reflected the rise in raw material costs for

MCBs. The industry’s net sales value increased from $*** million in 2007 to $*** million in 2008 and

then fell to $*** million in 2009, but it was $*** million in interim 2009 and $*** million in interim

2010.176

The domestic industry’s operating income and operating income margin fell in 2008, even though

apparent U.S. consumption of MCBs increased *** percent over 2007.177 The industry’s operating

income fell by almost half from 2007 to 2008, from $*** million in 2007 to $*** million in 2008. It

further declined to $*** million in 2009. Apparent U.S. consumption rose sharply during the first quarter

of 2010, allowing U.S. producers to earn an operating income of $*** million in interim 2010, as

compared to $*** in interim 2009.178 The industry’s operating income margin also declined from ***

percent in 2007 to *** percent in 2008, before increasing slightly to *** percent in 2009. The operating

income margin was *** percent in interim 2009, but *** percent in interim 2010.179

 166 CR/PR at Table III-2a.

 167 CR/PR at Table III-2a.

 168 CR/PR at Table III-2a.

 169 CR/PR at Table III-6a.

 170 CR/PR at Table III-6a.

 171 CR/PR at Table III-6a.

 172 CR/PR at Table IV-4a.

 173 See CR/PR at Table IV-4a. Similarly, the industry recovered market share in the second half of 2009 relative

to the first half as apparent U.S. consumption increased by over *** percent in quantity terms. See CR/PR at IV-4b.

 174 CR/PR at Table IV-4a.

 175 See CR/PR at Table VI-1a. Although the decrease in net sales can, to some extent, be attributed to the steady

decline in export shipments during 2007-09 and demand during 2008-09, subject imports contributed significantly to

this decrease, as indicated by the domestic industry’s loss of market share. See CR/PR at Tables III-3a, IV-3a, C-1. 

Exports accounted for *** percent of U.S. producers’ total shipments in 2009 and *** percent in interim 2010. 

Exports decreased by *** percent from 2007 to 2009 and increased by *** percent between the interim periods. CR

at III-5, PR at III-3.

 176 CR/PR at Table VI-1a.

 177 CR/PR at Table IV-1a, C-1.

 178 CR/PR at Tables VI-1a, C-1.

 179 CR/PR at Tables VI-1, C-1. 

21
The domestic industry’s capital expenditures declined from $*** in 2007 to $*** in 2008, before

increasing slightly to $*** in 2009. Capital expenditures were higher in interim 2010, at $***, than in

interim 2009, at $***.180 The industry’s return on investment declined from *** percent in 2007 to ***

percent in 2008 and *** percent in 2009.181

Although the domestic industry was able to raise its prices overall from 2007 to 2009, as

discussed previously, unit COGS and the COGS-to-net sales ratio increased during the period. The

increase in the COGS-to-net sales ratio occurred because, from 2007 to 2009, there was a cost-price

squeeze in which the domestic industry was unable to raise prices sufficiently to cover costs. The

decrease in operating income was primarily attributable to the increase in net sales values being

insufficient to compensate for the industry’s increasing costs from 2007 to 2009.182 Although respondents

argue that the domestic industry was able to fully pass through its increasing raw material costs to

purchasers, the record does not support this argument.183 We find that the domestic industry’s inability to

increase its prices sufficiently led to its reduced profitability.

We have considered whether there are other factors that may have adversely affected the

domestic industry during the period examined.184 We have already noted that nonsubject imports had a

small and declining presence during the period.185

We acknowledge, as respondents argue, that the recession, which caused a substantial decline in

apparent U.S. consumption in 2009, adversely impacted the industry. For this reason, the period 2007 to

2008 is notable, because it preceded both the downturn (and later increase) in demand and the filing of the

petition and was therefore unaffected by those events. Consumption was increasing from 2007 to 2008,

but low-priced subject imports increased even faster and as a result gained significant market share. The

ratio of subject imports to domestic production also increased greatly. Even though domestic producers

increased U.S. sales and shipments in response to increased demand, they nevertheless lost some market

share to the lower-priced subject imports. The upward trend in subject imports in 2007-2008 coincided

with an increase in domestic producers’ COGS-to-net sales ratio and a decline in profitability and return

on investment.

We also disagree with respondents’ conclusion that the domestic industry’s improved

performance during the second half of 2009 and interim 2010 despite the continued presence of a

significant volume of subject imports indicates that subject imports were not a cause of injury to the

 180 CR/PR at Table VI-4. Research and development expenses decreased from $*** in 2007 to $*** in 2008 and

*** in 2009. They were slightly higher in interim 2010, at $***, than in interim 2009, at $***. CR/PR at Table VI4. Similarly, as noted above, total raw material and direct labor costs declined by $*** from 2007 to 2009, while net

sales fell by $***. From 2007 to 2008, raw material and direct labor costs increased by $***, but net sales increased

by only $***. From 2008 to 2009, raw materials and direct labor declined by $***.

 181 CR/PR at Table VI-5.

 182 CR at VI-14, PR at VI-4; CR/PR at Table VI-3.

 183 RHI Respondents’ Prehearing Brief at 35-39. We note that the raw materials component of COGS as a

percentage of net sales increased from *** percent in 2007 to *** percent in 2008, before falling to *** percent in

2009. CR/PR at Table VI-1a. During 2007-2008, when both sales values and costs increased, the increase in total

net sales of $*** was less than the increase in raw material costs of $*** and COGS of $***. Moreover, from 2008

to 2009, the decline in net sales of $*** outstripped the decline in raw material costs and COGS of $*** and $***,

respectively. See CR/PR at Table VI-1a. Similarly, as noted above, total raw material and direct labor costs

declined by $*** from 2007 to 2009, while net sales fell by $***. From 2007 to 2008, raw materials and direct

labor increased by $***, but net sales increased by only $***. From 2008 to 2009, raw materials and direct labor

declined by $***.

 184 Commissioner Pinkert notes that nonsubject imports never accounted for more than *** percent of apparent

U.S. consumption at any time during the period examined in these investigations. Therefore, one of the threshold

considerations for the analysis required by Bratsk and Mittal (whether price-competitive non-subject imports were a

significant factor in the U.S. market) is not satisfied.

 185 See CR/PR at Table IV-4a.

22
domestic industry.186 We have placed greater emphasis on data for full years than we have for quarterly

data in assessing the state of the domestic industry and the effects of the subject imports, and we are

reluctant to give weight to partial year comparisons that are comparing different parts of a year,

particularly when the partial year data largely reflect the period after the filing of the petitions. The fullyear data for the 2007-2009 period make plain that the industry was suffering from reduced production,

U.S. shipments, and market share. Given that the subject imports continued to gain market share and

continued to undersell the domestic product during 2009, it is clear that they continued to impact the

domestic industry adversely.187 188

The respondents additionally point out that the decline in the domestic industry’s export

shipments may have caused lower domestic production and capacity utilization, but the domestic

industry’s reduced exports do not diminish the effects of the subject imports during the period.189

For the reasons discussed above, we conclude that there is a causal nexus between the subject

imports and the diminished performance of the domestic industry, which reflects a domestic industry that

is materially injured by reason of subject imports.

 186 RHI Respondents’ Prehearing Brief at 47-49; Vesuvius Respondents’ Prehearing Brief at 4-5. 

 187 CR/PR at II-1. Respondents allege that sales of MCBs for linings of basic oxygen furnaces constitute a

market in which domestic producers are insulated from import competition. RHI Respondents’ Prehearing Brief at

20. That portion of the market, however, accounts for only 5 to 10 percent of sales of MCBs, and the evidence

indicates that imports also compete there. CR at IV-9, PR at IV-5; Resco’s Posthearing Brief, Exhibit 6, at 1.

 188 See RHI’S Prehearing Brief at 44-47. The domestic industry was able to return to profitability only in the

second half of 2009, when apparent U.S. consumption grew rapidly and the effects of the petition were felt as the

domestic industry’s COGS reversed its upward path and began declining. The domestic industry improved from a

*** position in the first half of 2009 to profitability in the second half of that year when apparent consumption

increased by over *** percent in quantity terms. Also during this period, unit COGS declined by a greater

percentage than net sales values, resulting in a drop in the COGS-to-net sales ratio from *** percent to *** percent. 

See CR/PR at Tables IV-4b and VI-2. See also CR at VI-14 to VI-15, PR at VI-4 (noting that the reduction in net

costs/expenses led to improved profitability in the second half of 2009 and first quarter of 2010). The domestic

industry’s COGS-to-net sales ratio remained above the level of 2007, and its market share remained below the 2007

level, indicating continued material injury due to the subject imports. Similarly, in interim 2010, which covers only

three months of data, apparent U.S. consumption rebounded sharply, increasing by almost *** percent in terms of

quantity over the same three months in 2009, resulting in the domestic industry’s U.S. shipments increasing 69.1

percent. At the same time, the domestic industry’s unit COGS fell by 8.7 percent and net sales values went down

more slowly. See CR/PR at Table C-1. Even with the increase in apparent U.S. consumption and easing of raw

material prices in the second half of 2009, the industry continued to experience an elevated COGS-to-net sales ratio

and reduced profitability and market share during 2009 due to the effects of the subject imports. CR/PR at Tables

IV-4b and VI-1b.

 189 See CR/PR at Table C-1. Export shipments fell by *** short tons from 2007-2008, resulting in lower net

sales for the domestic industry. However, U.S. shipments of subject imports increased by 6,706 short tons from

2007 to 2008, and therefore were a significant factor in reducing the domestic industry’s production, capacity

utilization rate and sales, regardless of the effects of the industry’s reduced exports. Id.

23
VI. CRITICAL CIRCUMSTANCES

In its final antidumping duty determinations concerning MCBs from China, Commerce found that

critical circumstances exist with respect to a number of subject producers/exporters.190 Because we have

determined that the domestic industry is materially injured by reason of subject imports from China, we

must further determine “whether the imports subject to the affirmative [Commerce critical circumstances]

determination . . . are likely to undermine seriously the remedial effect of the antidumping order to be

issued.”191 The SAA indicates that the Commission is to determine “whether, by massively increasing

imports prior to the effective date of relief, the importers have seriously undermined the remedial effect of

the order.”192

The statute further provides that in making this determination the Commission shall consider,

among other factors it considers relevant – 

(I) the timing and the volume of the imports,

(II) a rapid increase in inventories of the imports, and

(III) any other circumstances indicating that the remedial effect of the antidumping order

will be seriously undermined.193

In considering the timing and volume of subject imports, the Commission’s practice is to consider

import quantities prior to the filing of the petition with those subsequent to the filing of the petition194

using monthly statistics on the record regarding those firms for which Commerce has made an affirmative

critical circumstance determination.195

Resco urges the Commission to make an affirmative critical circumstances finding. It argues that

the Commission should base its critical circumstances determination on import trends for the seven-month

pre-petition period of January 2009 through July 2009 and a post-petition period of August 2009 through

February 2010.196 It maintains that the Commission should use the same period as Commerce because

this would allow consideration of the maximum amount of data that could be collected.197 It adds that a

surge in subject imports from China occurred in the two months prior to Commerce issuing its

preliminary determination in March 2010 and evaluating import trends over the seven-month periods

makes this apparent.198

We are not, however, persuaded by Resco’s argument that we should diverge from our normal

practice of relying on data gathered for the six-month periods immediately preceding and following the

 190 Final Determination, 75 Fed. Reg. at 45469.

 191 19 U.S.C. § 1673d(b)(4)(A)(i).

 192 SAA at 877.

 193 19 U.S.C. § 1673d(b)(4)(A)(ii).

 194 The legislative history for the critical circumstances provision indicates that the provision was designed “to

deter exporters whose merchandise is subject to an investigation from circumventing the intent of the law by

increasing their exports to the United States during the period between initiation of an investigation and a

preliminary determination by [Commerce].” ICC Industries, Inc. v. United States, 812 F.2d 694, 700 (Fed. Cir.

1987), quoting H.R. Rep. No. 317, 96th Cong., 1st Sess. 63 (1979).

 195 See Certain Lined School Paper Supplies from China, India, and Indonesia, USITC Pub. 3884 at 47;

Carbozole Violet Pigment from China and India, Inv. Nos. 701-TA-437 and 731-TA-1060 and 1061 (Final), USITC

Pub. 3744 (December 2004) at 26; Certain Frozen Fish Fillets from Vietnam, Inv. No. 731-TA-1012 (Final), USITC

Pub. 3617 (August 2003) at 20-22.

 196 Resco’s Prehearing Brief at 60.

 197 Resco’s Prehearing Brief at 60.

 198 Resco’s Prehearing Brief at 60.

24
filing of the petition.199 The traditional six-month period and the seven-month period show similar trends,

and there is no compelling reason to depart from our usual practice.200 Based on a comparison of subject

import volumes over the six-month periods before and after the petition’s filing in July 2009, we find no

massive increase in imports prior to the effective date of relief that could seriously undermine the

remedial effect of the order. Although monthly imports from China *** in the six months after the filing

of the petitions than in the prior six months, the increase was commensurate with the rapid increase in

apparent U.S. consumption during the second half of 2009 as a result of the recovery in steel

production.201 Thus, the record reflects no massive increase in subject import volume subsequent to the

petition’s filing. 

Inventory data confirm the lack of any massive increase in subject imports that could seriously

undermine the remedial effect of the order. Indeed, the record shows that importers’ end-of-period

inventories of subject merchandise from China in interim 2010 were lower than end-of-the period

inventories in interim 2009, which is inconsistent with the conclusion that U.S. importers were

stockpiling MCBs from China after the filing of the petition in July 2009.202

We therefore determine that critical circumstances do not exist with respect to the subject imports

from China covered by Commerce’s affirmative critical circumstances determination, and we make a

negative critical circumstances determination.

CONCLUSION

For the foregoing reasons, and based on the record in the final phase of these investigations, we

find that an industry in the United States is materially injured by reason of imports of MCBs from China

that are sold in the United States at less than fair value and subsidized by the Government of China and

by imports of MCBs from Mexico that are sold in the United States at less than fair value. We also

determine that critical circumstances do not exist with respect to the subject imports from China covered

by Commerce’s affirmative critical circumstances determination.

 199 Compare Certain Brake Drums and Rotors from China, Inv. No. 731-TA-744 (Final), USITC Pub. 3035

(April 1997) at 19 n.109 with Steel Concrete Reinforcing Bars from Turkey, Inv. Nos. 731-TA-745 (Final), USITC

Pub. 3034 (April 1997) at 34.

 200 See CR/PR at Table IV-6.

 201 See CR/PR at Table IV-4b (*** percent increase in apparent U.S. consumption during the second half of 2009

over the first half). See also CR/PR at Fig. II-1 (indicating recovery in steel production in second half of 2009).

 202 See CR/PR at Table VII-3 (indicating slight decline in importers’ inventories of MCBs from China).

25

SEPARATE AND DISSENTING VIEWS OF CHAIRMAN DEANNA TANNER

OKUN, COMMISSIONER DANIEL R. PEARSON AND 

COMMISSIONER SHARA L. ARANOFF

Based on the record in the final phase of these investigations, we find that an industry in the

United States is threatened with material injury by reason of imports of certain magnesia carbon bricks

(MCBs) from China that are subsidized by the government of China and sold in the United States at less

than fair value (LTFV). We further determine that an industry in the United States is not materially

injured or threatened with material injury by reason of imports of MCBs from Mexico that are sold in the

United States at LTFV. 

We join the Commission’s Views with respect to background, domestic like product, domestic

industry, cumulation for purposes of our material injury analysis, legal standards, and conditions of

competition. We write separately, however, with respect to our analysis of present material injury and

threat of material injury by reason of the subject imports.

The Commission has essentially complete data coverage for the domestic industry.1

 The 

Commission also received completed questionnaire responses from seven subject producers in China that

accounted for an estimated *** percent of Chinese export shipments to the United States in 2009,2

 and

from a single subject producer in Mexico that accounted for approximately 100 percent of Mexican

export shipments to the United States during the period examined.3

 When appropriate, we have relied on

the facts otherwise available, including information available from published sources and information

submitted in these investigations.4

 

 1 CR at III-1, PR at III-1. The three firms that provided complete questionnaire responses accounted for ***

percent of reported 2009 domestic MCB production. 

 2 CR at VII-3, PR at VII-2. These responses from producers in China are believed to account for approximately

*** percent of China’s 2008 MCB capacity. 

 3 CR at VII-7, PR at VII-5. The responding producer in Mexico, RHI-Refmex S.A. de C.V. (“Refmex”),

accounted for approximately 100 percent of Mexican production during the period examined. 

 4 Commissioner Okun notes that the statute authorizes the Commission to take adverse inferences, but such

authorization does not relieve the Commission of its obligation to consider the record evidence as a whole in making

its determination. See 19 U.S.C. § 1677e. She generally gives credence to the facts supplied by the participating

parties and certified by them as true, but bases her decision on the evidence as a whole, and does not automatically

accept participating parties’ suggested interpretations of the record evidence. Regardless of the level of participation

and the interpretations urged by participating parties, the Commission is obligated to consider all evidence relating to

each of the statutory factors and may not draw adverse inferences that render such analysis superfluous. “In general,

the Commission makes determinations by weighing all of the available evidence regarding a multiplicity of factors

relating to the domestic industry as a whole and by drawing reasonable inferences from the evidence it finds most

persuasive.” SAA at 869.

27
I. NO MATERIAL INJURY BY REASON OF CUMULATED SUBJECT IMPORTS FROM

CHINA AND MEXICO5

Based on the record in the final phase of these investigations, we find that an industry in the

United States is not materially injured by reason of cumulated subject imports from China and Mexico. 

A. Volume of the Subject Imports 

In evaluating the volume of subject imports, section 771(7)(C)(i) of the Tariff Act provides that

the “Commission shall consider whether the volume of imports of the merchandise, or any increase in that

volume, either in absolute terms or relative to production or consumption in the United States, is

significant.”6

Subject imports were in the U.S. market in substantial volumes on a cumulated basis throughout

the period examined, never accounting for less than *** of the market.7

 In an environment of rising

demand,8

 the cumulated volume of subject imports increased from 2007 to 2008.9 While this increase in

subject import volume was at a rate higher than the increase in apparent U.S. consumption, subject

imports’ small gain in market share was largely at the expense of nonsubject imports.10 As demand

collapsed in late 2008, subject import volumes decreased from 2008 to 2009.11 Despite this decrease in

volume, subject imports gained market share due to a larger decline in U.S. producers’ shipments.12 As

market conditions began to improve in the second half of 2009 and the first quarter of 2010, a sharp

improvement in apparent U.S. consumption became evident.13 Apparent U.S. consumption was ***

percent higher in January-March 2010 (“interim 2010") compared with January-March 2009 (“interim

 5 Negligibility under 19 U.S.C. § 1677(24) is not an issue in these investigations. Questionnaire data indicate that

from July 2008 to June 2009, which is the most recent 12-month period preceding the filing of the petitions for

which data were available, subject imports from China accounted for *** percent of total U.S. imports of MCBs,

while subject imports from Mexico accounted for *** percent of total U.S. imports of MCBs. The volume of subject

imports from each subject country is thus well above the statute’s three percent negligibility level. CR at IV-8, PR at

IV-5. 

 6 19 U.S.C. § 1677(7)(C)(i).

 7 We evaluate the volume of subject imports using U.S. shipments of subject imports. Because the Harmonized

Tariff Schedule numbers applicable to MCBs are basket categories that include products outside the scope of these

investigations, questionnaire data are the best data available for measuring the volume of imports. Questionnaire

data may understate import volumes because not all importers responded to the questionnaire. Importer

questionnaire data represents 60 percent of total imports from China and 100 percent of total imports from Mexico. 

CR at IV-1, PR at IV-1. Based on questionnaire responses, the volume of shipments of cumulated subject imports

was *** short tons in 2007, *** short tons in 2008, and *** short tons in 2009. Apparent U.S. consumption was ***

short tons in 2007, *** short tons in 2008, and *** short tons in 2009. CR/PR at Tables IV-3a, IV-3b, IV-4a, and

IV-4b. 

 8 Apparent U.S. consumption increased from *** short tons in 2007 to *** short tons in 2008. CR/PR at Table

IV-3a.

 9

 Cumulated subject imports increased from *** short tons in 2007 to *** short tons in 2008. Ibid. 

 10 From 2007 to 2008, the market share of subject imports measured by quantity made modest gains from ***

percent to *** percent, as the domestic industry’s market share declined from *** percent to *** percent and the

already small share held by nonsubject imports declined from *** percent to *** percent. CR/PR at Table C-1. 

 11 The volume of shipments of cumulated subject imports declined from *** short tons in 2008 to *** short tons

in 2009. CR/PR at Table IV-3a.

 12 The market share, based on quantity, held by subject imports was *** percent in 2008 and *** percent in 2009. 

CR/PR at Table C-1. 

 13 Ibid. 

28
2009").14 Subject imports on a cumulated basis were *** percent higher, or *** short tons in interim

2010, compared with *** short tons in interim 2009.15 The market share of subject imports on a

cumulated basis was actually lower in interim 2010 compared with interim 2009.16 We find that the

volume of subject imports on a cumulated basis was significant in absolute terms and relative to apparent

U.S. consumption and production during the period examined. 

B. Price Effects of the Subject Imports

In evaluating the price effects of the subject imports, section 771(7)(C)(ii) of the Tariff

Act provides that the Commission shall consider whether –

(I) there has been significant price underselling by the imported merchandise as

compared with the price of domestic like products of the United States, and

(II) the effect of imports of such merchandise otherwise depresses prices to a significant

degree or prevents price increases, which otherwise would have occurred, to a significant

degree.17

Subject imports and domestic MCBs appear to be highly substitutable18 and most sales of both the

domestic like product and subject imports are made directly to end users.19 With regard to

substitutability, a majority of purchaser questionnaire respondents considered subject imports to be

“always” or at least “frequently” interchangeable with the domestic product.20 MCB demand elasticity is

low as a result of the limited substitutability of other products for MCBs and the low cost share of MCBs

in steel production.21

Petitioner, respondents, and purchasers all indicated that price is an important factor in

purchasing decisions.22 The Commission collected quarterly pricing data for five products: two

specifications of MCB for electric arc furnaces and three MCB specifications for use in ladles. Reported

pricing data accounted for approximately *** percent of U.S. producers’ shipments of MCBs, 60.2

 14 Apparent U.S. consumption was *** short tons in interim 2010 compared with *** short tons in interim 2009. 

Ibid. 

 15 Ibid. 

 16 Ibid. The market share of subject imports on a cumulated basis was lower in interim 2010, at *** percent,

compared with *** percent in interim 2009. Domestic producers’ market share was *** percent in interim 2010

compared with *** percent in interim 2009, while nonsubject imports’ market share in those periods remained at ***

percent. 

 17 19 U.S.C. § 1677(7)(C)(ii).

 18 CR at II-19, PR at II-13. 

 19 From January 2007 through March 2010, over 99 percent of shipments of U.S. product and over 98 percent of

imports from China were made to end users. In addition, *** reported U.S. shipments of imports from Mexico and

from nonsubject sources were to end users. CR/PR at Table II-1. 

 20 Sixteen of 19 responding purchasers viewed subject imports from China as either “always” or “frequently”

interchangeable with the domestic like product. Nine of 11 responding importers viewed subject imports from

Mexico as either “always” or frequently” interchangeable with the domestic like product. CR/PR at Table II-8.

 21 CR at II-31, PR at II-21. 

 22 CR/PR at Tables II-6, II-7, CR at II-24, PR at II-16. There is some evidence in the record, however, that other

factors are also important considerations for purchasers. For example, the price to performance ratio, a measurement

of the cost per ton of steel produced or the cost per heat as compared to price alone, was rated “very important” by

19 of 20 purchasers. CR at II-22, PR at II-14. 

29
percent of U.S. shipments of subject imports from China, and *** percent of U.S. shipments of subject

imports from Mexico during the period examined.23

Taken as a whole, the pricing data show significant underselling by subject imports. Instances of

overselling were largely limited to the beginning of the period examined.24 Specifically, subject imports

undersold the domestic like product in 77 of 91 pricing comparisons (approximately 85 percent) for

products 1 through 5, with margins ranging from 1.0 to 35.1 percent.25 Subject imports from China

undersold the domestic like product in 59 of 65 quarterly pricing comparisons by margins ranging from

2.3 to 35.1 percent.26 Subject imports from Mexico undersold the domestic like product in 18 of 26

quarterly pricing comparisons by margins ranging from 1.0 to 28.7 percent.27 Given the consistency of

the underselling margins and the substitutability of domestic and imported products, we find significant

price underselling by subject imports from China and Mexico compared with the price of the domestic

like product.

We have also examined pricing trends. Prices for both the domestically-produced product and

subject imports increased during the period examined. Depending on the product in question,

weighted-average sales prices for the five U.S.-produced MCB products increased by 10.0 percent to 31.3

percent. Weighted-average sales prices for products imported from China also increased for four of the

five pricing products by 6.1 percent to 32.7 percent, and prices for two of the three products imported

from Mexico increased by *** percent to *** percent.28 Because prices for the domestic like product

generally increased during the period examined, we do not find that cumulated subject imports from

China and Mexico significantly depressed prices of the domestic like product.

We have also considered whether subject imports from China and Mexico suppressed prices of

the domestic like product to a significant degree. There is little indication that subject imports suppressed

domestic producer prices during the period examined, as changes in prices charged by the domestic

industry largely tracked changes in the industry's costs. During the period examined, the domestic

industry’s cost of goods sold (“COGS”) was largely affected by increases in raw material prices,

specifically the price of magnesia. For the three year period between 2007 and 2009, the industry’s

COGS to net sales ratio fluctuated and increased overall by a modest *** percentage points.29 On a per

unit basis, the domestic industry’s COGS increased from 2007 to 2009, primarily as a result of changes in

raw material costs.30 While the industry increased the unit value of its net sales in 2008, the increases

were not quite sufficient to offset rising costs. By 2009, however, the ratio of COGS to sales had

declined,31 and by the first quarter of 2010, unit COGS was lower than the 2008 and 2009 ratios. 

Moreover, we note that in the most recent period, January-March 2010, the industry reported its lowest

 23 CR at V-6, PR at V-3-V-4.

 24 Imports of product *** from China oversold domestically-produced MCBs in *** 2007 and in *** 2008. 

Imports of product *** from China oversold domestically-produced MCBs in *** 2007 and *** 2007. Imports of

product *** from Mexico oversold domestically produced MCBs in *** 2007. Imports of product *** oversold

domestically produced MCBs in *** 2007, and in *** 2008. In addition, imports of product *** from Mexico

oversold the domestically-produced product in *** 2009. CR/PR at Tables V-1-V-5.

 25 CR/PR at Table V-7, CR at V-18, PR at V-4. 

 26 CR/PR at Table V-7, CR at V-18, PR at V-11.

 27 Ibid. 

 28 CR/PR at Table V-6. 

 29 CR/PR at Tables VI-1a and C-1. The COGS-to-net-sales ratio was *** percent in 2007, *** percent in 2008,

*** percent in 2009, *** percent in interim 2009, and *** percent in interim 2010.

 30 CR/PR at Tables VI-1a, C-1, CR at VI-1, PR at VI-1. Unit COGS per ton was $*** in 2007, $*** in 2008,

$*** in 2009, $*** in interim 2009, and $*** in interim 2010. 

 31 Ibid. The unit value of net sales per ton was $*** in 2007, $*** in 2008, $*** in 2009, $*** in interim 2009,

and $*** in interim 2010. 

30
COGS to net sales ratio as a result of costs decreasing faster than net sales unit values.32 Based on the

record, we do not find that the domestic industry is currently experiencing a cost-price squeeze as a result

of significant underselling by subject imports. Therefore, we do not find that subject imports prevented

price increases, which otherwise would have occurred during the period examined, to a significant degree.

The lost sales and lost revenue data provide some support for the proposition that certain

purchasers are switching from domestic to subject sources based on price, but non-price factors seem to

be of primary importance to other purchasers.33 With regard to lost sales and lost revenue, of the 33 lost

sales allegations totaling $29.7 million and five lost revenue allegations totaling $448,827, *** lost sales

allegations were partially or completely confirmed (totaling $***) and *** lost revenue allegations ***

confirmed.34 Considering that the value of net sales for the domestic industry averaged about $*** per

year,35 the value of those confirmed allegations is not significant and does not indicate any unusual

pricing disadvantage experienced by the domestic industry in this competitive marketplace. Moreover,

the fact that *** lost revenue allegations were confirmed supports our conclusion that subject imports had

no price-suppressing effects. In particular, of the three responding U.S. producers, ***, only the smallest

producer, ***,36 reported that it had to either reduce prices or roll back announced price increases.37

Accordingly, although subject imports undersold the domestic product, the record does not

indicate that subject imports had any significant price suppressing or depressing effects. Thus, we

conclude that subject imports did not have a significant adverse effect on domestic prices during the

period examined. 

C. Impact of the Subject Imports on the Domestic Industry38

In examining the impact of subject imports, section 771(7)(C)(iii) of the Tariff Act provides that

the Commission “shall evaluate all relevant economic factors which have a bearing on the state of the

 32 The ratio of COGS to sales was lower in interim 2010, at *** percent, compared to interim 2009, at ***

percent. Ibid. 

 33 Information on the reasons for switching from domestic sources of supply to subject import sources differed

among purchasers. One purchaser that responded to the lost sales allegations reported that it shifted MCB purchases

from U.S. producers to subject imports from China in ***. CR at V-24, PR at V-13. One purchaser explained that it

began to source MCBs from China after its domestic supplier stated that it was not particularly interested in

supplying the purchaser with MCBs and would be focusing its business on other products. CR at V-26, PR at V-14. 

As a result, the purchaser reportedly paid *** percent more for MCBs from China. CR at V-27, PR at V-14.

 34 CR/PR at Tables V-8 and V-9. We note also that *** purchasers involved in the lost sales allegations

disagreed with the allegations. 

 35 CR/PR at Table VI-1a. Net sales values were $*** in 2007, $*** in 2008, and $*** in 2009. 

 36 CR/PR at Table III-1. 

 37 CR at V-20, PR at V-12. 

 38 We have considered the magnitude of the dumping margins found by Commerce. In its final determinations of

sales at LTFV, Commerce issued weighted-average LTFV margins ranging from 128.10 to 236.00 percent with

respect to imports from China, and 57.90 percent with respect to subject imports from Mexico. CR/PR at Tables I-2

and I-3. Commerce calculated final countervailable subsidy rates of 24.24 percent to 253.87 percent based on its

identification of the following government programs alleged in the petition to have provided countervailable

subsidies to producers of MCBs in China: VAT rebates on Purchases of Domestically Produced Equipment;

Location-Based Income Tax Reduction Programs for FIEs; Local Income Tax Exemption and Reduction Programs

for “Productive” FIEs; Income Tax Credits for FIEs Purchasing Domestically Produced Equipment; Provision of

Electricity for LATR; and Export Restraints on Raw Materials. CR/PR at Table 1-1, CR at I-5, 

PR at I-4. 

31
industry.”39 These factors include output, sales, inventories, ability to raise capital, research and

development, and factors affecting domestic prices. No single factor is dispositive and all relevant factors

are considered “within the context of the business cycle and conditions of competition that are distinctive

to the affected industry.”40

The domestic industry’s performance declined over the period examined according to most

measures. From 2007 to 2008, during a period of rising apparent U.S. consumption41 and with constant

production capacity, domestic MCB production decreased by 1.8 percent, resulting in a slight decline in

capacity utilization of 1.1 percentage points.42 Despite this decline in production, domestic producers

were able to increase the quantity and value of U.S. shipments43 and to decrease inventories as a ratio to

shipments.44 Although operating income remained positive, it declined, due principally to increases in the

cost of goods sold related to raw material price increases,45 and increases in selling, general and

administrative expenses.46 At the same time, despite a decline in the number of production and related

workers of 7.2 percent (or 8 workers), productivity increased by 3.4 percent.47

An unprecedented drop in demand occurred in the last quarter of 2008. As previously mentioned,

demand for MCBs depends greatly upon steel production.48 Raw steel production registered an increase

early in 2007 and remained at levels approaching ten million tons of steel produced per month until the

last quarter of 2008. Raw steel production then experienced a precipitous decline that reached its bottom

in early 2009.49 These dramatic changes in underlying demand resulted in a *** percent drop in domestic

MCB consumption from 2008 to 2009.50 Between the same years, domestic production decreased by

 39 19 U.S.C. § 1677(7)(C)(iii); see also SAA at 851 and 885 (“In material injury determinations, the Commission

considers, in addition to imports, other factors that may be contributing to overall injury. While these factors, in

some cases, may account for the injury to the domestic industry, they also may demonstrate that an industry is facing

difficulties from a variety of sources and is vulnerable to dumped or subsidized imports.”). 

 40 19 U.S.C. § 1677(7)(C)(iii); see also SAA at 851, 885; Live Cattle from Canada and Mexico, Inv. Nos. 701-

TA-386, 731-TA-812-813 (Preliminary), USITC Pub. 3155 at 25 n.148 (Feb. 1999).

 41 The quantity of apparent U.S. consumption rose from *** short tons in 2007 to *** short tons in 2008. CR/PR

at Table C-1. 

 42 U.S. producers’ capacity was 114,241 short tons in each full year of the period examined. Production was

73,552 short tons in 2007 and 72,258 short tons in 2008. Capacity utilization was 64.4 percent in 2007 and 63.3

percent in 2008. Domestic producers lost 1.2 percentage points of market share to subject imports in 2008. Ibid. 

 43 U.S. shipment quantities were 59,403 short tons in 2007 and 63,789 short tons in 2008. U.S. shipment values

were $62.6 million in 2007 and $76.6 million in 2008. CR/PR at Table C-1. The quantity of total net sales

registered a decrease from 2007 to 2008 as a result of a decline in the quantity of ***. *** totaled *** short tons in

2007 and *** in 2008. CR/PR at Table C-1. Exports accounted for *** percent of U.S. producers’ total shipments

in 2007, *** percent in 2008, *** percent in 2009, *** percent in interim 2009, and *** percent in interim 2010. 

CR/PR at Table III-3a. The decline in export shipments mirrored the decline in global crude steel production. 

CR/PR at Figure II-2, CR/PR at Table C-1. 

 44 CR/PR at Table C-1. The ratio of inventories to total shipments was *** percent in 2007, and *** percent in

2008. Ending inventories increased irregularly from 8.0 million short tons in 2007 to 7.3 million short tons in 2008

and to 8.6 million short tons in 2009. Such inventories were 8.5 million short tons in interim 2010 compared with

6.8 million short tons in interim 2009. CR/PR at Table C-1. 

 45 Per-ton raw material costs increased by 26.1 percent between 2007 and 2008 and by a further 8.4 percent in the

first quarter of 2009. CR/PR at Table V-1a. 

 46 Operating income was $*** in 2007 and $*** in 2008. The cost of goods sold increased from $*** in 2007 to

$*** in 2008 and selling, general and administrative expenses increased from $*** in 2007 to $*** in 2008. CR/PR

at Table VI-1a. 

 47 CR/PR at Table C-1. Productivity, measured in short tons per hour, was 307.7 in 2007 and 318.3 in 2008. 

 48 CR at II-14, PR at II-9. 

 49 CR/PR at Figure II-1. 

 50 CR/PR at Table C-1. 

32
30.8 percent, resulting in a decline in capacity utilization of 19.5 percentage points.51 The quantity and

value of U.S. shipments both declined and the ratio of inventories to shipments increased. Operating

income decreased but remained positive.52 The number of production related workers, hours worked, and

wages paid all declined.53 Unit labor costs per short ton increased as hourly wages rose and productivity

declined.54 

An examination of annual trends masks the changes that began in the second half of 2009. As a

result of improvements in underlying demand that began in April 2009,55 domestic MCB demand was

stronger in the second half of the year.56 Cumulated subject imports, which declined overall from their

2008 level, were concentrated in the second half of the year.57 Domestic production was also heavily

concentrated in the second half of the year.58 The domestic producers operating income changed from

*** in the first half of 2009, to *** in the second half of 2009, and the ratio of operating income to sales

changed from ***.59 

The improvement in MCB demand that began in April 2009 continued in the first quarter of

2010. U.S. consumption quantity was *** percent greater in interim 2010 than the level of consumption

one year earlier.60 Although subject import volume was *** percent greater, subject imports lost ***

percentage points of market share to the domestic industry in interim 2010.61 Domestic production was

82.2 percent higher and the rate of capacity utilization was 27.3 percentage points higher, as compared

with the first quarter of 2009.62 In addition, the quantity of U.S. shipments was 69.1 percent higher.63

The domestic industry’s employment indicators also demonstrated improvement in the most recent

period.64 In fact, the level of employment exceeded that of any full year for which data were collected.65

 51 Domestic production was 72,258 short tons in 2008 and 49,997 short tons in 2009. Capacity utilization was

63.3 percent in 2008 and 43.8 percent in 2009. CR/PR at Table C-1. From 2008 to 2009 the quantity of subject

imports fell but because this decline was less than the decline in the size of the U.S. market, the domestic producers

lost 7.4 percentage points of market share to subject imports. CR/PR at Table C-1. 

 52 CR/PR at Table VI-1a. 

 53 The number of production and related workers was 102 in 2008, and 92 in 2009. Hours worked totaled

227,000 in 2008, and 179,000 in 2009. Wages paid were $6.4 million in 2008, and $5.2 million in 2009. CR/PR at

Table C-1.

 54 Hourly wages steadily rose from $26.95 in 2007, to $28.28 in 2008, and to $29.05 in 2009. Productivity

initially increased from 307.7 short tons in 2007 to 318.3 short tons in 2008 before declining to 279.3 short tons in

2009. CR/PR at Table C-1.

 55 CR/PR at Figure II-1. 

 56 Based on questionnaire data that provided U.S. shipments of imports, apparent U.S. consumption was *** short

tons in January-June 2009 and *** short tons in July-December 2009. CR/PR at Table IV-3b. 

 57 Cumulated subject imports totaled *** short tons in January-June 2009 and nearly double that amount, ***

short tons in July-December 2009. CR/PR at Table IV-5b. 

 58 U.S. production was 17,576 short tons in January-June 2009 and 32,416 short tons in July-December of that

year. CR/PR at Table IV-5b. 

 59 CR/PR at Table VI-1b. 

 60 Apparent U.S. consumption was *** short tons in interim 2010, compared with *** short tons in interim 2009. 

CR/PR at Table C-1. 

 61 Ibid. 

 62 Production by U.S. producers was *** short tons in interim 2010, compared with *** short tons in interim

2009. Capacity utilization was 60.5 percent in interim 2010 and 33.2 percent in interim 2009. Ibid. 

 63 The quantity of U.S. shipments was 15,198 short tons in interim 2010, compared with 8,989 short tons in

interim 2009. Ibid. 

 64 Hours worked totaled 62,000 in interim 2010, and 39,000 in interim 2009. Wages paid were $1.8 million in

interim 2010, and $1.1 million in interim 2009. Ibid. 

 65 The number of production and related workers was 112 in interim 2010 and 83 in interim 2009. Ibid. 

33
We note further that the domestic industry experienced its *** operating income as a ratio to net sales in

***, while the volume of subject imports by quantity was increasing.66

In sum, we do not find a sufficient causal link between cumulated subject imports and the current

condition of the domestic industry. As discussed above, U.S. shipments increased in spite of increases in

subject imports and the market share held by such imports from 2007 to 2008. Operating income as a

share of net sales was positive in every year and the domestic industry’s *** operating income as a ratio

to net sales was achieved *** even as the volume of subject imports increased.67 As explained above, we

also do not find that subject imports had a significant adverse effect on domestic prices in the form of

price depression or price suppression, despite significant underselling. The domestic industry was able to

raise prices to cover most of its increased costs, even as subject imports increased. 

Accordingly, although indicators of the industry’s condition are generally unfavorable, the factors

described above indicate that the subject imports are not contributing significantly to the domestic

industry’s condition. Therefore, we find that the record does not demonstrate the requisite causal nexus

between the subject imports and the condition of the domestic industry. For these reasons we find that

subject imports are not having a significant adverse impact on the domestic industry. 

For the foregoing reasons, and based on the record in the final phase of these investigations, we

find that an industry in the United States is not materially injured by reason of imports of MCBs from

China that have been found by Commerce to be subsidized by the government of China and by imports of

MCBs from China and Mexico that have been found by Commerce to be sold in the United States at less

than fair value. 

II. THREAT OF MATERIAL INJURY

A. Cumulation

For a determination of threat of material injury by reason of subject imports, section 771(7)(H) of

the Tariff Act of 1930 provides that to the extent practicable, the Commission may cumulatively assess

the volume and price effects of imports of the subject merchandise from all countries with respect to

which – 

(i) petitions were filed under section 1671a(b) or 1673a(b) of this title on the same

day.

(ii) investigations were initiated under section 1671a(a) or 1673a(a) of this title on

the same day, or

(iii) petitions were filed under section 1671a(b) or 1673a(b) of this title and

investigations were initiated under section 1671a(a) or 1673a(a) of this title on

the same day, if such imports compete with each other and with domestic like

products in the United States market.68

Cumulation for determining threat of material injury, in contrast to cumulation for material

injury, is within the discretion of the Commission. In exercising that discretion, the Commission has

 66 CR/PR at Tables IV-2a, C-1. The domestic industry’s operating income as a ratio to net sales was *** in

interim 2010, compared with *** in interim 2009. The quantity of cumulated subject imports was *** short tons in

interim 2010, compared with *** short tons in interim 2009. 

 67 CR/PR at Table C-1. If the domestic industry maintains the rate of shipments that it reported in the first quarter

of 2010, (15,198 short tons), it can be expected to ship 60,792 short tons in the full year 2010, a quantity that

exceeds the amount shipped in 2007 and 2009. 

 68 19 U.S.C. 1677(7)(H) (emphasis added).

34
traditionally considered factors such as (1) whether the imports are increasing at similar rates in the same

markets, (2) whether the imports have similar margins of underselling, and (3) the probability that imports

will enter the United States at prices that would have a depressing or suppressing effect on domestic

prices of that merchandise.69 In these investigations, examination of these and other factors lead us to

conclude that we should not exercise our discretion to cumulate subject imports from China with subject

imports from Mexico.

First, subject imports from China and Mexico are not increasing at similar rates in the U.S.

market. Although shipments of subject imports from both China and Mexico increased overall during the

three calendar years of the period examined, significant differences exist in the trends between years. In

particular, between 2007 and 2008, shipments of imports from China, already at a high level, increased

markedly by 21.4 percent, while over that period, shipments of imports from Mexico, which were at a

much lower level, actually declined slightly.70 Subsequently, between 2008 and 2009, the trends were

different as well, with shipments of imports from China falling notably, whereas shipments of imports

from Mexico nearly doubled.71 Second, data on actual prices and shipment unit values indicate that,

generally, imports from Mexico were sold at a price point that was higher than the prices of imports from

China.72 73

Third, although we agree with our colleagues that there was sufficient geographic overlap

between the subject imports for purposes of cumulating such imports in determining whether present

material injury exists, we note that, nonetheless, imports from Mexico were significantly more

concentrated geographically than were imports from China. A substantial majority (74 percent) of

imports from Mexico were concentrated in the Southeast and Central Southwest regions of the United

States (and none in the Pacific region), whereas imports from China were shipped by ocean vessel to both

the east and west coasts, as well as to the north central region of the country.74

Finally, the record indicates that the Chinese and Mexican industries would be differently

motivated when considering whether to ship to the United States in the imminent future. Between 2007

and 2009, the Chinese industry, which was many times larger than the Mexican industry to begin with,

 69 See Torrington Co. v. United States, 790 F. Supp. 1161, 1172 (Ct. Int’l Trade 1992) (affirming Commission’s

determination not to cumulate for purposes of threat analysis when pricing and volume trends among subject

countries were not uniform and import penetration was extremely low for most of the subject countries), aff’d

without opinion, 991 F.2d 809 (Fed. Cir. 1993); Metallverken Nederland B.V. v. United States, 728 F. Supp. 730,

741-42 (Ct. Int’l Trade 1989); Asociacion Colombiana de Exportadores de Flores v. United States, 704 F. Supp.

1068, 1072 (Ct. Int’l Trade 1988).

 70 CR/PR at Table IV-3a. Shipments of imports from China increased from *** short tons in 2007 to *** short

tons in 2008. By contrast, shipments of imports from Mexico declined from *** short tons in 2007 to *** short tons

in 2008, or by *** percent. 

 71 CR/PR at Table IV-3a. Shipments of imports from China declined sharply from *** short tons in 2008 to ***

short tons in 2009, or by *** percent. Shipments of imports from Mexico rose sharply from *** short tons in 2008

to *** short tons in 2009, or by *** percent.

 72 CR/PR at Figures V1-V-5. For example, in 2009 the unit value of shipments of imports from China was

$1,018 per ton, and that of shipments of imports from Mexico was $*** per ton. This relationship among the two

sources remained the same throughout the three calendar years of the period examined. CR/PR at Table C-1. 

 73 Although pricing comparisons for imports from Mexico are fewer owing to the low volume of imports from

Mexico during the period, margins of underselling were more sporadic and generally smaller for imports from

Mexico than for imports from China. Overall, for imports from Mexico, underselling occurred in 18 of 26 quarters,

or 69 percent of the time, as opposed to imports from China that undersold in 59 of 65 quarters, or 91 percent of the

time. CR/PR at Table V-7. Where imports from Mexico were sold in significant volumes (e.g., product 4 in

calendar year 2009), underselling margins were less than 10 percent. CR/PR at Table V-4. 

 74 Prehearing brief of RHI-Refmex S.A. de C.V., RHI Refractories Liaoning Co., Ltd. and Veitsch-Radex

America, Inc. (“RHI Respondents’ Prehearing Brief”) at Exhibit 4; CR at IV-7, PR at IV-4.

35
grew rapidly.75 As Chinese production grew, home market shipments declined and export shipments

increased.76 The Mexican industry, on the other hand, which was limited to a single firm (Refmex), did

not add significantly to its capacity during the period examined, adding only *** tons of capacity between

2007 and 2008 in response to growing home market demand.77 In addition, unlike Mexico, China faces

significant barriers to its MCB exports, in the form of antidumping duties, in important non-U.S. markets,

such as Turkey and the European Union.78 Further, the record indicates that Refmex has more incentive

to ship to its home market than to the U.S. market because, during the period examined, operating

margins were consistently higher on its Mexican sales than on its U.S. sales.79 A similar conclusion

cannot be drawn, however, for the Chinese industry, as the record lacks conclusive evidence on demand

conditions and price levels in the Chinese home market.80

Accordingly, these differing trends in import volumes, and distinctions in pricing strategies,

industry size, geographic concentration of imports, and incentive to ship to the U.S. market indicate that,

in the absence of antidumping and countervailing duty orders in these investigations, imports from subject

sources would likely compete differently in the U.S. market. Thus, in determining whether an industry in

the United States is threatened with material injury by reason of subject imports, we do not exercise our

discretion to cumulate subject imports from China with subject imports from Mexico, and conduct

separate threat of material injury analyses regarding each of these subject countries.

B. Threat of Material Injury By Reason of Subject Imports

Section 771(7)(F) of the Tariff Act directs the Commission to determine whether the U.S.

industry is threatened with material injury by reason of the subject imports by analyzing whether “further

dumped or subsidized imports are imminent and whether material injury by reason of imports would

occur unless an order is issued or a suspension agreement is accepted.”81 The Commission may not make

such a determination “on the basis of mere conjecture or supposition,” and considers the threat factors “as

a whole” in making its determination whether dumped or subsidized imports are imminent and whether

material injury by reason of subject imports would occur unless an order is issued.82 In making our

determinations, we consider all statutory threat factors that are relevant to these investigations.83 

 75 Reported Chinese capacity increased from 369,485 short tons in 2007 to 538,700 short tons in 2009, an

increase of 45.8 percent. CR/PR at Table VII-1. 

 76 Reported Chinese capacity increased from 369,485 short tons in 2007 to 538,700 short tons in 2009, an

increase of 45.8 percent. Reported Chinese total export shipments increased from 205,873 short tons in 2007 to

219,772 short tons in 2009 and home market shipments declined from 38,983 short tons in 2007 to 32,061 short tons

in 2009. CR/PR at Table VII-1. 

 77 The capacity of the Mexican producer increased from *** short tons in 2007 to *** short tons in 2008, and then

remained at that level in 2009. CR/PR at Table VII-2.

 78 CR at VII-12, PR at VII-6.

 79 Posthearing brief of RHI-Refmex S.A. de C.V., RHI Refractories Liaoning Co., Ltd. and Veitsch-Radex

America, Inc. (“RHI Respondents’ Posthearing Brief) at Exhibit J.

 80 See, e.g., RHI Respondents’ Prehearing Brief at Exhibit 29 (Chinese demand for steel expected to grow by 5 to

8 percent in 2010, but down from 19 percent in the first nine months of 2009); Resco’s Posthearing Brief at Exhibit

11 (documenting steel price declines in China).

 81 19 U.S.C. § 1677(7)(F)(ii).

 82 Ibid.

 83 These factors are as follows:

(I) if a countervailable subsidy is involved, such information as may be presented to it by the administering

authority as to the nature of the subsidy (particularly as to whether the countervailable subsidy is a subsidy

described in Article 3 or 6.1 of the Subsidies Agreement) and whether imports of the subject merchandise

are likely to increase,

36
1. Threat of Material Injury By Reason of Subject Imports From China

The volume of subject imports from China was substantial throughout the period examined, first

increasing from 34,613 short tons in 2007 to 41,701 short tons in 2008, before declining to slightly below

its 2007 level in 2009.84 By 2009, subject imports from China had captured substantial market share

from the domestic industry and nonsubject imports as the market shares of those sources declined.85 The

domestic industry’s overall loss of market share to subject imports was due primarily to the rapid increase

in subject imports from China, as the overall presence in the market of subject imports from China

increased by 8.3 percentage points over the three calendar years.

With regard to current production capacity for MCBs in China, we note first that the

Commission’s coverage of the Chinese industry, which is by far the largest MCB industry in the world, is

not appreciably better than the coverage in the preliminary phase of these investigations. Of the 35 firms

identified by the petitioner as producing MCBs in China, the Commission received data from only

seven.86 Although these firms’ responses, based on their own estimates, accounted for approximately ***

of Chinese exports to the United States in 2009, they also accounted for only *** percent of total Chinese

capacity, based on 2008 data.87 As a result, record data on excess capacity in the Chinese industry are

likely considerably understated.88 

(II) any existing unused production capacity or imminent, substantial increase in production capacity in the

exporting country indicating the likelihood of substantially increased imports of the subject merchandise

into the United States, taking into account the availability of other export markets to absorb any additional

exports,

(III) a significant rate of increase of the volume or market penetration of imports of the subject merchandise

indicating the likelihood of substantially increased imports,

(IV) whether imports of the subject merchandise are entering at prices that are likely to have a significant

depressing or suppressing effect on domestic prices and are likely to increase demand for further imports,

(V) inventories of the subject merchandise,

(VI) the potential for product-shifting if production facilities in the foreign country, which can be used to

produce the subject merchandise, are currently being used to produce other products;

(VIII) the actual and potential negative effects on the existing development and production efforts of the

domestic industry, including efforts to develop a derivative or more advanced version of the domestic like

product, and ,

(IX) any other demonstrable adverse trends that indicate the probability that there is likely to be material

injury by reason of imports (or sale for importation) of the subject merchandise (whether or not it is actually

being imported at the time).

19 U.S.C. § 1677(7)(F)(i). This investigation does not involve an agricultural product, so statutory threat factor

(VII) is not implicated. As no one has argued that the domestic industry is currently engaging or will imminently

engage in any efforts to develop a derivative or more advanced version of the domestic like product, statutory threat

factor (VIII) is not implicated.

 84 CR/PR at Table IV-2a. During the first three months of 2010, subject imports were*** short tons compared

with *** short tons during the same period in 2009. Ibid. 

 85 The market share of subject imports from China increased from *** percent in 2007 to *** percent in 2009. 

During that same period, the market share of domestic producers declined from *** percent to *** percent and the

market share of nonsubject imports fell from *** percent to *** percent. CR/PR at Table C-1.

 86 CR at VII-3, PR at VII-2. 

 87 Ibid. 

 88 The RHI respondents argued that the data the Commission received were from the subset of Chinese firms that

exported to the United States during the period examined, and implied that the remaining firms, given that they were

not export-oriented, had little incentive to respond to the Commission’s questionnaire. RHI Respondents’

Posthearing Brief, Appendix at p. 37. Whether or not these firms were export-oriented, we note that because these

firms did not respond to the questionnaire, we lack information on the amount of excess capacity of these firms, and

37
Based on data from the firms that did respond to the questionnaire, reported Chinese production

capacity rose markedly during the period examined, increasing over *** percent between 2007 and 2008,

and is expected to continue to rise significantly in 2011.89 Responding firms, moreover, reported

substantial excess capacity; in 2009, they operated at a capacity utilization rate of only 46.7 percent; thus,

they had excess capacity of approximately 287,000 short tons,90 the equivalent of more than three times

total U.S. consumption in 2009. Moreover, due to the low response rate among Chinese producers, our

data on the excess capacity of the Chinese industry are likely significantly understated. 

In addition, available data indicate that the Chinese industry became more export-oriented during

the period examined. Despite the existence of a rapidly growing steel industry in China, between 2007

and 2009 the share of shipments of the responding Chinese producers going to the home market declined

steadily, with exports accounting for more than 87 percent of shipments in 2009.91 Although the U.S.

market accounted for a relatively small share of total export shipments by reporting firms (around 10

percent), we note that, since 2007, the Chinese industry has become subject to antidumping duty orders in

the European Union and in Turkey.92 Thus, going forward, the U.S. market will likely be relatively more

attractive to the Chinese industry than alternative export markets.93 Further, with regard to inventories

held in the United States by U.S. importers, such inventories, although they did not increase appreciably

between 2007 and 2009, were substantial in relation to preceding-period shipments and apparent U.S.

consumption.94 Finally, there is a significant potential for product shifting within the Chinese industry, as

six of the seven responding firms noted that they produced, or had the capability of producing, other

products on the same equipment and machinery used to produce MCBs.95

Accordingly, we find that the substantial volume of imports from China during the period

examined, significant levels of excess capacity in the Chinese industry (particularly compared with the

size of the U.S. market), the industry’s increasing focus on export markets, the high level of inventories

held in the United States, the presence of barriers to Chinese exports in important third country markets,

and a potential for product shifting, indicate the likelihood of substantially increased subject imports in

the absence of import relief.

With regard to likely price effects, we evaluate the likely underselling and price effects in light of

key conditions of competition in the U.S. market. First, as noted supra, the record suggests that price is

thus their theoretical ability to increase production of MCBs.

 89 Reported capacity in China increased from 369,485 short tons in 2007 to 538,808 short tons in 2008, before

remaining virtually constant in 2009. Reported capacity is expected to increase slightly to 549,452 short tons in

2010, and increase again more substantially to 636,862 short tons in 2011. CR/PR at Table VII-1.

 90 Ibid. 

 91 The share of home market shipments in total shipments by reporting Chinese producers declined from 15.9

percent in 2007 to 12.7 percent in 2009. At the same time, the share of export shipments in total shipments increased

from 83.9 percent in 2007 to 87.1 percent in 2009. These ratios are not projected to change significantly in 2011

from their 2009 levels. Ibid. 

 92 CR at VII-12, PR at VII-6.

 93 Responding producers noted that, besides the European Union, they sold to 20 other export destinations during

the period examined. CR at VII-4, n.11; PR at VII-3, n.11. The record lacks evidence, however, as to the relative

volumes sold to these markets compared with the European market, demand conditions in those markets, or price

levels in those markets, that would permit us to determine whether these markets would be attractive destinations for

Chinese exporters compared with the U.S. market.

 94 U.S. importers’ end-of-period inventories of imports from China increased from 20,677 short tons in 2007 to

21,137 short tons in 2009. The 2009 total was 63.9 percent of preceding-period U.S. shipments and was *** percent

of apparent U.S. consumption. CR/PR at Tables VII-3 and C-1.

 95 CR at VII-6, PR at VII-3.

38
an important factor in purchasing decisions.96 This suggests that subject imports from China are at least

moderately substitutable with the domestic like product.97 Second, as measured by apparent U.S.

consumption, demand for MCBs rose moderately between 2007 and 2008, but then dropped sharply, by

*** percent, in 2009. Consumption was markedly higher in interim 2010 than in interim 2009;98

however, the data suggest that the MCB market may have recovered faster than the raw steel market.99 

We have found that subject imports from China undersold domestic MCBs to a significant degree

and that, notwithstanding this underselling, prices for the domestic like product were not depressed or

suppressed during the period examined. Thus, as explained above, we determine that subject imports did

not have a significant adverse effect on domestic prices during the period examined. Nonetheless, we

have found that, among other factors, the substantial excess capacity in the Chinese industry and its

consistent and increasing focus on export markets during the period examined indicate the likelihood of

increased subject imports in the absence of import relief. We find that it is likely that given that (1)

Chinese MCBs are consistently priced below the domestic like product, (2) price is an important factor in

purchasing decisions, and (3) underselling margins generally increased toward the end of the period

examined (at least until the petitions were filed), U.S. purchasers would likely purchase subject imports

from China in preference to the domestic like product and this purchasing pattern would likely result in

price depression and/or price suppression.100 Consequently, in light of consistent underselling and the

price sensitivity of the domestic like product, we determine that imports of the subject merchandise are

entering at prices that are likely imminently to have a significant depressing or suppressing effect on

domestic prices in a market where U.S. demand is beginning to recover, and that such prices are likely to

increase demand for further imports. 

Finally, we note that in the preliminary phase of these investigations we determined that the

domestic industry was vulnerable to material injury from likely substantially increased volumes of subject

imports from China, because the market conditions that had allowed the domestic industry to avoid such

injury during the period examined had deteriorated. Those market conditions have now improved

sufficiently so that we can no longer make that determination. In particular, as noted above, MCB

consumption has begun to recover from its low point in calendar year 2009. MCB consumption was

nearly *** percent higher in the first quarter of 2010 than in the comparable period of 2009 and, if

annualized such consumption would slightly exceed consumption in 2008, which was the peak year of the

period examined.

 96 CR/PR at Table II-3, CR at II-20-II-24, PR at II-13-II-16. Nineteen out of 20 responding purchasers reported

that price was “very important” in their purchasing decisions. The same proportion of purchasers reported that it

was “very important” that product quality met industry expectations. Purchasers were unanimous in reporting that

reliability of supply was “very important” in their purchasing decisions. 

Resco indicated that price is an important, and many times the only, factor that customers consider when

making their purchasing decisions. According to Resco, the market price is not the deciding factor for less than 30

percent of its customers. Respondents indicated that while price is important to their customers, their customers are

more concerned with finding suppliers who bring new ideas and new abilities through technology and service to

lower their costs of producing steel. CR at II-24, PR at II-16. 

 97 CR at II-19, PR at II-13. The final staff report suggests that there is a high degree of substitutability between

domestically produced MCB and MCB imported from China. 

 98 Apparent U.S. consumption first increased markedly from *** short tons in 2007 to *** short tons in 2008, and

then declined sharply to *** short tons in 2009. Apparent U.S. consumption was *** short tons in January-March

2010 compared with *** short tons in January-March 2009. CR/PR at Table C-1.

 99 CR/PR at Figures II-1, II-2, CR at II-14, PR at II-9. 

 100 Between the third quarter of 2008 and the third quarter of 2009, underselling margins of imports from China

increased for four of the five products examined. CR/PR at Tables V-1 through V-5. The petitions in these

investigations were filed in July 2009.

39
Although to some extent the improving demand environment makes the industry appear less

vulnerable than it was in the preliminary phase, there are still troubling signs that indicate that the likely

increased volumes of low-priced subject imports from China would nonetheless have a significant impact

on the domestic MCB industry. First, as noted above, the fortunes of the MCB industry are very closely

linked to the health of the U.S. steel industry. In that regard, it is significant that, although MCB

consumption has begun to recover to pre-recession levels, raw steel production has not yet regained its

levels of 2007 and 2008, and anecdotal evidence on the prospects for a full recovery in the steel industry

is mixed at best.101 Moreover, inventories of Chinese product were significant in relation to precedingperiod U.S. shipments throughout the period, particularly in 2009.102 Finally, to the extent the demand

environment for MCBs continues to improve, this will likely provide further incentive for Chinese

exporters to increase their shipments to the U.S. market and continue to undersell significantly the

domestic like product in the absence of import relief. In that event, the domestic industry would likely

experience significantly reduced profitability due to significantly depressed or suppressed prices as well

as reduced production, shipments, market share, and employment.

 In considering whether the domestic industry is threatened with material injury by reason of

subject imports from China, we have also considered the extent to which other factors are likely to

contribute to future injury in order to ensure that we do not attribute future injury from other factors to

subject imports. In this final phase of these investigations, we have examined the role of nonsubject

imports in the U.S. MCB market. Nonsubject imports are not a significant factor in the MCB market,

inasmuch as during the period examined they never exceeded *** percent of the U.S. market and their

volumes declined in both absolute volume and market share.103 Thus, we conclude that, in the imminent

future, nonsubject imports would not capture market share from the domestic industry to the same extent

as subject imports from China. Similarly, for reasons outlined below we conclude that, in the imminent

future, subject imports from Mexico would not capture market share from the domestic industry to the

same extent as subject imports from China.

Consequently, we find that there is a causal nexus between subject imports from China and a

likely imminent adverse impact on the domestic industry, which demonstrates that the domestic MCB

industry is threatened with material injury by reason of subject imports from China.

2. No Threat of Material Injury By Reason of Subject Imports From Mexico

Based on an evaluation of the statutory threat factors that are relevant to these investigations, we

determine that the domestic industry producing MCBs is not threatened with material injury by reason of

subject imports from Mexico.

We do not find that subject imports of MCBs from Mexico entered the United States during the

period examined at such a significant rate of increase in volume or market share to indicate the likelihood

of substantially increased imports. We have found that the volume and market share of cumulated subject

imports are significant in absolute terms and relative to apparent U.S. consumption and production. But,

as discussed below, although subject imports from Mexico increased from 2008 to 2009, and in interim

 101 CR/PR at Figure II-1; Resco’s Prehearing Brief at Exhibit 19.

 102 U.S. importers’ end-of-period inventories of imports from China increased from 20,677 short tons in 2007 to

21,137 short tons in 2009. The 2009 total was 63.9 percent of preceding-period U.S. shipments and was *** percent

of apparent U.S. consumption. CR/PR at Tables VII-3 and C-1.

 103 U.S. shipments of imports from nonsubject sources declined from *** short tons in 2007 to *** short tons in

2008, and then increased only slightly, to *** short tons, in 2009. Their market share declined from *** percent in

2007 to *** percent in 2008, before recovering to *** percent in 2009, for an overall decline of *** percentage

points. CR/PR at Table C-1.

40
2010 when compared to interim 2009,104 we do not expect such imports to increase in the imminent future

so as to constitute a threat of material injury.

Subject imports from Mexico were present in the U.S. market at a stable level and accounted for a

small share of U.S. consumption in both 2007 (*** short tons; *** percent share) and 2008 (*** short

tons; *** percent share.)105 In 2009 and interim 2010, subject imports from Mexico increased from these

lower levels, to capture shares of ***. Petitioner argued that these trends indicate that the Mexican

industry became increasingly export- oriented during the period examined.106 The Mexican producer

Refmex explained that this increase in the second half of 2009 and early 2010 was due to the need to

supply certain customers temporarily with Mexican MCBs until both Chinese and European product

produced by related companies could be approved by those customers.107 Accordingly, we do not find

that the events of late 2009 and early 2010 presage a future surge in subject imports from Mexico. 

Moreover, data suggest that the industry in Mexico is not especially export-oriented, with U.S. exports

accounting for *** percent and *** percent of total shipments in 2007 and 2008, increasing to ***

percent in 2009. Interim 2010 shipments showed a slight decline, at *** percent, compared to interim

2009, at *** percent. Projections are for the share going to the U.S. market to decline markedly, which is

consistent with record evidence that the Mexican industry faces more favorable market conditions in its

home market.108

Current production capacity for MCBs in Mexico, accounted for by the sole producer Refmex,

totaled *** short tons in 2008 and 2009. While it is projecting a small increase in production in 2010

over 2009, at *** short tons compared to *** short tons in 2009, the company is also reporting that its

capacity to produce MCBs will decrease to approximately *** short tons in 2010 and 2011.109 While we

have placed only limited weight on this projection, given the theoretical ability of Refmex to shift

capacity between subject and nonsubject products, we do not find that this excess capacity will enter the

U.S. market in significant volumes in the imminent future. We note that Refmex’s order books for 2010

and early 2011 suggest strong and growing home market demand in the steel, cement, and other

industries, a trend we find likely to continue in the imminent future.110

Petitioners have also argued that an order on subject imports from China in the absence of one on

subject imports from Mexico would create a scenario in which RHI would ship larger quantities of MCBs

from Mexico to the United States and fill the resulting gap in the Mexican market with product from its

related production facilities in China.111 We do not find evidence that any such action is imminent. Aside

from petitioner’s speculation, the record contains no evidence that it would make economic sense for RHI

to incur double shipping costs - China to Mexico and Mexico to United States - and RHI has provided

credible evidence that it would be more economical to serve the U.S. market from its European plants.112

104 CR/PR at Table IV-3a. 

105 CR/PR at Table C-1.

106 Resco’s Posthearing Brief at p. 13, (brief cites to Hearing Transcript at 258:4-7, generally). 107 CR at VII-8, n. 24; PR at VII-5, n. 24. ***.

 108 RHI Respondents’ Posthearing Brief , p. 25.

 109 CR/PR at Table VII-2. Refmex produces both MCBs and other magnesia-based products in its plant such as

bricks for the cement industry. Hearing transcript, p. 174 (Beschel). Production of the subject MCBs accounts for

under ** percent of total production at that plant. CR at VII-7 and n. 15, PR at VII-5, and n. 15

 110 RHI Respondents’ Posthearing Brief, pp. 23-24.

 111 Resco’s Prehearing Brief, p. 45, Hearing transcript, pp. 54-55, 82-84.

 112 Hearing transcript, pp. 219-221, and RHI Respondents’ Postbearing Brief, pp. 26-30. RHI has four MCB

production plants located in Austria and Germany. RHI’s European MCB operations are reported to account for

***. CR at VII-13, PR at VII-8. According to RHI, these plants are operating at between *** percent capacity

utilization, and lead times are between *** weeks, as opposed to *** weeks for RHI’s MCB producers in China and

Mexico. RHI Respondents’ Posthearing Brief, Appendix, p. 33. 

41
Further, RHI is the sole domestic supplier in Mexico and is located near its principal customers, an

advantage that would be lost if imports from China were to supplant Mexican production.113

Given the circumstances under which the increase in subject imports occurred, no evidence of an

imminent increase in capacity or a change away from its home market focus, and no indication that

Refmex is likely to shift shipments of Chinese MCBs to and from the Mexican market in the absence of

an antidumping duty order on subject imports from Mexico, we conclude that the volume of subject

imports from Mexico is not likely to increase substantially in the imminent future.

We recognize that subject imports from Mexico undersold the domestic like product in 18 of 26

possible comparisons with margins of up to 28.7 percent.114 However, despite the significant

underselling, as noted above we have found that because domestic prices increased during the period

examined, and changes in domestic producers’ prices closely tracked increases in the cost of goods sold

(largely reflecting higher raw material prices for magnesia), subject imports did not significantly depress

or suppress prices of the domestic like product. Given the generally low volume of imports from Mexico

and our finding that significant increased imports from Mexico are not imminent, we find that the record

does not support a finding of likely significant price effects in the imminent future by reason of subject

imports from Mexico.

In evaluating the likely impact on the domestic industry of the subject imports from Mexico, we

take into consideration that we do not find the domestic industry to be vulnerable or that cumulated

subject imports are currently having a significant adverse impact on the domestic industry. Thus, we

cannot conclude that any change is imminent that would cause the small volume of subject imports from

Mexico entering at prices that undersell but do not suppress or depress prices for domestic MCBs in the

U.S. market to have a likely imminent adverse impact on the domestic industry.

In light of these considerations, we conclude that the domestic industry is not threatened with

material injury by reason of subject imports from Mexico.

 113 Ibid. We note that the domestic producer Resco also argued that RHI could move production equipment to

Mexico (Hearing transcript, p. 267 (Mazard), an action that we do not find plausible in the imminent future given the

costs and other impracticalities detailed by RHI. RHI Respondents’ Postbearing Brief, p. 11, Appendix A, pp. 33-

34, Exhibit C, Hearing transcript, p. 194 (Beschel).

 114 CR/PR at Table V-7, CR at V-18, PR at V-11.

42
PART I: INTRODUCTION

BACKGROUND

These investigations result from a petition filed on July 29, 2009, with the U.S. Department of

Commerce (“Commerce”) and the U.S. International Trade Commission (“USITC” or “Commission”) by

Resco Products Inc., (“Resco”) Pittsburgh, PA. The petition alleges that an industry in the United States

is materially injured and threatened with material injury by reason of subsidized and less-than-fair-value

(“LTFV”) imports of certain magnesia carbon bricks (“MCBs”)1

 from China and by reason of LTFV

imports of MCBs from Mexico. Information relating to the background of the investigations is provided

below.2

Effective date Action

July 29, 2009 Petition filed with Commerce and the Commission; institution of the

Commission's investigation

August 19, 2009 Commerce’s notices of initiation

September 14, 2009 Commission’s preliminary determinations

December 23, 2009 Commerce’s preliminary negative countervailing duty determination 

March 11, 2010 Commerce’s preliminary antidumping duty determination (Mexico)

March 12, 2010 Commerce’s preliminary antidumping duty determination (China)

April 23, 2010 Commission’s scheduling of its final phase investigations (75 FR 21346)

July 27, 2010 Commission’s hearing1

August 2, 2010 Commerce’s final antidumping and countervailing duty determinations 

(China LTFV, 75 FR 45468), (China CVD, 75 FR 45472), 

(Mexico, 75 FR 45097)

August 26, 2010 Commission’s vote

September 7, 2010 Commission’s determination to Commerce

 1 App. B is contains the list of witnesses appearing at the hearing.

 1 See the section entitled “The Subject Merchandise” in Part I of this report for a complete description of the

merchandise subject to these investigations.

 2 Federal Register notices cited in the tabulation are presented in app. A.

I-1
STATUTORY CRITERIA AND ORGANIZATION OF THE REPORT

Statutory Criteria

Section 771(7)(B) of the Tariff Act of 1930 (the “Act”) (19 U.S.C. § 1677(7)(B)) provides that in

making its determinations of injury to an industry in the United States, the Commission--

shall consider (I) the volume of imports of the subject merchandise, (II)

the effect of imports of that merchandise on prices in the United States

for domestic like products, and (III) the impact of imports of such 

merchandise on domestic producers of domestic like products, but only

in the context of production operations within the United States; and. . .

may consider such other economic factors as are relevant to the

determination regarding whether there is material injury by reason of

imports.

Section 771(7)(c) of the Act (19 U.S.C. § 1677(7)(c)) further provides that--

In evaluating the volume of imports of merchandise, the Commission

shall consider whether the volume of imports of the merchandise, or any

increase in that volume, either in absolute terms or relative to production

or consumption in the United States is significant.

. . .

In evaluating the effect of imports of such merchandise on prices, the

Commission shall consider whether . . . (I) there has been significant

price underselling by the imported merchandise as compared with the

price of domestic like products of the United States, and (II) the effect of

imports of such merchandise otherwise depresses prices to a significant

degree or prevents price increases, which otherwise would have

occurred, to a significant degree.

. . .

In examining the impact required to be considered under subparagraph

(B)(i)(III), the Commission shall evaluate (within the context of the

business cycle and conditions of competition that are distinctive to the

affected industry) all relevant economic factors which have a bearing on

the state of the industry in the United States, including, but not limited to

. . . 

(I) actual and potential declines in output, sales, market share, profits,

productivity, return on investments, and utilization of capacity, (II)

factors affecting domestic prices, (III) actual and potential negative

effects on cash flow, inventories, employment, wages, growth, ability to

raise capital, and investment, (IV) actual and potential negative effects

on the existing development and production efforts of the domestic

industry, including efforts to develop a derivative or more advanced

version of the domestic like product, and (V) in {an antidumping

investigation}, the magnitude of the margin of dumping.

I-2
Organization of the Report

Part I of this report presents information on the subject merchandise, subsidies and dumping

margins, and domestic like product. Part II of this report presents information on conditions of

competition and other relevant economic factors. Part III presents information on the condition of the

U.S. industry, including data on capacity, production, shipments, inventories, and employment. Parts IV

and V present the volume and pricing of imports of the subject merchandise, respectively. Part VI

presents information on the financial experience of U.S. producers. Part VII presents the statutory

requirements and information obtained for use in the Commission’s consideration of the question of threat

of material injury, as well as information regarding nonsubject countries.

U.S. MARKET SUMMARY

MCBs generally are used to provide thermal and corrosion resistance in a variety of settings,

primarily in the production of iron and steel. The leading U.S. producers of MCBs are ANH, Magnesita

Refractories (“Magnesita”) (previously reporting as LWB Refractories (“LWB”)), and Resco, while

leading producers of MCBs outside the United States include Mayerton Refractories, RHI Refractories

Liaoning, Wonjin Worldwide, and Yingkou Bayuquan of China and RHI-Refmex (“Refmex”) of Mexico. 

The leading U.S. importers of MCBs from China are Veitsch-Radex America, Inc., Fedmet, ANH, and

Mayerton, while the leading importer of MCBs from Mexico is Veitsch-Radex. Leading importers of

MCBs from nonsubject countries (primarily Austria, Germany, and the Slovak Republic) include VeitschRadex and U.S. Steel. 

Apparent U.S. consumption of MCBs totaled approximately *** short tons ($***) in 2009. 

Currently, four firms are known to produce MCBs in the United States. U.S. producers’ U.S. shipments

of MCBs totaled 42,243 short tons ($53.9 million) in 2009, and accounted for *** percent of apparent

U.S. consumption by quantity and *** percent by value. U.S. shipments of imports from subject sources

totaled 36,552 short tons ($37.4 million) in 2009 and accounted for *** percent of apparent U.S.

consumption by quantity and *** percent by value. U.S. imports from nonsubject sources totaled ***

short tons ($***) in 2009 and accounted for *** percent of apparent U.S. consumption by quantity and

value.

SUMMARY DATA AND DATA SOURCES

A summary of data collected in the investigations is presented in appendix C, table C-1. Except

as noted, U.S. industry data are based on questionnaire responses of three firms that accounted for ***

percent of U.S. production of MCBs during 2009. U.S. imports from China are based on questionnaire

responses from 12 firms that accounted for approximately *** percent of Chinese MCB imports. U.S.

imports from Mexico are based on one firm that accounted for approximately 100 percent of Mexican

MCB imports. Data regarding the Chinese industry are based on seven foreign producer questionnaire

responses that accounted for *** percent of Chinese MCB production. Data regarding the Mexican

industry are based on one foreign producer questionnaire response that accounted for 100 percent of

Mexican MCB production. Information with respect to other foreign industries is drawn from public

sources.

PREVIOUS AND RELATED TITLE VII INVESTIGATIONS

MCBs have not been the subject of any prior countervailing/antidumping duty investigations in

the United States.

I-3
NATURE AND EXTENT OF SUBSIDIES AND SALES AT LTFV

Subsidies

On August 2, 2010, Commerce published a notice in the Federal Register of its final affirmative 

determination of countervailable subsidies for producers and exporters of MCBs from China.3

 In its

notice, Commerce identified the following government programs alleged in the petition to have provided

countervailable subsidies to producers of MCBs in China:

! VAT Rebates on Purchases of Domestically Produced Equipment

! Location-Based Income Tax Reduction Programs for FIEs

! Local Income Tax Exemption and Reduction Programs for “Productive” FIEs

! Income Tax Credits for FIEs Purchasing Domestically Produced Equipment

! Provision of Electricity for LATR

! Export Restraints on Raw Materials

Table I-1

MCBs: Commerce’s final countervailable subsidy rate with respect to imports from China

Manufacturer/Exporter

 Net Countervailable Subsidy Rate

(percent ad valorem) 

RHI 24.24

Mayerton 253.87

All others 24.24

Source: Certain Magnesia Carbon Bricks from the People’s Republic of China: Final Affirmative Countervailing

Duty Determination, 75 FR 45472, August 2, 2010.

Sales at LTFV

On August 2, 2010, Commerce published notices in the Federal Register of its final

determination of sales at LTFV with respect to imports from Mexico.4

 Table I-2 presents Commerce’s

dumping margins with respect to imports of MCBs from Mexico.

Table I-2

MCBs: Commerce’s final weighted-average LTFV margins with respect to imports from Mexico

Manufacturer/Exporter Margin (percent ad valorem) 

RHI-Refmex S.A. de C.V. 57.90

All others 57.90

Source: Certain Magnesia Carbon Bricks from Mexico: Notice of Final Determination of Sales at Less Than Fair

Value and Postponement of Final Determination, 75 FR 45097, August 2, 2010.

 3 Certain Magnesia Carbon Bricks from the People’s Republic of China: Final Affirmative Countervailing Duty

Determination, 75 FR 45472, August 2, 2010.

 4 Certain Magnesia Carbon Bricks from Mexico: Notice of Final Determination of Sales at Less Than Fair

Value, 75 FR 45097, August 2, 2010.

I-4
On August 2, 2010, Commerce published notices in the Federal Register of its final

determination of sales at LTFV with respect to imports from China.5

 Table I-3 presents Commerce’s

dumping margins with respect to imports of MCBs from China.

Table I-3

MCBs: Commerce’s final weighted-average LTFV margins with respect to imports from China

Producer/Exporter

Margin

(percent ad valorem)

RHI Refractories Liaoning Co., Ltd. 128.10

Dashiqiao City Guancheng Refractory Co., Ltd. 128.10

Fengchi Imp. and Exp. Co., Ltd. of Haicheng City 128.10

Jiangsu Sujia Group New Materials Co., Ltd. 128.10

Liaoning Fucheng Refractories Group Co., Ltd. 128.10

Liaoning Fucheng Special Refractory Co., Ltd. 128.10

Liaoning Jiayi Metals and Minerals Co., Ltd. 128.10

Yingkou Bayuquan Refractories Co., Ltd. 128.10

Yingkou Dalmond Refractories Co., Ltd. 128.10

Yingkou Guangyang Co., Ltd. 128.10

Yingkou Jiahe Refractories Co., Ltd. 128.10

Yingkou Kyushu Refractories Co., Ltd. 128.10

Yingkou New Century Refractories, Ltd. 128.10

Yingkou Wonjin Refractory Material Co., Ltd. 128.10

All others 236.00

Source: Certain Magnesia Carbon Bricks from the People’s Republic of China: Final Determination of Sales at Less Than Fair

Value and Critical Circumstances, 75 FR 45468, August 2, 2010.

 5 Certain Magnesia Carbon Bricks from the People’s Republic of China: Final Determination of Sales at Less

Than Fair Value and Critical Circumstances, 75 FR 45468, August 2, 2010.

I-5
THE SUBJECT MERCHANDISE

Commerce’s Scope

Commerce has defined the imported merchandise subject to these investigations as:

certain chemically bonded (resin or pitch), magnesia carbon bricks with a magnesia component

of at least 70 percent magnesia (“MgO”) by weight, regardless of the source of raw materials for

the MgO, with carbon levels ranging from trace amounts to 30 percent by weight, regardless of

enhancements, (for example, magnesia carbon bricks can be enhanced with coating, grinding, tar

impregnation or coking, high temperature heat treatments, anti-slip treatments or metal casing)

and regardless of whether or not anti-oxidants are present (for example, antioxidants can be

added to the mix from trace amounts to 15 percent by weight as various metals, metal alloys, and

metal carbides).6

Tariff Treatment

During the period examined, MCBs have been classified in the Harmonized Tariff Schedule of

the United States (HTS) under subheading 6902.10.10, magnesite bricks (which also contains products

other than MCBs, including refractory blocks, tiles, and other refractory products), and under HTS

subheading 6902.10.50, other refractory bricks. MCBs may also enter under HTS tariff line 6815.91.00,

articles of stone or other mineral substances, not elsewhere specified or included, containing magnesite,

dolomite, or chromite, or HTS subheading 6815.99, articles of stone or other mineral substances, not

elsewhere specified or included, not containing magnesite, dolomite, or chromite.7

 Table I-4 presents

current tariff rates for MCBs. 

 6 Ibid.

 7

 Ibid.

I-6
Table I-4

MCBs: Tariff rates, 2010

HTS provision Article description

General1 Special2 Column 23

Rates (percent ad valorem)

6815

6815.91.00.00

6815.99

6815.99.20.00

6815.99.40.00

6902

6902.10

6902.10.10.00

6902.10.50.00

Articles of stone or of other mineral substances (including

carbon fibers, articles of carbon fibers and articles of

peat), not elsewhere specified or included:

 Containing magnesite, dolomite or chromite

 Other:

Talc, steatite and soapstone, cut or

 sawed, or in blanks, crayons, 

cubes, disks or other forms.............

Other ..............................................

Refractory bricks, blocks, tiles and similar refractory ceramic

constructional goods, other than those of siliceous fossil

meals or similar siliceous earths:

Containing by weight, singly or together, more than 50 

percent of the elements magnesium, calcium or 

chromium, expressed as MgO, CaO or Cr2O3:

Magnesite bricks..............................................

 

Other................................................................

Free

Free

Free

Free

Free

(

4

)

(

4

)

(

4

)

(

4

)

(

4

)

30%

2.2 ¢/kg

30%

13%

30%

 1 Normal trade relations, formerly known as the most-favored-nation duty rate. 

 2

 Special rates not applicable when General rate is free.

 3

 Applies to imports from a small number of countries that do not enjoy normal trade relations duty status.

 4

 General note 3(c)(i) defines the special duty program symbols enumerated for this provision. 

Source: Harmonized Tariff Schedule of the United States (2010).

I-7
THE PRODUCT

Description and Applications

MCBs are a refractory8

 product made mostly from a combination of magnesia and carbon that

provides thermal and corrosion resistance in operations involving high temperatures and harsh operating

conditions, such as in the production of steel. The scope of this case consists of chemically bonded

MCBs where the magnesia component amounts to at least 70 percent and the carbon levels range from

trace amounts to 30 percent.9

 MCBs may contain other substances such as antioxidants that range from

trace amounts to 15 percent by weight.

MCBs are considered to be the most durable refractory brick on the market for furnaces and ladle

linings, especially around the slag line.10 While other refractory bricks, such as fired magnesite11, fired

bauxite, magnesia dolomite,12 and magnesia alumina graphite bricks, may be used in place of MCBs,

these alternatives do not have the same physical characteristics of MCBs, are easily differentiated by

price, and their uses are not perceived by the steel producers as substitutable.13 MCBs are used to line the

lower sidewalls, upper sidewalls, slag lines, and roofs of ladles14 and ladle metallurgy furnaces involved

in steel production and refining where it comes in contact with both molten steel and molten slag. 

Furthermore, MCBs are also used to line basic oxygen furnaces (“BOF”) and for electric arc furnaces

(“EAF”).15

MCBs are produced in a large number of grades with different levels of magnesia, carbon, and

different contributions of additives depending upon the intended specific applications.16 MCBs are

characterized by its high heat resistance (it has a high melting point, which varies depending on the

amount and type of impurity within the grain of the brick),17 good resistance to slags, and low

vulnerability to degradation by iron oxide and alkalies. Unlike most other refractory products, MCB

degradation can occur within the refractory structure itself as a result of high-temperature reactions. The

degradation can disrupt the brick structure through the loss of the carbon bond, resulting in greater

vulnerability to wear. Therefore, the quality of magnesia selected for use in MCBs should have overall

low levels of impurities to minimize the reducing effects of carbon. Heat treatments on the magnesia raw

 8 Refractories are heat-resistant materials that line high-temperature furnaces, ladles, and other processing units. 

In addition to being heat-resistant, refractories also withstand physical wear and corrosion by chemical agents. The

Refractories Institute, http://www.refractoriesinstitute.org (accessed August 12, 2009).

 9

 Petition, CVD Vol. I, p. 5.

 10 Conference transcript, p. 46 (Mazard).

 11 Fired magnesite brick is 98 percent magnesite and is heated to 2900 degrees Fahrenheit, giving the brick a

ceramic bond. This brick is typically used in non-steel contact areas and electric furnaces and in basic oxygen

furnaces of non-steel contact. Hearing transcript, p. 95 (Copp).

 12 Dolomite brick can be burned or resin bonded. In the steel industry dolomite brick is typically burned and is

used in producing a different chemistry of steel than when using MCBs. Hearing transcript, p. 96 (Copp).

 13 Conference transcript, p. 45 (Mazard).

 14 Ladles used in steel production are the largest users of MCBs, followed by electric arc furnaces. Sales for basic

oxygen furnaces constitute a small portion of the MCB market since steel manufacturing practices have extended the

life of MCB applications. Conference transcript, p. 24 (Brown).

 15 Troell, Peter T., “Evolution of Magnesia-Carbon Refractories,” Ceramic Industry, Feb. 1995, Vol. 144, Issue 2.

 16 There are at least eight different grades of magnesia and four different grades of graphite. Conference

transcript, p. 110 (B. Stein).

 17 MCBs with 90 to 95 percent magnesia have a melting point of 3,980 degrees Fahrenheit while pure magnesia

(100 percent) melts at 5,070 degrees Fahrenheit. Harbison-Walker Co., “Refractory Raw Materials,” p. CR-3.

I-8
materials can cause the magnesia to be either fused18 or sintered,19 which alter the performance of MCBs

in their application. Sintered magnesia is used in a range of market applications and has a high melting

point while fused magnesia is considered to maintain strength and corrosion resistance as well as

chemical stability thereby enhancing the performance of MCBs.20 The carbon in MCBs prevents liquid

slag from penetrating and eroding the bricks. The high carbon content of MCBs is achieved by adding

carbon in such forms as pitch or graphite with natural flake graphite the most common. Graphite purity is

also important in determining stability and performance in high-temperature environments.21 Natural

flake graphite is one of the widely used carbons because of its high oxidation resistance, which

contributes to the reduced erosion rates and its ability to impart high thermal conductivity to the brick.22

The high thermal conductivity results in reduced thermal stresses within the brick and faster cooling of

the MCBs between heats.23 High temperature stability of MCBs also is achieved through the addition of

additives, such as powdered metals (aluminum, magnesium, and silicon), to enhance resistance to

oxidation as these metals consume oxygen that would otherwise oxidize with the carbon, thereby 

increasing the strength of the bricks.24 MCB quality can be further enhanced with the combination of

other treatments25 such as pitch or resin impregnation,26 metal casing,27 and high-temperature treatments28

resulting in a broad range of product options to suit a variety of demanding steel applications.29

The refractory brick market is a mature industry and there have not been any major

breakthroughs in steel production and processing or in the refractory and MCB markets.30 Refractory

products are frequently sold independently of other refractory brick for a ladle, or as part of a package

from a single vendor including all of the bricks necessary to line a ladle.31 Package orders, as opposed to

individual orders for MCBs, are determined based on customer preferences.32

Most steel producing companies use several types of refractory brick to line their furnaces and

ladles. A variety of refractory products are used because rates of wear and replacement of the refractory

bricks vary significantly based on the type of steel being produced, individual furnaces used, and the

 18 Magnesia is said to be fused when the heat treatment during the production process becomes molten. Landy,

Richard A., “Magnesia Refractories,” Refractories Handbook, ed. Schacht, Charles A., 2004, p. 111.

 19 Sintering refers to the process of forming objects from a metal powder by heating the powder at a temperature

below its melting point. When the powder is compacted into the desired shape and heated, i.e., sintered, for up to

three hours, the particles composing the powder join together to form a single solid object. Landy, Richard A.,

“Magnesia Refractories,” Refractories Handbook, ed. Schacht, Charles A. 2004, p. 111.

 20 Landy, Richard A., “Magnesia Refractories,” Refractories Handbook, ed. Schacht, Charles A. 2004, pp.

111–113.

 21 Troell, Peter T., “Evolution of Magnesia-Carbon Refractories,” Ceramic Industry, Feb. 1995, Vol. 144, Issue 2.

 22 Troell, Peter T., “Evolution of Magnesia-Carbon Refractories,” Ceramic Industry, Feb. 1995, Vol. 144, Issue 2.

 23 Harbison-Walker Co., “Refractory Raw Materials,” p. CR-3.

 24 Harbison-Walker Co., “Refractory Raw Materials,” p. CR-3.

 25 Conference transcript, p. 44 (Mazard).

 26 Pitch or resin impregnation fills in the voids of the brick, making is less porous and increasing the carbon in the

brick resulting in better steel slag resistance. E-mail from ***.

 27 Metal casings on MCBs increase strength and improve corrosion resistance in areas of the furnace where

mechanical equipment can corrode MCBs that are not plated. Metal cased MCBs are not used in ladles used for

steel production. E-mail from ***.

 28 High-temperature treatments decrease the porosity of the MCBs resulting in increased resistance to steel slag

penetration. E-mail from ***.

 29 Troell, Peter T., “Evolution of Magnesia-Carbon Refractories,” Ceramic Industry, Feb. 1995, Vol. 144, Issue 2.

 30 Conference transcript, p. 55 (Brown). 

 31 Conference transcript, p. 47 (Mazard).

 32 Conference transcript, p. 91 (Copp).

I-9
various performance requirements of the different areas of the steel furnaces or ladle.33 More specifically,

MCBs are only used in the most demanding areas of the furnace or ladles which is principally along the

slag lines and at the top of the steel vessel where active chemical processes are taking place and

impurities and waste tend to aggregate. Other less costly products are used at the bottom and lower sides

of the furnace or ladles where slag conditions34 are less aggressive and will wear out at lower rates.35

MCBs and the other refractory bricks are strategically placed in the ladle so that the overall wear on the

ladle is even and the ladle lining provides the lowest cost per ton of steel produced for refractories.36 An

example of a refractory-lined ladle is shown in Figure I-1.

Manufacturing Processes

The raw materials used to make magnesite for MCBs are: (1) fired magnesia produced from

natural magnesium carbonate; (2) sea-water magnesium produced by firing magnesium hydroxide

extracted from sea water;37 or (3) brine magnesia produced from high-salt concentration from deep water

wells. These raw materials are sintered magnesia, while fused magnesia is produced by melting the

sintered magnesia.

After processing to produced sintered or fused magnesia, it is then crushed, ground, and

screened.38 It must be reduced to the appropriate size to satisfy the specific requirements of the brick

being produced. Magnesia that has been ground and screened is moved to holding bins or hoppers; each

bin or hopper is weighed and separated into batches that are specific to the brands and chemical

formulations of the different types of MCBs.39 The basic production process is as shown in Figure I-2. 

 33 The type of steel being produced and the specific production methods associated with the product determine

how frequently the lining of a ladle is replaced. Conference transcript, p. 53 (Brown).

 34 During production, there is steel within the ladle as well as residue that are generated from the metallurgical

process, which is called slag, and is, in a sense, liquid glass. Different bricks line different parts of the ladle.

However, MCBs tend to be the most expensive brick and are used near the slag area since that is where a lot of fluid

reactions take place. The lining in that area has to be designed in a way that the slag will react least with the lining. 

This helps promote even wear during steel production, thereby generating the highest ladle performance level for the

steel producer. Hearing transcript, p. 96 (Copp); 99 (Richter). 

 35 Conference transcript, pp. 44–45 (Mazard).

 36 Conference transcript, p. 46 (Mazard).

 37 The supply of seawater magnesium is virtually limitless, producing high-purity magnesium oxide. The largest

seawater facilities are located in Japan, Great Britain, the United States, and Israel. Landy, Richard A., “Magnesia

Refractories,” Refractories Handbook, ed. Schacht, Charles A., 2004, pp. 132–133.

 38 The raw material is crushed in jaw crushers, gyratory and cone crushers; intermediate pulverizers, such as cage

disintegrators and hammer mills; and fine grinding mills, such as rod mills and ball mills.

 39 Landy, Richard A., “Magnesia Refractories,” Refractories Handbook, ed. Schacht, Charles A. 2004, pp.

132–133.

I-10
Figure I-1

Refractory-lined ladle

Source: Resco.

I-11
Figure I-2

MCBs production process

Source: Petition, CVD Vol. I, p. 7.

Magnesia raw materials Graphite

Crushing

Size grading

Binder Mixing / kneading

Pressing

Curing

Inspection

Product

Finishing (metal casing, tarimpregnation, coating, 

coking, etc.)

Magnesia raw materials Graphite Additives

Crushing

Size grading

Binder Mixing / kneading

Pressing

Curing

Inspection

Product

Finishing (metal casing, tarimpregnation, coating, 

coking, etc.)

Additives

I-12
The magnesia is mixed with other materials, including pitch, binders, carbon, and other metallic

additives specific to the brick being made.40 When mixing is complete, the material is transported to a

press for forming into individual shaped bricks. MCBs are molded in a wide variety of sizes depending

on the specific application and the configuration of the furnace or ladle lining for which they are

designed. There are several methods of pressing and manufacturing facilities differ with regard to the

type of press used. Presses include the uniaxial press (such as a mechanical press, friction press, or a

hydraulic press)41 and the isostatic press.42 Once the bricks are pressed they are heated in batch or tunnel

ovens to set resin binds. Finally, the bricks are packaged for shipment.43

The shape and density of the MCBs are major factors in determining resistance to degradation

and operational life of the bricks.44 Density is determined, for the most part, by the type of press used in

production. Refractory producers in the United States, the European Union, and Mexico tend to use the

hydraulic press, while the friction press is more common among Chinese producers.45 The hydraulic

press uses the force of a hydraulic piston to press and de-air the mix in one stroke. Hydraulic presses are

a newer technology requiring fewer workers and are useful in the production of very large brick shapes.46

A friction press, presses the mix with frequent strokes in order to de-air the mix and results in a MCB of

higher density compared to the hydraulic press according to respondents at the staff conference.47 While

the disparity in density of the refractory brick produced from the two presses may differ by a few percent,

the difference in the brick’s resistance to wear and its operational life is more significant.48 Furthermore,

although a friction press requires more manpower than a hydraulic press, the respondents claim that

friction presses can change their brick molds more quickly and produce another size, shape, or quality

grade that the customer may require.49 

 40 The most common type is a muller mixer, a mixing bowl fitted with wheels that rotate while the mixer bowl

revolves or the rotating wheels revolve while the mixer bowl is stationary. This equipment produces a kneading

action to the materials in which the portion of the materials directly under the wheels is squeezed and pressed

producing a “de-airing” action. Another mixer type is one that has a bowl fitted with a high-intensity rotor, ribbon

blades, or screw. These mixers usually produce a uniform mix faster than the muller type, but the de-airing is not as

good. 

 41 A uniaxial press can apply force to a brick through a number of different methods. Pressure is applied in one

direction to achieve uniform density and a homogeneous micro-structure on a variety different presses. A

mechanical press uses a ram to compact the brick against a stationary mold, and it uses the compacted brick

thickness itself to control the final movement of the press without independent control of the compacting force. A

friction press uses a flywheel driven at a preset speed to drive a ram to compact the brick. A friction press uses the

energy contained in the flywheel to control the thickness of the brick without independent control of the brick

thickness. A hydraulic press uses pressure to force a ram against the brick. Brick thickness is controlled by a rigid

stop to control the travel of the ram. Carniglia, Stephen C. and Gordon L. Barna, Handbook of Industrial

Refractories Technology, Principles, Types, Properties and Applications, 1992, pp. 508–510 .

 42 The isostatic press can be used to produce difficult refractory geometries such as nozzles, shrouds, and

diffusers for certain BOF applications. In isostatic pressing a preformed body is hermetically wrapped in a flexible

metal foil or polymeric bag and placed in a vessel which is then filled with oil under pressure to form the complex

design.

 43 Carniglia, Stephen C. & Gordon L. Barna, Handbook of Industrial Refractories Technology, Principles, Types,

Properties and Applications, 1992, pp. 515-516 and e-mail from ***. 

 44 Conference transcript, p. 177 (B. Stein).

 45 Conference transcript, pp. 110–111 (B. Stein) and Petitioner’s postconference brief, exh. 1, pp. 12-13. 

 46 Conference transcript, p. 124 (Conrad).

 47 Conference transcript, pp. 110–111 (B. Stein).

 48 Conference transcript, p. 115 (B. Stein).

 49 Conference transcript, p. 124 (Conrad).

I-13
Petitioner disputes that the friction press makes a denser MCB than the hydraulic press and

claims that the hydraulic press has the capability and efficiency to make MCBs that are just as dense. In

this regard, petitioner states:

“Petitioner also submits that there is absolutely no basis in fact or data to support

Respondents’ comments at the conference that a friction screw press can somehow make

a denser MCB than a hydraulic press. This urban legend was debated and put to bed at

least 25 years ago. Friction screw presses are less costly to install than the more

sophisticated and automated hydraulic presses. The friction screw press is generally

more labor intensive and typically does not have any automation, that is, the mold is

hand fed with the MCB mix and the friction pressing is controlled by an operator who, at

best guesses at the density of the MCB . The idea that one could somehow use lower

grade raw materials and press a denser MCB product on a friction press that could

compete with higher purity and quality raw materials used in MCB on a hydraulic press

is ludicrous. Hydraulic presses have the capability and the efficience to make just as

dense MCB as a friction screw press by utilizing multiple strokes in the press-pause

cycle of the pressing process. In general, hydraulic presses can make a higher quality

MCB than those made on friction presses.”50

DOMESTIC LIKE PRODUCT ISSUES

No issues with respect to domestic like product have been raised in these investigations. The

petitioner proposes that the domestic like product is co-extensive with the scope of the petition.51

Respondents agree with the petitioner’s definition of domestic like product; however, the respondent RHI

notes that other refractory brick may be competitive with MCBs.52

 50 Petitioner’s postconference brief, exh. 1, pp. 12–13.

 51 Hearing transcript, pp. 50-51 (Mazard)

 52 The alternatives include dolomite refractory bricks, magnesite refractory bricks, bauxite refractory bricks, and

alumina-magnesia refractory bricks. Respondent RHI’s prehearing brief, p. 8.

I-14
PART II: CONDITIONS OF COMPETITION IN THE U.S. MARKET

U.S. MARKET CHARACTERISTICS

The majority of MCBs in the United States are sold to steel manufacturers. Three producers

account for *** domestic sales and two importers accounted for *** of sales of imported MCBs from

China in 2009. The third-largest importer of MCBs from China in 2009 was ***. Importer VeitschRadex, which is related to Mexican MCB producer Refmex, accounted for *** imports of MCBs from

Mexico. 

Two of three responding U.S. producers reported selling MCBs nationally and one producer

(***) reported selling MCBs. to all regions except ***. Six of nine responding importers reported

selling imported Chinese MCBs nationally. Of the remaining three importers, all three reported selling to

the Northeast, two to the Southeast and Midwest, and one to the Central. Veitsch-Radex reported selling

*** of its MCBs from Mexico to the Southeast and Central Southwest regions during the year ending

June 2009 due to high U.S. inland transportation costs.1

 Resco argued that it ships nationwide, including

plants in the southwest, such as the Gerdau Ameristeel plant in Midlothian, Texas.2

CHANNELS OF DISTRIBUTION

Almost all MCBs from every source are sold directly to end users.3

 As shown in table II-1, in

each period, over 99 percent of shipments of U.S. product and over 98 percent of imports from China

were to end users. *** reported U.S. shipments of MCBs imported from Mexico and nonsubject

countries were to end users. Petitioner indicates that all major domestic and foreign producers, including

Chinese producers, compete for critical large volume accounts in the steel industry and approximately 75

percent of all MCBs sold in the United States is sold to approximately 25 end users.4

 1 Hearing transcript, p. 172 (Garcia) and Veitsch-Radex’s prehearing brief, exh. 4. ***. ***. Respondent

Veitsch-Radex’s prehearing brief, p. 4, and its August 18, 2010 submission.

 2

 Hearing transcript, p. 264 (Mazard).

 3

 RMA factbook 2009, p. 3. (See petition, p. 21 and exh. 5.)

 4

 Petition, p. 9.

II-1
Table II-1

MCBs: U.S. producers’ and importers’ U.S. shipments of MCB, by sources and channels of 

distribution, 2007-09, and January-March 2010

Item

Period

2007 2008 2009

Jan.-Mar.

2010

 Share of reported shipments (percent)

Domestic producers’ U.S. shipments of MCBs to:

 Distributors 0.6 0.3 0.1 0.0

 End users 99.4 99.7 99.9 100.0

U.S. importers’ U.S. shipments of MCBs from China to:

 Distributors 0.3 1.2 1.2 0.0

 End users 99.7 98.8 98.8 100.0

U.S. importers’ U.S. shipments of MCBs from Mexico to:

 Distributors *** *** *** ***

 End users *** *** *** ***

U.S. importers’ U.S. shipments of MCBs from all other countries to: 

 Distributors *** *** *** ***

 End users *** *** *** ***

Note.–Data for domestic producers include only U.S. commercial shipments.

Source: Compiled from data submitted in response to Commission questionnaires.

PURCHASER CHARACTERISTICS

Purchaser questionnaires were sent to 35 purchasers of MCBs identified by U.S. producers and

importers.5

 Twenty purchasers responded to the purchaser questionnaire. Of the 20 purchasers

responding to the questionnaire, 18 firms identified themselves as end users. Since 2007, purchasers have

increasingly used “full line supply” contracts instead of purchasing bricks individually, which eliminates

the need to maintain inventories or technical refractory staff on hand.6

All twenty purchasers reported their purchases of MCBs produced in the United States, China,

Mexico, and nonsubject countries (table II-2). Responding firms reported purchases totaling 83,804 tons

($78.9 million) in 2007; 89,896 tons ($102.7 million) in 2008; and 62,746 tons ($71.0 million) in 2009. 

 5 Purchaser questionnaires were sent to both firms and separate plants identified in preliminary phase

questionnaires. Responses received from purchasers, however, were entirely on firm-level, not plant-level bases.

 6

 Respondent RHI’s postconference brief, p. 14. For more regarding full line supply contracts, see Part V:

Pricing and Related Information.

II-2
Table II-2

MCBs: Quantity and unit value of purchases from the United States, subject countries, and

nonsubject countries, 2007-09 and January-March 2010 

Source 2007 2008 2009 Jan.-Mar. 2010

Quantity (short tons)

U.S. 54,066 56,227 33,815 15,874

China 28,169 32,185 27,857 9,428

Mexico 649 625 590 374

Nonsubject1 919 859 484 181

 Total 83,804 89,896 62,746 25,857

Unit value (dollars per ton)

U.S. 1,015 1,205 1,193 1,112

China 789 1,038 1,051 1,054

Mexico 1,148 1,095 1,334 1,231

Nonsubject1 1,125 979 1,190 1,210

 1

 Nonsubject countries include Germany, India, Japan, Korea, the Slovak Republic, Turkey, and the UK. 

Source: Compiled from data submitted in response to Commission questionnaires.

Reported purchases accounted for approximately 78 percent of apparent consumption during 2009 on a

quantity basis (approximately 76 percent on a value basis).7

Purchasers were also asked about changes in the relative shares of MCBs bought from different

countries in the last three years. Table II-3 lists the changes each purchaser has made in its sourcing

decisions regarding MCBs during 2007-08 and 2008-09, based on relative shares of purchases. It shows

the dynamics of the purchasing decisions made on a firm-by-firm basis. Between 2007 and 2009, the

share of a firm’s purchases of MCBs imported from China increased for 10 purchasers and decreased for

6 purchasers. The share of a firm’s purchases of MCBs imported from Mexico increased for 4 purchasers

and decreased for 3 purchasers.

Table II-3

MCBs: Changes in shares of purchases attributable to the United States, China, Mexico, and

nonsubject sources, 2007-08 and 2008-09, by purchaser

* * * * * * *

Additionally, purchasers were asked in general how their sourcing pattern changed since 2007.8

Four firms reported decreasing their purchases of MCBs from domestic producers (citing increasing

prices, poor performance and service, and decreased steel production), while two firms reported an

increase in purchases from domestic sources (citing service, delivery, and duties on imports). Two firms

 7 Some purchasers did not provide data on their annual purchases, so these data are at least slightly understated. 

In addition, data do not include direct imports of MCBs

 8

 Not all purchasers reported their purchase values, but all 20 reported general trends in purchasing patterns. 

Some purchasers’ responses did not entirely match the purchase share data they reported. 

II-3
reported that their purchase of MCBs from domestic producers fluctuated based on steel production

levels, and ten firms reported that their purchase of MCBs from domestic sources remained constant. 

 Three firms reported decreasing their purchases of MCBs from Chinese producers (citing lack of

service and deliveries, suppliers going out of business, duties, and decreased steel production), while five

firms reported increasing their purchases from Chinese sources (citing lower prices; better quality,

performance, and service; and one purchaser’s steel production shifting from a closed plant to one that

used a Chinese MCB supplier). Five firms reported that their purchases of MCBs from Chinese

producers fluctuated (citing changes in price and in steel production), and the remaining seven reported

that their purchases of MCBs from Chinese sources remained constant. Four purchasers reported buying

MCBs from only one country (all four purchased solely from China) due to quality, price (including total

cost per ton), and service. 

Two firms reported decreasing their purchase of MCBs from Mexican producers (citing duties, 

delivery delays, and decreased steel demand), while one firm reported an increase in purchases from

Mexican sources (citing purchases from a new supplier). No firms reported fluctuations in their

purchases of MCBs from Mexican producers, and eleven firms reported that their purchases of MCBs

from Mexican sources remained constant (with six of these firms reporting that they purchased minimal

or no product from Mexico). 

With respect to MCBs from nonsubject countries, three firms reported increased purchases from

nonsubject countries (citing low prices (Korea), trial purchases from new suppliers to improve

performance and cost (the UK and the Slovak Republic), and purchases of European manufactured Basic

Oxygen Furnace (“BOF”) lining and Magnesita (Brazil) ladle trial). No firms reported decreasing

purchases from nonsubject countries.9

 Two firms reported fluctuations in their purchases of MCBs from

nonsubject countries (citing changes in steel production and trial purchases). Six firms reported that their

purchases of MCBs from nonsubject countries remained constant, although most of these firms reported

no purchases from nonsubject countries. 

Four of 20 responding purchasers reported that they had made significant changes to their

purchasing patterns in the last three years, with three explaining those changes. One firm changed

suppliers after the preliminary duties were imposed, one firm changed its purchasing frequency from

annual to quarterly, and one firm reported that ***.10 Overall, purchasers keep very small levels of

inventories of MCBs on hand, approximately 3 percent of yearly purchases. Seven purchasers do not

maintain inventories of MCB, whereas 12 do (see table II-4).

 9 *** did, however, have a decline in the share of nonsubject purchases, as shown in table II-3.

 10 A fourth firm responded that it made significant changes to its purchasing frequency depending on finished

product supply and demand.

II-4
Table II-4

MCBs: Quantity of inventories held by purchasers as a share of yearly purchases, by source, 2007-

09 and January-March 2010 

Source 2007 2008 2009 Jan.-Mar. 2010

Shares (percent)

United States 2.3 1.6 2.1 0.8

China 4.0 4.5 4.9 2.5

Mexico 5.2 1.2 3.5 1.0

Nonsubject1 5.2 4.3 2.6 0.7

Total 2.8 2.6 3.3 1.4

1

 Nonsubject countries include Turkey and Japan.

Note.–These numbers are minimum inventory shares, as *** reported incorrect inventory data which were not

included in this tabulation, and *** only reported data for 2010. *** data, which included only inventories of MCBs

manufactured in China, also are not included in the data set. 

Source: Compiled from data submitted in response to Commission questionnaires.

Purchasers have plants located across the United States. The states in which the greatest number

of plants are located are Illinois (six plants), Pennsylvania (five plants), and Ohio (five plants). 

Respondents argued that most firms that purchase Mexican product are located in the Southwest,

Southeast, or lower Midwest.11 However, the seven purchasers that purchased Mexican product reported

a total of 16 plant locations, most of which are located in the Midwest (seven plants located in Ohio,

Illinois, Michigan, Indiana, and Kentucky), Southeast (four plants located in Alabama, North Carolina,

and South Carolina), and Northeast (three plants located in Pennsylvania). In contrast to the respondents’

claim, only two plants of the responding purchasers that purchased Mexican product were located in the

Central Southwest (Texas and Arizona). 

SUPPLY AND DEMAND CONSIDERATIONS

Supply

U.S. Supply

Based on available information, U.S. MCB producers have the ability to respond to changes in

demand with large changes in the quantity of shipments of U.S.-produced MCBs to the U.S. market. The

main contributing factors to the high degree of responsiveness of supply are the availability of unused

capacity, the existence of alternate markets, and the ability to switch production between the subject

product and alternate products; supply responsiveness is constrained by the somewhat limited ability to

use inventories. 

 11 Conference transcript, p. 161 (Thomas).

II-5
Industry capacity

The industry’s level of unused capacity with which U.S. producers could increase production of

MCBs in response to a price change is relatively large. While total industry capacity has remained

unchanged since 2007, U.S. producers’ capacity utilization decreased from 64.4 percent in 2007 to 43.8

percent in 2009 but was 60.5 percent in the first quarter of 2010, compared with 33.2 percent in the first

quarter of 2009.12

Alternative markets

U.S. producers have the ability to divert a moderate amount of shipments to or from alternative

markets in response to changes in the price of MCBs. Exports by the U.S. producers, as a share of total

shipments, decreased irregularly from *** percent in 2007 to *** percent in 2009, on a quantity basis, but

were *** percent in interim 2010, compared with *** percent in the same period of 2009. 

Inventory levels

Data indicate that U.S. producers have a somewhat limited ability to use inventories to increase

shipments of MCBs to the U.S. market, as the majority of producers’ shipments normally come from their

inventories that are held for specific customers. The ratio of end-of-period inventories to total shipments

for the U.S. producers decreased from 10.8 percent in 2007 to 10.1 percent in 2008 before increasing to

17.6 percent in 2009. This ratio was much lower in the first quarter of 2010 (12.1 percent), compared

with the first quarter of 2009 (17.1 percent). 

Production alternatives

*** of *** U.S. producers (***) indicated that they produce products other than MCBs on the

equipment and machinery that are used to produce MCBs. Producers indicated that they can produce

products such as dolomite brick, alumina magnesia carbon brick, and fired brick in addition to MCBs. 

Subject Imports from China

Based on questionnaire responses of six Chinese producers of MCB, Chinese producers have the

ability to respond to changes in demand with large changes in the quantity of shipments of MCBs to the

U.S. market.13 The main contributing factors to the high degree of responsiveness of supply are the

availability of unused capacity, the existence of alternate markets, the ability to produce alternate

products, and available inventories. 

 12 Since MCBs are produced on machinery and equipment that is used to produce other types of bricks, capacity

and capacity utilization figures for MCBs are subject to fluctuations based on the production mix.

 13 Chinese producers’ exports to the United States represented 73.1 percent of total reported U.S. imports from

China in 2009.

II-6
Industry capacity

Chinese producers’ level of unused capacity indicates that they could increase production of

MCBs in response to a price change. Chinese producers’ capacity utilization decreased from 67.9 percent

in 2007 to 46.7 percent in 2009 and was 54.6 percent in the first quarter of 2010, compared with 36.2

percent in the first quarter of 2009. 

Alternative markets

 Available data indicate that subject producers in China are able to divert shipments to or from

their home market and alternative markets to the United States in response to changes in the price of

MCBs in the United States. Shipments of MCBs from China to non-U.S. markets (both exports to

alternative markets and shipments to their home market) remained at approximately 90 percent of total

shipments in 2007 to 2009 on a quantity basis, but were *** percent in interim 2010, compared with ***

percent in the same period of 2009. Responding foreign producers reported shipping to markets

throughout the world including Europe, Asia, South Africa, the Middle East, North America, and South

America.

Inventory levels

Data indicate that Chinese producers and importers of MCBs from China have a large ability to

use inventories as a means of increasing shipments of MCBs to the U.S. market. The ratio of end-ofperiod inventories to total shipments for the Chinese producers decreased irregularly from 6.6 percent in

2007 to 6.4 percent in 2009 and was *** percent in interim 2010, compared with *** percent in interim

2009. Importers’ inventories of Chinese MCBs decreased from 65.9 percent of U.S. import shipments of

Chinese MCBs in 2007 to 63.9 percent in 2009, and were 41.7 percent in interim 2010 compared to 60.4

percent in interim 2009.14 Larger inventories of MCBs allow importers to maintain just-in-time delivery

schedules of imported MCBs for their U.S. customers.15

Production alternatives

Six Chinese producers indicated that they are able to switch production between MCBs and other

products in response to a relative change in prices. One of these producers reported that switching

production to aluminum magnesium carbon brick, magnesium lime carbon brick, and magnesium spinel

carbon brick could be done at any time at no additional cost and can be produced on the same production

line as MCBs. Two producers reported that they could switch production among MCB, alumina

magnesia carbon brick, and alumina silica carbon brick. 

 14 More than *** of this inventory is held by ***. Respondent RHI notes that “relatively high inventory ratios

are prevalent throughout the U.S. import trade,” as purchasers “value very highly MCB suppliers’ delivery time and

reliability of supply.” Respondent RHI’s prehearing brief, p. 61.

 15 Hearing transcript, p. 92 (Richter).

II-7
Subject Imports from Mexico

Based on available information, the sole Mexican producer, Refmex, which is owned by RHI, has

the ability to respond to changes in demand with *** changes in the quantity of shipments of MCBs to

the U.S. market.16 The main contributing factors to the *** degree of responsiveness of supply are ***. 

Industry capacity

The Mexican producer’s level of unused capacity indicates that it could increase production of

MCBs in response to a price change. The Mexican producer’s capacity utilization decreased from ***

percent in 2007 to *** percent in 2009. Capacity utilization was *** percent in interim 2010, compared

with *** percent in interim in 2009. 

Respondent RHI reported that “capacity {it} firmly had available for the manufacture of MCBs is

currently in 2010 being used to manufacture other refractories, in particular burned bricks for the cement

industry,” in particular Mexico-headquartered cement producer Cemex. At Refmex’s Ramos Arizpe

plant, lead times have doubled, from eight to 16 weeks, and it projects to be at full capacity through

2011.17 

Alternative markets

Available data indicate that the Mexican producer has the ability to divert shipments to or from its

home market and alternative markets to the United States in response to changes in the price of MCBs in

the United States. Shipments of MCBs from Mexico to non-U.S. markets (both exports to alternative

markets and shipments to the home market, which accounted for *** of Refmex’s shipments) decreased

from *** percent of total shipments in 2007 to *** percent in 2009, and were *** percent in interim 2010

compared to *** percent in interim 2009. Refmex also exports to ***. Refmex reported that its

shipments to the United States will decrease to *** percent of production for 2010 and *** percent in

2011, compared with *** percent in 2009 due to a “dramatic rebound in production for the Mexican

market.”18

Inventory levels

Data indicate that the Mexican producer and importer have a moderate-to-large ability to use

inventories as a means of increasing shipments of MCBs to the U.S. market. The ratio of end-of-period

inventories to total shipments for the Mexican producer increased from *** percent in 2007 to ***

percent in 2009 and was *** percent in interim 2010, compared with *** percent in interim 2009. RHI

reported that this increase in Mexican-held inventories is held to serve the home market.19 Importers’

inventories of Mexican MCBs decreased from *** percent of U.S. import shipments of Mexican MCBs

in 2007 to *** percent in 2009, and were *** percent in interim 2010 compared to *** percent in interim

2009.20 Respondent RHI argued that this level of inventories should be gauged in relation to rising U.S.

 16 One Mexican producer responded to the foreign producers’ questionnaire. Its exports to the United States

represented *** reported U.S. imports from Mexico in 2009.

 17 Hearing transcript, pp. 173-174 (Garcia).

 18 Respondent RHI’s prehearing brief, exh. 4.

 19 Ibid.

 20 ***.

II-8
demand for MCBs and that the inventories in the most recent period are ***.21 Furthermore, RHI argued

that comparatively high inventory ratios reflect importers’ different “circumstances of sale” and that the

ratio of imports to inventory for Mexico in interim 2010 is in line with that for non-subject imports.22

Lastly, RHI argued that it would not abandon its home-market customers which purchase MCBs and

other products, especially considering that it earns significantly larger profits on its sales of MCBs in

Mexico than on MCB sales to the United States.23

Production alternatives

***. 

Nonsubject Imports

MCBs are supplied to the United States from a number of countries. According to purchaser

questionnaire responses, MCBs were imported from Germany, India, Japan, Korea, the Slovak Republic,

Turkey, and the UK since 2007. Respondent RHI noted that it has made some of its capacity in Europe

available to service the market in the United States, in particular for subject product.24 In addition,

Magnesita has its headquarters, owns a large magnesite mine, and has the capability of exporting MCBs

from Brazil, ***.25

Demand

U.S. Demand

Based on available information, it is likely that any change in the price level of MCBs will result

in a small change in the quantity of MCBs demanded. The main contributing factors are the lack of

substitute products and the small cost share of MCBs in its end-use products.

Demand Characteristics

As described in more detail in Part I, MCB is used by steel producers for lining electric arc

furnaces, basic oxygen furnaces, steel transfer ladles, and steel processing ladles.26 Thus, demand for

MCBs depends greatly upon steel production. 

As seen in figure II-1, raw steel production fluctuated between January 2007 and August 2008,

increasing overall by 14.9 percent and then decreasing 56.2 percent between August 2008 and April 2009. 

Between April 2009 and April 2010, steel production increased 83.0 percent, but was still 7.8 percent

lower than in January 2007. In July, the Wall Street Journal reported that “Steel prices tumbled in June,

and U.S. steel mills are responding by cutting production. Earlier this year, they were ramping 

 21 Respondent RHI’s prehearing brief, exh. 4.

 22 Ibid.

 23 Respondent RHI’s prehearing brief, p. 62.

 24 Hearing transcript, p. 205 (Beschel).

 25 Hearing transcript, p. 166 (Beschel) and conference transcript, p. 58 (Brown). 

 26 See Part I and conference transcript, p. 13 (Brown).

II-9
Figure II-1

Pig iron and raw steel production, by month, January 2007-April 2010

Source: American Iron and Steel Institute.

up capacity to meet the growth in demand they hoped would emerge from the economic recovery. 

Instead, demand has been spotty.”27 However, it further reported that prices will likely increase after

August when demand traditionally tends to increase. By comparison, demand for MCBs increased

from 2007 to late 2008 and then decreased during late 2008 and early 2009. Available data indicate that

total U.S. apparent consumption of MCBs increased *** percent between 2007 and 2008 but decreased

*** percent between 2008 and 2009. Apparent consumption was *** percent higher in January-March

2010 than the same period one year earlier.

Most market participants confirmed these fluctuating trends. One domestic producer, 5 of 10

responding importers, and 10 of 18 responding purchasers indicated that demand for MCBs had

fluctuated since January 2007. Additionally, 2 of 3 responding U.S. producers, 5 of 10 responding

importers, and 5 of 18 responding purchasers indicated that demand for MCBs in the United States has

decreased. In contrast, two purchasers indicated that demand had increased and one purchaser reported

no change in demand.

 Purchasers were asked how demand for their end-use product had changed since 2007 and how

this had affected their MCB consumption. Eleven of 18 responding purchasers reported fluctuating 

demand for these products, four reported no change, and three reported that demand decreased. A

majority (12 of 17) of responding purchasers reported that changes in demand for their products affected

their demand for MCBs. When asked if the change in demand had affected their willingness to accept

price increases or had any other effect on the prices of MCBs, 6 of 15 purchasers responded affirmatively. 

***. ***. 

Purchasers were also asked if their firms had experienced any routine or non-routine downtimes

since 2007. Thirteen of 19 responding purchasers reported routine downtimes; purchasers reported that

furnace relines using MCBs may take place three to four times per year, but also that routine downtime is

planned so the downtime does not affect their ability to meet demand. Four of eight responding

 27 “Industry Cuts Back as Steel Prices Fall,” Wall Street Journal, July 6, 2010.

II-10
purchasers reported non-routine downtimes. Specifically, one purchaser reported extended production

outages in 2009, one firm reported a plant closure in 2008, and a third firm reported that it has had

unscheduled downtimes, but that these have not significantly affected any of the three firms’ ability to

meet demand. 

Substitute Products

Two producers, three importers, and four purchasers listed substitutes for MCB, including

alumina magnesia carbon brick, burned magnesite, dolomite brick, magnesia alumina carbon brick,

magnesia chrome brick, and magnesium oxide brick (without carbon). Among producers, *** reported

that direct bonded magnesia chrome can be used in Electric Arc Furnace (“EAF”) slaglines and ladle

slaglines and that burned magnesite can be used in EAF linings, whereas *** reported that dolomite brick

use is limited to steel ladle applications. Importer *** reported that dolomite bricks and alumina

magnesia carbon brick were substitutes for ladle applications, and that magnesia chrome was a substitute

in both ladle and EAF applications. Importer *** reported that burned dolomite brick is used in certain

steel bar mills and magnesia chrome brick is used in some ultra low carbon and stainless steels. Importer

*** stated that alumina magnesia carbon brick and magnesia alumina carbon brick can be substitutes only

by end users’ condition and request, not by the supplier’s decision. Among purchasers, *** reported that

dolomite brick is cheaper and works better. *** reported that direct bonded magnesite brick and

magnesium oxide brick (without carbon) were older technologies and performed poorly. *** stated that 

magnesium chrome brick is a substitute for MCBs. Two of the three purchasers which reported

substitutes noted that changes in the prices of these substitutes do not affect the price of MCBs. 

Petitioner indicates that while conceptually there is substitutability between MCBs and some of

these products, none of these products provide the performance, the cost effectiveness, the safety, the

reliability, or the consistency of MCBs.28

Cost Share

MCBs generally make up a small share of the final cost of steel products that it is used to

produce. Responding producers and importers indicated that the value of MCBs as a share of the cost of

steel production is 2 percent or less. Nine purchasers reported cost shares of 2 percent or less, and one

purchaser reported a cost share of 10 percent.

In addition, purchasers were asked what portion of the cost of a full and partial reline would be

accounted for by MCBs. Nineteen purchasers reported that the cost shares of complete reline of a steel

furnace or refining vessel would range from 20 to 100 percent, with an average cost share of

approximately 82 percent for a BOF, 52 percent for an EAF, and 50 percent for a ladle.29 Seventeen

purchasers reported shares of their demand for MCBs that is due to full relines, partial relines, and other

uses. Based on a simple average, full relines account for approximately 64 percent of demand for MCBs,

partial relines account for approximately 28 percent, and other uses account for the remainder.

 28 Conference transcript, p. 77 (Brown), hearing transcript, pp. 98 (Copp), 98-99 (Richter), and 116 (Magrath).

 29 MCBs typically last for 10,000-40,000 heats in a BOF, 400-1,000 heats in an EAF, and 50-150 heats in a ladle. 

Hearing transcript, p. 68 (Brown).

II-11
Demand Outside the United States

Two producers (***) and four importers *** reported that demand for MCBs. outside the United

States has decreased since 2007, while one producer and one importer reported fluctuating demand. 

Additionally, two importers (***) noted increasing demand outside the United States since 2007. Four

responding purchasers reported that demand outside the United States for MCBs has fluctuated since

2007, two purchasers reported an increase, and one reported that there had been no change. Among those

reporting changes, three purchasers noted that increased Chinese production of steel had increased

demand outside the United States for MCB, and two reported that MCB demand depends on world steel

production. Included in figure II-2 are crude steel production data for China, all countries except China

and the United States, and all countries except the United States. Steel production outside the United

States followed a similar trend to that in the United States, decreasing in the second half of 2008, but not

falling as dramatically as U.S. steel production. In total, U.S. steel production decreased 36.3 percent

between 2008 and 2009. Outside the United States, steel production only decreased by 5.9 percent,

buoyed by a 13.9 percent increase in steel production in China. Accordingly, China’s share of non-U.S.

steel production has increased from 38.0 percent in January 2007 to 48.2 percent in April 2010. Since the

end of 2008, non-U.S. steel production has been generally increasing, achieving greater production in

March 2010 than any other month since January 2007.

Figure II-2

Non-U.S. crude steel production outside the United States, by month, January 2007-April 2010

Source: World Steel Association.

Demand for MCBs outside the United States reportedly follows a similar path. Respondent RHI

asserted that Chinese consumption of MCBs has been increasing with the growth of the Chinese steel

II-12
industry.30 Petitioner Resco argued, however, that expected capacity increases in China will exceed the

rate of growth of demand for MCBs.31 Respondent RHI argued that demand for MCBs in Mexico has 

increased in 2010, noting a 13.5-percent per year growth rate in 2010. This is compared with a 19-

percent decrease in 2009.32

SUBSTITUTABILITY ISSUES

The degree of substitution between domestic and imported MCB depends upon such factors as

relative prices, quality (e.g., performance, life of refractory lining, etc.), and conditions of sale (e.g., price

discounts/rebates, lead times between order and delivery dates, payment terms, product services, etc.). 

Based on available data, staff believes that there is a high degree of substitutability between domestically

produced MCB and MCB imported from China and Mexico.

Knowledge of Country Sources

Purchasers were asked to indicate the countries of origin for MCBs for which they have actual

marketing/pricing knowledge. Seventeen of 20 responding purchasers were familiar with U.S.-produced

MCB, 17 were familiar with those from China, 8 were familiar with those from Mexico, and 11 were

familiar with those from other countries, including Brazil, Turkey, Germany, Korea, India, Japan, the

Slovak Republic, Poland, and the UK. 

Purchasers were also asked how frequently they and their customers made purchasing decisions

based on the country of origin or the manufacturer of MCBs. The majority of purchasers reported that

they and their customers rarely or never make MCB purchasing decisions based on country of origin. 

Most purchasers reported that they at least sometimes make an MCB purchasing decisions based on the

manufacturer, but that their customers less often make a decision based on the manufacturer of the MCB

(table II-5).

Table II-5

MCBs: Purchaser responses to questions regarding the origin of their purchases

Purchaser/customer decision Always Usually Sometimes Rarely Never

Purchaser makes purchase decision based on

country of origin 1 1 1 6 11

Purchaser makes purchase decision based on

the manufacturer 4 3 5 2 6

Purchaser’s customer makes purchase

decision based on country of origin 0 0 1 3 12

Purchaser’s customer makes purchase

decision based on the manufacturer 0 1 2 2 13

Source: Compiled from data submitted in response to Commission questionnaires.

 30 Respondent RHI’s prehearing brief, p. 5.

 31 Hearing transcript, p. 56 (Mazard).

 32 “Steel production to grow 13.5% in 2010: Canacero,” El Semanario, June 18, 2010, submitted as respondent

RHI’s prehearing brief, exh. 24.

II-13
Factors Affecting Purchasing Decisions

Major Factors in Purchasing

Purchasers were asked to identify the three major factors considered by their firm in deciding

from whom to buy MCBs (table II-6). Quality was reported to be one of top three factors by all 20 of the

responding purchasers,33 while price was reported to be one of top three factors by 19 firms. Quality was

the most-frequently cited most important factor (12 purchasers), price was the most frequently reported

second most important factor (11 purchasers), and availability and service were the most frequently

reported third most important factor (4 purchasers each).

Table II-6

MCBs: Ranking factors used in purchasing decisions, as reported by U.S. purchasers

Factor

Number of firms reporting

First Second Third Total

Quality 12 6 3 21(1)

Price 7 11 1 19

Availability 1 1 4 6

Service 0 1 4 5

Technical support 0 1 2 3

Reliability 0 0 3 3

Delivery, delivery terms, lead times 0 0 3 3

 1 *** reported two aspects of quality that it considers to be the two most important factors: product performance

and product quality/consistency.

Source: Compiled from data submitted in response to Commission questionnaires.

When asked how often they purchase the MCBs that are offered at the lowest price, 20 purchasers

responded: 1 firm indicated “always,” 8 firms indicated “usually,” 5 firms indicated “sometimes,” 4 firms

indicated “rarely,” and 2 firms indicated “never.” Twelve purchasers listed reasons why they purchased

higher-priced MCBs even though lower-priced MCBs were available. Reasons indicated by purchasers

included: quality, service, delivery, and availability of brick. Most firms did not specify the country of

origin of the higher-priced MCBs that they purchased.

Importance of Specified Purchase Factors

Twenty purchasers were asked to rate the importance of 15 factors when making their purchasing

decisions (table II-7). The factors listed as “very important” by all 20 responding firms were product

consistency and reliability of supply. The factors listed as “very important” by at least half of the

responding firms were price (19 firms); quality meets industry expectations (19 firms); availability (18

firms); technical support/service (14 firms); quality exceeds industry expectations (13 firms); delivery

time and discounts offered (11 firms); and delivery terms and packaging (10 firms). 

 33 One of the purchasers reported product performance and product quality/consistency as its top two factors; we

classified both under quality. 

II-14
Table II-7

MCBs: Importance of factors as reported by U.S. purchasers

Factor

Very important

Somewhat

important Not important

Number of firms responding 

Availability 18 2 0

Delivery terms 10 7 3

Delivery time 11 9 0

Discounts offered 11 8 1

Extension of credit 5 7 8

Minimum quantity requirements 4 8 8

Packaging 10 8 2

Price 19 1 0

Product consistency 20 0 0

Product range 7 9 4

Quality meets industry expectations 19 1 0

Quality exceeds industry expectations 13 7 0

Reliability of supply 20 0 0

Technical support/service 14 5 1

U.S. transportation costs 9 8 3

Other1 2 00

 1 Other includes: consignment inventories and product performance.

Source: Compiled from data submitted in response to Commission questionnaires.

Additionally, purchasers were asked specifically how important the price-performance ratio is for

the MCBs that they purchase in terms of cost per ton of steel produced or cost per heat, as compared to

price alone. Nineteen of 20 purchasers reported that the price-performance ratio was “very important.” 

In fact, *** reported that the ratio was “very, very important.” The final purchaser, ***, reported that this

ratio is only “somewhat important” compared to price alone. 

Factors Determining Quality

Purchasers were asked to identify the factors that determine the quality of MCBs. Purchasers

reported numerous specific factors including: performance (including density, durability of the brick, life

of the refractory lining, wear rate, product consistency, resistance to erosion, vertical cracks, and whether

it was fused vs. burned), dimensions of the bricks (e.g., consistent size and shape), chemistry (e.g., grades

of magnesite, level of anti-oxidants, and carbon level and grade), and other factors such as packaging,

installation ease, and safety.

Certification/Qualification Issues

Purchasers were asked if they require certification or prequalification of their suppliers. Nineteen

of 20 responding purchasers reported that they required prequalification, with all 19 of these firms

requiring it for all of their purchases. Purchasers noted that qualification often entails checking

references, price review, product review, and/or running trials on new products. Purchasers reported a

II-15
large range of times to certify or qualify a new supplier: 4 firms reported qualification times of 3 to 30

days, 6 firms reported qualification times of 60 to 90 days, 5 firms reported qualification times of 100 to

180 days, and 2 firms reported qualification times of 360 days or greater. 

Six of 15 responding purchasers reported that one or more firms had failed to qualify. Of the six,

three purchasers listed two U.S. producers or distributors of domestic MCBs as failing to qualify as

follows (reasons are identified in parentheses): North American Refractories Company (“NARCO,”

which is now part of ANH) (“too high in price compared to Chinese until present, where we have

changed back,” and “did not perform in ladle”), and Magnesita (“poor performance and service, too high

in price” and “performance, service, and price”).34 Four purchasers listed the following foreign producers

or importers of MCBs from China as failing to qualify: NARCO (“did not perform in ladle”), PRCO

(“was not comfortable with quality and was not able to provide answers to all technical questions”),

Vesuvius (“unsafe installation process”), and Veitsch-Radex35 (poor “delivery quality”).

Supply Sources

Eleven purchasers reported contacting between one and three suppliers for their MCB needs, and

eight purchasers reported contacting four or more suppliers. Half of the purchasers (10 of 20) noted

changing suppliers since 2007. A number of different MCB suppliers were added or dropped by

individual purchasers. Among those added were RHI, Refrako, Magnesita, Mayerton, and Wonjin.

Among those dropped were Vesuvius, Orind USA, and S&S Intersource. Eight purchasers reported that

they became aware of new suppliers since 2007. 

Supplier Perceptions

Petitioner indicated that price is an important, and many times the only, factor that customers

consider when making their purchasing decisions. Petitioner also stated that although it attempts to

differentiate its products by providing augmented services such as daily on-site interaction with the

customer and understanding what its goals and expectations are in the current environment, price is

increasingly becoming the only differentiating factor.36 Petitioner reported that “value buyers” for which

price is not the deciding factor make up less than 30 percent of the market.37 Petitioner stated that these

customers tend to have longer vision and want a domestic MCB industry, but that this type of customer is

becoming increasingly rare because the steel industry is presently under terrible pressure.38 Respondents

indicated that while price is important to their customers, their customers are more concerned with finding

suppliers who bring new ideas and new abilities through technology and service to lower their costs of

producing steel.39

 34 Additionally, one purchaser, ***, listed Orind U.S.A. as a firm that failed to qualify. It did not specify the

origin of the MCB that it tested. It reported that Orind U.S.A. failed to qualify because of “poor quality and

service.” Orind provided an importer’s questionnaire response in the preliminary phase of these investigations, but

not in the final phase. Mr. Beschel of RHI testified that Orind has a “horrible facility” in China, and “their quality

has been going up and going down.” Hearing testimony, p. 224 (Beschel).

 35 Veitsch-Radex imports product from both China and Mexico.

 36 Conference transcript, pp. 66-67 (Brown).

 37 Conference transcript, p. 67 (Brown).

 38 Ibid.

 39 Conference transcript, p. 157 (B. Stein and Conrad).

II-16
Comparison of U.S.-Produced and Imported MCB

In order to determine whether U.S.-produced MCBs can generally be used in the same

applications as imports from China and Mexico, U.S. producers, importers, and purchasers were asked

whether the products can “always,” “frequently,” “sometimes,” or “never” be used interchangeably. In

general, most responding U.S. producers, importers, and purchasers reported that MCBs from identified

sources were “always” interchangeable. As shown in table II-8, all three responding producers and six of

eight responding importers indicated that MCBs produced in the United States and imported from China

and Mexico can “always” be used interchangeably; the other importers reported that U.S. and Chinese

and U.S. and Mexican product were “sometimes” interchangeable. *** reported that different grades of

raw materials can affect the chemistry of the MCB, resulting in decreased performance of the brick. One

importer did not compare the MCBs among different countries, but reported that interchangeability

depends on the source of the raw materials. Petitioner stated that all countries produce MCBs to the same

standards and grades and that the limited range of forms that petitioner imports from China is for

commodity products.40

Table II-8

MCBs: Perceived interchangeability between MCB produced in the United States and in other

countries, by country pairs

Country pair

Number of U.S.

producers

reporting

Number of U.S.

importers reporting

Number of U.S.

purchasers

reporting

AFSNAFSNAFSN

U.S. vs. subject countries:

 U.S. vs. China 3 0 0 0 6 0 2 0 10 6 3 0

 U.S. vs. Mexico 3 0 0 0 6 0 1 0 7 3 2 0

U.S. vs. nonsubject countries:

 U.S. vs. Brazil 3 0 0 0 2 0 1 0 3 1 1 0

 U.S. vs. other nonsubject 2 00050104400

Subject country comparisons:

 China vs. Mexico 3 0 0 0 6 0 1 0 7 2 1 0

Nonsubject country comparisons:

 China vs. Brazil 1 0 0 0 2 0 1 0 3 1 0 0

 China vs. other nonsubject 2 00050104400

 Mexico vs. Brazil 1 0 0 0 2 0 1 0 3 0 1 0

 Mexico vs. other nonsubject 2 00050104110

 Brazil vs. other nonsubject 2 00040103100

Note.--A = Always, F = Frequently, S = Sometimes, N = Never.

Source: Compiled from data submitted in response to Commission questionnaires.

 40 Petitioner’s postconference brief, pp. 14-15.

II-17
A majority of responding purchasers also reported that the U.S. and subject product was “always”

interchangeable. Specifically, 10 of 19 responding purchasers reported that product from the United

States and China was “always” interchangeable and 7 of 12 responding purchasers reported that product

from the United States and Mexico was “always” interchangeable. Purchasers reported a number

differences between U.S. and Chinese product. One purchaser noted that the Chinese MCB was of a

higher quality and that China offers a wider range of products. Another purchaser stated that U.S.-

produced MCBs and MCBs produced in China are not the same size, while a third reported differences in

product specifications and quality. With respect to differences between U.S. and Mexican product, one 

purchaser reported different sizing while another purchaser noted that it does not perform any product

trials or accept any MCBs from Mexico. In comparing MCBs from China with MCBs from Mexico, one

firm reported that Chinese product was better quality and had better delivery time than Mexican product. 

With respect to MCBs from Brazil, one purchaser noted that it was unable to procure MCBs from Brazil

because Brazil is running at full capacity. Only 1 of 20 responding purchasers noted that it only buys

MCBs from a single source.

The perceived level of differences other than price varied substantially among U.S. producers,

importers, and purchasers. As indicated in table II-9, all three responding U.S. producers reported that

there were either “sometimes” or “never” differences other than price between MCBs produced

domestically, and those imported from China and Mexico. In contrast, most importers (seven of nine that

provided a response) reported there were “always” or “frequently” differences other than price between

MCBs produced in the United States and that imported from China or Mexico. Additionally, a majority

of purchasers reported that there were either “always” or “frequently” differences other than price

between MCBs produced in the United States and in China (12 of 19 purchasers), and between MCBs

produced in the United States and in Mexico (8 of 13 purchasers). When comparing MCBs from China

with MCBs from Mexico, 8 of 10 responding purchasers noted that were either “sometimes” or “never”

differences other than price. 

Differences other than price reported by purchasers included: technical support; technology;

service; transportation network; and availability. Chinese product was reported to be superior to the U.S.

product with better access to raw materials, quality, consistent delivery, stable long-term pricing, and a

wider range of product. Mexico was reported to have lower quality and poorer delivery than U.S.

product. Finally, one firm reported that differences are based on producer rather than country of origin.

Petitioner Resco argued that purchasers have increasingly made MCBs more commodity-like in

terms of pricing, since suppliers of MCBs imported from China have leveled the playing field with

respect to quality, delivery, performance, and service within the past 10 years.41 Respondent RHI asserted

that similar MCBs from different suppliers perform differently when actually used in making steel. 

Consequently, it is unknown whether one supplier’s MCBs will increase or reduce costs until an actual

test run is performed.42

Ten of 17 responding purchasers noted that they have commingled MCBs from different sources,

though most purchasers stated that this was atypical. Only 2 of the 10 purchasers that had commingled

MCBs did not report that it was an uncommon practice or describe the instances when it might occur. 

One other purchaser stated that it does not commingle MCBs from different suppliers, but that its supplier

may commingle MCBs from different sources. Reasons reported by the seven remaining purchasers for

commingling MCBs from different sources were: running out of inventory, transitioning from one

supplier to another, lack of availability, and using newly-sourced MCBs in trial runs. 

 41 Hearing transcript, pp. 103-107 (Brown, Magrath, and Richter) and Petitioner’s prehearing brief, pp. 13-14.

 42 Hearing transcript, pp. 158-160 (McPhie).

II-18
Table II-9

MCBs: Perceived differences other than price between MCB produced in the United States and in

other countries, by country pairs

Country pair

Number of U.S.

producers

reporting

Number of U.S.

importers reporting

Number of U.S.

purchasers

reporting

AFS N AF S N AF S N

U.S. vs. subject countries:

 U.S. vs. China 0 0 2 1 *** *** *** *** 8 4 5 2

 U.S. vs. Mexico 0 0 2 1 2 4 0 2 5 3 3 2

U.S. vs. nonsubject countries:

 U.S. vs. Brazil 0 0 1 0 1 3 0 0 2 0 3 0

 U.S. vs. other nonsubject 0 0 1 1 1 2 1 2 1 3 2 1

Subject country comparisons:

 China vs. Mexico 0 0 1 2 1 4 0 2 1 1 5 3

Nonsubject country comparisons:

 China vs. Brazil 0 0 0 1 0 3 0 0 1 0 3 0

 China vs. other nonsubject 0 0 0 2 1 2 0 2 1 2 2 2

 Mexico vs. Brazil 0 0 0 1 0 3 0 0 0 1 3 0

 Mexico vs. other nonsubject 0 0 0 2 1 2 0 2 1 1 2 1

 Brazil vs. other nonsubject 0 0 0 2 0 2 0 2 1 0 2 0

Note.--A = Always, F = Frequently, S = Sometimes, N = Never.

Source: Compiled from data submitted in response to Commission questionnaires.

Factor Comparisons

Purchasers were asked to compare MCBs produced in the United States, subject countries, and

nonsubject countries with respect to the same 15 different attributes previously presented in table II-7. A

summary of responses is tabulated in table II-10. The majority of firms comparing products from the

United States and China reported that the products were comparable for all factors except delivery time,

for which the U.S. product was reported to be superior; and price, for which the Chinese product was

reported to be superior (i.e., the price of Chinese product is generally lower). Most firms comparing

products from the United States and Mexico reported that the products were comparable for all factors

except delivery time and reliability of supply, for which the U.S. product was reported superior; and

price, for which the Mexican product was reported to be superior. Most firms comparing products from

the United States and nonsubject countries reported that the products were comparable for all factors

except availability, delivery time, and technical support/service, for which the U.S. product was reported

to be superior; and price, for which the nonsubject product was reported to be superior. 

II-19
Table II-10

MCB: Comparisons of U.S. product, product from subject countries, and product from other

countries, as reported by U.S. purchasers

Factor

U.S. vs. China U.S. vs. Mexico U.S. vs. nonsubject2

SC I SC I SC I

Number of firms responding 

Availability 5 9 2 3 7 1 3 2 0

Delivery terms 3 13 0 3 8 0 2 3 0

Delivery time 12 4 0 7 4 0 3 2 0

Discounts offered 1 11 4 1 8 2 1 3 1

Extension of credit 1 15 0 1 10 0 1 4 0

Minimum quantity requirements 3 11 2 2 9 0 1 4 0

Packaging 3 13 0 4 7 0 1 4 0

Price1

 0 4 12 0 5 6 1 1 3

Product consistency 2 13 1 4 7 0 1 4 0

Product range 3 12 1 3 8 0 2 3 0

Quality meets industry expectations 2 14 0 3 8 0 1 4 0

Quality exceeds industry expectations 4 12 0 4 7 0 1 4 0

Reliability of supply 5 10 1 6 5 0 2 3 0

Technical support/service 6 10 0 5 6 0 3 2 0

U.S. transportation costs1

 2 13 1 3 8 0 0 5 0

Factor

China vs. Mexico

China vs.

nonsubject3

Mexico vs.

nonsubject4

SC I SC I SC I

Availability 3 9 0 0 3 0 0 1 0

Delivery terms 1 11 0 0 3 0 0 1 0

Delivery time 4 7 1 0 3 0 0 1 0

Discounts offered 1 10 0 0 3 0 0 1 0

Extension of credit 0 12 0 0 3 0 0 1 0

Minimum quantity requirements 2 10 0 0 3 0 0 1 0

Packaging 1 10 1 0 3 0 0 1 0

Price1

 480030010

Product consistency 3 9 0 0 3 0 0 1 0

Product range 1 11 0 0 3 0 0 1 0

Quality meets industry expectations 1 11 0 0 3 0 010

Quality exceeds industry expectations 3 8 1 0 3 0 0 1 0

Reliability of supply 3 8 1 0 3 0 0 1 0

Technical support/service 2 9 1 0 3 0 0 1 0

U.S. transportation costs1

 291030010

 1 A rating of superior means that the price/U.S. transportation cost is generally lower. For example, if a firm reported 

“U.S. superior,” it meant that the price of U.S. product is generally lower than the price of the imported product. 2 The nonsubject countries included in these comparisons were Europe, Korea, the Slovak Republic, and Turkey. 3 The nonsubject countries included in these comparisons were Korea, Germany, and Turkey. 4 The nonsubject country included in these comparisons was Germany.

Note.--S=first listed country’s product is superior; C=both countries’ products are comparable; I=first listed country’s product

is inferior. 

Source: Compiled from data submitted in response to Commission questionnaires.

II-20
ELASTICITY ESTIMATES

U.S. Supply Elasticity43

The domestic supply elasticity for MCB measures the sensitivity of the quantity supplied to

changes in the U.S. market price of MCBs. The elasticity of domestic supply depends on several factors

including the level of excess capacity, the ease with which producers can alter capacity, producers’ ability

to shift to and from production of other products, the availability of inventories, and the availability of

alternative markets for U.S.-produced MCBs. 

In the short term, the domestic industry has a high degree of responsiveness to changes in prices. 

Supply responsiveness is enhanced by the availability of unused capacity, the existence of alternate

markets, and the ability to switch from producing alternate products; supply responsiveness is constrained

by the somewhat limited ability to use inventories, and is likely in the range of 5 to 7. Petitioner agreed

with staff’s estimate of supply elasticity.44

U.S. Demand Elasticity

The U.S. demand elasticity for MCBs measures the sensitivity of the overall quantity demanded

to a change in the U.S. market price of MCB, and is likely to be low, in the range of -0.25 to -0.5. This

estimate is driven by factors discussed earlier, such as the very low cost share of MCBs in steel

production and the limited substitutability of other products for MCBs. Petitioner agreed that demand

elasticity is likely to be low due to the low cost share of MCBs in the cost of producing steel.45

Substitution Elasticity

The elasticity of substitution depends upon the extent of product differentiation between the

domestic and imported products.46 Product differentiation, in turn, depends upon such factors as quality,

shapes, availability, and conditions of sale. Based on the above data, substitution elasticity between

domestic and imported MCBs is moderate to high, and is likely to be in the range of 3 to 5. Petitioner

disagreed with staff’s estimate of substitution elasticity, due to its position that MCBs are commoditylike. It believes substitutability to be very high, but did not provide an estimate.47

 43 A supply function is not defined in the case of a non-competitive market.

 44 Petitioner’s prehearing brief, pp. 24-25.

 45 Ibid., pp. 23-24.

 46 The substitution elasticity measures the responsiveness of the relative U.S. consumption levels of the subject

imports and the domestic like product to changes in their relative prices. This reflects how easily purchasers switch

from the U.S. product to the subject product (or vice versa) when prices change.

 47 Petitioner’s prehearing brief, p. 25.

II-21

PART III: U.S. PRODUCERS’ PRODUCTION, SHIPMENTS, AND

EMPLOYMENT

The Commission analyzes a number of factors in making injury determinations (see 19 U.S.C. §§

1677(7)(B) and 1677(7)(C)). Information on the alleged margins of dumping and countervailing duties

was presented earlier in this report and information on the volume and pricing of imports of the subject

merchandise is presented in Parts IV and V. Information on the other factors specified is presented in this

section and/or Part VI and (except as noted) is based on the questionnaire responses of three firms that

accounted for *** percent of U.S. production of MCBs during 2009.

U.S. PRODUCERS

The Commission sent producer questionnaires to four firms identified as U.S. producers of MCBs

by the petitioners. Three firms submitted questionnaire responses.1

 Presented in table III-1 is a list of

current domestic producers of MCBs and each company’s position on the petition, production location(s),

related and/or affiliated firms, and share of reported production of MCBs in 2009. Three firms, ANH,

Magnesita, and Resco, accounted for *** percent of reported 2009 domestic production of MCBs. 

Three U.S. producers are related to foreign producers of the subject merchandise and two are

related to U.S. importers of the subject merchandise. In addition, as discussed in greater detail below, two

U.S. producers directly import the ***.

Table III-1

MCBs: U.S. producers, positions on the petition, U.S. production locations, related and/or

affiliated firms, and shares of 2009 reported U.S. production

Firm

Position on

petition

U.S. production

location(s) Related and/or affiliated firms

Share of

production

(percent)

ANH Support White Cloud, MI *** ***

Magnesita Support York, PA *** ***

TYK Support Clairton, PA *** ***

Resco Petitioner Hammond, IN *** ***

Note.–Because of rounding, shares may not total to 100.0 percent.

Source: Compiled from data submitted in response to Commission questionnaires.

 1 ***.

III-1
U.S. CAPACITY, PRODUCTION, AND CAPACITY UTILIZATION

U.S. producers’ capacity, production, and capacity utilization data for MCBs are presented in

tables III-2a and II-2b. These data show capacity to produce MCBs remained steady from 2007 to 2009

and during the interim periods January-March 2009 and January-March 2010. Production of MCBs

decreased by 32.0 percent from 2007 to 2009 and increased by 82.2 percent between the interim periods. 

Capacity utilization decreased by 20.6 percentage points from 2007 to 2009, and increased by

27.3 percentage points between the interim periods.2

Table III-2a

MCBs: U.S. capacity, production, and capacity utilization, 2007-09, January-March 2009, and

January-March 2010

Item

Calendar year January-March–

2007 2008 2009 2009 2010

Capacity1

 (short tons) 114,241 114,241 114,241 28,585 28,585

Production (short tons) 73,552 72,258 49,997 9,485 17,286

Capacity utilization (percent) 64.4 63.3 43.8 33.2 60.5

 1 ***. Data reflect revisions by ***.

Source: Compiled from data submitted in response to Commission questionnaires.

Table III-2b

MCBs: U.S. capacity, production, and capacity utilization, January-June 2009, and July-December

2009

Item

2009

January-June July-December

Capacity1

 (short tons) 57,120 57,120

Production (short tons) 17,576 32,416

Capacity utilization (percent) 30.8 56.7

 1 ***. Data reflect revisions by ***.

Source: Compiled from data submitted in response to Commission questionnaires.

 2 ***.

III-2
U.S. producers were asked if they had experienced any plant openings, relocations, expansions,

acquisitions, consolidations, closures, or prolonged shutdowns because of strikes or equipment failure;

curtailment of production because of shortages of materials; or any other change in the character of their

operations or organization relating to the production of MCBs since January 1, 2007.3

 *** reported the

following changes:

* * * * * * *4

*** also reported that raw material costs went up due to the Chinese magnesia producers being

required to stop production while the Olympics were held in Beijing, and due to increasing export license

fees.5

 *** reported the following changes:6

* * * * * * *7

*** reported the production of other products on the same equipment and machinery and using

the same production and related workers employed in the production of MCBs. ***.8

 ***.9

U.S. PRODUCERS’ SHIPMENTS

U.S. producers sell MCBs individually but also ship them as part of “project” sales packages. 

Project sales packages include total refractory needs for a given ladle, furnace, or steel plant, and can

include a range of related services.10 Data on domestic producers’ shipments of MCBs are presented in

tables III-3a and III-3b. U.S. shipments accounted for *** percent of U.S. producers’ total shipments of

MCBs in 2009, and *** percent in interim 2010. There was no reported internal consumption. Transfers

to related firms accounted for *** percent of U.S. producers’ total shipments of MCBs in 2008, 2009, and

interim 2009. U.S. shipments decreased by 28.9 percent from 2007 to 2009, and increased by 69.1

percent between the interim periods. The unit value of U.S. shipments increased by 21.1 percent from

2007 to 2009, and decreased by 5.6 percent in the interim periods. Exports of MCBs were reported by

***. These exports decreased by *** percent from 2007 to 2009, and increased by *** percent between

the interim periods. Exports accounted for *** percent of U.S. producers’ total shipments during 2009,

and *** percent in interim 2010. The export markets listed included ***. 

 3 ***.

 4

 ***.

 5

 Hearing transcript, pp. 90-91 (Brown).

 6

 ***.

 7

 ***.

 8

 ***. 

 9

 Resco reported ***. Resco producer questionnaire, p. 6, II-4.

 10 ANH’s posthearing brief, pp. 3, 8. ***.

III-3
Table III-3a

MCBs: U.S. producers’ shipments, by types, 2007-09, January-March 2009, and January-March

2010

Item

Calendar year January-March–

2007 2008 2009 2009 2010

Quantity (short tons)

Commercial shipments *** *** *** *** ***

Transfers to related firms *** *** *** *** ***

U.S. shipments 59,403 63,789 42,243 8,989 15,198

Export shipments *** *** *** *** ***

Total shipments *** *** *** *** ***

Value (1,000 dollars)

Commercial shipments *** *** *** *** ***

Transfers to related firms *** *** *** *** ***

U.S. shipments 62,611 76,612 53,933 11,558 18,449

Export shipments *** *** *** *** ***

Total shipments *** *** *** *** ***

Unit value (per short ton)

Commercial shipments *** *** *** *** ***

Transfers to related firms *** *** *** *** ***

U.S. shipments 1,054 1,201 1,277 1,286 1,214

Export shipments *** *** *** *** ***

Total shipments *** *** *** *** ***

Share of quantity (percent)

Commercial shipments *** *** *** *** ***

Transfers to related firms *** *** *** *** ***

U.S. shipments *** *** *** *** ***

Export shipments *** *** *** *** ***

Total shipments 100.0 100.0 100.0 100.0 100.0

 1 Not applicable.

Note.–Because of rounding, figures may not add to the totals shown.

Source: Compiled from data submitted in response to Commission questionnaires.

III-4
Table III-3b

MCBs: U.S. producers’ shipments, by types, January-June 2009, and July-December 2009

Item

2009

January-June July-December

Quantity (short tons)

Commercial shipments *** ***

Transfers to related firms *** ***

U.S. shipments 16,651 25,592

Export shipments *** ***

Total shipments *** ***

Value (1,000 dollars)

Commercial shipments *** ***

Transfers to related firms *** ***

U.S. shipments 21,252 32,681

Export shipments *** ***

Total shipments *** ***

Unit value (per short ton)

Commercial shipments *** ***

Transfers to related firms *** ***

U.S. shipments 1,276 1,277

Export shipments *** ***

Total shipments *** ***

Share of quantity (percent)

Commercial shipments *** ***

Transfers to related firms *** ***

U.S. shipments *** ***

Export shipments *** ***

Total shipments 100.0 100.0

Note.–Because of rounding, figures may not add to the totals shown.

Source: Compiled from data submitted in response to Commission questionnaires.

III-5
U.S. PRODUCERS’ INVENTORIES

Data collected in these investigations on domestic producers’ end-of-period inventories of MCBs

are presented in tables III-4a and III-4b. Domestic producers’ inventories increased by 6.7 percent from

2007 to 2009, and increased by 23.7 percent in interim 2010 compared with interim 2009.11 U.S.

producers’ inventories were equivalent to between *** and *** percent of U.S. producers’ total

shipments during 2007 to March 2010. *** accounted for *** percent of the inventories held at the end

of March 2010.12

Table III-4a

MCBs: U.S. producers’ end-of-period inventories, 2007-09, January-March 2009, and JanuaryMarch 2010

Item

Calendar year January-March–

2007 2008 2009 2009 2010

Inventories (short tons) 8,042 7,334 8,585 6,840 8,461

Ratio to production (percent) 10.9 10.1 17.2 18.0 12.2

Ratio to U.S. shipments (percent) 13.5 11.5 20.3 19.0 13.9

Ratio to total shipments (percent) *** *** *** *** ***

Note.–Partial-year ratios are based on annualized production and shipments.

Source: Compiled from data submitted in response to Commission questionnaires.

Table III-4b

MCBs: U.S. producers’ end-of-period inventories, January-June 2009, and July-December 2009

Item

2009

January-June July-December

Inventories (short tons) 6,416 8,585

Ratio to production (percent) 18.3 13.2

Ratio to U.S. shipments (percent) 19.3 16.8

Ratio to total shipments (percent) *** ***

Note.–Partial-year ratios are based on annualized production and shipments.

Source: Compiled from data submitted in response to Commission questionnaires.

 11 Resco reported it currently has about 30 days of inventory and that half of its shipments come out of stock and

half of them are made to order. Conference transcript, pp. 59-60 (Brown).

 12 ***. 

III-6
U.S. PRODUCERS’ IMPORTS AND PURCHASES

Two of the four U.S. producers, ***, reported that they directly imported MCBs from *** during

the period of review. U.S. producers’ imports of MCBs are presented in tables

III-5a and III-5b.13 

***. 

Table III-5a

MCBs: U.S. producers’ imports, 2007-09, January-March 2009, and January-March 2010

* * * * * * *

Table III-5b

MCBs: U.S. producers’ imports, January-June 2009, and July-December 2009

* * * * * * *

U.S. EMPLOYMENT, WAGES, AND PRODUCTIVITY

U.S. producers’ aggregate employment data for MCBs are presented in tables III-6a and III-6b. 

From 2007 to 2009, U.S. MCB producers reported a decrease in the number of production and related

workers , and reported an increase in interim 2010 compared with interim 2009. *** accounted for the

largest share of the decrease in number of employees from 2007 to 2009, and *** accounted for the

majority of the increase in interim 2010.14 Productivity fell irregularly from 2007 to 2009 by 9.2 percent

and increased by 14.6 percent in interim 2010 compared with interim 2009. Resco reported that it

reduced it’s work week at the Hammond plant by 20 percent, and made similar cuts in salaried personnel

and benefits at both Hammond and the Pittsburgh headquarters.15 Resco executives took a 65 percent

reduction in compensation and benefits beginning in mid-2008.16 ANH reported that in 2009 it had to lay

off 50 hourly workers at its White Cloud, MI, plant, and an additional 100 sales and administrative

employees primarily at its Pittsburgh headquarters.17 After the imposition of the preliminary duties, ANH

was able to rehire 50 production employees for two extra shifts at the White Cloud plant.18

 13 ***. 

 14 Resco reported that in addition to employee layoffs, its top four executives attending the conference have taken

a 65 percent compensation reduction since the middle of 2008. Conference transcript, p. 18 (Brown). 

 15 Hearing transcript, p. 33 (Brown).

 16 Hearing transcript, p. 50 (Mcgrath).

 17 Hearing transcript, pp. 61-62 (Richter).

 18 Hearing transcript, p. 64 (Richter).

III-7
Table III-6a

MCBs: U.S. producers’ employment-related data, 2007-09, January-March 2009, and JanuaryMarch 2010

Item

Calendar year January-March–

2007 2008 2009 2009 2010

Production and related workers (PRWs) 110 102 92 83 112

Hours worked by PRWs (1,000 hours) 239 227 179 39 62

Wages paid to PRWs (1,000 dollars) 6,441 6,420 5,200 1,102 1,823

Hourly wages $26.95 $28.28 $29.05 $28.26 $29.40

Productivity (short tons produced per 

 1,000 hours) 307.7 318.3 279.3 243.2 278.8

Unit labor costs (per short ton) $87.57 $88.85 $104.01 $116.18 $105.46

Source: Compiled from data submitted in response to Commission questionnaires.

Table III-6b

MCBs: U.S. producers’ employment-related data, January-June 2009, and July-December 2009

Item

2009

January-June July-December

Production and related workers (PRWs) 78 106

Hours worked by PRWs (1,000 hours) 72 112

Wages paid to PRWs (1,000 dollars) 2,117 3,299

Hourly wages $29.40 $29.46

Productivity (short tons produced per 

 1,000 hours) 244.1 289.4

Unit labor costs (per short ton) $120.45 $101.77

Source: Compiled from data submitted in response to Commission questionnaires.

III-8
PART IV: U.S. IMPORTS, APPARENT CONSUMPTION, AND

MARKET SHARES

U.S. IMPORTERS

Importer questionnaires were sent to 27 firms believed to be importers of subject MCBs, as well

as to all U.S. producers of MCBs.1

 Usable questionnaire responses were received from 12 companies,2 3

representing 60 percent of total imports from China and 100 percent of total imports from Mexico.4 Table

IV-1 lists all responding U.S. importers of MCBs from China, Mexico, and other sources, their locations,

and their shares of reported U.S. imports in 2009. In 2009, the largest importer of MCBs, in each

instance, from China, Mexico, and other sources ***.5 6

Table IV-1

MCBs: U.S. importers, source(s) of imports, U.S. headquarters, and shares of imports in 2009

* * * * * * *

U.S. IMPORTS

U.S. imports are based on questionnaire responses.7

 Tables IV-2a and IV-2b present data for U.S.

imports of MCBs from China, Mexico, and all other sources. China is the largest foreign supplier of

MCBs to the United States, accounting for *** percent of the quantity of total imports in 2009, and

*** percent of the value. Mexico is the second-largest foreign supplier of MCBs to the United States,

accounting for *** percent of the quantity of total imports in 2009 and *** percent of the value.8

 1 The Commission sent questionnaires to those firms identified in the petition, along with firms that, based on a

review of data provided by U.S. Customs and Border Protection (“Customs”), may have imported at least 100,000

kilograms or greater than one percent of total imports under HTS subheading 6902.10.10 in any one year since 2007.

 2

 *** submitted questionnaire responses in the preliminary phase investigations, but have not responded in the

final phase investigations. In the preliminary phase, these firms accounted for *** percent of reported imports in

2008.

 3

 The Commission received questionnaire responses from two firms that reported that they did not import MCBs

during the period examined. Those firms are: ***. 

 4

 Coverage for Chinese imports is derived from Petitioner’s estimate of total imports of MCBs. Petition, exh. 3.

 5

 ***.

 6

 Four firms reported imports from sources other than China and Mexico: ***. 

 7

 MCBs are classifiable in the Harmonized Tariff Schedule of the United States (“HTS”) under subheadings

6815.91.00, 6815.99.00, 6902.10.10, and 6902.10.50. These HTS subheadings are residual or “basket” subheadings

covering MCBs and other products. 

 Commission staff believes that coverage for subject imports from Mexico to be excellent, while subject

imports from China and nonsubject imports, while understated, are good. ***. 

 8

 The remainder comes from ***. 

IV-1
Table IV-2a

MCBs: U.S. imports, by sources, 2007-09, January-March 2009, and January-March 2010

Source

Calendar year January-March

2007 2008 2009 2009 2010

Quantity (short tons)

China 34,613 41,701 33,643 5,620 6,210

Mexico *** *** *** *** ***

 Subtotal *** *** *** *** ***

Nonsubject *** *** *** *** ***

Total *** *** *** *** ***

Value (1,000 dollars)

1

China 24,105 33,822 27,083 4,786 4,966

Mexico *** *** *** *** ***

 Subtotal *** *** *** *** ***

Nonsubject *** *** *** *** ***

Total *** *** *** *** ***

Unit value (per short ton)

1

China $696 $811 $805 $852 $800

Mexico *** *** *** *** ***

 Subtotal *** *** *** *** ***

Nonsubject *** *** *** *** ***

Average *** *** *** *** ***

Share of quantity (percent)

China 84.1 93.1 87.6 82.6 68.8

Mexico *** *** *** *** ***

 Subtotal *** *** *** *** ***

Nonsubject *** *** *** *** ***

Total *** *** *** *** ***

Share of value (percent)

China 81.2 92.3 82.6 79.4 60.2

Mexico *** *** *** *** ***

 Subtotal *** *** *** *** ***

Nonsubject *** *** *** *** ***

Total *** *** *** *** ***

1

 Landed, U.S. port of entry, duty-paid. 

Source: Compiled from data submitted in response to Commission questionnaires.

IV-2
Table IV-2b

MCBs: U.S. imports, by sources, January-June 2009, and July-December 2009

Source

2009

January-June July-December

Quantity (short tons)

China 10,776 22,867

Mexico *** ***

 Subtotal *** ***

Nonsubject *** ***

Total *** ***

Value (1,000 dollars)

1

China 8,754 18,259

Mexico *** ***

 Subtotal *** ***

Nonsubject *** ***

Total *** ***

Unit value (per short ton)

1

China $812 $798

Mexico *** ***

 Subtotal *** ***

Nonsubject *** ***

Average *** ***

Share of quantity (percent)

China 86.4 88.6

Mexico *** ***

 Subtotal *** ***

Nonsubject *** ***

Total *** ***

Share of value (percent)

China 82.7 82.8

Mexico *** ***

 Subtotal *** ***

Nonsubject *** ***

Total 100.0 100.0

1

 Landed, U.S. port of entry, duty-paid. 

Source: Compiled from data submitted in response to Commission questionnaires.

IV-3
From 2007 to 2009, the quantity of imports of MCBs from China decreased by 2.8 percent while

the value increased by 12.4 percent. The quantity and value of imports of MCBs from China during

interim 2010 increased by 10.5 percent and 3.8 percent, respectively, compared with interim 2009. The

unit value of imports of MCBs from China increased by 15.7 percent from 2007 to 2009, and decreased

by 6.1 percent in interim 2010 compared with interim 2009. From 2007 to 2009, the quantity and value

of imports of MCBs from Mexico increased by *** percent and *** percent, respectively, then increased

by *** percent and *** percent in interim 2010 compared with interim 2009. The unit value of imports

of MCBs from Mexico increased by *** percent from 2007 to 2009, and decreased by *** percent in

interim 2010 compared with interim 2009. The quantity of imports from other countries decreased by

*** percent while the value decreased by *** percent from 2007 to 2009,. The quantity and value of

imports from other countries increased by *** percent and *** percent in interim 2010 compared with

interim 2009. The unit value of imports of MCBs from other sources increased by *** percent from 2007

to 2009, and increased by *** percent in interim 2010 compared with interim 2009.

CUMULATION CONSIDERATIONS

In assessing whether subject imports are likely to compete with each other and with the domestic 

like product with respect to cumulation, the Commission generally has considered the following four

factors: (1) the degree of fungibility, including specific customer requirements and other quality-related

questions; (2) presence of sales or offers to sell in the same geographic markets; (3) common channels of

distribution; and (4) simultaneous presence in the market. Channels of distribution and fungibility

(interchangeability) are discussed in Part II of this report.

Petitioner has argued that U.S. imports of MCBs from China and Mexico should be cumulated. It

reports that substitutability between domestic and subject imports is high and that imports from China and

Mexico are interchangeable.9

 The Petitioner argued that the geographic market for the Chinese product

is national, and acknowledges that imports from Mexico enter largely through the Central Southwestern

and Southeastern regions of the United States, but that ***.10 Chinese, Mexican, and U.S. producers of

MCBs sell the majority of their product to end users.11 The petitioner also argued that imported MCBs

were present in the U.S. market simultaneously with U.S.-produced MCBs.12

RHI argued that there is insignificant overlap between imports of MCBs from Mexico and China,

because the Mexican MCBs are sold in different geographic markets and in insignificant quantities.13

Mexican MCBs are transported overland to the Central Southeastern and Southwestern states and a few

lower Midwestern states, whereas imports of MCBs from China travel by ocean vessel to ports along both

the east and west coasts and the north central region of the country.14 RHI further points out that the

Commission’s pricing product information shows limited competition between MCB imports from

Mexico and imports from China and U.S. MCBs. Products 1-5 cover nearly 80 percent of subject imports

from China, but only *** percent of imports from Mexico.15 

 9 Petitioner’s prehearing brief, p. 9.

 10 Petitioner’s prehearing brief, p. 10.

 11 Table II-1.

 12 Petitioner’s prehearing brief, p. 11.

 13 Respondent RHI’s prehearing brief, pp. 12-13

 14 Respondent RHI’s prehearing brief, p. 13.

 15 Respondent RHI’s prehearing brief, p. 14.

IV-4
NEGLIGIBILITY

The statute requires that an investigation be terminated without an injury determination if imports

of the subject merchandise are found to be negligible.16 Negligible imports are generally defined in the

Tariff Act of 1930, as amended, as imports from a country of merchandise corresponding to a domestic

like product where such imports account for less than 3 percent of the volume of all such merchandise

imported into the United States in the most recent 12-month period for which data are available that

precedes the filing of the petition or the initiation of the investigation. However, if there are imports of

such merchandise from a number of countries subject to investigations initiated on the same day that

individually account for less than 3 percent of the total volume of the subject merchandise, and if the

imports from those countries collectively account for more than 7 percent of the volume of all such

merchandise imported into the United States during the applicable 12-month period, then imports from

such countries are deemed not to be negligible.17 Imports from China accounted for *** percent of total

imports of MCBs by quantity during July 2008-June 2009. Imports from Mexico accounted for

*** percent of total imports of MCBs by quantity during July 2008-June 2009.

APPARENT U.S. CONSUMPTION

Data concerning apparent U.S. consumption of MCBs during the period of investigation shown in

tables IV-3a, and IV-3b, and figure IV-1 are based on questionnaire responses. The quantity of apparent

U.S. consumption decreased by *** percent from 2007 to 2009, and then increased by *** percent in

interim 2010 compared with interim 2009. The steel industry is the end-use market for MCBs, where

they are used for the linings of ladles, electric arc furnaces, and basic oxygen furnaces.18 Ladles are the

largest user of MCBs, followed by electric arc furnaces. Basic oxygen furnaces account for about 5 to 10

percent of demand due to process control techniques like slag splashing and the growth of mini-mills.19

The strong demand for MCBs stopped around the fourth quarter of 2008 through the first half of 2009,

and then began to recover in the second half of 2009 through the first quarter of 2010.20 Steel production

declined by roughly 50 percent from roughly October 2008 through June 2009.21 Full year 2009 steel

production was down 36 percent compared with full year 2008 production figures.22

 16 Sections 703(a)(1), 705(b)(1), 733(a)(1), and 735(b)(1) of the Act (19 U.S.C. §§ 1671b(a)(1), 1671d(b)(1),

1673b(a)(1), and 1673d(b)(1)).

 17 Section 771(24) of the Act (19 U.S.C. § 1677(24)).

 18 Hearing transcript, p. 36 (Copp).

 19 Ibid.

 20 Hearing transcript, p. 23 (Thomas) and p. 157 (Beschel).

 21 Respondent RHI’s posthearing brief, appendix, p. 11. 

 22 World Steel Association.

IV-5
Table IV-3a

MCBs: U.S. shipments of domestic product, U.S. shipments of imports, and apparent U.S.

consumption, 2007-09, January-March 2009, and January-March 2010

Item

Calendar year January-March

2007 2008 2009 2009 2010

Quantity (short tons)

U.S. producers’ U.S. shipments 59,403 63,789 42,243 8,989 15,198

U.S. shipments of imports from–

 China 31,387 38,102 33,090 8,013 10,198

 Mexico *** *** *** *** ***

 Subtotal *** *** *** *** ***

 Nonsubject countries *** *** *** *** ***

 Total U.S. import shipments *** *** *** *** ***

Apparent U.S. consumption *** *** *** *** ***

Value (1,000 dollars)

U.S. producers’ U.S. shipments 62,611 76,612 53,933 11,558 18,449

U.S. shipments of imports from--

 China 27,155 35,542 33,676 8,028 11,092

 Mexico *** *** *** *** ***

 Subtotal *** *** *** *** ***

 Nonsubject countries *** *** *** *** ***

 Total U.S. import shipments *** *** *** *** ***

Apparent U.S. consumption *** *** *** *** ***

Note.–Because of rounding, figures may not add to the totals shown.

Source: Compiled from data submitted in response to Commission questionnaires.

IV-6
Table IV-3b

MCBs: U.S. shipments of domestic product, U.S. shipments of imports, and apparent U.S.

consumption, January-June 2009, and July-December 2009

Item

2009

January-June July-December

Quantity (short tons)

U.S. producers’ U.S. shipments 16,651 25,592

U.S. shipments of imports from–

 China 14,398 18,692

 Mexico *** ***

 Subtotal *** ***

 Nonsubject countries *** ***

Total U.S. import shipments *** ***

Apparent U.S. consumption *** ***

Value (1,000 dollars)

U.S. producers’ U.S. shipments 21,252 32,681

U.S. shipments of imports from--

 China 14,048 18,665

 Mexico *** ***

 Subtotal *** ***

 Nonsubject countries *** ***

Total U.S. import shipments *** ***

Apparent U.S. consumption *** ***

Note.–Because of rounding, figures may not add to the totals shown.

Source: Compiled from data submitted in response to Commission questionnaires.

Figure IV-1

MCBs: Apparent U.S. consumption, by sources, 2007-09, January-March 2009, and January-March

2010

* * * * * * *

Source: Table IV-3a.

IV-7
U.S. MARKET SHARES

U.S. market share data are presented in tables IV-4a and IV-4b. The quantity of the U.S.

producers’ market share decreased by *** percentage points from 2007 to 2009 and was *** percentage

points higher in interim 2010 compared with interim 2009. In contrast, the share of subject imports from

China increased from *** percent in 2007 to *** percent in 2009, on the basis of quantity, and decreased

from *** percent in interim 2009 to *** percent in interim 2010. The share of subject imports from

Mexico increased from *** percent in 2007 to *** percent in 2009, and increased from *** percent in

interim 2009 to *** percent in interim 2010. Nonsubject imports’ market share decreased from

*** percent in 2007 to *** percent in 2009, and held level at *** percent in interim 2009 and 2010.

Table IV-4a

MCBs: U.S. consumption and market shares, 2007-09, January-March 2009, and January-March

2010

* * * * * * *

Table IV-4b

MCBs: U.S. consumption and market shares, January-June 2009, and July-December 2009

* * * * * * *

RATIO OF IMPORTS TO U.S. PRODUCTION

Information concerning the ratio of imports to U.S. production of MCBs is presented in tables

IV-5a and IV-5b. Imports from China were equivalent to 47.1 percent of U.S. production during 2007

and steadily increased to 67.3 percent in 2009, but were 35.9 percent in interim 2010 compared with 59.2

percent in interim 2009. Imports from Mexico were equivalent to *** percent of U.S. production during

2007 and steadily increased to *** percent during 2009, but were *** percent in interim 2010 compared

with *** percent in interim 2009.

IV-8
Table IV-5a

MCBs: U.S. production, U.S. imports, and ratios of imports to U.S. production, 2007-09, JanuaryMarch 2009, and January-March 2010

Item

Calendar year January-March

2007 2008 2009 2009 2010

Quantity (short tons)

U.S. production 73,552 72,258 49,997 9,485 17,286

Imports from:

 China 34,613 41,701 33,643 5,620 6,210

 Mexico *** *** *** *** ***

 Subtotal *** *** *** *** ***

 Nonsubject countries *** *** *** *** ***

Total imports *** *** *** *** ***

Ratio of U.S. imports to production (percent)

Imports from:

 China 47.1 57.7 67.3 59.2 35.9

 Mexico *** *** *** *** ***

 Subtotal *** *** *** *** ***

 Nonsubject countries *** *** *** *** ***

Total imports *** *** *** *** ***

Note.–Because of rounding, figures may not add to the totals shown.

Source: Compiled from data submitted in response to Commission questionnaires.

IV-9
Table IV-5b

MCBs: U.S. production, U.S. imports, and ratios of imports to U.S. production, January-June 2009,

and July-December 2009

Item

2009

January-June July-December

U.S. production 17,576 32,416

Imports from:

 China 10,776 22,867

 Mexico *** ***

 Subtotal *** ***

 Nonsubject countries *** ***

Total imports *** ***

Imports from:

 China 61.3 70.5

 Mexico *** ***

 Subtotal *** ***

 Nonsubject countries *** ***

Total imports *** ***

Note.–Because of rounding, figures may not add to the totals shown.

Source: Compiled from data submitted in response to Commission questionnaires.

IV-10
CRITICAL CIRCUMSTANCES

On April 15, 2010, the Petitioner filed a timely critical circumstances allegation with respect to

imports of MCBs from China. Petitioner contends that based on the preliminary dumping margins

assigned by Commerce, importers know or should have known that imports of MCBs from China were

being sold at less than fair value. Petitioner also contends that based on the Commission’s preliminary

affirmative determination, there is a reasonable basis to impute importers’ knowledge that material injury

is likely by reason of imports of MCBs from China. RHI argued that the increase in imports from the prepetition period to the post-petition period was not in response to the filing of the petition, but in response

to the recovery of the U.S. steel industry and the associated rebound in MCB demand.23 Commerce

issued a final affirmative critical circumstances determination in conjunction with its less than fair value

determination.24 Table IV-6 presents RHI’s monthly exports to the United States provided to Commerce

for the seven-month period prior to the filing of the petition on July 29, 2009 and the seven-month period

following the filing of the petition.25

Table IV-6

MCBs: RHI Liaoning’s and RHI Dalian’s exports to the United States subject to Commerce’s critical

circumstances determination, by month, January 2009 - February 2010

* * * * * * *

 23 Respondent RHI’s prehearing brief, p. 68.

 24 Certain Magnesia Carbon Bricks from the People’s Republic of China: Final Determination of Sales at Less

Than Fair Value and Critical Circumstances, 75 FR 45468, August 2, 2010.

 25 These data were provided by RHI.

IV-11

PART V: PRICING AND RELATED INFORMATION

FACTORS AFFECTING PRICES

Raw Material Costs

Magnesia is the main raw material used to produce MCB. According to ***, magnesite accounts

for *** percent of the cost of raw materials in producing MCB.1

 Petitioner indicates that it purchases ***

used in the production of MCB. Raw material costs accounted for approximately 74.3 percent of the total

cost of goods sold for U.S. producers from January 2007 to March 2010. Per-ton raw material costs

increased by 26.1 percent between 2007 and 2008 and by a further 8.4 percent in the first quarter of 2009. 

These costs have since decreased and were 9.4 percent lower in the first quarter of 2010 compared to the

same time period in 2009, however were still 77.5 percent of the cost of goods sold that quarter. Between

January 2007 and June 2008, the price of all types of magnesia increased steadily, but have decreased

since that time.2

 In February 2008, the Freedonia Group projected that the price of refractories made of

magnesite and chrome would increase by 18 percent between 2006 and 2011 and by 15 percent between

2011 and 2016.3

 All producers and importers reported increasing raw material costs since 2007, and all

expect further increases in the price of magnesite.

U.S. Inland Transportation Costs

Transportation costs for U.S. inland shipments of MCBs generally account for a small-tomoderate share of the delivered price of these products. U.S. producers reported that the costs ranged

from 4 to 7 percent of the delivered price for MCBs (with a simple average of 5.3 percent), while U.S.

importers reported that the costs ranged from 2 to 15 percent of the delivered price for MCBs (with a

simple average of *** percent).

Other Refractory Products and Services

Respondent RHI estimated that 50 percent of MCB purchasers buy MCBs as part of an entire

lining for a ladle or furnace. For these sales, MCBs are purchased on the basis of the package, not just the

price of the MCBs included within the package.4

 Nearly all purchasers (19 of 20) reported buying MCBs

from suppliers that also supply them with other refractory products. 

An increasing proportion of MCB sales take place as part of a cost-per-ton or cost-per-heat

program. These may be referred to in the industry as “program sales” or “project sales,” and may include

other related services such as installation and technical assistance, in which case these types of contracts

 1 ***.

 2

 Prices petitioner paid for ***. Staff telephone interview with ***, September 2, 2009. ***. Email from ***,

June 23, 2010. 

 3

 Industry Study 2309: Refractories, The Freedonia Group, Inc. (February 2008), pp. 25-26 and table II-4,

attached in Exhibit S-4 of Petitioner’s Responses to Questions Regarding Additional Subsidy Allegations, August 7,

2009. Respondent RHI contends that this report was published before the recession in the United States, and thus,

any forecasts of prices of inputs to the steel industry is irrelevant. Respondent RHI’s prehearing brief, app. A. 

 4

 Respondent RHI’s postconference brief, pp. 14-15.

V-1
may also be called “full-line service” arrangements.5

 Six of 20 responding purchasers (***) reported

purchasing MCBs via cost-per-ton or cost-per-heat programs. Additionally, ANH reported sales to ***

on a project sale basis, with ***.6

PRICING PRACTICES

Pricing Methods

Two of the three producers reported using transaction-by-transaction negotiations for some of

their sales of MCB, with one (***) also using contracts. One producer (***) reported using a price list.

Most (8 of 11) importers reported that sales prices are determined using transaction-by-transaction

negotiations, while 6 reported using contracts. Two of three producers and ***

responding importers make their sales on an f.o.b. basis, whereas one producer and *** importers

typically sell on a delivered basis. Of the responding firms, only *** do not typically arrange freight. 

Nearly all (19 of 20) purchasers reported that purchasing MCBs usually involves negotiations with

suppliers. 

Producer Resco reported selling ***7

 ***.8 Four importers reported selling on a long-term

contract basis with contracts that last one to five years: ***.9

 *** and *** responding importers reported

that prices for long-term contracts can be renegotiated within the contract period. Also, *** and ***

responding importers reported that only prices are fixed in long-term contracts. Two of the five importers

and *** reported that meet-or-release clauses were not typically included in long-term contracts. Four of

eight responding importers reported making at least 69 percent of their sales on a short-term contract

basis, with these contracts lasting between 3 and 12 months. Three of 10 responding importers and ***

producers reported that only prices were fixed for these contracts and that pricing could be negotiated for

*** producers and four of the 10 responding importers. *** are the only firms which typically include

meet-or-release clauses in their short-term contracts.

Lead Times

One of two responding producers and three of eight responding importers reported that at least 80

percent of their sales of MCBs were from inventory.10 Six of nine responding importers reported that all

of their sales are on a made-to-order basis. U.S. producers reported lead times from inventory ranging

from one to three days and lead times for sales of produced-to-order MCBs of one to two days to two to

three weeks. Delivery lead times for all but one responding U.S. importer ranged from one to seven days

on sales from inventory; importers that reported lead times for sales of made-to-order MCBs ranged from

two to four months. The two responding U.S. producers reported making *** of their sales within 101 to

1,000 miles of their storage or production facilities. Importer *** ships all of its MCBs more than 1,000

 5 Hearing transcript, p. 250 (Beschel). Determining the specific price of a MCB as part of project sales is an

extremely difficult task to perform. The individual parts of the contract are not separately priced or invoiced, so

producer ANH, ***, was unable to formulate specific pricing and value data for these sales. Hearing transcript, p.

132 (Richter). These data, which represent *** percent of ANH’s total shipments throughout the period under

examination were not included in the data set of this investigation. Producer ANH’s posthearing brief, p. 3. ***.

 6

 Producer ANH’s posthearing brief, exh. 2.

 7

 Since the preliminary phase of these investigations, producer LWB has changed its name to Magnesita.

 8

 *** did not report ***.

 9

 ***.

 10 The other responding producer reported an even split between made-to-order and inventory sales.

V-2
miles from its storage facility and importer *** ships all of its MCBs between 100 and 1,000 miles from

its storage facility; the other five responding importers ship to purchasers located a variety of distances

from the importers’ storage facilities. Based on a simple average, importers shipped approximately 21

percent to a destination less than 100 miles from its storage facility, 48 percent between 100 and 1,000

miles, and 31 percent more than 1,000 miles. 

Sales Terms and Discounts

Two producers and *** responding importers indicated that they typically do not offer discounts

for their sales of MCBs beyond that which may be provided for in their sales terms for early payment. 

*** include price discounts when conducting negotiations. *** offer annual volume discounts. Sales

terms are net 30 days for all responding producers and importers, ***. Two producers and three

importers (including ***) offer small discounts for early payments. 

PRICE DATA

The Commission requested U.S. producers and importers of MCBs to provide quarterly data for

the total quantity and f.o.b. value of MCBs that they shipped to unrelated customers in the U.S. market

during January 2007-March 2010. The products for which pricing data were requested are as follows:

Product 1.--Resin-bonded, Magnesia Carbon Brick for electric arc furnaces with a carbon content

of 13 percent, fused grain and antioxidant additions that correspond to Resco’s brand Nuline

10-99.

Product 2.--Resin-bonded, Magnesia Carbon Brick for electric arc furnaces with a carbon content

of 15 percent, fused grain and antioxidant additions that correspond to Resco’s brand Nuline 15

DF.

Product 3.--Resin-bonded, Magnesia Carbon Brick for steel ladles with a carbon content of 8

percent, 50 percent sintered and 50 percent fused grain, and antioxidant additions that correspond

to RHI’s brand Ancarbon AC51 CE.

Product 4.--Resin-bonded, Magnesia Carbon Brick for steel ladles with a carbon content of 10

percent, fused grain and antioxidant additions that correspond to RHI’s brand Ancarbon AC72

CE.

Product 5.--Resin-bonded, Magnesia Carbon Brick for steel ladles with a carbon content of 13

percent, fused grain and antioxidant additions that correspond to Resco’s brand Nuline 2-99.

Three U.S. producers, nine importers of MCBs from China, and one importer of MCBs from

Mexico provided usable pricing data for sales of the requested products, although not all firms reported

pricing for all products for all quarters.11 12 Pricing data reported by these firms accounted for

 11 Due to a variety of specific chemistries for MCBs, some producers and importers reported data for products

that did not exactly meet the product specifications but were competitive with the specified product. When this

occurred, these firms reported how their products differed from the definition of the pricing product. Differences

noted by these firms include: *** reported product 3 had a 12-percent carbon content; producer *** product 1 was

not 100-percent fused grain and product 4 had an 11-percent carbon content; *** product 1 was its ***, product 2

was its ***, and product 5 was its ***; *** product 2 was an EAF brick, and had a 10-percent carbon content with

(continued...)

V-3
approximately *** percent of U.S. producers’ shipments of MCB, 60.2 percent of U.S. shipments of

subject imports from China, and *** percent of U.S. shipments of subject imports from Mexico during

January 2007-March 2010.13

Price Trends

Pricing data are shown in tables V-1 to V-5 and figures V-1 to V-5. In general, prices for MCBs 

produced domestically increased over the period. Weighted-average sales prices for the five U.S.-

produced MCB pricing products increased by 10.0 to 31.3 percent (table V-6). Prices for domestically

produced product 1 peaked in the second quarter of 2009, then decreased to 2008 levels in the final three

quarters of the period examined. Prices for domestically produced product 2 increased until the third

quarter of 2008, and remained at approximately that level until the first quarter of 2010, when prices were

7.8 percent lower than the fourth quarter of 2009. Pricing for the other domestically produced pricing

products generally increased throughout the period examined.

Weighted-average sales prices for products imported from China also increased for four of the

five pricing products (by 6.1 to 32.7 percent) and two of the three products imported from Mexico (by

*** to *** percent). See table V-6 for detailed information. Prices of product 1 imported from China

generally increased from the first quarter of 2007 to the first quarter of 2010, with the exception of the

third quarter of 2009, ***. Prices of product 2 imported from China declined from the first quarter of

2007 to the second quarter of 2007, increased until the fourth quarter of 2008, and have remained near,

but slightly below that level since that time. Prices for product 3 imported from China first decreased

until the first quarter of 2008, then increased to a peak in the fourth quarter of 2008, and has generally

declined since that time (with the exception of a 2.6 percent increase in the first quarter of 2010). Prices

of products 4 and 5 imported from China generally increased from the first quarter of 2007 to the first

quarter of 2010. 

Prices for product 2 imported from Mexico increased irregularly from the fourth quarter of 2007

to the third quarter of 2008, declined until the first quarter of 2009, increased in the second quarter of

2009, and have declined since that time. Prices for products 3 imported from Mexico generally declined

from the first quarter of available data to the last quarter, as did the prices of product 4 from Mexico from

the first quarter of 2008 to the first quarter of 2010. The prices of product 4 were lowest in 2007,

however. 

 11 (...continued)

fused grain and anti-oxidants, product 4 was for a steel ladle, and had a 10-percent carbon content with fused grain

and anti-oxidants, and product 5 had a 12-percent carbon content with fused grain and anti-oxidants; and ***

product 1 was its ***, product 2 included its ***, and product 5 included its ***.

 12 In the prehearing report, pricing data for ***. Upon further investigation by staff, the pricing product for which

***. E-mail from ***. This data was not included in this final version of the staff report. 

 13 Pricing data do not include prices for MCBs that were sold as part of cost-per-ton, cost-per-heat, or full-line

service contracts. ***.

V-4
Table V-1

MCBs: Weighted-average f.o.b. prices and quantities of domestic and imported product 11 and

margins of underselling/(overselling), by quarters, January 2007-March 2010

Period

United States China

Price 

(per ton)

Quantity

(tons)

Price 

(per ton)

Quantity

(tons)

Margin

(percent)

2007:

 Jan.-Mar. $*** *** $837 737 ***

 Apr.-June *** *** 837 693 ***

 July-Sept. *** *** 924 977 ***

 Oct.-Dec. *** *** 934 1,046 ***

2008:

 Jan.-Mar. *** *** 952 1,436 ***

 Apr.-June *** *** 1,018 1,457 ***

 July-Sept. *** *** 1,024 1,496 ***

 Oct.-Dec. *** *** 1,031 634 ***

2009:

 Jan.-Mar. *** *** 1,061 672 ***

 Apr.-June *** *** *** *** ***

 July-Sept. *** *** 825 1,650 ***

 Oct.-Dec. *** *** *** *** ***

2010:

 Jan.-Mar. *** *** *** *** ***

 1 Product 1: Resin-bonded, Magnesia Carbon Brick for electric arc furnaces with a carbon content of 13 percent,

fused grain and antioxidant additions that correspond to Resco's brand Nuline 10-99.

Source: Compiled from data submitted in response to Commission questionnaires.

V-5
Table V-2

MCBs: Weighted-average f.o.b. prices and quantities of domestic and imported product 21 and

margins of underselling/(overselling), by quarters, January 2007-March 2010

Period

United States China Mexico

Price 

(per ton)

Quantity

(tons)

Price 

(per ton)

Quantity

(tons)

Margin

(percent)

Price 

(per ton)

Quantity

(tons)

Margin

(percent)

2007:

 Jan.-Mar. $*** *** $1,044 812 *** -- 0 --

 Apr.-June *** *** 933 848 *** -- 0 --

 July-Sept. *** *** 1,011 962 *** -- 0 --

 Oct.-Dec. *** *** 998 1,207 *** $*** *** ***

2008:

 Jan.-Mar. *** *** 1,056 1,564 *** *** *** ***

 Apr.-June *** *** 1,054 1,880 *** -- 0 --

 July-Sept. *** *** 1,113 1,619 *** *** *** ***

 Oct.-Dec. *** *** 1,124 836 *** *** *** ***

2009:

 Jan.-Mar. *** *** 1,120 1,188 *** *** *** ***

 Apr.-June *** *** 1,094 1,047 *** *** *** ***

 July-Sept. *** *** 1,088 1,346 *** *** *** ***

 Oct.-Dec. *** *** 1,082 1,743 *** *** *** ***

2010:

 Jan.-Mar. *** *** 1,107 1,935 *** *** *** ***

 1 Product 2: Resin-bonded, Magnesia Carbon Brick for electric arc furnaces with a carbon content of 15 percent,

fused grain and antioxidant additions that correspond to Resco's brand Nuline 15 DF.

Source: Compiled from data submitted in response to Commission questionnaires.

V-6
Table V-3

MCBs: Weighted-average f.o.b. prices and quantities of domestic and imported product 31 and

margins of underselling/(overselling), by quarters, January 2007-March 2010

Period

United States China Mexico

Price 

(per ton)

Quantity

(tons)

Price 

(per ton)

Quantity

(tons)

Margin

(percent)

Price 

(per ton)

Quantity

(tons)

Margin

(percent)

2007:

 Jan.-Mar. $*** *** $*** *** *** $*** *** ***

 Apr.-June *** *** *** *** *** *** *** ***

 July-Sept. *** *** *** *** *** *** *** ***

 Oct.-Dec. *** *** *** *** *** -- 0 --

2008:

 Jan.-Mar. *** *** *** *** *** -- 0 --

 Apr.-June *** *** 861 418 *** -- 0 --

 July-Sept. 1,285 94 *** *** *** -- 0 --

 Oct.-Dec. *** *** *** *** *** -- 0 --

2009:

 Jan.-Mar. 1,065 96 *** *** *** -- 0 --

 Apr.-June *** *** *** *** *** -- 0 --

 July-Sept. *** *** 896 807 *** *** *** ***

 Oct.-Dec. *** *** *** *** *** *** *** ***

2010:

 Jan.-Mar. *** *** *** *** *** -- 0 --

 1 Product 3: Resin-bonded, Magnesia Carbon Brick for steel ladles with a carbon content of 8 percent, 50

percent sintered and 50 percent fused grain, and antioxidant additions that correspond to RHI's brand Ancarbon

AC51 CE.

Source: Compiled from data submitted in response to Commission questionnaires.

V-7
Table V-4

MCBs: Weighted-average f.o.b. prices and quantities of domestic and imported product 41 and

margins of underselling/(overselling), by quarters, January 2007-March 2010

Period

United States China Mexico

Price 

(per ton)

Quantity

(tons)

Price 

(per ton)

Quantity

(tons)

Margin

(percent)

Price 

(per ton)

Quantity

(tons)

Margin

(percent)

2007:

 Jan.-Mar. $*** *** $866 1,357 *** $*** *** ***

 Apr.-June *** *** 899 1,061 *** -- 0 --

 July-Sept. *** *** *** *** *** *** *** ***

 Oct.-Dec. *** *** *** *** *** -- 0 --

2008:

 Jan.-Mar. *** *** *** *** *** *** *** ***

 Apr.-June *** *** 1,032 1,793 *** *** *** ***

 July-Sept. *** *** *** *** *** *** *** ***

 Oct.-Dec. *** *** 1,084 881 *** *** *** ***

2009:

 Jan.-Mar. *** *** 1,099 955 *** *** *** ***

 Apr.-June *** *** 1,078 1,272 *** *** *** ***

 July-Sept. *** *** 1,102 1,371 *** *** *** ***

 Oct.-Dec. *** *** 1,116 1,540 *** *** *** ***

2010:

 Jan.-Mar. *** *** 1,115 1,523 *** *** *** ***

 1 Product 4: Resin-bonded, Magnesia Carbon Brick for steel ladles with a carbon content of 10 percent, fused

grain and antioxidant additions that correspond to RHI's brand Ancarbon AC72 CE.

Source: Compiled from data submitted in response to Commission questionnaires.

V-8
Table V-5

MCBs: Weighted-average f.o.b. prices and quantities of domestic and imported product 51 and

margins of underselling/(overselling), by quarters, January 2007-March 2010

Period

United States China Mexico

Price 

(per ton)

Quantity

(tons)

Price 

(per ton)

Quantity

(tons)

Margin

(percent)

Price 

(per ton)

Quantity

(tons)

Margin

(percent)

2007:

 Jan.-Mar. $*** *** $889 795 *** -- 0 --

 Apr.-June *** *** 1,075 930 *** -- 0 --

 July-Sept. *** *** 931 1,126 *** -- 0 --

 Oct.-Dec. *** *** 999 1,039 *** -- 0 --

2008:

 Jan.-Mar. *** *** 1,002 1,334 *** -- 0 --

 Apr.-June *** *** *** *** *** -- 0 --

 July-Sept. *** *** *** *** *** -- 0 --

 Oct.-Dec. *** *** 1,015 581 *** -- 0 --

2009:

 Jan.-Mar. *** *** *** *** *** -- 0 --

 Apr.-June *** *** 1,033 862 *** $*** *** ***

 July-Sept. *** *** 1,035 1,267 *** -- 0 --

 Oct.-Dec. *** *** 1,096 1,039 *** -- 0 --

2010:

 Jan.-Mar. *** *** *** *** *** -- 0 --

 1 Product 5: Resin Bonded, Magnesia Carbon Brick for steel ladles with a carbon content of 13 percent, fused

grain and antioxidant additions that correspond to Resco's brand Nuline 2-99.

Source: Compiled from data submitted in response to Commission questionnaires.

V-9
Figure V-1

MCBs: Weighted-average f.o.b. prices and quantities of domestic and imported product 1, by

quarters, January 2007-March 2010

* * * * * * *

Figure V-2

MCBs: Weighted-average f.o.b. prices and quantities of domestic and imported product 2, by

quarters, January 2007-March 2010

* * * * * * *

Figure V-3

MCBs: Weighted-average f.o.b. prices and quantities of domestic and imported product 3, by

quarters, January 2007-March 2010

* * * * * * *

Figure V-4

MCBs: Weighted-average f.o.b. prices and quantities of domestic and imported product 4, by

quarters, January 2007-March 2010

* * * * * * *

Figure V-5

MCBs: Weighted-average f.o.b. prices and quantities of domestic and imported product 5, by

quarters, January 2007-March 2010

* * * * * * *

V-10
Table V-6

MCBs: Summary of weighted-average f.o.b. prices for products 1-5 from the United States, China,

and Mexico

Item Number of

quarters

Low price 

(per ton)

High price

(per ton)

Change in price1

(percent)

Product 1 

United States 13 1,138 1,464 10.0

China 13 825 1,110 32.7

Product 2

United States 13 1,142 1,506 20.8

China 13 933 1,124 6.1

Mexico *** *** *** ***

Product 3 

United States 13 886 1,285 28.9

China 13 769 1,217 (2.9)

Mexico *** *** *** ***

Product 4

United States 13 934 1,270 31.3

China 13 866 1,116 28.7

Mexico *** *** *** ***

Product 5 

United States 13 978 1,250 25.4

China 13 889 1,097 23.4

Mexico *** *** *** ***

 1 Percentage change from the first quarter in which price data were available to the last quarter in which price data

were available, based on unrounded data.

Source: Tables V-1 to V-5.

Price Comparisons

Margins of underselling and overselling for the period are presented in table V-7. As can be seen

from the table, prices for MCBs imported from China were below those for U.S.-produced MCBs in 59 of

65 instances; margins of underselling ranged from 2.3 to 35.1 percent. In the remaining six instances,

prices for MCBs from China were 1.7 to 13.0 percent above prices for the domestic product. Prices for

MCBs imported from Mexico were below those for U.S.-produced MCBs in 18 of 26 instances; margins

of underselling ranged from 1.0 to 28.7 percent. In the remaining eight instances, prices for MCBs from

Mexico were 0.4 to 43.0 percent above prices for the domestic product. 

V-11
Table V-7

MCBs: Number of quarters of underselling and (overselling) and highest and lowest margins of

underselling and (overselling), by product number, January 2007-March 2010

Product

and

Country

Number of

quarters of

underselling

Number of

quarters of

(overselling)

Margins of underselling Margins of (overselling)

Average 

(percent) 

Range (percent)

Average 

(percent)

Range (percent)

Min Max Min Max

China

1 13 0 22.6 11.3 35.1 -- -- --

2 13 0 21.1 9.2 28.2 -- -- -- 

3 9 4 16.9 4.0 25.6 (7.1) (1.7) (13.0)

4 13 0 8.2 3.3 12.2 -- -- --

5 11 2 11.1 2.3 18.2 (4.6) (1.7) (7.4)

Subtotal 59 6 16.1 2.3 35.1 (6.3) (1.7) (13.0)

Mexico

2 9 0 22.5 15.2 28.7 -- -- -- 

3 2 3 6.8 5.2 8.3 (41.9) (40.0) (43.0)

4 7 4 4.9 1.0 10.6 (10.3) (0.4) (25.0)

5 0 1 -- -- -- *** *** ***

Subtotal 18 8 13.9 1.0 28.7 *** *** ***

Total 77 14 15.6 1.0 35.1 *** *** ***

Source: Compiled from data submitted in response to Commission questionnaires.

LOST SALES AND LOST REVENUES

The Commission requested U.S. producers of MCBs to report any instances of lost sales or

revenues they experienced due to competition from imports of MCBs from China and/or Mexico during

January 2007-March 2010. Petitioner provided allegations of both lost sales and lost revenues in the

petition. Of the two responding non-petitioning U.S. producers (*** and ***), neither reported that it had

to either reduce prices or roll back announced price increases. One of these producers (***) indicated that

***. However, both of these producers indicated that they had lost sales of MCBs to imports from China

and Mexico and provided lost sales allegations. The 33 lost sales allegations totaled $29.7 million and

involved 22,662 tons and the 5 lost revenues allegations totaled $448,827 and involved 1,575 tons of

MCB.14 Staff contacted 22 purchasers and a summary of the information obtained follows (tables V-8

and V-9). Six purchasers, accounting for 4,118 tons and $5.0 million of the lost sales allegations,

indicated that they agreed or partly agreed with the lost sales allegations. *** of the 3 firms named in the

lost revenues allegations fully confirmed the allegations.

 14 Any allegations submitted in petitioner’s producer questionnaire response were not included or verified if they

occurred before the filing of the petition.

V-12
Table V-8

MCBs: U.S. producers’ lost sales allegations

* * * * * * *

Table V-9

MCBs: U.S. producers’ lost revenue allegations

* * * * * * *

 In his testimony at the preliminary conference, Joseph Stein of S&S Intersource indicated that it

is important to examine whether the lost sales and revenue allegations involve integrated steel mill or

steel mills with electric arc furnaces.15 S&S Intersource indicated that many of Resco’s long term

relationships were with integrated steel mills selling BOF linings and the ladles in those BOF plants, and

that if “ET Works, Fairfield, Granite City, the big mills on the lakes in Michigan, and Sparrows Point”

represent a significant portion of Resco’s customer base, they lost volume because the steel mills that they

serve shut down.16 Of the purchasers named in lost sales and lost revenue allegations, *** are integrated

steel mills. ***.

***.

***, indicated that the company could only track transactions *** for the lost sales allegation

made by *** and involving *** and that it was possible that the company purchased product originating

from the alleged source ***. ***.17 ***.18 After further checking *** records, *** indicated that prior to

*** did not purchase the product from ***.19

*** agreed with the two lost sales allegations involving his firm made by ***, but indicated that

the alleged prices were higher. ***.

*** disagreed with the lost sale allegation. *** indicated that the sale was lost due to service

issues, not price.

*** disagreed with the lost sales allegation made by *** involving *** tons of MCBs. ***

indicated he was able to identify the supplier (***) by the product code provided in the allegation and that

he contacted them and they were able to share more detail involving the allegation. *** indicated that the

decision to purchase from a Chinese source was based more on technical specifications than on price. 

*** indicated that his firm reviewed the technical specifications and decided that the Chinese brick

formulation best suited its operational parameters. He indicated that the prices quoted by the Chinese

supplier were about *** percent below the price quoted by the U.S. supplier, but that this is not a true

comparison because the brick specifications were not the same resulting in one of the main reasons for the

difference in price. *** indicated that the U.S. supplier is a key supplier to his business and that in 2008

***.

***.

***. They indicated that this was a trial order. They also indicated that the price provided in the

allegation is comparable to those offered by other suppliers of U.S.-produced MCBs and imports of

MCBs except for ***.

*** disagreed with the lost sales allegations, stating, “***.”

 15 Conference transcript, pp. 116-117 (J. Stein).

 16 Transcript, pp. 119-120 (J. Stein). S&S Intersource also indicated that in some cases Resco may have had a

unreliable payment history with some mills and indicated that it would provide details in a postconference

submission. However, S&S Intersource did not make a postconference submission. 

 17 Staff telephone interview with ***, August 14, 2009.

 18 E-mail from ***, August 17, 2009. 

 19 E-mail from ***, August 24, 2009. 

V-13
*** indicated that he had purchased or considered quotes for MCBs imported from China for

some but not all of the products listed in the lost revenue allegation made by ***. For the *** products

specified in the allegation, *** indicated that he did not consider any quotes for MCBs imported from

China and only considered quotes for domestically produced MCB. For the other products mentioned in

the allegation, he indicated that the alleged quotes for the imported product were pretty close to the actual

quotes. Although he has purchased MCBs imported from China, he indicated that he will only use

domestically produced magnesia carbon bricks in some parts of his furnace ***.20 *** indicated

that because of various surcharges passed onto his company by suppliers in the past, he currently requires

various suppliers to ***. *** indicated that the quality of the product is the most important factor in

determining from what source he will purchase and that service and price are equally considered as the

second-most important factors in determining a purchase. He indicated that he typically ***, and that

quality and service for U.S.-produced MCBs and MCBs imported from China are comparable. 

Regarding a lost sales allegation, *** indicated that his firm had purchased MCBs ***, and has

preferred to source its material inputs domestically. *** approached *** and stated that it was not

particularly interested in supplying *** with magnesia brick. *** indicated that ***. He indicated that

only after *** informed his company of its decision to not actively solicit its business did his company

seek to source magnesia brick from other vendors and in this case a Chinese vendor. *** indicated that

his current price from his suppliers of Chinese-origin magensia bricks is approximately *** percent

higher than the price at which it was procuring bricks from ***.

*** indicated that he purchased both U.S.-produced MCBs and MCBs imported from Mexico. 

***.21 He also currently purchases MCBs from *** (the U.S. producer that made the lost sales

allegation), ***. He indicated that “price was not the bottom line” in making his purchase decision, but

that price, quality, and service all are important factors. He indicated that he strives for “price equality”

among his suppliers and that imports of MCBs from Mexico are priced “a little lower” than from other

sources. He indicated that service is good from ***. He also indicated that part of his decision to

purchase from *** is based on the relationship and familiarity he has with the company ***. He

indicated that *** has higher-priced products than *** and that its service is not as good as other

suppliers since it does not have a local person to provide service. He also indicated that he never relies

totally on one supplier and that he never purchases MCBs ***. 

***.

*** agreed with the lost sales allegation involving his firm. However, he indicated that the

alleged competing prices were higher. ***. All of these revised prices were below the alleged rejected

U.S. prices for each of these products.

*** indicated that he did not recognize the quantities or dollar amounts regarding the two lost

revenue allegations involving his company. He indicated that he purchases some refractories from ***,

but the date provided and the large dollar amounts are not familiar to him. *** is unaware of any

domestic suppliers that are losing sales or revenue regarding any recent/current purchases. With respect

to the *** allegation, he partially agreed with the allegation, stating that the domestic price was exact, the

actual competing import price was $100 lower than alleged, and the quantity would only be reached if

*** was utilizing 100 percent of its capacity. The actual quantity would be 40 to 50 percent of the

allegation.22

***. 

*** disagreed with the lost sales allegation. He stated, “***.”

 20 Staff telephone interview with ***, August 11, 2009.

 21 ***.

 22 Staff telephone interview with ***, June 16, 2010. For calculation purposes, 50 percent of the quantity and

value of the allegation was considered confirmed.

V-14
In a staff interview on August 26, 2009, ***, indicated that *** could neither confirm nor deny

the lost revenues allegation involving *** because the company does not keep records in a way that

would allow it to confirm or deny the allegation.

 *** agreed with the lost sales allegations. He noted that in the “***.”

*** disagreed with the lost sales allegation, explaining that he did not receive any quotes from

domestic or importing companies on the date specified.

V-15

PART VI: FINANCIAL EXPERIENCE OF U.S. PRODUCERS

BACKGROUND

Three U.S. firms provided usable financial data on their operations producing MCBs.1

 These

reported data are believed to represent the vast majority of U.S. production of MCBs in 2009.

OPERATIONS ON MCBs

Income-and-loss data for the reporting U.S. producers of MCBs are presented in tables VI-1a and

VI-1b, and are briefly described here. 

• Total net sales quantity declined *** from 2007 to 2008 and was *** lower in 2009. Total net

sales value increased *** from 2007 to 2008 and fell *** in 2009. The average unit value

(“AUV”) of total net sales increased from 2007 to 2009. In January-March 2010 compared to the

same period in 2009, the quantity and value of total net sales were *** greater although sales

AUV was lower. In 2009, total net sales were *** greater in July-December than in JanuaryJune. 

• The absolute values of the cost of goods sold (“COGS”) and selling, general, and administrative

(“SG&A”) expenses followed the trend of sales, increasing from 2007 to 2008, decreasing in

2009, but higher in January-March 2010 than in January-March 2009. From 2007 to 2008, the

dollar value increase of raw materials and of total COGS was greater than the dollar value

increase of sales. From 2008 to 2009, the dollar value decrease of raw materials and of total

COGS was less than the dollar value decrease of sales. The AUV of COGS rose from 2007 to

2009; it was greater in January-March 2009 than in January-March 2010.2

 The COGS-to-sales

ratio increased between 2007 and 2008 and declined *** in 2009. That ratio was lower in

January-March 2010 than in January-March 2009. The AUV of SG&A expenses rose *** from

2007 to 2008 and rose once more in 2009 from 2008. It was smaller in January-March 2010 than

January-March 2009 because of the ***. The SG&A expense-to-sales ratio remained on

relatively the same level during 2007-09 and was *** smaller in January-March 2010 than in

January-March 2009. The absolute values of COGS and SG&A expenses were greater in the

July-December 2009 period than in the January-June 2009 period because of higher sales

quantity, although the dollar value increase of COGS and SG&A expenses was less than the

dollar value increase of sales. AUVs and ratios for these two cost categories were *** lower

because of higher sales volume.

• For the three firms together, operating income fell *** from 2007 to 2009 following the trend in

sales; over the three year period, the value of sales declined more than did the values of COGS

and SG&A expenses . Operating income was *** higher in January-March 2010 compared with

 1 The firms are: ANH, Magnesita (previously reporting as LWB), and Resco. TYK America ***. Letter from

TYK America, Inc., June 7, 2010 (EDIS document 430866). Each of the reporting firms has a fiscal year that ends

on or about December 31. There are minor differences between data reported in the trade and financial sections of

the Commission’s producers’ questionnaire, which are attributable to rounding. Commission staff verified the

questionnaire response of ANH on July 1-2, 2010 (see Verification Report, EDIS document 429326). 

 2

 COGS was primarily affected by changes in raw material costs. The average unit value (“AUV”) of sales was

higher in 2008 compared with 2007 as were the AUVs of raw materials and COGS. Sales AUV was higher in 2009

and increased more than did COGS or raw materials.

VI-1
the same period in 2009 partly because of improved profit margins and partly because sales

volume was greater.3

 Comparing January-March 2009 and the same period in 2010, although

sales AUV was less, so were the AUVs of raw materials, total COGS, and SG&A expenses. All

of the operating income reported by the firms in 2009 occurred during July-December 2009.

• Net income before taxes (NIBT) and cash flow fell from 2007 to 2009. NIBT was negative in

2008 and 2009 but was *** higher and positive in interim 2010 compared with interim 2009

when NIBT was negative. Cash flow fell *** from 2007 to 2008 and declined in 2009 from

2008. Except for the January-March 2009 period when cash flow was negative, it was positive in

other periods investigated.4

 Although not shown in table VI-1b, NIBT and cash flow was

positive in July-December 2009, offsetting the loss and negative cash flow recorded by the three

firms in January-June 2009.

Table VI-1a

MCBs: Results of operations of U.S. producers, 2007-09, January-March 2009, and January-March

2010

* * * * * * *

Table VI-1b

MCBs: Results of operations of U.S. producers, January-June 2009 and July-December 2009

* * * * * * *

Raw materials utilized in the production of MCBs include such inputs as magnesite, aluminum

and silicon powdered metal, carbon, and resin.5

 COGS were mostly affected by changes in raw material

costs. Raw material costs generally followed sales quantity–they rose in absolute value, as a percentage

of net sales, and on a per-unit basis from 2007 to 2008 and fell in dollar amounts in 2009 (as a percentage

of sales and AUV, raw material costs remained on about the same level in 2009 from 2008). On a perunit basis and as a ratio to total net sales, raw material costs were higher in interim 2009 than in interim

2010. Raw material costs also increased as a share of total COGS, from *** percent in 2007 to ***

percent in 2008 and were 74.4 percent in 2009. Raw material costs averaged $*** per short ton of sales

in 2009 for the three reporting U.S. producers (up *** from $*** per short ton in 2007, and ranged from

$*** to $*** per short ton of sales on a firm-by-firm basis.6

 Raw material costs were higher in JanuaryJune 2009, averaging nearly $*** for the three firms together and ranging from $*** to $***, than during

July-December 2009, when they averaged $***.7

 

Resco stated that in order to reduce raw material input costs, it began reclaiming unused brick to

use in MCB mixes as a replacement for higher priced virgin materials, as well as processing “spent

 3 Also, see variance analysis in table VI-3.

 4

 Net income before taxes is calculated after deducting interest charges (the largest single item) and other

expenses and adding other income items to operating income. Cash flow is the sum of net income plus depreciation.

***. U.S. producers’ questionnaire responses of the three firms.

 5

 Costs and sales values of MCBs may vary in a wide range because of the use of different grades of magnesite

and other inputs. See Petitioner’s postconference brief, exh. 1, pp. 5-6 and exh. 12 (***). Natural gas and electricity

also are used in the production process. Such costs are usually classified in other factory costs because they are not

a direct raw material cost. 

 6

 Calculated from the questionnaire responses of the three firms. The upward price trend for magnesia raw

materials during 2005-08 is depicted in exh. 12 of petitioner’s postconference brief, ***. Reportedly, purchases ***. 

Staff interview with ***, September 2, 2009.

 7

 Magnesita reported ***.

VI-2
linings” from steelmakers in 2006.8

 ***. Resco alleges that export restraints in China on magnesia raw

materials have restricted supply and resulted in higher prices in the United States.9

Table VI-2 depicts operating data for MCBs on a firm-by-firm basis.

Table VI-2

MCBs: Selected results of operations of U.S. producers, by firm, 2007-09, January-March 2009,

January-March 2010, January-June 2009, and July-December 2009

* * * * * * *

ANH, which produces MCBs at its White Cloud, MI facility, ***. It was *** of the periods for

which data were gathered (***). The quantity and value of ANH’s sales *** between 2007 and 2009, but

were *** in interim 2010 compared with interim 2009.10 Its operating income margin *** from 2007 to

2009. ANH reported ***.11

Magnesita produces MCBs at its plant in York, PA (*** of that plant’s production). In 2009,

Magnesita was the ***. It was *** of the periods for which data were collected; its operating income

margin ***.

Resco is the ***. Unlike ***. Resco’s total net sales value fell from 2007 to 2009, but was ***. 

Resco’s operating income increased between 2007 (***) and 2008 (***) as Resco’s ***. Resco’s ***.12

Its SG&A expenses are ***. Starting in July 2008, Resco cut costs at its Hammond, IN, plant through

***.13 Resco ***.14

 8 Conference transcript, p. 54 (Brown). Also, ***. Resco’s U.S. producers’ questionnaire response, IV-15, and

petitioner’s postconference brief, exh. 1, p. 7. ***. See the differences in raw materials AUVs for the three firms in

table VI-2.

 9

 Resco argues that its profitability declined as prices could not be increased to keep up with escalating Chinese

raw material costs for key inputs of MCBs (magnesia and graphite), while imports of MCBs were selling at less than

fair value. Conference transcript, p. 38 (Magrath) and petitioner’s postconference brief, exh. 12. Additionally Resco

stated that export restrictions by China have increased raw material costs. 

 With regard to export restrictions, the United States requested consultations with China on June 23, 2009, on the

issue of China’s restraints on the export from China of various forms of raw materials, including inputs to MCBs. In

its request for consultation, the United States cited 32 measures through which China allegedly imposes export

restraints and noted that there appear to be additional unpublished restrictive measures (WTO dispute settlement case

DS394). A similar request for consultations also was made by the European Communities on June 23, 2009 (WTO

case DS395), and by Mexico on August 21, 2009 (WTO case DS 398). On July 2, 2009, the European Communities

requested to join the consultations and on July 6, 2009, Canada, Mexico, and Turkey requested to join the

consultations with a number of other WTO members reserving their rights on this issue. The United States requested

the establishment of a panel on November 4, 2009, and a single panel was established on December 21, 2009 to hear

the three complaints. The panel members were composed on March 29, 2010. See, WTO, dispute settlement–the

disputes–DS394, DS395, and DS398. In a communication of May 18, 2010, the panel issued a preliminary ruling on

its terms of reference and scope of products. See, WT/ DS394/9, WT/DS395/9, WT/DS398/8, China–measures

related to the exportation of various raw materials, communication from the panel, 18 May 2010. EDIS document

431598.

 10 See earlier note in table VI-1 regarding ANH’s ***.

 11 In 2009, ANH reported ***. For further information on *** imports, see Tables III-5a and III-5b.

 12 Resco’s raw material costs are ***.

 13 In its questionnaire response, Resco presented a table of its income statement with the cost savings added back. 

A comparison of that table with the results of operations indicates that Resco ***.

 14 In 2008, Resco reported ***. For further information on *** imports, see Tables III-5a and III-5b.

VI-3
Each of the responding firms provided a breakdown between fixed costs and variable costs15 in

their questionnaire response in the preliminary phase of these investigations. Assuming that the cost

structure described in 2008 remains the same in 2009, fixed costs accounted for about *** percent of

COGS (mainly in the category of “other factory costs”) and *** percent of SG&A expenses. While the

fixed cost portion of COGS seems very low, it should be noted that raw materials costs, chiefly forms of

magnesia, accounted for about *** percent of total COGS in 2009. Based on the breakdown between

fixed and variable costs, the breakeven point, which is the quantity sold where total revenues and total

costs are equal,16 can be calculated for the three firms. That point was equivalent to *** short tons in

2009 and constituted *** percent of the reported production of the three firms together in that year. This

number is smaller than the breakeven tonnage calculated in the preliminary phase investigations (for

2008) because the calculated fixed costs are smaller although the unit contribution margin is greater.

A variance analysis for the operations of U.S. producers of MCBs is presented in table VI-3. The

information for this variance analysis is derived from tables VI-1a and VI-1b.17 The analysis shows that

the decrease of $*** in the operating income from 2007 to 2009 was attributable to the favorable price

variance (unit sales values increased) that was less than the combined unfavorable net cost/expense

variance (unit costs increased) and volume variance (sales volume fell). Operating income was nearly

$*** higher in interim 2010 than in interim 2009 because an unfavorable price variance (unit prices

decreased) was overwhelmed by a favorable variance on net cost/expense (unit costs and expenses

decreased). Between January-June 2009 and July-December 2009, data reported by the three firms

indicated an increase in total operating income was due to an unfavorable price variance that was

overwhelmed by a favorable variance on net cost/expense.

 15 Raw material costs are “variable costs” (i.e., the dollar value varies directly with production and the AUV of a

variable cost stays the same unless the underlying cost of the input changes). The dollar value of “fixed costs” stays

the same but the AUV changes with variations in how the fixed costs are absorbed by changes in production. While

the absolute value of fixed costs remains the same, the AUVs of fixed costs varies inversely with production

changes–they rise when production falls and decrease with production increases. Variable costs increase or decrease

with changes in production although the AUV of variable costs stays the same with changes in production. *** of

the reporting firms stated that all raw material costs are variable costs and *** classified direct labor as a variable

cost. Other factory costs include both fixed costs (depreciation, insurance, plant management) and variable costs

(indirect materials, electricity, utility charges). The three reporting firms were split on the nature of other factory

costs: ***. In 2009, the fixed cost component accounted for *** percent of other factory costs. SG&A expenses

also have fixed and variable components. About *** percent of total SG&A expenses were estimated to be fixed

costs in 2009. 

 16 The breakeven point, or the point to which sales/production can fall before the firm loses money, can be

calculated as sales minus variable costs minus fixed costs equals zero. Sales minus variable costs is the contribution

margin. Rearranging the equation, the quantity at the breakeven point equals fixed costs in dollars divided by the

unit contribution margin. 

 17 A variance analysis is calculated in three parts, sales variance, cost of sales variance, and SG&A expense

variance. Each part consists of a price variance (in the case of the sales variance) or a cost or expense (cost/expense)

variance (in the case of the cost of sales and SG&A expense variance), and a volume variance. The sales or

cost/expense variance is calculated as the change in unit price or per-unit cost/expense times the new volume, while

the volume variance is calculated as the change in volume times the old unit price or per-unit cost/expense. 

Summarized at the bottom of the table, the price variance is from sales; the cost/expense variance is the sum of those

items from COGS and SG&A variances, respectively, and the volume variance is the sum of the volume components

of the net sales, COGS, and SG&A expense variances. The overall volume component of the variance analysis is

generally small.

VI-4
Table VI-3

MCBs: Variance analysis on the operations of U.S. producers, 2007-09, and January-March 2009 to

January-March 2010, and January-June 2009 to July-December 2009

* * * * * * *

CAPITAL EXPENDITURES AND RESEARCH AND DEVELOPMENT EXPENSES

Each of the U.S. producers was asked about the nature of their capital expenditures and research

and development (“R&D”) expenses (table VI-4). ANH reported in the preliminary phase of these

investigations that its capital expenditures in 2006 and 2007, ***.18 ANH reported *** R&D expenses

***.19 Magnesita stated that ***. Resco stated that its ***.20 Resco’s R&D expenses ***.21

Table VI-4

MCBs: Capital expenditures and research and development expenses of U.S. producers, 2007-09,

January-March 2009, January-March 2010, January-June 2009, and July-December 2009

* * * * * * *

ASSETS AND RETURN ON INVESTMENT

Data on the U.S. producers’ total assets and their return on investment (“ROI”) are presented in

table VI-5. Total assets utilized in the production, warehousing, and sale of MCBs for reporting U.S.

producers increased by nearly *** percent from 2007 to 2009, led by cash and equivalents and by raw

materials and work-in-process inventories, which together ***. ROI, which is calculated as the ratio of

operating income to total assets, therefore followed the trend of operating income, which fell from 2007

to 2009.

Table VI-5

MCBs: The value of assets and return on investment of U.S. producers, fiscal years 2007-09

* * * * * * *

 18 In its final phase questionnaire, ANH stated that ***. ANH questionnaire response, III-13c. In its posthearing

brief, ANH stated that ***. ANH’s posthearing brief, p. 2.

 19 In its questionnaire response, ANH stated ***.

 20 Resco stated at the staff conference that it planned to install a hydraulic press at Hammond in 2006 to prepare

for a potential increase in MCBs production due to increasing demand from steel producers. It claimed that lowpriced imports from China and Mexico captured the increased volume of MCBs, and that the press sits uninstalled

and unused. Conference transcript, p. 19 (Brown). Reportedly, the hydraulic press ***. Resco’s posthearing brief

exh. 3, p. 4. In the preliminary phase investigations, Resco also stated that ***. Resco’s U.S. producers’

questionnaire response and posthearing brief, exh. 3, pp. 10-11.

 21 Resco stated ***. Resco’s U.S. producers’ questionnaire response.

VI-5
CAPITAL AND INVESTMENT

The Commission requested U.S. producers of MCBs to describe any actual or potential negative

effects of imports of MCBs from China on their firms’ growth, investment, ability to raise capital,

development and production efforts, or the scale of capital investments. Their responses are shown

below.

Actual Negative Effects

ANH: ***.22

Magnesita: ***.

Resco: ***.

Anticipated Negative Effects

ANH: ***.

Magnesita: ***.

***.

***.

Resco: ***.

 22 ANH ***.

VI-6
PART VII: THREAT CONSIDERATIONS AND INFORMATION ON

NONSUBJECT COUNTRIES

Section 771(7)(F)(I) of the Act (19 U.S.C. § 1677(7)(F)(I)) provides that–

In determining whether an industry in the United States is threatened

with material injury by reason of imports (or sales for importation) of the

subject merchandise, the Commission shall consider, among other

relevant economic factors1

--

(I) if a countervailable subsidy is involved, such information as may be

presented to it by the administering authority as to the nature of the

subsidy (particularly as to whether the countervailable subsidy is a

subsidy described in Article 3 or 6.1 of the Subsidies Agreement), and

whether imports of the subject merchandise are likely to increase,

(II) any existing unused production capacity or imminent, substantial

increase in production capacity in the exporting country indicating the

likelihood of substantially increased imports of the subject merchandise

into the United States, taking into account the availability of other export

markets to absorb any additional exports,

(III) a significant rate of increase of the volume or market penetration of

imports of the subject merchandise indicating the likelihood of

substantially increased imports,

(IV) whether imports of the subject merchandise are entering at prices

that are likely to have a significant depressing or suppressing effect on

domestic prices, and are likely to increase demand for further imports,

(V) inventories of the subject merchandise,

(VI) the potential for product-shifting if production facilities in the

foreign country, which can be used to produce the subject merchandise,

are currently being used to produce other products,

(VII) in any investigation under this title which involves imports of both

a raw agricultural product (within the meaning of paragraph (4)(E)(iv))

and any product processed from such raw agricultural product, the

likelihood that there will be increased imports, by reason of product

shifting, if there is an affirmative determination by the Commission

 1 Section 771(7)(F)(ii) of the Act (19 U.S.C. § 1677(7)(F)(ii)) provides that “The Commission shall consider

[these factors] . . . as a whole in making a determination of whether further dumped or subsidized imports are

imminent and whether material injury by reason of imports would occur unless an order is issued or a suspension

agreement is accepted under this title. The presence or absence of any factor which the Commission is required to

consider . . . shall not necessarily give decisive guidance with respect to the determination. Such a determination

may not be made on the basis of mere conjecture or supposition.”

VII-1
under section 705(b)(1) or 735(b)(1) with respect to either the raw

agricultural product or the processed agricultural product (but not both),

(VIII) the actual and potential negative effects on the existing

development and production efforts of the domestic industry, including

efforts to develop a derivative or more advanced version of the domestic

like product, and

(IX) any other demonstrable adverse trends that indicate the probability

that there is likely to be material injury by reason of imports (or sale for

importation) of the subject merchandise (whether or not it is actually

being imported at the time).2

Information on the nature of the alleged subsidies was presented earlier in this report; information

on the volume and pricing of imports of the subject merchandise is presented in Parts IV and V; and

information on the effects of imports of the subject merchandise on U.S. producers’ existing development

and production efforts is presented in Part VI. Information on inventories of the subject merchandise;

foreign producers’ operations, including the potential for “product-shifting;” any other threat indicators, if

applicable; and any dumping in third-country markets, follows. Also presented in this section of the

report is information obtained for consideration by the Commission on nonsubject countries and the

global market.

THE INDUSTRY IN CHINA

China is the largest producer of MCBs in the world.3

 ***.4 The Chinese MCB industry relies on

rich, high-grade magnesia reserves to produce its MCBs.5

 Together, China, North Korea, and Russia

account for nearly 75 percent of global magnesia production capacity. China has been described as a

mainstay of world supply of magnesia with changes in Chinese exports of magnesia affecting worldwide

refractory access to magnesia through tightened supply and rising prices.6

The Commission requested data from the 35 firms that were listed in the petition as producing

MCBs in China during the period of the investigation. The Commission received a response from seven

firms,7

 and data regarding the Chinese industry are based on these questionnaire responses. The

responses are believed to account for approximately *** percent of Chinese export shipments to the

United States in 2009, and *** percent of China’s 2008 MCB capacity. Respondents stated that in order

 2 Section 771(7)(F)(iii) of the Act (19 U.S.C. § 1677(7)(F)(iii)) further provides that, in antidumping

investigations, “. . . the Commission shall consider whether dumping in the markets of foreign countries (as

evidenced by dumping findings or antidumping remedies in other WTO member markets against the same class or

kind of merchandise manufactured or exported by the same party as under investigation) suggests a threat of material

injury to the domestic industry.”

 3

 Respondent RHI’s posthearing brief, appendix p. 36.

 4

 ***.

 5 http://www.fengchi.com.cn/en/jj.htm, retrieved September 1, 2009.

 6

 http://indmin.com/Article/2259762/Channel/0/Magnesia-make-over-a-global-review.html, retrieved September

2, 2009.

 7

 Producers in China that submitted foreign producer questionnaire responses were: ***. *** submitted

questionnaire responses in the preliminary phase investigations, but have not responded in the final phase

investigations. In the preliminary phase, these firms reported a combined 2008 MCB capacity of *** short tons and

combined MCB production of *** short tons.

VII-2
to meet the demand of China’s large and growing steel industry, the majority of the Chinese MCB

industry is not export-oriented. They stated that the questionnaire responses received by the Commission

do not include full coverage of the Chinese MCB industry, but reflect the subset of Chinese MCB

producers that export to the United States.8

Table VII-1 presents information on the Chinese industry’s MCB operations. Chinese capacity

increased from 2007 to 2009, remained level between the interim periods, and is projected to increase in

both 2010 and 2011.9

 Chinese production increased irregularly from 2007 to 2009, was higher in interim

2010 than in interim 2009, and is projected to increase in both 2010 and 2011. Chinese capacity

utilization decreased from 2007 to 2009, but was higher in interim 2010 compared with interim 2009. 

Chinese producers projected capacity utilization in 2010 and 2011 to be at 2007-08 levels. The share of

Chinese shipments sold to its home market ranged from 12.9 percent to 16.1 percent during 2007 to

2009.10 The majority of Chinese producer export shipments was to countries other than the United

States.11 Respondents reported that demand in the third-country markets is projected to continue growing

at a higher rate than demand in the United States, and because those markets are cheaper to ship to, it is

unlikely that the Chinese producers would seek additional sales in the United Sates.12 Chinese total

exports as a share of its total shipments ranged from 83.9 percent to 87.1 percent during 2007-09.

In the most recent fiscal year, Chinese producers of MCBs estimated that the share of their total

sales represented by sales of MCBs, based on quantity, is as follows: ***.

Six Chinese producers of MCBs reported that they produce, or have the capability to produce,

other products on the same equipment and machinery used to produce MCBs: ***.13

 8 Respondent RHI’s posthearing brief, appendix p. 37.

 9

 ***.

 10 RHI estimates the Chinese steel industry’s total demand for MCBs in 2009 ranged from *** to ***. 

Respondent RHI’s posthearing brief, appendix p. 36. 

 11 These other export markets include: ***.

 12 Respondent RHI’s posthearing brief, appendix, p. 38.

 13 RHI Liaoning questionnaire response, II-5.

VII-3
Table VII-1

MCBs: Chinese production capacity, production, shipments, and inventories, 2007-09, JanuaryMarch 2009, January-March 2010, and projected 2010-11

Item

Actual experience Projections

2007 2008 2009

January-March

2009 2010 2010 2011

Quantity (short tons)

Capacity1 369,485 538,808 538,700 133,176 133,864 549,452 636,862

Production 251,008 306,495 251,395 48,216 73,105 340,130 379,056

End of period inventories 16,213 18,323 16,221 23,486 25,241 28,360 16,917

Shipments

 Internal/transfers 591 381 407 0 11 0 0

 Home market 38,983 40,309 32,061 5,804 8,294 49,846 50,536

 Exports to–

The United States 23,791 30,148 24,594 5,112 3,577 12,244 9,971

All other markets 182,082 232,964 195,178 32,388 50,496 264,534 329,993

 Total exports 205,873 263,112 219,772 37,499 54,074 276,778 339,964

Total shipments 245,447 303,803 252,240 43,054 62,379 326,624 390,500

Ratios and shares (percent)

Capacity utilization 67.9 56.9 46.7 36.2 54.6 61.9 59.5

Inventories to production 6.5 6.0 6.5 12.2 8.6 8.3 4.5

Inventories to total shipments 6.6 6.0 6.4 13.6 10.1 8.7 4.3

Share of total quantity of

 shipments:

 Internal/transfers 0.2 0.1 0.2 0.0 0.0 0.0 0.0

Home market 15.9 13.3 12.7 13.5 13.3 15.3 12.9

 Exports to–

The United States 9.7 9.9 9.8 11.9 5.7 3.7 2.6

All other markets 74.2 76.7 77.4 75.2 81.0 81.0 84.5

All export markets 83.9 86.6 87.1 87.1 86.7 84.7 87.1

 1 ***.

Note. –Because of rounding, figures may not add to the totals shown.

Source: Compiled from data submitted in response to Commission questionnaires.

VII-4
THE INDUSTRY IN MEXICO

The Commission requested data from the only MCB producer in Mexico, RHI-Refmex S.A. de

D.V. (“Refmex”)14. The Commission received a response from Refmex, which accounted for 100 percent

of Mexican production and approximately 100 percent of Mexican exports during the period of

investigation.

Refmex has one production plant that produces MCBs in Mexico. The Ramos Arizpe plant

produces magnesia-based products such as unfired MCBs, fired MCBs, alumina magnesia carbon bricks,

unshaped magnesia products, mixes, mortars, concrete, and tobholes. Production of unfired magnesia

bricks, including both MCBs and aluminum magnesia carbon bricks, accounts for under *** percent of

the total production at that plant.15 Refmex’s Tlalnepantla de Baz plant produces silica products such as

unshaped refractory products, tondish mixes, baurish mixes, mortars, concretes, fire clay bricks, bauxite

bricks, high-alumina bricks, and insulation fire bricks.16 Due to the risk of contamination, production of

silica and magnesia products cannot be mixed at the same plant.17 Refmex reported that the recession in

Mexico was not as deep as in the United States, and its Mexican customers, the cement industry in

particular, continued to do well.18 Refmex switched capacity that had previously been used to produce

subject MCBs to the production of burned bricks for the cement industry19 and other refractories. Refmex

reported that its MCB production is at maximum capacity to serve the Mexican market, where sales are

typically more profitable than exports.20 

Table VII-2 presents information on Refmex’s MCB operations in Mexico.21 Refmex’s capacity 

*** from 2007 to 2008, then *** from 2008 to 2009 and during the interim periods. Refmex’s capacity is

projected to *** during full year 2010 and 2011. 22 Refmex’s production of MCBs *** percent from

2007 to 2009 and was ***. Refmex’s production is expected to ***. Refmex’s capacity utilization ***

percent in 2007 to *** percent in 2009. Interim 2010 capacity utilization stood at *** percent compared

with *** percent in interim 2009. Capacity utilization for both full year 2010 and 2011 is projected to be

*** percent.

The volume of Refmex’s shipments to its home market ranged from a low of *** percent in 2009

to *** percent in 2008. The *** of Refmex’s exports was exported to the United States.23 These exports

*** percent from 2007 to 2009 and *** as a share of Refmex’s total shipments from *** percent in 2007

to *** percent in 2009.24 Refmex reports that its U.S. exports are concentrated among customers in the

 14 ***.

 15 Respondent RHI’s posthearing brief, appendix, p. 22. ***. Refmex questionnaire response, p. 8, II-7.

 16 Hearing transcript, pp. 170-171 (Garcia).

 17 Hearing transcript, pp. 214-215 (Garcia).

 18 Hearing transcript, pp. 172-173 (Garcia).

 19 Refmex reported it has an alliance with the major Mexican cement producer Cemex to supply its kilns in

Mexico, the Caribbean, Central America, and South America. Hearing transcript, p. 173 (Garcia).

 20 Respondent RHI’s posthearing brief, p. 11.

 21 Refmex’s reported capacity data was revised from the data reported in the preliminary investigation (***). 

Refmex reported the adjustment was made to account for typical product mix. Hearing transcript, p. 185

(Malashevich). 

 22 Refmex currently has five hydraulic presses. Hearing transcript, p. 214 (Garcia).

 23 The other export markets are ***.

 24 ***. Respondent RHI’s posthearing brief, appendix p. 15, fn. 28.

VII-5
Central Southwest and Southeast regions and only ships to northern steel producers in unusual

circumstances.25 Refmex’s shipments to other countries *** from *** percent of total shipments in 2007

to *** percent of total shipments in 2009.26

Table VII-2

MCBs: Mexican production capacity, production, shipments, and inventories, 2007-09, JanuaryMarch 2009, January-March 2010, and projected 2010-11

* * * * * * *

U.S. IMPORTERS’ INVENTORIES OF MCBS

 Eight U.S. importers reported inventories of imports of MCBs from China during the period for

which data were collected, one firm reported inventories from Mexico, and two firms reported inventories

from other countries.27 Data collected in these investigations on U.S. importers’ end-of-period inventories

of MCBs are presented in table VII-3. Inventories from China and Mexico *** irregularly from 2007 to

2009, but were *** in interim 2010 than in interim 2009. Petitioners argued that increases in subject

imports were a result of stockpiling of inventories in anticipation of the orders.28 Respondents argue that

the long supply chain and lead times involved with importing from China require that importers maintain

significant inventories in order to compete with domestic producers.29 

U.S. IMPORTERS’ CURRENT ORDERS

Three U.S. importers reported imports or the arrangement of imports of MCBs of *** short tons

from China and *** short tons from Mexico after March 31, 2010.30

ANTIDUMPING AND COUNTERVAILING DUTY INVESTIGATIONS

IN THIRD-COUNTRY MARKETS

On October 6, 2005, the European Commission imposed antidumping duties on imports of MCBs

from China that vary for six manufacturers and are fixed at 39.9 percent for all other companies.31 These

duties were to expire in October 2010; however Magnesita requested a review of the order on July 8,

2010, and therefore the duties remain in place until the review is complete.32 On September 1, 2007,

Turkey imposed antidumping duties ($145/ton) on imports of MCBs from China.33

 25 Respondent RHI’s prehearing brief, p. 13. However, seven U.S. purchasers of Mexican MCBs reported plant

locations in the Midwest (seven plants), Southeast (four plants), and Northeast (three plants).

 26 Data do not include project sales. 

 27 The following firms reported inventories from China: ***.

 28 Hearing transcript, p. 58 (Mazard).

 29 Respondents Vesuvius’ and Yingkou Bayuquan’s posthearing brief, p. 5.

 30 Those firms are ***. 

 31 On August 12, 2009, the EC amended the margin for Yingkou Bayuquan Refractories to zero percent and the

margin for Dashiquiao Sanqiang Refractory to 14.4 percent. Respondent Vesuvius’ and Yingkou Banuquan’s

postconference brief, exh. 9.

 32 Hearing transcript, p. 55 (Mazard).

 33 Petitioner’s postconference brief, p. 29, exh. 7.

VII-6
Table VII-3

MCBs: U.S. importers’ end-of-period inventories of imports, 2007-09, January-March 2009, and

January-March 2010

Source

Calendar year January-March

2007 2008 2009 2009 2010

Imports from China:

 Inventories (short tons) 20,677 21,958 21,137 19,353 17,008

Ratio to imports (percent) 59.7 52.7 62.8 86.1 68.5

 Ratio to U.S. shipments of imports

 (percent) 65.9 57.6 63.9 60.4 41.7

Imports from Mexico:

 Inventories (short tons) *** *** *** *** ***

Ratio to imports (percent) *** *** *** *** ***

 Ratio to U.S. shipments of imports

 (percent) *** *** *** *** ***

Imports from subject sources:

 Inventories (short tons) *** *** *** *** ***

Ratio to imports (percent) *** *** *** *** ***

 Ratio to U.S. shipments of imports

 (percent) *** *** *** *** ***

Imports from all other sources:

 Inventories (short tons) *** *** *** *** ***

Ratio to imports (percent) *** *** *** *** ***

 Ratio to U.S. shipments of imports

 (percent) *** *** *** *** ***

Imports from all sources:

 Inventories (short tons) *** *** *** *** ***

Ratio to imports (percent) *** *** *** *** ***

 Ratio to U.S. shipments of imports

 (percent) *** *** *** *** ***

Note.–Because of rounding, figures may not add to the totals shown. Partial-year ratios are based on annualized

import and shipment data.

Source: Compiled from data submitted in response to Commission questionnaires.

VII-7
INFORMATION ON PRODUCERS IN NONSUBJECT COUNTRIES

In assessing whether the domestic industry is materially injured or threatened with material

injury “by reason of subject imports,” the legislative history states “that the Commission must examine all

relevant evidence, including any known factors, other than the dumped or subsidized imports, that may be

injuring the domestic industry, and that the Commission must examine those other factors (including nonsubject imports) ‘to ensure that it is not attributing injury from other sources to the subject imports.’”34

Europe

RHI AG (Austria) is the world's largest manufacturer of heat-resistant refractory products,

and is said to account for a global refractories market share of approximately 15 percent and as much as

30 percent of the European and NAFTA markets.35 RHI AG is also the parent company of RHI

Refractories Liaoning Co., Ltd. (China) and RHI-Refmex (Mexico). RHI has MCB production plants in

Duisburg, Germany; Veitsch, Germany; and Carinthia, Austria.36 Magnesita has MCB production plants

in Hagen and Oberhausen, Germany, as well as its MCB plant in York, PA.37 Finally, Refratechnik

Cement GmbH produces MCBs in a plant located in Gottingen, Germany. ***.38

Brazil

Magnesita Refractarios SA (Magnesita) is reported to be the largest producer of refractory

products, including brick, in Brazil. A profile of Magnesita’s activities indicated that the company sells

and distributes heat-resistant products used in the construction of high temperature industrial furnaces.

Products include a full range of refractory bricks, paste, mortar, cement, and concrete. In addition to its

home market and South American sales, Magnesita also exports its products to Europe, Asia, and Latin

America.39 In September 2008, Magnesita purchased U.S. MCB producer LWB, making Magnesita the

world’s third-largest producer of refractory brick products.40 Magnesita has exported *** MCBs to North

America. The company has made a ***.41 The vast majority of Magnesita’s MCB sales have been inside

South America during the period of investigation.

 34 Mittal Steel Point Lisas Ltd. v. United States, Slip Op. 2007-1552 at 17 (Fed. Cir., Sept. 18, 2008), quoting

from Statement of Administrative Action on Uruguay Round Agreements Act, H.R. Rep. 103-316, Vol. I at 851-52;

see also Bratsk Aluminum Smelter v. United States, 444 F.3d 1369 (Fed. Cir. 2006).

 35 http://www.referenceforbusiness.com/history2/68/RHI-AG.html, retrieved August 21, 2009.

 36 Petitioner stated during the hearing that RHI has production capacity in Canada; however, respondents claim

that Canadian production capacity does not exist. Hearing transcript, p. 113 (Magrath) and p. 273 (McPhie). 

Commission staff is not aware of any MCB production capacity in Canada, however, staff notes that VeitschRadex’s importing operations are headquartered in Burlington, Ontario, Canada.

 37 Petitioner’s postconference brief, exh. 1 and exh. 14.

 38 Staff telephone interview with ***.

 39 http://wrightreports.ecnext.com/coms2/reportdesc_COMPANY_C07621060, retrieved August 21, 2009.

 40 http://www.wealth.bloomberg.com/apps/news?pid=conewsstory&tkr=GPIX:LX&sid=aYtSKEDpAhug,

retrieved August 27, 2009.

 41 E-mail correspondence with Magnesita, August 28, 2009.

VII-8
APPENDIX A

FEDERAL REGISTER NOTICES

A-1

21346 Federal Register / Vol. 75, No. 78 / Friday, April 23, 2010 / Notices 

1The record is defined in sec. 207.2(f) of the 

Commission’s Rules of Practice and Procedure (19 

CFR 207.2(f)). 

1For purposes of these investigations, the 

Department of Commerce has defined the subject 

merchandise as ‘‘certain chemically bonded (resin 

or pitch), magnesia carbon bricks with a magnesia 

component of at least 70 percent magnesia (‘‘MgO’’) 

by weight, regardless of the source of raw materials 

for the MgO, with carbon levels ranging from trace 

amounts to 30 percent by weight, regardless of 

enhancements, (for example, magnesia carbon 

bricks can be enhanced with coating, grinding, tar 

impregnation or coking, high temperature heat 

treatments, anti-slip treatments or metal casing) and 

regardless of whether or not antioxidants are 

present (for example, antioxidants can be added to 

the mix from trace amounts to 15 percent by weight 

as various metals, metal alloys, and metal 

carbides).’’ 

Oregon Resource Advisory Council 

(SEORAC) will meet as indicated below: 

DATES: The meeting will begin at 7 p.m. 

(Pacific Daylight Time) on May 6, 2010. 

ADDRESSES: The SEORAC will meet by 

teleconference. For a copy of material to 

be discussed or the conference call 

number, please contact the BLM Vale 

District; information below. 

FOR FURTHER INFORMATION CONTACT: 

Mark Wilkening, Public Affairs Officer, 

BLM Vale District Office, 100 Oregon 

Street, Vale, Oregon 97918, or by 

telephone at (541) 473–6218. 

SUPPLEMENTARY INFORMATION: The 

SEORAC will conduct a public meeting 

by teleconference to discuss and come 

to consensus on contents of a letter to 

be sent to the Oregon/Washington BLM 

State Director on the Final 

Environmental Impact Statement for 

Vegetation Treatments Using Herbicides 

on BLM Lands in Oregon. The 

conference call meeting is open for the 

public to access by telephone. Public 

comment is scheduled from 7:45 to 8 

p.m. (Pacific Daylight Time) May 6, 

2010. For a copy of the information 

distributed to the SEORAC members 

please contact Mark Wilkening, Public 

Affairs Officer, BLM Vale District Office, 

100 Oregon Street, Vale, Oregon 97918, 

or by telephone at (541) 473–6218. 

Larry Frazier, 

Acting District Manager, Vale District Office. 

[FR Doc. 2010–9430 Filed 4–22–10; 8:45 am] 

BILLING CODE 4310–33–P 

INTERNATIONAL TRADE 

COMMISSION 

[Investigation No. 731–TA–130 (Third 

Review)] 

Chloropicrin From China 

Determination 

On the basis of the record 1 developed 

in the subject five-year review, the 

United States International Trade 

Commission (Commission) determines, 

pursuant to section 751(c) of the Tariff 

Act of 1930 (19 U.S.C. 1675(c)), that 

revocation of the antidumping duty 

order on chloropicrin from China would 

be likely to lead to continuation or 

recurrence of material injury to an 

industry in the United States within a 

reasonably foreseeable time. 

Background 

The Commission instituted this 

review on July 1, 2009 (74 FR 31760) 

and determined on October 15, 2009 

that it would conduct a full review (74 

FR 55065, October 26, 2009). Notice of 

the scheduling of the Commission’s 

review and of a public hearing to be 

held in connection therewith was given 

by posting copies of the notice in the 

Office of the Secretary, U.S. 

International Trade Commission, 

Washington, DC, and by publishing the 

notice in the Federal Register on 

October 15, 2009 (74 FR 55065). 

Counsel for the three domestic 

producers of chloropicrin offered to 

submit written testimony in lieu of an 

oral hearing presentation. In connection 

with the offer of written testimony, 

counsel indicated a willingness to 

respond to written questions of the 

Commissioners by a date to be set by the 

Commission. No other party filed a 

request to appear at the hearing. 

Consequently, the public hearing in 

connection with the review, scheduled 

to begin at 9:30 a.m. on February 18, 

2010, at the U.S. International Trade 

Commission Building was cancelled. 

The Commission transmitted its 

determination in this investigation to 

the Secretary of Commerce on April 19, 

2010. The views of the Commission are 

contained in USITC Publication 4142 

(April 2010), entitled Chloropicrin from 

China: Investigation No. 731–TA–130 

(Third Review). 

By order of the Commission. 

Issued: April 19, 2010. 

Marilyn R. Abbott, 

Secretary to the Commission. 

[FR Doc. 2010–9403 Filed 4–22–10; 8:45 am] 

BILLING CODE 7020–02–P 

INTERNATIONAL TRADE 

COMMISSION 

[Investigation Nos. 701–TA–468 and 731– 

TA–1166–1167 (Final)] 

Certain Magnesia Carbon Bricks From 

China and Mexico 

AGENCY: United States International 

Trade Commission. 

ACTION: Scheduling of the final phase of 

a countervailing duty investigation and 

antidumping investigations. 

SUMMARY: The Commission hereby gives 

notice of the scheduling of the final 

phase of a countervailing duty 

investigation No. 701–TA–468 (Final) 

and antidumping investigation Nos. 

731–TA–1166–1167 (Final) under 

sections 705(b) and 735(b) of the Tariff 

Act of 1930 (19 U.S.C. 1671d(b) and 

1673d(b)) (the Act) to determine 

whether an industry in the United 

States is materially injured or 

threatened with material injury, or the 

establishment of an industry in the 

United States is materially retarded, by 

reason of subsidized imports from China 

or less-than-fair-value imports from 

China or Mexico of certain magnesia 

carbon bricks, provided for in 

subheadings 6902.10.10, 6902.10.50, 

6815.91.00, and 6815.99.00 of the 

Harmonized Tariff Schedule of the 

United States.1

For further information concerning 

the conduct of this phase of the 

investigations, hearing procedures, and 

rules of general application, consult the 

Commission’s Rules of Practice and 

Procedure, part 201, subparts A through 

E (19 CFR part 201), and part 207, 

subparts A and C (19 CFR part 207). 

DATES: Effective Date: March 12, 2010. 

FOR FURTHER INFORMATION CONTACT: 

Elizabeth Haines (202–205–3200), Office 

of Investigations, U.S. International 

Trade Commission, 500 E Street, SW., 

Washington, DC 20436. Hearingimpaired persons can obtain 

information on this matter by contacting 

the Commission’s TDD terminal on 202– 

205–1810. Persons with mobility 

impairments who will need special 

assistance in gaining access to the 

Commission should contact the Office 

of the Secretary at 202–205–2000. 

General information concerning the 

Commission may also be obtained by 

accessing its Internet server (http:// 

www.usitc.gov). The public record for 

these investigations may be viewed on 

the Commission’s electronic docket 

(EDIS) at http://edis.usitc.gov. 

SUPPLEMENTARY INFORMATION: 

Background.—The final phase of 

these investigations is being scheduled 

as a result of a negative preliminary 

determination by the Department of 

Commerce that certain benefits which 

constitute subsidies within the meaning 

of section 703 of the Act (19 U.S.C. 

1671b) are being provided to 

manufacturers, producers, or exporters 

in China of certain magnesia carbon 

bricks, and affirmative preliminary 

determinations that imports of certain 

WReier-Aviles on DSKGBLS3C1PROD with NOTICES

Federal Register / Vol. 75, No. 78 / Friday, April 23, 2010 / Notices 21347 

magnesia carbon bricks from China and 

Mexico are being sold in the United 

States at less than fair value within the 

meaning of section 733 of the Act (19 

U.S.C. 1673b). The investigations were 

requested in a petition filed on July 29, 

2009, by Resco Products Inc., 

Pittsburgh, PA. 

Participation in the investigations and 

public service list.—Persons, including 

industrial users of the subject 

merchandise and, if the merchandise is 

sold at the retail level, representative 

consumer organizations, wishing to 

participate in the final phase of these 

investigations as parties must file an 

entry of appearance with the Secretary 

to the Commission, as provided in 

section 201.11 of the Commission’s 

rules, no later than 21 days prior to the 

hearing date specified in this notice. A 

party that filed a notice of appearance 

during the preliminary phase of the 

investigations need not file an 

additional notice of appearance during 

this final phase. The Secretary will 

maintain a public service list containing 

the names and addresses of all persons, 

or their representatives, who are parties 

to the investigations. 

Limited disclosure of business 

proprietary information (BPI) under an 

administrative protective order (APO) 

and BPI service list.—Pursuant to 

section 207.7(a) of the Commission’s 

rules, the Secretary will make BPI 

gathered in the final phase of these 

investigations available to authorized 

applicants under the APO issued in the 

investigations, provided that the 

application is made no later than 21 

days prior to the hearing date specified 

in this notice. Authorized applicants 

must represent interested parties, as 

defined by 19 U.S.C. 1677(9), who are 

parties to the investigations. A party 

granted access to BPI in the preliminary 

phase of the investigations need not 

reapply for such access. A separate 

service list will be maintained by the 

Secretary for those parties authorized to 

receive BPI under the APO. 

Staff report.—The prehearing staff 

report in the final phase of these 

investigations will be placed in the 

nonpublic record on July 13, 2010, and 

a public version will be issued 

thereafter, pursuant to section 207.22 of 

the Commission’s rules. 

Hearing.—The Commission will hold 

a hearing in connection with the final 

phase of these investigations beginning 

at 9:30 a.m. on July 27, 2010, at the U.S. 

International Trade Commission 

Building. Requests to appear at the 

hearing should be filed in writing with 

the Secretary to the Commission on or 

before July 19, 2010. A nonparty who 

has testimony that may aid the 

Commission’s deliberations may request 

permission to present a short statement 

at the hearing. All parties and 

nonparties desiring to appear at the 

hearing and make oral presentations 

should attend a prehearing conference 

to be held at 9:30 a.m. on July 22, 2010, 

at the U.S. International Trade 

Commission Building. Oral testimony 

and written materials to be submitted at 

the public hearing are governed by 

sections 201.6(b)(2), 201.13(f), and 

207.24 of the Commission’s rules. 

Parties must submit any request to 

present a portion of their hearing 

testimony in camera no later than 7 

business days prior to the date of the 

hearing. 

Written submissions.—Each party 

who is an interested party shall submit 

a prehearing brief to the Commission. 

Prehearing briefs must conform with the 

provisions of section 207.23 of the 

Commission’s rules; the deadline for 

filing is July 20, 2010. Parties may also 

file written testimony in connection 

with their presentation at the hearing, as 

provided in section 207.24 of the 

Commission’s rules, and posthearing 

briefs, which must conform with the 

provisions of section 207.25 of the 

Commission’s rules. The deadline for 

filing posthearing briefs is August 3, 

2010; witness testimony must be filed 

no later than three days before the 

hearing. In addition, any person who 

has not entered an appearance as a party 

to the investigations may submit a 

written statement of information 

pertinent to the subject of the 

investigations, including statements of 

support or opposition to the petition, on 

or before August 3, 2010. On August 19, 

2010, the Commission will make 

available to parties all information on 

which they have not had an opportunity 

to comment. Parties may submit final 

comments on this information on or 

before August 23, 2010, but such final 

comments must not contain new factual 

information and must otherwise comply 

with section 207.30 of the Commission’s 

rules. All written submissions must 

conform with the provisions of section 

201.8 of the Commission’s rules; any 

submissions that contain BPI must also 

conform with the requirements of 

sections 201.6, 207.3, and 207.7 of the 

Commission’s rules. The Commission’s 

rules do not authorize filing of 

submissions with the Secretary by 

facsimile or electronic means, except to 

the extent permitted by section 201.8 of 

the Commission’s rules, as amended, 67 

FR 68036 (November 8, 2002). Even 

where electronic filing of a document is 

permitted, certain documents must also 

be filed in paper form, as specified in II 

(C) of the Commission’s Handbook on 

Electronic Filing Procedures, 67 FR 

68168, 68173 (November 8, 2002). 

Additional written submissions to the 

Commission, including requests 

pursuant to section 201.12 of the 

Commission’s rules, shall not be 

accepted unless good cause is shown for 

accepting such submissions, or unless 

the submission is pursuant to a specific 

request by a Commissioner or 

Commission staff. 

In accordance with sections 201.16(c) 

and 207.3 of the Commission’s rules, 

each document filed by a party to the 

investigations must be served on all 

other parties to the investigations (as 

identified by either the public or BPI 

service list), and a certificate of service 

must be timely filed. The Secretary will 

not accept a document for filing without 

a certificate of service. 

Authority: These investigations are being 

conducted under authority of title VII of the 

Tariff Act of 1930; this notice is published 

pursuant to section 207.21 of the 

Commission’s rules. 

By order of the Commission. 

Issued: April 19, 2010. 

Marilyn R. Abbott, 

Secretary to the Commission. 

[FR Doc. 2010–9405 Filed 4–22–10; 8:45 am] 

BILLING CODE 7020–02–P 

INTERNATIONAL TRADE 

COMMISSION 

[Investigation No. 731–TA–244 (Third 

Review)] 

Natural Bristle Paint Brushes From 

China 

AGENCY: United States International 

Trade Commission. 

ACTION: Scheduling of a full five-year 

review concerning the antidumping 

duty order on natural bristle paint 

brushes from China. 

SUMMARY: The Commission hereby gives 

notice of the scheduling of a full review 

pursuant to section 751(c)(5) of the 

Tariff Act of 1930 (19 U.S.C. 1675(c)(5)) 

(the Act) to determine whether 

revocation of the antidumping duty 

order on natural bristle paint brushes 

from China would be likely to lead to 

continuation or recurrence of material 

injury within a reasonably foreseeable 

time. For further information 

concerning the conduct of this review 

and rules of general application, consult 

the Commission’s Rules of Practice and 

Procedure, part 201, subparts A through 

E (19 CFR part 201), and part 207, 

subparts A, D, E, and F (19 CFR part 

207). 

WReier-Aviles on DSKGBLS3C1PROD with NOTICES

Federal Register / Vol. 75, No. 147 / Monday, August 2, 2010 / Notices 45097 

1 In the Preliminary Determination, we included 

HTSUS subheading 6815.99 in our description of 

the scope of the investigation. Subsequently, we 

determined that all of the ten-digit subheadings 

under this subheading must be used instead. 

Accordingly, the HTSUS ten-digit subheadings have 

been listed. 

Staff is designated examiner to evaluate 

and analyze the facts and information 

presented in the application and case 

record and to report findings and 

recommendations to the Board. 

Public comment is invited from 

interested parties. Submissions (original 

and 3 copies) shall be addressed to the 

Board’s Executive Secretary at the 

address below. The closing period for 

their receipt is October 1, 2010. Rebuttal 

comments in response to material 

submitted during the foregoing period 

may be submitted during the subsequent 

15-day period to October 18, 2010. 

A copy of the application will be 

available for public inspection at the 

Office of the Executive Secretary, 

Foreign–Trade Zones Board, Room 

2111, U.S. Department of Commerce, 

1401 Constitution Avenue NW, 

Washington, DC 20230–0002, and in the 

‘‘Reading Room’’ section of the Board’s 

website, which is accessible via 

www.trade.gov/ftz. For further 

information, contact Elizabeth 

Whiteman at 

Elizabeth.Whiteman@trade.gov or (202) 

482–0473. 

Dated: July 21, 2010. 

Andrew McGilvray 

Executive Secretary. 

[FR Doc. 2010–18956 Filed 7–30–10; 8:45 am] 

BILLING CODE 3510–DS–S 

DEPARTMENT OF COMMERCE 

INTERNATIONAL TRADE 

ADMINISTRATION 

(A–201–837) 

Certain Magnesia Carbon Bricks from 

Mexico: Notice of Final Determination 

of Sales at Less Than Fair Value 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

SUMMARY: The Department of Commerce 

determines that certain magnesia carbon 

bricks (bricks) from Mexico are being, or 

are likely to be, sold in the United States 

at less–than-fair–value (LTFV), as 

provided in section 735 of the Tariff Act 

of 1930, as amended (the Act). The 

estimated margins of sales at LTFV are 

shown in the ‘‘Final Determination 

Margins’’ section of this notice. 

EFFECTIVE DATE: (August 2, 2010.) 

FOR FURTHER INFORMATION CONTACT: 

David Goldberger or Katherine Johnson, 

AD/CVD Operations, Office 2, Import 

Administration, International Trade 

Administration, U.S. Department of 

Commerce, 14th Street and Constitution 

Avenue, NW, Washington, DC 20230; 

telephone (202) 482–4136 and (202) 

482–4929, respectively. 

SUPPLEMENTARY INFORMATION: 

Background 

On March 11, 2010, the Department of 

Commerce (Department) published in 

the Federal Register the preliminary 

determination of sales at LTFV in the 

antidumping duty investigation of 

certain magnesia carbon bricks from 

Mexico. See Certain Magnesia Carbon 

Bricks from Mexico: Notice of 

Preliminary Determination of Sales at 

Less Than Fair Value and Postponement 

of Final Determination, 75 FR 11517 

(March 11, 2010) (Preliminary 

Determination). 

On April 9, 2010, the Department 

issued a post–preliminary 

determination analysis for the 

respondent in this investigation, RHI– 

Refmex S.A. de C.V. (Refmex) in which 

the Department applied a quarterly 

costing methodology to recalculate the 

cost of production (COP). See 

Memorandum entitled ‘‘Cost of 

Production and Constructed Value 

Calculation Adjustments for the Post– 

Preliminary Analysis RHI–Refmex S.A. 

de C.V.,’’ dated April 7, 2010; and 

Memorandum entitled ‘‘Post– 

Preliminary Determination Analysis 

Utilizing Quarterly Cost Methodology 

for Refmex,’’ dated April 9, 2010. Based 

on the data and methodology described 

in these memoranda, we calculated a 

post–preliminary dumping margin for 

Refmex of 50.28 percent. 

During April and May 2010, we 

verified the sales and COP questionnaire 

responses of Refmex. During May 2010, 

we issued the COP, U.S. sales, and 

home market sales verification reports. 

See Memorandum to the File entitled 

‘‘Verification of the Cost Response of 

RHI–Refmex S.A. de C.V. in the 

Antidumping Duty Investigation of 

Certain Magnesia Carbon Bricks from 

Mexico,’’ dated May 10, 2010 (CVR); 

Memorandum to the File entitled 

‘‘Verification of the CEP Sales Response 

of RHI–Refmex S.A. de C.V.,’’ dated May 

12, 2010 (CEPVR); and Memorandum to 

the File entitled ‘‘Verification of the 

Home Market Sales Response of RHI– 

Refmex S.A. de C.V.,’’ dated June 1, 

2010 (HMVR). 

On June 8 and June 15, 2010, 

respectively, the petitioner in this 

investigation, Resco Products Inc, and 

Refmex each submitted case and 

rebuttal briefs. 

Period of Investigation (POI) 

The POI is July 1, 2008, to June 30, 

2009. This period corresponds to the 

four most recent fiscal quarters prior to 

the month of the filing of the petition. 

See 19 CFR 351.204(b)(1). 

Scope of Investigation 

The merchandise under investigation 

consists of certain chemically–bonded 

(resin or pitch), magnesia carbon bricks 

with a magnesia component of at least 

70 percent magnesia (MgO) by weight, 

regardless of the source of raw materials 

for the MgO, with carbon levels ranging 

from trace amounts to 30 percent by 

weight, regardless of enhancements (for 

example, magnesia carbon bricks can be 

enhanced with coating, grinding, tar 

impregnation or coking, high 

temperature heat treatments, anti–slip 

treatments or metal casing) and 

regardless of whether or not 

antioxidants are present (for example, 

antioxidants can be added to the mix 

from trace amounts to 15 percent by 

weight as various metals, metal alloys, 

and metal carbides). Certain magnesia 

carbon bricks that are the subject of this 

investigation are currently classifiable 

under subheadings 6902.10.1000, 

6902.10.5000, 6815.91.0000, 

6815.99.2000, and 6815.99.40001 of the 

Harmonized Tariff Schedule of the 

United States (HTSUS). While HTSUS 

subheadings are provided for 

convenience and customs purposes, the 

written description is dispositive. 

Analysis of Comments Received 

All issues raised in the case and 

rebuttal briefs submitted by the parties 

to this investigation are addressed in the 

‘‘Issues and Decision Memorandum for 

the Final Determination in the Less– 

Than-Fair–Value Investigation of 

Certain Magnesia Carbon Bricks from 

Mexico’’ from Edward C. Yang, Acting 

Deputy Assistant Secretary for 

Antidumping and Countervailing Duty 

Operations, to Ronald K. Lorentzen, 

Deputy Assistant Secretary for Import 

Administration (Decision Memo), dated 

July 26, 2010, which is hereby adopted 

by this notice. A list of the issues that 

parties have raised and to which we 

have responded, all of which are in the 

Decision Memo, is attached to this 

notice as an appendix. Parties can find 

a complete discussion of all issues 

raised in this investigation and the 

corresponding recommendations in the 

Decision Memo, which is on file in the 

Central Records Unit, Room 1117 of the 

Commerce Department. In addition, a 

complete version of the Decision Memo 


erowe on DSK5CLS3C1PROD with NOTICES
45098 Federal Register / Vol. 75, No. 147 / Monday, August 2, 2010 / Notices 

can be accessed directly on the Web at 

http://ia.ita.doc.gov/frn. The paper copy 

and electronic version of the Decision 

Memo are identical in content. 

Verification 

As provided in section 782(i) of the 

Act, we verified the sales and COP 

information submitted by Refmex for 

use in our final determination. We used 

standard verification procedures 

including an examination of relevant 

accounting and production records, and 

original source documents provided by 

the respondent. Our sales and cost 

verification results are outlined in 

separate verification reports. See 

CEPVR, HMVR, and CVR. The 

verification reports are on file and 

available in the Central Records Unit, 

Room 1117 of the Commerce 

Department. 

Changes Since the Preliminary 

Determination 

Based on our analysis of the 

comments received and our findings at 

verification, we have made certain 

changes to the margin calculations for 

Refmex. For a discussion of these 

changes, see the ‘‘Margin Calculations’’ 

section of the Decision Memo. 

Continuation of Suspension of 

Liquidation 

In accordance with section 

735(c)(1)(B) of the Act, we are directing 

U.S. Customs and Border Protection 

(CBP) to continue to suspend 

liquidation of all imports of subject 

merchandise that are entered or 

withdrawn from warehouse, for 

consumption on or after March 11, 

2010, the date of publication of the 

preliminary determination in the 

Federal Register. We will instruct CBP 

to continue to require a cash deposit or 

the posting of a bond for all companies 

based on the estimated weighted– 

average dumping margins shown below. 

The suspension of liquidation 

instructions will remain in effect until 

further notice. 

Final Determination Margins 

We determine that the weighted– 

average dumping margins are as follows: 

Manufacturer/Exporter Weighted–Average 

Margin (percent) 

RHI–Refmex S.A. de 

C.V. ........................... 57.90 

All Others ...................... 57.90 

All–Others Rate 

Section 735(c)(5)(A) of the Act 

provides that the estimated ‘‘All Others’’ 

rate shall be an amount equal to the 

weighted average of the estimated 

weighted–average dumping margins 

established for exporters and producers 

individually investigated, excluding any 

zero and de minimis margins, and any 

margins determined entirely under 

section 776 of the Act. Refmex is the 

only respondent in this investigation for 

which the Department calculated a 

company–specific rate. Therefore, for 

purposes of determining the all–others 

rate and pursuant to section 735(c)(5)(A) 

of the Act, we are using the weighted– 

average dumping margin calculated for 

Refmex, as referenced above. See, e.g., 

Notice of Final Determination of Sales 

at Less Than Fair Value: Stainless Steel 

Sheet and Strip in Coils From Italy, 64 

FR 30750, 30755 (June 8, 1999); and 

Coated Free Sheet Paper from 

Indonesia: Notice of Preliminary 

Determination of Sales at Less Than 

Fair Value and Postponement of Final 

Determination, 72 FR 30753, 30757 

(June 4, 2007), unchanged in Notice of 

Final Determination of Sales at Less 

Than Fair Value: Coated Free Sheet 

Paper from Indonesia, 72 FR 60636 

(October 25, 2007). 

Disclosure 

We will disclose the calculations 

performed within five days of the date 

of publication of this notice to parties in 

this proceeding in accordance with 19 

CFR 351.224(b). 

International Trade Commission 

Notification 

In accordance with section 735(d) of 

the Act, we have notified the 

International Trade Commission (ITC) of 

our final determination. As our final 

determination is affirmative, the ITC 

will determine within 45 days whether 

imports of the subject merchandise are 

causing material injury, or threat of 

material injury, to an industry in the 

United States. If the ITC determines that 

material injury or threat of injury does 

not exist, the proceeding will be 

terminated and all securities posted will 

be refunded or canceled. If the ITC 

determines that such injury does exist, 

the Department will issue an 

antidumping duty order directing CBP 

to assess antidumping duties on all 

imports of the subject merchandise 

entered, or withdrawn from warehouse, 

for consumption on or after the effective 

date of the suspension of liquidation. 

Return or Destruction of Proprietary 

Information 

This notice will serve as the only 

reminder to parties subject to 

administrative protective order (APO) of 

their responsibility concerning the 

destruction of proprietary information 

disclosed under APO in accordance 

with 19 CFR 351.305(a)(3). Timely 

written notification of return/ 

destruction of APO materials or 

conversion to judicial protective order is 

hereby requested. Failure to comply 

with the regulations and the terms of an 

APO is a sanctionable violation. 

We are issuing and publishing this 

determination and notice in accordance 

with sections 735(d) and 777(i) of the 

Act. 

Dated: July 26, 2010. 

Ronald K. Lorentzen, 

Deputy Assistant Secretary for Import 

Administration. 

Appendix--Issues in Decision Memo 

Comments 

Comment 1: Exclusion of Functional 

Magnesia Carbon Brick Products from 

the Scope 

Comment 2: CEP Offset 

Comment 3: Adjustments to COP Data 

Comment 4: Treatment of Full Line 

Service Contract Transactions 

Comment 5: Movement Expenses 

Comment 6: Home Market Price 

Adjustments 

Comment 7: Adjustments to U.S. Sales 

Prices 

Comment 8: Indirect Selling Expenses 

Incurred in Mexico 

[FR Doc. 2010–18925 Filed 7–30–10; 8:45 am] 

BILLING CODE 3510–DS–S 

DEPARTMENT OF COMMERCE 

National Oceanic and Atmospheric 

Administration 

RIN 0648–XX95 

Magnuson-Stevens Act Provisions; 

General Provisions for Domestic 

Fisheries; Application for Exempted 

Fishing Permits 

AGENCY: National Marine Fisheries 

Service (NMFS), National Oceanic and 

Atmospheric Administration (NOAA), 

Commerce. 

ACTION: Notice; request for comments. 

SUMMARY: The Assistant Regional 

Administrator for Sustainable Fisheries, 

Northeast Region, NMFS (Assistant 

Regional Administrator), has made a 

preliminary determination that an 

Exempted Fishing Permit (EFP) 

application contains all of the required 

information and warrants further 

consideration. This EFP would allow 

four commercial fishing vessels to fish 

outside of the limited access scallop 

days-at-sea (DAS) program and the sea 

scallop access area regulations in 

support of research conducted by the 


erowe on DSK5CLS3C1PROD with NOTICES
45468 Federal Register / Vol. 75, No. 147 / Monday, August 2, 2010 / Notices 

1See Certain Magnesia Carbon Bricks from the 

People’s Republic of China: Preliminary 

Determination of Sales at Less Than Fair Value and 

Postponement of Final Determination, 75 FR 11847 

(March 12, 2010) (‘‘Preliminary Determination’’). 

2See Certain Magnesia Carbon Bricks from the 

People’s Republic of China: Amended Preliminary 

Determination of Sales at Less Than Fair Value, 75 

FR 20813 (April 21, 2010) (‘‘Amended Preliminary 

Determination’’). 

3See Certain Magnesia Carbon Bricks from the 

People’s Republic of China: Notice of Preliminary 

Affirmative Determination of Critical 

Circumstances, 75 FR 28237 (May 20, 2010) 

(‘‘Preliminary Critical Circumstances 

Determination’’). 

4See Mayerton’s April 1, 2010 letter at 1. 

5For sales, we conducted verification of RHI’s 

North American affiliates, Veitsch Radix America, 

Inc. (incorporated in Canada) (‘‘VRC’’) and Veitsch 

Radix America, Inc. (incorporated in the U.S.) 

(‘‘VRA’’), which handled all of RHI’s POI sales. See 

Memo to the File, through Scot T. Fullerton, 

Program Manager, from Paul Walker and Dana 

Griffies, Case Analysts, ‘‘Investigation of Magnesia 

Carbon Bricks from the People’s Republic of China: 

Sales Verification of Veitsch Radix America, Inc.,’’ 

dated June 10, 2010 (‘‘VRC Verification Report’’). 

For FOPs, we conducted verification of RHI, which 

produced the merchandise under consideration. See 

Memo to the File, through Scot T. Fullerton, 

Program Manager, from Paul Walker and Dana 

Griffies, Case Analysts, ‘‘Investigation of Magnesia 

Carbon Bricks from the People’s Republic of China: 

Factors of Production Verification of RHI 

Refractories Liaoning Co., Ltd.,’’ dated June 11, 2010 

(‘‘RHI Verification Report’’). 

6See Memo to the File, through Scot T. Fullerton, 

Program Manager, from Paul Walker and Dana 

Griffies, Case Analysts, ‘‘Investigation of Magnesia 

Carbon Bricks from the People’s Republic of China: 

Verification of Yingkou New Century Refractories 

Ltd.,’’ dated June 10, 2010 (‘‘New Century 

Verification Report’’); Memo to the File, through 

Scot T. Fullerton, Program Manager, from Paul 

Walker and Dana Griffies, Case Analysts, 

‘‘Investigation of Magnesia Carbon Bricks from the 

People’s Republic of China: Verification of Fengchi 

Import & Export Co., Ltd. of Haicheng City,’’ dated 

June 11, 2010 (‘‘Fengchi Verification Report’’). 

7See the memoranda to the file dated June 15, 

2010, June 22, 2010, July 6, 2010 and July 14, 2010. 

8The petitioner is Resco Products, Inc. 

(hereinafter referred to as the ‘‘Petitioner’’). 

9See I&D Memo at Comment 1a & 1b; see also 

Memorandum to the File from Paul Walker, Case 

Analyst, through Scot T. Fullerton, Program 

Manager, ‘‘Magnesia Carbon Bricks from the 

People’s Republic of China: Surrogate Values for the 

Final Determination,’’ dated concurrently with this 

notice. 

10See I&D Memo at Comment 2b. 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[A–570–954] 

Certain Magnesia Carbon Bricks From 

the People’s Republic of China: Final 

Determination of Sales at Less Than 

Fair Value and Critical Circumstances 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

DATES: Effective Date: August 2, 2010. 

SUMMARY: On March 12, 2010, the 

Department of Commerce (the 

‘‘Department’’) published the 

Preliminary Determination of sales at 

less than fair value (‘‘LTFV’’) in the 

antidumping investigation of magnesia 

carbon bricks (‘‘bricks’’) from the 

People’s Republic of China (‘‘PRC’’).1 On 

April 21, 2010, the Department 

published the Amended Preliminary 

Determination in the antidumping 

investigation of bricks from the PRC.2

On May 20, 2010, the Department 

published the Preliminary Critical 

Circumstances Determination in the 

antidumping investigation of bricks 

from the PRC.3 The period of 

investigation (‘‘POI’’) is January 1, 

2009—June 30, 2009. Based on our 

analysis of the comments received, we 

have made changes to the margin 

calculation for RHI Refractories 

Liaoning Co., Ltd. (‘‘RHI’’). We continue 

to find that bricks from the PRC are 

being, or are likely to be, sold in the 

United States at LTFV as provided in 

section 735 of the Tariff Act of 1930, as 

amended (‘‘the Act’’). The estimated 

margins of sales at LTFV are shown in 

the ‘‘Final Determination Margins’’ 

section of this notice. 

FOR FURTHER INFORMATION CONTACT: Paul 

Walker or Dana Griffies, AD/CVD 

Operations, Office 9, Import 

Administration, International Trade 

Administration, U.S. Department of 

Commerce, 14th Street and Constitution 

Avenue, NW., Washington, DC 20230; 

telephone: (202) 482–0413 or (202) 482– 

3023, respectively. 

SUPPLEMENTARY INFORMATION: 

Background 

On April 1, 2010, Liaoning Mayerton 

Refractories Co., Ltd. and Dalian 

Mayerton Refractories Co., Ltd. 

(collectively, ‘‘Mayerton’’) stated that it 

would no longer participate in the 

investigation.4

For RHI, the Department conducted 

sales verification from April 12–16, 

2010 and factors of production (‘‘FOP’’) 

verification May 17–20, 2010.5 For 

Yingkou New Century Refractories Ltd. 

(‘‘New Century’’) and Fengchi Import & 

Export Co., Ltd. of Haicheng City 

(‘‘Fengchi’’), the Department conducted 

separate rates verifications on May 21, 

and May 24, 2010, respectively.6 See the 

‘‘Verification’’ section below for 

additional information. 

Between June 14, 2010 and July 14, 

2010, the Department placed labor wage 

rate data on the record and invited 

parties to comment on the Department’s 

labor wage rate methodology.7

Between June 18, 2010 and July 16, 

2010, we received case and rebuttal 

briefs from the Petitioner, 8 the 

government of the PRC (‘‘GOC’’) and 

RHI. 

Analysis of Comments Received 

All issues raised in the case and 

rebuttal briefs by parties to this 

investigation are addressed in the 

‘‘Investigation of Magnesia Carbon 

Bricks from the People’s Republic of 

China: Issues and Decision 

Memorandum for the Final 

Determination’’ (‘‘I&D Memo’’), dated 

concurrently with this notice and which 

is hereby adopted by this notice. A list 

of the issues which parties raised, and 

to which we respond in the I&D Memo, 

are attached to this notice as Appendix 

I. The I&D Memo is a public document 

and is on file in the Central Records 

Unit (‘‘CRU’’), Room 1117, and is 

accessible on the World Wide Web at 

http://trade.gov/ia/index.asp. The paper 

copy and electronic version of the 

memorandum are identical in content. 

Changes Since the Preliminary 

Determination 

Based on our analysis of information 

on the record of this investigation, we 

have made changes to RHI’s margin 

calculation for the final determination. 

For the final determination, we have 

adjusted the surrogate value for fused 

magnesia to exclude certain aberrational 

data and adopted a new methodology 

for calculating the surrogate value for 

labor.9 In addition, we have applied 

certain discounts that RHI reported to 

its sales database.10

Regarding Mayerton, for the final 

determination, we have applied total 

adverse facts available (‘‘AFA’’) for its 

failure to participate and included it as 

part of the PRC-wide entity. For more 

information see the ‘‘Mayerton’’ section 

below. 

Scope of Investigation 

The merchandise under investigation 

consists of certain chemically-bonded 

(resin or pitch), magnesia carbon bricks 

with a magnesia component of at least 

70 percent magnesia (‘‘MgO’’) by weight, 

regardless of the source of raw materials 

for the MgO, with carbon levels ranging 

from trace amounts to 30 percent by 

weight, regardless of enhancements (for 

example, magnesia carbon bricks can be 

enhanced with coating, grinding, tar 

impregnation or coking, high 

temperature heat treatments, anti-slip 

treatments or metal casing) and 

regardless of whether or not 

antioxidants are present (for example, 

antioxidants can be added to the mix 

from trace amounts to 15 percent by 

weight as various metals, metal alloys, 

and metal carbides). Certain magnesia 

carbon bricks that are the subject of this 


erowe on DSK5CLS3C1PROD with NOTICES2
Federal Register / Vol. 75, No. 147 / Monday, August 2, 2010 / Notices 45469 

11 In the Preliminary Determination, we included 

HTSUS subheading 6815.99 in our description of 

the scope of the investigation. Subsequently, we 

determined that all of the ten-digit subheadings 

under subheading 6815.99 must be used instead. 

Accordingly, the appropriate HTSUS ten-digit 

subheadings have been listed. 

12See Section 776(a)(2)(D) of the Act. 

13See Sections 776(a)(2)(C) and (D) and 776(b) of 

the Act; see also Certain Circular Welded Carbon 

Quality Steel Line Pipe from the People’s Republic 

of China: Final Determination of Sales at Less Than 

Fair Value, 74 FR 14514, 14516 (March 31, 2009). 

14See VRC Verification Report, RHI Verification 

Report, New Century Verification Report and 

Fengchi Verification Report. 

15See Preliminary Determination at 11848–49. 

16As noted in the ‘‘Separate Rates’’ section below, 

these include Dashiqiao City Guancheng Refractor 

Co., Ltd.; Fengchi; Jiangsu Sujia Group New 

Materials Co. Ltd.; Liaoning Fucheng Refractories 

Group Co., Ltd.; Liaoning Fucheng Special 

Refractory Co., Ltd.; Liaoning Jiayi Metals & 

Minerals Co., Ltd.; Yingkou Bayuquan Refractories 

Co., Ltd.; Yingkou Dalmond Refractories Co., Ltd.; 

Yingkou Guangyang Co., Ltd.; Yingkou Kyushu 

Refractories Co, Ltd.; New Century; Yingkou 

Wonjin Refractory Material Co., Ltd.; and Yingkou 

Jiahe Refractories Co., Ltd. 

17See Preliminary Critical Circumstances 

Determination at 28239. 

investigation are currently classifiable 

under subheadings 6902.10.1000, 

6902.10.5000, 6815.91.0000, 

6815.99.2000 and 6815.99.4000 11 of the 

Harmonized Tariff Schedule of the 

United States (‘‘HTSUS’’). While HTSUS 

subheadings are provided for 

convenience and customs purposes, the 

written description is dispositive. 

Use of Facts Available 

Section 776(a)(2) of the Act provides 

that if an interested party: (A) 

Withholds information that has been 

requested by the Department; (B) fails to 

provide such information in a timely 

manner or in the form or manner 

requested, subject to subsections 

782(c)(1) and (e) of the Act; (C) 

significantly impedes a determination 

under the antidumping statute; or (D) 

provides such information but the 

information cannot be verified, the 

Department shall, subject to subsection 

782(d) of the Act, use facts otherwise 

available in reaching the applicable 

determination. 

Section 782(c)(1) of the Act provides 

that if an interested party ‘‘promptly 

after receiving a request from {the 

Department} for information, notifies 

{the Department} that such party is 

unable to submit the information in the 

requested form and manner, together 

with a full explanation and suggested 

alternative form in which such party is 

able to submit the information,’’ the 

Department may modify the 

requirements to avoid imposing an 

unreasonable burden on that party. 

Section 782(d) of the Act provides 

that, if the Department determines that 

a response to a request for information 

does not comply with the request, the 

Department will inform the person 

submitting the response of the nature of 

the deficiency and shall, to the extent 

practicable, provide that person the 

opportunity to remedy or explain the 

deficiency. If that person submits 

further information that continues to be 

unsatisfactory, or this information is not 

submitted within the applicable time 

limits, the Department may, subject to 

section 782(e), disregard all or part of 

the original and subsequent responses, 

as appropriate. 

Section 782(e) of the Act states that 

the Department shall not decline to 

consider information deemed 

‘‘deficient’’ under section 782(d) if: (1) 

The information is submitted by the 

established deadline; (2) the information 

can be verified; (3) the information is 

not so incomplete that it cannot serve as 

a reliable basis for reaching the 

applicable determination; (4) the 

interested party has demonstrated that it 

acted to the best of its ability; and (5) 

the information can be used without 

undue difficulties. 

Furthermore, section 776(b) of the Act 

states that if the administering authority 

finds that an interested party has not 

acted to the best of its ability to comply 

with a request for information, the 

administering authority may, in 

reaching its determination, use an 

inference that is adverse to that party. 

The adverse inference may be based 

upon: (1) The petition, (2) a final 

determination in the investigation under 

this title, (3) any previous review under 

section 751 of the Act or determination 

under section 753 of the Act, or (4) any 

other information placed on the record. 

Mayerton 

As noted above, Mayerton withdrew 

from the instant investigation. By 

ceasing to participate in the 

investigation, Mayerton prevented the 

Department from verifying the accuracy 

of its information as provided by section 

782(i) of the Act, and thus, failed to 

demonstrate eligibility for a separate 

rate.12 Therefore, Mayerton is 

considered to be part of the PRC-wide 

entity. Due to its failure to act to the best 

of its ability in responding to the 

Department’s requests for information, 

we find that Mayerton, as part of the 

PRC-wide entity, significantly impeded 

the Department’s proceeding.13

Accordingly, we have assigned the PRCwide rate margin to Mayerton of 236.00 

percent. For a discussion of the PRCwide entity’s rate, see the ‘‘PRC-wide 

Entity’’ and ‘‘Corroboration’’ sections, 

below. 

Verification 

As provided in section 782(i) of the 

Act, we conducted verification of the 

information submitted by RHI, New 

Century and Fengchi for use in our final 

determination.14 We used standard 

verification procedures, including 

examination of relevant accounting and 

production records, as well as original 

source documents provided by the 

respondents. 

Surrogate Country 

In the Preliminary Determination, we 

stated that we selected India as the 

appropriate surrogate country to use in 

this investigation for the following 

reasons: (1) It is a significant producer 

of comparable merchandise; (2) it is at 

a similar level of economic development 

pursuant to 773(c)(4) of the Act; and (3) 

we have reliable data from India that we 

can use to value the factors of 

production.15 For the final 

determination, we received no 

comments and made no changes to our 

findings with respect to the selection of 

a surrogate country. 

Critical Circumstances 

In the Preliminary Critical 

Circumstances Determination, the 

Department determined that, in 

accordance with section 733(e)(1) of the 

Act, critical circumstances exists with 

respect to RHI, the separate rate 

respondents 16 and the PRC-wide entity 

(which includes Mayerton).17

No other information has been placed 

on the record since the Preliminary 

Critical Circumstances Determination to 

contradict the information upon which 

we based our finding that critical 

circumstances exist, nor has any party 

commented on our preliminary critical 

circumstances finding. Therefore, for 

the final determination, in accordance 

with section 735(a)(3) of the Act, we 

continue to find that critical 

circumstances exist with respect to RHI, 

the separate rate respondents and the 

PRC-wide entity (including Mayerton). 

Separate Rates 

In proceedings involving non-marketeconomy (‘‘NME’’) countries, the 

Department begins with a rebuttable 

presumption that all companies within 

the country are subject to government 

control and, thus, should be assigned a 

single antidumping duty deposit rate. It 

is the Department’s policy to assign all 

exporters of merchandise subject to an 

investigation in an NME country this 

single rate unless an exporter can 


erowe on DSK5CLS3C1PROD with NOTICES2
45470 Federal Register / Vol. 75, No. 147 / Monday, August 2, 2010 / Notices 

18See Final Determination of Sales at Less Than 

Fair Value: Sparklers from the People’s Republic of 

China, 56 FR 20588 (May 6, 1991) (‘‘Sparklers’’), as 

amplified by 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’’), and 19 CFR 351.107(d). 

19See I&D Memo at Comment 3. 

20See Statement of Administrative Action 

accompanying the URAA, H.R. Rep. No. 103–316, 

vol. 1, at 870 (1994) (‘‘SAA’’). 

21See, e.g., Synthetic Indigo from the People’s 

Republic of China: Notice of Final Determination of 

Sales at Less Than Fair Value, 65 FR 25706, 25707 

(May 3, 2000). 

22See SAA at 870. 

23See Tapered Roller Bearings and Parts Thereof, 

Finished and Unfinished, from Japan, and Tapered 

Roller Bearings, Four Inches or Less in Outside 

Diameter, and Components Thereof, from Japan; 

Preliminary Results of Antidumping Duty 

Administrative Reviews and Partial Termination of 

Administrative Reviews, 61 FR 57391, 57392 

(November 6, 1996), unchanged in Tapered Roller 

Bearings and Parts Thereof, Finished and 

Unfinished, From Japan, and Tapered Roller 

Bearings, Four Inches or Less in Outside Diameter, 

and Components Thereof, From Japan; Final 

Results of Antidumping Duty Administrative 

Reviews and Termination in Part, 62 FR 11825 

(March 13, 1997). 

24See Certain Steel Grating from the People’s 

Republic of China: Final Determination of Sales at 

Less than Fair Value, 75 FR 32366 (June 8, 2010) 

and accompanying Issues and Decision 

Memorandum at Comment 2. 

25See Comment 1b below. 

26See Certain Magnesia Carbon Bricks from the 

People’s Republic of China and Mexico: Initiation 

of Antidumping Duty Investigations, 74 FR 42852 

(August 25, 2009) (‘‘Initiation Notice’’). 

demonstrate that it is sufficiently 

independent so as to be entitled to a 

separate rate.18 In the Preliminary 

Determination, we found that Dashiqiao 

City Guancheng Refractor Co., Ltd.; 

Fengchi Imp. and Exp. Co., Ltd. of 

Haicheng City; Jiangsu Sujia Group New 

Materials Co. Ltd.; Liaoning Fucheng 

Refractories Group Co., Ltd.; Liaoning 

Fucheng Special Refractory Co., Ltd.; 

Liaoning Jiayi Metals & Minerals Co., 

Ltd.; Yingkou Bayuquan Refractories 

Co., Ltd.; Yingkou Dalmond Refractories 

Co., Ltd.; Yingkou Guangyang Co., Ltd.; 

Yingkou Kyushu Refractories Co, Ltd.; 

Yingkou New Century Refractories Ltd.; 

and Yingkou Wonjin Refractory Material 

Co., Ltd., demonstrated their eligibility 

for, and were hence assigned, separaterate status. In the Amended Preliminary 

Determination, we found that Yingkou 

Jiahe Refractories Co., Ltd. 

demonstrated its eligibility for, and was 

hence assigned, separate-rate status. No 

party has commented on the eligibility 

of these companies for separate rate 

status. Consequently, for the final 

determination, we continue to find that 

the evidence placed on the record of 

this investigation by these companies 

demonstrates both a de jure and de facto 

absence of government control with 

respect to their exports of the 

merchandise under investigation. Thus, 

we continue to find that the separate 

rate companies are eligible for separaterate status. 

While the Petitioner has commented 

on RHI’s eligibility for a separate rate, 

which we have addressed in Comment 

3 of the I&D Memo, we continue to find 

that RHI is eligible for a separate rate. 

Accordingly, for the final determination, 

we continue to find that the evidence 

placed on the record of this 

investigation by RHI demonstrates both 

a de jure and de facto absence of 

government control with respect to its 

exports of the merchandise under 

investigation.19 Thus, we continue to 

find that RHI is eligible for separate-rate 

status. 

PRC-wide Entity 

In the Preliminary Determination, we 

treated PRC exporters/producers that 

did not respond to the Department’s 

request for information, as part of the 

PRC-wide entity because they did not 

demonstrate that they operate free of 

government control. No additional 

information has been placed on the 

record with respect to these entities 

after the Preliminary Determination. 

The PRC-wide entity, and Mayerton, 

have not provided the Department with 

the requested information; therefore, 

pursuant to section 776(a)(2)(A) of the 

Act, the Department continues to find 

that the use of facts available is 

appropriate to determine the PRC-wide 

rate. Section 776(b) of the Act provides 

that, in selecting from among the facts 

otherwise available, the Department 

may employ an adverse inference if an 

interested party fails to cooperate by not 

acting to the best of its ability to comply 

with requests for information.20 We find 

that, because the PRC-wide entity, and 

Mayerton, did not respond to our 

request for information, they have failed 

to cooperate to the best of their ability. 

Therefore, the Department finds that, in 

selecting from among the facts 

otherwise available, an adverse 

inference is appropriate for the PRCwide entity. Because we begin with the 

presumption that all companies within 

a NME country are subject to 

government control, and because only 

the companies listed under the ‘‘Final 

Determination Margins’’ section below 

have overcome that presumption, we are 

applying a single antidumping rate, i.e., 

the PRC-wide rate, to all other exporters 

of the merchandise under consideration 

from the PRC. Such companies, 

including Mayerton, did not 

demonstrate entitlement to a separate 

rate.21 The PRC-wide rate applies to all 

entries of the merchandise under 

consideration, except for those 

companies which have received a 

separate rate. 

Corroboration 

Section 776(c) of the Act provides 

that, when the Department relies on 

secondary information rather than on 

information obtained in the course of an 

investigation as facts available, it must, 

to the extent practicable, corroborate 

that information from independent 

sources reasonably at its disposal. 

Secondary information is described as 

‘‘information derived from the petition 

that gave rise to the investigation or 

review, the final determination 

concerning merchandise subject to this 

investigation, or any previous review 

under section 751 concerning the 

merchandise subject to this 

investigation.’’ 22 To ‘‘corroborate’’ 

means simply that the Department will 

satisfy itself that the secondary 

information to be used has probative 

value. Independent sources used to 

corroborate may include, for example, 

published price lists, official import 

statistics and customs data, and 

information obtained from interested 

parties during the particular 

investigation. To corroborate secondary 

information, the Department will, to the 

extent practicable, examine the 

reliability and relevance of the 

information used.23

The AFA rate that the Department 

used is from the Petition, however, we 

have updated the labor wage rate used 

to calculate the Petition rates. The 

Department’s practice is not to 

recalculate dumping margins provided 

in petitions, but rather to corroborate 

the applicable petition rate when 

applying that rate as adverse facts 

available.24 In the instant case, however, 

the surrogate wage rate used in the 

Petition was based upon the 

Department’s methodology that the 

Federal Circuit found unlawful in 

Dorbest II.25 In light of the Federal 

Circuit decision to invalidate the wage 

rate methodology, the Department has 

adjusted the petition rate using the 

surrogate value for labor used in this 

final determination. 

Petitioner’s methodology for 

calculating the United States price and 

normal value in the Petition is 

discussed in the Initiation Notice.26 To 

corroborate the AFA margin that we 

have selected, we compared this margin 

to the margins we found for RHI. We 

found that the margin of 236.00 percent 

has probative value because it is in the 

range of the model-specific margins that 


erowe on DSK5CLS3C1PROD with NOTICES2
Federal Register / Vol. 75, No. 147 / Monday, August 2, 2010 / Notices 45471 

27See Memorandum to the File, through Scot T. 

Fullerton, Program Manager, from Paul Walker, 

Case Analyst, ‘‘Investigation of Magnesia Carbon 

Bricks from the People’s Republic of China: RHI 

Refractories Liaoning Co., Ltd.,’’ dated concurrently 

with this notice. 

28Correction to an inadvertent error in the date 

listed in the Preliminary Critical Circumstances 

Determination. 

29See Certain Magnesia Carbon Bricks from the 

People’s Republic of China: Final Affirmative 

Countervailing Duty Determination, dated 

concurrently with this notice. 

30See, e.g., Notice of Final Determination of Sales 

at Less Than Fair Value: Carbazole Violet Pigment 

23 from India, 69 FR 67306, 67307 (November 17, 

2004). 

we found for RHI.27 Accordingly, we 

find that the rate of 236.00 percent is 

corroborated within the meaning of 

section 776(c) of the Act. 

Final Determination Margins 

We determine that the following 

percentage weighted-average margins 

exist for the following entities for the 

POI: 

Exporter Producer 

Weightedaverage 

margin 

RHI Refractories Liaoning Co., Ltd ............................................. RHI Refractories Liaoning Co., Ltd ............................................ 128.10 

Dashiqiao City Guancheng Refractor Co., Ltd ........................... Dashiqiao City Guancheng Refractor Co., Ltd .......................... 128.10 

Fengchi Imp. And Exp. Co., Ltd. of Haicheng City .................... Fengchi Refractories Co., of Haicheng City .............................. 128.10 

Jiangsu Sujia Group New Materials Co., Ltd ............................. Jiangsu Sujia Group New Materials Co., Ltd ............................ 128.10 

Liaoning Fucheng Refractories Group Co., Ltd .......................... Liaoning Fucheng Refractories Group Co., Ltd ......................... 128.10 

Liaoning Fucheng Special Refractory Co., Ltd ........................... Liaoning Fucheng Special Refractory Co., Ltd .......................... 128.10 

Liaoning Jiayi Metals & Minerals Co., Ltd .................................. Liaoning Jiayi Metals & Minerals Co., Ltd ................................. 128.10 

Yingkou Bayuquan Refractories Co., Ltd ................................... Yingkou Bayuquan Refractories Co., Ltd .................................. 128.10 

Yingkou Dalmond Refractories Co., Ltd ..................................... Yingkou Dalmond Refractories Co., Ltd .................................... 128.10 

Yingkou Guangyang Co., Ltd ..................................................... Yingkou Guangyang Co., Ltd .................................................... 128.10 

Yingkou Jiahe Refractories Co., Ltd ........................................... Yingkou Jiahe Refractories Co., Ltd .......................................... 128.10 

Yingkou Kyushu Refractories Co, Ltd ........................................ Yingkou Kyushu Refractories Co, Ltd ....................................... 128.10 

Yingkou New Century Refractories Ltd ...................................... Yingkou New Century Refractories Ltd ..................................... 128.10 

Yingkou Wonjin Refractory Material Co., Ltd ............................. Yingkou Wonjin Refractory Material Co., Ltd ............................ 128.10 

PRC-wide Entity* ........................................................................ .................................................................................................... 236.00 

* This rate also applies to Liaoning Mayerton Refractories Co., Ltd. and Dalian Mayerton Refractories Co., Ltd. 

Disclosure 

We will disclose the calculations 

performed within five days of the date 

of publication of this notice to parties in 

this proceeding in accordance with 

section 351.224(b) of the Department’s 

regulations. 

Continuation of Suspension of 

Liquidation 

Pursuant to section 735(c)(1)(B) of the 

Act, and consistent with our finding of 

critical circumstances for RHI, the 

separate rate companies and the PRCwide entity, pursuant to section 

733(e)(2) of the Act, we will instruct 

U.S. Customs and Border Protection 

(‘‘CBP’’) to continue to suspend 

liquidation of all entries of the 

merchandise under consideration from 

the PRC entered, or withdrawn from 

warehouse, for consumption on or after 

December 12, 2009, which is 90 days 

prior to the date of publication of the 

Preliminary Determination.28 CBP shall 

continue to require a cash deposit or the 

posting of a bond equal to the estimated 

amount by which the normal value 

exceeds the U.S. price as shown above. 

These instructions suspending 

liquidation will remain in effect until 

further notice. 

Additionally, the Department 

determined in its final determination for 

the companion countervailing duty 

(‘‘CVD’’) investigation that RHI’s 

merchandise benefited from export 

subsidies.29 Therefore, we will instruct 

CBP to require a cash deposit or posting 

of a bond equal to the weighted-average 

amount by which normal value exceeds 

U.S. price for RHI, as indicated above, 

minus the amount determined to 

constitute an export subsidy.30

With respect to the companies 

receiving a separate rate, we note that 

the rate applied in this proceeding as a 

separate rate is the calculated rate 

received by RHI. In the companion 

countervailing duty investigation, the 

Department found that RHI merchandise 

benefited from export subsidies during 

the POI, and, consequently, all other 

exporters (besides RHI and Mayerton) 

were found to have benefited from 

export subsidies based upon RHI 

results. Therefore, we will instruct CBP 

to require a cash deposit or posting of 

a bond equal to the weighted-average 

amount by which normal value exceeds 

U.S. price for RHI, as indicated above, 

minus the amount determined to 

constitute an export subsidy. 

With respect to the PRC-wide entity, 

as AFA, we applied to highest rate form 

the petition that we were able to 

corroborate. See the ‘‘Corroboration’’ 

section above. We note that, although in 

the companion countervailing duty 

investigation the Department found that 

all other exporters (besides RHI and 

Mayerton) were found to have benefited 

from export subsidies, because we have 

applied AFA to the PRC-wide entity, we 

will not instruct CBP to deduct any 

export subsidy from the PRC-wide 

entity’s cash deposit rate. 

ITC Notification 

In accordance with section 735(d) of 

the Act, we have notified the 

International Trade Commission (‘‘ITC’’) 

of our final determination of sales at 

LTFV. As our final determination is 

affirmative, in accordance with section 

735(b)(2) of the Act, within 45 days the 

ITC will determine whether the 

domestic industry in the United States 

is materially injured, or threatened with 

material injury, by reason of imports or 

sales (or the likelihood of sales) for 

importation of the merchandise under 

consideration. If the ITC determines that 

material injury or threat of material 

injury does not exist, the proceeding 

will be terminated and all securities 

posted will be refunded or canceled. If 

the ITC determines that such injury 

does exist, the Department will issue an 

antidumping duty order directing CBP 

to assess antidumping duties on all 

imports of the subject merchandise 

entered, or withdrawn from warehouse, 

for consumption on or after the effective 

date of the suspension of liquidation. 

Notification Regarding APO 

This notice also serves as a reminder 

to the parties subject to administrative 

protective order (‘‘APO’’) of their 

responsibility concerning the 


erowe on DSK5CLS3C1PROD with NOTICES2
45472 Federal Register / Vol. 75, No. 147 / Monday, August 2, 2010 / Notices 

1The Petitioner in the instant investigation is 

Resco Products Inc. 

disposition of proprietary information 

disclosed under APO in accordance 

with 19 CFR 351.305. Timely 

notification of return or destruction of 

APO materials or conversion to judicial 

protective order is hereby requested. 

Failure to comply with the regulations 

and the terms of an APO is a 

sanctionable violation. 

This determination and notice are 

issued and published in accordance 

with sections 735(d) and 777(i)(1) of the 

Act. 

Dated: July 26, 2010. 

Ronald K. Lorentzen, 

Acting Deputy Assistant Secretary for Import 

Administration. 

APPENDIX I 

Comment 1: Surrogate Values 

a. Magnesia 

b. Labor 

Comment 2: Deductions to Gross Unit Price 

a. Indirect Selling Expenses 

b. Discounts 

Comment 3: RHI’s Separate Rate 

Comment 4: Service Contracts 

Comment 5: Exclusion of Resin-bonded 

Magnesia Carbon Functional Refractory 

Products from the Scope 

Comment 6: Double Remedy 

Comment 7: FOP Allocation Ratio 

[FR Doc. 2010–18938 Filed 7–30–10; 8:45 am] 

BILLING CODE 3510–DS–P 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[C–570–955] 

Certain Magnesia Carbon Bricks From 

the People’s Republic of China: Final 

Affirmative Countervailing Duty 

Determination 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce 

SUMMARY: The Department of Commerce 

(the Department) has reached a final 

determination that countervailable 

subsidies are being provided to 

producers/exporters of magnesia carbon 

bricks (MCBs) from the People’s 

Republic of China (PRC). For 

information on the estimated subsidy 

rates, see the ‘‘Suspension of 

Liquidation’’ section of this notice. 

DATES: Effective Date: August 2, 2010. 

FOR FURTHER INFORMATION CONTACT: 

Summer Avery or Toni Page, AD/CVD 

Operations, Office 6, Import 

Administration, International Trade 

Administration, U.S. Department of 

Commerce, Room 7866, 14th Street and 

Constitution Avenue, NW., Washington, 

DC 20230; telephone: (202) 482–4052 or 

(202) 482–1398, respectively. 

SUPPLEMENTARY INFORMATION: 

Case History 

The following events have occurred 

since the preliminary determination. 

See Certain Magnesia Carbon Bricks 

From the People’s Republic of China: 

Preliminary Negative Countervailing 

Duty Determination, 74 FR 68241 

(December 23, 2009) (Preliminary 

Determination). 

On January 7, 2010, Petitioner 1

submitted a letter, in accordance with 

section 705(a)(1) of the Tariff Act of 

1930, as amended (the Act), requesting 

alignment of the final countervailing 

duty (CVD) determination with the final 

antidumping duty (AD) determinations 

of MCBs from the PRC and Mexico. On 

January 28, 2010, the Department 

aligned the final CVD determination 

with the final determinations in the 

companion AD investigations of MCBs 

from the PRC and Mexico. See Certain 

Magnesia Carbon Bricks From the 

People’s Republic of China: Alignment 

of Final Countervailing Duty 

Determination With Final Antidumping 

Duty Determinations, 75 FR 4528 

(January 28, 2010). 

On January 22, 2010, the GOC filed a 

request for a hearing for the instant 

investigation. 

The Department issued three 

supplemental questionnaires to the 

Government of the People’s Republic of 

China (GOC) on December 8, 2009, 

February 22, 2010, and March 26, 2010, 

respectively. The GOC submitted 

responses on January 5, 2010, March 15, 

2010, March 22, 2010, and April 2, 

2010. 

The Department issued two 

supplemental questionnaires to 

Liaoning Mayerton Refractories (LMR) 

and its cross-owned affiliate Dalian 

Mayerton Refractories Co. Ltd. (DMR) 

(collectively, Mayerton) on December 8, 

2009 and February 22, 2010, 

respectively. Mayerton submitted a 

response on January 5, 2010 for the first 

supplemental questionnaire but did not 

respond to the Department’s second 

supplemental questionnaire. On April 1, 

2010, Mayerton filed a letter with the 

Department informing us that that they 

would no longer be participating in this 

investigation. 

The Department issued two 

supplemental questionnaires to RHI 

Refractories Liaoning Co., Ltd. (RHIL) as 

well as its cross-owned affiliates RHI 

Refractories (Dalian) Co., Ltd. (RHID) 

and Liaoning RHI Jinding Magnesia Co., 

Ltd. (RHIJ) (collectively, RHI) on 

December 8, 2009 and February 22, 

2010, respectively. RHI submitted 

responses to the Department’s 

questionnaires on January 5, 2010, 

March 15, 2010, and March 22, 2010. 

Public versions of all questionnaires and 

responses, as well as the various 

memoranda cited below, are available in 

the Department’s Central Records Unit 

(CRU), Room 1117 in the HCHB 

building of the Commerce Department. 

From May 4 through May 7, 2010, we 

conducted verification of the 

questionnaire responses submitted by 

RHI. We issued the verification report 

for RHI on June 1, 2010. See 

Memorandum to the File from Toni 

Page and Summer Avery, International 

Trade Analysts, Verification of the 

Questionnaire Responses Submitted by 

RHI Refractories Liaoning Co., Ltd., RHI 

Refractories (Dalian) Co., Ltd., and 

Liaoning RHI Jinding Magnesia Co., Ltd. 

(June 1, 2010). 

On May 6, 2010, the Department 

issued its post-preliminary 

determination regarding two programs, 

‘‘Export Restraints of Raw Materials’’ 

and the ‘‘Provision of Electricity for Less 

than Adequate Remuneration.’’ See 

Countervailing Duty Investigation of 

Certain Magnesia Carbon Bricks from 

the People’s Republic of China: PostPreliminary Determination (May 6, 

2010). 

The Department received case briefs 

from Petitioner, the GOC, and RHI on 

June 10, 2010 and rebuttal briefs from 

the same parties on June 17, 2010. On 

June 17, 2010, the GOC withdrew its 

hearing request. 

Scope of Investigation 

The merchandise under investigation 

consists of certain chemically-bonded 

(resin or pitch), magnesia carbon bricks 

with a magnesia component of at least 

70 percent magnesia (‘‘MgO’’) by weight, 

regardless of the source of raw materials 

for the MgO, with carbon levels ranging 

from trace amounts to 30 percent by 

weight, regardless of enhancements (for 

example, magnesia carbon bricks can be 

enhanced with coating, grinding, tar 

impregnation or coking, high 

temperature heat treatments, anti-slip 

treatments or metal casing) and 

regardless of whether or not 

antioxidants are present (for example, 

antioxidants can be added to the mix 

from trace amounts to 15 percent by 

weight as various metals, metal alloys, 

and metal carbides). Certain magnesia 

carbon bricks that are the subject of this 

investigation are currently classifiable 

under subheadings 6902.10.1000, 

6902.10.5000, 6815.91.0000, 


erowe on DSK5CLS3C1PROD with NOTICES2
Federal Register / Vol. 75, No. 147 / Monday, August 2, 2010 / Notices 45473 

2 In the Preliminary Determination, we included 

HTSUS subheading 6815.99 in our description of 

the scope of the investigation. Subsequently, we 

determined that all of the ten-digit subheadings 

under subheading 6815.99 must be used instead. 

Accordingly, the appropriate HTSUS ten-digit 

subheadings have been listed. 

6815.99.2000 and 6815.99.4000 2 of the 

Harmonized Tariff Schedule of the 

United States (‘‘HTSUS’’). While HTSUS 

subheadings are provided for 

convenience and customs purposes, the 

written description is dispositive. 

Scope Comments 

On September 8, 2009, Pilkington 

North America Inc. (PNA), a U.S. 

importer of magnesia bricks from the 

People’s Republic of China (PRC) and 

Mexico, filed timely comments 

concerning the scope of the AD and 

CVD investigations of certain magnesia 

carbon bricks from the PRC and the AD 

investigation of certain magnesia carbon 

bricks from Mexico. See Letter from 

Pilkington North America Inc. Re: Scope 

Comments (September 8, 2009). 

In its submission, PNA requested that 

the Department amend the scope of 

these investigations to exclude ceramic 

bonded magnesia bricks with or without 

trace amounts of carbon or clarify that 

this product is outside the scope of 

these investigations. According to PNA, 

the ceramic bonded magnesia bricks it 

imports are clearly not within the 

intended scope of these investigations. 

Petitioner did not submit comments on 

PNA’s submission; however, in a 

telephone conversation with a 

Department official, Petitioner stated 

that it agreed that the bricks at issue 

were outside the scope of these 

investigations. See Memorandum to the 

File, through Tom Gilgunn, Program 

Manager, Office 6, from Summer Avery, 

International Trade Analyst, Re: Import 

Administration Countervailing Duty 

Investigation of Certain Magnesia 

Carbon Bricks from the People’s 

Republic of China: Scope Comments 

(February 16, 2010). 

After reviewing PNA’s comments, the 

Department determined that the scope 

of these investigations does not include 

the bonded MCBs imported by PNA. 

However, because the language in the 

scope is clear that only chemically 

bonded magnesia carbon bricks are 

covered, the Department concluded that 

it was not necessary to amend or clarify 

the existing scope language in these 

investigations in response to PNA’s 

request. See Memorandum from John M. 

Anderson, Acting Deputy Assistant 

Secretary Re: Certain Magnesia Carbon 

Bricks from the People’s Republic of 

China and Mexico: Scope Comments 

(February 24, 2010). 

A respondent in the companion AD 

investigation of MCBs from Mexico, 

RHI–Refmex S.A. de C.V. (Refmex), 

argued in its case brief that the 

Department should expressly hold that 

resin-bonded magnesia carbon 

functional refractory products, as 

opposed to magnesia carbon brick 

products, are not within the scope of the 

MCBs under investigation. The 

Department has decided not to amend 

the scope of the MCB investigations to 

include a specific exclusion for such 

products because the current 

description of the scope of these 

investigations adequately limits the 

scope to bricks. A full summary of 

Refmex’s comments and the 

Department’s position are at Comment 1 

of the Issues and Decision 

Memorandum for the AD Mexico 

investigation and Comment 5 of the 

Issues and Decision Memorandum for 

the AD PRC investigation. See Issues 

and Decision Memorandum for Certain 

Magnesia Carbon Bricks From Mexico: 

Final Determination of Sales at Less 

Than Fair Value and Issues and 

Decision Memorandum for Certain 

Magnesia Carbon Bricks From the 

People’s Republic of China: Final 

Determination of Sales at Less Than Fair 

Value (July 26, 2010). 

Analysis of Subsidy Programs and 

Comments Received 

All issues raised in the case and 

rebuttal briefs by parties to this 

investigation are addressed in the 

Memorandum to Ronald K. Lorentzen, 

Deputy Assistant Secretary for Import 

Administration, from Edward C. Yang, 

Acting Deputy Assistant Secretary for 

Antidumping and Countervailing Duty 

Operations, entitled ‘‘Issues and 

Decision Memorandum for the Final 

Affirmative Countervailing Duty 

Determination: Certain Magnesia Carbon 

Bricks from the People’s Republic of 

China,’’ dated concurrently with this 

notice (hereinafter, Decision 

Memorandum), which is hereby 

adopted by this notice. Attached to this 

notice as an Appendix is a list of the 

issues that parties have raised and to 

which we have responded in the 

Decision Memorandum. The Decision 

Memorandum also contains a complete 

analysis of the programs covered by this 

investigation, and the methodologies 

used to calculate the subsidy rates. 

Parties can find a complete discussion 

of all issues raised in this investigation 

and the corresponding 

recommendations in this public 

memorandum, which is on file in the 

CRU. In addition, a complete version of 

the Decision Memorandum can be 

accessed directly on the Internet at 

http://ia.ita.doc.gov/frn/. The paper 

copy and electronic version of the 

Decision Memorandum are identical in 

content. 

Use of Adverse Facts Available 

For purposes of this final 

determination, we continue to rely on 

facts available and have drawn adverse 

inferences, in accordance with sections 

776(a) and (b) of the Act, with regard to 

RHI’s receipt of countervailable 

subsidies under the ‘‘Provision of 

Electricity for Less than Adequate 

Remuneration’’ and ‘‘Export Restraints of 

Raw Materials’’ programs. In addition, 

pursuant to sections 776(a)(2)(A) and (C) 

of the Act, we have based the CVD rate 

for Mayerton on facts otherwise 

available and drawn adverse inferences. 

A full discussion of our decision to 

apply adverse facts available (AFA) is 

presented in the Decision Memorandum 

in the section ‘‘Application of Facts 

Available, Including the Application of 

Adverse Inferences,’’ as well as the 

Department’s positions in Comment 6: 

Whether the Use of Facts Available with 

Adverse Inferences Is Warranted For the 

Export Restraint Subsidy and Comment 

8: Whether the Department Correctly 

Applied AFA and Treated the Provision 

of Electricity as a Countervailable 

Subsidy in the Decision Memorandum. 

Suspension of Liquidation 

In accordance with section 

705(c)(1)(B)(i)(I) of the Act, we have 

calculated an individual rate for the 

mandatory respondent still participating 

in this investigation, RHI. Section 

705(c)(5)(A)(i) of the Act states that for 

companies not investigated, we will 

determine an ‘‘all others’’ rate equal to 

the weighted-average countervailable 

subsidy rates established for exporters 

and producers individually 

investigated, excluding any zero and de 

minimis countervailable subsidy rates, 

and any rates determined entirely under 

section 776 of the Act. In this 

investigation, the Department selected 

two mandatory respondents to review. 

Because there is only one respondent in 

this investigation for which the 

Department has calculated a companyspecific rate, consistent with our 

practice and section 705(c)(5)(A)(i) of 

the Act, its rate serves as the ‘‘all others’’ 

rate. See, e.g., Final Affirmative 

Countervailing Duty Determination: 

Certain Hot-Rolled Carbon Steel Flat 

Products from Thailand, 66 FR 50410, 

50411 (October 3, 2001); and Final 

Affirmative Countervailing Duty 

Determination: Pure Magnesium From 

Israel, 66 FR 49351, 49353 (September 

27, 2001). As discussed above, 

mandatory respondent Mayerton 


erowe on DSK5CLS3C1PROD with NOTICES2
45474 Federal Register / Vol. 75, No. 147 / Monday, August 2, 2010 / Notices 

withdrew from the instant investigation. 

As discussed in the Decision 

Memorandum, for each program 

examined in this investigation, we have 

made the adverse inference that 

Mayerton benefitted from the program 

and calculated a rate accordingly. 

Exporter/ 

manufacturer 

Net countervailable 

subsidy rate 

RHI ........................ 24.24% ad valorem. 

Mayerton ............... 253.87% ad valorem. 

All Others .............. 24.24% ad valorem. 

In accordance with section 

705(c)(1)(C) of the Act, we are directing 

U.S. Customs and Border Protection 

(CBP) to suspend liquidation of all 

imports of the subject merchandise from 

the PRC that are entered, or withdrawn 

from warehouse, for consumption on or 

after the date of publication of this 

notice in the Federal Register. The 

suspension of liquidation will remain in 

effect until further notice. 

If the International Trade Commission 

(ITC) issues a final affirmative injury 

determination, we will issue a 

countervailing duty order and order 

CBP to continue the suspension of 

liquidation of entries of MCBs and to 

require a cash deposit on all such 

entries equal to the subsidy rate listed 

above. If the ITC determines that 

material injury, or threat of material 

injury, does not exist, this proceeding 

will be terminated and all deposits or 

securities posted as a result of the 

suspension of liquidation will be 

refunded or canceled. 

ITC Notification 

In accordance with section 705(d) of 

the Act, we will notify the ITC of our 

determination. In addition, we are 

making available to the ITC all nonprivileged and non-proprietary 

information related to this investigation. 

We will allow the ITC access to all 

privileged and business proprietary 

information in our files, provided the 

ITC confirms that it will not disclose 

such information, either publicly or 

under an APO, without the written 

consent of the Assistant Secretary for 

Import Administration. 

Return or Destruction of Proprietary 

Information 

In the event that the ITC issues a final 

negative injury determination, this 

notice will serve as the only reminder 

to parties subject to an administrative 

protective order (APO) of their 

responsibility concerning the 

destruction of proprietary information 

disclosed under APO in accordance 

with 19 CFR 351.305(a)(3). Timely 

written notification of the return/ 

destruction of APO materials or 

conversion to judicial protective order is 

hereby requested. Failure to comply 

with the regulations and terms of an 

APO is a violation which is subject to 

sanction. 

This determination is issued and 

published pursuant to sections 705(d) 

and 777(i) of the Act. 

Dated: July 26, 2010. 

Ronald K. Lorentzen, 

Deputy Assistant Secretary for Import 

Administration. 

Appendix—List of Comments and 

Issues in the Decision Memorandum 

Comment 1: Whether the Department Has the 

Authority to Apply the CVD Law to the 

PRC While Treating the PRC as A NonMarket Economy In The Parallel 

Antidumping Investigation 

Comment 2: Whether the Simultaneous 

Application of the CVD Law and the 

Antidumping Non-Market Economy 

Methodology in This Case Would Lead to 

Impermissible Double Remedies 

Comment 3: Whether the Department’s 

Application of Countervailing Duties to a 

Non-Market Economy Country Violates the 

Administrative Procedures Act 

Comment 4: Whether the Department’s 

Decision to Initiate an Investigation of 

Export Restraints at Issue Was Contrary to 

Law and Unsupported by Fact 

Comment 5: Whether the Export Restraints at 

Issue Can be Found to Confer a Financial 

Contribution to the Industry Producing 

MCBs 

Comment 6: Whether the Use of Facts 

Available with Adverse Inferences Is 

Warranted For the Export Restraint 

Subsidy 

Comment 7: Whether the Department Should 

Adjust the Manner It Calculates the Export 

Restraints Benefit 

Comment 8: Whether the Department 

Correctly Applied AFA and Treated the 

Provision of Electricity as a 

Countervailable Subsidy 

Comment 9: Whether the Provision of 

Electricity Is Specific and Provides a 

Financial Contribution 

Comment 10: Whether the Department 

Should Use RHI’s Revised 2008 Sales 

Amount in the Department’s Final 

Calculations 

Comment 11: Whether the Department 

Should Examine Income Tax Credits for 

Purchases of Domestically Produced 

Equipment in Detail 

Comment 12: Whether the Department 

Should Apply AFA with Respect to VAT 

Rebates Associated with RHI’s Purchases of 

Domestically Produced Equipment 

Comment 13: Whether the Department 

Should Apply Total AFA When Assigning 

Mayerton’s Final Countervailing Duty Rate 

[FR Doc. 2010–18939 Filed 7–30–10; 8:45 am] 

BILLING CODE 3510–DS–P 


erowe on DSK5CLS3C1PROD with NOTICES2

APPENDIX B

HEARING WITNESSES

B-1

CALENDAR OF PUBLIC HEARING

Those listed below appeared as witnesses at the United States International Trade

Commission’s hearing:

Subject: Certain Magnesia Carbon Bricks from China and Mexico

Inv. Nos.: 701-TA-468 and 731-TA-1166-1167 (Final)

Date and Time: July 27, 2010 - 9:30 a.m.

Sessions were held in connection with these investigations in the Main Hearing Room (room

101), 500 E Street, S.W., Washington, D.C.

CONGRESSIONAL APPEARANCE:

The Honorable Peter J. Visclosky, U.S. Representative, 1st District, Indiana

EMBASSY APPEARANCE:

Embassy of Mexico

Washington, D.C.

Salvador Behar, Legal Counsel for International Trade

OPENING REMARKS:

Petitioner (Camelia C. Mazard, Doyle, Barlow & Mazard, PLLC)

Respondents (Ritchie T. Thomas, Squire, Sanders & Dempsey L.L.P.)
In Support of the Imposition of

 Antidumping and Countervailing Duty Orders:

Doyle, Barlow & Mazard PLLC

Washington, D.C.

on behalf of

Resco Products, Inc.

William K. Brown, President and Chief Executive Officer,

Resco Products, Inc.

Rick Copp, Vice President of Sales and Marketing,

Resco Products, Inc. 

Dr. Patrick J. Magrath, Economic Consultant,

Georgetown Economic Services

Camelia C. Mazard )

Robert W. Doyle ) – OF COUNSEL

Andre P. Barlow )

Cadence Global Strategies, PLLC

Washington, D.C.

on behalf of

ANH Refractories Company (“ANH”)

Tomas Richter, Senior Manager of Marketing, North

American Refractories Company

Stephen Claeys ) – OF COUNSEL
In Opposition to the Imposition of

 Antidumping and Countervailing Duty Orders:

Squire, Sanders & Dempsey L.L.P.

Washington, D.C.

on behalf of

RHI-Refmex S.A. de C.V.

RHI Refractories Liaoning Co., Ltd.

Veitsch-Radex America, Inc.

Martin Beschel, Commercial Director, Steel

Americas, Veitsch-Radex America, Inc.

Victor Garcia, Director General, RHI-Refmex

S.A. de C.V.

Bruce Malashevich, President and CEO, Economic

Consulting Services, LLC

Alex Cook, Economist, Economic Consulting 

Services, LLC

 

Ritchie T. Thomas )

Cathy Kettlewell ) – OF COUNSEL

Iain R. McPhie )

REBUTTAL/CLOSING REMARKS:

Petitioners (Camelia C. Mazard, Doyle, Barlow & Mazard, PLLC)

Respondents (Iain R. McPhie, Squire, Sanders & Dempsey L.L.P.)

APPENDIX C

SUMMARY DATA

C-1

Table C-1

MCB: Summary data concerning the U.S. market, 2007-09, January-March 2009, and January-March 2010

(Quantity=short tons, value=1,000 dollars, unit values, unit labor costs, and unit expenses are per short ton; period changes=percent, except where noted)

Reported data Period changes

January-March Jan.-March

Item 2007 2008 2009 2009 2010 2007-09 2007-08 2008-09 2009-10

U.S. consumption quantity:

 Amount . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Producers' share (1) . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Importers' share (1):

 China . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Mexico . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Subtotal . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 All other sources . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Total imports . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

U.S. consumption value:

 Amount . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Producers' share (1) . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Importers' share (1):

 China . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Mexico . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Subtotal . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 All other sources . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Total imports . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

U.S. shipments of imports from:

 China:

 Quantity . . . . . . . . . . . . . . . . . . 31,387 38,103 33,090 8,013 10,198 5.4 21.4 -13.2 27.3

 Value . . . . . . . . . . . . . . . . . . . . 27,155 35,542 33,676 8,028 11,092 24.0 30.9 -5.3 38.2

 Unit value . . . . . . . . . . . . . . . . . $865 $933 $1,018 $1,002 $1,088 17.6 7.8 9.1 8.6

 Ending inventory quantity . . . . 20,677 21,958 21,137 19,353 17,008 2.2 6.2 -3.7 -12.1

 Mexico:

 Quantity . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Ending inventory quantity . . . . *** *** *** *** *** *** *** *** ***

 Subtotal:

 Quantity . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Ending inventory quantity . . . . *** *** *** *** *** *** *** *** ***

 All other sources:

 Quantity . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Ending inventory quantity . . . . *** *** *** *** *** *** *** *** ***

 All sources:

 Quantity . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Ending inventory quantity . . . . *** *** *** *** *** *** *** *** ***

Table continued on next page.

C-3
Table C-1--Continued

MCB: Summary data concerning the U.S. market, 2007-09, January-March 2009, and January-March 2010

(Quantity=short tons, value=1,000 dollars, unit values, unit labor costs, and unit expenses are per short ton; period changes=percent, except where noted)

Reported data Period changes

January-March Jan.-March

Item 2007 2008 2009 2009 2010 2007-09 2007-08 2008-09 2009-10

U.S. producers':

 Average capacity quantity . . . . . 114,241 114,241 114,241 28,585 28,585 0.0 0.0 0.0 0.0

 Production quantity . . . . . . . . . . 73,552 72,258 49,997 9,485 17,286 -32.0 -1.8 -30.8 82.2

 Capacity utilization (1) . . . . . . . . 64.4 63.3 43.8 33.2 60.5 -20.6 -1.1 -19.5 27.3

 U.S. shipments:

 Quantity . . . . . . . . . . . . . . . . . . 59,403 63,789 42,243 8,989 15,198 -28.9 7.4 -33.8 69.1

 Value . . . . . . . . . . . . . . . . . . . . 62,611 76,612 53,933 11,558 18,449 -13.9 22.4 -29.6 59.6

 Unit value . . . . . . . . . . . . . . . . . $1,054 $1,201 $1,277 $1,286 $1,214 21.1 13.9 6.3 -5.6

 Export shipments:

 Quantity . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Ending inventory quantity . . . . . 8,042 7,334 8,585 6,840 8,461 6.7 -8.8 17.1 23.7

 Inventories/total shipments (1) . . *** *** *** *** *** *** *** *** ***

 Production workers . . . . . . . . . . 110 102 92 83 112 -16.2 -7.2 -9.8 35.3

 Hours worked (1,000s) . . . . . . . 239 227 179 39 62 -25.1 -5.0 -21.1 59.0

 Wages paid ($1,000s) . . . . . . . . 6,441 6,420 5,200 1,102 1,823 -19.3 -0.3 -19.0 65.4

 Hourly wages . . . . . . . . . . . . . . . $26.95 $28.28 $29.05 $28.26 $29.40 7.8 4.9 2.7 4.1

 Productivity (tons/1,000 hours) . 307.7 318.3 279.3 243.2 278.8 -9.2 3.4 -12.3 14.6

 Unit labor costs . . . . . . . . . . . . . $87.57 $88.85 $104.01 $116.18 $105.46 18.8 1.5 17.1 -9.2

 Net sales:

 Quantity . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Cost of goods sold (COGS) . . . . *** *** *** *** *** *** *** *** ***

 Gross profit or (loss) . . . . . . . . . *** *** *** *** *** *** *** *** ***

 SG&A expenses . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Operating income or (loss) . . . . *** *** *** *** *** *** *** *** ***

 Capital expenditures . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit COGS . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit SG&A expenses . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit operating income or (loss) . *** *** *** *** *** *** *** *** ***

 COGS/sales (1) . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Operating income or (loss)/

 sales (1) . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 (1) "Reported data" are in percent and "period changes" are in percentage points.

Note.--Financial data are reported on a fiscal year basis and may not necessarily be comparable to data reported on a calendar year basis. Because of rounding,

figures may not add to the totals shown. Unit values and shares are calculated from the unrounded figures.

Source: Compiled from data submitted in response to Commission questionnaires.

C-4
Table C-21

MCBs: Combined operations for U.S. producers, 2007-09, January-March 2009, and

January-March 2010

* * * * * * *